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EXHIBIT 10.1
$75,000,000
CREDIT AGREEMENT
dated as of
May 8, 1997
among
Tekni-Plex, Inc.
The Guarantors Party Hereto
The Banks Party Hereto
The LC Issuing Banks Referred to Herein
and
Xxxxxx Guaranty Trust Company of New York,
as Agent
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X.X. Xxxxxx Securities Inc.,
as Arranger
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TABLE OF CONTENTS
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PAGE
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions.................................................. 1
Section 1.02. Accounting Terms and Determinations.......................... 18
ARTICLE 2
THE CREDITS
Section 2.01. Commitments to Lend.......................................... 18
Section 2.02. Method of Borrowing.......................................... 19
Section 2.03. Maturity of Loans............................................ 20
Section 2.04. Interest Rates............................................... 20
Section 2.05. Method of Electing Interest Rates............................ 22
Section 2.06. Fees......................................................... 24
Section 2.07. Termination or Optional Reduction of
Commitments.............................................. 24
Section 2.08. Mandatory Reduction of Commitments........................... 25
Section 2.09. Optional Prepayments......................................... 26
Section 2.10. General Provisions as to Payments............................ 27
Section 2.11. Funding Losses............................................... 28
Section 2.12. Computation of Interest and Fees............................. 28
Section 2.13. Notes........................................................ 28
Section 2.14. Letters of Credit............................................ 29
ARTICLE 3
CONDITIONS
Section 3.01. Closing...................................................... 35
Section 3.02. Borrowings and Issuances of Letters
of Credit................................................ 37
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence and Power................................ 38
Section 4.02. Corporate and Governmental Authorization;
No Contravention......................................... 38
Section 4.03. Binding Effect............................................... 39
Section 4.04. Financial Information........................................ 39
Section 4.05. Litigation................................................... 39
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Section 4.06. Compliance with ERISA........................................ 40
Section 4.07. Environmental Compliance..................................... 40
Section 4.08. Taxes........................................................ 42
Section 4.09. Subsidiaries................................................. 42
Section 4.10. No Regulatory Restrictions on Borrowing...................... 42
Section 4.11. Full Disclosure.............................................. 42
Section 4.12. Representations in Collateral Documents
True and Correct......................................... 43
Section 4.13. Representations of Guarantors................................ 43
Section 4.14. Intellectual Property........................................ 44
Section 4.15. Solvency..................................................... 44
ARTICLE 5
COVENANTS
Section 5.01. Information.................................................. 44
Section 5.02. Payment of Obligations....................................... 47
Section 5.03. Maintenance of Property; Insurance........................... 47
Section 5.04. Conduct of Business and Maintenance of
Existence................................................ 48
Section 5.05. Compliance with Laws......................................... 48
Section 5.06. Inspection of Property, Books and Records.................... 48
Section 5.07. Mergers and Sales of Assets.................................. 49
Section 5.08. Use of Proceeds.............................................. 49
Section 5.09. Negative Pledge.............................................. 49
Section 5.10. Limitation on Debt........................................... 51
Section 5.11. Minimum Consolidated Net Worth............................... 51
Section 5.12. Fixed Charge Coverage Ratio.................................. 52
Section 5.13. Leverage Ratio............................................... 52
Section 5.14. Minimum Consolidated EBITDA.................................. 53
Section 5.15. Restricted Payments.......................................... 53
Section 5.16. Investments.................................................. 53
Section 5.17. Consolidated Capital Expenditures............................ 55
Section 5.18. Transactions with Affiliates................................. 55
Section 5.19. Limitation on Restrictions Affecting
Subsidiaries............................................. 56
Section 5.20. Retirement of Subordinated and Other
Long-Term Debt........................................... 56
Section 5.21. Limitation on Fixed-Price Contracts.......................... 57
Section 5.22. Further Assurances........................................... 57
ARTICLE 6
DEFAULTS
Section 6.01. Events of Defaults........................................... 58
Section 6.02. Notice of Default............................................ 62
Section 6.03. Cash Cover................................................... 62
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ARTICLE 7
THE AGENT
Section 7.01. Appointment and Authorization................................ 62
Section 7.02. Agent and Affiliates......................................... 63
Section 7.03. Action by Agent.............................................. 63
Section 7.04. Consultation with Experts.................................... 63
Section 7.05. Liability of Agent........................................... 63
Section 7.06. Indemnification.............................................. 64
Section 7.07. Credit Decision.............................................. 64
Section 7.08. Successor Agent.............................................. 64
Section 7.09. Agent's Fee.................................................. 65
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate
Inadequate or Unfair..................................... 65
Section 8.02. Illegality................................................... 65
Section 8.03. Increased Cost and Reduced Return............................ 66
Section 8.04. Taxes........................................................ 67
Section 8.05. Base Rate Loans Substituted for Affected
Euro-Dollar Loans........................................ 70
Section 8.06. Substitution of Bank......................................... 71
ARTICLE 9
GUARANTY
Section 9.01. The Guaranty................................................. 71
Section 9.02. Guaranty Unconditional....................................... 71
Section 9.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances................... 72
Section 9.04. Waiver by Each Guarantor..................................... 73
Section 9.05. Subrogation and Contribution................................. 73
Section 9.06. Stay of Acceleration......................................... 73
Section 9.07. Limit of Liability........................................... 73
Section 9.08. Release upon Sale............................................ 73
ARTICLE 10
MISCELLANEOUS
Section 10.01. Notices..................................................... 74
Section 10.02. No Waivers.................................................. 74
Section 10.03. Expenses; Indemnification................................... 74
Section 10.04. Sharing of Set-offs......................................... 75
Section 10.05. Amendments and Waivers; Release of
Collateral............................................... 76
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Section 10.06. Successors; Participations and Assignments.................. 76
Section 10.07. Reliance on Margin Stock.................................... 78
Section 10.08. Governing Law; Submission to Jurisdiction................... 79
Section 10.09. Counterparts; Integration; Effectiveness.................... 79
Section 10.10. Confidentiality............................................. 79
Section 10.11. Waiver of Jury Trial........................................ 80
COMMITMENT SCHEDULE
PRICING SCHEDULE
SCHEDULE 1 -- Debt of the Borrower and its Subsidiaries
SCHEDULE 2 -- Subsidiaries
EXHIBIT A -- Note
EXHIBIT B -- Opinion of Counsel for the Obligors
EXHIBIT C -- Opinion of Special Counsel for the Agent
EXHIBIT D -- Assignment and Assumption Agreement
EXHIBIT E -- Form of Security Agreement
EXHIBIT F -- Form of Pledge Agreement
EXHIBIT G -- Forms of Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing
EXHIBIT H -- Form of Opinion of Local Counsel
EXHIBIT I -- Form of Intercompany Note
EXHIBIT J -- Form of Payoff Letter
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AGREEMENT dated as of May 8, 1997 among TEKNI-PLEX, INC., the
GUARANTORS parties hereto, the BANKS parties hereto, the LC ISSUING BANKS
referred to herein and XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Acquisition" means any acquisition, whether in a single transaction or
series of related transactions, by the Borrower or any one or more Subsidiaries,
or any combination thereof, of (i) all or a substantial part of the assets, or a
going business or division, of any Person, whether through purchase of assets or
securities, by merger or otherwise, (ii) control of securities of an existing
corporation or other Person having ordinary voting power (apart from rights
accruing under special circumstances) to elect a majority of the board of
directors of such corporation or other Person or (iii) control of a greater than
50% ownership interest in any existing partnership, joint venture or other
Person.
"Additional Debt Incurrence" means the incurrence of any Debt by the
Borrower or any of its Subsidiaries (other than Debt which is permitted under
Section 5.10) to which the Required Banks have consented.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Agent, completed by
such Bank and returned to the Agent (with a copy to the Borrower).
"Affiliate" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Borrower (a "Controlling Person") or
(ii) any Person (other than the Borrower or a Subsidiary) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to vote 10% or
more of any class of voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
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"Agent" means Xxxxxx Guaranty Trust Company of New York in its capacity
as agent for the Banks hereunder, and its successors in such capacity.
"Aggregate LC Exposure" means, at any time, the sum, without
duplication, of (i) the aggregate amount that is (or may thereafter become)
available for drawing under all Letters of Credit outstanding at such time and
(ii) the aggregate unpaid amount of all LC Reimbursement Obligations at such
time.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans and its participations in Letters of Credit, its
Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.
"Asset Sale" means any sale, lease or other disposition (including any
such transaction effected by way of merger or consolidation) by the Borrower or
any of its Subsidiaries of any asset, including, without limitation, any
sale-leaseback transaction, whether or not involving a capital lease, but
excluding (i) dispositions of inventory, cash, cash equivalents and other cash
management investments and obsolete, unused or unnecessary equipment, in each
case in the ordinary course of business, and (ii) dispositions to the Borrower
or a Subsidiary of the Borrower.
"Assignee" has the meaning set forth in Section 10.06(c).
"Bank" means each bank listed on the signature pages hereof, each
Assignee which becomes a Bank pursuant to Section 10.06(c), and their respective
successors.
"Bank Parties" means the Banks, the LC Issuing Banks and the Agent.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"Base Rate Loan" means a Loan which bears interest at the Base Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election or the provisions of Section 2.05(a) or Article 8.
"Base Rate Margin" has the meaning set forth in Section 2.04(a).
"Borrower" means Tekni-Plex, Inc., a Delaware corporation, and its
successors.
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"Borrowing" means a borrowing hereunder consisting of Loans made to the
Borrower on the same day pursuant to Article 2, all of which Loans are of the
same type (subject to Article 8) and, except in the case of Base Rate Loans,
have the same initial Interest Period. A Borrowing is a Base Rate Borrowing if
such Loans are Base Rate Loans or a Euro-Dollar Borrowing if such Loans are
Euro-Dollar Loans.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time, and regulations
promulgated thereunder.
"Closing Date" means the date on or after the Effective Date on which
the Agent shall have received all the documents specified in or pursuant to
Section 3.01.
"Collateral" means collateral subject to the Collateral Documents.
"Collateral Account" means an account in the name and under the control
of the Agent into which there shall be deposited from time to time amounts
required to be delivered to the Agent pursuant to Section 2.08 or 6.03 of this
Agreement.
"Collateral Documents" means the Pledge Agreement, the Security
Agreement, the Mortgages, any additional pledges, security agreements or
mortgages delivered pursuant to the Loan Documents and any instruments of
assignment or other instruments or agreements executed pursuant to the
foregoing.
"Commitment" means (i) with respect to each Bank listed on the
Commitment Schedule, the amount set forth opposite the name of such Bank on the
Commitment Schedule and (ii) with respect to any Assignee, the amount of the
transferor Bank's Commitment assigned to it pursuant to Section 10.06(c), in
each case as such amount may be changed from time to time pursuant to Section
2.07 or 10.06(c); provided that, if the context so requires, the term
"Commitment" means the obligation of a Bank to extend credit up to such amount
to the Borrower hereunder.
"Commitment Percentage" means, with respect to any Bank at any time,
the percentage which the amount of such Bank's Commitment at such time
represents of the aggregate amount of all the Commitments at such time. At any
time after the Commitments shall have terminated, the term "Commitment
Percentage" shall refer to a Bank's Commitment Percentage immediately before
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such termination, adjusted to reflect any subsequent assignments pursuant to
Section 10.06.
"Commitment Schedule" means the Commitment Schedule attached hereto.
"Consolidated Capital Expenditures" means, for any period, the
additions to property, plant and equipment and other capital expenditures of the
Borrower and its Consolidated Subsidiaries for such period, as the same are or
would be set forth in a consolidated statement of cash flows of the Borrower and
its Consolidated Subsidiaries for such period.
"Consolidated Debt" means, at any date, the consolidated Debt of the
Borrower and its Consolidated Subsidiaries as of such date.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
for such period plus, to the extent deducted in determining Consolidated Net
Income for such period, the aggregate amount of (i) Consolidated Interest
Expense, (ii) income tax expense and (iii) depreciation, amortization and other
similar non-cash charges.
"Consolidated Interest Expense" means, for any period, the interest
expense of the Borrower and its Consolidated Subsidiaries, determined on a
consolidated basis for such period.
"Consolidated Net Income" means, for any period, the net income of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
for such period, adjusted to exclude the effect of any extraordinary or other
non-recurring gain (but not loss).
"Consolidated Net Working Investment" means at any date (i)
consolidated current assets of the Borrower and its Consolidated Subsidiaries
(exclusive of cash and cash equivalents) minus (ii) the consolidated current
liabilities of the Borrower and its Consolidated Subsidiaries (exclusive of
Debt), all determined as of such date.
"Consolidated Net Worth" means, at any date, the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries
determined as of such date.
"Consolidated Subsidiary" means, at any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
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its consolidated financial statements if such statements were prepared as of
such date.
"Control Group" means MST/TP Partners, L.P., Tekni-Plex Partners, L.P.,
Dr. F. Xxxxxxx Xxxxx, Mr. Xxxxxxx Xxxxx, each of the partners in either of the
foregoing partnerships, and each Person designated by a partner for purposes of
estate or similar personal planning who receives shares of capital stock of the
Borrower in connection with a liquidation, unwinding or the like of either of
the foregoing partnerships.
"Credit Exposure" means, with respect to any Bank at any time, (i) the
amount of its Commitment at such time or (ii) if its Commitment shall have
terminated, an amount equal to its Outstanding Committed Amount at such time.
"Debt" of any Person means, at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with GAAP, (v) all non-contingent obligations (and, for purposes of
Section 5.09 and the definitions of Material Debt and Material Financial
Obligations, all contingent obligations) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person, whether
or not such Debt is otherwise an obligation of such Person, and (vii) all
Guarantees by such Person of Debt of another Person (each such Guarantee to
constitute Debt in an amount equal to the amount of such other Person's Debt
Guaranteed thereby).
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
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"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to close.
"Domestic Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Bank may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 10.09.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
the environment or the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Substances or wastes into the environment, including (without limitation)
ambient air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"Environmental Liabilities" means all liabilities in connection with or
relating to the business, assets presently or previously owned, leased or
operated, activities (including, without limitation, off-site disposal) or
operations of the Borrower and each Subsidiary, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to matters covered by Environmental Laws.
"Equity Issuance" means the issuance of any equity securities by the
Borrower or any of its Subsidiaries (other than equity securities issued to the
Borrower or any of its Subsidiaries), if at the time of such issuance the
Leverage Ratio is greater than 4:1.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
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"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on which
commercial banks are open for international business (including dealings in
dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Bank, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Bank as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means a Loan which bears interest at a Euro-Dollar
Rate pursuant to the applicable Notice of Borrowing or Notice of Interest Rate
Election.
"Euro-Dollar Margin" has the meaning set forth in Section 2.04(b).
"Euro-Dollar Rate" means a rate of interest determined pursuant to
Section 2.04(b) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.04(b).
"Events of Default" has the meaning set forth in Section 6.01.
"Evergreen Letter of Credit" means a Letter of Credit that is
automatically extended unless the relevant LC Issuing Bank gives notice to the
beneficiary thereof stating that such Letter of Credit will not be extended.
"Excess Cash Flow" means, for any period the excess (if any) of: (a)
the sum of (i) Consolidated Net Income for such period plus (ii) to the extent
deducted in determining Consolidated Net Income for such period, depreciation,
amortization and other similar noncash charges plus (iii) any increase (or minus
any decrease) during such period in deferred tax liabilities of the Borrower and
its Consolidated Subsidiaries, taken as a whole, for such fiscal period, plus
(iv) any decrease in Consolidated Net Working Investment between the beginning
and the
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end of such period; minus (b) the sum of (i) Consolidated Capital Expenditures
for such period, (ii) any increase in Consolidated Net Working Investment
between the beginning and the end of such period, (iii) cash dividends paid on
preferred stock during such period, (iv) mandatory prepayments and repayments of
long-term Debt of the Borrower and its Consolidated Subsidiaries during such
period (other than prepayments on account of Excess Cash Flow for a prior
period), (v) repayments during such period of the revolving credit loans and
short-term Debt of the Borrower and its Consolidated Subsidiaries which were not
made with the proceeds of other Debt, and (vi) to the extent included in
Consolidated Net Income for such period, the amount of any gain on disposition
of an asset if such disposition constitutes an Asset Sale.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Domestic Business Day next
succeeding such day, provided that (i) if such day is not a Domestic Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Domestic Business Day as so published on the next
succeeding Domestic Business Day and (ii) if no such rate is so published on
such next succeeding Domestic Business Day, the Federal Funds Rate for such day
shall be the average rate quoted to Xxxxxx Guaranty Trust Company of New York on
such day on such transactions as determined by the Agent.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
"Fiscal Year" means a fiscal year of the Borrower.
"Fixed Charge Coverage Ratio" means, at any date, the ratio of (i) the
result of (A) Consolidated EBITDA minus (B) Consolidated Capital Expenditures
for the period of four consecutive Fiscal Quarters then ended to (ii)
Consolidated Interest Expense for such period.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in by
the Borrower's independent public accountants) with the most recent audited
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consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Banks.
"Group of Loans" means, at any time, a group of Loans consisting of (i)
all Loans which are Base Rate Loans at such time or (ii) all Euro-Dollar Loans
having the same Interest Period at such time, provided that, if a Loan of any
particular Bank is converted to or made as a Base Rate Loan pursuant to Article
8, such Loan shall be included in the same Group or Groups of Loans from time to
time as it would have been in if it had not been so converted or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise), (ii) to reimburse a bank for amounts drawn under a
letter of credit for the purpose of paying such Debt or (iii) entered into for
the purpose of assuring in any other manner the holder of such Debt or other
obligation of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part); provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term Guarantee used as a verb has a corresponding meaning.
"Guarantor" means, subject to Section 9.08, each Person who has
executed this Agreement as a guarantor.
"Hazardous Substance" means any toxic, radioactive, caustic or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and other hydrocarbons, or any substance having any constituent elements
displaying any of the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 10.03(b).
"Information Memorandum" means the confidential descriptive memorandum
dated February, 1997 furnished to the Banks in connection with the transactions
contemplated hereby.
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"Interest Period" means, with respect to each Euro-Dollar Loan, the
period commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in such notice; provided that:
(a) any Interest Period which would otherwise end on a day
which is not a Euro-Dollar Business Day shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business
Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last Euro-Dollar
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, subject to clause (c) below, end on the last
Euro-Dollar Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, Guarantee, time deposit or otherwise
(but not including any demand deposit). "LC Exposure" means, with respect to any
Bank at any time, an amount equal to its Commitment Percentage of the Aggregate
LC Exposure at such time.
"LC Indemnitees" has the meaning set forth in Section 2.14(k).
"LC Issuing Bank" means Xxxxxx Guaranty Trust Company of New York (and
any other Bank which, at the Borrower's request, shall have agreed to issue
Letters of Credit hereunder and confirmed such agreement in a notice to the
Agent), each in its capacity as an LC Issuing Bank under the letter of credit
facility described in Section 2.14.
"LC Office" means, with respect to any LC Issuing Bank, the office at
which it books any Letter of Credit issued by it.
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"LC Payment Date" has the meaning set forth in Section 2.14(g).
"LC Reimbursement Due Date" has the meaning set forth in Section
2.14(h).
"LC Reimbursement Obligations" means, at any time, all obligations of
the Borrower to reimburse the LC Issuing Banks for amounts paid by the LC
Issuing Banks in respect of drawing under Letters of Credit, including any
portion of any such obligations to which a Bank has become subrogated pursuant
to Section 2.14(i).
"Letter of Credit" means a letter of credit issued hereunder by an LC
Issuing Bank.
"Leverage Ratio" means, on any date, the ratio of (i) Consolidated Debt
on such date to (ii) Consolidated EBITDA for the period of four consecutive
fiscal quarters of the Borrower most recently ended on or prior to such date.
For purposes of determining Consolidated EBITDA at any time during the first
four Fiscal Quarters ending after a Fiscal Quarter in which an Acquisition has
been made, Consolidated EBITDA shall be increased for any Fiscal Quarter which
began prior to such Acquisition by the amount of EBITDA which the Borrower (with
the consent of the Agent, such consent not to be unreasonably withheld or
delayed) shall determine would have been attributable to the acquired assets for
the Fiscal Quarter most recently ended on or prior to the date of such
Acquisition; provided that for the Fiscal Quarter in which the Acquisition has
occurred, such increase shall be prorated to reflect only the days during such
Fiscal Quarter prior to the consummation of the Acquisition.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has substantially the same practical effect as a
security interest, in respect of such asset. For purposes hereof, the Borrower
or any Subsidiary shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Loan" means a loan made by a Bank pursuant to Section 2.01.
"Loan Documents" means this Agreement, the Notes and the Collateral
Documents.
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"London Interbank Offered Rate" has the meaning set forth in Section
2.04(b).
"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received by the Borrower or any of its Subsidiaries in connection with one or
more related events under any insurance policy maintained by the Borrower or any
of its Subsidiaries covering losses with respect to tangible real or personal
property or improvements or losses from business interruption or (ii) any award
or other compensation with respect to any condemnation of property (or any
transfer or disposition of property in lieu of condemnation) received by the
Borrower or any of its Subsidiaries, if the amount of such aggregate proceeds or
award or other compensation exceeds $1,000,000.
"Material Adverse Effect" means (i) any material adverse effect upon
the condition (financial or otherwise), results of operations, properties,
assets, or business of the Borrower and its Subsidiaries, taken as a whole; (ii)
a material adverse effect on the ability of the Borrower or any other Person to
consummate the transactions contemplated hereby to occur on the Closing Date;
(iii) a material adverse effect on the ability of the Borrower to perform under
this Agreement and the Notes and the other Loan Documents; or (iv) a material
adverse effect on the rights and remedies of the Agent and the Banks under this
Agreement and the Notes and the other Loan Documents.
"Material Debt" means Debt (except Debt outstanding hereunder) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal or face amount exceeding
$5,000,000.
"Material Financial Obligations" means a principal or face amount of
Debt (other than the Loans and LC Reimbursement Obligation) and/or payment or
collateralization obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, exceeding in the aggregate $5,000,000.
"Material Plan" means, at any time, a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.
"Mortgage" means each mortgage, deed of trust or deed to secure debt
substantially in the form of Exhibit G hereto between each Obligor party
thereto, as mortgagor or trustor, and the Agent, as mortgagee or beneficiary,
entered into as of the Closing Date and relating to the Borrower's facilities in
Decatur,
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Indiana, Lawrenceville, Georgia, Flemington, New Jersey, Wenatchee, Washington
and Somerset County, New Jersey, and any mortgage, deed of trust or deed to
secure debt entered into pursuant hereto after the Closing Date, in each case as
amended from time to time.
"Multiemployer Plan" means, at any time, an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Net Cash Proceeds" means, with respect to any Reduction Event, an
amount equal to the cash proceeds received by the Borrower or any of its
Subsidiaries from or in respect of such Reduction Event (including any cash
proceeds, received as income or other proceeds, of any noncash proceeds of any
Asset Sale), less (x) any expenses reasonably incurred by such Person in respect
of such Reduction Event and (y) if such Reduction Event is an Asset Sale, (I)
the amount of any Debt secured by a Lien on any asset disposed of in such Asset
Sale and discharged from the proceeds thereof and (II) any taxes actually paid
or to be payable by such Person (as estimated by a senior financial or
accounting officer of the Borrower, giving effect to the overall tax position of
the Borrower) in respect of such Asset Sale.
"Notes" means promissory notes of the Borrower, substantially in the
form of Exhibit A hereto, evidencing the Borrower's obligation to repay the
Loans, and "Note" means any one of such promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"Notice of Interest Rate Election" has the meaning set forth in Section
2.05.
"Obligors" means the Borrower and the Guarantors, and "Obligor" means
any of them.
"Outstanding Committed Amount" means, with respect to any Bank at any
time, the sum of (i) the outstanding principal amount of each of its Loans and
(ii) its LC Exposure, all determined at such time after giving effect to any
prior assignments by or to such Bank pursuant to Section 10.06(c).
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"Parent" means, with respect to any Bank, any Person controlling such
Bank.
"Participant" has the meaning set forth in Section 10.06(c).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a limited liability
company, a partnership, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means, at any time, an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pledge Agreement" means the pledge agreement substantially in the form
of Exhibit F hereto between each Obligor party thereto and the Agent entered
into as of the Closing Date, as amended from time to time.
"Pricing Schedule" means the Pricing Schedule attached hereto.
"Prime Rate" means the rate of interest publicly announced by Xxxxxx
Guaranty Trust Company of New York in New York City from time to time as its
Prime Rate.
"Quarterly Payment Dates" means each March 31, June 30, September 30
and December 31.
"Reduction Event" means (i) any Asset Sale, (ii) any Additional Debt
Incurrence or (iii) any Equity Issuance. The description of any transaction as
falling within the above definition does not affect any limitation on such
transaction imposed by Article 5 of this Agreement.
"Reduction Percentage" means (i) in respect of an Asset Sale or
Additional Debt Incurrence, 100% of the Net Cash Proceeds thereof; (ii) in
respect of an
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Equity Issuance, 50% of the Net Cash Proceeds thereof, and (iii) in respect of
Excess Cash Flow, 50% of the amount thereof.
"Reference Banks" means the principal London offices of Fleet Bank,
National Association, LaSalle National Bank and Xxxxxx Guaranty Trust Company of
New York, and "Reference Bank" means any one of such Reference Banks; provided
that upon the resignation of any Reference Bank, the Agent and the Borrower
shall designate a mutually satisfactory substitute Reference Bank.
"Regulated Activity" means any generation, treatment, storage,
recycling, transportation or disposal of any Hazardous Substance.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Release" means any discharge, emission or release, including a Release
as defined in CERCLA at 42 U.S.C. Section 9601(22). The term "Released" has a
corresponding meaning.
"Required Banks" means, at any time, Banks having at least 51% of the
aggregate amount of the Credit Exposures at such time.
"Restricted Investment" means any Investment by the Borrower and its
Subsidiaries in any Person, other than (i) Investments in Guarantors or Persons
which, within 30 days after the consummation of such Investment, become
Guarantors, (ii) Temporary Cash Investments and (iii) Investments constituting
intercompany loans permitted under Section 5.10(d).
"Restricted Payment" means (i) any dividend or other distribution on
any shares of the Borrower's capital stock (except dividends payable solely in
shares of its capital stock other than mandatorily redeemable preferred stock)
or (ii) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Borrower's capital stock or (b) any option,
warrant (other than the redeemable warrants issued to Rice Mezzanine Lenders,
L.P., and Rice Partners II, L.P. if retired on or prior to the Closing Date for
an amount not to exceed $20,000,000) or other right to acquire shares of the
Borrower's capital stock (but not including payments of principal, premium (if
any) or interest made pursuant to the terms of convertible debt securities prior
to conversion); provided that (x) payments in an aggregate amount not to exceed
$5,000,000 in respect of the repurchase of the Borrower's capital stock from
employees of the Borrower and its Subsidiaries, former employees and their
estates and (y) payments in an
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aggregate amount not to exceed $400,000 in respect of the repurchase of the
Borrower's capital stock from Tekni-Plex Partners L.P. and/or Xxxxxx X. Ablum
shall not be Restricted Payments.
"Revolving Credit Period" means the period from and including the
Effective Date to but not including the Termination Date.
"Rollover Amount" has the meaning set forth in Section 5.17.
"SEC" means the Securities and Exchange Commission.
"Security Agreement" means the security agreement substantially in the
form of Exhibit E hereto between each Obligor party thereto and the Agent
entered into as of the Closing Date, as amended from time to time.
"Special Expenses" means (i) non-recurring expenses incurred in
connection with the preparation of this Agreement and the closing hereunder, and
(ii) in the case of an Acquisition otherwise permitted under this Agreement,
non-recurring expenses and charges related to such Acquisition, such as
investment banking fees, breakup fees, legal fees, severance expense,
restructuring charges and other non-recurring expenses and charges, up to a
maximum aggregate amount of $12,000,000 for all such Acquisitions during the
term of this Agreement; provided, however, that if the Borrower reasonably
believes that the expenses and charges referred to in the preceding clause (ii)
are likely to exceed $2,000,000 for any Acquisition, prior to the consummation
of such Acquisition the Borrower shall provide the Agent and the Banks with a
written good faith estimate of the nature and amount of such expenses and
charges.
"Subordinated Debt" means the Subordinated Notes and up to $75 million
of other subordinated Debt issued by the Borrower which contains terms and
conditions no more favorable to the holders of such Debt that those governing
the Subordinated Notes.
"Subordinated Notes" means (i) the senior subordinated notes, in an
aggregate principal amount of $75,000,000, issued on or prior to the Closing
Date pursuant to the Indenture, dated as of April 1, 1997, between the Borrower
and Marine Midland Bank, as Trustee, as the same, subject to Section 5.20 may be
amended, supplemented, waived or otherwise modified and in effect from time to
time, and (ii) any notes of the Borrower with terms identical to the senior
subordinated notes described in clause (i) hereof that are exchanged for such
senior subordinated notes as part of a registered offer as described under
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"Description of Notes -- Registration Rights" in the Offering Memorandum for
such senior subordinated notes dated April 1, 1997.
"Subsidiary" means, as to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person. Unless
otherwise specified, "Subsidiary" means a Subsidiary of the Borrower; provided
that Dolco Packaging Ltd. shall not be considered a Subsidiary of the Borrower.
"Temporary Cash Investment" means any Investment in (i) direct
obligations of the United States or any agency thereof or obligations guaranteed
by the United States or any agency thereof, (ii) commercial paper rated at least
A-1 by Standard & Poor's Ratings Services and P-1 by Xxxxx'x Investors Service,
Inc., (iii) time deposits with, including certificates of deposit issued by, any
office located in the United States of any bank or trust company which is
organized or licensed under the laws of the United States or any State thereof
and has capital, surplus and undivided profits aggregating at least
$1,000,000,000 or (iv) repurchase agreements with respect to securities
described in clause (i) above entered into with an office of a bank or trust
company meeting the criteria specified in clause (iii) above, provided in each
case that such Investment matures within one year after it is acquired by the
Borrower or a Subsidiary.
"Termination Date" means May 8, 2002, or, if such day is not a
Euro-Dollar Business Day, the next succeeding Euro-Dollar Business Day unless
such Euro-Dollar Business Day falls in another calendar month, in which case the
Termination Date shall be the next preceding Euro-Dollar Business Day.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America.
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SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with GAAP;
provided that, if the Borrower notifies the Agent that the Borrower wishes to
amend any provision hereof to eliminate the effect of any change in GAAP (or if
the Agent notifies the Borrower that the Required Banks wish to amend any
provision hereof for such purpose), then such provision shall be applied on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such provision is amended in
a manner satisfactory to the Borrower and the Required Banks.
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments to Lend. (a) Each Bank severally agrees, on
the terms and conditions set forth in this Agreement, to make loans to the
Borrower from time to time during the Revolving Credit Period; provided that,
immediately after each such loan is made, such Bank's Outstanding Committed
Amount shall not exceed its Commitment and the aggregate Outstanding Committed
Amounts shall not exceed the aggregate Commitments. The initial Borrowing under
this Section shall be in an aggregate principal amount not less than $5,000,000,
and each subsequent Borrowing shall be in an amount of $1,000,000 or any larger
integral multiple of $1,000,000 (except that any Borrowing may be in the
aggregate amount of the unused Commitments) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, prepay Loans to
the extent permitted by Section 2.09 and reborrow at any time during the
Revolving Credit Period under this Section.
(b) On any Domestic Business Day during the Revolving Credit Period, if
no Default shall have occurred and be continuing at such time, the Borrower may,
with the consent of the Required Banks, increase the aggregate amount of the
Commitments by agreeing with each existing Bank that each such Bank shall make
available its pro rata share of the amount by which the Commitments are to be
increased or, to the extent that any existing Bank declines to so increase its
Commitment, either by designating a Person not theretofore a Bank and acceptable
to the Agent to become a Bank or by agreeing with an existing Bank that such
Bank's Commitment shall be further increased. Upon execution and delivery by the
Borrower and such Bank or other Person of an instrument of assumption in
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form and amount satisfactory to the Agent, such existing Bank shall have a
Commitment as therein set forth or such other Person shall become a Bank with a
Commitment as therein set forth and all the rights and obligations of a Bank
with such a Commitment hereunder; provided that (i) the Borrower shall provide
prompt notice of such increase to the Agent, which shall promptly notify the
other Banks and (ii) the aggregate amount of each such increase shall be at
least $5,000,000 and shall not exceed $25,000,000. Upon an increase in the
aggregate amount of the Commitments pursuant to this subsection (b), within five
Domestic Business Days in the case of each Base Rate Borrowing outstanding, and
at the end of the then current Interest Period with respect thereto in the case
of each Euro-Dollar Borrowing then outstanding, the Borrower shall prepay or
repay such Borrowing in its entirety, and, to the extent the Borrower elects to
do so and subject to the conditions specified in Article 3, the Borrower shall
reborrow Loans from the Banks in proportion to their respective Commitments
after giving effect to such increase, until such time as all outstanding Loans
are held by the Banks in such proportion.
SECTION 2.02. Method of Borrowing. (a) The Borrower shall give the
Agent notice (a "Notice of Borrowing") not later than 11:00 A.M. (New York City
time) on (x) the date of each Base Rate Borrowing and (y) the third Euro-Dollar
Business Day before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic
Business Day in the case of a Base Rate Borrowing or a Euro-Dollar
Business Day in the case of a Euro-Dollar Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or a Euro-Dollar Rate; and
(iv) in the case of a Euro-Dollar Borrowing, the duration of
the initial Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
(b) Promptly after receiving a Notice of Borrowing, the Agent shall
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing, and such Notice of Borrowing shall not thereafter be revocable
by the Borrower.
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(c) Not later than 1:00 P.M. (New York City time) on the date of each
Borrowing, each Bank shall make available its ratable share of such Borrowing,
in Federal or other funds immediately available in New York City, to the Agent
at its address specified in or pursuant to Section 10.01. The failure of any
Bank to make available such funds shall not relieve any other Bank of its
obligations hereunder. Unless the Agent determines that any applicable condition
specified in Article 3 has not been satisfied, the Agent will make any funds so
received from the Banks available to the Borrower in Federal or other funds
immediately available in New York City no later than 2:00 P.M. (New York City
time) on the date of such Borrowing by credit to an account of the Borrower at
the Agent's aforesaid address or to such other account of the Borrower in New
York City as may have been specified in the applicable Notice of Borrowing and
as shall be reasonably acceptable to the Agent.
(d) Unless the Agent shall have received notice from a Bank before the
date of any Borrowing that such Bank will not make available to the Agent such
Bank's share of such Borrowing, the Agent may assume that such Bank has made
such share available to the Agent on the date of such Borrowing in accordance
with subsection (b) of this Section, and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such share available
to the Agent, such Bank and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at (i) if such amount is repaid by
the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and
the interest rate applicable thereto pursuant to Section 2.04 and (ii) if such
amount is repaid by such Bank, the Federal Funds Rate. If such Bank shall repay
to the Agent such corresponding amount, the Borrower shall not be required to
repay such amount and the amount so repaid by such Bank shall constitute such
Bank's Loan included in such Borrowing for purposes of this Agreement.
SECTION 2.03. Maturity of Loans. Each Loan shall mature, and the
principal amount thereof shall be due and payable (together with interest
accrued thereon), on the Termination Date.
SECTION 2.04. Interest Rates. (a) Each Base Rate Loan shall bear
interest on the outstanding principal amount thereof, for each day from the date
such Loan is made until it becomes due, at a rate per annum equal to the sum of
(x) the Base Rate Margin plus (y) the Base Rate for such day. Such interest
shall be payable quarterly in arrears on each Quarterly Payment Date and, with
respect
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to the principal amount of any Base Rate Loan converted to a Euro-Dollar Loan,
on the date such amount is so converted. Any overdue principal of or interest on
any Base Rate Loan shall bear interest, payable on demand, for each day until
paid at a rate per annum equal to the sum of 2% plus the Base Rate Margin for
such day plus the Base Rate for such day.
"Base Rate Margin" means a rate per annum determined in accordance with
the Pricing Schedule.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period applicable
thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Interest
Period. Such interest shall be payable for each Interest Period on the last day
thereof and, if such Interest Period is longer than three months, at intervals
of three months after the first day thereof.
"Euro-Dollar Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
The "Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Interest Period
means the average (rounded upward, if necessary, to the next higher 1/16 of 1%)
of the respective rates per annum at which deposits in dollars are offered to
each of the Reference Banks in the London interbank market at approximately
11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal amount of
the Euro-Dollar Loan of such Reference Bank to which such Interest Period is to
apply and for a period of time comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
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Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents).
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the higher of (i) the sum of 2% plus the Euro-Dollar Margin for such
day plus the Adjusted London Interbank Offered Rate applicable to such Loan on
the day before such payment was due and (ii) the sum of 2% plus the Base Rate
Margin for such day plus the Base Rate for such day (or, if the circumstances
described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum
equal to the sum of 2% plus the Base Rate Margin for such day plus the Base Rate
for such day).
(d) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall promptly notify the Borrower and the
participating Banks of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(e) Each Reference Bank agrees to use its best efforts to furnish
quotations to the Agent as contemplated by this Section. If any Reference Bank
does not furnish a timely quotation, the Agent shall determine the relevant
interest rate on the basis of the quotation or quotations furnished by the
remaining Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.01 shall apply.
SECTION 2.05. Method of Electing Interest Rates. (a) The Loans included
in each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Group of Loans (subject to subsection (d) of this Section and the
provisions of Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect
to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar
Business Day, and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may
elect to convert such Loans to Base Rate Loans or elect to continue
such Loans as Euro-Dollar Loans for an additional Interest Period,
subject to Section
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2.11 if any such conversion is effective on any day other than the last
day of an Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent not later than 11:00 A.M. (New York City
time) on the third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective. A Notice of Interest
Rate Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Group of Loans; provided that (i) such portion
shall be allocated ratably among the Loans comprising such Group and (ii) the
portion to which such Notice applies, and the remaining portion to which it does
not apply, shall each be at least $5,000,000 (unless such portion is comprised
of Base Rate Loans). If no such notice is timely received before the end of an
Interest Period for any Group of Euro-Dollar Loans, the Borrower shall be deemed
to have elected that such Group of Loans be converted to Base Rate Loans at the
end of such Interest Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which such
notice applies;
(ii) the date on which the conversion or continuation selected
in such notice is to be effective, which shall comply with the
applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be converted,
the new type of Loans and, if the Loans resulting from such conversion
are to be Euro-Dollar Loans, the duration of the next succeeding
Interest Period applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans
for an additional Interest Period, the duration of such additional
Interest Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Agent shall notify each Bank
of the contents thereof and such notice shall not thereafter be revocable by the
Borrower.
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(d) The Borrower shall not be entitled to elect to convert any Loans
to, or continue any Loans for an additional Interest Period as, Euro-Dollar
Loans if (i) the aggregate principal amounts of any Group of Euro-Dollar Loans
created or continued as a result of such election would be less than $5,000,000
or (ii) a Default shall have occurred and be continuing when the Borrower
delivers notice of such election to the Agent.
SECTION 2.06. Fees. (a) The Borrower shall pay to the Agent, for the
account of the Banks ratably in proportion to their Commitments, a commitment
fee at the Commitment Fee Rate (determined daily in accordance with the Pricing
Schedule) per annum on the daily amount by which the aggregate amount of the
Commitments exceeds the aggregate Outstanding Committed Amounts. Such commitment
fee shall accrue from and including the Effective Date to but excluding the date
on which the Commitments terminate in their entirety.
(b) The Borrower shall pay to the Agent, for the several accounts of
the Banks ratably in proportion to their Commitment Percentages, a letter of
credit fee for each day at the LC Fee Rate (determined daily in accordance with
the Pricing Schedule) per annum on the aggregate amount available for drawing
(whether or not conditions for drawing have been satisfied) under all Letters of
Credit outstanding at the close of business on such day. The Borrower shall pay
to each LC Issuing Bank a fronting fee of 0.25% per annum on the aggregate
amount available for drawing (whether or not conditions for drawing have been
satisfied) under all Letters of Credit issued by such LC Issuing Bank, and other
standard and customary processing charges.
(c) Fees accrued for the several accounts of the Banks under this
Section shall be payable quarterly in arrears on each Quarterly Payment Date and
on the day on which the Commitments terminate in their entirety.
SECTION 2.07. Termination or Optional Reduction of Commitments. (a) The
Borrower may, upon at least three Domestic Business Days' notice to the Agent,
(i) terminate the Commitments at any time, if there are no Outstanding Committed
Amounts at such time, or (ii) ratably reduce from time to time by an aggregate
amount of $5,000,000 or a larger multiple of $1,000,000, the aggregate amount of
the Commitments in excess of the aggregate Outstanding Committed Amounts.
Promptly after receiving a notice pursuant to this subsection, the Agent shall
notify each Bank of the contents thereof.
(b) Unless previously terminated, the Commitments shall terminate in
their entirety on the Termination Date.
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SECTION 2.08. Mandatory Reduction of Commitments. (a) If the Borrower
or any of its Subsidiaries shall at any time, or from time to time, after the
date hereof receive any Net Cash Proceeds of any Reduction Event, the
Commitments shall be reduced in an amount equal to the Reduction Percentage of
such Net Cash Proceeds; provided that, so long as no Default has occurred and is
continuing, receipt of Net Cash Proceeds of any Asset Sale shall require
reduction of the Commitments only to the extent that such Net Cash Proceeds are
not actually expended within 180 days of receipt (or committed, within 180 days
of receipt, to be expended and subsequently actually expended) for reinvestment
in other assets owned or to be owned by the Borrower or a Subsidiary.
(b) If the Leverage Ratio for any Fiscal Year ending after the date
hereof exceeds 4:1, the Commitments shall be reduced in an amount equal to the
Reduction Percentage of Excess Cash Flow for such Fiscal Year.
(c) Promptly following the receipt thereof by the Borrower or any of
its Subsidiaries, the Borrower shall deposit with the Agent in the Collateral
Account an amount of cash equal to the aggregate Major Casualty Proceeds
received by such Person. With respect to any such Major Casualty Proceeds, so
long as no Default has occurred and is continuing, the aggregate amount of such
cash proceeds which such Person has expended or committed to expend for the
restoration or replacement of the asset in respect of which such payment or
award was made (or for investment in any other fixed assets) shall be released
by the Agent to the Borrower; provided that if within 180 days of receipt of
such Major Casualty Proceeds such Person shall not have expended or committed to
expend an equivalent amount for the restoration or replacement of the asset in
respect of which such Major Casualty Proceeds were received (or for investment
in any other fixed assets), the excess of the amount of such Major Casualty
Proceeds over the amount of such expenditures and commitments shall be applied
to reduce the Commitments on such 180th day.
(d) On the date of a reduction of the Commitments pursuant to clause
(a), (b) or (c) of this Section, the Borrower shall prepay or repay the Loans or
provide cover for Aggregate LC Exposure in such amounts as shall be necessary so
that immediately after such payment the result of (i) the aggregate Outstanding
Committed Amounts minus (ii) the amount of any cover for Aggregate LC Exposure
then held by the Agent pursuant to this clause (d) does not exceed the aggregate
amount of the Commitments as then reduced, first, by prepaying or repaying
Loans, and, second, following payment in full of the Loans, by providing cover
for Aggregate LC Exposure. Cover for Aggregate LC Exposure
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shall be effected by paying to the Agent immediately available funds, to be held
by the Agent in the Collateral Account, in an amount required by the preceding
sentence (after giving effect to repayments and prepayments of the Loans
pursuant to the preceding sentence) which amount shall be retained by the Agent
in such Collateral Account until such time as the Letters of Credit shall have
been terminated and all of the Aggregate LC Exposure paid in full; provided that
if the Commitments shall have been terminated, all other amounts payable
hereunder shall have been paid in full and no Default shall have occurred and be
continuing, the Agent shall from time to time upon the request of the Borrower
return to the Borrower such portion of such amount as the Agent in its sole
discretion determines is no longer needed to provide cover for Aggregate LC
Exposure and related fees and expenses payable under this Agreement.
(e) The reductions required by clause (a) (and the corresponding
prepayments required by clause (d)) of this Section shall be made forthwith upon
receipt by the Borrower or any of its Subsidiaries, as the case may be, of any
Net Cash Proceeds of any Reduction Event; provided that if the Reduction
Percentage of the Net Cash Proceeds in respect of any Reduction Event is less
than $1,000,000, such prepayment shall be made upon receipt of proceeds such
that, together with all other such amounts not previously applied, the Reduction
Percentage of such Net Cash Proceeds is equal to at least $1,000,000; and
provided further that if any such prepayment or reduction would otherwise
require prepayment of Euro-Dollar Loans or portions thereof prior to the last
day of the related Interest Periods, such prepayment shall, unless the Agent
otherwise notifies the Borrower upon the instructions of the Required Banks, be
deferred to such last day. The reductions required by clause (b) (and the
corresponding prepayments required by clause (d)) of this Section shall be made
on the last Euro-Dollar Business Day of the first Fiscal Quarter following the
end of the related Fiscal Year. The Borrower shall give the Agent at least three
Euro-Dollar Business Days' notice of each prepayment required pursuant to this
Section. The reductions required by clause (c) of this Section shall be made on
the date specified therein, and the corresponding prepayments required by clause
(d) of this Section shall be made on such date or, if such date is not a
Domestic Business Day, on the next succeeding Domestic Business Day.
SECTION 2.09. Optional Prepayments. (a) Subject in the case of
Euro-Dollar Loans to Section 2.11, the Borrower may, upon notice to the Agent by
11:00 A.M. (New York City time) on the date of such prepayment, prepay any Group
of Base Rate Loans or, upon at least three Euro-Dollar Business Days' notice to
the Agent, prepay any Group of Euro-Dollar Loans, in each case in whole at any
time, or from time to time in part in amounts aggregating
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$1,000,000 or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with interest accrued thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Loans of
the several Banks included in such Group of Loans.
(b) Promptly after receiving a notice of prepayment pursuant to this
Section, the Agent shall notify each Bank of the contents thereof and of such
Bank's ratable share of such prepayment, and such notice shall not thereafter be
revocable by the Borrower.
SECTION 2.10. General Provisions as to Payments. (a) The Borrower shall
make each payment of principal of, and interest on, the Loans and LC
Reimbursement Obligations and each payment of fees hereunder (other than fees
payable directly to the LC Issuing Banks) not later than 1:00 P.M. (New York
City time) on the date when due, in Federal or other funds immediately available
in New York City, to the Agent at its address specified in or pursuant to
Section 10.01. The Agent will promptly distribute to each Bank its ratable share
of each such payment received by the Agent for the account of the Banks.
Whenever any payment of principal of, or interest on, the Base Rate Loans or LC
Reimbursement Obligations or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the
next succeeding Domestic Business Day. Whenever any payment of principal of, or
interest on, the Euro-Dollar Loans shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the
next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day
falls in another calendar month, in which case the date for payment thereof
shall be the next preceding Euro-Dollar Business Day. If the date for any
payment of principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Borrower notifies the Agent before the date on which any
payment is due to the Banks hereunder that the Borrower will not make such
payment in full, the Agent may assume that the Borrower has made such payment in
full to the Agent on such date, and the Agent may, in reliance on such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent that the Borrower
shall not have so made such payment, each Bank shall repay to the Agent
forthwith on demand such amount distributed to such Bank together with interest
thereon, for each day from the date such amount is distributed to such Bank
until the date such Bank repays such amount to the Agent, at the Federal Funds
Rate.
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SECTION 2.11. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted to a different type of Loan (whether such payment or conversion is
pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last day
of an Interest Period applicable thereto, or the last day of an applicable
period fixed pursuant to Section 2.04(c), or if the Borrower fails to borrow,
prepay, convert or continue any Euro-Dollar Loan after notice has been given to
any Bank in accordance with Section 2.02(b), 2.05(c) or 2.09(b), the Borrower
shall reimburse each Bank within 15 days after demand for any resulting loss or
expense incurred by it (or, without duplication, by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties, but
excluding loss of margin for the period after such payment or conversion or
failure to borrow, prepay, convert or continue; provided that such Bank shall
have delivered to the Borrower a certificate as to the amount of such loss or
expense and its method of calculation, which certificate shall be conclusive in
the absence of manifest error.
SECTION 2.12. Computation of Interest and Fees. All interest and fees
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed (including the first day but excluding the last day).
SECTION 2.13. Notes. (a) The Borrower's obligation to repay the Loans
of each Bank shall be evidenced by a single Note payable to the order of such
Bank for the account of its Applicable Lending Office.
(b) Each Bank may, by notice to the Borrower and the Agent, request
that the Borrower's obligation to repay such Bank's Loans of a particular type
be evidenced by a separate Note. Each such Note shall be in substantially the
form of Exhibit A hereto with appropriate modifications to reflect the fact that
it relates solely to Loans of the relevant type. Each reference in this
Agreement to the "Note" of such Bank shall be deemed to refer to and include any
or all of such Notes, as the context may require.
(c) Promptly after it receives each Bank's Note pursuant to Section
3.01(a), the Agent shall forward such Note to such Bank. Each Bank shall record
the date, amount and type of each Loan made by it and the date and amount of
each payment of principal made by the Borrower with respect thereto, and may, if
such Bank so elects in connection with any transfer or enforcement of its Note,
endorse on the schedule forming a part thereof appropriate notations to evidence
the foregoing information with respect to each such Loan then outstanding;
provided that a Bank's failure to make (or any error in making) any such
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recordation or endorsement shall not affect the Borrower's obligations hereunder
or under the Notes. Each Bank is hereby irrevocably authorized by the Borrower
so to endorse its Note and to attach to and make a part of its Note a
continuation of any such schedule as and when required.
SECTION 2.14. Letters of Credit. (a) Issuance. Each LC Issuing Bank
agrees, on the terms and conditions set forth in this Agreement, to issue
letters of credit hereunder at the request of the Borrower from time to time
prior to the date that is 30 days before the Termination Date; provided that,
immediately after each such letter of credit is issued and participations
therein are sold to the Banks as provided in this subsection:
(i) the Aggregate LC Exposure shall not exceed $15,000,000;
(ii) in the case of each Bank, its Outstanding Committed
Amount shall not exceed its Commitment; and
(iii) the aggregate Outstanding Committed Amounts shall not
exceed the aggregate Commitments.
Whenever an LC Issuing Bank issues a Letter of Credit hereunder, such LC Issuing
Bank shall be deemed, without further action by any party hereto, to have sold
to each other Bank, and each such Bank shall be deemed, without further action
by any party hereto, to have purchased from such LC Issuing Bank, a
participation in such Letter of Credit, on the terms specified in this Section,
equal to such Bank's Commitment Percentage thereof.
(b) Notice of Proposed Issuance. With respect to each Letter of Credit,
the Borrower shall give the relevant LC Issuing Bank and the Agent at least five
Domestic Business Days' prior notice (i) specifying the date such Letter of
Credit is to be issued and (ii) describing the proposed terms of such Letter of
Credit and the nature of the transactions to be supported thereby. Promptly
after it receives such notice, the Agent shall notify each Bank of the contents
thereof.
(c) Conditions to Issuance. No LC Issuing Bank shall issue any Letter
of Credit unless:
(i) such Letter of Credit shall be satisfactory in form and
substance to such LC Issuing Bank,
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(ii) the Borrower shall have executed and delivered such
other instruments and agreements relating to such Letter of Credit as
such LC Issuing Bank shall have reasonably requested,
(iii) such LC Issuing Bank shall have confirmed with the Agent
on the date of such issuance that the limitations specified in clauses
(i), (ii) and (iii) of subsection (a) of this Section will not be
exceeded immediately after such Letter of Credit is issued, and
(iv) such LC Issuing Bank shall not have been notified in
writing by the Borrower or the Agent expressly to the effect that any
condition specified in clause (d) or (e) of Section 3.02 is not
satisfied at the time such Letter of Credit is to be issued.
(d) Expiry Dates. No Letter of Credit shall have an expiry date
later than the fifth Domestic Business Day before the Termination Date. Subject
to the preceding sentence, each Letter of Credit issued hereunder shall expire
on or before the first anniversary of the date of such issuance; provided that
the expiry date of any Letter of Credit may be extended from time to time (i) at
the Borrower's request for a period not exceeding one year or (ii) in the case
of an Evergreen Letter of Credit, automatically, in each case so long as such
extension is granted (or the last day on which notice can be given to prevent
such extension occurs) no earlier than three months before the then existing
expiry date thereof.
(e) Notice of Proposed Extensions of Expiry Dates. The relevant LC
Issuing Bank shall give the Agent at least three Domestic Business Days' notice
before such LC Issuing Bank extends (or allows an automatic extension of) the
expiry date of any Letter of Credit issued by it. Such notice shall identify
such Letter of Credit, the date on which it is to be extended (or the last day
on which notice can be given to prevent such extension) and the date to which it
is to be extended. Promptly after it receives such notice, the Agent shall
notify each Bank of the contents thereof. No LC Issuing Bank shall extend (or
allow the extension of) the expiry date of any Letter of Credit if (x) such
extension does not comply with subsection (d) of this Section, (y) such LC
Issuing Bank shall not have confirmed with the Agent on the date of such
extension that the limitations specified in clauses (i), (ii) and (iii) of
subsection (a) of this Section will not be exceeded immediately after such
Letter of Credit is extended, or (z) such LC Issuing Bank shall have been
notified by the Borrower or the Agent expressly to the effect that any condition
specified in clause (d) or (e) of Section 3.02 is not satisfied at the time of
such proposed extension.
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(f) Notice of Actual Issuances and Extensions. Promptly after it issues
any Letter of Credit or extends any Letter of Credit (or allows any Evergreen
Letter of Credit to be extended), the relevant LC Issuing Bank will notify the
Agent of the date, face amount, beneficiary or beneficiaries and expiry date or
extended expiry date of such Letter of Credit. Promptly after it receives such
notice, the Agent shall notify each Bank of the contents thereof and the amount
of such Bank's participation in such Letter of Credit. Promptly after it issues
any Letter of Credit, the relevant LC Issuing Bank will send a copy of such
Letter of Credit to the Agent.
(g) Drawings. If an LC Issuing Bank receives a demand for payment under
any Letter of Credit issued by it and determines that such demand should be
honored, such LC Issuing Bank shall (i) promptly notify the Borrower and the
Agent as to the amount to be paid by such LC Issuing Bank as a result of such
demand and the date of such payment (an "LC Payment Date") and (ii) make such
payment in accordance with the terms of such Letter of Credit.
(h) Reimbursement by the Borrower. (A) If any amount is drawn under any
Letter of Credit, the Borrower irrevocably and unconditionally agrees to
reimburse the relevant LC Issuing Bank for such amount, together with any and
all reasonable charges and expenses which such LC Issuing Bank may pay or incur
relative to such drawing. Such reimbursement shall be due and payable on the
relevant LC Payment Date or the date on which such LC Issuing Bank notifies the
Borrower of such drawing, whichever is later; provided that, if such notice is
given after 12:00 Noon (New York time) on the later of such dates, such
reimbursement shall be due and payable on the next following Domestic Business
Day (the date on which it is due and payable being an "LC Reimbursement Due
Date").
(B) In addition, the Borrower agrees to pay, on the applicable LC
Reimbursement Due Date, interest on each amount drawn under a Letter of Credit,
for each day from and including the date such amount is drawn to but excluding
such LC Reimbursement Due Date, at a rate per annum equal to the sum of the Base
Rate Margin for such day plus the Base Rate for such day. The Borrower also
agrees to pay, on demand, interest on any overdue amount (including any overdue
interest) payable under this subsection (h), for each day from and including the
date when such amount becomes due to but excluding the date such amount is paid
in full, at a rate per annum equal to the sum of 2% plus the Base Rate Margin
for such day plus the Base Rate for such day.
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(C) Each payment by the Borrower pursuant to this subsection (h)
shall be made to the relevant LC Issuing Bank in Federal or other funds
immediately available to it at its address specified in or pursuant to Section
10.01.
(i) Payments by Banks. (A) If the Borrower fails to pay any LC
Reimbursement Obligation in full when due, the relevant LC Issuing Bank may
notify the Agent of the unreimbursed amount and request that the Banks reimburse
such LC Issuing Bank for their respective Commitment Percentages thereof.
Promptly after it receives any such notice, the Agent shall notify each Bank of
the unreimbursed amount and such Bank's Commitment Percentage thereof. Upon
receiving such notice from the Agent, each Bank shall make available to such LC
Issuing Bank, at its address specified in or pursuant to Section 10.01, an
amount equal to such Bank's Commitment Percentage of such unreimbursed amount,
in Federal or other funds immediately available to such LC Issuing Bank, by 3:00
P.M. (New York time) (i) on the day such Bank receives such notice if it is
received at or before 12:00 Noon (New York time) on such day or (ii) on the next
Domestic Business Day if such notice is received after 12:00 Noon (New York
time) on the date of receipt, in each case together with interest on such amount
for each day from and including the relevant LC Payment Date to but excluding
the day such payment is due from such Bank at the Federal Funds Rate for such
day. Upon payment in full thereof, such Bank shall be subrogated to the rights
of such LC Issuing Bank against the Borrower to the extent of such Bank's
Commitment Percentage of the related LC Reimbursement Obligation (including
interest accrued thereon).
(B) If any Bank fails to pay when due any amount to be paid by it
pursuant to clause (A) of this subsection, interest shall accrue on such Bank's
obligation to make such payment, for each day from and including the date such
payment became due to but excluding the date such Bank makes such payment, at a
rate per annum equal to (x) for each day from the day such payment is due to the
third succeeding Domestic Business Day, inclusive, the Federal Funds Rate for
such day and (y) for each day thereafter the sum of 2% plus the Base Rate Margin
for such day plus the Base Rate for such day.
(C) If the Borrower shall reimburse any LC Issuing Bank for any
drawing with respect to which any Bank shall have made funds available to such
LC Issuing Bank in accordance with clause (A) of this subsection, such LC
Issuing Bank shall promptly upon receipt of such reimbursement distribute to
such Bank its Commitment Percentage thereof, including interest, to the extent
received by such LC Issuing Bank.
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(j) Exculpatory Provisions. The obligations of the Borrower and the
Banks under this Section shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower or any Bank may have or have had against any LC Issuing Bank,
any Bank, any beneficiary of any Letter of Credit, the Agent or any other
Person. The Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to the use of such Letter of
Credit by such beneficiary. None of the LC Issuing Banks, the Banks, the Agent
and their respective officers, directors, employees and agents shall be
responsible for, and the obligations of each Bank to make payments to each LC
Issuing Bank and of the Borrower to reimburse each LC Issuing Bank for drawings
pursuant to this Section (other than obligations resulting solely from the gross
negligence or willful misconduct of the relevant LC Issuing Bank) shall not be
excused or affected by, among other things, (i) the use which may be made of any
Letter of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
presented under any Letter of Credit or of any endorsements thereon, even if
such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (iii) payment by any LC Issuing Bank against
presentation of documents to it which do not comply with the terms of the
relevant Letter of Credit; or (iv) any dispute between or among the Borrower,
any beneficiary of any Letter of Credit or any other Person or any claims or
defenses whatsoever of the Borrower or any other Person against any beneficiary
of any Letter of Credit. No LC Issuing Bank shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit.
Any action taken or omitted by the Agent, any LC Issuing Bank or any Bank in
connection with any Letter of Credit and the related drafts and documents, if
done without willful misconduct or gross negligence, shall be binding on the
Borrower and shall not place the Agent, any LC Issuing Bank or any Bank under
any liability to the Borrower.
(k) Indemnification by Borrower. The Borrower agrees to indemnify and
hold harmless each Bank, each LC Issuing Bank and the Agent (collectively, the
"LC Indemnitees") from and against any and all claims, damages, losses,
liabilities, costs or expenses (including, without limitation, the reasonable
fees and disbursements of counsel) which such LC Indemnitee may reasonably incur
(or which may be claimed against such LC Indemnitee by any Person whatsoever) by
reason of or in connection with any execution and delivery or transfer of or
payment or failure to pay under any Letter of Credit or any actual or proposed
use of any Letter of Credit, including any claims, damages, losses, liabilities,
costs or expenses which any LC Issuing Bank may incur by reason of any Bank's
failure to
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comply with its obligations to such LC Issuing Bank hereunder in connection with
any Letter of Credit (but nothing herein contained shall affect any rights the
Borrower may have against such defaulting Bank); provided that the Borrower
shall not be required to indemnify any LC Issuing Bank for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of such LC Issuing Bank
in determining whether a request presented under any Letter of Credit issued by
it complied with the terms of such Letter of Credit or (ii) such LC Issuing
Bank's failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Letter of Credit. Nothing in this subsection is intended to limit the
obligations of the Borrower under any other provision of this Section.
(l) Indemnification by Banks. The Banks shall, ratably in proportion to
their Commitment Percentages, indemnify each LC Issuing Bank (to the extent not
reimbursed by the Borrower) against any claims, damages, losses, liabilities,
reasonable costs and reasonable expenses (including, without limitation,
reasonable fees and disbursements of counsel) that any such indemnitee may
suffer or incur in connection with this Section or any action taken or omitted
by such indemnitee under this Section; provided that the Banks shall not be
required to indemnify any LC Issuing Bank for any such claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by
(i) its own gross negligence or willful misconduct, (ii) its failure to pay
under any Letter of Credit issued by it after the presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit or (iii) its liabilities under any Letter of Credit issued by it in
contravention of subsection (c)(iii) of this Section or extended by it in
contravention of clause (y) of the last sentence of subsection (e) of this
Section (to the extent that the limitations referred to therein were in fact
exceeded).
(m) Liability for Damages. Nothing in this Section shall preclude the
Borrower or any Bank from asserting against any LC Issuing Bank any claim for
direct (but not consequential) damages suffered by the Borrower or such Bank to
the extent, but only to the extent, caused by (A) the willful misconduct or
gross negligence of such LC Issuing Bank in determining whether a request
presented under any Letter of Credit issued by it complied with the terms
thereof or (B) such LC Issuing Bank's failure to pay under any such Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions thereof.
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(n) Dual Capacities. In its capacity as a Bank, each LC Issuing Bank
shall have the same rights and obligations under this Section as any other Bank.
(o) Information to be Provided to Agent. The LC Issuing Banks shall
furnish to the Agent upon request such information as the Agent shall reasonably
request in order to calculate (i) the Aggregate LC Exposure existing from time
to time and (ii) the amount of any fee payable for the account of the Banks
under Section 2.06(b).
ARTICLE 3
CONDITIONS
SECTION 3.01. Closing. The closing hereunder shall occur upon the
satisfaction of the following events (in the case of each document to be
received, such document to be dated the Closing Date unless otherwise
indicated):
(a) receipt by the Agent of a duly executed Note for the account of
each Bank dated on or before the Closing Date and complying with the provisions
of Section 2.13;
(b) receipt by the Agent of an opinion of Winthrop, Stimson, Xxxxxx &
Xxxxxxx, counsel for the Obligors, substantially in the form of Exhibit B hereto
and covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(c) receipt by the Agent of an opinion of Xxxxx Xxxx & Xxxxxxxx,
special counsel for the Agent, substantially in the form of Exhibit C hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Required Banks may reasonably request;
(d) receipt by the Agent of duly executed counterparts of each of the
Collateral Documents, together with (i) evidence satisfactory to the Agent of
the effectiveness and perfection (to the extent required thereby) of the Liens
contemplated thereby (including the filing of UCC-1's and the delivery of any
promissory notes and stock certificates comprising the Collateral) or, with
respect to the Mortgages, arrangements satisfactory to the Agent for the prompt
recording thereof; (ii) opinions of Ice Xxxxxx Xxxxxxx & Xxxx, special Indiana
counsel, Powell, Goldstein, Xxxxxx & Xxxxxx, special Georgia counsel, Xxxxxxx &
Xxxxxx, special New Jersey counsel, and Xxxx Xxxxxx Spears Lubersky LLP, special
Washington counsel, substantially in the form of Exhibit H hereto, with such
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changes as are acceptable to the Agent; and (iii) with respect to each property
subject to a Mortgage (A) policies of title insurance (or irrevocable and
binding commitments, dated and recertified as of the Closing Date, to issue such
policies), on forms issued by the American Land Title Association and otherwise
in form and substance reasonably satisfactory to the Agent and issued by such
title insurance company or companies as are acceptable to the Agent, with all
premiums, expenses and fees paid or caused to be paid by the Borrower, insuring
(or committing to insure) the Liens created under each Mortgage, in such amounts
as the Agent shall request, subject only to Liens permitted under the Loan
Documents, containing such endorsements and affirmative assurances as are
satisfactory to the Agent, and reinsured in amounts and under reinsurance
agreements in form and substance satisfactory to the Agent; (B) recent
"as-built" surveys that comply with the current Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys and that are otherwise in form and
substance satisfactory to the Agent; and (C) to the extent requested by the
Agent, environmental reports with respect to such properties in form and
substance satisfactory to the Agent;
(e) receipt by the Agent of evidence satisfactory to it of the
insurance coverage required by Section 5.03 and the Collateral Documents;
(f) receipt by the Agent of a certificate of the chief executive
officer of the Borrower as to the solvency of the Borrower, in form acceptable
to the Banks;
(g) receipt by the Agent of all documents the Agent may reasonably
request relating to the existence of the Obligors, the corporate authority for
and the validity of the Loan Documents, and any other matters relevant hereto,
all in form and substance satisfactory to the Agent;
(h) receipt by the Agent of payment in full of all costs, fees,
expenses (including, without limitation, legal fees and expenses, title
premiums, survey charges and recording taxes and fees) and other amounts payable
for the account of the Banks or the Agent in the amounts previously agreed upon
to be payable on or before the Closing Date;
(i) there shall not be pending or, to the best of the Borrower's
knowledge, threatened, any action, suit or other proceeding (1) with respect to
which, in the judgment of the Required Banks, there is a reasonable possibility
of a decision which could reasonably be expected to have a Material Adverse
Effect or (2) which, in the judgment of the Required Banks, in any manner draws
into question the validity or enforceability of the Loan Documents;
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(j) receipt by the Agent and the Banks of a pro forma consolidated
balance sheet and consolidated statement of operations of the Borrower and its
Consolidated Subsidiaries, which pro forma financial statements shall be
satisfactory to the Agent and demonstrate that the Borrower is in compliance
with the covenants contained in Sections 5.11 to 5.14, inclusive, after giving
effect to all Borrowings and issuances of Letters of Credit on the Closing Date;
(k) receipt by the Agent of payoff letters in substantially the form
attached as Exhibit J hereto or such other evidence as the Agent may reasonably
require that all Debt of the Borrower and its Subsidiaries identified on
Schedule 1 hereto (other than Debt identified in Part B of such Schedule 1) has
been retired, and any commitments with respect thereto terminated, on terms and
conditions satisfactory to the Banks, and all Liens securing such Debt have been
discharged; and
(l) receipt by the Agent of evidence satisfactory to it that the
Borrower shall have received cash proceeds of not less than $72,750,000 (before
payment of related expenses estimated to be $600,000) from the issuance of the
Subordinated Notes.
Promptly after the Closing Date occurs, the Agent shall notify the Borrower and
the Banks thereof, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.02. Borrowings and Issuances of Letters of Credit. The
obligation of any Bank to make a Loan on the occasion of any Borrowing, and the
obligation of any LC Issuing Bank to issue (or extend or allow an extension of
the expiry date of) any Letter of Credit, are each subject to the satisfaction
of the following conditions:
(a) the Closing Date shall have occurred on or before May 15,
1997;
(b) receipt by the Agent of a Notice of Borrowing as required
by Section 2.02, or receipt by the relevant LC Issuing Bank of a notice
of proposed issuance or extension as required by Section 2.14(b) or
2.14(e), as the case may be;
(c) immediately after such Borrowing or issuance or extension
of a Letter of Credit, the aggregate Outstanding Committed Amounts will
not exceed the aggregate Commitments;
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(d) immediately before and after such Borrowing or issuance or
extension of a Letter of Credit, no Default shall have occurred and be
continuing; and
(e) the representations and warranties of the Obligors
contained in this Agreement shall be true on and as of the date of such
Borrowing or issuance or extension of a Letter of Credit.
Each Borrowing and each issuance or extension of a Letter of Credit hereunder
shall be deemed to be a representation and warranty by the Borrower on the date
of such Borrowing or issuance or extension of a Letter of Credit as to the facts
specified in clauses (c), (d) and (e) of this Section and by each Obligor, with
respect to itself only, as to the fact specified in clause (e) of the Section.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants, and each Guarantor represents and
warrants, with respect to itself only, as to the matters set forth in Section
4.13, that:
SECTION 4.01. Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all corporate powers and
all material governmental licenses, consents, authorizations and approvals
required to carry on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention. The execution, delivery and performance by the Borrower of the
Loan Documents to which it is a party are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official (other than filings which have been made on or prior to the Closing
Date) and do not (i) contravene any provision of applicable law or regulation or
of the Borrower's certificate of incorporation or by-laws, (ii) contravene, or
constitute a default under, any agreement, judgment, injunction, order, decree
or other instrument binding upon the Borrower or any Subsidiary, the
consequences of which contravention or default, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (iii) except
as contemplated by the
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Collateral Documents, result in the creation or imposition of any Lien on any
asset of the Borrower or any Subsidiary.
SECTION 4.03. Binding Effect. Each of the Loan Documents (other than
the Notes) to which the Borrower is a party constitutes a valid and binding
agreement of the Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms except (i) as may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) as rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability, and (iii) as limited by principles of reasonableness,
good faith and fair dealing.
SECTION 4.04. Financial Information. (a) The consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of June 28, 1996 and the
related consolidated statements of operations, cash flows and stockholders'
equity for the Fiscal Year then ended, reported on by BDO Xxxxxxx, LLP, a copy
of which has been delivered to each of the Banks, fairly present, in conformity
with GAAP, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year.
(b) The unaudited consolidated balance sheet of the Company as of
December 27, 1996 and the related unaudited consolidated statements of
operations, cash flows and stockholders' equity for the six months then ended, a
copy of which has been delivered to the Banks, fairly present, in conformity
with GAAP, the consolidated financial position of the Borrower and its
Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such six-month period.
(c) Since June 28, 1996, there has been no material adverse change in
the business, financial position, results of operations or prospects of the
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.05. Litigation. There is no action, suit or proceeding
pending against, or to the best of the Borrower's knowledge threatened against
or affecting, the Borrower or any Subsidiary before any court or arbitrator or
any governmental body, agency or official (i) in which there is a reasonable
possibility of an adverse decision which could have a Material Adverse Effect or
(ii) which in any manner draws into question the validity or enforceability of
the Loan Documents.
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SECTION 4.06. Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any amendment
to any Plan, which has resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security under ERISA or
the Internal Revenue Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA.
SECTION 4.07. Environmental Compliance. (a) Except (x) to the extent
addressed by prior or present remediation activities by the Borrower and its
Subsidiaries or by third parties pursuant to contractual obligations or (y) to
the extent that the Environmental Liabilities of the Borrower and its
Subsidiaries, taken as a whole, that relate to or can reasonably be expected to
result from the matters referred to in clauses (i) through (vii), would not
exceed $6,000,000 for any individual issue arising at or relating to a
particular facility, or $15,000,000 in the aggregate:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been received, no complaint
has been served, no penalty has been assessed and, to the best of the
Borrower's knowledge, no investigation or review is pending or
threatened by any governmental or other entity with respect to any (A)
alleged violation by the Borrower or any Subsidiary of any
Environmental Law, (B) alleged failure by the Borrower or any
Subsidiary to have any environmental permit, certificate, license,
approval, registration or authorization required in connection with the
conduct of its business, (C) Regulated Activity or (D) Release of
Hazardous Substances;
(ii) other than Regulated Activity undertaken in compliance
with all applicable Environmental Laws, (A) neither the Borrower nor
any Subsidiary has engaged in any Regulated Activity and (B) no
Regulated Activity has occurred at or on any property now or previously
owned, leased or operated by the Borrower or any Subsidiary during the
period of such ownership, lease or operation by the Borrower or any
Subsidiary;
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(iii) to the best of the Borrower's knowledge, no
polychlorinated biphenyls, radioactive material, urea formaldehyde,
lead, asbestos, asbestos-containing material or underground storage
tank (active or abandoned) is or has been present at any property now
or previously owned, leased or operated by the Borrower or any
Subsidiary during the period of such ownership, lease or operation by
the Borrower or any Subsidiary;
(iv) no Hazardous Substance has been Released (and no written
notification of such Release has been filed) or is present (whether or
not in a reportable or threshold planning quantity) at, on or under any
property now or previously owned, leased or operated by the Borrower or
any Subsidiary during the period of such ownership, lease or operation
by the Borrower or any Subsidiary;
(v) to the best of the Borrower's knowledge, no property now
or previously owned, leased or operated by the Borrower or any
Subsidiary or any property to which the Borrower or any Subsidiary has,
directly or indirectly, transported or arranged for the transportation
of any Hazardous Substances, is listed or, to the best of the
Borrower's knowledge, proposed for listing, on the National Priorities
List promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA)
or on any similar federal, state or foreign list of sites requiring
investigation or clean-up;
(vi) there are no liens under Environmental Laws on any of the
real property or other assets owned or leased by the Borrower or any
Subsidiary, to the best of the Borrower's knowledge no government
actions have been taken or are in process which could subject any of
such properties or assets to such liens, and neither the Borrower nor
any Subsidiary would be required to place any notice or restriction
relating to Hazardous Substances at any property owned by it in any
deed to such property; and
(vii) there has been no environmental investigation, study,
audit, test, review or other analysis conducted of which the Borrower
has knowledge in relation to the current or prior business of the
Borrower or any property or facility now or previously owned, leased or
operated by the Borrower or any Subsidiary, access to which has not
been provided to the Banks at least five days prior to the date hereof.
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(b) For purposes of this Section, the terms "Borrower" and "Subsidiary"
shall include any business or business entity (including a corporation) which is
a predecessor, in whole or in part, of the Borrower or any Subsidiary.
SECTION 4.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Borrower or any
Subsidiary, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of taxes
or other governmental charges are, in the Borrower's opinion, adequate.
SECTION 4.09. Subsidiaries. (a) Each of the Borrower's corporate
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
(b) Schedule 2 lists all of the Subsidiaries of the Borrower as of the
Closing Date. Each Subsidiary of the Borrower is a Guarantor, and each Guarantor
is a direct or indirect Subsidiary of the Borrower.
SECTION 4.10. No Regulatory Restrictions on Borrowing. The Borrower is
not (i) an "investment company" within the meaning of the Investment Company Act
of 1940, as amended, (ii) a "holding company" or a "subsidiary company" of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended, or (iii) otherwise subject to any regulatory scheme which
restricts its ability to incur debt.
SECTION 4.11. Full Disclosure. (a) All information heretofore furnished
by the Borrower to the Agent or any Bank for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Bank will
be, to the best of the Borrower's knowledge, true and accurate in all material
respects on the date as of which such information is stated or certified in
light of the circumstances under which such information was provided. The
Borrower has, to the best of the Borrower's knowledge, disclosed to the Banks in
writing any and all facts which materially and adversely affect, or may affect
(to the extent the Borrower can now reasonably foresee), the business,
operations or financial
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condition of the Borrower and its Consolidated Subsidiaries, taken as a whole,
or the Obligors' ability to perform their obligations under the Loan Documents.
(b) The projected financial statements set forth in the Information
Memorandum were based on reasonable assumptions and as of their date represented
the best estimate of future performance of the Borrower and its Subsidiaries.
During the period from the respective dates as of which information is stated in
the Information Memorandum to and including the Closing Date, no event has
occurred and no condition has come into existence which would have caused the
projected financial statements therein to be materially misleading.
SECTION 4.12. Representations in Collateral Documents True and Correct.
Each of the representations and warranties of the Borrower contained in the
Collateral Documents is true and correct.
SECTION 4.13. Representations of Guarantors. Each Guarantor is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. The execution, delivery and
performance by each Guarantor of the Loan Documents to which it is a party are
within such Guarantor's corporate powers, have been duly authorized by all
necessary corporate action, require no action by or in respect of, or filing
with, any governmental body, agency or official and do not (i) contravene any
provision of applicable law or regulation or of the certificate of incorporation
or by-laws of such Guarantor, (ii) contravene, or constitute a default under,
any agreement, judgment, injunction, order, decree or other instrument binding
upon such Guarantor the consequences of which contravention or default, singly
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, or (iii) except as contemplated by the Collateral Documents, result in
the creation or imposition of any Lien on any asset of such Guarantor. The Loan
Documents to which each Guarantor is a party constitute valid and binding
agreements of such Guarantor, in each case enforceable against the Borrower in
accordance with their respective terms except (i) as may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights generally,
(ii) as rights of acceleration and the availability of equitable remedies may be
limited by equitable principles of general applicability, and (iii) as may be
limited by principles of reasonableness, good faith and fair dealing. Each of
the representations and warranties of each Guarantor contained in the Collateral
Documents to which such Guarantor is a party is true and correct.
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SECTION 4.14. Intellectual Property. The Borrower and each of its
Subsidiaries owns, possesses or holds under valid licenses all patents,
trademarks, service marks, trade names, copyrights, licenses and other
intellectual property rights that are necessary for the operation of their
respective properties and businesses, and neither the Borrower nor any of its
Subsidiaries is in violation of any provision thereof. Neither the Borrower nor
its Subsidiaries has received actual notice of, or knows of any valid basis for,
any claim of infringement of any material license, patent, trademark, trade
name, service xxxx, copyright, trade secret or any other intellectual property
right of others, and, to the best knowledge of the Borrower and each of its
Subsidiaries, there is no infringement or claim of infringement by others of any
material license, patent, trademark, trade name, service xxxx, copyright, trade
secret or other intellectual property right of the Borrower and its
Subsidiaries.
SECTION 4.15. Solvency. Subject to Section 9.07 hereof, as of the
Closing Date after giving effect to the transactions contemplated hereby to
occur on the Closing Date, and at all times thereafter: (i) the aggregate fair
market value of the assets of each of the Borrower and the Guarantors will
exceed its liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities), (ii) each of the Borrower and the Guarantors will
have sufficient cash flow to enable it to pay its debts as they mature and (iii)
none of the Borrower and the Guarantors will have unreasonably small capital for
the business in which it is engaged.
ARTICLE 5
COVENANTS
The Borrower agrees that, so long as any Bank has any Credit Exposure
hereunder or interest or fees accrued hereunder remain unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
Banks:
(a) as soon as available and in any event within 90 days after the end
of each Fiscal Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, cash flows and stockholders' equity for
such Fiscal Year, setting forth in each case in comparative form the figures for
the previous Fiscal Year, all reported on in a manner which would be acceptable
to the SEC by BDO Xxxxxxx, LLP or other independent public accountants of
nationally recognized standing;
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(b) as soon as available and in any event within 45 days after the end
of each of the first three Fiscal Quarters of each Fiscal Year, a consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as of the end of
such Fiscal Quarter, the related consolidated statement of operations for such
Fiscal Quarter and the related consolidated statements of cash flows for the
portion of the Fiscal Year ended at the end of such Fiscal Quarter, setting
forth in the case of each such statement of cash flows in comparative form the
figures for the corresponding period in the previous Fiscal Year, all certified
(subject to normal year-end adjustments) as to fairness of presentation and
consistency with GAAP by the Borrower's chief executive officer or chief
accounting officer;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
Borrower's chief executive officer or chief accounting officer (i) setting forth
in reasonable detail the calculations required to establish whether the Borrower
was in compliance with the requirements of Sections 5.09 to 5.17, inclusive, on
the date of such financial statements, and (ii) stating whether any Default
exists on the date of such certificate and, if any Default then exists, setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i) stating
whether anything has come to their attention to cause them to believe that any
Default existed on the date of such statements, and (ii) confirming the
calculations set forth in the officer's certificate delivered simultaneously
therewith pursuant to clause (c) above;
(e) within five Domestic Business Days after any officer of the
Borrower obtains knowledge of any Default, if such Default is then continuing, a
certificate of the Borrower's chief executive officer or chief accounting
officer setting forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto;
(f) as soon as reasonably practicable after any officer of the Borrower
obtains knowledge thereof, notice of any event or condition which has had or
threatens to have a Material Adverse Effect and the nature of such Material
Adverse Effect;
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(g) promptly after the mailing thereof to the Borrower's shareholders
generally, copies of all financial statements, reports and proxy statements so
mailed;
(h) promptly after the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) filed by the Borrower with the SEC;
(i) if and when any member of the ERISA Group (i) gives or is required
to give notice to the PBGC of any "reportable event" (as defined in Section 4043
of ERISA) with respect to any Plan which might reasonably constitute grounds for
a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or makes any amendment to any Plan which has resulted or
could reasonably result in the imposition of a Lien or the posting of a bond or
other security, a certificate of the Borrower's chief executive officer or chief
accounting officer setting forth details as to such occurrence and the action,
if any, which the Borrower or applicable member of the ERISA Group is required
or proposes to take;
(j) promptly, upon receipt of any complaint, order, citation, notice or
other written communication from any Person with respect to, or upon the
Borrower's obtaining knowledge of, (i) the existence or alleged existence of a
violation of any applicable Environmental Law or any Environmental Liability in
connection with any property now or previously owned, leased or operated by the
Borrower or any of its Subsidiaries, (ii) any Release of any Hazardous Substance
on such property or any part thereof in a quantity that is reportable under any
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applicable Environmental Law, and (iii) any pending or threatened proceeding for
the termination, suspension or non-renewal of any permit required under any
applicable Environmental Law, in each case (x) which could result in liability
or expenses in excess of $6,000,000 for any individual issue arising at or
relating to a particular facility, or $15,000,000 in the aggregate or (y) which
individually or in the aggregate could have a material adverse effect on the
condition (financial or otherwise), assets, liabilities (including, without
limitation, environmental liabilities) or prospects, taken as a whole, of the
Borrower and its Subsidiaries, notice thereof; and
(k) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries (including,
without limitation, any Guarantor) as the Agent, at the request of any Bank, may
reasonably request.
SECTION 5.02. Payment of Obligations. The Borrower will pay and
discharge, and will cause each Subsidiary to pay and discharge, at or before
maturity, all of their respective material obligations and liabilities
(including, without limitation, tax liabilities and claims of materialmen,
warehousemen and the like which if unpaid might by law give rise to a Lien other
than inchoate statutory liens in respect of obligations not yet due and
payable), except where the same are contested in good faith by appropriate
proceedings, and will maintain, and will cause each Subsidiary to maintain, in
accordance with GAAP, any appropriate reserves for the accrual thereof.
SECTION 5.03. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Subsidiary to keep, all material property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each Subsidiary to, maintain
(either in the Borrower's name or in such Subsidiary's own name) with
financially sound and responsible insurance companies, insurance on all their
respective properties in at least such amounts, against at least such risks and
with no greater risk retention as are usually maintained, insured against or
retained, as the case may be, in the same general area by companies of
established repute engaged in the same or a similar business. The Borrower will
furnish to the Banks, upon request from the Agent, information presented in
reasonable detail as to the insurance so carried.
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SECTION 5.04. Conduct of Business and Maintenance of Existence. The
Borrower and its Subsidiaries will engage in business activity involving the
manufacture and distribution of packaging materials, other disposable products,
and related materials and related businesses, and will preserve, renew and keep
in full force and effect their respective corporate existences and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business; provided that nothing in this Section shall
prohibit:
(i) the merger of a Subsidiary into the Borrower if, after
giving effect thereto, no Default shall have occurred and be
continuing;
(ii) the merger or consolidation of a Subsidiary with or into
a Person other than the Borrower if the corporation surviving such
consolidation or merger is a Subsidiary and, after giving effect
thereto, no Default shall have occurred and be continuing;
(iii) the merger or consolidation of the Borrower with or into
any other Person if the corporation surviving such consolidation or
merger is the Borrower and, after giving effect thereto, no Default
shall have occurred and be continuing; or
(iv) the termination of the corporate existence of a
Subsidiary if the Borrower in good faith determines that such
termination is in the best interest of the Borrower and is not
materially disadvantageous to the Banks.
The Borrower will not, and will not permit any of its Subsidiaries to,
engage in any line or lines of business activity other than those engaged in on
the Closing Date and any other line or lines of business activity involving the
manufacture and distribution of packaging materials, other disposable products,
and related materials and related businesses.
SECTION 5.05. Compliance with Laws. The Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder), except where the necessity or manner of
compliance therewith is contested in good faith by appropriate proceedings.
SECTION 5.06. Inspection of Property, Books and Records. The Borrower
will keep, and will cause each Subsidiary to keep, proper books of record and
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account in which full and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of any Bank at such Bank's
expense to visit and inspect any of their respective properties, to examine and
make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be requested.
SECTION 5.07. Mergers and Sales of Assets. (a) The Borrower will not,
and will not permit any Subsidiary to, consolidate or merge with or into any
other Person; provided that the Borrower may merge with any other Person if the
corporation surviving the merger is the Borrower, and any Subsidiary may merge
with any other Person if the corporation surviving the merger is the Borrower or
a Subsidiary, in each case only if immediately after giving effect to such
merger, no Default shall have occurred and be continuing.
(b) No Obligor will sell, lease or otherwise transfer, directly or
indirectly, any Collateral except for (i) dispositions of inventory, cash, cash
equivalents and other cash management investments and obsolete, unused or
unnecessary equipment, in each case in the ordinary course of business, (ii)
dispositions to the Borrower or a Subsidiary, (iii) dispositions of portions of
any business acquired in an Acquisition, so long as such portions have an
aggregate value not in excess of 15% of the aggregate purchase price for such
Acquisition, and (iv) Permitted Dispositions (as defined in the Mortgages).
SECTION 5.08. Use of Proceeds. The proceeds of the Loans and the
Letters of Credit will be used by the Borrower (a) in an aggregate amount not to
exceed $50,000,000 (plus any amount by which the Commitments have been increased
pursuant to Section 2.01(b)), to finance Acquisitions otherwise permitted under
the terms of this Agreement, and (b) for general corporate purposes, including
for working capital purposes. Neither any proceeds of the Loans nor any Letter
of Credit will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of buying or carrying any "margin stock"
within the meaning of Regulation U.
SECTION 5.09. Negative Pledge. Neither the Borrower nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
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(a) any Lien existing on any asset of any Person at the time such Person
becomes a Subsidiary and not created in contemplation of such event;
(b) any Lien on any asset securing Debt in an aggregate principal amount at
any time outstanding not to exceed $2,500,000 incurred or assumed for the
purpose of financing all or any part of the cost of acquiring, constructing or
improving such asset, provided that such Lien attaches to such asset
concurrently with or within 180 days after the acquisition thereof;
(c) any Lien on any asset of any Person existing at the time such Person is
merged or consolidated with or into the Borrower or a Subsidiary and not created
in contemplation of such event;
(d) any Lien existing on any asset prior to the acquisition thereof by the
Borrower or a Subsidiary and not created in contemplation of such acquisition;
(e) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by any of the foregoing
clauses of this Section, provided that such Debt is not secured by any
additional assets and the amount of such Debt is not increased (except for the
amount of any premium required to be paid pursuant to the terms of such Debt,
plus expenses reasonably incurred by the issuer of such Debt, in connection with
such refinancing, extension, renewal or refunding);
(f) Liens arising in the ordinary course of its business which (i) do not
secure Debt or Derivatives Obligations and (ii) do not secure any single
obligation or liability (or class of obligations or liabilities having a common
cause) in an amount exceeding $5,000,000;
(g) Liens created by the Collateral Documents;
(h) Permitted Encumbrances (as defined in the Mortgages) and those Liens
permitted to be contested under Section 2.06 of the Mortgages;
(i) Liens in favor of the Trustee under the Indenture governing the
Subordinated Notes, to the extent such Liens are permitted under the Indenture;
and
(j) Liens to secure a Debt owed to the Borrower or a Guarantor.
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SECTION 5.10. Limitation on Debt. The Borrower will not, and will not
permit any of its Subsidiaries to, incur or at any time be liable with respect
to any Debt except:
(a) Debt under this Agreement;
(b) Debt secured by Liens permitted by Section 5.09;
(c) Debt of the Borrower owed to a Guarantor, or Debt of a Guarantor owed
to the Borrower or another Guarantor, provided that any such Debt shall be
evidenced by an instrument in substantially the form of Exhibit I hereto;
(d) Subordinated Debt; and
(e) Debt of the Borrower and its Subsidiaries not otherwise permitted by
this Section incurred after the Closing Date in an aggregate principal amount at
any time outstanding not to exceed $5,000,000; provided that the aggregate
principal amount of Debt incurred by all Subsidiaries pursuant to this clause
(f) shall not exceed $2,500,000 at any time outstanding.
SECTION 5.11. Minimum Consolidated Net Worth. Consolidated Net Worth will
at no time during any fiscal period set forth below be less than an amount equal
to the sum of (i) $22,000,000 plus (ii) an amount equal to 75% of Consolidated
Net Income for each Fiscal Quarter ending after June 27, 1997 but before the
date of determination, in each case, for which Consolidated Net Income is
positive (but with no deduction on account of negative Consolidated Net Income
for any Fiscal Quarter) plus (iii) 100% of the aggregate net proceeds, including
the fair market value of property other than cash (as determined in good faith
by the Borrower's board of directors), received by the Borrower from the
issuance and sale after the date hereof of any capital stock of the Borrower
(other than the proceeds of any issuance and sale of any capital stock (x) to a
Subsidiary or (y) which is required to be redeemed, or is redeemable at the
option of the holder, if certain events or conditions occur or exist or
otherwise) or in connection with the conversion or exchange of any Debt of the
Borrower into capital stock of the Borrower after the date hereof. For purposes
of determining compliance with this Section, Special Expenses and payments
permitted pursuant to the proviso to the definition of Restricted Payment shall
not be taken into account in calculating Consolidated Net Worth (and each
certificate delivered pursuant to Section 5.01(c) with respect to compliance
shall set forth the foregoing adjustments in reasonable detail).
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SECTION 5.12. Fixed Charge Coverage Ratio. On the last day of each Fiscal
Quarter ending during one of the periods set forth below, the Fixed Charge
Coverage Ratio will not be less than the ratio set forth below opposite such
period:
Period Ratio
------ -----
Fourth Fiscal Quarter of 1997 through
Second Fiscal Quarter of 1999 2.00:1.00
Third Fiscal Quarter of 1999 through
Second Fiscal Quarter of 2000 2.25:1.00
Third Fiscal Quarter of 2000 through
Fourth Fiscal Quarter of 2000 2.30:1.00
First Fiscal Quarter of 2001 through
Fourth Fiscal Quarter of 2001 2.50:1.00
First Fiscal Quarter of 2002 through
Third Fiscal Quarter of 2002 2.75:1.00
For purposes of determining compliance with this Section, Special Expenses shall
not be taken into account in calculating Consolidated EBITDA (and each
certificate delivered pursuant to Section 5.01(c) with respect to compliance
shall set forth the foregoing adjustments in reasonable detail).
SECTION 5.13. Leverage Ratio. At no time during any Fiscal Quarter ending
during one of the periods set forth below shall the Leverage Ratio be greater
than the ratio set forth below opposite such period.
Period Ratio
------ -----
Fourth Fiscal Quarter of 1997 through
Second Fiscal Quarter of 1998 5.00:1.00
Third Fiscal Quarter of 1998 4.75:1.00
Fourth Fiscal Quarter of 1998 through
Second Fiscal Quarter of 1999 4.50:1.00
Third Fiscal Quarter of 1999 through
Fourth Fiscal Quarter of 1999 4.25:1.00
First Fiscal Quarter of 2000 through
Fourth Fiscal Quarter of 2000 4.00:1.00
First Fiscal Quarter of 2001 through
Fourth Fiscal Quarter of 2001 3.75:1.00
First Fiscal Quarter of 2002 through
Third Fiscal Quarter of 2002 3.50:1.00
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For purposes of determining compliance with this Section, Special Expenses shall
not be taken into account in calculating Consolidated EBITDA (and each
certificate delivered pursuant to Section 5.01(c) with respect to compliance
shall set forth the foregoing adjustments in reasonable detail).
SECTION 5.14. Minimum Consolidated EBITDA. Consolidated EBITDA for any four
consecutive Fiscal Quarters will at no time be less than $24,000,000. For
purposes of determining compliance with this Section, Special Expenses shall not
be taken into account in calculating Consolidated EBITDA (and each certificate
delivered pursuant to Section 5.01(c) with respect to compliance shall set forth
the foregoing adjustments in reasonable detail).
SECTION 5.15. Restricted Payments. Neither the Borrower nor any Subsidiary
will declare or make any Restricted Payment.
SECTION 5.16. Investments. Neither the Borrower nor any Subsidiary will (a)
hold, make or acquire any Restricted Investment in any Person or (b) consummate
or agree to consummate any Acquisition unless:
(i) both before and immediately after giving effect to such
Acquisition or Restricted Investment, no Default shall have occurred and be
continuing;
(ii) immediately after any such Restricted Investment is made or
acquired or any such Acquisition is consummated or agreed to, the sum,
without duplication, of (A) the aggregate amount expended by the Borrower
and its Subsidiaries with respect to Acquisitions (including the value of
capital stock of the Borrower used to make Acquisitions) after the date
hereof plus (B) the aggregate net book value of all Restricted Investments
does not in the aggregate exceed the sum of (x) an amount equal to 50% of
the aggregate amount of Excess Cash Flow for each Fiscal Year ending after
the date hereof (any such incremental amount pursuant to this clause (x) to
be added on the date of receipt of the financial statements referred to in
Section 5.01 for such Fiscal Year), and (y) an additional amount equal to
$100,000,000 for all periods after the Closing Date; and
(iii) in the case of an Acquisition, (A) the Person whose assets,
securities or other equity interests are acquired by the Borrower or its
Subsidiaries is engaged in the same line of business activity as the
Borrower and its Subsidiaries or any other line or lines of business
activity involving the manufacture and distribution of packaging materials,
other
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disposable products, and related materials and related businesses; (B)
immediately after such Acquisition is consummated, the aggregate proceeds
of the Loans expended by the Borrower and its Subsidiaries in connection
with Acquisitions made after the Closing Date does not exceed $50,000,000
(plus any amount by which the Commitments have been increased pursuant to
Section 2.01(b)); (C) the purchase price for such Acquisition does not
exceed $100,000,000; and (D) the Borrower would be in compliance with
Sections 5.11 to 5.14, inclusive, after the Fixed Charge Coverage Ratio,
Leverage Ratio and Consolidated EBITDA are each adjusted with respect to
such Acquisition on the date of consummation or proposed consummation
thereof (the "Transaction Date") as follows: in calculating Consolidated
EBITDA, Consolidated Interest Expense and Consolidated Capital
Expenditures, (1) the incurrence of any Debt incurred in connection with
such Acquisition and the application of the proceeds therefrom shall be
assumed to have occurred on the first day of the period of four consecutive
Fiscal Quarters (or other period) for which such amounts are required to be
determined in accordance with the definitions of Fixed Charge Coverage
Ratio and Leverage Ratio (the "Reference Period"), (2) pro forma effect
shall be given to any Acquisition (including adjustments to operating
results permitted to be made in accordance with generally accepted
accounting principles and any pro forma cost savings which the Borrower
expects to realize and to the inclusion of which the Agent and, if such
expected pro forma cost savings are in excess of $2,000,000, the Required
Banks, have consented (such consents not to be unreasonably withheld or
delayed)) which occurs during the Reference Period or subsequent to the
Reference Period and prior to the Transaction Date as if such Acquisition
had occurred on the first day of the Reference Period, (3) the incurrence
of any Debt during the Reference Period or subsequent to the Reference
Period and prior to the Transaction Date and the application of the
proceeds therefrom shall be assumed to have occurred on the first day of
such Reference Period and (4) Consolidated Interest Expense attributable to
any Debt (whether existing or being incurred) bearing a floating interest
rate shall be computed on a pro forma basis as if the rate in effect on the
date of computation had been the applicable rate for the entire period,
unless such Person or any of its Subsidiaries is a party to an interest
party swap or cap or similar agreement (which shall remain in effect for
the twelve month period after the Transaction Date) which has the effect of
fixing the interest rate on the date of computation, in which case such
rate (whether higher or lower) shall be used.
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At least thirty (30) days prior to the closing date for any Acquisition (or, in
the case of any Acquisition that occurs within 30 days after the Effective Date,
within such time as the Borrower and the Agent agree), the Borrower shall have
delivered to each of the Bank Parties (i) a compliance certificate certifying
the Borrower's compliance with the provisions of this Agreement, including,
without limitation, Sections 5.11 to 5.14, inclusive, after giving effect on a
pro forma basis to such Acquisition and (ii) a report of the chief executive
officer or chief accounting officer of the Borrower, in a form and providing
sufficient detail and justification for the information provided therein,
including assumptions, as shall be found to be reasonable by the Agent in its
good faith discretion after completion of reasonable due diligence, establishing
(x) the basis for such certification and (y) that after giving effect to such
Acquisition and the financing therefor, the Borrower shall be in compliance at
the end of each Fiscal Year until the Termination Date with the covenants
contained in Sections 5.11 to 5.14, inclusive.
SECTION 5.17. Consolidated Capital Expenditures. Consolidated Capital
Expenditures relating to operations existing on the Closing Date of the Borrower
and its Subsidiaries existing on the Closing Date will not exceed $10,000,000
for any Fiscal Year; provided that if the aggregate amount of such Consolidated
Capital Expenditures actually made in any Fiscal Year shall be less than
$10,000,000 (before giving effect to any Rollover Amount from prior years
permitted in such Fiscal Year), then the amount of such shortfall may be added
to the amount of such Consolidated Capital Expenditures permitted for succeeding
Fiscal Years (such shortfall amount in any Fiscal Year, the "Rollover Amount"
for such Fiscal Year); provided further, however, that such Consolidated Capital
Expenditures for any Fiscal Year (after giving effect to any Rollover Amount
from prior years) will under no circumstances exceed $20,000,000.
SECTION 5.18. Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, pay any funds to or for
the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Borrower or such Subsidiary as could have been obtained from a third party
that was not an Affiliate; provided that the foregoing provisions of this
Section shall not prohibit (i) any such Subsidiary from declaring or paying any
lawful dividend or other payment ratably in respect of all its capital stock of
the relevant class so long as,
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after giving effect thereto, no Default shall have occurred and be continuing,
or (ii) so long as no Default has occurred and is continuing, payments by the
Borrower, not exceeding $600,000 in the aggregate in any fiscal year, required
to be made to Tekni-Plex Partnership or MST Partners L.P. or their respective
affiliates or partners under the terms of existing agreements and notes.
SECTION 5.19. Limitation on Restrictions Affecting Subsidiaries. Neither
the Borrower nor any of its Subsidiaries will enter into, or suffer to exist,
any agreement with any Person, other than this Agreement, which prohibits or
limits the ability of any Subsidiary to (a) pay dividends or make other
distributions to, or pay any Debt owed to, the Borrower or any Subsidiary, (b)
make loans or advances to the Borrower or any Subsidiary, (c) transfer any of
its properties or assets to the Borrower or any Subsidiary or (d) create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired (other than with respect to assets
subject to consensual liens permitted under Section 5.09); provided that the
foregoing shall not apply to (i) restrictions in effect on the date of this
Agreement contained in agreements governing Debt outstanding on the date of this
Agreement (including, without limitation, the Subordinated Notes) and, if such
Debt is renewed, extended or refinanced, restrictions in the agreements
governing the renewed, extended or refinancing Debt (and successive renewals,
extensions and refinancings thereof) if such restrictions are no more
restrictive than those contained in the agreements governing the Debt being
renewed, extended or refinanced, or (ii) restrictions applicable to an acquired
entity or its assets in effect at the Acquisition thereof by the Borrower or a
Subsidiary and not incurred in contemplation of such Acquisition.
SECTION 5.20. Retirement of Subordinated and Other Long-Term Debt. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, redeem, retire, purchase, acquire, defease or otherwise make any
payment in respect of the principal of any Subordinated Debt other than
regularly scheduled mandatory repayments, redemptions or sinking fund payments.
The Borrower will not, and will not permit any of its Subsidiaries to, consent
to or solicit any amendment, supplement, waiver or other modification of any
agreement or instrument evidencing or governing any Subordinated Debt, without
the prior written consent of the Required Banks. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, optionally
redeem, retire, purchase, acquire, defease or otherwise make any payment in
respect of the principal of any other long-term Debt (other than the Loans).
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SECTION 5.21. Limitation on Fixed-Price Contracts. Excluding contracts,
purchase orders and arrangements in respect of which and to the extent the
Borrower or any Subsidiary has entered into option, swap or other hedging
arrangements, the Borrower will not, and will not permit any of its Subsidiaries
to, enter into any contract, purchase order or other arrangement providing for
delivery more than six months after the execution thereof pursuant to which the
Borrower or any Subsidiary agrees to manufacture, produce, supply, sell,
distribute or otherwise transfer any material or product at a fixed price that
may not be adjusted to reflect fluctuations in market conditions and such
Person's cost of goods sold if the aggregate contract price to be paid under all
such arrangements during any fiscal year would exceed 10% of the consolidated
net sales of the Borrower and its Subsidiaries during such year.
SECTION 5.22. Further Assurances. (a) The Borrower will, and will cause
each of the other Obligors to, at the Borrower's sole cost and expense, do,
execute, acknowledge and deliver all such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment and transfers as the Agent shall
from time to time request, which may be necessary in the reasonable judgment of
the Agent from time to time to assure, perfect, convey, assign and transfer to
the Agent the property and rights conveyed or assigned pursuant to the
Collateral Documents, or which may facilitate the performance of the terms of
the Collateral Documents, or the filing, registering or recording of the
Collateral Documents. Without limiting the foregoing, the Borrower shall use all
reasonable efforts to deliver to the Agent waivers of contractual and statutory
landlord's, landlord's mortgagee's and warehouseman's Liens in form and
substance satisfactory to the Agent under each existing lease, warehouse
agreement or similar agreement to which the Borrower is a party and each
amendment, renewal or extension thereof, and with respect to each new lease to
which the Borrower becomes a party.
(b) All costs and expenses in connection with the grant of any security
interests under the Collateral Documents, including, without limitation,
reasonable legal fees and other reasonable costs and expenses in connection with
the granting, perfecting and maintenance of any security interests under the
Collateral Documents or the preparation, execution, delivery, recordation or
filing of documents and any other acts as the Agent may reasonably request in
connection with the grant of such security interests, shall be paid by the
Borrower promptly upon demand.
(c) The Borrower will not, and will not permit any of its Subsidiaries to,
enter into or become subject to any agreement which would impair their ability
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to comply, or which would purport to prohibit them from complying, with the
provisions of this Section.
(d) The Borrower will cause each Subsidiary acquired after the Closing Date
(i) to become a party to this Agreement as guarantor by executing a supplement
hereto in form and substance satisfactory to the Agent and (ii) to enter into a
Security Agreement and any other agreements as may be necessary or desirable in
order to grant (subject to and to the extent permitted by restrictions permitted
by Section 5.19 hereof, and subject to Liens permitted by Section 5.09 hereof)
perfected first priority security interests upon all of its assets to secure its
obligations hereunder. In addition, the Borrower will pledge, or cause to be
pledged, pursuant to a Pledge Agreement, all of the capital stock or other
equity interests of such Subsidiary owned directly or indirectly by the
Borrower. The Borrower shall cause each such Subsidiary to take such actions as
may be necessary or desirable to effect the foregoing within 30 days after such
Subsidiary is acquired, including, without limitation, causing such Subsidiary
to (x) execute and deliver to the Agent such number of copies as the Agent may
specify of such supplements and Security Agreement and other documents creating
security interests and (y) deliver such certificates, evidences of corporate
action or other documents as the Agent may reasonably request, all in form and
substance satisfactory to the Agent, relating to the satisfaction of the
Borrower's obligations under this Section. Upon compliance by the Borrower with
the provisions of this subsection (d), Schedule 2 shall be deemed to have been
amended to reflect that such Subsidiary is a Guarantor.
ARTICLE 6
DEFAULTS
SECTION 6.01. Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or
any LC Reimbursement Obligation, or shall fail to pay within five days any
interest, fee or other amount payable by it hereunder;
(b) the Borrower shall fail to observe or perform any covenant contained in
Article 5, other than those contained in Sections 5.01 through 5.06, or any
Obligor shall fail to observe or perform any covenant contained in Section 4(A)
or 4(J) of the Security Agreement or Section 5(B) of the Pledge Agreement;
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(c) any Obligor shall fail to observe or perform any covenant or agreement
(other than those covered by clause (a) or (b) above) contained in the Loan
Documents for 15 days after the Agent gives notice thereof to the Borrower at
the request of any Bank;
(d) any representation, warranty, certification or statement made by any
Obligor in any Loan Document or in any certificate, financial statement or other
document delivered pursuant to any Loan Document shall prove to have been
incorrect in any material respect when made (or deemed made);
(e) the Borrower or any Subsidiary shall fail to make one or more payments
in respect of Material Financial Obligations when due or within any applicable
grace period;
(f) any event or condition shall occur which results in the acceleration of
the maturity of any Material Debt or enables (or, with the giving of notice or
lapse of time or both, would enable) the holder of such Debt or any Person
acting on such holder's behalf to accelerate the maturity thereof;
(g) the Borrower or any Subsidiary shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall fail generally to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect;
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(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $5,000,000 which it shall have become liable to
pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer, any Material Plan; or a condition
described in Section 4042(a)(1)-(3) of ERISA shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any Material Plan
must be terminated; or there shall occur a complete or partial withdrawal from,
or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect
to, one or more Multiemployer Plans which causes one or more members of the
ERISA Group to incur a current payment obligation in excess of $5,000,000 and
such payment obligation shall continue unsatisfied and unstayed for a period of
15 days;
(j) judgments or orders for the payment of money exceeding $5,000,000 in
aggregate amount shall be rendered against the Borrower or any Subsidiary and
such judgments or orders shall continue unsatisfied and unstayed for a period of
15 days;
(k) any Lien created by any of the Collateral Documents shall at any time
fail to constitute a valid and (to the extent required by the Collateral
Documents) perfected Lien prior to all other Liens except for Permitted Liens
(as defined in the Security Agreement) on any material part of the Collateral
purported to be subject thereto, securing the obligations purported to be
secured thereby, with the priority required by the Loan Documents, or any
Obligor shall so assert in writing;
(l) the Borrower or any Subsidiary of the Borrower incurs after the date
hereof Environmental Liabilities in excess of $15,000,000 in the aggregate,
which Environmental Liabilities would, under GAAP, be reflected in the financial
statements (or the footnotes thereto) of the Borrower; or
(m) (1) so long as Tekni-Plex Partners, L.P. has not liquidated or unwound
or otherwise distributed its shares of capital stock of the Borrower, MST/TP
Partners, L.P. ceases to be the sole general partner of Tekni-Plex Partners,
L.P.; (2) members of the Control Group shall cease to own, directly or
indirectly, more than a fifty percent (50%) economic interest in the Borrower;
provided that in the event of an issuance by the Borrower of shares of its
capital
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stock, the economic interest in the Borrower held by members of the Control
Group may be reduced to not less than a thirty percent (30%) economic interest
in the Borrower; (3) members of the Control Group shall cease to control
directly or indirectly more than fifty percent (50%) of the shares of capital
stock of the Borrower entitled (excluding stock that is entitled to vote only
upon the occurrence of a contingency that has not yet occurred) to vote in the
election of a majority of the members of the board of directors of the Borrower;
provided that in the event of an issuance by the Borrower of capital stock of
the Borrower, such voting stock interest in the Borrower held by members of the
Control Group may be reduced to not less than a thirty percent (30%) voting
stock interest in the Borrower; (4) any person or group of persons (within the
meaning of Section 13 or 14 of the Exchange Act), excluding from such group any
members of the Control Group, shall have acquired after the date hereof,
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the SEC
under said Act) of the lesser of (x) more than 40% of the outstanding shares of
common stock of the Borrower or (y) a greater voting stock interest in the
Borrower than is held by members of the Control Group; or (5) during any period
of twelve consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period ("Initial Directors") or who were
nominated for election by all of the Initial Directors (other than any such
Initial Directors who shall have died, become incapacitated or resigned for
family, health or other personal reasons prior to such nomination), shall cease
to constitute a majority of the Borrower's board of directors;
then, and in every such event, the Agent shall:
(i) if requested by Banks having more than 50% in aggregate amount of
the Commitments, by notice to the Borrower terminate the Commitments and
they shall thereupon terminate;
(ii) if requested by Banks having more than 50% of the Aggregate LC
Exposure, by notice to each LC Issuing Bank instruct such LC Issuing Bank
(x) not to extend the expiry date of any outstanding Letter of Credit
and/or (y) in the case of any Evergreen Letter of Credit, to give notice to
the beneficiary thereof terminating such Letter of Credit as soon as is
permitted by the provisions thereof, whereupon such LC Issuing Bank shall
deliver notice to that effect promptly (or as soon thereafter as is
permitted by the provisions of the relevant Letter of Credit) to the
beneficiary of each such Letter of Credit and the Borrower; and
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(iii) if requested by Banks holding Notes evidencing more than 50% in
aggregate outstanding principal amount of the Loans, by notice to the
Borrower declare the Loans (together with accrued interest thereon) to be,
and the Loans (together with accrued interest thereon) shall thereupon
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower;
provided that, if any Event of Default specified in clause 6.01(g) or 6.01(h)
occurs with respect to the Borrower, then without any notice to the Borrower or
any other act by the Agent or the Banks, the Commitments shall thereupon
terminate and the Loans (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Bank and shall thereupon notify all the Banks thereof.
SECTION 6.03. Cash Cover. The Borrower agrees that, if an Event of Default
shall have occurred and be continuing and Banks having more than 50% of the
Aggregate LC Exposure instruct the Agent to request cash collateral pursuant to
this Section, the Borrower will, promptly after it receives such request from
the Agent, pay to the Agent an amount in immediately available funds equal to
the then aggregate amount available for subsequent drawings under all
outstanding Letters of Credit, to be held by the Agent in the Collateral Account
to secure the payment of all LC Reimbursement Obligations arising from
subsequent drawings under such Letters of Credit; provided that, if any Event of
Default specified in clause (g) or (h) of Section 6.01 occurs with respect to
the Borrower, the Borrower shall pay such amount to the Agent forthwith without
any notice or demand or any other act by the Agent or the Banks.
ARTICLE 7
THE AGENT
SECTION 7.01. Appointment and Authorization. Each Bank irrevocably appoints
and authorizes the Agent to enter into and act as its agent in connection with
the Collateral Documents and to take such action as agent on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
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the terms hereof or thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 7.02. Agent and Affiliates. Xxxxxx Guaranty Trust Company of New
York shall have the same rights and powers under the Loan Documents as any other
Bank and may exercise or refrain from exercising the same as though it were not
the Agent, and Xxxxxx Guaranty Trust Company of New York and its affiliates may
accept deposits from, lend money to and generally engage in any kind of business
with the Borrower or any Subsidiary or affiliate of the Borrower as if it were
not the Agent.
SECTION 7.03. Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
SECTION 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for any Obligor), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
SECTION 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates or any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Banks (or such different
number of Banks as any provision hereof expressly requires for such consent or
request) or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with the Loan Documents or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Obligor; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of the Loan Documents or any
other instrument or writing furnished in connection herewith. The Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex,
facsimile or similar writing) believed by it to be genuine or to be signed by
the proper party or parties. Without limiting the generality of the foregoing,
the use of the term "agent" in this Agreement with reference to the Agent is not
intended
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to connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship between independent contracting parties.
SECTION 7.06. Indemnification. The Banks shall, ratably in accordance with
their Credit Exposures, indemnify the Agent, its affiliates and their respective
directors, officers, agents and employees (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitees' gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with the Loan Documents or any action taken or
omitted by such indemnitees thereunder.
SECTION 7.07. Credit Decision. Each Bank acknowledges that it has,
independently and without reliance on the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under the Loan Documents.
SECTION 7.08. Successor Agent. Subject to the appointment of and acceptance
of appointment by a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Banks and the Borrower. Upon receipt of
such notice, the Required Banks shall have the right with, so long as no Default
has occurred and is continuing, the consent of the Borrower (not to be
unreasonably withheld), to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Banks, and shall have accepted such
appointment, within 30 days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of the Banks with, so long
as no Default has occurred and is continuing, the consent of the Borrower (not
to be unreasonably withheld), appoint a successor Agent, which shall be a
commercial bank organized or licensed under the laws of the United States or of
any State thereof and having a combined capital and surplus of at least
$100,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent resigns as Agent
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hereunder, the provisions of this Article shall inure to its benefit as to
actions taken or omitted to be taken by it while it was Agent.
SECTION 7.09. Agent's Fee. The Borrower shall pay to the Agent for its own
account fees in the amounts and at the times previously agreed upon by the
Borrower and the Agent.
ARTICLE 8
CHANGE IN CIRCUMSTANCES
SECTION 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If
on or before the first day of any Interest Period for any Euro-Dollar Loan:
(a) the Agent is advised by the Reference Banks that deposits in
dollars (in the applicable amounts) are not being offered to the
Reference Banks in the London interbank market for such Interest
Period, or
(b) Banks holding 50% or more of the aggregate principal amount
of the affected Loans advise the Agent that the Adjusted London
Interbank Offered Rate as determined by the Agent will not adequately
and fairly reflect the cost to such Banks of funding their Euro-Dollar
Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, (i) the obligations of the Banks to
make Euro-Dollar Loans or to continue or convert outstanding Loans as or into
Euro-Dollar Loans shall be suspended and (ii) each outstanding Euro-Dollar Loan
shall be converted into a Base Rate Loan on the last day of the then current
Interest Period applicable thereto. Unless the Borrower notifies the Agent at
least two Domestic Business Days before the date of any affected Borrowing for
which a Notice of Borrowing has previously been given that it elects not to
borrow on such date, such Borrowing shall instead be made as a Base Rate
Borrowing.
SECTION 8.02. Illegality. If, on or after the date hereof, the adoption of
any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Bank (or
its
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Euro-Dollar Lending Office) with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency,
shall make it unlawful or impossible for any Bank (or its Euro-Dollar Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Agent, the Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans, or to convert outstanding
Loans into Euro-Dollar Loans or continue outstanding Loans as Euro-Dollar Loans,
shall be suspended. Before giving any notice to the Agent pursuant to this
Section, such Bank shall designate a different Euro-Dollar Lending Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such notice
is given, each Euro-Dollar Loan of such Bank then outstanding shall be converted
to a Base Rate Loan either (a) on the last day of the then current Interest
Period applicable to such Euro-Dollar Loan if such Bank may lawfully continue to
maintain and fund such Loan as a Euro-Dollar Loan to such day or (b) immediately
if such Bank shall determine that it may not lawfully continue to maintain and
fund such Loan as a Euro-Dollar Loan to such day.
SECTION 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Applicable Lending Office) or any LC
Issuing Bank with any request or directive (whether or not having the force of
law) of any such authority, central bank or comparable agency, shall impose,
modify or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System, but
excluding with respect to any Euro-Dollar Loan any such requirement included in
an applicable Euro-Dollar Reserve Percentage), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit (including letters of credit and participations therein)
extended by, any Bank (or its Applicable Lending Office) or any LC Issuing Bank
or shall impose on any Bank (or its Applicable Lending Office) or any LC Issuing
Bank or the London interbank market any other condition affecting its
Euro-Dollar Loans, its Notes or its obligation to make Euro-Dollar Loans or its
obligations hereunder in respect of Letters of Credit and the result of any of
the foregoing is to increase the cost to such Bank (or its Applicable Lending
Office) or such LC Issuing Bank of making or maintaining any Euro-Dollar Loan or
issuing or participating in any Letter of
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Credit, or to reduce the amount of any sum received or receivable by such Bank
(or its Applicable Lending Office) or such LC Issuing Bank under this Agreement
or under its Note with respect thereto, by an amount deemed by such Bank or LC
Issuing Bank to be material, then, within 15 days after demand by such Bank
(with a copy to the Agent), the Borrower shall pay to such Bank or LC Issuing
Bank such additional amount or amounts as will compensate such Bank or LC
Issuing Bank for such increased cost or reduction.
(b) If any Bank shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Bank (or its Parent) as a consequence of such Bank's obligations
hereunder to a level below that which such Bank (or its Parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within 15 days after demand
by such Bank (with a copy to the Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank (or its Parent)
for such reduction.
(c) Each Bank and LC Issuing Bank will promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank or LC Issuing Bank to compensation pursuant to this
Section and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Bank or LC Issuing Bank, be otherwise
disadvantageous to it. A certificate of any Bank or LC Issuing Bank claiming
compensation under this Section and setting forth the additional amount or
amounts to be paid to it hereunder and the basis thereof shall be conclusive in
the absence of manifest error; provided that no Bank shall be required to
disclose information that it considers in its sole discretion to be
confidential. In determining such amount, such Bank or LC Issuing Bank may use
any reasonable averaging and attribution methods.
SECTION 8.04. Taxes. (a) For the purposes of this Section, the following
terms have the following meanings:
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"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings with respect to any payment by any
Obligor pursuant to this Agreement or under any Note, and all liabilities with
respect thereto, excluding (i) in the case of each Bank Party, taxes imposed on
its net income, and franchise or similar taxes imposed on it, by a jurisdiction
under the laws of which it is organized or in which its principal executive
office is located or, in which its Applicable Lending Office is located and (ii)
in the case of each Bank, any United States withholding tax imposed on such
payment, but not excluding any portion of such tax that exceeds the United
States withholding tax which would have been imposed on such a payment to such
Bank under the laws and treaties in effect when such Bank first becomes a party
to this Agreement.
"Other Taxes" means any present or future stamp or documentary taxes
and any other excise or property taxes, or similar charges or levies, which
arise from any payment made pursuant to this Agreement or under any Note or from
the execution, delivery, registration or enforcement of, or otherwise with
respect to, any Loan Document.
(b) Subject to Section 8.04(e), all payments by any Obligor to or for the
account of any Bank Party hereunder or under any Note shall be made without
deduction for any Taxes or Other Taxes; provided that, if any Obligor shall be
required by law to deduct any Taxes or Other Taxes from any such payment, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) such Bank Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Obligor shall make
such deductions, (iii) such Obligor shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable law
and (iv) such Obligor shall promptly furnish to the Agent, at its address
specified in or pursuant to Section 10.01, to the extent available, the original
or a certified copy of a receipt evidencing payment thereof or any other
document reasonably requested by the Agent.
(c) Subject to Section 8.04(e), Obligors agree to indemnify each Bank Party
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts payable
under this Section) paid by such Bank Party and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be paid within 15 days after such Bank Party makes
demand therefor, which demand shall be accompanied by a statement providing an
explanation of the facts and calculations that form the basis for such demand.
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Such statement shall be final, conclusive and binding on the Obligors absent
manifest error.
(d) Each Bank organized under the laws of a jurisdiction outside the United
States, before it signs and delivers this Agreement in the case of each Bank
listed on the signature pages hereof and before it becomes a Bank in the case of
each other Bank, and, from time to time thereafter, before any Bank designates a
new Euro-Dollar Lending Office which is an Affiliate or if requested in writing
by the Borrower (but only so long as such Bank remains lawfully able to do so),
shall provide each of the Borrower and the Agent with Internal Revenue Service
form 1001 or 4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Bank is entitled to benefits
under an income tax treaty to which the United States is a party which exempts
such Bank from United States withholding tax or reduces the rate of withholding
tax on payments of interest for the account of such Bank or certifying that the
income receivable by it pursuant to this Agreement is effectively connected with
the conduct of a trade or business in the United States.
(e) For any period with respect to which a Bank has failed to provide the
Borrower or the Agent with the appropriate form referred to in Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
after the date on which such form originally was required to be provided), no
Obligor shall be required to increase any payment to such Bank pursuant to
Section 8.04(b)(i) and such Bank shall not be entitled to indemnification under
Section 8.04(b) or 8.04(c) with respect to Taxes imposed by the United States;
provided that if a Bank that is otherwise exempt from, or subject to a reduced
rate of, withholding tax becomes subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall, at such Bank's expense,
take such steps as such Bank shall reasonably request to assist such Bank to
recover such Taxes.
(f) If any Obligor is required to pay additional amounts to or for the
account of any Bank pursuant to this Section as a result of a change in law or
treaty occurring after such Bank first became a party to this Agreement, then
such Bank will, at the Borrower's request and expense, change the jurisdiction
of its Applicable Lending Office if, in the sole judgment of such Bank, such
change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such Bank.
(g) Upon the reasonable request of the Borrower, and at the Borrower's
expense, a Bank Party shall use reasonable efforts to cooperate with the
Borrower with a view to obtain a refund of any Taxes or Other Taxes which were
not
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correctly or legally imposed and for which the Borrower has indemnified such
Bank Party under this Section 8.04 if obtaining such refund would not, in the
sole judgment of the Bank Party, be disadvantageous to such Bank Party; provided
that nothing in this Section 8.04(g) shall be construed to require any Bank
Party to institute any administrative proceeding (other than the filing of a
claim for any such refund) or judicial proceeding to obtain any such refund. If
a Bank Party shall receive a refund from a taxing authority (as a result of any
error in the imposition of Taxes or Other Taxes by such taxing authority) of any
Taxes or Other Taxes paid by the Borrower pursuant to subsection 8.04(b) or (c)
above, such Bank Party shall promptly pay to the Borrower the amount so received
without interest (other than interest received from the taxing authority with
respect to such refund) and net of out-of-pocket expenses; provided that such
Bank Party shall only be required to pay to the Borrower such amounts as such
Bank Party in its sole discretion, determines are attributable to Taxes or Other
Taxes paid by the Borrower. In the event such Bank Party or the Agent is
required to repay the amount of such refund (including interest, if any), the
Borrower, upon the request of such Bank Party or the Agent (as the case may be),
agrees to promptly return to such Bank Party or the Agent the amount of such
refund and interest, if any (plus penalties, interest and other charges imposed
in connection with the repayment of such amounts by such Bank Party or the
Agent).
(h) Notwithstanding the foregoing, nothing in this Section 8.04 shall be
construed to (i) entitle the Borrower or any other persons to any information
determined by any Bank Party or the Agent, in its sole discretion, to be
confidential or proprietary information of such Bank Party or the Agent, to any
tax or financial information of any Bank Party or the Agent or to inspect or
review any books and records of any Bank Party or the Agent, or (ii) interfere
with the rights of any Bank Party or the Agent to conduct its fiscal or tax
affairs in such manner as it deems fit.
SECTION 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Bank to make, or to continue or convert outstanding
Loans as or to, Euro-Dollar Loans has been suspended pursuant to Section 8.02 or
(ii) any Bank has demanded compensation under Section 8.03 or 8.04 with respect
to its Euro-Dollar Loans, and in any such case the Borrower shall, by at least
five Euro-Dollar Business Days' prior notice to such Bank through the Agent,
have elected that the provisions of this Section shall apply to such Bank, then,
unless and until such Bank notifies the Borrower that the circumstances giving
rise to such suspension or demand for compensation no longer exist, all Loans
which would otherwise be made by such Bank as (or continued as or converted to)
Euro-Dollar Loans shall instead be Base Rate Loans
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(on which interest and principal shall be payable contemporaneously with the
related Euro-Dollar Loans of the other Banks). If such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer exist, the principal amount of each such Base Rate Loan
shall be converted into a Euro-Dollar Loan on the first day of the next
succeeding Interest Period applicable to the related Euro-Dollar Loans of the
other Banks.
SECTION 8.06. Substitution of Bank. If (i) the obligation of any Bank to
make Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any
Bank or LC Issuing Bank has demanded compensation under Section 8.03 or 8.04,
the Borrower shall have the right, with the assistance of the Agent, to seek a
mutually satisfactory substitute bank or banks (which may be one or more of the
Bank Parties) to purchase the Note and assume the Commitment of such Bank or
replace the Letter of Credit issued by such LC Issuing Bank.
ARTICLE 9
GUARANTY
SECTION 9.01. The Guaranty. Each Guarantor hereby unconditionally
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of the principal of and interest on each Note issued
by the Borrower pursuant to this Agreement, and the full and punctual payment of
all other amounts payable by the Borrower or any other Guarantor under the Loan
Documents. Upon failure by the Borrower or any other Guarantor to pay punctually
any such amount, each Guarantor shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in this Agreement or the other
Loan Documents.
SECTION 9.02. Guaranty Unconditional. The obligations of each Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of the Borrower or any other Guarantor under
the Loan Documents, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to the Loan
Documents;
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(iii) any release, impairment, non-perfection or invalidity of any
direct or indirect security for any obligation of the Borrower or any other
Guarantor under the Loan Documents;
(iv) any change in the corporate existence, structure or ownership of
the Borrower or any other Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any
other Guarantor or their respective assets or any resulting release or
discharge of any obligation of the Borrower or any other Guarantor
contained in the Loan Documents;
(v) the existence of any claim, set-off or other rights which such
Guarantor may have at any time against the Borrower, any other Guarantor,
the Agent, any LC Issuing Bank, any Bank or any other Person, whether in
connection herewith or any unrelated transactions, provided that nothing
herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against the
Borrower or any other Guarantor for any reason of the Loan Documents, or
any provision of applicable law or regulation purporting to prohibit the
payment by the Borrower or any other Guarantor of the principal of or
interest on any Note or any other amount payable by the Borrower or any
other Guarantor under the Loan Documents; or
(vii) any other act or omission to act or delay of any kind by the
Borrower, any other Guarantor, the Agent, any LC Issuing Bank, any Bank or
any other Person or any other circumstance whatsoever which might, but for
the provisions of this paragraph, constitute a legal or equitable discharge
of the Guarantor's obligations hereunder.
SECTION 9.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations hereunder shall remain in full force
and effect until the Commitments shall have terminated and the principal of and
interest on the Notes and all other amounts payable by the Obligors under the
Loan Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by the Obligors
under the Loan Documents is rescinded or must be otherwise restored or returned
upon the insolvency, bankruptcy or reorganization of any Obligor or otherwise,
each Guarantor's obligations hereunder with respect to such payment
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shall be reinstated at such time as though such payment had been due but not
made at such time.
SECTION 9.04. Waiver by Each Guarantor. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Borrower or any other Guarantor or any other Person.
SECTION 9.05. Subrogation and Contribution. Until all amounts payable by
the Obligors under the Loan Documents shall have been paid in full, each
Guarantor agrees not to enforce or exercise any and all rights to which it may
be entitled, by operation of law or otherwise, upon making any payment hereunder
(i) to be subrogated to the rights of the payee against the Borrower with
respect to such payment or against any direct or indirect security therefor, or
otherwise to be reimbursed, indemnified or exonerated by or for the account of
the Borrower in respect thereof or (ii) to receive any payment, in the nature of
contribution or for any other reason, from any other Guarantor with respect to
such payment.
SECTION 9.06. Stay of Acceleration. If acceleration of the time for payment
of any amount payable by any Obligor under the Loan Documents is stayed upon
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by each Guarantor hereunder forthwith on demand by the
Agent made at the request of the requisite proportion of the Banks specified in
Article 6 of the Agreement.
SECTION 9.07. Limit of Liability. The obligations of each Guarantor
hereunder shall be limited to an aggregate amount equal to the largest amount
that would not render its obligations hereunder subject to avoidance under
Section 548 of the United States Bankruptcy Code or any comparable provisions of
any applicable state law.
SECTION 9.08. Release upon Sale. Upon any sale by the Borrower of a
Guarantor permitted by this Agreement, such Guarantor shall automatically and
without further action by any Bank or the Agent be released from its obligations
as a Guarantor hereunder.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. All notices, requests and other communications to
any party under any Loan Document shall be in writing (including bank wire,
facsimile or similar writing) and shall be given to such party: (a) in the case
of the Borrower or the Agent, at its address or facsimile number set forth on
the signature pages hereof, (b) in the case of any Guarantor, in care of the
Borrower, (c) in the case of any Bank, at its address or facsimile number set
forth in its Administrative Questionnaire or (d) in the case of any party, at
such other address or facsimile number as such party may hereafter specify for
the purpose by notice to the Agent and the Borrower. Each such notice, request
or other communication shall be effective (i) if given by facsimile, when
transmitted to the facsimile number referred to in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered at the address
referred to in this Section; provided that notices to the Agent or any LC
Issuing Bank under Article 2 or Article 8 shall not be effective until received.
SECTION 10.02. No Waivers. No failure or delay by any Bank Party in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 10.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of special counsel for the Agent, in connection with the
preparation and administration of the Loan Documents, any waiver or consent
thereunder or any amendment thereof or any Default or alleged Default thereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
each Bank Party, including (without duplication) the fees and disbursements of
outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Bank Party, its respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
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against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of the Loan Documents or any actual or proposed use of any
Letter of Credit or any proceeds of Loans hereunder; provided that no Indemnitee
shall have the right to be indemnified hereunder for such Indemnitee's own gross
negligence or willful misconduct as determined by final judgment of a court of
competent jurisdiction.
(c) The Borrower hereby indemnifies each Indemnitee from and against and
agrees to hold each of them harmless from any and all liabilities, losses,
damages, costs and expenses of any kind (including, without limitation,
reasonable expenses of investigation by engineers, environmental consultants and
similar technical personnel and reasonable fees and disbursements of counsel) of
any Indemnitee arising out of, in respect of or in connection with any and all
Environmental Liabilities. Without limiting the generality of the foregoing, the
Borrower hereby waives all rights for contribution or any other rights of
recovery with respect to liabilities, losses, damages, costs and expenses
arising under or related to Environmental Laws that it might have by statute or
otherwise against any Indemnitee.
SECTION 10.04. Sharing of Set-offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest then due with
respect to the Loans and participations in LC Reimbursement Obligations held by
it which is greater than the proportion received by any other Bank in respect of
the aggregate amount of principal and interest then due with respect to the
Loans and participations in LC Reimbursement Obligations held by such other
Bank, the Bank receiving such proportionately greater payment shall purchase
such participations in the Loans and participations in LC Reimbursement
Obligations held by the other Banks, and such other adjustments shall be made,
as may be required so that all such payments of principal and interest with
respect to the Loans and participations in LC Reimbursement Obligations held by
the Banks shall be shared by the Banks pro rata; provided that nothing in this
Section shall impair the right of any Bank to exercise any right of set-off or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of any Obligor other than its indebtedness in respect of
the Loans and the LC Reimbursement Obligations. Each Obligor agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in a Loan or LC Reimbursement Obligation, whether or not
acquired pursuant to the
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81
foregoing arrangements, may exercise rights of set-off or counterclaim and other
rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of such Obligor in the amount of such
participation.
SECTION 10.05. Amendments and Waivers; Release of Collateral. Any provision
of this Agreement or the Notes may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by the Borrower and the Required
Banks (and, if the rights or duties of the Agent or any LC Issuing Bank are
affected thereby, by the Agent or such LC Issuing Banks, as the case may be);
provided that no such amendment or waiver shall, unless signed by all the Banks,
(i) increase or decrease the Commitment of any Bank (except for an increase
pursuant to Section 2.01(b) or a ratable decrease in the Commitments of all
Banks) or subject any Bank to any additional obligation, (ii) reduce the
principal of or rate of interest on any Loan or the amount of any LC
Reimbursement Obligation or any interest thereon or any fees hereunder, except
as provided below, (iii) postpone the date fixed for any payment of principal of
or interest on any Loan or of any LC Reimbursement Obligation or any interest
thereon or any fees hereunder or for the termination of any Commitment or
(except as expressly provided in Section 2.14) extend the expiry date of any
Letter of Credit, (iv) release any Guarantor from its obligations hereunder or
(v) change the percentage of the Commitments or of the Aggregate LC Exposure or
of the aggregate unpaid principal amount of the Loans, or the number of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement. Any provision of the
Collateral Documents may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the relevant Obligor and the Agent with
the consent of the Required Banks; provided that no such amendment or waiver
shall, unless signed by all the Banks, effect or permit a release of all or
substantially all of the Collateral. Notwithstanding the foregoing, Collateral
shall be released from the Lien of the Collateral Documents from time to time as
necessary to effect any sale or pledge of assets permitted by the Loan
Documents, and the Agent shall execute and deliver all release documents
reasonably requested to evidence such release.
SECTION 10.06. Successors; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
Borrower may not assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all the Bank Parties.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any
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or all of its Loans and participations in Letters of Credit. If a Bank grants
any such participating interest to a Participant, whether or not upon notice to
the Borrower and the Agent, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower, the LC Issuing Banks
and the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower and the LC Issuing Banks hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement described in clause (i), (ii) or (iii) of
Section 10.05 without the consent of the Participant. The Borrower agrees that
each Participant shall, to the extent provided in its participation agreement,
be entitled to the benefits of Article 8 with respect to its participating
interest; provided that no Participant shall be entitled to receive any greater
payment under Article 8 unless such transfer is with the Borrower's consent. An
assignment or other transfer which is not permitted by subsection (c) or (d)
below shall be given effect for purposes of this Agreement only to the extent of
a participating interest granted in accordance with this subsection. Any Bank
that grants a participation shall (A) withhold or deduct from each payment to
the Participant the amount of tax required under applicable law to be withheld
or deducted from such payment (other than amounts the Borrower or the Agent are
required to withhold or deduct under this Agreement), (B) pay any tax so
withheld or deducted by it to the appropriate taxing authority in accordance
with applicable law and (C) indemnify the Borrower and the Agent for and against
any losses, costs and expenses incurred by the Borrower or the Agent (as the
case may be) as a result of any failure by such Bank to so withhold or deduct
and pay such tax. If any Bank is required to make any payment under this Section
10.06(b), the Borrower (i) shall pay to such Bank the amount of any tax benefit
realized by the Borrower related to such payments made by such Bank, and (ii)
agrees to reasonably cooperate with such Bank to minimize any such indemnity
payment and to recover any tax benefit available to the Borrower.
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $5,000,000) of all, of its rights and
obligations under this Agreement and its Note, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
substantially in the form of Exhibit D hereto signed by such Assignee and such
transferor Bank, with (and subject to) the subscribed consent of the
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83
Agent and, so long as no Default has occurred and is continuing, the Borrower
(which consents shall not be unreasonably withheld or delayed); provided that if
an Assignee is an affiliate of such transferor Bank or was a Bank immediately
before such assignment, no such consent shall be required; and provided,
further, that after any such assignment such assigning Bank shall, if it has not
transferred all of its rights and obligations, retain a Commitment of not less
than $5,000,000. When such instrument has been signed and delivered by the
parties thereto and such Assignee has paid to such transferor Bank the purchase
price agreed between them, such Assignee shall be a Bank party to this Agreement
and shall have all the rights and obligations of a Bank with a Commitment as set
forth in such instrument of assumption, and the transferor Bank shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection, the transferor Bank, the Agent
and the Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to the Assignee. In connection with any such assignment, the
transferor Bank shall pay to the Agent an administrative fee for processing such
assignment in the amount of $3,500. If the Assignee is not incorporated under
the laws of the United States or a State thereof, it shall deliver to the
Borrower and the Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
8.04.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 or 8.04 than such
Bank would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent or by
reason of the provisions of Section 8.02, 8.03 or 8.04 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
SECTION 10.07. Reliance on Margin Stock. Each of the Banks represents to
the Agent and each of the other Banks that it in good faith is not relying upon
any "margin stock" (as defined in Regulation U) as collateral in the extension
or maintenance of the credit provided for in this Agreement.
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SECTION 10.08. Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. Each Obligor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Obligor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
SECTION 10.09. Counterparts; Integration; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective when the Agent has received from each of the
parties hereto a counterpart hereof signed by such party or facsimile or other
written confirmation satisfactory to the Agent confirming that such party has
signed a counterpart hereof.
SECTION 10.10. Confidentiality. Each Bank Party agrees to keep any
information delivered or made available by the Borrower pursuant to or in
connection with this Agreement confidential from anyone other of than persons
employed or retained by such Bank Party who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated hereby;
provided that nothing herein shall prevent any Bank Party from disclosing such
information (a) to any other Bank Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility contemplated hereby, (c)
upon the order of any court or administrative agency, (d) upon the request or
demand of any regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by any Bank Party prohibited by
this Agreement, (f) in connection with any litigation to which any Bank Party or
its subsidiaries or Parent may be a party, (g) to the extent necessary in
connection with the exercise of any remedy hereunder, (h) to legal counsel and
independent auditors and (i) subject to obtaining a prior written agreement for
the benefit of the Borrower on terms substantially similar to those contained in
this Section, to any actual or proposed Participant or Assignee.
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85
SECTION 10.11. WAIVER OF JURY TRIAL. EACH OBLIGOR AND EACH BANK PARTY
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TEKNI-PLEX, INC., as Borrower
By /s/ F. Xxxxxxx Xxxxx
------------------------------------
Title: Chief Executive Officer
Address: 000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX
Facsimile: 000-000-0000
DOLCO PACKAGING CORP., as
Guarantor
By /s/ F. Xxxxxxx Xxxxx
------------------------------------
Title: Chief Executive Officer
Address: 000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX
Facsimile: 000-000-0000
FLEET BANK, NATIONAL ASSOCIATION
By /s/ Xxxxx Xxxxxxxx
------------------------------------
Title: Vice President
XXXXXX FINANCIAL, INC.
By /s/ Xxxxxxxxxxx X. X'Xxxxxxx
------------------------------------
Title: Vice President
LASALLE NATIONAL BANK
By /s/ X.X. Xxxxxx
------------------------------------
Title: Senior Vice President
SUMMIT BANK
By /s/ Xxxxxx X. Xxxx
------------------------------------
Title: Assistant Vice President
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XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Bank
and LC Issuing Bank
By /s/ Xxxxxxxx XxXxxxx
------------------------------------
Title: Vice President
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By /s/ Xxxxxxxx XxXxxxx
------------------------------------
Title: Vice President
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COMMITMENT SCHEDULE
Bank Commitment
---- ----------
Xxxxxx Guaranty Trust Company of New York $15,000,000
Fleet Bank, National Association $15,000,000
Xxxxxx Financial, Inc. $15,000,000
LaSalle National Bank $15,000,000
Summit Bank/United Jersey Bank $15,000,000
-----------
Total $75,000,000
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PRICING SCHEDULE
Each of "Commitment Fee Rate", "Euro-Dollar Margin", "LC Fee Rate" and
"Base Rate Margin" means, for any date, the percentage set forth below in the
row opposite such term and in the column corresponding to the Pricing Level that
applies at such date:
================================================================================
Pricing Level Level I Level II Level III Level IV Level V Level VI
--------------------------------------------------------------------------------
Commitment Fee Rate 0.25% 0.30% 0.375% 0.375% 0.50% 0.50%
--------------------------------------------------------------------------------
Euro-Dollar Margin 1.0% 1.25% 1.50% 1.75% 2.125% 2.50%
--------------------------------------------------------------------------------
Base Rate Margin 0.0% 0.25% 0.50% 0.75% 1.125% 1.50%
--------------------------------------------------------------------------------
LC Fee Rate 1.0% 1.25% 1.50% 1.75% 2.125% 2.50%
================================================================================
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies at any date after September 30, 1997 if, as of
such date, the Leverage Ratio is less than 2 to 1.
"Level II Pricing" applies at any date after September 30, 1997 if, as of
such date, (i) the Leverage Ratio is less than or equal to 2.25 to 1 and (ii)
Level I Pricing does not apply.
"Level III Pricing" applies at any date after September 30, 1997 if, as of
such date, (i) the Leverage Ratio is less than or equal to 2.5 to 1 and (ii)
neither Level I Pricing nor Level II Pricing applies.
"Level IV Pricing" applies from the Closing Date through
September 30, 1997 and at any date thereafter if, as of such date, (i) the
Leverage Ratio is less than or equal to 3 to 1 and (ii) none of Level I Pricing,
Level II Pricing and Level III Pricing applies.
"Level V Pricing" applies on any date after September 30, 1997 if, as of
such date, (i) the Leverage Ratio is less than or equal to 4 to 1 and (ii) none
of Level I Pricing, Level II Pricing, Level III Pricing and Level IV Pricing
applies.
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"Level VI Pricing" applies on any date after September 30, 1997 if, as of
such date, (i) the Leverage Ratio is greater than 4 to 1.
"Leverage Ratio" means, on any date, the Leverage Ratio set forth in the
most recent certificate delivered pursuant to Section 5.01(c); provided that
unless the Required Banks otherwise agree, if the Borrower has failed to deliver
the financial statements and accompanying certificates most recently required to
have been delivered within the periods specified therefor in Section 5.01, Level
VI Pricing shall apply until the next date on which financial statements and
accompanying certificates are timely delivered.
"Pricing Level" refers to the determination of which of Level I, Level II,
Level III, Level IV, Level V or Level VI Pricing applies on any day.
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SCHEDULE 1
DEBT OF THE BORROWER AND ITS SUBSIDIARIES
A. None
B. None
92
SCHEDULE 2
SUBSIDIARIES*
DOLCO PACKAGING CORP., a Delaware corporation
--------
* Tekni-Plex Inc. has an additional subsidiary, Dolco Packaging Ltd., a
corporation organized under the laws of British Columbia, which holds no assets,
conducts no business and has filed for dissolution under the laws of British
Columbia.
93
EXHIBIT A - Note
NOTE
New York, New York
--------- --, ----
For value received, TEKNI-PLEX, INC., a Delaware corporation (the
"Borrower"), promises to pay to the order of ______________________ (the
"Bank"), for the account of its Applicable Lending Office, the unpaid principal
amount of each Loan made by the Bank to the Borrower pursuant to the Credit
Agreement referred to below on the maturity date provided for in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal amount
of each such Loan on the dates and at the rate or rates provided for in the
Credit Agreement. All such payments of principal and interest shall be made in
lawful money of the United States in Federal or other immediately available
funds at the office of Xxxxxx Guaranty Trust Company of New York, 00 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx.
All Loans made by the Bank, the respective types thereof and all
repayments of the principal thereof shall be recorded by the Bank and, if the
Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding may be endorsed by the Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of the Bank to make any such recordation or
endorsement shall not affect the Borrower's obligations hereunder or under the
Credit Agreement.
This note is one of the Notes referred to in the Credit Agreement dated as
of May 8, 1997 among Tekni-Plex, Inc., the Guarantors party thereto, the Banks
party thereto, the LC Issuing Banks party thereto and Xxxxxx Guaranty Trust
Company of New York, as Agent (as the same may be amended from time to time, the
"Credit Agreement"). Terms defined in the Credit Agreement are used herein with
the same meanings. Reference is made to the Credit Agreement for provisions for
the prepayment hereof and the acceleration of the maturity hereof.
94
The payment in full of the principal and interest on this note has,
pursuant to the provisions of the Credit Agreement, been unconditionally
guaranteed by certain Guarantors.
TEKNI-PLEX, INC.
By_______________________
Name:
Title:
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Loans and Payments of Principal
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Date Amount Type Amount of
of Principal Notation
Loan Repaid Made By
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96
EXHIBIT B - Opinion of Counsel for the Obligors
OPINION OF
COUNSEL FOR THE OBLIGORS
[LETTERHEAD OF WSP&R]
May 8, 1997
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We have acted as New York counsel to Tekni-Plex, Inc. (the "Borrower") and
Dolco Packaging Corp. ("Dolco"; each of the Borrower and Dolco being referred to
herein, individually, as an "Obligor" and, collectively, as the "Obligors") in
connection with the negotiation, execution and delivery of the Credit Agreement,
dated as of May 8, 1997, among the Borrower, the Guarantors parties thereto, the
Banks parties thereto, the LC Issuing Banks referred to therein and Xxxxxx
Guaranty Trust Company of New York, as Agent (the "Credit Agreement").
This opinion is delivered to you pursuant to Section 3.01(b) of the Credit
Agreement. Capitalized terms used herein and not otherwise defined herein are
used with the meanings ascribed to such terms in the Credit Agreement. The
Credit Agreement, together with the Notes, the Mortgages, the Security
Agreement, the Pledge Agreement, the Copyright Security Agreement (as defined in
the Security Agreement), the Patent Security Agreement (as defined in the
Security Agreement) and the Trademark Security Agreement (as defined in the
Security Agreement) being entered into on the date hereof, are referred to
herein as the "Loan Documents".
97
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments, and have conducted such other investigations of
fact and law, as we have deemed necessary or advisable for purposes of this
opinion.
On the basis of the foregoing and the assumptions hereinafter set forth,
and subject to the qualifications and limitations hereinafter set forth, we are
of the opinion that:
1. Each Obligor is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware, and has all corporate
power and authority required to carry on its business as described in the
Offering Memorandum dated April 1, 1997 of the Borrower relating to its 11 1/4%
Senior Subordinated Notes due 2007.
2. The execution and delivery by each Obligor of the Loan Documents to
which such Obligor is a party and the performance by such Obligor of its
obligations thereunder (i) are within such Obligor's corporate powers and have
been duly authorized by all necessary corporate action, (ii) require no action
by or in respect of, or filing with, any governmental body, agency or official
of the State of New York or the United States of America (except as contemplated
by the Loan Documents), (iii) do not contravene, or constitute a default under,
any provision of any applicable law or regulation of the State of New York or
the United States of America or of the charter or by-laws of such Obligor or of
(x) any agreement or instrument known to us to which either Obligor is a party
or by which either Obligor or any of its properties is bound or (y) to the best
of our knowledge after due inquiry, any judgment, injunction, order or decree
binding upon such Obligor, and (iv) to the best of our knowledge after due
inquiry, will not result in the creation or imposition of any Lien on any asset
of such Obligor (except for the Liens created pursuant to the Collateral
Documents).
3. The Loan Documents stated to be governed by the law of the State of New
York and to which each Obligor is a party constitute the valid and binding
agreements of such Obligor, and the Notes issued by the Borrower constitute the
valid and binding obligations of the Borrower, in each case enforceable in
accordance with its terms.
4. To the best of our knowledge after due inquiry, there is no action,
suit or proceeding pending against, or threatened against, either Obligor before
any court or arbitrator or any governmental body, agency or official, in which
there is
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98
a reasonable possibility of an adverse decision which could materially adversely
affect the business, financial position or results of operations of such
Obligor, or which in any manner questions the validity of any Loan Document.
5. Neither Obligor is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or is, directly or indirectly,
controlled by or acting on behalf of any Person which is an "investment company"
within the meaning of said Act.
6. Neither Obligor is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
7. Each of the Collateral Documents stated to be governed by the law of
the State of New York creates as security for the secured obligations described
therein, including any future obligations which are secured obligations, a valid
security interest, for the benefit of the secured parties named therein, in all
of the right, title and interest of each Obligor, in such Obligor's Collateral
described therein, to the extent that the New York Uniform Commercial Code (the
"UCC"), the United States Copyright Act, the United States Patent Act or the
United States Trademark Act is applicable to the creation of security interests
therein (the "Security Interests").
8. Upon delivery of the certificate representing the outstanding shares of
Dolco (the "Pledged Stock"), together with the related duly executed stock
power, to the Agent in the State of New York in accordance with the terms of the
Pledge Agreement and assuming the continued possession thereof in the State of
New York by the Agent and the absence of any notice on the part of the Agent or
any Bank of any adverse claim (as defined in Section 8-302(2) of the UCC) in
respect thereof, the Security Interest in such Pledged Stock will constitute a
perfected security interest under such Pledge Agreement, which security interest
will have priority over any other security interest in the Pledged Stock which
can be perfected under the UCC, and no registration, recordation or filing with
any governmental body or agency is required for the perfection of such security
interest.
9. The Security Interests (as defined in the Security Agreement and the
Pledge Agreement) will validly secure the Secured Obligations (as so defined) in
respect of all future Loans made by the Banks to, and all obligations with
respect to Letters of Credit incurred by, either Obligor, whether or not at the
time such Loans are made or such obligations are incurred an Event of Default or
other
3
99
event not within the control of the Banks has relieved or may relieve the Banks
from their obligations to make such Loans or to issue such Letters of Credit,
and are perfected to the extent set forth in paragraph 8 above with respect to
such Secured Obligations.
The opinion expressed above are subject to the following qualifications
and limitations:
(a) our opinion is subject to the effect of (i) applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and other laws affecting
creditors' rights generally, (ii) general equitable principles, (iii)
requirements of reasonableness, good faith and fair dealing, and (iv)
additionally in the case of indemnities and exculpatory provisions
(including certain waivers) in the Loan Documents, public policy;
(b) certain remedial provisions of the Collateral Documents we are opining
on may be unenforceable in whole or in part, but the inclusion of such
provisions does not affect the validity of the balance of such Loan
Documents, and the practical realization of the benefits created by such
Loan Documents taken as a whole will not be materially impaired by the
unenforceability of those particular provisions; in addition, certain
remedial provisions of such Loan Documents may be subject to procedural
requirements not set forth therein;
(c) the Security Interests will not be enforceable with respect to, or
attach to, any Collateral until value has been given and the applicable
Obligor has rights in such Collateral;
(d) we express no opinion as to the right, title or interest of any Person
in or to, or the legal or equitable ownership of, any of the Collateral or
the perfection or priority of any Lien (except to the limited extent set
forth in paragraph 8 above);
(e) we express no opinion as to Section 10.08 of the Credit Agreement,
insofar as such Section relates to the subject matter jurisdiction of
federal courts;
(f) we express no opinion as to the effect of the law of any jurisdiction
other than the State of New York in which enforcement of the Credit
Agreement or the Notes may be sought which limits the rate of interest
legally chargeable or collectible; and
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100
(g) whenever our opinion is stated to be "to the best of our knowledge
after due inquiry", we have relied exclusively upon certificates of
officers (after the discussion of the contents thereof with such officers)
of the Borrower or certificates of others or representations and
warranties in the Loan Documents, as to the existence or nonexistence of
the circumstances upon which such opinion is predicated. We have no reason
to believe, however, that any such certificate or representation or
warranty is untrue or inaccurate in any material respect.
We have assumed the accuracy and completeness of all, and the authenticity
of all original, certificates, agreements, documents, records and other
materials submitted to us, the conformity with the originals of any copies
submitted to us, the genuineness of all signatures and the legal capacity of all
natural persons. We have assumed that the Loan Documents constitute (subject to
the same qualifications as are contained in subparagraph (a) of the immediately
preceding paragraph) the valid and legally binding agreements of the Banks, the
LC Issuing Banks and the Agent parties thereto.
We are members of the bar of the State of New York, and we do not express
herein any opinion as to any law other than the law of the State of New York,
the federal law of the United States of America and the General Corporation Law
of the State of Delaware.
This opinion is being furnished only to the Banks and the Agent and is
solely for their benefit in connection with the transactions provided for in or
contemplated by the Credit Agreement. This opinion may not be otherwise
distributed or relied upon by any person, firm or corporation for any purpose,
or quoted or reproduced, in whole or in part, in any other document or filed
with any government agency without our prior written consent, except that a copy
of this opinion may be delivered to any Participant or Assignee under the Credit
Agreement.
Very truly yours,
5
101
EXHIBIT C - Opinion of Special Counsel for the Agent
OPINION OF
XXXXX XXXX & XXXXXXXX, SPECIAL COUNSEL
FOR THE AGENT
April , 1997
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York, as Agent
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
We have participated in the preparation of the Credit Agreement dated as
of April , 1997 (the "Credit Agreement") among Tekni-Plex, Inc., a Delaware
corporation (the "Borrower"), the Guarantors party thereto, the Banks party
thereto, the LC Issuing Banks referred to therein and Xxxxxx Guaranty Trust
Company of New York, as Agent, and have acted as special counsel for the Agent
for the purpose of rendering this opinion pursuant to Section 3.01(c) of the
Credit Agreement. Terms defined in the Credit Agreement are used herein as
therein defined.
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The execution, delivery and performance by the Borrower of the Loan
Documents to which it is a party are within the Borrower's corporate powers and
have been duly authorized by all necessary corporate action.
102
2. Each Loan Document to which the Borrower is a party (other than the
Notes) constitutes a valid and binding agreement of the Borrower and each Note
issued thereunder today constitutes a valid and binding obligation of the
Borrower, in each case enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware. In giving the foregoing opinion, we express no opinion as to the
effect (if any) of any law of any jurisdiction (except the State of New York) in
which any Bank is located which limits the rate of interest that such Bank may
charge or collect. This opinion is rendered solely to you in connection with the
above matter.
This opinion may not be relied upon by you for any other purpose or relied
upon by any other Person without our prior written consent.
Very truly yours,
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EXHIBIT D - Assignment and Assumption Agreement
ASSIGNMENT AND ASSUMPTION AGREEMENT
AGREEMENT dated as of _________, 19__ among (the
"Assignor"), (the "Assignee")[, TEKNI-PLEX, INC. (the
"Borrower") and XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the
"Agent").]
WHEREAS, this Assignment and Assumption Agreement (the "Agreement")
relates to the Credit Agreement dated as of May 8, 1997 among the Borrower, the
Guarantors party thereto, the Assignor and the other Banks party thereto, the LC
Issuing Banks party thereto and the Agent (as amended from time to time, the
"Credit Agreement");
WHEREAS, as provided under the Credit Agreement, the Assignor has a
Commitment to make Loans to the Borrower and participate in Letters of Credit in
an aggregate principal amount at any time outstanding not to exceed
$____________;
WHEREAS, Loans made to the Borrower by the Assignor under the Credit
Agreement in the aggregate principal amount of $__________ are outstanding at
the date hereof; and
WHEREAS, Letters of Credit with a total amount available for drawing
thereunder of $__________ are outstanding at the date hereof
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Credit Agreement in respect of a portion of its
Commitment thereunder in an amount equal to $__________ (the "Assigned Amount"),
together with a corresponding portion of each of its outstanding Loans and its
LC Exposure, and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
have the respective meanings set forth in the Credit Agreement.
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SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Credit Agreement to the extent of the Assigned Amount, including the purchase
from the Assignor of the corresponding portion of the outstanding principal
amount of each Loan made by the Assignor and the corresponding portion of each
component of its LC Exposure. Upon the execution and delivery hereof by the
Assignor, the Assignee, [the Borrower, the Agent and the LC Issuing Banks] and
the payment of the amounts specified in Section 3 required to be paid on the
date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of a Bank under the Credit Agreement
with a Commitment in an amount equal to the Assigned Amount, and (ii) the
Commitment of the Assignor shall, as of the date hereof, be reduced by a like
amount and the Assignor released from its obligations under the Credit Agreement
to the extent such obligations have been assumed by the Assignee. The assignment
provided for herein shall be without recourse to the Assignor.
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in Federal funds the amount heretofore agreed between them.*
Commitment and/or facility fees accrued before the date hereof are for the
account of the Assignor and such fees accruing on and after the date hereof with
respect to the Assigned Amount are for the account of the Assignee. Each of the
Assignor and the Assignee agrees that if it receives any amount under the Credit
Agreement which is for the account of the other party hereto, it shall receive
the same for the account of such other party to the extent of such other party's
interest therein and promptly pay the same to such other party.
[SECTION 4. Consent of the Agent and the LC Issuing Banks. This Agreement
is conditioned upon the consent of the Agent and the LC Issuing Banks pursuant
to Section 10.06(c) of the Credit Agreement. Pursuant to Section 10.06(c), the
Borrower agrees to execute and deliver a Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein.]
--------
* Amount should combine principal together with accrued interest and breakage
compensation, if any, to be paid by the Assignee, net of any portion of any
upfront fee to be paid by the Assignor to the Assignee. It may be preferable in
an appropriate case to specify these amounts generically or by formula rather
than as a fixed sum.
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SECTION 5. Non-Reliance on Assignor. The Assignor makes no representation
or warranty in connection with, and shall have no responsibility with respect
to, the solvency, financial condition or statements of any Obligor, or the
validity and enforceability of the any Obligor's obligations under the Credit
Agreement or any Note. The Assignee acknowledges that it has, independently and
without reliance on the Assignor, and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of the
Obligors.
SECTION 6. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
By____________________________
Name:
Title:
By____________________________
Name:
Title:
The undersigned consent to the foregoing assignment.
[TEKNI-PLEX, INC.
By____________________________
Name:
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Title:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent and LC Issuing Bank
By____________________________
Name:
Title:
[OTHER LC ISSUING BANKS]
By____________________________
Name:
Title: ]
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EXHIBIT E
SECURITY AGREEMENT
AGREEMENT dated as of May 8, 1997 between TEKNI-PLEX, INC. (with its
successors, the "Borrower"), DOLCO PACKAGING CORP. (together with the Borrower
and any other Person which becomes a Grantor pursuant to Section 3(B), the
"Grantors" and each a "Grantor") and XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Agent (with its successor in such capacity, the "Agent").
WITNESSETH:
WHEREAS, the Borrower, certain banks (the "Banks") and Xxxxxx Guaranty
Trust Company of New York, as agent for such Banks, are parties to a Credit
Agreement of even date herewith (as the same may be amended from time to time,
the "Credit Agreement"); and
WHEREAS, in order to induce said Banks and Xxxxxx Guaranty Trust
Company of New York, as agent for such Banks, to enter into the Credit
Agreement, each Grantor has agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure the Grantors' obligations
under the Credit Agreement and the obligations of the Borrower under the Notes
issued pursuant thereto;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
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"Accounts" means all "accounts" (as defined in the UCC) now owned or
hereafter acquired by any Grantor, and shall also mean and include all accounts
receivable, contract rights, book debts and other obligations or indebtedness
owing to any Grantor arising from the sale, lease or exchange of goods or other
property by it and/or the performance of services by it (including, without
limitation, any such obligation which might be characterized as an account,
contract right or general intangible under the Uniform Commercial Code in effect
in any jurisdiction) and all of any Grantor's rights in, to and under all
purchase orders for goods, services or other property, and all of any Grantor's
rights to any goods, services or other property represented by any of the
foregoing (including returned or repossessed goods and an unpaid seller's right
of rescission, replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to any Grantor under all contracts for the sale,
lease or exchange of goods or other property and/or the performance of services
by it (whether or not yet earned by performance on the part of such Grantor), in
each case whether now in existence or hereafter arising or acquired including,
without limitation, the right to receive the proceeds of said purchase orders
and contracts and all collateral security and guarantees of any kind given by
any Person with respect to any of the foregoing.
"Collateral" has the meaning set forth in Section 3.
"Copyright License" means any agreement now or hereafter in existence
granting to any Grantor, or pursuant to which any Grantor has granted to any
other Person, any right to use, copy, reproduce, distribute, prepare derivative
works based upon, display or publish any records or other materials on which a
Copyright is in existence or may come into existence.
"Copyrights" means all the following: (i) all copyrights under the laws
of the United States or any other country (whether or not the underlying works
of authorship have been published), all registrations and recordings thereof,
all intellectual property rights to works of authorship (whether or not
published), and all applications for copyrights under the laws of the United
States or an other country, including, without limitation, registrations,
recordings and applications in the United States Copyright Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, including, without limitation,
those described in Schedule 1 to Exhibit E hereto, (ii) all reissues, renewals
and extensions thereof, (iii) all claims for, and rights to xxx for, past or
future infringements of any of the foregoing, and (iv) all income, royalties,
damages and payments now or hereafter due or payable with respect to any of the
foregoing, including, without limitation, damages and payments for past or
future infringements thereof.
"Copyright Security Agreement" means a Copyright Security Agreement
executed and delivered by a Grantor in favor of the Agent, for the benefit of
the Banks, substantially in the form of Exhibit E hereto, as the same may be
amended from time to time.
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"Documents" means all "documents" (as defined in the UCC) or other
receipts covering, evidencing or representing goods, now owned or hereafter
acquired by any Grantor.
"Equipment" means all "equipment" (as defined in the UCC) now owned or
hereafter acquired by any Grantor, including, without limitation, all motor
vehicles, trucks, trailers and Rolling Stock.
"General Intangibles" means all "general intangibles" (as defined in
the UCC) now owned or hereafter acquired by any Grantor, including, without
limitation, (i) all obligations or indebtedness owing to any Grantor (other than
Accounts) from whatever source arising, (ii) all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, Trademark Licenses, rights in intellectual
property, goodwill, trade names, brand names, service marks, trade secrets,
permits and licenses, (iii) all rights or claims in respect of refunds for taxes
paid, and (iv) all rights in respect of any pension plan or similar arrangement
maintained for employees of any member of the ERISA Group.
"Instruments" means all "instruments", "chattel paper" or "letters of
credit" (each as defined in the UCC) evidencing, representing, arising from or
existing in respect of, relating to, securing or otherwise supporting the
payment of, any of the Accounts, including (but not limited to) promissory
notes, drafts, bills of exchange and trade acceptances, now owned or hereafter
acquired by any Grantor.
"Inventory" means all "inventory" (as defined in the UCC), now owned or
hereafter acquired by any Grantor, wherever located, and shall also mean and
include, without limitation, all raw materials and other materials and supplies,
work-in-process and finished goods and any products made or processed therefrom
and all substances, if any, commingled therewith or added thereto.
"Leased Rolling Stock" has the meaning set forth in Section 3(A).
"Patent License" means any agreement now or hereafter in existence
granting to any Grantor, or pursuant to which any Grantor has granted to any
other Person, any right with respect to any Patent or any invention now or
hereafter in existence, whether patentable or not, whether a patent or
application for patent is in existence on such invention or not, and whether a
patent or application for patent on such invention may come into existence.
"Patents" means all of the following: (i) all letters patent and design
letters patent of the United States or any other country and all applications
for letters patent and design letters patent of the United States or any other
country, including, without limitation, applications in the United States Patent
and Trademark Office or in any similar office or agency of the
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000
Xxxxxx Xxxxxx, any State thereof or any other country or any political
subdivision thereof, including, without limitation, those described in Schedule
1 to Exhibit C hereto, (ii) all reissues, divisions, continuations,
continuations-in-part, renewals and extensions thereof, (iii) all claims for,
and rights to xxx for, past or future infringements of any of the foregoing, and
(iv) all income, royalties, damages and payments now or hereafter due or payable
with respect to any of the foregoing, including, without limitation, damages and
payments for past or future infringements thereof
"Patent Security Agreement" means the Patent Security Agreement
executed and delivered by each Grantor in favor of the Agent, for the benefit of
the Banks, substantially in the form of Exhibit C hereto, as the same may be
amended from time to time.
"Perfection Certificate" means a certificate substantially in the form
of Exhibit A, completed and supplemented with the schedules and attachments
contemplated thereby to the satisfaction of the Agent, and duly executed by the
chief executive officer of each Grantor.
"Permitted Liens" means the Security Interests and the Liens on the
Collateral permitted to be created, to be assumed or to exist pursuant to
Section 5.09 of the Credit Agreement.
"Proceeds" means all proceeds of, and all other profits, products,
rents or receipts, in whatever form, arising from the collection, sale, lease,
exchange, assignment, licensing or other disposition of, or other realization
upon, Collateral, including, without limitation, all claims of each Grantor
against third parties for loss of, damage to or destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of insurance in
respect of, any Collateral, and any condemnation or requisition payments with
respect to any Collateral, in each case whether now existing or hereafter
arising.
"Rolling Stock" means all railcars, barges and other water carrier
equipment, and all accessions, appurtenances and parts installed on and
additions thereto, and replacements thereof, now owned or hereafter acquired by
the Company.
"Rolling Stock Leases" has the meaning set forth in Section 3(A).
"Rolling Stock Revenues" means any monies, revenues, payments or
credits now owned or hereafter acquired by any Grantor which are generated by or
attributable to the Rolling Stock or Leased Rolling Stock, including, without
limitation, railcar hire payments, mileage allowances, per diem mileage
payments, empty mileage allowances, mileage credits and excess mileage credits,
in each case whether now existing or hereafter arising.
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"Secured Obligations" means the obligations secured under this
Agreement including (a) all principal of and interest (including, without
limitation, any interest which accrues after the commencement of any case,
proceeding or other action relating to the bankruptcy, insolvency or
reorganization of any Grantor, whether or not allowed or allowable as a claim in
any such proceeding) on any loan or any letter of credit reimbursement
obligation under, or any note issued pursuant to, the Credit Agreement, (b) all
other amounts payable by the Grantors hereunder or under the Credit Agreement or
any other Security Document, and (c) any renewals or extensions of any of the
foregoing.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"Trademark License" means any agreement now or hereafter in existence
granting to any Grantor, or pursuant to which any Grantor has granted to any
other Person, any right to use any Trademark.
"Trademarks" means all of the following: (i) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, brand names, trade dress, prints and
labels on which any of the foregoing have appeared or appear, package and other
designs, and any other source or business identifiers, and general intangibles
of like nature, and the rights in any of the foregoing which arise under
applicable law, (ii) the goodwill of the business symbolized thereby or
associated with each of them, (iii) all registrations and applications in
connection therewith, including, without limitation, registrations and
applications in the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any other country or
any political subdivision thereof, including, without limitation, those
described in Schedule 1 to Exhibit D hereto, (iv) all reissues, extensions and
renewals thereof, (v) all claims for, and rights to xxx for, past or future
infringements of any of the foregoing, and (vi) all income, royalties, damages
and payments now or hereafter due or payable with respect to any of the
foregoing, including, without limitation, damages and payments for past or
future infringements thereof.
"Trademark Security Agreement" means the Trademark Security Agreement
executed and delivered by each Grantor in favor of the Agent, for the benefit of
the Banks, substantially in the form of Exhibit D hereto, as the same may be
amended from time to time.
"UCC" means the Uniform Commercial Code as in effect on the date hereof
in the State of New York; provided that if by reason of mandatory provisions of
law, the perfection or the effect of perfection or non-perfection of the
Security Interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than New
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112
York, "UCC" means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.
SECTION 2. Representations and Warranties
Each Grantor represents and warrants as follows:
(A) The Grantors have good and marketable title to all of the
Collateral, free and clear of any Liens other than Permitted Liens. Each Grantor
has taken all actions necessary under the UCC to perfect its interest in any
Accounts purchased or otherwise acquired by it, as against its assignors and
creditors of its assignors.
(B) No Grantor has performed any acts which would prevent the Agent
from enforcing any of the terms of this Agreement or which would limit the Agent
in any such enforcement. Other than financing statements or other similar or
equivalent documents or instruments with respect to the Security Interests and
Permitted Liens and other than documents or instruments in respect of which a
termination statement or other termination document has been filed, no financing
statement, mortgage, security agreement or similar or equivalent document or
instrument covering all or any part of the Collateral is on file or of record in
any jurisdiction in which such filing or recording would be effective to perfect
a Lien on such Collateral. No Collateral is in the possession of any Person
(other than the Grantors) asserting any claim thereto or security interest
therein, except that the Agent or its designee may have possession of Collateral
as contemplated hereby and warehousemen, carriers or other bailees may from time
to time assert claims to or security interests in Collateral in their
possession.
(C) Not less than five Domestic Business Days prior to the date of the
first Borrowing under the Credit Agreement, the Grantors shall deliver a
Perfection Certificate to the Agent. The information set forth therein shall be
correct and complete. The Grantors shall use all reasonable efforts to furnish
to the Agent, not later than 60 days following the date of the first Borrowing,
file search reports from each UCC filing office set forth in Schedule 7 to the
Perfection Certificate confirming the filing information set forth in such
Schedule.
(D) To the extent that the Collateral is subject to the UCC, the
Security Interests constitute valid security interests under the UCC securing
the Secured Obligations. When UCC financing statements in the form specified in
Exhibit A shall have been filed in the offices specified in the Perfection
Certificate, and this Agreement and any amendments hereto in appropriate form
have been filed in the office of the Secretary of the Interstate Commerce
Commission, with respect to any Rolling Stock, Leased Rolling Stock or Rolling
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Stock Leases, the Security Interests shall constitute perfected security
interests in the Collateral (except Inventory in transit) to the extent that a
security interest therein may be perfected by filing pursuant to the UCC and the
Interstate Commerce Act, prior to all other Liens and rights of others therein
except for the Permitted Liens. When the Patent Security Agreement and the
Trademark Security Agreement have been filed with the United States Patent and
Trademark Office, the Security Interests shall constitute perfected security
interests in all right, title and interest of the Grantors in Patents and
Trademarks, prior to all other Liens and rights of others therein except for
Permitted Liens. When a Copyright Security Agreement has been filed with the
United States Copyright Office, the Security Interests shall constitute
perfected security interests in all right, title and interest of the Grantors in
Copyrights, prior to all other Liens and rights of others therein except for
Permitted Liens.
(E) The Inventory and Equipment are insured in accordance with the
requirements of the Credit Agreement.
(F) The Grantors have produced or will produce all Inventory produced
by them in compliance with the applicable requirements of the Fair Labor
Standards Act, as amended.
SECTION 3. The Security Interests
(A) In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all of the obligations of the Grantors hereunder and under the Credit
Agreement, the Grantors hereby grant to the Agent for the ratable benefit of the
Banks a continuing security interest in and to all of the following property of
the Grantors, whether now owned or existing or hereafter acquired or arising and
regardless of where located (all being collectively referred to as the
"Collateral"):
(1) Accounts;
(2) Inventory;
(3) General Intangibles;
(4) Documents;
(5) Instruments;
(6) Equipment;
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(7) All books and records (including, without limitation, customer
lists, marketing information, credit files, price lists, operating records,
vendor and supplier price lists, sales literature, computer programs, printouts
and other computer materials and records) of any Grantor pertaining to any of
the Collateral;
(8) All right, title, claims and benefits now owned or hereafter
acquired by any Grantor in and to any railcar leases, subleases, rental
agreements and car hire contracts in which any Grantor shall at any time have
any interest, and any right, title, claim and benefits of any Grantor now owned
or hereafter acquired in and to any management agreement concerning all such
leases and agreements (collectively, "Rolling Stock Leases"); and all right,
title and interest of any Grantor in the railcars and equipment provided
pursuant to any Rolling Stock Leases ("Leased Rolling Stock"); in each case,
including, without limitation, all rights of any Grantor to receive and apply
any Rolling Stock Revenues attributable to any Leased Rolling Stock or pursuant
to any Rolling Stock Leases;
(9) All rights now owned or hereafter acquired by any Grantor to
receive and collect any Rolling Stock Revenues; and
(10) All Proceeds of all or any of the Collateral described in Clauses
1 through 9 hereof.
(B) The Borrower will cause any Subsidiary acquired after the Closing
Date to take appropriate steps to (i) become a Grantor hereunder and (ii)
immediately grant to the Agent for the ratable benefit of the Banks a first
priority security interest (subject to Permitted Liens and to restrictions
permitted by Section 5.19 of the Credit Agreement) upon all of its assets as
additional security for the Secured Obligations.
(C) The Security Interests are granted as security only and shall not
subject the Agent or any Bank to, or transfer or in any way affect or modify,
any obligation or liability of any Grantor with respect to any of the Collateral
or any transaction in connection therewith.
SECTION 4. Further Assurances; Covenants
(A) No Grantor will change its name, identity or corporate structure in
any manner unless it shall have given the Agent not less than 30 days' prior
notice thereof and delivered an opinion of counsel with respect thereto in
accordance with Section 4(L). No Grantor will change the location of (i) its
chief executive office or chief place of business or (ii) the locations where it
keeps or holds any Collateral or any records relating thereto from the
applicable location described in the Perfection Certificate unless it shall have
given the Agent
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115
not less than 30 days' prior notice thereof and delivered an opinion of counsel
with respect thereto in accordance with Section 4(L). The Grantors shall not in
any event change the location of any Collateral if such change would cause the
Security Interests in such Collateral to lapse or cease to be perfected, it
being understood, however, that the Grantors shall be able to transfer cash to
the extent permitted by the other provisions of this Agreement and the other
Loan Documents.
(B) Each Grantor will, from time to time, at its expense, execute,
deliver, file and record any statement, assignment, instrument, document,
agreement or other paper and take any other action, (including, without
limitation, any filings with the United States Patent and Trademark Office, any
filings with the United States Copyright Office, any filings with the Interstate
Commerce Commission, any filings of financing or continuation statements under
the UCC and any filings in, or agreements governed by the laws of, foreign
jurisdictions) that from time to time may be necessary, or that the Agent may
reasonably request, in order to create, preserve, perfect, confirm or validate
the Security Interests or to enable the Agent and the Banks to obtain the full
benefits of this Agreement, or to enable the Agent to exercise and enforce any
of its rights, powers and remedies hereunder with respect to any of the
Collateral. To the extent permitted by applicable law, each Grantor hereby
authorizes the Agent to execute and file financing statements or continuation
statements without such Grantor's signature appearing thereon. The Grantors
agree that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
The Grantors shall pay the costs of, or incidental to, any recording or filing
of any financing or continuation statements concerning the Collateral.
(C) If any Collateral is at any time in the possession or control of
any warehouseman, bailee or any of a Grantor's agents or processors, such
Grantor, if any Event of Default shall have occurred and be continuing and if
requested to do so by the Agent acting on the instructions of the Required
Banks, shall notify such warehouseman, bailee, agent or processor of the
Security Interests created hereby and to hold all such Collateral for the
Agent's account subject to the Agent's instructions.
(D) Each Grantor shall keep full and accurate books and records
relating to the Collateral, and stamp or otherwise xxxx such books and records
in such manner as the Required Banks may reasonably require in order to reflect
the Security Interests.
(E) Each Grantor will immediately deliver and pledge each Instrument to
the Agent, appropriately endorsed to the Agent, provided that so long as no
Event of Default shall have occurred and be continuing, each Grantor may retain
for collection in the ordinary course any Instruments received by it in the
ordinary course of business, and the Agent shall, promptly upon request of a
Grantor, make appropriate arrangements for making any other Instrument pledged
by such Grantor available to it for purposes of presentation, collection or
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116
renewal (any such arrangement to be effected, to the extent deemed appropriate
to the Agent, against trust receipt or like document).
(F) Each Grantor shall use all reasonable efforts to cause to be
collected from its account debtors, as and when due, any and all amounts owing
under or on account of each Account (including, without limitation, Accounts
which are delinquent, such Accounts to be collected in accordance with lawful
collection procedures) and shall apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Account. Subject
to the rights of the Agent and the Banks hereunder if an Event of Default shall
have occurred and be continuing, each Grantor may allow in the ordinary course
of business as adjustments to amounts owing under its Accounts (i) an extension
or renewal of the time or times of payment, or settlement for less than the
total unpaid balance, which such Grantor finds appropriate in accordance with
sound business judgment and (ii) a refund or credit due as a result of returned
or damaged merchandise, all in accordance with such Grantor's ordinary course of
business consistent with its or the Borrower's historical collection practices.
The costs and expenses (including, without limitation, attorney's fees) of
collection, whether incurred by the Grantors or the Agent, shall be borne by the
Grantors.
(G) Upon the occurrence and during the continuance of any Event of
default, upon request of the Required Banks through the Agent, each Grantor will
promptly notify (and each Grantor hereby authorizes the Agent so to notify) each
account debtor in respect of any Account or Instrument that such Collateral has
been assigned to the Agent hereunder, and that any payments due or to become due
in respect of such Collateral are to be made directly to the Agent or its
designee.
(H) Each Grantor shall, (i) as soon as practicable after the date
hereof, in the case of Equipment now owned in which a security interest is
perfected by a notation on the certificate of title or similar evidence of the
ownership of such goods and (ii) within 10 days of acquiring any other similar
Equipment, in each case, (a) having a value in excess of $100,000, or (b) having
a value in excess of $50,000, if the aggregate of all such items owned by the
Grantors at any time is greater than $250,000, deliver to the Agent any and all
certificates of title, applications for title or similar evidence of ownership
of such Equipment and shall cause the Agent to be named as lienholder on any
such certificate of title or other evidence of ownership. Each Grantor shall
promptly inform the Agent of any additions to or deletions from the Equipment
exceeding $250,000 in the aggregate and shall not permit any such items to
become a fixture to real estate except pursuant to the Mortgages or an accession
to other personal property except such other property that is Collateral.
(I) Each Grantor shall as soon as practicable after the date hereof, at
its own cost and expense, cause to be plainly, distinctly, permanently and
conspicuously placed, fastened or painted upon each side of each item of Rolling
Stock a legend bearing such words as the
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Agent may request indicating the Lien over and security interest in such Rolling
Stock created hereby in letters not less than one inch in height. The Grantors
may permit the Rolling Stock to be operated within the United States, but shall
not permit the Rolling Stock to be operated outside the boundaries of the
continental United States.
(J) Subject to Section 12, without the prior written consent of the
Required Banks, no Grantor will (a) sell, lease, exchange, assign or otherwise
dispose of, or grant any option with respect to, any Collateral, except that,
subject to the rights of the Agent and the Banks hereunder if an Event of
Default shall have occurred and be continuing, such Grantor may sell, lease or
exchange ( ) Inventory and obsolete, unused or unnecessary Equipment in the
ordinary course of business, and (y) portions of any business acquired in an
Acquisition, so long as such portions have an aggregate value not in excess of
15% of the aggregate purchase price for such Acquisition, whereupon, in the case
of such a sale or exchange, the Security Interests created hereby in such item
(but not in any Proceeds arising from such sale or exchange) shall cease
immediately without any further action on the part of the Agent; or (b) create,
incur or suffer to exist any Lien with respect to any Collateral, except for
Permitted Liens.
(K) Prior to the date of the first Borrowing under the Credit
Agreement, each Grantor will cause the Agent to be named as an insured party on
each insurance policy covering risks relating to any of its Inventory and
Equipment. Each Grantor will deliver to the Agent, upon request of the Agent,
the insurance policies for such insurance or certificates of insurance
evidencing such coverage. Each such insurance policy shall include effective
waivers by the insurer of all claims for insurance premiums against the Agent or
any Bank, provide for coverage to the Agent regardless of the breach by relevant
Grantor of any warranty or representation made therein, not be subject to
co-insurance, and provide that no cancellation, termination or material
modification thereof shall be effective until at least 30 days (or, in the case
of non-payment of premiums, at least 10 days) after receipt by the Agent of
notice thereof.
(L) Each Grantor will, promptly upon request, provide to the Agent all
information and evidence it may reasonably request concerning the Collateral to
enable the Agent to enforce the provisions of this Agreement.
(M) Each Grantor shall notify the Agent promptly if it knows, or has
reason to know, that any application or registration relating to any Copyright,
Patent or Trademark may become abandoned. In the event that any Grantor receives
notice of or becomes aware that any right to a Copyright, Copyright License,
Patent, Patent License, Trademark or Trademark License has been infringed,
misappropriated or diluted by a third party, such Grantor shall notify the Agent
promptly after it learns thereof and shall, unless such Grantor shall reasonably
determine that any such action would be of insufficient economic value,
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promptly take such other actions as such Grantor shall reasonably deem
appropriate under the circumstances to protect such Copyright, Copyright
License, Patent, Patent License, Trademark or Trademark License. Within thirty
(30) days after having filed an application for the registration of any
Copyright with the United States Copyright Office or any Patent or Trademark
with the United States Patent and Trademark Office, or with any similar office
or agency in any other country or any political subdivision thereof, upon
request of the Agent, each Grantor shall execute and deliver any and all
agreements, instruments, documents and papers the Agent may request to evidence
the Security Interests in such Copyright, Patent or Trademark and the goodwill
and general intangibles of such Grantor relating thereto or represented thereby.
Each Grantor hereby appoints the Agent its attorney-in-fact to execute and file
all such writings for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed; such power, being coupled with an interest, shall
be irrevocable until the Secured Obligations are paid in full. The Agent shall
provide copies to each Grantor of any writings in which the Agent has acted as
attorney-in-fact within 30 days after the execution of such writings.
(N) Not more than four months nor less than 10 days prior to (i) as to
all Collateral, each anniversary of the date hereof during the term of the
Credit Agreement, if requested to do so by the Agent acting on the instructions
of the Required Banks, and (ii) as to the Collateral affected by such action,
each date on which it proposes to take any action contemplated by Section 4(A),
each Grantor shall, at its cost and expense, cause to be delivered to the Banks
an opinion of counsel, satisfactory to the Agent, substantially in the form of
Exhibit B to the effect that all financing statements and amendments or
supplements thereto, continuation statements and other documents required to be
recorded or filed in order to perfect and protect the Security Interests, to the
extent such Security Interests can be perfected by recording or filing, for a
period, specified in such opinion, continuing until a date not earlier than six
months from the date of such opinion, against all creditors of and purchasers
from such Grantor have been filed in each filing office necessary for such
purpose and that all filing fees and taxes, if any, payable in connection with
such filings have been paid in full.
(O) Within five (5) Business Days of entering into, amending, modifying
or terminating any Rolling Stock Lease, each Grantor will deliver a copy of such
Rolling Stock Lease, amendment or modification or notice of such termination to
the Agent.
(P) From time to time upon request by the Agent, each Grantor shall, at
its cost and expense, cause to be delivered to the Banks an opinion of counsel
satisfactory to the Agent as to such matters relating to the transactions
contemplated hereby as the Required Banks may reasonably request.
SECTION 5. General Authority
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Each Grantor hereby irrevocably appoints the Agent its true and lawful
attorney, with full power of substitution, in the name of the Grantors, the
Agent, the Banks or otherwise, for the sole use and benefit of the Agent and the
Banks, but at such Grantor's expense, to the extent permitted by law to
exercise, at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:
(i) to demand, xxx for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if the Agent were
the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Agent shall give each Grantor not less than thirty (30) days'
prior notice of the time and place of any sale or other intended disposition of
any of the Collateral, except any Collateral which is perishable or threatens to
decline speedily in value or is of a type customarily sold on a recognized
market. The Agent and each Grantor agree that such notice constitutes
"reasonable notification" within the meaning of Section 9-504(3) of the UCC.
SECTION 6. Remedies upon Event of Default
(A) If any Event of Default has occurred and is continuing, the Agent
may exercise on behalf of the Banks all rights of a secured party under the UCC
(whether or not in effect in the jurisdiction where such rights are exercised),
and, in addition, the Agent may, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
(i) apply cash, if any, then held by it as Collateral as specified in Section 8
and (ii) if there shall be no such cash or if such cash shall be insufficient to
pay all the Secured Obligations in full, sell the Collateral or any part thereof
at public or private sale, for cash, upon credit or for future delivery, and at
such price or prices as the Agent may deem satisfactory. The Agent or any Bank
may be the purchaser of any or all of the Collateral so sold at any public sale
(or, if the Collateral is of a type customarily sold in a recognized market or
is of a type which is the subject of widely distributed standard price
quotations, at any private sale). Each Grantor will execute and deliver such
documents and take such other action as the Agent deems necessary or advisable
in order that any such sale may be made in compliance with law. Upon any such
sale the Agent shall have the right to
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deliver, assign and transfer to the purchaser thereof the Collateral so sold.
Each purchaser at any such sale shall hold the Collateral so sold to it
absolutely and free from any claim or right of whatsoever kind, including any
equity or right of redemption of any Grantor which may be waived, and each
Grantor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale required by
Section 5 shall (1) in the case of a public sale, state the time and place fixed
for such sale, and (2) in the case of a private sale, state the day after which
such sale may be consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the Agent
may fix in the notice of such sale. At any such sale the Collateral may be sold
in one lot as an entirety or in separate parcels, as the Agent may determine.
The Agent shall not be obligated to make any such sale pursuant to any such
notice. The Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In the case of any sale of all
or any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Agent until the selling price is paid by the
purchaser thereof, but the Agent shall not incur any liability in the case of
the failure of such purchaser to take up and pay for the Collateral so sold and,
in the case of any such failure, such Collateral may again be sold upon like
notice. The Agent, instead of exercising the power of sale herein conferred upon
it, may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(B) For the purpose of enforcing any and all rights and remedies under
this Agreement, if any Event of Default has occurred and is continuing, the
Agent may (i) require each Grantor to, and each Grantor agrees that it will, at
its expense and upon the request of the Agent, forthwith assemble all or any
part of the Collateral as directed by the Agent and make it available at a place
designated by the Agent which is, in its opinion, reasonably convenient to the
Agent and such Grantor, whether at the premises of such Grantor or otherwise,
(ii) to the extent permitted by applicable law, enter, with or without process
of law and without breach of the peace, any premise where any of the Collateral
is or may be located, and without charge or liability to it seize and remove
such Collateral from such premises, (iii) have access to and use each Grantors'
books and records relating to the Collateral and (iv) prior to the disposition
of the Collateral, store or transfer it without charge in or by means of any
storage or transportation facility owned or leased by the relevant Grantor,
process, repair or recondition it or otherwise prepare it for disposition in any
manner and to the extent the Agent deems appropriate and, in connection with
such preparation and disposition, use without charge any trademark, trade name,
brand name,
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copyright, patent or technical process used by the Borrower. The Agent may also
render any or all of the Collateral unusable at any Grantor's premises and may
dispose of such Collateral on such premises without liability for rent or costs.
(C) Without limiting the generality of the foregoing, if any Event of
Default has occurred and is continuing,
(i) subject to any outstanding licenses or sublicenses to or by any
Grantor, the Agent may license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any Copyrights,
Patents or Trademarks included in the Collateral throughout the world for such
term or terms, on such conditions and in such manner as the Agent shall in its
sole discretion determine;
(ii) the Agent may (without assuming any obligations or liability
thereunder), at any time and from time to time, in its sole discretion, enforce
(and shall have the exclusive right to enforce) against any licensee or
sublicensee all rights and remedies of each Grantor in, to and under any
Copyright Licenses, Patent Licenses or Trademark Licenses and take or refrain
from taking any action under any thereof, and each Grantor hereby releases the
Agent and each of the Banks from, and agrees to hold the Agent and each of the
Banks free and harmless from and against any claims and expenses arising out of,
any lawful action so taken or omitted to be taken with respect thereto; and
(iii) upon request by the Agent, each Grantor will execute and deliver
to the Agent a power of attorney, in form and substance satisfactory to the
Agent, for the implementation of any lease, assignment, license, sublicense,
grant of option, sale or other disposition of a Copyright, Patent or Trademark
or any action related thereto. In the event of any such disposition pursuant to
this Section, each Grantor shall supply its know-how and expertise relating to
the manufacture and sale of the products bearing Trademarks or the products or
services made or rendered in connection with Patents, and its customer lists and
other records relating to such Patents and Trademarks and to the distribution of
said products, to the Agent.
SECTION 7. Limitation on Duty of Agent in Respect of Collateral.
Beyond the exercise of reasonable care in the custody thereof, the
Agent shall have no duty as to any Collateral in its possession or control or in
the possession or control of any agent or bailee or any income thereon or as to
the preservation of rights against prior parties or any other rights pertaining
thereto. The Agent shall be deemed to have exercised reasonable care in the
custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property, and
shall not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the
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value thereof, by reason of the act or omission of any warehouseman, carrier,
forwarding agency, consignee or other agent or bailee selected by the Agent in
good faith.
SECTION 8. Application of Proceeds
(A) Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any part
of the Collateral shall be applied by the Agent in the following order of
priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and counsel
for the Agent, and all expenses, liabilities and advances incurred or
made by the Agent in connection therewith, and any other unreimbursed
expenses for which the Agent or any Bank is to be reimbursed pursuant
to Section 10.03 of the Credit Agreement or Section 11 hereof and
unpaid fees owing to the Agent under the Credit Agreement;
second, to the ratable payment of unpaid principal of the Secured
Obligations;
third, to the ratable payment of accrued but unpaid interest on
the Secured Obligations in accordance with the provisions of the Credit
Agreement;
fourth, to the ratable payment of all other Secured Obligations,
until all Secured Obligations shall have been paid in full; and
finally, to payment to the Grantors or their successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
(B) The Agent may make distributions hereunder in cash or in kind or,
on a ratable basis, in any combination thereof. The Agent shall invest all
amounts to be applied to LC Exposures in Temporary Cash Investments selected by
it and hold such amounts in trust for application to future drawings under the
Letters of Credit notified to it by the LC Issuing Banks in the order in which
such drawings are made. If the Agent holds any amounts which were distributable
in respect of LC Exposures after the Letters of Credit have expired and all
amounts payable with respect thereto have been paid, such amounts shall be
applied in the order set forth in subsection (A) above.
(C) In making the determinations and allocations required by this
Section, the Agent shall have no liability to any of the Banks for actions taken
in reliance on information supplied by the Banks as to the amounts of the
Secured Obligations held by them. All distributions made by the Agent pursuant
to this Section shall be final, and the Agent shall have no duty to inquire as
to the application by the Banks of any amount distributed to them.
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However, if at any time the Agent determines that an allocation or distribution
previously made pursuant to this Section was based on a mistake of fact
(including, without limiting the generality of the foregoing, mistakes based on
any assumption that principal or interest has been paid by payments which are
subsequently recovered from the recipient thereof through the operation of any
bankruptcy, reorganization, insolvency or other laws or otherwise), the Agent
may in its discretion, but shall not be obligated to, adjust subsequent
allocations and distributions hereunder so that, on a cumulative basis, the
Agent and the Banks receive the distributions to which they would have been
entitled if such mistake of fact had not been made.
SECTION 9. Concerning the Agent
The provisions of Article 7 of the Credit Agreement shall inure to the
benefit of the Agent in respect of this Agreement and shall be binding upon the
parties to the Credit Agreement in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Agent therein set
forth:
(A) The Agent is authorized to take all such action as is provided to
be taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein (including, without
limitation, the timing and methods of realization upon the Collateral) the Agent
shall act or refrain from acting in accordance with written instructions from
the Required Banks or, in the absence of such instructions, in accordance with
its discretion.
(B) The Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Security Interests in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder. The Agent shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by any
Grantor.
SECTION 10. Appointment of Co-Agents
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Agent may appoint another bank or trust company or one or
more other persons, either to act as co-agent or co-agents, jointly with the
gent, or to act as separate agent or agents on behalf of the Banks with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 9).
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SECTION 11. Expenses
In the event that any Grantor fails to comply with the provisions of
the Credit Agreement or this Agreement, such that the value of any Collateral or
the validity, perfection, rank or value of any Security Interest is thereby
diminished or potentially diminished or put at risk, the Agent if requested by
the Required Banks may, but shall not be required to, effect such compliance on
behalf of such Grantor, and such Grantor shall reimburse the Agent for the costs
thereof on demand. The Grantors jointly and severally agree that all insurance
expenses and all expenses of protecting, storing, warehousing, appraising,
insuring, handling, maintaining and shipping the Collateral, any and all excise,
property, sales and use taxes imposed by any state, federal or local authority
on any of the Collateral, or in respect of periodic appraisals and inspections
of the Collateral to the extent the same may reasonably be requested by the
Required Banks from time to time, or in respect of the sale or other disposition
thereof shall be borne and paid by the Grantors; and if the Grantors fail to
promptly pay any portion thereof when due, the Agent or any Bank may, at its
option, but shall not be required to, pay the same and charge any Grantor's
account therefor, and the Grantors jointly and severally agree to reimburse the
Agent or such Bank therefor on demand. All sums so paid or incurred by the Agent
or any Bank for any of the foregoing and any and all other sums for which any
Grantor may become liable hereunder and all costs and expenses (including
attorneys' fees, legal expenses and court costs) reasonably incurred by the
Agent or any Bank in enforcing or protecting the Security Interests or any of
their rights or remedies under this Agreement, shall, together with interest
thereon until paid at the rate applicable to Base Rate Loans plus 2%, be
additional Secured Obligations hereunder.
SECTION 12. Termination of Security Interests; Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Grantors. At any time and from time to time prior to such termination of the
Security Interests, the Agent may release any of the Collateral with the prior
written consent of the Required Banks; provided that the Agent may not release
all or substantially all of the Collateral (as defined in the Credit Agreement)
without the prior written consent of all the Banks. Upon any such termination of
the Security Interests or release of Collateral, the Agent will, at the expense
of the relevant Grantor, execute and deliver to each Grantor such documents as
such Grantor shall reasonably request to evidence the termination of the
Security Interests or the release of such Collateral, as the case may be.
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SECTION 13. Notices
All notices, communications and distributions hereunder shall be given
in accordance with Section 10.01 of the Credit Agreement.
SECTION 14. Waivers; Non-exclusive Remedies
No failure on the part of the Agent to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Agent of any right under the Credit Agreement or this Agreement
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement and the Credit Agreement are cumulative and
are not exclusive of any other remedies provided by law.
SECTION 15. Successors and Assigns
This Agreement is for the benefit of the Agent and the Banks and their
successors and assigns, and in the event of an assignment of all or any of the
Secured Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on each Grantor and its successors and assigns.
SECTION 16. Changes in Writing
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by each Grantor and
the Agent with he consent of the Required Banks; provided that no such
modification shall, unless signed by all the Banks, effect or permit a release
of all or substantially all of the Collateral (as defined in the Credit
Agreement) or amend this Section 16.
SECTION 17. New York Law
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws of
any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 18. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Agent and the
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Banks in order to carry out the intentions of the parties hereto as nearly as
may be possible; and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
SECTION 19. Counterparts
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TEKNI-PLEX, INC.
By ______________________________
Title:
DOLCO PACKAGING CORP.
By ______________________________
Title:
XXXXXX GUARANTY TRUST COMPANY OF NEW
YORK, as Agent
By ______________________________
Title:
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EXHIBIT A
PERFECTION CERTIFICATE
The undersigned, the chief executive officers and chief legal officers
of Tekni-Plex, Inc., a Delaware corporation (the "Borrower") and Dolco Packaging
Corp., a Delaware corporation (together with the Borrower, the "Grantors" and
each "Grantor"), hereby certify with reference to the Security Agreement dated
as of May 8, 1997 between the Grantors and Xxxxxx Guaranty Trust Company of New
York, as Agent (terms defined therein being used herein as therein defined), to
the Agent and each Bank as follows:
1. Names. (a) The exact corporate name of each Grantor as it appears
in its certificate of incorporation is as follows:
(b) Set forth below is each other corporate name each Grantor has had
since its organization, together with the date of the relevant change:
(c) Except as set forth in Schedule 1, no Grantor has changed its
identity or corporate structure in any way within the past five years. To the
extent that any Grantor has changed its identity or corporate structure within
the past 5 years pursuant to a merger, consolidation, acquisition or other
change in form, Schedule 1 sets forth the information required by paragraphs 1,
2 and 3 hereof as to each acquiree or constituent party to such merger or
consolidation, unless such acquiree or constituent party was (i) transitory in
nature, (ii) held no assets (other than on a temporary basis for the sole
purpose of consummating such acquisition, merger or consolidation) and (iii)
conducted no activities. No such change in form has occurred with respect to any
Grantor since _______.
[Changes in identity or corporate structure would include mergers,
consolidations and acquisitions, as well as any change in the form, nature or
jurisdiction of corporate organization. If any such change has occurred, include
in Schedule 1 the information required by paragraphs 1, 2 and 3 of this
certificate as to each acquiree or constituent party to a merger or
consolidation.]
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(d) The following is a list of all other names (including trade names
or similar appellations) used by each Grantor or any of its divisions or other
business units at any time during the past five years:
2. Current Locations. (a) The chief executive office of each Grantor is
located at the following address:
Mailing Address County State
--------------- ------ -----
(b) The following are all the locations where each Grantor maintains
any books or records relation to any Accounts:
Mailing
Name Address County State
---- ------- ------ -----
(c) The following are all the places of business of each Grantor not
identified above:
Mailing
Name Address County State
---- ------- ------ -----
(d) The following are all the locations where each Grantor maintains
any Inventory not identified above:
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Mailing
Name Address County State
---- ------- ------ -----
(e) The following are the names and addresses of all Persons other than
the Grantors which have possession of any of the Inventory of any Grantor:
Mailing
Name Address County State
---- ------- ------ -----
3. Prior Locations. (a) Set forth below is the information required by
subparagraphs (a), (b) and (c) of paragraph 2 with respect to each location or
place of business maintained by each Grantor at any time during the past five
years:
(b) Set forth below is the information required by subparagraphs (d)
and (e) of paragraph 2 with respect to each location or bailee here or with whom
Inventory has been lodged at any time during the past four months:
4. Unusual Transactions. Except as set forth in Schedule 4, all
Accounts have been originated by a Grantor and all Inventory and Equipment has
been acquired by a Grantor in the ordinary course of its business.
5. File Search Reports. Attached hereto as Schedule 5(A) is a true copy
of a file search report from the Uniform Commercial Code filing officer in each
jurisdiction identified in paragraph 2 or 3 above with respect to each name set
forth in paragraph 1 above. Attached hereto as Schedule 5(B) is a true copy of
each financing statement or other filing identified in such file search reports.
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6. UCC Filings. A duly signed financing statement on Form UCC-1 in
substantially the form of Schedule 6(A) hereto has been duly filed in the
Uniform Commercial Code filing office in each jurisdiction identified i
paragraph 2 hereof. Attached hereto as Schedule 6(B) is a true copy of each such
filing duly acknowledged by the filing officer.
7. Schedule of Filings. Attached hereto as Schedule 7 is a schedule
setting forth filing information with respect to the filings described in
paragraph 6 above.
8. Filing Fees. All filing fees and taxes payable in connection with
the filings described in paragraph 6 above have been paid.
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IN WITNESS WHEREOF, we have hereunto set our hands this day of May,
1997.
----------------------------
Title:
----------------------------
Title:
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SCHEDULE 6(A)
DESCRIPTION OF COLLATERAL
All accounts, chattel paper, contract rights, general intangibles, inventory,
equipment and documents, now owned or hereafter acquired, wherever located, and
all proceeds thereof.
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SCHEDULE 7
SCHEDULE OF FILINGS
Debtor Filing Officer File Number
------ -------------- -----------
Date of Filing*
---------------
Tekni-Plex, Inc. Secretary of State, NJ
Tekni-Plex, Inc. Somerset County, NJ
Tekni-Plex, Inc. Hunterdon County, NJ
Dolco Packaging Corp. Secretary of State, NJ
Dolco Packaging Corp. Somerset County, NJ
Dolco Packaging Corp. Hunterdon County, NJ
Dolco Packaging Corp. Gwinnett County, GA
Dolco Packaging Corp. Secretary of State, IN
Dolco Packaging Corp. Secretary of State, WA
Dolco Packaging Corp. Secretary of State, TX
Dolco Packaging Corp. Secretary of State, MA
Dolco Packaging Corp. Town of Haverhill, MA
---------------
* Indicate lapse date, if other than fifth anniversary.
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EXHIBIT B
TO SECURITY
AGREEMENT
1. The Security Agreement creates a valid security interest, for the
benefit of the Secured Parties, in all of the Company's right, title and
interest in all Collateral to the extent that the Uniform Commercial Code (the
"UCC") is applicable to the creation of a security interest therein and, to the
extent provided in Section 9-306 of the UCC, all proceeds thereof.
2. The filing of the financing statements described as items ________
in the offices designated in Schedule A are the only filings, recordings and
registrations necessary to perfect, publish notice of and preserve the security
interest in the Collateral covered by the UCC (the "UCC Collateral") created by
the Security Agreement to the extent such security interest may be perfected by
filing under the UCC, and no further filing or recording of any document or
instrument or other action will be required so to perfect and preserve such
security interest, except that (i) continuation statements relating to said
financing statements must be filed within _______________ [state time period]
and (ii) additional filings may be necessary with respect to the UCC Collateral
if the Company [or __________, as the case may be,] changes its name, identity
or corporate structure or the jurisdiction in which its places of business or
the UCC Collateral are located.
3. The Liens and security interests created by the Security Agreement
on or in the UCC Collateral will validly secure the payment of all future
advances pursuant to the Credit Agreement, whether or not at the time such
advances are made an Event of Default or other event not within the control of
the Banks has relieved or may relieve the Banks from their obligations to make
such advances, and are perfected to the extent set forth in paragraph 2 above
with respect to such future advances.
135
EXHIBIT C TO
SECURITY
AGREEMENT
PATENT SECURITY AGREEMENT
(PATENTS, PATENT APPLICATIONS AND PATENT LICENSES)
WHEREAS, _______________, a [Delaware] corporation (herein referred to
as "Grantor") owns the Patents (as defined in the Security Agreement referred to
below) (including design patents and applications for patents) listed on
Schedule 1 annexed hereto, and is a party to the Patent Licenses (as defined in
the Security Agreement referred to below) identified in Schedule 1 annexed
hereto;
WHEREAS, Grantor, certain banks and Xxxxxx Guaranty Trust Company of
New York, as agent for such banks, are parties to a Credit Agreement of even
date herewith (as the same may be amended and in effect from time to time among
said parties and such banks (the "Banks") as may from time to time be parties
thereto, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Security Agreement of even date
herewith (as said Agreement may be amended and in effect from time to time, the
"Security Agreement") between Grantor and Xxxxxx Guaranty Trust Company of New
York, as agent for the secured parties referred to therein (in such capacity,
together with its successors in such capacity, "Grantee"), Grantor has granted
to Grantee for the benefit of such secured parties a continuing security
interest in substantially all the assets of Grantor, including all right, title
and interest of Grantor in, to and under the Patent Collateral (as defined
herein) whether now owned or existing or hereafter acquired or arising, to
secure the Secured Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively
136
referred to as the "Patent Collateral"), whether now owned or existing or
hereafter acquired or arising:
(i) each Patent (including each design patent and patent
application), including, without limitation, each Patent (including
each design patent and patent application) referred to in Schedule 1
annexed hereto;
(ii) each Patent License, including, without limitation, each
Patent License identified in Schedule 1 annexed hereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by
Grantor against third parties for past, present or future infringement
of any Patent (including any design patent), including, without
limitation, any Patent referred to in Schedule 1 annexed hereto
(including, without limitation, any such Patent issuing from any
application referred to in Schedule 1 annexed hereto), and all rights
and benefits of Grantor under any Patent License, including, without
limitation, any Patent License identified in Schedule 1 annexed hereto.
Grantor hereby irrevocably constitutes and appoints Grantee and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full power and authority in the name of Grantor or
in its name, from time to time, in Grantee's discretion, so long as any Event of
Default (as defined in the Credit Agreement) has occurred and is continuing, to
take with respect to the Patent Collateral any and all appropriate action which
Grantor might take with respect to the Patent Collateral and to execute any and
all documents and instruments which may be necessary or desirable to carry out
the terms of this Patent Security Agreement and to accomplish the purposes
hereof.
Except to the extent not prohibited in the Security Agreement, Grantor
agrees not to sell, license, exchange, assign or otherwise transfer or dispose
of, or grant any rights with respect to, or mortgage or otherwise encumber, any
of the foregoing Patent Collateral.
This security interest is granted in conjunction with the security
interests granted to Grantee pursuant to the Security Agreement. Grantor does
hereby further acknowledge and affirm that the rights and remedies of Grantee
with respect to the security interest in the Patent Collateral made and granted
hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
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137
IN WITNESS WHEREOF, Grantor has caused this Patent Security Agreement
to be duly executed by its officer thereunto duly authorized as of the ____ day
of ____________, 19__.
[COMPANY]
By:_________________________
Title:
Acknowledged:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By:_________________________
Title:
3
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
I, ______________________, a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY, that _________________________,
_______________ of [NAME OF COMPANY], personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such
_________________, appeared before me this day in person and acknowledged that
(s)he signed, executed and delivered the said instrument as her/his own free and
voluntary act and as the free and voluntary act of said Company, for the uses
and purposes therein set forth being duly authorized so to do.
GIVEN under my hand and Notarial Seal this ___ day of _______________,
19__.
[Seal]
________________________________
Signature of notary public
My Commission expires __________
4
139
SCHEDULE 1
TO PATENT
SECURITY AGREEMENT
PATENTS
A. U.S. Patents and Design Patents
I.D. No. Patent No. Issue Date Title
-------- ---------- ---------- -----
B. U.S. Patent Applications
Serial No. Date Filed Title
---------- ---------- -----
C. Foreign Patents
I.D. No. Patent No. Issue Date Title
-------- ---------- ---------- -----
5
140
EXCLUSIVE PATENT LICENSES
Name of Parties Date of Subject
Agreement Licensor/Licensee Agreement Matter
--------- ----------------- --------- -------
6
141
EXHIBIT D TO
SECURITY
AGREEMENT
TRADEMARK SECURITY AGREEMENT
(TRADEMARKS, TRADEMARK REGISTRATIONS, TRADEMARK
APPLICATIONS AND TRADEMARK LICENSES)
WHEREAS, _______________, a [Delaware] corporation (herein referred to
as "Grantor"), owns the Trademarks (as defined in the Security Agreement
referred to below) listed on Schedule 1 annexed hereto, and is a party to the
Trademark Licenses (as defined in the Security Agreement referred to below)
identified in Schedule 1 annexed hereto;
WHEREAS, Grantor, certain banks and Xxxxxx Guaranty Trust Company of
New York, as agent for such banks, are parties to a Credit Agreement of even
date herewith (as the same may be amended and in effect from time to time among
said parties and such banks (the "Banks") as may from time to time be parties
thereto, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Security Agreement of even date
herewith (as said Agreement may be amended and in effect from time to time, the
"Security Agreement") between Grantor and Xxxxxx Guaranty Trust Company of New
York as agent for the secured parties referred to therein (in such capacity,
together with its successors in such capacity, "Grantee"), Grantor has granted
to Grantee for the benefit of such secured parties a security interest in
substantially all the assets of Grantor, including all right, title and interest
of Grantor in, to and under the Trademark Collateral (as defined herein),
whether now owned or existing or hereafter acquired or arising, to secure the
Secured Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Trademark Collateral"),
whether now owned or existing or hereafter acquired or arising:
142
(i) each Trademark, including, without limitation, each Trademark
application referred to in Schedule 1 annexed hereto, and all of the
goodwill of the business connected with the use of, or symbolized by,
each such Trademark;
(ii) each Trademark License, including, without limitation, each
Trademark License identified in Schedule 1 annexed hereto, and all of
the goodwill of the business connected with the use of, or symbolized
by, each Trademark licensed pursuant thereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by
Grantor against third parties for past, present or future unfair
competition with, or violation of intellectual property rights in
connection with or injury to, or infringement or dilution of, any
Trademark, including, without limitation, any Trademark referred to in
Schedule 1 hereto, and all rights and benefits of Grantor under any
Trademark License, including, without limitation, any Trademark License
identified in Schedule 1 hereto, or for injury to the goodwill
associated with any of the foregoing.
Grantor hereby irrevocably constitutes and appoints Grantee and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full power and authority in the name of Grantor or
in its name, from time to time, in Grantee's discretion, so long as any Event of
Default (as defined in the Credit Agreement) has occurred and is continuing, to
take with respect to the Trademark Collateral any and all appropriate action
which Grantor might take with respect to the Trademark Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Trademark Security Agreement and to accomplish the
purposes hereof.
Except to the extent not prohibited in the Security Agreement, Grantor
agrees not to sell, license, exchange, assign or otherwise transfer or dispose
of, or grant any rights with respect to, or mortgage or otherwise encumber, any
of the foregoing Trademark Collateral.
This security interest is granted in conjunction with the security
interests granted to Grantee pursuant to the Security Agreement. Grantor does
hereby further acknowledge and affirm that the rights and remedies of Grantee
with respect to the security interest in the Trademark Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
2
143
IN WITNESS WHEREOF, Grantor has caused this Trademark Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of __________, 19__.
[COMPANY]
By: _________________________
Title:
Acknowledged:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By: ________________________
Title:
3
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
I, ______________________, a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY, that _________________________,
_______________ of [NAME OF COMPANY], personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such
_________________, appeared before me this day in person and acknowledged that
(s)he signed, executed and delivered the said instrument as her/his own free and
voluntary act and as the free and voluntary act of said Company, for the uses
and purposes therein set forth being duly authorized so to do.
GIVEN under my hand and Notarial Seal this ___ day of _______________,
19__.
[Seal]
________________________________
Signature of notary public
My Commission expires __________
145
SCHEDULE 1
TO TRADEMARK
SECURITY
AGREEMENT
U.S. TRADEMARKS AND TRADEMARK REGISTRATIONS
A. U.S. Trademarks and Trademark Registrations
Reg. No. Reg. Date Xxxx
-------- --------- ----
B. U.S. Trademark Applications
Serial No. Date Filed Xxxx
---------- ---------- ----
EXCLUSIVE TRADEMARK LICENSES
Name of Parties Date of Subject
Agreement Licensor/Licensee Agreement Matter
--------- ----------------- --------- -------
146
EXHIBIT E TO
SECURITY
AGREEMENT
COPYRIGHT SECURITY AGREEMENT
(COPYRIGHTS, COPYRIGHT REGISTRATIONS, COPYRIGHT
APPLICATIONS AND COPYRIGHT LICENSES)
WHEREAS, _______________, a [Delaware] corporation (herein referred to
as "Grantor") owns the Copyrights (as defined in the Security Agreement referred
to below) listed on Schedule 1 annexed hereto, and is a party to the Copyright
Licenses (as defined in the Security Agreement referred to below) identified in
Schedule 1 annexed hereto;
WHEREAS, Grantor, certain banks and Xxxxxx Guaranty Trust Company of
New York, as agent for such banks, are parties to a Credit Agreement of even
date herewith (as the same may be amended and in effect from time to time among
said parties and such banks (the "Banks") as may from time to time be parties
thereto, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Security Agreement of even date
herewith (as said Agreement may be amended and in effect from time to time, the
"Security Agreement") between Grantor and Xxxxxx Guaranty Trust Company of New
York, as agent for the secured parties referred to therein (in such capacity,
together with its successors in such capacity, the "Grantee"), Grantor has
granted to Grantee for the benefit of such secured parties a security interest
in substantially all the assets of the Grantor, including all right, title and
interest of Grantor in, to and under the Copyright Collateral (as defined
herein), whether now owned or existing or hereafter acquired or arising, to
secure the Secured Obligations (as defined in the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor does hereby grant to
Grantee a continuing security interest in all of Grantor's right, title and
interest in, to and under the following (all of the following items or types of
property being herein collectively referred to as the "Copyright Collateral"),
whether now owned or existing or hereafter acquired or arising:
(i) each Copyright, including, without limitation, each Copyright
referred to in Schedule 1 annexed hereto;
147
(ii) each Copyright License, including, without limitation, each
Copyright License identified in Schedule 1 annexed hereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by
Grantor against third parties for past, present or future infringement
of any Copyright, including, without limitation, any Copyright referred
to in Schedule 1 annexed hereto, and all rights and benefits of Grantor
under any Copyright License, including, without limitation, any
Copyright License identified in Schedule 1 annexed hereto.
Grantor hereby irrevocably constitutes and appoints Grantee and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full power and authority in the name of Grantor or
in its name, from time to time, in Grantee's discretion, so long as any Event of
Default (as defined in the Credit Agreement) has occurred and is continuing, to
take with respect to the Copyright Collateral any and all appropriate action
which Grantor might take with respect to the Copyright Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Copyright Security Agreement and to accomplish the
purposes hereof.
Except to the extent not prohibited in the Security Agreement, Grantor
agrees not to sell, license, exchange, assign or otherwise transfer or dispose
of, or grant any rights with respect to, or mortgage or otherwise encumber, any
of the foregoing Copyright Collateral.
This security interest is granted in conjunction with the security
interests granted to Grantee pursuant to the Security Agreement. Grantor does
hereby further acknowledge and affirm that the rights and remedies of Grantee
with respect to the security interest in the Copyright Collateral made and
granted hereby are more fully set forth in the Security Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
2
148
IN WITNESS WHEREOF, Grantor has caused this Copyright Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of _______, 19__.
[COMPANY]
By: ______________________
Title:
Acknowledged:
XXXXXX GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By:_____________________
Title:
3
000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
I, ______________________, a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY, that _________________________,
_______________ of [NAME OF COMPANY], personally known to me to be the same
person whose name is subscribed to the foregoing instrument as such
_________________, appeared before me this day in person and acknowledged that
(s)he signed, executed and delivered the said instrument as her/his own free and
voluntary act and as the free and voluntary act of said Company, for the uses
and purposes therein set forth being duly authorized so to do.
GIVEN under my hand and Notarial Seal this ___ day of _______________,
19__.
[Seal]
________________________________
Signature of notary public
My Commission expires __________
150
SCHEDULE 1
TO COPYRIGHT
SECURITY
AGREEMENT
COPYRIGHTS AND COPYRIGHT REGISTRATION
Registration No. Reg. Date Title
---------------- --------- -----
COPYRIGHT APPLICATIONS
Serial No. Date Filed Title
---------- ---------- -----
COPYRIGHT LICENSES
Name of Parties Date of Subject
Agreement Licensor/Licensee Agreement Matter
--------- ----------------- --------- --------
151
EXHIBIT F
PLEDGE AGREEMENT
AGREEMENT dated as of May 8, 1997 between TEKNI-PLEX, INC. (with
its successors, the "Borrower", and, together with any other Person
which becomes a Grantor pursuant to Section 3(B), the "Grantors" and
each a "Grantor") and XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, as
Agent (with its successors in such capacity, the "Agent").
WITNESSETH:
WHEREAS, the Borrower, certain banks (the "Banks") and Xxxxxx Guaranty
Trust Company of New York, as agent for such banks, are parties to a Credit
Agreement of even date herewith (as the same may be amended from time to time,
the "Credit Agreement"); and
WHEREAS, in order to induce said Banks and Xxxxxx Guaranty Trust
Company of New York, as agent for such Banks, to enter into the Credit
Agreement, each Grantor has agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure its obligations under the
Credit Agreement and the obligations of the Borrower under the Notes issued
pursuant thereto;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise defined herein
have, as used herein, the respective meanings provided for therein. The
following additional terms, as used herein, have the following respective
meanings:
"Collateral" has the meaning assigned to such term in Section 3(A).
"Issuer" means (i) each of the Subsidiaries listed on Schedule I hereto
and (ii) any other Person which becomes a Subsidiary after the date of this
Agreement.
152
"Pledged Instruments" means (i) all intercompany notes listed on
Schedule I hereto and (ii) any instrument required to be pledged to the Agent
pursuant to Section 3(B).
"Pledged Securities" means the Pledged Instruments and the Pledged
Stock.
"Pledged Stock" means (i) the Subsidiary Shares and (ii) any other
capital stock required to be pledged to the Agent pursuant to Section 3(B).
"Secured Obligations" means the obligations secured under this
Agreement including (i) all principal of and interest (including, without
limitation, any interest which accrues after, or would accrue but for, the
commencement of any case, proceeding or other action relating to the bankruptcy,
insolvency or reorganization of any Grantor, whether or not allowed or allowable
as a claim in any such proceeding) on any loan under, or any note issued
pursuant to, the Credit Agreement, (ii) all other amounts payable by any Grantor
hereunder or under the Credit Agreement and (iii) any renewals or extensions of
any of the foregoing.
"Security Interests" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
"Subsidiary Shares" means all shares of capital stock of the Subsidiary
listed on Schedule I hereto.
Unless otherwise defined herein, or unless the content otherwise
requires, all terms used herein which are defined in the New York Uniform
Commercial Code as in effect on the date hereof shall have the meanings therein
stated.
SECTION 2. Representations and Warranties
Each Grantor represents and warrants as follows:
(A) Title to Pledged Securities. The Grantors own all of the Pledged
Securities, free and clear of any Liens other than the Security Interests. The
Pledged Stock includes all of the issued and outstanding capital stock of Dolco
Packaging Corp. and all of the issued and outstanding stock of each other Issuer
owned by the Grantors. All of the Pledged Stock has been duly authorized and
validly issued, and is fully paid and non-assessable, and is subject to no
options to purchase or similar rights of any Person. No Grantor is or will
become a party to or otherwise bound by any agreement, other than this
Agreement, which restricts in any manner the rights of any present or future
holder of any of the Pledged Securities with respect thereto.
(B) Validity, Perfection and Priority of Security Interests. Upon the
delivery of the Pledged Instruments and certificates representing the Pledged
Stock to the Agent in
2
153
accordance with Section 4 hereof, the Agent will have valid and perfected
security interests in the Collateral subject to no prior Lien. No registration,
recordation or filing with any governmental body, agency or official is required
in connection with the execution or delivery of this Agreement or necessary for
the validity or enforceability hereof or for the perfection or enforcement of
the Security Interests. Neither the Borrower nor any of its Subsidiaries has
performed or, subject to bankruptcy, insolvency, reorganization and other laws
relating to the rights or relief of debtors, will perform any acts which might
prevent the Agent from enforcing any of the terms and conditions of this
Agreement or which would limit the Agent in any such enforcement.
(C) UCC Filing Locations. The chief executive office of the Borrower is
located at its address set forth on the signature pages of the Credit Agreement.
Under the Uniform Commercial Code as in effect in the State in which such office
is located, no local filing is required to perfect a security interest in
collateral consisting of general intangibles.
SECTION 3. The Security Interests
In order to secure the full and punctual payment of the Secured
Obligations in accordance with the terms thereof, and to secure the performance
of all the obligations of the Grantors hereunder:
(A) Each Grantor hereby assigns and pledges to and with the Agent for
the benefit of the Banks and grants to the Agent for the benefit of the Banks
security interests in the Pledged Securities, and all of its rights and
privileges with respect to the Pledged Securities, and all income and profits
thereon, and all interest, dividends and other payments and distributions with
respect thereto, and all proceeds of the foregoing (the "Collateral").
Contemporaneously with the execution and delivery hereof, the Borrower is
delivering the intercompany notes constituting the Pledged Instruments and
certificates representing the Subsidiary Shares in pledge hereunder.
(B) In the event that any Person becomes an Issuer, or any Issuer at
any time issues any additional or substitute shares of capital stock of any
class to a Grantor or any other Subsidiary, or issues any substitute note, or
owes any other Debt to a Grantor or any other Subsidiary, the relevant Grantor
will, or will cause such Subsidiary to take appropriate steps to become a
Grantor hereunder (including, in connection therewith, the delivery of
appropriate limited recourse guaranties of the Borrower's obligations under the
Credit Agreement and legal opinions and the making of appropriate
representations and warranties) and to, immediately pledge and deposit with the
Agent certificates representing all such shares and such note or an instrument
evidencing such other Debt as additional security for the Secured Obligations.
All such shares, notes and instruments constitute Pledged Securities and are
subject to all provisions of this Agreement.
3
154
(C) The Security Interests are granted as security only and shall not
subject the Agent or any Bank to, or transfer or in any way affect or modify,
any obligation or liability of the Borrower or any of its Subsidiaries with
respect to any of the Collateral or any transaction in connection therewith.
SECTION 4. Delivery of Pledged Securities
All Pledged Instruments shall be delivered to the Agent by the Grantors
pursuant hereto endorsed to the order of the Agent, and accompanied by any
required transfer tax stamps, all in form and substance satisfactory to the
Agent. All certificates representing Pledged Stock delivered to the Agent by the
Grantors pursuant hereto shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, with signatures appropriately guaranteed, and accompanied by any required
transfer tax stamps, all in form and substance satisfactory to the Agent.
SECTION 5. Further Assurances
(A) Each Grantor agrees that it will, at its expense and i such manner
and form as the Agent may reasonably require, execute, deliver, file and record
any financing statement, specific assignment or other paper and take any other
action that may be necessary or desirable, or that the Agent may request, in
order to create, preserve, perfect or validate any Security Interest or to
enable the Agent to exercise and enforce its rights hereunder with respect to
any of the Collateral. To the extent permitted by applicable law, each Grantor
hereby authorizes the Agent to execute and file, in the name of the Borrower or
otherwise, Uniform Commercial Code financing statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or of a
financing statement relating to this Agreement) which the Agent in its sole
discretion may deem necessary or appropriate to further perfect the Security
Interests.
(B) Each Grantor agrees that it will not change (i) its name, identity
or corporate structure in any manner or (ii) the location of its chief executive
office unless it shall have given the Agent not less than 30 days' prior notice
thereof.
SECTION 6. Record Ownership of Pledged Stock
The Agent may at any time or from time to time during the continuance
of an Event of Default, in its sole discretion, cause any or all of the Pledged
Stock to be transferred of record into the name of the Agent or its nominee.
Each Grantor will promptly give to the Agent copies of any notices or other
communications received by it with respect to Pledged Stock registered in its
name, and the Agent will promptly give to the Borrower copies of any
4
155
notices and communications received by the Agent with respect to Pledged Stock
registered in the name of the Agent or its nominee.
SECTION 7. Right to Receive Distributions on Collateral
During the continuance of any Event of Default, the Agent shall have
the right to receive and to retain as Collateral hereunder all dividends,
interest and other payments and distributions made upon or with respect to the
Collateral, and each Grantor shall take all such action as the Agent may deem
necessary or appropriate to give effect to such right. All such dividends,
interest and other payments and distributions which are received by a Grantor
shall be received in trust for the benefit of the Agent and the Banks (but,
unless an Event of Default shall have occurred and be continuing, may be used by
such Grantor as permitted by the other provisions of this Agreement and the
other Loan Documents). If the Agent so directs during the continuance of an
Event of Default, such dividends, interest and other payments and distributions
shall be segregated from other funds of such Grantor and shall, forthwith upon
demand by the Agent during the continuance of an Event of Default, be paid over
to the Agent as Collateral in the same form as received (with any necessary
endorsement). After all Events of Default have been cured, the Agent's right to
retain dividends, interest and other payments and distributions under this
Section 7 shall cease, and the Agent shall pay over to such Grantor any such
Collateral retained by it during the continuance of an Event of Default.
SECTION 8. Right to Vote Pledged Stock
Unless an Event of Default shall have occurred and be continuing, each
Grantor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Pledged Stock, and the Agent
shall, upon receiving a written request from such Grantor accompanied by a
certificate signed by the principal executive officer or principal financial
officer of the Borrower stating that no Event of Default has occurred and is
continuing, deliver to such Grantor or as specified in such request such
proxies, powers of attorney, consents, ratifications and waivers in respect of
any of the Pledged Stock which is registered in the name of the Agent or its
nominee as shall be specified in such request and be in form and substance
satisfactory to the Agent.
If an Event of Default shall have occurred and be continuing, the Agent
shall have the right to the extent permitted by law, and each Grantor shall take
all such action as may be necessary or appropriate to give effect to such right,
to vote and to give consents, ratifications and waivers, and take any other
action with respect to any or all of the Pledged Stock with the same force and
effect as if the Agent were the absolute and sole owner thereof.
SECTION 9. General Authority
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156
Each Grantor hereby irrevocably appoints the Agent its true and lawful
attorney, with full power of substitution, in the name of the Grantors, the
Agent, the Banks or otherwise, for the sole use and benefit of the Agent and
Banks, but at the expense of such Grantor, to the extent permitted by law to
exercise, at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:
(i) to demand, xxx for, collect, receive and give acquittance for any
and all monies due or to become due upon or by virtue thereof,
(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same
or the proceeds or avails thereof, as fully and effectually as if the Agent were
the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make
any allowance and other adjustments with reference thereto;
provided that the Agent shall give the relevant Grantor not less than thirty
(30) days' prior written notice of the time and place of any sale or other
intended disposition of any of the Collateral. The Agent and the Grantors agree
that such notice constitutes "reasonable notification" within the meaning of
Section 9-504(3) of the Uniform Commercial Code.
SECTION 10 Remedies upon Event of Default
If any Event of Default shall have occurred and be continuing, the
Agent may exercise on behalf of the Bank all the rights of a secured party under
the Uniform Commercial Code (whether or not in effect in the jurisdiction where
such rights are exercised), and, in addition, the Agent may, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, (i) apply the cash, if any, then held by it as
Collateral as specified in Section 13 and (ii) if there shall be no such cash or
if such cash shall be insufficient to pay all the Secured Obligations in full,
after not less than thirty (30) days' prior written notice to the relevant
Grantor, sell the Collateral or any part thereof at public or private sale or at
any broker's board or on any securities exchange, for cash, upon credit or for
future delivery, and at such price or prices as the Agent may deem satisfactory.
Any Bank may be the purchaser of any or all of the Collateral so sold at any
public sale (or, if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed standard price
quotations, at any private sale). The Agent is authorized, in connection with
any such sale, if it deems it advisable so to do, (i) to restrict the
prospective bidders on or purchasers of any of the Pledged Securities to a
limited number of sophisticated investors who will
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represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all of
the Pledged Securities or on any other securities pledged hereunder a legend to
the effect that such security has not been registered under the Securities Act
of 1933 and may not be disposed of in violation of the provisions of said Act,
and (iii) to impose such other limitations or conditions in connection with any
such sale as the Agent deems necessary or advisable in order to comply with said
Act or any other law. Each Grantor will execute and deliver such documents and
take such other action as the Agent reasonably deems necessary or advisable in
order that any such sale may be made in compliance with law. Upon any such sale
the Agent shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Grantors which may be
waived, and each Grantor, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter adopted. The notice of such sale
required by Section 9 and this Section 10 shall (1) in the case of a public
sale, state the time and place fixed for such sale, (2) in the case of a sale at
a broker's board or on a securities exchange, state the board or exchange at
which such sale is to be made and the day on which the Collateral, or the
portion thereof so being sold, will first be offered for sale at such board or
exchange, and (3) in the case of a private sale, state the day after which such
sale may be consummated. Any such public sale shall be held at such time or
times within ordinary business hours and at such place or places as the Agent
may fix in the notice of such sale. At any such sale the Collateral may be sold
in one lot as an entirety or in separate parcels, as the Agent may determine.
The Agent shall not be obligated to make any such sale pursuant to any such
notice. The Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In the case of any sale of all
or any part of the Collateral on credit or for future delivery, the Collateral
so sold may be retained by the Agent until the selling price is paid by the
purchaser thereof, but the Agent shall not incur any liability in the case of
the failure of such purchaser to take up and pay for the Collateral so sold and,
in the case of any such failure, such Collateral may again be sold upon like
notice. The Agent, instead of exercising the power of sale herein conferred upon
it, may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
SECTION 11. Expenses
The Grantors jointly and severally agree that they will forthwith upon
demand pay to the Agent:
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(i) the amount of any taxes which the Agent may have been required to
pay by reason of the Security Interests or to free any of the Collateral from
any Lien thereon, and
(ii) the amount of any and all reasonable out-of-pocket expenses,
including the fees and disbursements of counsel and of any other experts, which
the Agent may incur in connection with (w) the administration or enforcement of
this Agreement, including such expenses as are incurred to preserve the value of
the Collateral and the validity, perfection, rank and value of any Security
Interest, (x) the collection, sale or other disposition of any of the
Collateral, (y) the exercise by the Agent of any of the rights conferred upon it
hereunder or (z) any Default or Event of Default.
Any such amount not paid within five business days after demand shall
bear interest at the rate applicable to Base Rate Loans plus 2% and shall be an
additional Secured Obligation hereunder.
SECTION 12. Limitation on Duty of Agent in Respect of Collateral
Beyond the exercise of reasonable are in the custody thereof, the Agent
shall have no duty as to any Collateral in its possession or control or in the
possession or control of any agent or bailee or any income thereon or as to the
preservation of rights against prior parties or any other rights pertaining
thereto. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which it accords its own
property, and the Agent shall not be liable or responsible for any loss or
damage to any of the Collateral, or for any diminution in the value thereof, by
reason of the act or omission of any agent or bailee selected by the Agent in
good faith.
SECTION 13. Application of Proceeds
Upon the occurrence and during the continuance of an Event of Default,
the proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held shall be applied by the Agent in the following
order of priorities:
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Agent, and all
expenses, liabilities and advances incurred or made by the Agent in connection
therewith, and any other unreimbursed expenses for which the Agent or any Bank
is to be reimbursed pursuant to Section 10.03 of the Credit Agreement or Section
11 hereof and unpaid fees owing to the Agent under the Credit Agreement;
second, to the ratable payment of unpaid principal of the Secured
Obligations;
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third, to the ratable payment of accrued but unpaid interest on the
Secured Obligations in accordance with the provisions of the Credit Agreement;
fourth, to the ratable payment of all other Secured Obligations, until
all Secured Obligations shall have been paid in full; and
finally, to payment to the Grantors or their successors or assigns, or
as a court of competent jurisdiction may direct, of any surplus then remaining
from such proceeds.
The Agent may make distributions hereunder in cash or in kind or, on a
ratable basis, in any combination thereof.
SECTION 14. Concerning the Agent
The provisions of Article VII of the Credit Agreement shall inure to
the benefit of the Agent in respect of this Agreement and shall be binding upon
the parties to the Credit Agreement in such respect. In furtherance and not in
derogation of the rights, privileges and immunities of the Agent therein set
forth:
(A) The Agent is authorized to take all such action as is provided to
be taken by it as Agent hereunder and all other action reasonably incidental
thereto. As to any matters not expressly provided for herein (including, without
limitation, the timing and methods of realization upon the Collateral), the
Agent shall act or refrain from acting in accordance with written instructions
from the Required Banks or, in the absence of such instructions, in accordance
with its discretion.
(B) The Agent shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Security Interests in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder. The Agent shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by the
Grantors.
SECTION 15. Appointment of Co-agents
At any time or times, in order to comply with any legal requirement in
any jurisdiction, the Agent may appoint another bank or trust company or one or
more other persons, either to act as co-agent or co-agents, jointly with the
Agent, or to act as separate agent or agents on behalf of the Banks, with such
power and authority as may be necessary for the effectual operation of the
provisions hereof and may be specified in the instrument of appointment (which
may, in the discretion of the Agent, include provisions for the protection of
such co-agent or separate agent similar to the provisions of Section 14).
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SECTION 16. Termination of Security Interests; Release of Collateral
Upon the repayment in full of all Secured Obligations and the
termination of the Commitments under the Credit Agreement, the Security
Interests shall terminate and all rights to the Collateral shall revert to the
Grantors. At any time and from time to time prior to such termination of the
Security Interests, the Agent may release any of the Collateral with the prior
written consent of the Required Banks; provided that the Agent may not release
all or substantially all of the Collateral (as defined in the Credit Agreement)
without the prior written consent of all the Banks. Upon any such termination of
the Security Interests or release of Collateral, the Agent will, at the expense
of the Grantors, execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence the termination of the Security
Interests or the release of such Collateral, as the case may be.
SECTION 17. Notices
All notices hereunder shall be given in accordance with Section 10.01
of the Credit Agreement.
SECTION 18. Waivers, Non-exclusive Remedies
No failure on the part of the Agent to exercise, and no delay in
exercising and no course of dealing with respect to, any right under this
Agreement shall operate as a waiver thereof; nor shall any single or partial
exercise by the Agent of any right under the Credit Agreement or this Agreement
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement and the Credit Agreement are cumulative and
are not exclusive of any other remedies provided by law.
SECTION 19. Successors and Assigns
This Agreement is for the benefit of the Agent and the Banks and their
successors and assigns, and in the event of an assignment of all or any of the
Secured Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Agreement shall be binding on the Agent, the Banks, the Grantors and their
respective successors and assigns.
SECTION 20. Changes in Writing
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by the Grantors and
the Agent with the consent of the Required Banks; provided that no such
modification shall, unless signed by all the Banks, effect or permit a release
of all or substantially all of the Collateral (as defined in the Credit
Agreement) or amend this Section 20.
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SECTION 21. New York Law
This Agreement shall be construed in accordance with and governed by
the laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws of
any jurisdiction other than New York are governed by the laws of such
jurisdiction.
SECTION 22. Severability
If any provision hereof is invalid or unenforceable in any
jurisdiction, hen, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Agent and the Banks in order to
carry out the intentions of the parties hereto as nearly as may be possible; and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TEKNI-PLEX, INC.
By: ___________________________________
Title: Chief Financial Officer
XXXXXX GUARANTY TRUST COMPANY
OF NEW YORK,
as Agent
By: ___________________________________
Title: Vice President
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SCHEDULE 1
SUBSIDIARIES
Dolco Packaging Corp. 100 shares Certif. No. 1
INTERCOMPANY NOTES
[To come]
164
EXHIBIT G
This instrument was prepared by the attorney described below in consultation
with counsel in the State in which the Property is located and, when recorded,
the recorded counterparts should be returned to:
Xxxxx X. XxXxxxxx, Esq.
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
===========================================================
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
dated as of May 8, 1997
by
TEKNI-PLEX, INC.,
the Mortgagor,
to
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
as Agent for the Banks,
the Mortgagee
Property:
Xxxxxxxxxx
Xxxxxxxxxx Xxxxxxxx
Xxxxxx xx Xxxxxxxx
Xxxxx of New Jersey
===========================================================
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES
OBLIGATIONS CONTAINING PROVISIONS FOR CHANGES IN INTEREST RATES. THIS INSTRUMENT
ALSO SECURES FUTURE ADVANCES.
165
TABLE OF CONTENTS*
Page
----
PREAMBLE................................................................... 01
RECITALS .................................................................. 01
GRANTING CLAUSES .......................................................... 02
GRANTING CLAUSE I. Land ............................................. 02
GRANTING CLAUSE II. Improvements .................................... 02
GRANTING CLAUSE III. Equipment......................................... 03
GRANTING CLAUSE IV. Appurtenant Rights................................ 04
GRANTING CLAUSE V. Agreements........................................ 04
GRANTING CLAUSE VI. Leases............................................ 04
GRANTING CLAUSE VII. Rents, Issues and Profits......................... 04
GRANTING CLAUSE VIII. Permits........................................... 05
GRANTING CLAUSE IX. Proceeds and Awards............................... 05
GRANTING CLAUSE X. Books and Records................................. 06
GRANTING CLAUSE XI. Other Intangible Property......................... 06
GRANTING CLAUSE XII. Additional Property .............................. 06
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01 Definitions.......................................... 07
1.02 Interpretation....................................... 11
1.03 Resolution of Drafting Ambiguities................... 11
ARTICLE II
CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR
SECTION 2.01 Title ............................................... 12
2.02 Secured Obligations.................................. 13
2.03 Impositions.......................................... 13
2.04 Legal and Insurance Requirements..................... 13
2.05 Status of the Property............................... 14
2.06 Permitted Contests................................... 14
2.07 Liens. . . .......................................... 15
2.08 Transfer ............................................ 15
----------------
*The Table of Contents is not part of this Mortgage.
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Page
----
ARTICLE III
INSURANCE, CASUALTY AND CONDEMNATION
SECTION 3.01 Insurance. . ....................................... 15
3.02 Casualty and Condemnation........................... 16
3.03 Insurance Claims and Proceeds;
Condemnation Awards............................... 17
ARTICLE IV
CERTAIN SECURED OBLIGATIONS
SECTION 4.01 Interest After Default.............................. 18
4.02 Changes in the Laws Regarding Taxation ............. 18
4.03 Indemnification .................................... 18
ARTICLE V
DEFAULTS, REMEDIES AND RIGHTS
SECTION 5.01 Events of Default................................... 19
5.02 Remedies .................................. 19
5.03 Waivers by the Mortgagor............................ 23
5.04 Jurisdiction and Process............................ 24
5.05 Sales. . . . ....................................... 24
5.06 Proceeds .................................. 27
5.07 Assignment of Leases................................ 27
5.08 Dealing With the Mortgaged Property................. 28
5.09 Right of Entry...................................... 29
5.10 Right to Perform Obligations........................ 29
5.11 Concerning the Mortgagee............................ 29
5.12 Expenses .................................. 30
ARTICLE VI
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 6.01 Security Agreement.................................. 31
6.02 Fixture Filing...................................... 31
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Page
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01 Revolving Loans......................................... 32
7.02 Release of Mortgaged Property........................... 32
7.03 Notices . ...................................... 33
7.04 Amendments in Writing................................... 33
7.05 Severability............................................ 33
7.06 Binding Effect.......................................... 34
7.07 GOVERNING LAW........................................... 34
Exhibit A - Description of the Land
Exhibit B - Permitted Encumbrances
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THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING(this "Mortgage") dated as of May 8, 1997 by TEKNI-PLEX, INC., a
Delaware corporation, having an address at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx,
XX 00000 (the "Mortgagor"), to XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, a New
York banking corporation, as Agent for the Banks (hereinafter defined), having
an address at 000 Xxxxxxx Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000 (the
"Mortgagee").
W I T N E S S E T H:*
RECITALS
A. Credit Agreement. Reference is hereby made to the Credit Agreement
(as amended from "Credit Agreement"), dated as of May 8, 1997 among the
Mortgagor, each Guarantor which is or may hereafter become a party thereto, each
Bank which is or may hereafter become a party thereto and Xxxxxx Guaranty Trust
Company of New York, as Agent.
B. Mortgage. The Lien of this Mortgage is being granted to secure
payment, performance and observance of the following indebtedness, liabilities
and obligations, whether now or hereafter owed or owing, hereinafter referred to
collectively as the "Secured Obligations":
(i) (a) all principal of and interest (including any interest which
accrues after the commencement of any case, proceeding or other action
relating to the bankruptcy, insolvency or reorganization of any Obligor on
any Note or Loan and any LC Reimbursement Obligation arising under the
Credit Agreement, (b) all other amounts payable by the Mortgagor hereunder
or under any other Loan Document and (c) any renewals or extensions of any
of the foregoing; and
(ii) the performance and observance of each other term, covenant,
agreement, obligation, requirement, condition and provision to be performed
or observed by the Mortgagor under this Mortgage or any other Loan Document.
-------------------
*Capitalized terms are defined in, or by reference in, Section 1.01.
169
GRANTING CLAUSES
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, for the purpose of securing the due and punctual payment,
performance and observance of the Secured Obligations and intending to be bound
hereby, the Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, MORTGAGE,
ASSIGN, TRANSFER and WARRANT to the Mortgagee and its successors under the Loan
Documents, with power of sale and right of entry as hereinafter provided, and
(to the extent covered by the Local UCC) does hereby GRANT AND WARRANT to the
Mortgagee and its successors under the Loan Documents, a continuing first
security interest in and to all of the property and rights described in the
following Granting Clauses (all of which property and rights are collectively
called the "Mortgaged Property"), to wit:
GRANTING CLAUSE I.
Land. The parcel or parcels of land located in Somerset County, State
of New Jersey and more particularly described in Exhibit A (the "Land").
GRANTING CLAUSE II.
Improvements. All estate, right, title and interest of the Mortgagor
in, to, under or derived from: all buildings, structures, facilities and other
improvements of every kind and description now or hereafter located on the Land,
including all parking areas, roads, driveways, walks, fences, walls and berms;
all estate, right, title and interest of the Mortgagor, if any, in, to, under or
derived from: all recreation, drainage and lighting facilities and other site
improvements; all water, sanitary and storm sewer, drainage, electricity, steam,
gas, telephone, telecommunications and other utility equipment and facilities;
all plumbing, lighting, heating, ventilating, air-conditioning, refrigerating,
incinerating, compacting, fire protection and sprinkler, surveillance and
security, vacuum cleaning, public address and communications equipment and
systems; all kitchen and laundry appliances; all walls, screens, awnings, floor
coverings, partitions, elevators, escalators, motors, electrical, computer and
other wiring, machinery, pipes, fittings and racking and shelving; and all other
items of fixtures, equipment and personal property of every kind and
description, in each case now or hereafter located on the Land or affixed
(actually or constructively) to the Improvements which by the nature of their
location thereon or affixation thereto are real property under applicable law;
and including all materials intended for the construction, reconstruction,
repair, replacement, alteration, addition or improvement of or to such
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buildings, equipment, fixtures, structures and improvements, all of which
materials shall be deemed to be part of the Mortgaged Property immediately upon
delivery thereof on the Land and to be part of the Improvements immediately upon
their incorporation therein (the foregoing being collectively called the
"Improvements").
GRANTING CLAUSE III.
Equipment. All estate, right, title and interest of the Mortgagor, if
any, in, to, under or derived from: all fixtures, chattels and articles of
personal property owned or leased by the Mortgagor or in which the Mortgagor has
or shall acquire an interest, wherever situated, and now or hereafter located on
or in the Land or the Improvements, whether or not affixed thereto (actually or
constructively) and which are not real property under applicable law, including
all cabinets, lockers, bookcases, shelving, keys or other entry systems,
partitions, shades, blinds, curtains, drapes, draperies, carpets, rugs,
furniture and furnishings, china, glassware, silverware, pots, pans, utensils,
linens, stoves, refrigerators, freezers, dishwashers, laundry and kitchen
appliances and equipment; all heating, lighting, plumbing, ventilating, air
conditioning, refrigerating, gas, steam, electrical, incinerating and compacting
plants, systems, fixtures and equipment, bulbs and bells; all elevators, stoves,
ranges, vacuum and other cleaning systems, floor cleaning, waxing and polishing
equipment, intercom, paging and call systems, switchboards, sprinkler systems
and other fire prevention, alarm and extinguishing apparatus and materials; all
pictures, paintings, works of art and decorations; all pipes, conduits, dynamos,
engines, compressors, generators, boilers, stokers, furnaces, pumps, trunks,
ducts, utensils, tools, implements and fittings; and all other furniture,
appliances, equipment, supplies, and tangible property of every kind and nature
whatsoever owned or leased by the Mortgagor, or in which the Mortgagor has or
shall have an interest, now or hereinafter located upon the Land, or
appurtenances thereto, or usable in connection with the present or future
operation or occupancy of the Land or the Improvements, and including any of the
foregoing that is temporarily removed from the Land or Improvements to be
repaired and later reinstalled thereon or therein (the foregoing being
collectively called the "Equipment"; and the Land with the Improvements thereon
and the Equipment therein being collectively called the "Property"). If the Lien
of this Mortgage is subject to a security interest covering any Property
described in this GRANTING CLAUSE III, then all of the right, title and interest
of the Mortgagor in and to any and all such Property is hereby assigned to the
Mortgagee, together with the benefits of all deposits and payments now or
hereafter made thereon by or on behalf of the Mortgagor.
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171
GRANTING CLAUSE IV.
Appurtenant Rights. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from all tenements, hereditaments
and appurtenances now or hereafter relating to the Property; the streets, roads,
sidewalks and alleys abutting the Property; all strips and gores within or
adjoining the Land; all land in the bed of any body of water adjacent to the
Land; all land adjoining the Land created by artificial means or by accretion;
all air space and rights to use air space above the Land; all development or
similar rights now or hereafter appurtenant to the Land; all rights of ingress
and egress now or hereafter appertaining to the Property; all easements and
rights of way now or hereafter appertaining to the Property; and all royalties
and other rights now or hereafter appertaining to the use and enjoyment of the
Property, including alley, party walls, support, drainage, crop, timber,
agricultural, horticultural, oil, gas and other mineral, water stock, riparian
and other water rights.
GRANTING CLAUSE V.
Agreements. All estate, right, title and interest of the Mortgagor, if
any, in, to, under or derived from: all Insurance Policies (including all
unearned premiums and dividends thereunder), all guarantees and warranties
relating to the Property, all supply and service contracts for water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone and other
utilities now or hereafter relating to the Property and all other contract
rights, now or hereafter relating to the use or operation of the Property (the
foregoing being collectively called the "Agreements").
GRANTING CLAUSE VI.
Leases. All estate, right, title and interest of the Mortgagor, if any,
in, to, under or derived from all Leases now or hereafter in effect, whether or
not of record, for the use or occupancy of all or any part of the Property,
together with all amendments, supplements, consolidations, replacements,
extensions, renewals and other modifications of any thereof.
GRANTING CLAUSE VII.
Rents, Issues and Profits. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from: all rents, royalties, issues,
profits, receipts, revenue, income and other benefits now or hereafter,
including during any period of redemption, accruing with respect to the
Property, including all rents and other sums now or hereafter, including during
any
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172
period of redemption, payable pursuant to the Leases; all other sums now or
hereafter, including during any period of redemption, payable with respect to
the use, occupancy, management, operation or control of the Property; and all
other claims, rights and remedies now or hereafter, including during any period
of redemption, belonging or accruing with respect to the Property, including
fixed, additional and percentage rents, occupancy charges, security deposits,
parking, maintenance, common area, tax, insurance, utility and service charges
and contributions (whether collected under the Leases or otherwise), proceeds of
sale of electricity, gas, heating, air-conditioning and other utilities and
services (whether collected under the Leases or otherwise), and deficiency rents
and liquidated damages following default or cancellation (the foregoing rents
and other sums described in this Granting Clause being collectively called the
"Rents"), all of which the Mortgagor hereby irrevocably directs be paid to the
Mortgagee, subject to the license granted to the Mortgagor pursuant to Section
5.07(b), to be held, applied and disbursed as provided in this Mortgage.
GRANTING CLAUSE VIII.
Permits. All estate, right, title and interest of the Mortgagor, if
any, in, to, under or derived from all licenses, authorizations, certificates,
variances, concessions, grants, franchises, consents, approvals and other
permits now or hereafter pertaining to the ownership, management or operation of
the Property (the foregoing being collectively called the "Permits").
GRANTING CLAUSE IX.
Proceeds and Awards. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from all proceeds of any Transfer,
financing, refinancing or conversion into cash or liquidated claims, whether
voluntary or involuntary, of any of the Mortgaged Property, including all
Insurance Proceeds, Awards and title insurance proceeds under any title
insurance policy now or hereafter held by the Mortgagor, and all rights,
dividends and other claims of any kind whatsoever (including damage, secured,
unsecured, priority and bankruptcy claims) now or hereafter relating to any of
the Mortgaged Property, all of which the Mortgagor hereby irrevocably directs be
paid to the Mortgagee to the extent provided hereunder, to be held, applied and
disbursed as provided in this Mortgage.
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GRANTING CLAUSE X.
Books and Records. All books and records (including customer lists,
credit files, computer programs, print outs and other computer materials and
records) of the Mortgagor, if any, now or hereafter pertaining to the ownership,
management or operation of the Property.
GRANTING CLAUSE XI.
Other Intangible Property. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from all intangible property, to the
extent not described in the foregoing Granting Clauses, now or hereafter
necessary to operate the Property as a going concern.
GRANTING CLAUSE XII.
Additional Property. All greater, additional or other estate, right,
title and interest of the Mortgagor in, to, under or derived from the Mortgaged
Property now or hereafter acquired by the Mortgagor, including all right, title
and interest of the Mortgagor in, to, under or derived from all extensions,
improvements, betterments, renewals, substitutions and replacements of, and
additions and appurtenances to, any of the Mortgaged Property hereafter acquired
by or released to the Mortgagor or constructed or located on, or affixed to, the
Property, in each case, immediately upon such acquisition, release,
construction, location or affixation; all estate, right, title and interest of
the Mortgagor in, to, under or derived from any other property and rights which
are, by the provisions of the Loan Documents, required to be subjected to the
Lien hereof; all estate, right, title and interest of the Mortgagor in, to,
under or derived from any other property and rights which are necessary to
maintain the Property and the Mortgagor's business or operations conducted
therein as a going concern, in each case, to the fullest extent permitted by
law, without any further conveyance, mortgage, assignment or other act by the
Mortgagor; and all estate, right, title and interest of the Mortgagor in, to,
under or derived from all other property and rights which are by any instrument
or otherwise subjected to the Lien hereof by the Mortgagor or anyone acting on
its behalf.
TO HAVE AND TO HOLD the Mortgaged Property, together with all estate,
right, title and interest of the Mortgagor and anyone claiming by, through or
under the Mortgagor in, to, under or derived from the Mortgaged Property and all
rights and appurtenances relating thereto, to the Mortgagee, forever.
PROVIDED ALWAYS that this Mortgage is upon the express condition that
the Mortgaged Property shall be released from the
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Lien of this Mortgage in full or in part in the manner and at the time provided
in Section 7.02.
THE MORTGAGOR ADDITIONALLY COVENANTS AND AGREES WITH THE MORTGAGEE AS
FOLLOWS:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01. Definitions. (a) Capitalized terms used in this Mortgage,
but not otherwise defined herein, are defined in, or are defined by reference
to, the Credit Agreement and have the same meanings herein as therein.
(b) In addition, as used herein, the following terms have the following
meanings:
"Agreements" is defined in Granting Clause V.
"Awards" means, at any time, all awards or payments received or
receivable by reason of any Condemnation, including all amounts received or
receivable with respect to any Transfer in lieu or anticipation of
Condemnation or in connection with any agreement with any condemning
authority which has been made in settlement of any proceeding relating to a
Condemnation.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as amended.
"Casualty" means any damage to, or destruction of, the Property.
"Condemnation" means any condemnation or other taking or temporary or
permanent requisition of the Property, any interest therein or right
appurtenant thereto, or any change of grade affecting the Property, as the
result of the exercise of any right of condemnation or eminent domain. A
Transfer to a governmental authority in lieu or anticipation of Condemnation
shall be deemed to be a Condemnation.
"Credit Agreement" is defined in the Recitals.
"Equipment" is defined in Granting Clause III.
"Impositions" means all taxes (including real estate taxes, transfer
taxes and sales and use taxes), assessments (including all assessments for
public improvements or benefits, whether or not commenced or completed prior
to the date hereof), water, sewer or other rents, rates and
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charges, excises, levies, license fees, permit fees, inspection fees and
other authorization fees and other charges, in each case whether general or
special, ordinary or extraordinary, foreseen or unforeseen, of every
character (including all interest and penalties thereon), which at any time
may be assessed, levied, confirmed or imposed on or in respect of, or be a
Lien upon, (i) the Property, any other Mortgaged Property or any interest
therein, (ii) any occupancy, use or possession of, or activity conducted
on, the Property to the extent that the failure to pay the same would
create a Lien on the Property, (iii) the Rents from the Property or the use
or occupancy thereof to the extent that the failure to pay the same would
create a Lien on the Property, or (iv) the Secured Obligations or the Loan
Documents, but excluding income, excess profits, franchise, capital stock,
estate, inheritance, succession, gift or similar taxes of the Mortgagor or
the Mortgagee or any other Secured Party, except to the extent that such
taxes of the Mortgagor or the Mortgagee or any other Secured Party are
imposed in whole or in part in lieu of, or as a substitute for, any taxes
which are or would otherwise be Impositions.
"Improvements" is defined in Granting Clause II.
"Insurance Policies" means the insurance policies and coverages
required to be maintained by the Mortgagor with respect to the Property
pursuant to the Credit Agreement.
"Insurance Premiums" means all premiums payable under the Insurance
Policies.
"Insurance Proceeds" means, at any time, all insurance proceeds (except
proceeds of business interruption insurance) or payments to which the
Mortgagor may be or become entitled under the Insurance Policies by reason
of any Casualty plus all insurance proceeds and payments to which the
Mortgagor may be or become entitled by reason of any Casualty under any
other insurance policies or coverages maintained by the Mortgagor with
respect to the Property.
"Insurance Requirements" means all provisions of the Insurance
Policies, all requirements of the issuer of any of the Insurance Policies
and all orders, rules, regulations and any other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) binding upon the Mortgagor and applicable to the Property, any
adjoining vaults, sidewalks, parking areas or driveways or any use or
condition thereof.
"Land" is defined in Granting Clause I.
"Lease" means each lease, sublease, tenancy, subtenancy, license,
franchise, concession or other
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occupancy agreement relating to the Property, together with any guarantee
of the obligations of the tenant or occupant thereunder or any right to
possession under any federal or state bankruptcy code in the event of the
rejection of any sublease by the sublandlord thereof or its trustee
pursuant to said code.
"Legal Requirements" means all provisions of the Leases, the
Agreements, the Permitted Liens, and the Permits and all applicable laws,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, directions and requirements of, and agreements with,
governmental bodies, agencies or officials, now or hereafter applicable to
the Property, any adjoining vaults, sidewalks, streets or ways, or any use
or condition thereof.
"Local UCC" means the Uniform Commercial Code as in effect in the State
in which the Property is located.
"Mortgage" is defined in the Preamble.
"Mortgaged Property" is defined in the Granting Clauses.
"Mortgagee" is defined in the Preamble.
"Mortgagor" is defined in the Preamble.
"National Flood Insurance Program" means the National Flood Insurance
Act of 1968 and the Flood Disaster Protection Act of 1973 (42 U.S.C.
Sections 4001 et seq.).
"Permits" is defined in Granting Clause VIII.
"Permitted Disposition" means any (i) Transfer in connection with a
Condemnation, (ii) Transfer of obsolete, unused or unnecessary Equipment in
the ordinary course of business or (iii) easement or similar encumbrance
with respect to the Property granted by the Mortgagor to any adjoining
landowner or any railroad, telephone, cable television, water, sewer,
utility or similar company, municipality or other governmental subdivision
in the ordinary course of business.
"Permitted Liens" means (i) any Liens permitted under clauses (g),(h)
and (k) of Section 5.09 of the Credit Agreement and, with respect to
Equipment, clauses (a) through (f) of Section 5.09 of the Credit Agreement,
(ii) Liens being contested pursuant to Section 2.06 and (iii) Permitted
Encumbrances.
"Permitted Encumbrances" means those matters set forth on Exhibit B
annexed hereto.
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"Post-Default Rate" means, with respect to any amount payable by the
Mortgagor hereunder which is not paid when due, a rate per annum equal to
the sum of 2% plus the rate applicable to Base Rate Loans from time to time.
"Property" is defined in Granting Clause III.
"Receiver" is defined in Section 5.02(a)(iv).
"Rents" is defined in Granting Clause VII.
"Restoration" means the restoration, repair, replacement or rebuilding
of the Property after a Casualty or Condemnation, and "Restore" means to
restore, repair, replace or rebuild the Property after a Casualty or
Condemnation, in each case to a utility and condition adequate to the
Mortgagor's use as conducted immediately prior to the Casualty or
Condemnation.
"Secured Obligations" is defined in the Recitals.
"Secured Parties" means the Mortgagee and all other holders of any of
the Secured Obligations (including all Persons to whom any of the Secured
Obligations may be payable from time to time).
"Transfer" means, when used as a noun, any sale, conveyance,
assignment, lease, or other transfer and, when used as a verb, to sell,
convey, assign, lease, or otherwise transfer, in each case (i) whether
voluntary or involuntary, (ii) whether direct or indirect and (iii)
including any agreement providing for a Transfer or granting any right or
option providing for a Transfer.
"Unavoidable Delays" means delays due to acts of God, fire, flood,
earthquake, explosion or other Casualty, inability to procure or shortage of
labor, equipment, facilities, sources of energy (including electricity,
steam, gas or gasoline), materials or supplies, failure of transportation,
strikes, lockouts, action of labor unions, Condemnation, litigation relating
to Legal Requirements, inability to obtain Permits or other causes beyond
the reasonable control of the Mortgagor, provided that lack of funds shall
not be deemed to be a cause beyond the control of the Mortgagor.
(c) In this Mortgage, unless otherwise specified, references to this
Mortgage or to Agreements, Leases, Permits, the Credit Agreement, Notes, Loan
Documents and Collateral Documents include all amendments, supplements,
consolidations, replacements, restatements, extensions, renewals and other
modifications thereof, in whole or in part.
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SECTION 1.02. Interpretation. In this Mortgage, unless otherwise
specified, (i) singular words include the plural and plural words include the
singular; (ii) words which include a number of constituent parts, things or
elements, including the terms Leases, Improvements, Land, Secured Obligations,
Property and Mortgaged Property, shall be construed as referring separately to
each constituent part, thing or element thereof, as well as to all of such
constituent parts, things or elements as a whole; (iii) words importing any
gender include the other genders; (iv) references to any Person include such
Person's successors and assigns and in the case of an individual, the word
"successors" includes such Person's heirs, devisees, legatees, executors,
administrators and personal representatives; (v) references to any statute or
other law include all applicable rules, regulations and orders adopted or made
thereunder and all statutes or other laws amending, consolidating or replacing
the statute or law referred to; (vi) the words "consent", "approve", "agree" and
"request", and derivations thereof or words of similar import, mean the prior
written consent, approval, agreement or request of the Person in question; (vii)
the words "include" and "including", and words of similar import, shall be
deemed to be followed by the words "without limitation"; (viii) the words
"hereto", "herein", "hereof" and "hereunder", and words of similar import, refer
to this Mortgage in its entirety; (ix) references to Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are to the Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses of this
Mortgage; (x) the Schedules and Exhibits to this Mortgage are incorporated
herein by reference; (xi) the titles and headings of Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are inserted as a
matter of convenience and shall not affect the construction of this Mortgage;
(xii) all obligations of the Mortgagor hereunder shall be satisfied by the
Mortgagor at the Mortgagor's sole cost and expense; and (xiii) all rights and
powers granted to the Mortgagee hereunder shall be deemed to be coupled with an
interest and be irrevocable.
SECTION 1.03. Resolution of Drafting Ambiguities. The Mortgagor
acknowledges that it was represented by counsel in connection with this
Mortgage, that it and its counsel reviewed and participated in the preparation
and negotiation of this Mortgage and that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party or the Mortgagee
shall not be employed in the interpretation of this Mortgage.
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ARTICLE II
CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR
SECTION 2.01. Title. (a) The Mortgagor warrants that, as of the date
hereof, (i) (x) the Mortgagor has good and marketable title to the fee simple
interest in the Land and the Improvements thereon, (y) the Mortgagor is the
owner of, or has a valid leasehold interest in, the Equipment and all other
items constituting the Mortgaged Property, and (z) this Mortgage constitutes a
valid, binding and enforceable first Lien on the Mortgaged Property, in each
case subject only to Permitted Encumbrances with respect thereto; and (ii) the
Permitted Encumbrances do not materially interfere with the enjoyment, use or
operation of the Property or materially, adversely affect the value thereof.
(b) The Mortgagor shall forever preserve, protect, warrant and defend
(i) the estate, right, title and interest of the Mortgagor in and to the
Mortgaged Property; (ii) the validity, enforceability and priority of the Lien
of this Mortgage on the Mortgaged Property; and (iii) the right, title and
interest of the Mortgagee and any purchaser at any sale of the Mortgaged
Property hereunder or relating hereto, in each case against all other Liens and
claims whatsoever, subject only to Permitted Liens.
(c) The Mortgagor, at its sole cost and expense, shall (i) upon the
request of the Mortgagee, promptly correct any defect or error which may be
discovered in this Mortgage or any financing statement or other document
relating hereto; and (ii) promptly execute, acknowledge, deliver, record and
re-record, register and re-register, and file and re-file this Mortgage and any
financing statements or other documents which the Mortgagee may require from
time to time (all in form and substance reasonably satisfactory to the
Mortgagee) in order (A) to effectuate, complete, perfect, continue or preserve
the Lien of this Mortgage as a first Lien on the Mortgaged Property, whether now
owned or hereafter acquired, subject only to the Permitted Liens, or (B) to
effectuate, complete, perfect, continue or preserve any right, power or
privilege granted or intended to be granted to the Mortgagee hereunder or
otherwise accomplish the purposes of this Mortgage, provided the same does not,
in any material respect, increase the obligations of, or diminish the rights
reserved to, the Mortgagor hereunder. To the extent permitted by law, the
Mortgagor hereby authorizes the Mortgagee to execute and file financing
statements or continuation statements without the Mortgagor's signature
appearing thereon. The Mortgagor shall pay within fifteen (15) days of demand
therefor the costs of, or incidental to, any recording or filing of any
financing or continuation statement, or amendment thereto, concerning the
Mortgaged Property.
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(d) Nothing herein shall be construed to subordinate the Lien of this
Mortgage to any Permitted Lien to which the Lien of this Mortgage is not
otherwise subordinate.
SECTION 2.02. Secured Obligations. The Mortgagor shall duly and
punctually pay, perform and observe the Secured Obligations in accordance with
the terms and provisions of the Loan Documents.
SECTION 2.03. Impositions. The Mortgagor shall (i) subject to Section
2.06, duly and punctually pay all material Impositions prior to the delinquency
date thereof; (ii) subject to Section 2.06, duly and punctually file all returns
and other statements required to be filed with respect to any material
Imposition prior to the delinquency date thereof; (iii) promptly notify the
Mortgagee of the receipt by the Mortgagor of any notice of default in the
payment of any material Imposition or in the filing of any return or other
statement relating to any material Imposition and simultaneously furnish to the
Mortgagee a copy of such notice of default; and (iv) not make deduction from or
claim any credit on any Secured Obligation by reason of any Imposition and, to
the extent permitted under applicable law, hereby irrevocably waives any right
to do so, provided, however, that if any such Imposition may be paid in
installments (whether or not interest shall accrue on the unpaid balance
thereof), the Mortgagor may pay the same in installments (together with any
accrued interest payable on the unpaid balance thereof) as the same respectively
become due, before any fine or penalty, attaches thereto, and provided further,
that if the Mortgagor contests the validity or amount of any such Imposition or
claim by appropriate proceedings and in accordance with Section 2.06, the
Mortgagor may defer payment thereof during the pendency of such contest
including any appeal period.
SECTION 2.04. Legal and Insurance Requirements. (a) The Mortgagor
represents and warrants that as of the date hereof, (i) to the best of the
Mortgagor's knowledge, (x) the Property and the use and operation thereof comply
with all Insurance Requirements and all material Legal Requirements, and (y)
there is no default under any Legal Requirement or Insurance Requirement which
would have a material adverse effect on the use or operation of the Property,
and (ii) the execution, delivery and performance of this Mortgage will not
contravene any provision of or constitute a default under any Legal Requirement
or Insurance Requirement.
(b) The Mortgagor shall (i) duly and punctually comply with all
material Legal Requirements and Insurance Requirements other than Legal
Requirements and Insurance Requirements the validity or applicability of which
are being contested pursuant to Section 2.06; (ii) procure, maintain and duly
and punctually comply with all Permits required for any construction,
reconstruction, repair, alteration, addition, improvement,
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maintenance, management, use and operation of the Property as then conducted
other than Permits the necessity of which are being contested pursuant to
Section 2.06; (iii) promptly notify the Mortgagee of the receipt by the
Mortgagor of any notice of default regarding any Legal Requirement, Insurance
Requirement or Permit or any possible or actual termination, of any Permit or
Insurance Policy and furnish to the Mortgagee a copy of such notice of default
or termination, except with respect to any default or termination which would
not have a material adverse effect on the use or operation of the Property as
then conducted; and (iv) promptly after obtaining knowledge thereof notify the
Mortgagee of any condition which, with or without the giving of notice or the
passage of time or both, would constitute a default regarding any Legal
Requirement or Insurance Requirement or a termination of any Permit or Insurance
Policy which default or termination would have a material adverse effect on the
use or operation of the Property as then conducted and the action being taken to
remedy such condition.
SECTION 2.05. Status of the Property. The Mortgagor represents and
warrants that, to the best of the Mortgagor's knowledge, (i) the Property is
served by all necessary water, sanitary and storm sewer, drainage, electric,
steam, gas, telephone and other utilities and utility facilities, which utility
facilities have capacities which are sufficient to serve the current use and
occupancy of the Property; (ii) the Property has legal access to all streets,
roads or alleys adjacent to the Property (including, as appropriate, access over
properly granted, perpetual, private right-of-way or easement Agreements)
sufficient to serve the current use and operation of the Property; (iii) the
Improvements are not located in an area designated as "flood prone" (as defined
under the regulations adopted under the National Flood Insurance Program), or to
the extent the Improvements are located in an area designated as "flood prone",
the Mortgagor maintains in full force and effect flood insurance under the
National Flood Insurance Program to the extent and in the minimum amounts
required by applicable law; and (iv) since the date of the survey described on
Exhibit B, there have been no material additions to or material alterations of
the Improvements.
SECTION 2.06. Permitted Contests. After prior notice to the Mortgagee,
the Mortgagor may contest, by appropriate proceedings conducted in good faith
and with due diligence, any Legal Requirement, any Insurance Requirement or any
Imposition, provided that (i) no Event of Default has occurred and is continuing
(it being agreed that the failure to comply with such Legal Requirement or
Insurance Requirement, or to pay such Imposition or to discharge such Lien
during such contest shall not constitute an Event of Default, provided that the
Mortgagor is otherwise in compliance with this Section); (ii) no Mortgaged
Property or interest therein is in danger of being sold, forfeited or lost, or
the priority of the Lien of the Mortgagee
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is not at risk, as a result of such contest or proceedings; (iii) in the case of
any Legal Requirement, the Mortgagee and the other Secured Parties are not in
danger of any criminal or material civil penalty or any other liability for
failure to comply therewith and no Mortgaged Property or interest therein is
subject to the imposition of any Lien as a result of such failure which is not
properly contested pursuant to this Section; and (iv) in the case of any
Insurance Requirement, no Insurance Policy or coverage is in danger of being
forfeited or lost as a result of such contest or proceedings, unless replaced;
and provided further that the Mortgagor establishes any reserve or other
appropriate provision required with respect to such contest under generally
accepted accounting principles consistently applied.
SECTION 2.07. Liens. Subject to the rights of contest provided the
Mortgagor in Section 2.06, the Mortgagor shall not create or permit to be
created or to remain, any Lien on the Mortgaged Property or any interest therein
and shall cause to be discharged any such Lien within forty-five (45) days
following receipt of notice of such Lien, in each case (i) whether voluntarily
or involuntarily created, (ii) whether directly or indirectly a Lien thereon and
(iii) whether subordinated hereto, except Permitted Liens. The provisions of
this Section shall apply to each and every Lien (other than Permitted Liens) on
the Mortgaged Property or any interest therein, regardless of whether a consent
to, or waiver of a right to consent to, any other Lien thereon has been
previously obtained in accordance with the terms of the Loan Documents. Nothing
herein shall obligate the Mortgagor to remove any inchoate statutory Lien in
respect of obligations not yet due and payable.
SECTION 2.08. Transfer. The Mortgagor shall not Transfer, or suffer any
Transfer of, the Mortgaged Property or any part thereof or interest therein,
except Permitted Dispositions. The provisions of this Section shall apply to
each and every Transfer of the Mortgaged Property or any interest therein,
regardless of whether a consent to, or waiver of a right to consent to, any
other Transfer thereof has been previously obtained in accordance with the terms
of the Loan Documents.
ARTICLE III
INSURANCE, CASUALTY AND CONDEMNATION
SECTION 3.01. Insurance. (a) The Mortgagor shall maintain in full force
and effect Insurance Policies with respect to the Property as required by the
Credit Agreement. The physical damage insurance maintained with respect to the
Property shall name the Mortgagee as an insured party and shall provide that all
property losses insured against shall be adjusted by the Mortgagor, subject to
the Mortgagee's rights
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pursuant to Section 3.03(a) hereof and the Credit Agreement. All insurance
maintained by the Mortgagor with respect to the Property shall provide that no
cancellation or material change thereof shall be effective until at least 30
days after receipt by the Mortgagee of written notice thereof; and all losses
shall be payable notwithstanding any foreclosure or other action or proceeding
taken pursuant to this Mortgage.
(b) The Mortgagor shall furnish to the Mortgagee from time to time not
later than 15 days prior to the expiration date of each policy required to be
maintained by the Mortgagor hereunder, an insurance certificate or certificates
executed by the insurer or its authorized agent with respect to the new or
extended policy. If the Mortgagor fails to maintain the Insurance Policies
required to be maintained under this Section, the Mortgagee shall have the right
to obtain such Insurance Policies and pay the premiums therefor. If the
Mortgagee obtains such Insurance Policies or pays the premiums therefor, upon
demand, the Mortgagor shall reimburse the Mortgagee for its reasonable expenses
in connection therewith, together with interest thereon, pursuant to Section
4.01.
(c) The Mortgagor may effect such coverage under subsection (a) of this
Section under blanket insurance policies covering other properties of the
Mortgagor, provided that (i) any such blanket insurance policy shall specify
therein, or the insurer under such policy shall certify to the Mortgagee, (A)
the maximum amount of the total insurance afforded by the blanket policy
allocated to the Property, and (B) any sublimits in such blanket policy
applicable to the Property, which sublimits shall not be less than the amounts
required pursuant to this Section; (ii) any such blanket insurance policy shall
comply in all respects with the other provisions of this Section; and (iii) the
protection afforded under any such blanket insurance policy shall be no less
than that which would have been afforded under a separate policy relating only
to the Property.
(d) The Mortgagor shall not maintain additional or separate insurance
concurrent in form or contributing in the event of loss with the insurance
required under this Section, unless (i) the policies providing such additional
or separate insurance are submitted to the Mortgagee for its approval, which
approval shall not be unreasonably withheld; (ii) the insurers under such
policies and the terms thereof are approved by the Mortgagee, which approval
shall not be unreasonably withheld; and (iii) the Mortgagee and the other
Secured Parties are included in such policies as additional insureds.
SECTION 3.02. Casualty and Condemnation. (a) The Mortgagor represents
and warrants that, as of the date hereof, (i) there is no Casualty or
Condemnation affecting in any material respect the use and occupancy of the
Property, (ii) there are no negotiations or proceedings presently pending
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in connection with a Condemnation and (iii) to the knowledge of the Mortgagor,
no Condemnation is proposed or threatened.
(b) If any Casualty occurs, the Mortgagor shall immediately take such
action as may be necessary or appropriate to preserve the undamaged portion of
the Property and to protect against personal injury or property damage.
(c) If any Casualty or Condemnation occurs (and provided the applicable
Insurance Proceeds or Awards have not been applied to the prepayment of the
Loans in accordance with Section 2.08(c) of the Credit Agreement and have been
made available to the Mortgagor, the Mortgagor shall promptly commence and
diligently pursue to completion the Restoration of such Property, subject to
Unavoidable Delays, whether or not the Insurance Proceeds or Awards with respect
to such Casualty or Condemnation are sufficient for such purpose; provided that
(i) any such Restoration shall be effected with due diligence, in a good and
workmanlike manner, in compliance with all applicable Legal Requirements and
Insurance Requirements; (ii) any such Restoration shall be conducted under the
supervision of an architect or engineer if customary for such Restoration (iii)
any such Restoration shall be located wholly on the Land and, unless consented
to by the Mortgagee and by the owner of the adjacent property, shall be
independent of and not connected with improvements located on adjacent property;
(iv) each such Restoration shall be promptly and fully paid for by the Mortgagor
except to the extent that any such payment is being contested in good faith; and
(vi) the Mortgagor shall procure prior to the commencement of any such
Restoration, and maintain throughout the continuation of the work involved, such
insurance and performance and payment bonds as are customary for the type of
construction and work involved.
SECTION 3.03. Insurance Claims and Proceeds; Condemnation Awards. (a)
If any Casualty occurs, (i) the Mortgagor shall promptly make proof of loss
under the applicable Insurance Policies and diligently pursue to conclusion its
claim for the Insurance Proceeds payable thereunder and any suit, action or
other proceeding necessary or appropriate to obtain payment of such Insurance
Proceeds and (ii) all such Insurance Proceeds shall be paid to the Mortgagor in
accordance with the Credit Agreement. If such Insurance Proceeds are required to
be delivered by the Mortgagor to the Mortgagee, then, until so delivered, any
such Insurance Proceeds received by the Mortgagor shall be held in trust by the
Mortgagor for and as the property of the Mortgagee and the other Secured Parties
and shall not be commingled with any other funds or property of the Mortgagor.
(b) If any Condemnation occurs, or if any negotiation or proceeding is
commenced which might in the reasonable judgment of the Mortgagor result in a
Condemnation, or if any Condemnation is proposed or threatened, the Mortgagor
shall, promptly after
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receiving notice or obtaining knowledge thereof, do all things deemed reasonably
necessary or appropriate by the Mortgagor to preserve the Mortgagor's interest
in such Property and promptly make claim for the Awards payable with respect
thereto and diligently pursue to conclusion such claim for such Awards and any
suit, action or other proceeding necessary or appropriate to obtain payment
thereof. All Awards with respect to any Condemnation shall be paid to the
Mortgagor in accordance with the Credit Agreement. If such Awards are required
to be delivered by the Mortgagor to the Mortgagee, then, until so delivered, any
such Awards received by the Mortgagor shall be held in trust by the Mortgagor
for and as the property of the Mortgagee and the other Secured Parties and shall
not be commingled with any other funds or property of the Mortgagor.
ARTICLE IV
CERTAIN SECURED OBLIGATIONS
SECTION 4.01. Interest After Default. If, pursuant to the terms of this
Mortgage, the Mortgagee shall make any payment on behalf of the Mortgagor
(including any payment made by the Mortgagee pursuant to Section 5.10), or shall
incur hereunder any expense for which the Mortgagee is entitled to reimbursement
pursuant to the terms of the Loan Documents, such Secured Obligation shall be
payable within fifteen (15) days of notice and any amounts not paid within
fifteen (15) days of notice shall bear interest at the Post-Default Rate from
the date incurred until paid. Such interest, and any other interest on the
Secured Obligations payable at the Post-Default Rate pursuant to the terms of
the Loan Documents, shall accrue through the date paid notwithstanding any
intervening judgment of foreclosure or sale. All such interest shall be part of
the Secured Obligations and shall be secured by this Mortgage.
SECTION 4.02. Changes in the Laws Regarding Taxation. If, after the
date hereof, there shall be enacted any applicable law deducting from the value
of the Property for the purpose of taxation the Lien of any Collateral Document
or changing in any way the applicable law for the taxation of mortgages, deeds
of trust or other Liens or obligations secured thereby, or the manner of
collection of such taxes, so as to adversely affect this Mortgage, the Secured
Obligations or any Secured Party, upon demand by the Mortgagee or any other
affected Secured Party and to the extent permitted under applicable law, the
Mortgagor shall pay all taxes, assessments or other charges resulting therefrom
or shall reimburse such Secured Party for all such taxes, assessments or other
charges which such Secured Party is obligated to pay as a result thereof.
SECTION 4.03. Indemnification. The Mortgagor shall protect, indemnify
and defend each of the Mortgagee and the other Secured Parties from and against
all liabilities, obligations,
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losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (including reasonable attorneys'
fees and expenses) which may be imposed on, incurred by or asserted against any
Secured Party by reason or on account of, or in connection with (a) the
Mortgagee's exercise of any of its rights and remedies hereunder; (b) any
accident, injury to or death of persons or loss of or damage to property
occurring in, on or about the Mortgaged Property or any part thereof or on the
adjoining sidewalks, curbs, adjacent property or adjacent parking areas, street
or ways; (c) any failure on the part of the Mortgagor to perform or comply with
any of the terms of this Mortgage; (d) the performance of any labor or services
or the furnishing of any materials or other property in respect of the Mortgaged
Property or any part thereof; or (e) any other conduct or misconduct of the
Mortgagor, any lessee of any of the Mortgaged Property, or any of their
respective agents, contractors, subcontractors, servants, employees, licensees
or invitees; provided, however, that any claims caused by the willful misconduct
or gross negligence of any Secured Party as determined by a court of competent
jurisdiction shall be excluded from the foregoing indemnification of such
Secured Party. Any amount payable under this Section will be deemed a demand
obligation and will bear interest pursuant to Section 4.01. The obligations of
the Mortgagor under this Section shall survive the termination of this Mortgage.
ARTICLE V
DEFAULTS, REMEDIES AND RIGHTS
SECTION 5.01. Events of Default. Any Event of Default under the Credit
Agreement shall constitute an Event of Default hereunder. All notice and cure
periods provided in the Credit Agreement and the other Loan Documents shall run
concurrently with any notice or cure periods provided under applicable law.
SECTION 5.02. Remedies. (a) Upon the occurrence and continuance of an
Event of Default, the Mortgagee shall have the right and power to exercise any
of the following remedies and rights, subject to mandatory provisions of
applicable law, to wit:
(i) to institute a proceeding or proceedings, by advertisement,
judicial process or otherwise as provided under applicable law, for the
complete or partial foreclosure of this Mortgage or the complete or partial
sale of the Mortgaged Property under the power of sale hereunder or under
any applicable provision of law; or
(ii) to sell the Mortgaged Property, and all estate, right, title,
interest, claim and demand of the Mortgagor
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therein and thereto, and all rights of redemption thereof, at one or more
sales, as an entirety or in parcels, with such elements of real or personal
property, at such time and place and upon such terms as the Mortgagee may
deem expedient or as may be required under applicable law, and in the event
of a sale hereunder or under any applicable provision of law of less than
all of the Mortgaged Property, this Mortgage shall continue as a Lien on the
remaining Mortgaged Property; or
(iii) to institute a suit, action or proceeding for the specific
performance of any of the provisions of this Mortgage; or
(iv) to be entitled to the appointment of a receiver, supervisor,
trustee, liquidator, conservator or other custodian (a "Receiver") of the
Mortgaged Property, without notice to Mortgagor, to the fullest extent
permitted by law, as a matter of right and without regard to, or the
necessity to disprove, the adequacy of the security for the Secured
Obligations or the solvency of the Mortgagor or any other Obligor, and the
Mortgagor hereby, to the fullest extent permitted by applicable law,
irrevocably waives such necessity and consents to such appointment, without
notice, said appointee to be vested with the fullest powers permitted under
applicable law, including to the extent permitted under applicable law those
under clause (v) of this subsection (a); or
(v) to enter upon the Property, by the Mortgagee or a Receiver
(whichever is the Person exercising the rights under this clause), and, to
the extent permitted by applicable law, exclude the Mortgagor and its
managers, employees, contractors, agents and other representatives therefrom
in accordance with applicable law, without liability for trespass, damages
or otherwise, and take possession of all other Mortgaged Property and all
books, records and accounts relating thereto, and upon demand the Mortgagor
shall surrender possession of the Property, the other Mortgaged Property and
such books, records and accounts to the Person exercising the rights under
this clause; and having and holding the same, the Person exercising the
rights under this clause may use, operate, manage, preserve, control and
otherwise deal therewith and conduct the business thereof, either personally
or by its managers, employees, contractors, agents or other representatives,
without interference from the Mortgagor or its managers, employees,
contractors, agents and other representatives; and, upon each such entry and
from time to time thereafter, at the expense of the Mortgagor and the
Mortgaged Property, without interference by the Mortgagor or its managers,
employees, contractors, agents and other representatives, the Person
exercising the rights under this
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clause may, as such Person deems expedient, (A) insure or reinsure the
Property, (B) make all reasonably necessary or proper repairs, renewals,
replacements, alterations, additions, Restorations, betterments and
improvements to the Property and (C) in such Person's own name or, at the
option of such Person, in the Mortgagor's name, exercise all rights, powers
and privileges of the Mortgagor with respect to the Mortgaged Property,
including the right to enter into Leases with respect to the Property,
including Leases extending beyond the time of possession by the Person
exercising the rights under this clause; and the Person exercising the
rights under this clause shall not be liable to account for any action
taken hereunder, other than for Rents actually received by such Person, and
shall not be liable for any loss sustained by the Mortgagor resulting from
any failure to let the Property or from any other act or omission of such
Person, except to the extent, in any case, such loss is caused by such
Person's own willful misconduct or gross negligence; or
(vi) with or, to the fullest extent permitted by applicable law,
without entry upon the Property, in the name of the Mortgagee or a Receiver
as required by law (whichever is the Person exercising the rights under this
clause) or, at such Person's option, in the name of the Mortgagor, to
collect, receive, xxx for and recover all Rents and proceeds of or derived
from the Mortgaged Property, and after deducting therefrom all costs,
expenses and liabilities of every character incurred by the Person
exercising the rights under this clause in collecting the same and in using,
operating, managing, preserving and controlling the Mortgaged Property and
otherwise in exercising the rights under clause (v) of this subsection (a)
or any other rights hereunder, including all amounts necessary to pay
Impositions, Rents, Insurance Premiums and other costs, expenses and
liabilities relating to the Property, as well as reasonable compensation for
the services of such Person and its managers, employees, contractors, agents
or other representatives, and to apply the remainder as provided in Section
5.06; or
(vii) to take any action with respect to any Mortgaged Property
permitted under the Local UCC; or
(viii) to take any other action, or pursue any other remedy or right,
as the Mortgagee may have under applicable law, including the right to
foreclosure through court action, and the Mortgagor does hereby grant the
same to the Mortgagee.
(b) To the fullest extent permitted by applicable law,
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(i) each remedy or right hereunder shall be in addition to, and not
exclusive or in limitation of, any other remedy or right hereunder, under
any other Loan Document or under applicable law;
(ii) every remedy or right hereunder, under any other Loan Document or
under applicable law may be exercised concurrently or independently and
whenever and as often as deemed appropriate by the Mortgagee;
(iii) no failure to exercise or delay in exercising any remedy or right
hereunder, under any other Loan Document or under applicable law shall be
construed as a waiver of any Default or other occurrence hereunder or under
any other Loan Document;
(iv) no waiver of, failure to exercise or delay in exercising any
remedy or right hereunder, under any other Loan Document or under applicable
law upon any Default or other occurrence hereunder or under any other Loan
Document shall be construed as a waiver of, or otherwise limit the exercise
of, such remedy or right upon any other or subsequent Default or other or
subsequent occurrence hereunder or under any other Loan Document;
(v) no single or partial exercise of any remedy or right hereunder,
under any other Loan Document or under applicable law upon any Default or
other occurrence hereunder or under any other Loan Document shall preclude
or otherwise limit the exercise of any other remedy or right hereunder,
under any other Loan Document or under applicable law upon such Default or
occurrence or upon any other or subsequent Default or other or subsequent
occurrence hereunder or under any other Loan Document;
(vi) the acceptance by the Mortgagee or any other Secured Party of any
payment less than the amount of the Secured Obligation in question shall be
deemed to be an acceptance on account only and shall not be construed as a
waiver of any Default hereunder or under any other Loan Document with
respect thereto; and
(vii) the acceptance by the Mortgagee or any other Secured Party of any
payment of, or on account of, any Secured Obligation shall not be deemed to
be a waiver of any Default or other occurrence hereunder or under any other
Loan Document with respect to any other Secured Obligation.
(c) If the Mortgagee has proceeded to enforce any remedy or right
hereunder or with respect hereto by foreclosure, sale, entry or otherwise, it
may compromise, discontinue or abandon such proceeding for any reason without
notice to the Mortgagor or any other Person (except other Secured Parties to the
extent
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required by the other Loan Documents); and, if any such proceeding shall be
discontinued, abandoned or determined adversely for any reason, the Mortgagor
and the Mortgagee shall retain and be restored to their former positions and
rights hereunder with respect to the Mortgaged Property, subject to the Lien
hereof except to the extent any such adverse determination specifically provides
to the contrary.
(d) For the purpose of carrying out any provisions of Section
5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, 5.10 or 6.01 or, if an Event of Default has
occurred, any other provision hereunder authorizing the Mortgagee or any other
Person to perform any action on behalf of the Mortgagor, the Mortgagor hereby
irrevocably appoints the Mortgagee or a Receiver appointed pursuant to Section
5.02(a)(iv) or such other Person as the attorney-in-fact of the Mortgagor (with
a power to substitute any other Person in its place as such attorney-in-fact) to
act in the name of the Mortgagor or, at the option of the Person appointed to
act under this subsection, in such Person's own name, to take the action
authorized under Section 5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, 5.10 or 6.01 or
such other provision, and to execute, acknowledge and deliver any document in
connection therewith or to take any other action incidental thereto as the
Person appointed to act under this subsection shall deem appropriate in its
discretion (subject to the provisions of this Mortgage); and the Mortgagor
hereby irrevocably authorizes and directs any other Person to rely and act on
behalf of the foregoing appointment and a certificate of the Person appointed to
act under this subsection that such Person is authorized to act under this
subsection.
SECTION 5.03. Waivers by the Mortgagor. To the fullest extent permitted
under applicable law, the Mortgagor shall not assert, and hereby irrevocably
waives, any right or defense the Mortgagor may have under any statute or rule of
law or equity now or hereafter in effect relating to (i) appraisement,
valuation, homestead exemption, extension, moratorium, stay, statute of
limitations, redemption, marshalling of the Mortgaged Property or the other
assets of the Mortgagor, sale of the Mortgaged Property in any order or notice
of deficiency or intention to accelerate any Secured Obligation; (ii) impairment
of any right of subrogation or reimbursement; (iii) any requirement that at any
time any action must be taken against any other Person, any portion of the
Mortgaged Property or any other asset of the Mortgagor or any other Person; (iv)
any provision barring or limiting the right of the Mortgagee to sell any
Mortgaged Property after any other sale of any other Mortgaged Property or any
other action against the Mortgagor or any other Person; (v) any provision
barring or limiting the recovery by the Mortgagee of a deficiency after any sale
of the Mortgaged Property; or (vi) the right of the Mortgagee to foreclose this
Mortgage in its own name on behalf of all of the Secured Parties by judicial
action as the real party in interest without the necessity of joining
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any other Secured Party. Nothing herein, however, shall be construed to limit
any rights, including right to notice, afforded to the Mortgagor under the Loan
Documents.
SECTION 5.04. Jurisdiction and Process. (a) To the extent permitted
under applicable law, in any suit, action or proceeding arising out of or
relating to this Mortgage or any other Collateral Document as it relates to any
Mortgaged Property, the Mortgagor (i) irrevocably consents to the non-exclusive
jurisdiction of any state or federal court sitting in the State in which the
Property is located and irrevocably waives any defense or objection which it may
now or hereafter have to the jurisdiction of such court or the venue of such
court or the convenience of such court as the forum for any such suit, action or
proceeding; and (ii) irrevocably consents to the service of (A) any process in
any such suit, action or proceeding, or (B) any notice relating to any sale, or
the exercise of any other remedy by the Mortgagee hereunder by mailing a copy of
such process or notice by United States registered or certified mail, postage
prepaid, return receipt requested to the Mortgagor at its address specified in
or pursuant to Section 7.03, such service to be effective when such process or
notice is mailed as aforesaid.
(b) Nothing in this Section shall affect the right of the Mortgagee to
bring any suit, action or proceeding arising out of or relating to this Mortgage
or any other Collateral Document in any court having jurisdiction under the
provisions of any other Collateral Document or applicable law or to serve any
process, notice of sale or other notice in any manner permitted by any other
Collateral Document or applicable law.
SECTION 5.05. Sales. Except as otherwise provided herein, to the
fullest extent permitted under applicable law, at the election of the Mortgagee,
the following provisions shall apply to any sale of the Mortgaged Property
hereunder, whether made pursuant to the power of sale hereunder, any judicial
proceeding or any judgment or decree of foreclosure or sale or otherwise:
(a) The Mortgagee or the court officer (whichever is the Person
conducting any sale) may conduct any number of sales from time to time. The
power of sale hereunder or with respect hereto shall not be exhausted by any
sale as to any part or parcel of the Mortgaged Property which is not sold,
unless and until the Secured Obligations shall have been paid in full, and
shall not be exhausted or impaired by any sale which is not completed or is
defective. Any sale may be as a whole or in part or parcels and, as provided
in Section 5.03, the Mortgagor has waived its right to direct the order in
which the Mortgaged Property or any part or parcel thereof is sold.
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(b) Any sale may be postponed or adjourned by public announcement at
the time and place appointed for such sale or for such postponed or
adjourned sale without further notice.
(c) After each sale, the Person conducting such sale shall execute and
deliver to the purchaser or purchasers at such sale a good and sufficient
instrument or instruments granting, conveying, assigning, Transferring and
delivering all right, title and interest of the Mortgagor in and to the
Mortgaged Property sold and shall receive the proceeds of such sale and
apply the same as provided in Section 5.06. The Mortgagor hereby irrevocably
appoints the Person conducting such sale as the attorney-in-fact of the
Mortgagor (with full power to substitute any other Person in its place as
such attorney-in-fact) to act in the name of the Mortgagor or, at the option
of the Person conducting such sale, in such Person's own name, to make
without warranty by such Person any conveyance, assignment, Transfer or
delivery of the Mortgaged Property sold, and to execute, acknowledge and
deliver any instrument of conveyance, assignment, Transfer or delivery or
other document in connection therewith or to take any other action
incidental thereto, as the Person conducting such sale shall deem
appropriate in its discretion; and the Mortgagor hereby irrevocably
authorizes and directs any other Person to rely and act upon the foregoing
appointment and a certificate of the Person conducting such sale that such
Person is authorized to act hereunder. Nevertheless, upon the request of
such attorney-in-fact the Mortgagor shall promptly execute, acknowledge and
deliver any documentation which such attorney-in-fact may require for the
purpose of ratifying, confirming or effectuating the powers granted hereby
or any such conveyance, assignment, Transfer or delivery by such
attorney-in-fact.
(d) Any statement of fact or other recital made in any instrument
referred to in Section 5.05(c) given by the Person conducting any sale as to
the nonpayment of any Secured Obligation, the occurrence of any Event of
Default, the amount of the Secured Obligations due and payable, the request
to the Mortgagee to sell, the notice of the time, place and terms of sale
and of the Mortgaged Property to be sold having been duly given, the
refusal, failure or inability of the Mortgagee to act, the appointment of
any substitute or successor agent, any other act or thing having been duly
done by the Mortgagor, the Mortgagee or any other such Person, shall be
taken as conclusive and binding against all other Persons as evidence of the
truth of the facts so stated or recited.
(e) The receipt by the Person conducting any sale of the purchase money
paid at such sale shall be sufficient
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discharge therefor to any purchaser of any Mortgaged Property sold, and no
such purchaser, or its representatives, grantees or assigns, after paying
such purchase price and receiving such receipt, shall be bound to see to
the application of such purchase price or any part thereof upon or for any
trust or purpose of this Mortgage or the other Loan Documents, or, in any
manner whatsoever, be answerable for any loss, misapplication or
nonapplication of any such purchase money or be bound to inquire as to the
authorization, necessity, expediency or regularity of such sale.
(f) Subject to mandatory provisions of applicable law, any sale
shall operate to divest all of the estate, right, title, interest, claim
and demand whatsoever, whether at law or in equity, of the Mortgagor in and
to the Mortgaged Property sold, and shall be a perpetual bar both at law
and in equity against the Mortgagor and any and all Persons claiming such
Mortgaged Property or any interest therein by, through or under the
Mortgagor.
(g) At any sale, the Mortgagee may bid for and acquire the
Mortgaged Property sold and, in lieu of paying cash therefor, may make
settlement for the purchase price by causing the Secured Parties to credit
against the Secured Obligations, including the expenses of the sale and the
cost of any enforcement proceeding hereunder, the amount of the bid made
therefor to the extent necessary to satisfy such bid.
(h) If the Mortgagor or any Person claiming by, through or under
the Mortgagor shall transfer or fail to surrender possession of the
Mortgaged Property, after the exercise by the Mortgagee of the Mortgagee's
remedies under Section 5.02(a)(v) or after any sale of the Mortgaged
Property pursuant hereto, then the Mortgagor or such Person shall be deemed
a tenant at sufferance of the purchaser at such sale, subject to eviction
by means of summary process for possession of land, or subject to any other
right or remedy available hereunder or under applicable law.
(i) Upon any sale, it shall not be necessary for the Person
conducting such sale to have any Mortgaged Property being sold present or
constructively in its possession.
(j) If a sale hereunder shall be commenced by the Mortgagee, the
Mortgagee may at any time before the sale abandon the sale, and may
institute suit for the collection of the Secured Obligations or for the
foreclosure of this Mortgage; or if the Mortgagee shall institute a suit
for collection of the Secured Obligations or the foreclosure of this
Mortgage, the Mortgagee may at any time before the entry of final judgment
in said suit dismiss the same and
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sell the Mortgaged Property in accordance with the provisions of this
Mortgage.
SECTION 5.06. Proceeds. Except as otherwise provided herein or required
under applicable law, upon being instructed to do so in an Enforcement Notice,
the proceeds of any sale of, or other realization upon, the Mortgaged Property
hereunder, whether made pursuant to the power of sale hereunder, any judicial
proceeding or any judgment or decree of foreclosure or sale or otherwise, shall
be applied and paid as follows:
(a) First: to the payment of all expenses of such sale or other
realization, including compensation for the Person conducting such sale
(which may include the Mortgagee), the cost of title searches, foreclosure
certificates and attorneys' fees and expenses incurred by such Person,
together with interest on any such expenses paid by such Person at the
Post-Default Rate from the date of demand through the date repaid to such
Person;
(b) Second: to the payment of the expenses and other amounts payable
under Sections 4.02 and 5.10, if any;
(c) Third: to the payment of the other Secured Obligations in the order
and priority set forth in Section 9 of the Security Agreement, until all
Secured Obligations shall have been paid in full; and
(d) Fourth: to pay to the Mortgagor or its successors and assigns, or
as a court of competent jurisdiction may direct, any surplus then remaining
from such proceeds.
SECTION 5.07. Assignment of Leases. (a) Subject to paragraph (d) below,
the assignments of the Leases and the Rents under Granting Clauses VI and VII
are and shall be present, absolute and irrevocable assignments by the Mortgagor
to the Mortgagee and, subject to the license to the Mortgagor under Section
5.07(b), the Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(iv)
(whichever is the Person exercising the rights under this Section) shall have
the absolute, immediate and continuing right to collect and receive all Rents
now or hereafter, including during any period of redemption, accruing with
respect to the Property. At the request of the Mortgagee or such Receiver, the
Mortgagor shall promptly execute, acknowledge, deliver, record, register and
file any additional general assignment of the Leases or specific assignment of
any Lease which the Mortgagee or such Receiver may require from time to time
(all in form and substance satisfactory to the Mortgagee or such Receiver) to
effectuate, complete, perfect, continue or preserve the assignments of the
Leases and the Rents under Granting Clauses VI and VII.
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(b) The Mortgagor shall have a license granted hereby to collect and
receive all Rents and apply the same subject to the provisions of the Loan
Documents, such license to be terminable by the Mortgagee as provided in Section
5.07(c).
(c) Upon the occurrence and continuance of an Event of Default, the
Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(iv) (whichever is
the Person exercising the rights under this Section) shall have the right to
terminate the license granted under Section 5.07(b) by notice to the Mortgagor
and to exercise the rights and remedies provided under Section 5.07(a), under
Sections 5.02(a)(v) and (vi) or under applicable law. Upon demand by the Person
exercising the rights under this Section, the Mortgagor shall promptly pay to
such Person all security deposits under the Leases and all Rents allocable to
any period after such demand. Subject to Sections 5.02(a)(v) and (vi) and any
applicable requirement of law, any Rents received hereunder by such Person shall
be promptly paid to the Mortgagee, and any Rents received hereunder by the
Mortgagee shall be deposited in the Collateral Account, to be held as provided
in the Credit Agreement, provided that, subject to Sections 5.02(a)(v) and (vi)
and any applicable requirement of law, any security deposits actually received
by such Person shall be promptly paid to the Mortgagee, and any security
deposits actually received by the Mortgagee shall be held, applied and disbursed
as provided in the applicable Leases and applicable law. Once the Event of
Default is remedied, the license granted in Section 5.07(b) shall automatically
be reinstated.
(d) Nothing herein shall be construed to be an assumption by the Person
exercising the rights under this Section, or otherwise to make such Person
liable for the performance, of any of the obligations of the Mortgagor under the
Leases, provided that such Person shall be accountable as provided in Section
5.07(c) for any Rents or security deposits actually received by such Person.
SECTION 5.08. Dealing With the Mortgaged Property. Subject to Section
7.02, the Mortgagee shall have the right to release any portion of the Mortgaged
Property, or grant or consent to the granting of any Lien affecting any portion
of the Mortgaged Property, to or at the request of the Mortgagor, for such
consideration as the Mortgagee may require without, as to the remainder of the
Mortgaged Property, in any way impairing or affecting the Lien or priority of
this Mortgage, or improving the position of any subordinate lienholder with
respect thereto, or the position of any guarantor, endorser, co-maker or other
obligor of the Secured Obligations, except to the extent that the Secured
Obligations shall have been reduced by any actual monetary consideration
received for such release and applied to the Secured Obligations, and may accept
by assignment, pledge or otherwise any other property in place thereof as the
Mortgagee
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may require without being accountable therefor to any other lienholder.
SECTION 5.09. Right of Entry. The Mortgagee and the representatives of
the Mortgagee shall have the right, upon being instructed to do so by the
Required Banks (i) without notice, if an Event of Default has occurred and is
continuing, (ii) with simultaneous notice, if any payment or performance is
required in the reasonable opinion of the Mortgagee to preserve the Mortgagee's
rights under this Mortgage or with respect to the Mortgaged Property, or (iii)
after reasonable notice, in all other cases, to enter upon the Property at
reasonable times, and with reasonable frequency, to inspect the Mortgaged
Property or, subject to the provisions hereof, to exercise any right, power or
remedy of the Mortgagee hereunder, provided that any Person so entering the
Property shall not unreasonably interfere with the ordinary conduct of the
Mortgagor's business, and provided further that no such entry on the Property,
for the purpose of performing obligations under Section 5.10 or for any other
purpose, shall be construed to be (x) possession of the Property by such Person
or to constitute such Person as a mortgagee in possession, unless such Person
exercises its right to take possession of the Property under Section 5.02(a)(v),
or (y) a cure of any Default or waiver of any Default or Secured Obligation. The
expense of any inspection pursuant to clause (iii) above shall be borne by the
Mortgagee unless an Event of Default shall have occurred and be continuing at
the time of such inspection, in which case the Mortgagor shall pay, or reimburse
the Mortgagee for, such expense.
SECTION 5.10. Right to Perform Obligations. If the Mortgagor fails to
pay or perform any obligation of the Mortgagor hereunder, the Mortgagee and the
representatives of the Mortgagee shall have the right, upon being instructed to
do so by the Required Banks at any time, to pay or perform such obligation (i)
without notice, if an Event of Default has occurred and is continuing, (ii) with
simultaneous notice, if such payment or performance is required in the
reasonable opinion of the Mortgagee to preserve the Mortgagee's rights under
this Mortgage or with respect to the Mortgaged Property or (iii) after notice
given reasonably in advance to allow the Mortgagor an opportunity to pay or
perform such obligation, provided that the Mortgagor is not contesting payment
or performance in accordance with the terms hereof and further provided that no
such payment or performance shall be construed to be a cure of any Default or
waiver of any Default or Secured Obligation. The Mortgagor shall reimburse the
Mortgagee on demand for the reasonable costs of performing any such obligations
and any amounts not paid on demand shall bear interest, payable on demand, for
each day until paid at the Post-Default Rate for such day.
SECTION 5.11. Concerning the Mortgagee. (a) The provisions of Article 7
of the Credit Agreement shall inure to
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the benefit of the Mortgagee in respect of this Mortgage and shall be binding
upon the parties to the Credit Agreement in such respect. In furtherance and not
in derogation of the rights, privileges and immunities of the Mortgagee therein
set forth:
(i) The Mortgagee is authorized to take all such action as is provided
to be taken by it as Mortgagee hereunder and all other action reasonably
incidental thereto. As to any matters not expressly provided for herein
(including the timing and methods of realization upon the Mortgaged
Property) the Mortgagee shall act or refrain from acting in accordance with
written instructions from the Required Banks or, in the absence of such
instructions, in accordance with its discretion.
(ii) The Mortgagee shall not be responsible for the existence,
genuineness or value of any of the Mortgaged Property or for the validity,
perfection, priority or enforceability of the Lien of this Mortgage on any
of the Mortgaged Property, whether impaired by operation of law or by reason
of any action or omission to act on its part hereunder. The Mortgagee shall
have no duty to ascertain or inquire as to the performance or observance of
any of the terms of this Mortgage by the Mortgagor.
(b) At any time or times, in order to comply with any legal requirement
in any jurisdiction, the Mortgagee may appoint another bank or trust company or
one or more other Persons, either to act as co-agent or co-agents, jointly with
the Mortgagee, or to act as separate agent or agents on behalf of the Secured
Parties with such power and authority as may be necessary for the effectual
operation of the provisions hereof and may be specified in the instrument of
appointment (which may, in the discretion of the Mortgagee, include provisions
for the protection of such co-agent or separate agent similar to the provisions
of this Section 5.11). References to the Mortgagee in Section 5.12 shall be
deemed to include any co-agent or separate agent appointed pursuant to this
Section 5.11.
Section 5.12. Expenses. The Mortgagor agrees that it will within
fifteen (15) days of demand pay to the Mortgagee (i) the amount of any taxes
which the Mortgagee may have been required to pay by reason of the Lien of this
Mortgage and has failed to pay or to free any of the Mortgaged Property from any
Lien thereon (other than Permitted Liens), (ii) the amount of any and all
reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel and of any other experts, which the Mortgagee may incur
in connection with preserving the value of the Mortgaged Property and the
validity, perfection, rank and value of the Lien of this Mortgage and (iii) the
amount of any and all out-of-pocket expenses, including the fees and
disbursements of counsel and of any other experts, which
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the Mortgagee may incur in connection with the collection, sale or other
disposition of any of the Mortgaged Property.
ARTICLE VI
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 6.01. Security Agreement. To the extent that the Mortgaged
Property constitutes or includes tangible or intangible personal property,
including goods or items of personal property which are or are to become
fixtures under applicable law, the Mortgagor hereby grants a security interest
therein and this Mortgage shall also be construed as a pledge and a security
agreement under the Local UCC; and, upon the occurrence and continuance of an
Event of Default, the Mortgagee shall be entitled to exercise with respect to
such tangible or intangible personal property all remedies available under the
Local UCC and all other remedies available under applicable law. Without
limiting the foregoing, upon the occurrence and continuation of an Event of
Default, any personal property may, at the Mortgagee's option and, except as
otherwise required by applicable law, without the giving of notice, (i) be sold
hereunder, (ii) be sold pursuant to the Local UCC or (iii) be dealt with by the
Mortgagee in any other manner permitted under applicable law. The Mortgagee may
require the Mortgagor to assemble the personal property and make it available to
the Mortgagee at a place to be designated by the Mortgagee. At any time and from
time to time upon the occurrence and continuance of an Event of Default, the
Mortgagee shall be the attorney-in-fact of the Mortgagor with respect to any and
all matters pertaining to the personal property with full power and authority to
give instructions with respect to the collection and remittance of payments, to
endorse checks, to enforce the rights and remedies of the Mortgagor and to
execute on behalf of the Mortgagor and in Mortgagor's name any instruction,
agreement or other writing required therefor. The Mortgagor acknowledges and
agrees that a disposition of the personal property in accordance with the
Mortgagee's rights and remedies in respect to the Property as heretofore
provided is a commercially reasonable disposition thereof. Notwithstanding the
foregoing, to the extent that the Mortgaged Property includes personal property
covered by the Security Agreement the provisions of the Security Agreement shall
govern with respect to such personal property.
SECTION 6.02. Fixture Filing. To the extent that the Mortgaged Property
includes goods or items of personal property which are or are to become fixtures
under applicable law, and to the extent permitted under applicable law, the
filing of this Mortgage in the real estate records of the county in which the
Mortgaged Property is located shall also operate from the time of filing as a
fixture filing with respect to such Mortgaged
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Property, and the following information is applicable for the purpose of such
fixture filing, to wit:
(a) Name and Address of the debtor:
Tekni-Plex, Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
(b) Name and Address of the secured party:
Xxxxxx Guaranty Trust Company of New York
as Agent
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
(c) This document covers goods or items of personal property which are
or are to become fixtures upon the Property.
(d) The name of the record owner of the real estate on which such
fixtures are or are to be located is Tekni-Plex, Inc.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Revolving Loans. The Secured Obligations secured by this
Mortgage include Loans made and LC Reimbursement Obligations relating to Letters
of Credit issued or extended under the Credit Agreement which are advanced, paid
and readvanced from time to time. Notwithstanding the amount outstanding at any
particular time, this Mortgage secures the total amount of Secured Obligations.
The unpaid balance of the Loans and the unpaid balance of the LC Reimbursement
Obligations may at certain times be, or be reduced to, zero. A zero balance, by
itself, does not affect any Bank's or LC Issuing Bank's obligation to issue or
extend Letters of Credit or to make payments upon draws under Letters of Credit,
or any Bank's obligation to advance Loans which are obligatory subject to the
conditions stated in the Credit Agreement. Each of the security interest of the
Mortgagee hereunder and the priority of the Lien of this Mortgage will remain in
full force and effect with respect to all of the Secured Obligations
notwithstanding such a zero balance of the Loans or the LC Reimbursement
Obligations, and the Lien of this Mortgage will not be extinguished until this
Mortgage has been terminated pursuant to Section 7.02(a).
SECTION 7.02. Release of Mortgaged Property. (a) This Mortgage shall
cease, terminate and thereafter be of no further force or effect (except as
provided in Section 4.03) upon payment in full of all Secured Obligations, the
expiration of all Letters of Credit issued under the Credit Agreement and the
termination
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of all Commitments under the Credit Agreement. At any time and from time to time
prior to such termination of this Mortgage, the Mortgagee may release any of the
Mortgaged Property with the consent of the Required Banks, provided that if such
release is in connection with the release of all or substantially all of the
collateral granted to secure the Secured Obligations, such release shall require
the consent of all Banks. In addition, the Mortgagee shall release any and all
Mortgaged Property required in connection with any transaction, or sale,
transfer, assignment or other disposition of the Mortgaged Property, consummated
by the Mortgagor and not prohibited by any Loan Document, and shall be fully
protected in relying on a certificate of an authorized officer of the Mortgagor
to such effect.
(b) Any termination or release under this Section 7.02 shall be at the
Mortgagor's request and expense and either in the statutory form or in a form
reasonably satisfactory to the Mortgagee.
SECTION 7.03. Notices. All notices, requests and other communications
required or permitted to be given under this Mortgage shall be in writing
(including facsimile transmission or similar writing) and shall be given to the
Mortgagor or the Mortgagee as specified in Section 10.01 of the Credit
Agreement. Except as otherwise provided herein, each notice, request or other
communication shall be effective as determined by Section 10.01 of the Credit
Agreement.
SECTION 7.04. Amendments in Writing. No provision of this Mortgage
shall be modified, waived or terminated, and no consent to any departure by the
Mortgagor from any provision of this Mortgage shall be effective, unless the
same shall be by an instrument in writing, signed by the Mortgagor and the
Mortgagee in accordance with Section 10.05 of the Credit Agreement. Any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 7.05. Severability. All rights, powers and remedies provided in
this Mortgage may be exercised only to the extent that the exercise thereof does
not violate applicable law, and all the provisions of this Mortgage are intended
to be subject to all mandatory provisions of applicable law and to be limited to
the extent necessary so that they will not render this Mortgage illegal,
invalid, unenforceable or not entitled to be recorded, registered or filed under
applicable law. If any provision of this Mortgage or the application thereof to
any Person or circumstance shall, to any extent, be illegal, invalid or
unenforceable, or cause this Mortgage not to be entitled to be recorded,
registered or filed, the remaining provisions of this Mortgage or the
application of such provision to other Persons or circumstances shall not be
affected thereby, and each provision
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of this Mortgage shall be valid and be enforced to the fullest extent permitted
under applicable law.
SECTION 7.06. Binding Effect. (a) The provisions of this Mortgage shall
be binding upon and inure to the benefit of each of the parties hereto and their
respective successors and assigns.
(b) To the fullest extent permitted under applicable law, the
provisions of this Mortgage binding upon the Mortgagor shall be deemed to be
covenants which run with the land.
(c) Nothing in this Section shall be construed to permit the Mortgagor
to Transfer or xxxxx x Xxxx upon the Mortgaged Property contrary to the
provisions of the Credit Agreement.
SECTION 7.07. GOVERNING LAW. THIS MORTGAGE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY IS
LOCATED.
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IN WITNESS WHEREOF, the Mortgagor has executed and delivered this
Mortgage as of the day first set forth above.
TEKNI-PLEX, INC.
[Seal]
By:__________________________________
Name:
Title:
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[Add State acknowledgment]
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EXHIBIT A
Description of the Land
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EXHIBIT B
Permitted Encumbrances
1. All those matters as shown on a survey prepared by Xxxxxx and Xxxxxx
Engineering Associates, Inc., dated March 11, 1996.
2. The other exceptions described in Schedule B, to that certain title
commitment number N-3007 issued with respect to the Property and insuring
Mortgagee by Lawyers Title Insurance Corporation dated as of the date
hereof.
206
EXHIBIT H
OPINION OF LOCAL COUNSEL
[Letterhead of Local Counsel]
May 8, 1997
To the Banks and the Agent
Referred to Below
c/x Xxxxxx Guaranty Trust Company
of New York
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
We have acted as special counsel to the Agent in the State of __________
(the "State") in connection with the transactions contemplated by the Credit
Agreement (the "Credit Agreement") dated as of May 8, 1997 among Tekni-Plex,
Inc., a Delaware corporation (the "Company"), the banks listed on the signature
pages thereof (the "Banks"), the Guarantors party thereto, the LC Issuing Banks
referred to therein and Xxxxxx Guaranty Trust Company of New York, as agent for
the Banks (the "Agent"), have assisted in the preparation of the Mortgage[s],
the Security Agreement and the Financing Statements (as defined below), and have
been requested to render this opinion pursuant to Section 3.01(d)(ii) of the
Credit Agreement. Capitalized terms used but not defined herein have the
meanings assigned to them in the Credit Agreement.
We have examined the Credit Agreement, the Notes, the mortgage[s] or
deed[s] of trust described in Schedule A hereto (the "Mortgage[s]"), the
Security Agreement dated as May 8, 1997 among the Company, Dolco Packaging Corp.
and the Agent (the "Security Agreement") and the financing statements described
in Schedule B hereto (the "Financing Statements"; the Credit Agreement, the
Notes, the Mortgage[s], the Security Agreement and the Financing Statements
being collectively referred to herein as the "Loan Documents"). The terms
"Mortgaged Property" and "Secured Parties" have the meanings assigned to them in
the Mortgage[s]. The term "Collateral" has the meaning assigned to it in the
Security Agreement.
We have also examined and relied upon the originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments, and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion.
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In rendering this opinion, we have assumed that:
(a) [Each of] the Company [and _____] is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, has been duly qualified as a foreign
corporation for the transaction of business, is in good standing in the
State and has all requisite corporate power and all material governmental
licenses, authorizations, consents and approvals necessary to own and
operate the Mortgaged Property and the Collateral.
(b) The execution, delivery and performance by the Company of
[each of] the Mortgage[s] [and the execution, delivery and performance by
[each of] the Company [and ______] of each of the other Loan Documents to
which it is a party] (i) are within its corporate powers, (ii) have been
duly authorized by all necessary corporate action, (iii) do not require any
authorization, approval or consent of, or filings or registrations with,
any governmental or regulatory authority or agency outside of the State
except for authorizations, consents, approvals that have already been
obtained or filings that have already been made and that remain in effect,
(iv) do not contravene any provision of its certificate of incorporation or
by-laws, and (v) do not contravene or constitute a breach of or default
under any applicable provision of the laws of any jurisdiction other than
the State and the federal laws of the United States or any applicable
regulation thereunder or under any agreement, judgment, injunction, order,
decree or other instrument binding upon it.
(c) The Mortgage and Financing Statements have been duly executed
and delivered by the Company [and ______].
(d) The Loan Documents other than the Mortgage[s] constitute
legal, valid and binding obligations of [each of] the Company [and ______]
under the laws of the State of New York.
(e) The Company owns the Mortgaged Property [and ______ and the
Company own] the Collateral.
Upon the basis of the foregoing, we are of the opinion that, under
applicable law in effect on the date of this opinion:
1. None of the execution, delivery and performance of the Mortgage[s] and
the other Loan Documents and the consummation of the transactions contemplated
thereby (i) contravene or constitute a breach of or default under any applicable
provision of the laws of the State or any applicable regulation thereunder, (ii)
require any authorization, approval or consent of, or filings or registrations
with any governmental or regulatory authority or agency of or in the State or
(iii) create any Lien upon any revenues or assets of the Company located in the
State other than the Liens created under the Mortgage[s] and the Security
Agreement on the Mortgaged Property and the Collateral.
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2. The [Each] Mortgage constitutes a legal, valid and binding obligation of
the Company, enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws relating to the enforcement of creditors' rights generally and by general
equitable principles. [Each of the Loan Documents which provides for its
governing law to be the laws of the State of New York would, if governed by the
laws of the State constitute a legal, valid and binding obligation of the
Company [and __________, as the case may be,] enforceable in accordance with its
terms, subject to the exceptions noted in the preceding sentence.]*
3. No authorizations, approvals or consents of, or filings or registrations
with, any governmental or regulatory authority or agency of or in the State of
__________ are necessary for the execution, delivery or performance by the
Company of the Mortgage[s] or for the execution, delivery or performance by the
Company [and __________] of the other Loan Documents or for the validity or
enforceability thereof or the consummation of any transaction contemplated
thereby, except for authorizations, consents, approvals that have already been
obtained or filings that have already been made and that remain in effect.
4. None of the Agent or the Banks is required to pay any tax or be
qualified to do business or file any designation for service of process or file
any reports in the State or comply with any statutory or regulatory rule or
requirement applicable only to financial institutions chartered or qualified to
do business in the State solely by reason of its execution and delivery or
acceptance of the Mortgage[s] or the other Loan Documents or by reason of its
participation in any of the transactions under or contemplated by the Loan
Documents, including, without limitation, the making of any Loan, the making and
receipt of payments pursuant thereto and the exercise of any right or remedy
under or with respect to the Mortgage[s], and the validity and enforceability of
the Mortgage[s] and the other Loan Documents will not be affected by any failure
to so qualify or file.
5. The [Each] Mortgage creates a valid mortgage or deed of trust Lien upon
such of the Mortgaged Property described therein (the "Real Property") as
constitutes real property under the law of the State and a valid security
interest in such of the other Mortgaged Property described therein (the "UCC
Property") as is subject to the provisions of Article 9 of the Uniform
Commercial Code as in effect in the State (the "Local UCC"), in each case in
favor of the Agent for the ratable benefit of the Secured Parties (as defined in
the Mortgage[s]) and securing the Secured Obligations (as defined in the
Mortgage[s]). The recording of the Mortgage[s] in the office[s] designated in
Schedule A hereto and the filing of the Financing Statements described as items
________ in the offices designated in Schedule B hereto are the only filings,
recordings and registrations necessary to perfect, publish notice of and
preserve the Lien of and security interest in the Mortgaged Property created by
the Mortgage[s] and the UCC Property created by the Mortgage and the Financing
Statements, except that (i) continuation statements relating to the Financing
Statements must be filed within _______________ [state time period], and (ii)
additional filings may be
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* This opinion is necessary only if a court in your jurisdiction would require
this determination in order to enforce the provision of the Mortgage[s].
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209
necessary with respect to the UCC Property if the Company changes its name,
identity or corporate structure or the jurisdiction in which its places of
business in the State or the UCC Property are located.
6. The Security Agreement creates a valid security interest, for the
benefit of the Secured Parties, in all of the Company's right, title and
interest in all Collateral to the extent that the Local UCC is applicable to the
creation of a security interest therein and, to the extent provided in Section
9-306 of the Local UCC, all proceeds thereof.
7. The filing of the Financing Statements described as items ________ in
the offices designated in Schedule B are the only filings, recordings and
registrations necessary to perfect, publish notice of and preserve the security
interest in the Collateral covered by the Local UCC (the "UCC Collateral")
created by the Security Agreement to the extent such security interest may be
perfected by filing under the Local UCC, and no further filing or recording of
any document or instrument or other action will be required so to perfect and
preserve such security interest, except that (i) continuation statements
relating to said Financing Statements must be filed within _______________
[state time period] and (ii) additional filings may be necessary with respect to
the UCC Collateral if the Company [or __________, as the case may be,] changes
its name, identity or corporate structure or the jurisdiction in which its
places of business in the State or the UCC Collateral are located.
8. No taxes or other charges, including, without limitation, intangible or
documentary stamp taxes, mortgage or recording taxes, transfer taxes or similar
charges, are payable to the State or to any jurisdiction therein on account of
the execution or delivery of the Mortgage[s], the Security Agreement or the
other Loan Documents, the creation of the indebtedness evidenced or secured
thereby, the creation of the Liens and security interests thereunder, or the
filing, recording or registration of the Mortgage[s] or the Financing
Statements, except for nominal filing or recording fees.
9. The Liens and security interests created by the Mortgage[s] and the
Security Agreement on or in the Mortgaged Property and the UCC Collateral will
validly secure the payment of all future advances pursuant to the Credit
Agreement, whether or not at the time such advances are made an Event of Default
or other event not within the control of the Banks has relieved or may relieve
the Banks from their obligations to make such advances, and are perfected to the
extent set forth in paragraph 7 above with respect to such future advances. The
priority of the Liens and security interests created by the Mortgage[s] and the
Security Agreement will be the same with respect to Loans made or deemed made
after the date hereof as with respect to any such Loans made on the date hereof,
except to the extent that any priority may be affected by any security interest,
Lien or other encumbrance imposed by law in favor of any government or
governmental authority or agency.
10. The Mortgage[s], the Security Agreement and the Financing Statements
conform to all requirements of the laws of the State and the Mortgage[s] and the
Security Agreement contain substantially all of the remedial, waiver and other
provisions normally contained in mortgages or deeds of trust and security
agreements used in connection with transactions of
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the type and value described in the Loan Documents. Enforcement of the remedies
provided in the Mortgage[s] will not deprive any Secured Party of its right to
seek a deficiency judgment nor will it limit the right of the Agent to foreclose
on other security securing the Secured Obligations (as defined in any of the
Collateral Documents).
[11. The choice of New York law to govern the Loan Documents in which such
choice is stipulated is a valid and effective choice of law under the laws of
the State and adherence to existing judicial precedents would require a court
sitting in the State to abide by such choice of law.]*
12. In connection with the remedies provided in the Mortgage[s] and the
Security Agreement:
(i) The exercise at any time and in any order of any remedies
available against the UCC Property or the UCC Collateral relating to the Real
Property located within the State would not be affected by, nor would the
exercise at any time of such remedies affect, the exercise of any remedies
relating to the Real Property, unless the Secured Obligations have been paid and
performed in full.
(ii) The exercise of any remedies with respect to any security or
collateral located outside of the State securing the Secured Obligations will
not affect or limit the Agent's ability to foreclose against, or exercise any
other remedies with respect to, the Mortgaged Property or UCC Collateral, either
contemporaneously with, or before or after the exercise of such remedies against
the Collateral located outside of the State except to the extent that the fair
value of such security or collateral so sold or disposed of has been
appropriately applied to the payment of such Secured Obligations, or unless such
Secured Obligations have been paid and performed in full.
(iii) There is no "one form of action" or similar law in the State
which would limit the Secured Parties to choosing only one remedy to enforce
their rights under the Mortgage[s] and the other Collateral Documents.
13. The Agent will have the power, without naming all of the Secured
Parties, to exercise remedies under the Mortgage and the Security Agreement for
the realization of the Mortgaged Property or the Collateral (as the case may be)
in its name as Agent.
The opinion expressed above as to the enforceability of the Mortgage[s] and
Security Agreement is subject to the qualification that certain of the remedial
provisions thereof may be limited by applicable law, although such limitations
do not in our opinion make the remedies provided for therein inadequate for the
practical realization of the benefits of the security intended to be afforded
thereby.
----------
* This opinion is not necessary if you are going to give the
opinion set forth in the second sentence of paragraph 2 above.
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We are admitted to practice only in the State of __________, and the
foregoing opinions are limited to the laws of said State and the federal laws of
the United States of America.
Very truly yours,
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EXHIBIT I
FORM OF INTERCOMPANY NOTE
Dated:
FOR VALUE RECEIVED, the undersigned,__________________, a corporation (the
"Payor"), hereby promises to pay to the order of ______________, a corporation
(the "Payee"), on demand, at [address] , the principal sum of ______________
Dollars, in lawful money of the United States of America and in immediately
available funds.
The undersigned agrees that the accounts of the Payee shall be prima facie
evidence of the amounts loaned by the Payee to the undersigned and the amounts
repaid by the undersigned to the Payee. All loans made by the Payee to the Payor
hereunder, and all payments made on account of principal hereof, shall be
recorded by the Payee, and, prior to any transfer hereof, shall be endorsed on
the schedule attached hereto which is part of this Intercompany Note.
The undersigned also agrees to pay on demand all costs and expenses
(including reasonable fees and expenses of counsel) incurred by the Payee in
enforcing this Intercompany Note.
This Note is one of the Intercompany Notes referred to in the Credit
Agreement dated as of April___ , 1997 (as amended, supplemented or modified from
time to time, the "CREDIT AGREEMENT") among the [Payor][Payee], Tekni-Plex,
Inc., the lenders named therein and Xxxxxx Guaranty Trust Company of New York,
as Agent. Capitalized terms used in this Intercompany Note have the respective
meanings assigned to them in the Credit Agreement.
If at any time demand is made against the Payor under, and pursuant to the
terms of, any guaranty executed by the Payor in connection with the Senior Debt
(as defined below), this Intercompany Note, and the payment obligations of the
Payor evidenced hereby, shall therewith be null and void and the Payee shall be
deemed to have contributed such obligations to the capital of the Payor.
The indebtedness evidenced by this Intercompany Note is subordinate and
subject in right of payment to the prior payment in full of the Senior Debt (as
defined below) in the manner and to the extent set forth below:
(a) The term "SENIOR DEBT" means all obligations of the Payor
incurred or to be incurred under, or in respect of, the Loan Documents
(including, without limitation, interest at the rate specified in the
relevant loan document accruing after the filing of a
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petition initiating any proceeding under the Bankruptcy Code of 1978, as
amended, whether or not such interest is allowed as a claim in such
proceeding).
(b) In the event of (i) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith, relative to the Payor
or to its creditors as such, or to its properties or assets, or (ii) any
liquidation, dissolution or other winding-up of the Payor, whether
voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (iii) any assignment for the benefit of creditors or any
other marshalling of assets or liabilities of the Payor, then and in any
such event the holders of Senior Debt shall be entitled to receive payment
in full of all amounts due on or to become due on or in respect of Senior
Debt then outstanding, in cash or in any other manner acceptable to the
holders of Senior Debt, before the holder is entitled to receive any
payment or distribution of any kind or character on account of principal of
or interest on this Intercompany Note, and to that end the holders of
Senior Debt shall be entitled to receive, for application to the payment
thereof, any payment or distribution of assets of the Payor of any kind or
character including, without limitation, securities that are subordinated
in right of payment to all Senior Debt to substantially the same extent as,
or to a greater extent than, this Intercompany Note, that may be payable or
deliverable in respect of this Intercompany Note in any such case,
proceeding, dissolution, liquidation or other winding-up or event referred
to in clauses (i) through (iii) above.
(c) In the event that the Payee shall receive any payment or
distribution of assets of the Payor of any kind or character in respect of
principal of or interest on this Intercompany Note in contravention of
subsection (b) hereof, then and in such event such payment or distribution
shall be received and held by the Payee in trust for the holders of the
Senior Debt and shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other Person making payment or distribution of assets of the Payor in trust
for the holders of, and for application to the payment of, all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in full,
in cash or in any other manner acceptable to the holders of Senior Debt,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
The undersigned hereby waives presentment for payment, demands, notice of
dishonor and protest of this Intercompany Note and further agrees that none of
its terms or provisions may be waived, altered, modified or amended except as
the Payee may consent in a writing duly signed for and on its behalf.
No failure or delay on the part of the Payee in exercising any of its
rights, powers or privileges hereunder shall operate as a waiver thereof, nor
shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The remedies provided herein are
cumulative and are not exclusive of any remedies provided by law.
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THIS PROMISSORY NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.
[Payor]
Address:
By:
Title:
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ADVANCES AND PAYMENTS OF PRINCIPAL
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of Principal Principal Notation
Date Loan Paid or Prepaid Balance Made By
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EXHIBIT J
[LENDER OR AGENT]
PAY-OFF LETTER
Re: Tekni-Plex, Inc. (the "Company")
Gentlemen:
Reference is made to the [loan instrument], pursuant to which
the [Lenders] have made secured loans to, and issued letters of credit for the
account of, the Company (together with all amendments and modifications thereto,
the "Existing Credit Agreement"). All capitalized terms used and not otherwise
defined in this letter shall have the meanings attributed to them in the
Existing Credit Agreement.
We, as lender and as agent for the lenders, have entered into,
or are about to enter into, a financing arrangement with the Company, pursuant
to which the lenders will make secured loans to the Company (the "New Credit
Agreement"). Pursuant to the Company's instructions in connection with the New
Credit Agreement, we will be paying the outstanding balance of loans and all
other amounts owing by the Company to the Lenders under the Existing Credit
Agreement.
Therefore, pursuant to mutual understanding, it is hereby
agreed that subject to and upon receipt in immediately available funds of the
amount of $__________ representing $___________ outstanding under Term Loan A,
$__________ outstanding under [identify loan types], $__________ in accrued
interest on the [Loans], $ __________ in accrued [commitment and letter of
credit] fees, and $________ in legal expenses no later than the close of
business on :
1. You hereby release any and all liens upon and security
interests in any Collateral securing the Company's obligations
under the Existing Credit Agreement and the related
documentation (collectively, the "Loan Documents"), and
further confirm that: (i) upon such receipt by you, you shall
claim no lien or security interests on or in any of the
Company's assets or property securing the loans that were made
pursuant to the Loan Documents,
217
and (ii) all amounts owing to you as of ___________________
under the loans that were made pursuant to the Existing Credit
Agreement have been paid in full;
2. You hereby agree to promptly execute and deliver to us any and
all appropriate UCC termination statements and/or other
releases to evidence your release of such liens and security
interests; and
3. You hereby confirm and agree that, from time to time
hereafter, you will, upon the Company's or our reasonable
request, and at the Company's expense, execute and deliver
such additional lien releases and/or termination documents as
may be necessary to effectively terminate any and all of such
liens and/or security interests on any public record.
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218
Very truly yours,
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, in
its capacity as agent for the lenders under
the New Credit Agreement
By_____________________________________
Name:
Title:
Each of the undersigned hereby
acknowledges its receipt and
acceptance of and agreement to
the terms and conditions of
this letter:
[LENDER OR AGENT]
By_____________________________
Name:.
Title:
Date:
TEKNI-PLEX, INC.
By_____________________________
Name:
Title:
Date:
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