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Exhibit 10.1
EXECUTION COPY
APPLIED EXTRUSION TECHNOLOGIES, INC.
CREDIT AGREEMENT
Dated as of April 7, 1994
and Amended and Restated as of
January 29, 1998
$70,000,000
THE CHASE MANHATTAN BANK
as Administrative Agent
LASALLE BUSINESS CREDIT, INC.
as Co-Agent
CHASE SECURITIES INC.
as Arranger
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TABLE OF CONTENTS
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Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms ................................................. 1
1.02 Accounting Terms and Determinations ................................... 20
1.03 Types of Loans ........................................................ 21
Section 2. Working Capital Commitments
2.01 Loans ................................................................. 21
2.02 Letters of Credit ..................................................... 21
2.03 Reductions of Working Capital Commitments ............................. 24
2.04 Fees .................................................................. 25
2.05 Lending Offices ....................................................... 26
2.06 Several Obligations ................................................... 26
2.07 Notes ................................................................. 26
2.08 Use of Proceeds ....................................................... 26
Section 3. Borrowings, Conversions and Prepayments
3.01 Borrowings ............................................................ 26
3.02 Prepayments and Conversions ........................................... 26
Section 4. Payments of Principal and Interest
4.01 Repayment of Loans .................................................... 29
4.02 Interest .............................................................. 29
Section 5. Payments; Pro Rata Treatment; Computations; Etc
5.01 Payments .............................................................. 31
5.02 Pro Rata Treatment .................................................... 31
5.03 Computations .......................................................... 32
5.04 Minimum and Maximum Amounts; Types .................................... 32
5.05 Certain Notices ....................................................... 32
5.06 Non-Receipt of Funds by the Administrative Agent ...................... 33
5.07 Sharing of Payments, Etc. ............................................. 34
5.08 Taxes ................................................................. 35
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Section 6. Yield Protection and Illegality
6.01 Additional Costs ...................................................... 37
6.02 Limitation on Types of Loans .......................................... 38
6.03 Illegality ............................................................ 39
6.04 Substitute Base Rate Loans ............................................ 39
6.05 Compensation .......................................................... 40
6.06 Additional Costs in Respect of Letters of Credit ...................... 40
6.07 Capital Adequacy ...................................................... 41
Section 7. Conditions Precedent to all Loans and Letters of Credit
7.01 Loans and Letters of Credit ........................................... 41
Section 8. Representations and Warranties
8.01 Corporate Existence ................................................... 42
8.02 Information ........................................................... 42
8.03 Litigation ............................................................ 43
8.04 No Breach ............................................................. 43
8.05 Corporate Action ...................................................... 43
8.06 Approvals ............................................................. 44
8.07 Regulations U and X ................................................... 44
8.08 ERISA ................................................................. 44
8.09 Taxes ................................................................. 44
8.10 Subsidiaries; Agreements .............................................. 44
8.11 Investment Company Act ................................................ 45
8.12 Public Utility Holding Company Act .................................... 45
8.13 Ownership and Use of Properties ....................................... 45
8.14 Environmental Matters ................................................. 45
8.15 Year 2000 Issue ....................................................... 49
Section 9. Covenants
9.01 Information ........................................................... 49
9.02 Taxes and Claims ...................................................... 54
9.03 Insurance ............................................................. 54
9.04 Maintenance of Existence; Conduct of Business ......................... 55
9.05 Maintenance of and Access to Properties ............................... 55
9.06 Compliance with Applicable Laws ....................................... 56
9.07 Litigation ............................................................ 56
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9.08 Indebtedness .......................................................... 56
9.09 Net Worth ............................................................. 56
9.10 Interest Coverage Ratio ............................................... 57
9.11 Leverage Ratio ........................................................ 57
9.12 Mergers, Asset Dispositions, Acquisitions, Etc ........................ 58
9.13 Liens ................................................................. 59
9.14 Investments ........................................................... 60
9.15 Restricted Payments ................................................... 60
9.16 Transactions with Affiliates .......................................... 60
9.17 Lines of Businesses ................................................... 61
9.18 Capital Expenditures .................................................. 61
9.19 Modification of Other Agreements ...................................... 62
9.20 Bank Accounts ......................................................... 62
9.21 Environmental Matters ................................................. 62
9.22 Senior Notes .......................................................... 63
9.23 Certain Obligations Respecting Guaranties and Collateral .............. 63
Section 10. Defaults
10.01 Events of Default .................................................... 64
10.02 Collateral Account ................................................... 68
Section 11. The Administrative Agent
11.01 Appointment, Powers and Immunities ................................... 68
11.02 Reliance by Administrative Agent ..................................... 69
11.03 Defaults ............................................................. 69
11.04 Rights as a Lender ................................................... 70
11.05 Indemnification ...................................................... 70
11.06 Non-Reliance on Administrative Agent and Other Lenders ............... 70
11.07 Failure to Act ....................................................... 71
11.08 Resignation or Removal of Administrative Agent ....................... 71
11.09 Collateral Sub-Agents ................................................ 72
Section 12. Miscellaneous
12.01 Waiver ............................................................... 72
12.02 Notices .............................................................. 72
12.03 Expenses, Etc. ....................................................... 72
12.04 Indemnification ...................................................... 73
12.05 Amendments, Etc ...................................................... 73
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12.06 Successors and Assigns ............................................... 74
12.07 Confidentiality ...................................................... 75
12.08 Survival ............................................................. 76
12.09 Captions ............................................................. 76
12.10 Counterparts; Integration ............................................ 76
12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER
OF JURY TRIAL ....................................................... 76
Section 13. Conditions Precedent to Effectiveness
13.01 Effectiveness ........................................................ 77
Schedules
SCHEDULE I - Assigned Agreements
SCHEDULE II - Security Documents
SCHEDULE III - [intentionally deleted]
SCHEDULE IV - Special Account Debtors
SCHEDULE V - Investments
SCHEDULE VI - Agreements; Liens
SCHEDULE VII - Environmental Matters
SCHEDULE VIII - Insurance
Exhibits
EXHIBIT A - [intentionally deleted]
EXHIBIT B - Form of Working Capital Note
EXHIBIT C - Form of Borrowing Base Certificate
EXHIBIT D - Forms of Opinions of Counsel to the Company
EXHIBIT E - Form of Opinion of Special Counsel to the Administrative Agent
EXHIBIT F - Form of Company Security Agreement
EXHIBIT G - Form of Company Pledge Agreement
EXHIBIT H - Form of Subsidiary Guaranty
EXHIBIT I - Form of Guarantor Acknowledgment
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CREDIT AGREEMENT
AGREEMENT dated as of April 7, 1994 and amended and restated as of January
29, 1998 among: APPLIED EXTRUSION TECHNOLOGIES, INC., a corporation duly
organized and validly existing under the laws of the State of Delaware (together
with its successors, the "Company"); each of the lenders which is or which may
from time to time become a signatory hereto (individually, together with its
successors, a "Lender" and, collectively, together with their respective
successors, the "Lenders"); and THE CHASE MANHATTAN BANK, as administrative
agent for the Lenders (in such capacity, together with its successors in such
capacity, the "Administrative Agent").
WHEREAS, the Company is a party to a Credit Agreement (as heretofore
amended, the "Original Agreement") dated as of April 7, 1994, together with each
of the Lenders and The Chase Manhattan Bank, as administrative agent for the
Lenders;
WHEREAS, the parties hereto desire to further amend the Original Agreement
to provide for aggregate working capital commitments of $70,000,000 by combining
and increasing the amount of working capital commitments and term commitments
available under the Original Agreement, and to make certain additional changes;
and
WHEREAS, in order to set forth in one document, for the convenience of the
parties, the text of the Original Agreement as heretofore amended and as amended
by the amendments to be made upon the effectiveness hereof, the Original
Agreement as heretofore amended will, upon satisfaction of the conditions set
forth in Section 13.01 hereof, be amended and restated to read in full as set
forth herein;
The parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms shall have
the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"Acquisition Documents" shall mean the Purchase Agreement, including the
exhibits and schedules thereto, and all agreements, documents and
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instruments executed and delivered pursuant to or in connection with any of
the foregoing.
"Affiliate" shall mean, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person and, if such Person is an individual, any member of the immediate
family (including parents, siblings, spouse, children, stepchildren, nephews,
nieces and grandchildren) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, "control" (including, with correlative meanings, "controlled by" and
"under common control with") shall mean possession, directly or indirectly, of
power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event, any Person which owns
directly or indirectly more than 5% of the securities having ordinary voting
power for the election of directors or other governing body of a corporation or
more than 5% of the partnership or other ownership interests of any other Person
(other than as a limited partner of such other Person) will be deemed to control
such corporation or other Person.
"Amended Agreement" shall mean this Credit Agreement dated as of April 7,
1994 and amended and restated as of January 29, 1998 among the Company, the
Lenders and the Administrative Agent.
"Applicable Lending Office" shall mean, for each Lender and for each Type
of Loan or Letter of Credit, the Lending Office of such Lender (or of an
Affiliate of such Lender) designated for such Type of Loan or Letter of Credit
below its name on the signature pages hereof or such other office of such Lender
(or of an Affiliate of such Lender) as such Lender may from time to time specify
to the Administrative Agent and the Company as the office by which its Loans of
such Type or such Letters of Credit are to be made and/or issued and maintained.
"Applicable Margin" shall mean, with respect to any Loan, the following
percentages (calculated as a function of the Type of such Loan):
(a) for Base Rate Loans: 1-1/4% per annum
(b) for Eurodollar Loans: 2-1/2% per annum
"Appraisers" shall mean Kostner Industries, X.X. Xxxxxx & Co. and
Xxxxxxx & Wakefield of Pennsylvania, Inc., or one or more other independent
property appraisers acceptable to the Administrative Agent from time to time.
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"Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (as any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Administrative Agent to be representative of the cost of
such insurance to the Lenders.
"Assigned Agreements" shall mean, collectively, the agreements listed on
Schedule I hereto, as each such agreement shall, subject to Section 9.19 hereof,
be modified and supplemented and in effect from time to time.
"Available PP&E Amount" shall mean, as at any date of determination
thereof, the sum of (x) 25% of Eligible Machinery and Equipment plus (y) 25% of
Eligible Real Property, in each case determined as provided in the respective
definition thereof.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as now or
hereafter in effect, or any successor statute.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Base Rate" shall mean, with respect to any Base Rate Loan for any day,
the rate per annum equal to the higher as of such day of (i) the Federal Funds
Rate plus 1/2 of 1%, (ii) the Prime Rate or (iii) the Base CD Rate plus 1%. Any
change in the Base Rate due to a change in the Federal Funds Rate, the Prime
Rate or the Base CD Rate shall be effective from and including the effective
date of such change in the Federal Funds Rate, the Prime Rate or the Base Rate,
respectively.
"Base Rate Loans" shall mean Loans which bear interest at a rate based
upon the Base Rate.
"Basic Documents" shall mean the Financing Documents, the Assigned
Agreements, the Indenture, the Senior Notes and any other agreement governing
"Borrowing Base" shall mean, as at any date, the amount of the Borrowing
Base as of the date of the Borrowing Base Certificate then most recently
delivered
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pursuant to Section 9.01(c) (the "Borrowing Base Date"), determined by
calculating the sum of (i) 85% of the aggregate amount of Eligible Receivables
at the Borrowing Base Date plus (ii) 50% of the aggregate amount of Eligible
Inventory at the Borrowing Base Date plus (iii) the Available PP&E Amount as at
the Borrowing Base Date; provided that (x) the amount determined pursuant to
clause (ii) shall at no time exceed 50% of the Borrowing Base and (y) the amount
determined pursuant to clause (iii) shall at no time exceed 40% of the Borrowing
Base.
"Borrowing Base Certificate" shall mean a certificate, duly executed by a
Senior Officer, appropriately completed and in substantially the form of Exhibit
C hereto.
"Business Day" shall mean any day other than a day on which commercial
banks are authorized or required to close in New York City and, if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment,
conversion or Interest Period, which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" shall mean expenditures in respect of fixed or
capital assets by the Company or any of its Subsidiaries, including the capital
portion of lease payments made in respect of Capital Lease Obligations, but
excluding (i) expenditures for the restoration or replacement of fixed assets to
the extent financed by the proceeds of any Property/Business Interruption
Insurance Policy and (ii) expenditures to the extent financed with proceeds from
the disposition of assets made pursuant to and in accordance with Section
9.12(ii).
"Capital Lease Obligations" shall mean, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
"Cash Flow" shall mean, for any period, (i) the sum (without duplication),
determined on a consolidated basis for the Company and its Subsidiaries, of (x)
operating profit of the Company and its Subsidiaries (calculated before
provision for income taxes, interest expense, extraordinary and non-recurring
items and
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income attributable to equity in affiliates) for such period plus (y)
depreciation, amortization and other non-cash items (to the extent deducted in
determining operating profit) for such period minus (ii) proceeds received
during such period (to the extent included in determining operating profit) of
any Property Insurance Policy.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time, and regulations
promulgated thereunder.
"Chase" shall mean The Chase Manhattan Bank and its successors.
"Closing Date" shall mean the date of the initial Loans under the Original
Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute.
"Collateral Monitor" shall mean LaSalle Business Credit, Inc., in its
capacity as collateral monitor for the Lenders, and its successors in such
capacity (including any successor designated by the Majority Lenders).
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414 of the Code.
"Current Assets" shall mean at any date the current assets (excluding cash
and cash equivalents and prepaid expenses) of the Company and its Subsidiaries
determined on a consolidated basis as of such date.
"Current Liabilities" shall mean at any date the consolidated current
liabilities (excluding the current portion of long-term Indebtedness) of the
Company and its Subsidiaries plus the current liabilities of any Person (other
than the Company or one of its Subsidiaries) which are Guaranteed by the Company
or one of its Subsidiaries, all determined on a consolidated basis as of such
date.
"Default" shall mean an Event of Default or an event which with notice or
lapse of time or both would, unless cured or waived, become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of
America.
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"Effective Date" has the meaning specified in Section 13.01.
"Eligible Inventory" shall mean, as at any date of determination thereof,
the value (determined at the lower of cost or market on an average cost basis)
of all Inventory owned by (and in the possession or under the control of) the
Company or any Subsidiary Guarantor and located in a jurisdiction in the United
States of America or Canada as to which appropriate Uniform Commercial Code
financing statements (or, in the case of Inventory located in Canada, comparable
filings) have been filed naming the Company or such Subsidiary Guarantor, as the
case may be, as "debtor" and the Administrative Agent as "secured party";
provided that Eligible Inventory shall not include any of the following: (a)
catalogs and other promotional materials of any kind; (b) work in process; (c)
any returned items not eligible for resale; (d) any damaged, defective or
recalled items not eligible for resale; (e) prototypes or salesmen's samples;
(g) any items of Inventory which have been consigned to the Company or a
Subsidiary Guarantor or as to which a Person claims a Lien other than a
Permitted Lien (as defined in the Security Documents); (h) any items of
Inventory which have been consigned by the Company or a Subsidiary Guarantor to
a consignee; (i) packing and shipping materials; (j) Inventory located on
premises leased by the Company or a Subsidiary Guarantor from a landlord from
which the Administrative Agent did not receive a landlord's waiver on terms
satisfactory to the Collateral Monitor within 90 days after the Closing Date, or
with respect to which the Company or such Subsidiary Guarantor has not entered
into arrangements reasonably satisfactory to the Collateral Monitor to evidence
payment of amounts owed to the landlord (provided that the amount of Eligible
Inventory with respect to which such arrangements not involving a waiver have
been made shall not exceed $5,000,000); and (k) Inventory which in the
reasonable judgment of the Majority Lenders is considered to be not
merchantable.
"Eligible Machinery and Equipment" shall mean, as at any date of
determination thereof, the orderly in-place liquidation value (as most recently
determined by the Appraiser pursuant to Section 7.01(r) or 9.01(e)(ii) of the
Original Agreement or Section 9.01(e)(ii)) or, if more recent, the cost (as
determined by the Company pursuant to Section 13.01(h) of all machinery and
equipment owned by (and in the possession of) the Company or any Subsidiary
Guarantor and located in a jurisdiction in the United States of America or
Quebec as to which appropriate Uniform Commercial Code financing statements (or,
in the case of machinery or equipment located in Quebec, comparable filings in
Quebec) have been filed naming the Company or such Subsidiary Guarantor, as the
case may be, as "debtor" and the Administrative Agent a "secured party";
provided that Eligible Machinery and Equipment shall not include any of the
following: (a) any items of machinery and equipment as to which any Person
claims a Lien other than a Permitted Lien (as defined in the Security
Documents);
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(b) any items of machinery and equipment which are damaged or defective; and (c)
machinery and equipment located on premises leased by the Company or a
Subsidiary Guarantor from a landlord from which the Administrative Agent has not
received a landlord's waiver on terms satisfactory to the Collateral Monitor.
"Eligible Real Property" shall mean, as at any date of determination
thereof, the fair market value (as most recently determined by the Appraisers
pursuant to Section 7.01(r) or 9.01 (e)(ii) of the Original Agreement or Section
9.01(e)(ii)) of all real property owned by (and in the possession of) the
Company or any Subsidiary Guarantor and located in a jurisdiction in the United
States of America or Quebec as to which surveys and title reports acceptable to
the Majority Lenders have been received and appropriate mortgages (or, in the
case of real property located in Quebec, deeds of hypothecation) have been filed
and recorded naming the Company or such Subsidiary Guarantor, as the case may
be, as "mortgagor" (or, in the case of real property located in Quebec,
"grantor") and the Administrative Agent as "mortgagee" (or, in the case of real
property located in Quebec, "creditor").
"Eligible Receivables" shall mean, as at any date of determination
thereof, the aggregate of all Receivables at said date due to the Company or a
Subsidiary Guarantor other than the following (determined without duplication):
(a) all Receivables which, at the date of the original issuance of
the respective invoice therefor, were payable more than 60 days after such
date,
(b) any Receivable due from an account debtor whose principal place
of business is located outside the United States of America or Canada,
(c) any Receivable due from (i) an Affiliate of the Company or (ii)
an account debtor which is the subject of bankruptcy, insolvency or
similar proceedings or which the Majority Lenders (through the
Administrative Agent) have notified the Company does not have a
satisfactory credit standing (as determined in the sole discretion of the
Majority Lenders),
(d) any Receivable which remains unpaid for more than 60 days after
the date set forth for payment in the invoice originally issued therefor,
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(e) all Receivables due from any account debtor if more than 50% of
the aggregate amount of the Receivables due from such account debtor are
otherwise excluded from the definition of "Eligible Receivables",
(f) any Receivable as to which there is any unresolved dispute with,
or claim or defense by, the respective account debtor (but only to the
extent of such dispute, claim or defense),
(g) any Receivable due from an account debtor that is the United
States of America or any department, agency or instrumentality thereof,
unless the Company has complied with the Federal Assignment of Claims Act
of 1940,
(h) any Receivable evidenced by an instrument (as defined in Article
9 of the Uniform Commercial Code) not in the possession of the
Administrative Agent and any other Receivable in which the Administrative
Agent does not have a perfected first priority security interest,
(i) except as otherwise provided in Schedule IV hereto, as such
schedule may be modified from time to time by the Administrative Agent
with the consent of the Majority Lenders, if the Receivables due from any
account debtor exceed an amount equal to 20% of the aggregate of all
Receivables at said date, an amount of such Receivables equal to such
excess, and
(j) any Receivable with respect to which goods are placed on
consignment, guaranteed sale, xxxx-and-hold, repurchase or return, or
other terms by reason of which payment by the account debtor may be
conditional.
"Environmental Laws" shall mean any and all applicable federal, state,
local and foreign statutes, laws, judicial decisions, regulations, ordinances,
rules, judgments, orders, decrees, codes, injunctions, permits, 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 release of pollutants, contaminants, wastes or other
hazardous substances 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, wastes or other hazardous
substances or the clean-up or other remediation thereof.
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"Environmental Liabilities" shall mean all liabilities in connection with
or relating to the business, assets, presently or previously owned or leased
property, activities (including, without limitation, off-site disposal) or
operations of the Company 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 (including, without limitation,
any matter disclosed or required to be disclosed in Schedule VII hereto).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar Loans,
the rate per annum determined by the Administrative Agent to be the average of
the rates quoted by the Reference Lenders at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) on the day two Business Days prior
to the first day of the Interest Period for such Loans for the offering by the
Reference Lenders to leading banks in the London interbank market of Dollar
deposits having a term comparable to such Interest Period and in an amount
comparable to the principal amount of the respective Eurodollar Loans of the
Reference Lenders to which such Interest Period relates. If any Reference Lender
is not participating in any Eurodollar Loans during the Interest Period therefor
(pursuant to Section 6.04 hereof or for any other reason), the Eurodollar Base
Rate for such Loans for such Interest Period shall be determined by reference to
the amount of the Loan which such Reference Lender would have made had it been
participating in such Loans. If any Reference Lender does not furnish a timely
quotation, the Administrative Agent shall determine the relevant interest rate
on the basis of the quotation or quotations furnished by the remaining Reference
Lender or Lenders or, if none of such quotations is available on a timely basis,
the provisions of Section 6.02 shall apply.
"Eurodollar Loans" shall mean Loans the interest on which is determined on
the basis of rates referred to in the definition of "Eurodollar Base Rate" in
this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loans, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the
Administrative Agent to be equal to (i) the Eurodollar Base Rate for such Loans
for the Interest Period for such Loans divided by (ii) 1 minus the Reserve
Requirement for such Loans for such Interest Period.
"Event of Default" shall have the meaning assigned to such term in Section
10.01 hereof.
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"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th 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 Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to Chase
on such day on such transactions as determined by the Administrative Agent.
"Financing Documents" shall mean this Agreement, the Subsidiary Guaranty,
the Guarantor Acknowledgment, the Notes and the Security Documents.
"Funded Indebtedness" shall mean Indebtedness which matures more than one
year after the incurrence thereof or is extendible, renewable or refundable, at
the option of the obligor, to a date more than one year after the incurrence
thereof (including the current portion thereof).
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States consistently applied.
"Guarantor Acknowledgment" shall mean the Guarantor Acknowledgment dated
as of the Effective Date, substantially in the form of Exhibit I hereto.
"Guaranty" by any Person shall mean any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
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
Indebtedness (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, other
than agreements to purchase goods at an arm's length price in the ordinary
course of business) or (ii) entered into for the purpose of assuring in any
other manner the holder of such Indebtedness of the payment thereof or to
protect such holder against loss in respect thereof (in whole or in part),
provided that the term Guaranty 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.
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"Hazardous Substances" shall mean any pollutants, contaminants, wastes or
other toxic, radioactive, caustic or otherwise hazardous substances, including
petroleum, its derivatives, by-products and other hydrocarbons, or any substance
having constituent elements displaying any of the foregoing characteristics,
regulated under Environmental Laws.
"Indebtedness" shall mean, as to any Person (determined without
duplication): (i) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
or acquisition price of property or services, other than accounts payable (other
than for borrowed money) incurred in the ordinary course of business; (ii)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for the
account of such Person (whether or not such obligations are contingent); (iii)
Capital Lease Obligations of such Person; (iv) obligations of such Person to
redeem or otherwise retire shares of capital stock of such Person; (v) all
obligations of such Person under or in respect of currency exchange contracts
and Interest Rate Protection Obligations; and (vi) indebtedness of others of the
type described in clause (i), (ii), (iii), (iv) or (v) above secured by a Lien
on the property of such Person, whether or not the respective obligation so
secured has been assumed by such Person; and (vii) indebtedness of others of the
type described in clause (i), (ii), (iii), (iv) or (v) above Guaranteed by such
Person.
"Indenture" shall mean the Indenture dated as of April 7, 0000 xxxxxxx xxx
Xxxxxxx xxx Xxxxxx Xxxxxx Trust Company of New York, as Trustee, as such
agreement shall, subject to Section 9.19 hereof, be modified and supplemented
and in effect from time to time.
"Interest Expense" shall mean, for any period, the sum (determined without
duplication) of the aggregate amount of interest accruing during such period on
Indebtedness of the Company and its Subsidiaries (on a consolidated basis),
including the interest portion of payments under Capital Lease Obligations and
any capitalized interest, and excluding amortization of debt discount and
expense.
"Interest Period" shall mean, with respect to any Eurodollar Loans, the
period commencing on the date such Loans are made or converted from Base Rate
Loans or the last day of the next preceding Interest Period with respect to such
Loans and ending on the numerically corresponding day in the first, third or
sixth calendar month thereafter, as the Company may select as provided in
Section 5.05 hereof, except that each such Interest Period which commences on
the last Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
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shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end after the last day
of the Working Capital Availability Period; (ii) each Interest Period which
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day); and (iii)
notwithstanding clause (i) above, no Interest Period shall have a duration of
less than one month and, if the Interest Period therefor would otherwise be a
shorter period, such Loans shall not be available hereunder.
"Interest Rate Protection Obligations" shall mean the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"IRB Letter of Credit" shall mean one or more Participation Letters of
Credit securing the Company's obligations in respect of outstanding City of
Salem, Massachusetts Flexible Mode Industrial Development Revenue Bonds (Applied
Extrusion Technologies, Inc. Issue), in form and substance satisfactory to
Chase.
"Inventory" shall mean inventory (as defined in Article 9 of the Uniform
Commercial Code) to the extent comprised of readily marketable materials,
products or goods of a type manufactured or consumed by the Company or any
Subsidiary Guarantor in the ordinary course of business as presently conducted.
"Investments" shall have the meaning assigned to such term in Section 9.14
hereof.
"Letter of Credit" shall have the meaning assigned to such term in Section
2.02(a) hereof.
"Letter of Credit Liabilities" shall mean, at any time and in respect of
any Letter of Credit, the sum of (i) the amount available for drawings under
such Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit.
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"Lien" shall mean, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Company and each of its Subsidiaries
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.
"Liquid Investments" shall mean (i) certificates of deposit maturing
within 180 days of the acquisition thereof denominated in Dollars and issued by
(X) a Lender or (Y) a bank or trust company having combined capital and surplus
of at least $500,000,000 and which has (or which is a Subsidiary of a bank
holding company which has) publicly traded debt securities rated AA or higher by
Standard & Poor's Corporation or Aa-2 or higher by Xxxxx'x Investors Service,
Inc.; (ii) obligations issued or guaranteed by the United States of America,
with maturities not more than 180 days after the date of issue; and (iii)
commercial paper with maturities of not more than 90 days and a published rating
of not less than A-1 from Standard & Poor's Corporation or P-1 from Xxxxx'x
Investors Service, Inc.
"Loans" shall mean the loans provided for by Section 2.01 hereof.
"Majority Lenders" shall mean, at any time while no Loans or Letter of
Credit Liabilities are outstanding, Lenders having at least 51% of the aggregate
amount of the Working Capital Commitments and, at any time while any Loans or
Letter of Credit Liabilities are outstanding, Lenders holding at least 51% of
the outstanding aggregate principal amount of the Loans and Letter of Credit
Liabilities (including, without limitation, participations in the Participation
Letters of Credit).
"Material Adverse Effect" means (i) a material adverse effect on the
condition (financial or otherwise), results of operations, properties, assets,
liabilities (including, without limitation, tax and ERISA liabilities and
Environmental Liabilities), business, operations, capitalization, stockholders'
equity, licenses, franchises or prospects of the Company and its Subsidiaries,
taken as a whole; (ii) a material adverse effect on the ability of any the
Company or any Subsidiary to perform its obligations under each Basic Document
to which it is a party; or (iii) a material adverse effect on the rights and
remedies of the Administrative Agent and the Lenders under the Financing
Documents.
"Mortgages" shall mean, collectively, the mortgages, deeds of trust, deeds
of hypothecation, leasehold mortgages, leasehold deeds of trust and similar
instruments listed on Schedule II, each in form and substance satisfactory to
the
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Administrative Agent, executed by the respective mortgagors in favor of the
Administrative Agent for the benefit of the Lenders.
"Multiemployer Plan" shall mean at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which the Company or
any member of the Controlled 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 Controlled Group during such five year period.
"Net Cash Proceeds" shall mean, in each case as set forth in reasonable
detail in a certificate of a Senior Officer delivered to the Administrative
Agent: (a) with respect to the disposition of any asset by the Company or any of
its Subsidiaries, the excess, if any, of (i) the cash received (including any
cash payments received by way of deferred payment pursuant to, or monetization
of, a note or installment receivable or otherwise, but only as and when
received) in connection with such disposition over (ii) the sum of (A) the
amount of any Indebtedness which is secured by such asset and which is required
to be repaid in connection with the disposition thereof, plus (B) the reasonable
out-of-pocket expenses incurred by the Company or such Subsidiary, as the case
may be, in connection with such disposition, plus (C) provision for taxes,
including income taxes, attributable to the disposition of such asset; (b) with
respect to the incurrence of Indebtedness of the Company or any of its
Subsidiaries, the gross proceeds received from such incurrence less all
reasonable out-of-pocket expenses, discounts and commissions and other fees and
expenses incurred or to be incurred and all federal, state, local and foreign
taxes assessed or to be assessed in connection with the closing of such
transaction; (c) with respect to the receipt by the Company or the
Administrative Agent of any payment under a Property Insurance Policy or
pursuant to any condemnation award, the aggregate amount of any such payment
made to the Company or the Administrative Agent less any income tax liability of
the Company relating to such payment and all legal expenses incurred in
connection with the recovery or collection thereof, and (d) with respect to the
termination of any Plan, the excess, if any, of (i) the amounts received by the
Company or any Subsidiary in connection with such termination over (ii) the
amount of taxes payable by such Person in connection therewith.
"Net Working Investment" shall mean, at any date, the amount by which
Current Assets exceeds Current Liabilities at such date.
"Net Worth" shall mean at any date the consolidated stockholders' equity
of the Company and its consolidated Subsidiaries determined as of such date.
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"Notes" shall have the meaning assigned to such term in Section 2.07
hereof.
"Offering Memorandum" shall mean the Information Memorandum dated January,
1998 prepared in connection with the transactions contemplated by this Amended
Agreement.
"Participation Letters of Credit" shall have the meaning assigned to such
term in Section 2.02(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, a corporation, a company, a voluntary
association, a partnership, a trust, an unincorporated organization or a
government or any agency, instrumentality or political subdivision thereof.
"Plan" shall mean 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 Code and either (i) is
maintained or contributed to, by the Company or any member of the Controlled
Group for employees of the Company or any member of the Controlled Group or (ii)
has at any time within the preceding five years been maintained, or contributed
to, by the Company or any Person which was at such time a member of the
Controlled Group for employees of any Person which was at such time a member of
the Controlled Group.
"Plants" shall mean the facilities of the Company located in Terre Haute,
Indiana; Xxxxxxxxx, Virginia; Varennes, Quebec, Canada; Salem, Massachusetts;
Middletown, Delaware; Orleans, Massachusetts; and Wilmington, Delaware.
"Post-Default Rate" shall mean, in respect of any principal of any Loan,
any Reimbursement Obligation or any other amount payable by the Company under
this Agreement or any Security Document which is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum during the
period commencing on the due date until such amount is paid in full equal to the
sum of 2% plus the higher of (i) the Base Rate as in effect from time to time
plus the Applicable Margin for Base Rate Loans and (ii) in the case of any Loan,
the rate of interest (if any) otherwise applicable to such Loan.
"Prime Rate" shall mean the rate of interest from time to time announced
by Chase at the Principal Office as its prime commercial lending rate. Each
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change in the interest rate provided for herein resulting from a change in the
Prime Rate shall take effect at the time of such change in the Prime Rate.
"Principal Office" shall mean the principal office of Chase, presently
located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Property Insurance Policy" shall mean insurance (x) against loss or
damage covering all tangible real and personal property and improvements of the
Company and its Subsidiaries, by reason of any Peril (as defined below) and (y)
covering any construction or repair of improvements, for the total value of the
work performed and equipment, supplies and material furnished against any Peril.
For purposes of this definition, the term "Peril" shall mean, collectively, (i)
fire, lighting, flood, windstorm, hail, explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and smoke and
(ii) all other perils covered by the "all-risk" endorsement then in use in the
States in which the Plants are located.
"Purchase Agreement" shall mean the Sale and Purchase Agreement dated as
of March 8, 1994 between the Company and Hercules Incorporated, a Delaware
corporation, as such agreement shall, subject to Section 9.19 hereof, be
modified and supplemented and in effect from time to time.
"Quarterly Dates" shall mean the last Business Day of each March, June,
September and December.
"Quebec" shall mean the Province of Quebec, Canada.
"Receivable" shall mean, as at any date of determination thereof, the
unpaid portion of the obligation, as stated in U.S. Dollars on the respective
invoice, of a customer of the Company or any Subsidiary Guarantor in respect of
Inventory purchased and shipped or services rendered, net of any credits,
rebates or offsets owed to the respective customer and, to the extent reflected
in such invoice, also net of any commissions payable to third parties which are
billed in addition to the xxxx for such Inventory.
"Reference Lenders" shall mean each of Chase and such other Lenders, if
any, as the Administrative Agent may designate with the consent of the Company.
"Regulated Activity" shall mean any generation, treatment, storage,
recycling, transportation or disposal of any Hazardous Substance.
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"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" shall mean, with respect to any Lender, any change on
or after the date of this Amended Agreement in United States federal, state or
foreign laws or regulations (including Regulation D) or the adoption or making
on or after such date of any interpretations, directives or requests applying to
a class of lenders including such Lender of or under any United States federal
or state, or any foreign, laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reimbursement Obligations" shall mean as at any date, the obligations of
the Company then outstanding under Section 2.02(e) hereof to reimburse any
Lender in the case of Syndicated Letters of Credit or Chase in the case of
Participation Letters of Credit.
"Release" shall mean any discharge, emission or release, including a
"Release" as defined in CERCLA at 42 U.S.C. Section 9601(22). The term
"Released" shall have a corresponding meaning.
"Reserve Requirement" shall mean, for any Eurodollar Loans for any
Interest Period therefor, the average maximum rate at which reserves (including
any marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion Dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to be determined
as provided in the definition of "Eurodollar Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans.
"Restricted Payment" shall mean dividends (in cash, property or
obligations) on, or other payments or distributions on account of, or the
setting apart of money for a sinking or other analogous fund for the purchase,
redemption, retirement or other acquisition of, any shares of any class of
capital stock of the Company, or the exchange or conversion of any shares of any
class of capital stock of the Company for or into any obligations of or shares
of any other class of capital stock of the Company or any other property, but
excluding dividends payable solely in, or exchanges or conversions for or into,
shares of
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capital stock of the Company of the same or a junior class; provided that
payments to the Company or a Wholly-Owned Subsidiary shall not constitute
Restricted Payments.
"Security Documents" shall mean, collectively, the Mortgages and the other
agreements listed on Schedule II hereto; and, from and after the execution and
delivery thereof, shall include any supplemental mortgage or security document
required pursuant to Section 9.18 hereof.
"Senior Notes" shall mean the Company's 11-1/2% Senior Notes Due 2002
issued pursuant to the Indenture, as such Senior Notes shall, subject to Section
9.19 hereof, be modified and supplemented and in effect from time to time.
"Senior Officer" shall mean the chief executive officer or chief financial
officer of the Company.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve System to
negotiable nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Subsidiary" shall mean, with respect to any Person, any corporation of
which at least a majority of the outstanding shares of stock having by the terms
thereof ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether or not at the time stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by such Person or one or more of the Subsidiaries
of such Person or by such Person and one or more of the Subsidiaries of such
Person.
"Subsidiary Guarantor" shall mean each of the following Subsidiaries of
the Company: Applied Extrusion Technologies (Canada), Inc., a Delaware
corporation, and each other Subsidiary of the Company that from time to time
becomes a party to the Subsidiary Guaranty or otherwise guarantees the
obligations of the Company hereunder pursuant to Section 9.23.
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"Subsidiary Guaranty" shall mean the Subsidiary Guaranty dated as of the
Closing Date, in substantially the form of Exhibit H hereto, as said agreement
shall be modified and supplemented and in effect from time to time.
"Syndicated Letters of Credit" shall have the meaning assigned to such
term in Section 2.02(a) hereof.
"Three-Month Secondary CD Rate" means, for any day, the secondary market
rate for three-month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board of Governors of the Federal Reserve System through the public
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15 (519) during the week following such day) or, if such
rate is not so reported on such day or such next preceding Business Day, the
average of the secondary market quotations for three-month certificates of
deposit of major money center banks in New York City received at approximately
10:00 a.m., New York City time, on such day (or, if such day is not a Business
Day, on the next preceding Business Day) by the Administrative Agent from three
negotiable certificate of deposit dealers of recognized standing selected by it.
"Type" shall have the meaning assigned to such term in Section 1.03
hereof.
"Unfunded Liabilities" shall mean, with respect to any Plan, at any time,
the amount (if any) by which (i) the value of all benefits 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 benefits 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 the Company or any member of the
Controlled Group to the PBGC or any other Person under Title IV of ERISA.
"Wholly-Owned Subsidiary" shall mean a Subsidiary of the Company all of
whose outstanding shares of capital stock (except directors' qualifying shares)
are directly or indirectly owned by the Company.
"Working Capital Availability Period" shall mean the period from and
including the date hereof to but not including the earlier of (i) November 1,
2001, if the Senior Notes shall not have been refinanced prior to such date on
terms and conditions reasonably satisfactory to the Administrative Agent (and in
any event
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no less favorable to the Administrative Agent and the Lenders than the Senior
Notes) and (ii) January 29, 2003.
"Working Capital Commitment" shall mean, as to any Lender, the obligation
of such Lender to make Loans and incur Letter of Credit Liabilities in an
aggregate principal amount at any one time outstanding up to but not exceeding
the amount set forth opposite such Lender's name on the signature pages hereof
under the caption "Working Capital Commitment" (as the same may be reduced from
time to time pursuant to Section 2.03 hereof).
"Working Capital Commitment Percentage" shall mean, as to any Lender, the
percentage equivalent of a fraction the numerator of which is the Working
Capital Commitment of such Lender and the denominator of which is the aggregate
amount of the Working Capital Commitments of all Lenders.
"Working Capital Notes" shall mean the promissory notes of the Company
evidencing the Loans, substantially in the form of Exhibit B hereto.
"Working Capital Obligations" shall mean, as at any date of determination
thereof, the sum of the following (determined without duplication): (i) the
aggregate principal amount of Loans outstanding hereunder plus (ii) the
aggregate amount of the Letter of Credit Liabilities hereunder.
1.02 Accounting Terms and Determinations. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP;
provided that if any change in GAAP in itself materially affects the calculation
of any financial covenant in Section 9, the Company may by notice to the
Administrative Agent, or the Administrative Agent (at the request of the
Majority Lenders) may by notice to the Company, require that such covenant
thereafter be calculated in accordance with GAAP as in effect, and applied by
the Company, immediately before such change in GAAP occurs. If such notice is
given, the compliance certificates delivered pursuant to Section 9.01 after such
change occurs shall be accompanied by reconciliations of the difference between
the calculation set forth therein and a calculation made in accordance with GAAP
as in effect from time to time after such change occurs. To enable the ready
determination of compliance with the covenants set forth in Section 9 hereof,
the Company will not change from September 30 in each year the date on which its
fiscal year ends, nor from December 31, March 31, and June 30 the dates on which
the first three fiscal quarters in each fiscal year end.
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1.03 Types of Loans. Loans hereunder are distinguished by "Type". The
"Type" of a Loan refers to the determination whether such Loan is a Eurodollar
Loan or a Base Rate Loan.
Section 2. Working Capital Commitments.
2.01 Loans. Each Lender severally agrees, on the terms and subject to the
conditions of this Agreement, from time to time during the Working Capital
Availability Period, to make Loans to the Company in an aggregate principal
amount at any one time outstanding which, together with an amount equal to its
Working Capital Commitment Percentage of all Letter of Credit Liabilities at
such time in respect of Syndicated Letters of Credit and Participation Letters
of Credit, shall not exceed its Working Capital Commitment, as reduced from time
to time pursuant to Section 2.03 hereof. The aggregate amount of all Working
Capital Obligations shall not at any time exceed the lesser of (i) the aggregate
of the Working Capital Commitments as reduced from time to time pursuant to
Section 2.03 hereof and (ii) the Borrowing Base.
2.02 Letters of Credit. (a) Subject to the terms and conditions hereof,
the Working Capital Commitments may, in addition to the Loans provided for in
Section 2.01 hereof, be utilized, upon the request of the Company, by the
issuance of letters of credit (i) by Chase for so long as it is Administrative
Agent hereunder if the Company shall so request in the notice referred to in
Section 2.02(b) and Chase shall agree that such letter of credit shall be issued
by Chase rather than by each of the Lenders (such letters of credit issued by
Chase being hereinafter referred to as the "Participation Letters of Credit"),
or (ii) by the Lenders pursuant to which each Lender shall be severally
obligated to pay its Working Capital Commitment Percentage of any drawing made
thereunder (such letters of credit issued by the Lenders being hereafter
referred to as the "Syndicated Letters of Credit", and the Syndicated Letters of
Credit and Participation Letters of Credit being collectively referred to as the
"Letters of Credit"). Upon the date of issuance of a Participation Letter of
Credit, Chase shall be deemed, without further action by any party hereto, to
have sold to each Lender, and each Lender shall be deemed, without further
action by any party hereto, to have purchased from Chase, a participation to the
extent of such Lender's Working Capital Commitment Percentage in such
Participation Letter of Credit and the related Letter of Credit Liabilities. The
aggregate amount of all Working Capital Obligations shall not at any time exceed
the lesser of (i) the aggregate of the Working Capital Commitments as reduced
from time to time pursuant to Section 2.03 hereof and (ii) the Borrowing Base.
The aggregate amount of all Letter of Credit Liabilities shall not at any time
exceed an amount equal to the lesser of (i) the aggregate amount of the Working
Capital Commitments as reduced from time to time pursuant to Section 2.03 hereof
and (ii) the sum of (x) $5,000,000 plus (y)
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the aggregate amount of Letter of Credit Liabilities in respect of the IRB
Letter of Credit; provided that the aggregate amount of Letter of Credit
Liabilities in respect of the IRB Letter of Credit shall not at any time exceed
$6,660,274.
(b) The Company shall give the Administrative Agent at least seven
Business Days' (in the case of Syndicated Letters of Credit) or three Business
Days' (in the case of Participation Letters of Credit) irrevocable prior notice
(effective upon receipt) specifying the date such Letter of Credit is to be
issued, whether it is requesting that such Letter of Credit be a Participation
Letter of Credit or a Syndicated Letter of Credit, and describing the proposed
terms of such Letter of Credit and the nature of the transactions proposed to be
supported thereby. Upon receipt of such notice the Administrative Agent shall
promptly notify each Lender of the contents thereof and of such Lender's Working
Capital Commitment Percentage of the amount of such proposed Letter of Credit
and, in the case of Syndicated Letters of Credit, not later than five Business
Days prior to the requested issuance date for such Letter of Credit shall
prepare and send to the Lenders and the Company a proposed form of such Letter
of Credit.
(c) On each day during the period commencing with the issuance by the
Lenders of any Syndicated Letter of Credit or the issuance by Chase of any
Participation Letter of Credit and until such Letter of Credit shall have
expired or been terminated, the Working Capital Commitment of each Lender shall
be deemed to be utilized for all purposes hereof in an amount equal to such
Lender's Working Capital Commitment Percentage of the amount then available for
drawings under such Syndicated Letter of Credit or Participation Letter of
Credit (as the case may be).
(d) Upon receipt from the beneficiary of any Letter of Credit of any
demand for payment or other drawing under such Letter of Credit, the
Administrative Agent shall promptly notify the Company and each Lender as to the
amount to be paid as a result of such demand or drawing and the respective
payment date. If at any time Chase shall make a payment to a beneficiary of a
Participation Letter of Credit in respect of a drawing or in respect of an
acceptance created in connection with a drawing under such Participation Letter
of Credit, each Lender will pay to Chase, immediately upon Chase's demand at any
time during the period commencing after such payment until reimbursement
therefor in full by the Company, an amount equal to such Lender's Working
Capital Commitment Percentage of such payment, together with interest on such
amount for each day from the date of Chase's demand for such payment (or, if
such demand is made after 11:00 a.m. (New York City time) on such date, from the
next succeeding Business Day) to the date of payment by such Lender of such
amount at a rate of interest per annum equal to the Federal Funds Rate for such
period.
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(e) The Company shall be irrevocably and unconditionally obligated
forthwith to reimburse (x) the Administrative Agent for the account of each
Lender in the case of Syndicated Letters of Credit, and (y) Chase in the case of
Participation Letters of Credit for any amounts paid by such Lender or Chase (as
the case may be) upon any drawing under any Letter of Credit, without
presentment, demand, protest or other formalities of any kind. Chase will pay to
each Lender such Lender's Working Capital Commitment Percentage of all amounts
received from the Company for application in payment, in whole or in part, of
the Reimbursement Obligation in respect of any Participation Letter of Credit,
but only to the extent such Lender has made payment to Chase in respect of such
Participation Letter of Credit pursuant to clause (d) above.
(f) The issuance by the Lenders of each Syndicated Letter of Credit or the
issuance by Chase of each Participation Letter of Credit shall, in addition to
the conditions precedent set forth in Section 7 hereof, be subject to the
conditions precedent (x) that in the case of a Syndicated Letter of Credit, such
Letter of Credit shall be in such form, contain such terms and support such
transactions as shall be reasonably satisfactory to each Lender and the
Administrative Agent and that the Company shall have executed and delivered such
other instruments and agreements relating to such Letter of Credit as the
Majority Lenders shall have reasonably requested, and (y) that in the case of
Participation Letters of Credit, such Letter of Credit shall be in such form,
and shall contain such terms and support such transactions, as shall be
reasonably satisfactory to Chase, and that the Company shall have executed and
delivered such other instruments and agreements relating to such Letter of
Credit as Chase shall have reasonably requested. No Letter of Credit shall have
a term extending beyond the earlier of (i) one year from the date of issuance
and (ii) seven Business Days prior to the last day of the Working Capital
Availability Period. A Lender shall be deemed to have determined that a proposed
Syndicated Letter of Credit is satisfactory unless it shall have notified the
Administrative Agent otherwise (which notice shall be effective upon receipt) on
or before the date three Business Days prior to the requested date of issuance
of such Syndicated Letter of Credit. If any Lender shall breach its obligation
to execute and deliver a Syndicated Letter of Credit hereunder, the other
Lenders shall be relieved of their obligation to execute and deliver and issue
such Syndicated Letter of Credit, provided that nothing herein shall affect any
rights the Company may have against the breaching Lender as a result of such
breach.
(g) The Company hereby indemnifies and holds harmless each Lender and the
Administrative Agent (which for purposes of this Section 2.02(g) shall include a
reference to Chase acting in its individual capacity hereunder as issuer of
Participation Letters of Credit) from and against any and all claims and
damages, losses, liabilities, costs or expenses which such Lender or the
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Administrative Agent may incur (or which may be claimed against such Lender or
the Administrative Agent by any Person whatsoever) by reason of or in connection
with the execution and delivery or transfer of or payment or failure to pay
under any Letter of Credit, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which the Administrative Agent may incur
by reason of or in connection with the failure of any other Lender to fulfill or
comply with its obligations to the Administrative Agent hereunder (but nothing
herein contained shall affect any rights the Company may have against such
defaulting Lender); provided that the Company shall not be required to indemnify
any Lender or the Administrative Agent 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 Lender or the
Administrative Agent in determining whether a request presented under any Letter
of Credit complied with the terms of such Letter of Credit or (ii) such Lender's
failure to pay under any Letter of Credit after the presentation to it of a
request strictly complying with the terms and conditions of the Letter of
Credit. Nothing in this Section 2.02(g) is intended to limit the obligations of
the Company under any other provision of this Agreement.
2.03 Reductions of Working Capital Commitments.
(a) Mandatory. (i) The Working Capital Commitments shall terminate on
the last day of the Working Capital Availability Period.
(ii) In addition, the Working Capital Commitments shall be reduced in the
amount and on the date of each prepayment applied to the Loans (or to provide
cover for Letter of Credit Liabilities) pursuant to paragraph (2), (3), (4) or
(5) of Section 3.02(b)(i).
(b) Optional. The Company shall have the right to terminate or reduce the
Working Capital Commitments at any time or from time to time, provided that: (i)
the Company shall give notice of each such termination or reduction to the
Administrative Agent as provided in Section 5.05 hereof and (ii) each partial
reduction shall be in an aggregate amount at least equal to $5,000,000 or any
larger multiple of $1,000,000.
(c) No Reinstatement. Working Capital Commitments once terminated or
reduced may not be reinstated.
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2.04 Fees.
(a) Commitment Fees. The Company shall pay to the Administrative Agent for
the account of each Lender commitment fees, at a rate per annum equal to 1/2 of
1%, on the daily average unused amount of such Lender's Working Capital
Commitments, for the period from the Closing Date to and including the earlier
of the date the Working Capital Commitments are terminated or the last day of
the Working Capital Availability Period. Accrued commitment fees shall be
payable on the Quarterly Dates and on the earlier of the date all Working
Capital Commitments are terminated or the last day of the Working Capital
Availability Period.
(b) Letter of Credit Fees.
(i) The Company shall pay to the Administrative Agent for the
account of each Lender, ratably in accordance with its Working
Capital Commitment Percentage, a letter of credit fee at the rate of
2.50% per annum, in each case on the daily aggregate amount
available for drawings under such Letter of Credit. Fees under this
subsection (b)(i) shall accrue for each day from and after the
issuance of the initial Letter of Credit, and accrued fees shall be
payable on each Quarterly Date and on the earlier of the date the
Working Capital Commitments are terminated or the last day of the
Working Capital Availability Period and, if later, on the first day
thereafter on which no Letters of Credit are outstanding.
(ii) The Company shall pay to Chase, for its own account, such
documentary, processing charges and administrative fees with respect
to all Letters of Credit in such amounts and at such times as may be
notified to the Company by Chase, in accordance with the customary
practices of Chase.
(c) Other Fees. The Company shall pay to the Administrative Agent on the
Effective Date and to Chase on such other dates as have been heretofore mutually
agreed other fees in the amounts heretofore mutually agreed. The Company shall
pay to each of the Administrative Agent and the Collateral Monitor on each
anniversary of the Closing Date, so long as any of the Working Capital
Commitments are in effect and until payment in full of all Loans hereunder, the
termination of all Letters of Credit and payment in full of all Letter of Credit
Liabilities, all interest thereon and all other amounts payable hereunder, an
annual administrative agency fee and an annual collateral monitoring fee,
respectively, in the amounts heretofore mutually agreed.
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2.05 Lending Offices. The Loans of each Type made by each Lender shall be
made and maintained at such Lender's Applicable Lending Office for Loans of such
Type.
2.06 Several Obligations. The failure of any Lender to make any Loan to be
made by it on the date specified therefor shall not relieve any other Lender of
its obligation to make its Loan on such date, but neither the Administrative
Agent nor any Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender.
2.07 Notes. The Loans made by each Lender shall be evidenced by a single
Working Capital Note of the Company (each a "Note") in substantially the form of
Exhibit B hereto, dated the Effective Date, payable to the order of such Lender
in a principal amount equal to such Lender's Working Capital Commitment as
originally in effect and otherwise duly completed. Each Lender is hereby
authorized by the Company to endorse on the schedule (or a continuation thereof)
attached to each Note of such Lender, to the extent applicable, the date, amount
and Type of, and the Interest Period (if any) for, each Loan made by such Lender
to the Company hereunder, and the date and amount of each payment or prepayment
of principal of such Loan received by such Lender, provided that any failure by
such Lender to make any such endorsement or any error in such endorsement shall
not affect the obligations of the Company under such Note or hereunder in
respect of such Loan.
2.08 Use of Proceeds. The proceeds of the Loans made on or after the
Effective Date shall be used by the Company for working capital, capital
expenditures, acquisitions and other general corporate purposes.
Section 3. Borrowings, Conversions and Prepayments.
3.01 Borrowings. The Company shall give the Administrative Agent notice of
each borrowing to be made hereunder as provided in Section 5.05 hereof. Not
later than 11:00 a.m. (or, in the case of Base Rate Loans, 1:00 p.m.) New York
time on the date specified for each such borrowing hereunder, each Lender shall
make available the amount of the Loan to be made by it on such date to the
Administrative Agent, at the Principal Office, in immediately available funds,
for the account of the Company. The amount so received by the Administrative
Agent shall, subject to the terms and conditions of this Agreement, be made
available to the Company by depositing the same, in immediately available funds,
in an account designated by the Company maintained with the Administrative Agent
at the Principal Office.
3.02 Prepayments and Conversions.
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(a) Optional Prepayments and Conversions. The Company shall have the right
to prepay Loans or to convert Loans of one Type into Loans of the other Type, at
any time or from time to time, provided that: (i) the Company shall give the
Administrative Agent notice of each such prepayment or conversion as provided in
Section 5.05 hereof, and (ii) the prepayment or conversion of any Eurodollar
Loan shall be subject to Section 6.05 hereof.
(b) Mandatory Prepayments and Cover. (i) Events Requiring Prepayment and
Cover.
(1) Borrowing Base and Working Capital Commitment Amount. The
Company shall from time to time prepay the Loans (or provide cover
for Letter of Credit Liabilities as provided below) in such amounts
as shall be necessary so that at all times the aggregate outstanding
amount of the Working Capital Obligations shall be less than or
equal to the lesser of (i) the Working Capital Commitments and (ii)
the Borrowing Base.
(2) Insurance Proceeds and Condemnation Awards. Promptly
following the receipt thereof by the Company or any of its
Subsidiaries, the Company shall deposit with the Administrative
Agent in the Collateral Account maintained by the Company pursuant
to the Security Documents an amount of cash or Liquid Investments
equal to the aggregate Net Cash Proceeds of any payment made to the
Company or any of its Subsidiaries (i) under any Property Insurance
Policy or (ii) pursuant to any condemnation award. With respect to
any such payment or award, so long as no Default has occurred and is
continuing, the aggregate amount of such Net Cash Proceeds which the
Company or such Subsidiary has expended or committed to expend for
the restoration or replacement of the asset in respect of which such
payment or award was made shall be released by the Administrative
Agent to the Company upon request (specifying in reasonable detail
the use of the released funds) to pay for such restoration or
replacement; provided that in the event that within 270 days of
receipt of such payment the Company or such Subsidiary shall not
have expended or committed to expend an equivalent amount for the
restoration or replacement of the asset in respect of which such
payment was made, the excess of the amount of such payment over the
amount of such expenditures and commitments shall be applied to
prepay the Loans (or provide cover for Letter of Credit Liabilities
as provided below) on such 270th day.
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(3) Incurrence of Indebtedness. The Company shall prepay the
Loans (or provide cover for Letter of Credit Liabilities as provided
below) in the amount of and on the date of each receipt by the
Company or any of its Subsidiaries of Net Cash Proceeds from the
incurrence of any Funded Indebtedness not otherwise permitted under
Section 9.08 to which the Majority Lenders have consented.
(4) Asset Dispositions. The Company shall prepay the Loans (or
provide cover for Letter of Credit Liabilities as provided below) in
the amount of and on the date of each receipt by the Company or any
of its Subsidiaries of the Net Cash Proceeds of any disposition by
such Person of any assets not otherwise permitted under Section 9.12
to which the Majority Lenders have consented. In addition, promptly
following the receipt thereof by the Company or any of its
Subsidiaries of the Net Cash Proceeds of any disposition permitted
pursuant to Section 9.12(viii), the Company shall deposit with the
Administrative Agent in the Collateral Account maintained by the
Company pursuant to the Security Documents an amount of cash or
Liquid Investments equal to the aggregate Net Cash Proceeds of such
disposition, to the extent such Net Cash Proceeds have not been
applied to repay the Loans. With respect to such Net Cash Proceeds,
so long as no Default has occurred and is continuing, the aggregate
amount of such Net Cash Proceeds which the Company or such
Subsidiary has expended or committed to expend for Capital
Expenditures shall be released by the Administrative Agent to the
Company upon request (specifying in reasonable detail the use of the
released funds) to pay for such Capital Expenditures; provided that
in the event that within 270 days of receipt of such Net Cash
Proceeds the Company or such Subsidiary shall not have committed to
expend an equivalent amount for Capital Expenditures, or within one
year of receipt the Company or such Subsidiaries shall not have
actually expended an equivalent amount for Capital Expenditures, the
excess of the amount of such Net Cash Proceeds over the amount of
such commitments or expenditures shall be applied to prepay the
Loans (or provide cover for Letter of Credit Liabilities as provided
below) on such 270th day or on the last day of such yearly period,
as the case may be.
(5) Reversion of Pension Plans. The Company shall prepay the
Loans (or provide cover for Letter of Credit Liabilities as provided
below) in the amount of and on the date of each receipt
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by the Company or any of its Subsidiaries of Net Cash Proceeds from
the termination of a Plan.
(ii) Prepayment and Cover of Working Capital Obligations. If the Company
shall be required pursuant to paragraphs (1) through (5) of clause (b)(i) above
to prepay any Loans or provide cover for any Letter of Credit Liabilities, the
Company shall, until the Loans have been paid in full, first prepay the
principal of such Loans and then, following such payment in full, provide cover
for the relevant Letter of Credit Liabilities. Cover for Letter of Credit
Liabilities shall be effected by paying all Reimbursement Obligations then due
and payable and then paying to the Administrative Agent immediately available
funds, to be held by the Administrative Agent in the Collateral Account
maintained by the Company pursuant to the Security Documents, in an amount equal
to the required prepayment, which amount shall be retained by the Administrative
Agent in such Collateral Account and applied to pay any Reimbursement
Obligations which become due until such time as the Letters of Credit shall have
been terminated and all of the Letter of Credit Liabilities paid in full.
Section 4. Payments of Principal and Interest.
4.01 Repayment of Loans. The Loans shall mature on the last day of the
Working Capital Availability Period.
4.02 Interest. The Company will pay to the Administrative Agent for the
account of each Lender interest on the unpaid principal amount of each Loan made
by such Lender for the period commencing on the date of such Loan to but
excluding the date such Loan shall be paid in full, at the following rates per
annum:
(a) if such Loan is a Base Rate Loan, the Base Rate plus the
Applicable Margin; and
(b) if such Loan is a Eurodollar Loan, the Eurodollar Rate plus the
Applicable Margin.
Notwithstanding any of the foregoing, the Company will pay to the Administrative
Agent for the account of each Lender interest at the applicable Post-Default
Rate on the principal of any Loan made by such Lender, on any Reimbursement
Obligation and on any other amount payable by the Company hereunder to or for
the account of such Lender (but, if such amount is interest, only to the extent
legally enforceable), which shall not be paid in full when due (whether at
stated maturity, by acceleration or otherwise), for the period commencing on the
due date thereof until the same is paid in full.
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Accrued interest on each Loan shall be payable (i) if such Loan is a Base
Rate Loan, on each Quarterly Date, (ii) if such Loan is a Eurodollar Loan, on
the last day of the Interest Period for such Loan (and, if such Interest Period
exceeds three months' duration, quarterly, commencing on the first quarterly
anniversary of the first day of such Interest Period), and (iii) in any event,
upon the payment, prepayment or conversion thereof, but only on the principal so
paid or prepaid or converted; provided that interest payable at the Post-Default
Rate shall be payable from time to time on demand of the Administrative Agent or
the Majority Lenders. Promptly after the determination of any interest rate
provided for herein or any change therein, the Administrative Agent shall notify
the Lenders and the Company thereof.
Notwithstanding the foregoing provisions of this Section 4.02, if at any
time the rate of interest set forth above on any Loan of or other obligation
payable to any Lender (the "Stated Rate") exceeds the maximum non-usurious
interest rate permissible for such Lender to charge commercial borrowers under
applicable law (the "Maximum Rate" for such Lender), the rate of interest
charged on such Loan of or other obligation payable to such Lender hereunder
shall be limited to the Maximum Rate for such Lender.
If the Stated Rate for any Loan of a Lender that has theretofore been
subject to the preceding paragraph at any time is less than the Maximum Rate for
such Lender, the principal amount of such Loan shall bear interest at the
Maximum Rate for such Lender until the total amount of interest paid to such
Lender or accrued on its Loans hereunder equals the amount of interest which
would have been paid to such Lender or accrued on such Lender's Loans hereunder
if the Stated Rate had at all times been in effect.
If, upon payment in full of all amounts payable hereunder, the total
amount of interest paid to any Lender or accrued on such Lender's Loans under
the terms of this Agreement is less than the total amount of interest which
would have been paid to such Lender or accrued on such Lender's Loans if the
Stated Rate had, at all times, been in effect, then the Company shall, to the
extent permitted by applicable law, pay to the Administrative Agent for the
account of such Lender an amount equal to the difference between (a) the lesser
of (i) the amount of interest which would have accrued on such Lender's Loans if
the Maximum Rate for such Lender had at all times been in effect or (ii) the
amount of interest which would have accrued on such Lender's Loans if the Stated
Rate had at all times been in effect and (b) the amount of interest actually
paid to such Lender or accrued on its Loans under this Agreement.
If any Lender ever receives, collects or applies as interest any sum in
excess of the Maximum Rate for such Lender, such excess amount shall be
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applied to the reduction of the principal balance of its Loans or to other
amounts (other than interest) payable hereunder, and if no such principal is
then outstanding, such excess or part thereof remaining shall be paid to the
Company.
Section 5. Payments; Pro Rata Treatment; Computations; Etc.
5.01 Payments. Except to the extent otherwise provided herein, all
payments of principal, interest, Reimbursement Obligations and other amounts to
be made by the Company hereunder and under the Notes shall be made in Dollars,
in immediately available funds, to the Administrative Agent at the Principal
Office, not later than 12:00 Noon New York time on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day). The
Administrative Agent, or any Lender for whose account any such payment is made,
may (but shall not be obligated to) debit the amount of any such payment which
is not made by such time to any ordinary deposit account of the Company with the
Administrative Agent or such Lender, as the case may be. The Company shall, at
the time of making each payment hereunder or under any Note, specify to the
Administrative Agent the Loans or other amounts payable by the Company hereunder
to which such payment is to be applied (and in the event that it fails to so
specify, or if an Event of Default has occurred and is continuing, the
Administrative Agent may apply such payment as it may elect in its sole
discretion to amounts then due, but subject to the other terms and conditions of
this Agreement, including, without limitation, Section 5.02 hereof). Each
payment received by the Administrative Agent hereunder or under any Note for the
account of a Lender shall be paid promptly to such Lender, in immediately
available funds, for the account of such Lender's Applicable Lending Office. If
the due date of any payment hereunder or under any Note would otherwise fall on
a day which is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension.
5.02 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under Section 2.01 hereof shall be made from
the Lenders, each payment of commitment fees and letter of credit fees under
Section 2.04 hereof shall be made for the account of the Lenders, and each
termination or reduction of the Working Capital Commitments under Section 2.03
hereof shall be applied to the Working Capital Commitments of the Lenders, pro
rata according to the Lenders' respective Working Capital Commitment
Percentages; (b) each payment by the Company of principal of or interest on
Loans of a particular Type (other than payments in respect of Loans of
individual Lenders provided for by Section 6 hereof) shall be made to the
Administrative Agent for the account of the Lenders pro rata in accordance with
the respective
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unpaid principal amounts of such Loans held by the Lenders; (c) each conversion
of Loans of a particular Type (other than conversions of Loans of individual
Lenders pursuant to Section 6.04 hereof) shall be made pro rata among the
Lenders in accordance with the respective principal amounts of such Loans held
by the Lenders; (d) each Syndicated Letter of Credit will be issued by the
Lenders severally and ratably among the Lenders in accordance with their
respective Working Capital Commitment Percentages; and (e) the Lenders (other
than Chase) shall purchase from Chase participations in the Participation
Letters of Credit to the extent of their respective Working Capital Commitment
Percentages.
5.03 Computations. Interest based on the Prime Rate hereunder shall be
computed on the basis of 365 days (or 366 days in a leap year) and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable. All other interest and fees shall be computed on the
basis of a year of 360 days and actual days elapsed (including the first day
but, except in the case of letter of credit fees, excluding the last day)
occurring in the period for which payable.
5.04 Minimum and Maximum Amounts; Types. Except for prepayments made
pursuant to Section 3.02(b) hereof, each borrowing, conversion and prepayment of
principal of Loans shall be in an aggregate principal amount equal to (a) in the
case of Eurodollar Loans, $3,000,000 or any larger multiple of $1,000,000 and
(b) in the case of Base Rate Loans, $1,000,000 or any larger multiple thereof,
except that any borrowing may be in the aggregate amount of the unused portion
of the Working Capital Commitments (borrowings, conversions or prepayments of
Loans of different Types or, in the case of Eurodollar Loans, having different
Interest Periods, at the same time hereunder to be deemed separate borrowings,
conversions and prepayments for purposes of the foregoing, one for each Type or
Interest Period). Notwithstanding anything to the contrary contained in this
Agreement there shall not be, at any one time, more than eight Interest Periods
in effect with respect to Eurodollar Loans.
5.05 Certain Notices. Notices to the Administrative Agent of terminations
or reductions of Working Capital Commitments, of borrowings, conversions and
prepayments of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Administrative Agent
not later than 12:00 noon (or, in the case of borrowings or prepayments of Base
Rate Loans, 10:00 a.m.) New York time on the number of Business Days prior to
the date of the relevant termination, reduction, borrowing, conversion and/or
prepayment specified below:
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Number of
Business
Notice Days Prior
------ ----------
Termination or reduction of
Working Capital Commitments 3
Borrowing or prepayment of Base
Rate Loans 0
Borrowing of conversion of or into,
or duration of Interest Period
for, Eurodollar Loans 3
Prepayments of Eurodollar Loans 1
Each notice of termination or reduction shall specify the amount of the
Working Capital Commitments to be terminated or reduced. Each notice of
borrowing, conversion or prepayment shall specify the amount, Type of the Loans
to be borrowed, converted or prepaid (subject to Sections 3.02(a) and 5.04
hereof), the date of borrowing, conversion or prepayment (which shall be a
Business Day) and, in the case of Eurodollar Loans, the duration of the Interest
Period therefor (subject to the definition of Interest Period). Each such notice
of duration of an Interest Period shall specify the Loans to which such Interest
Period is to relate. The Administrative Agent shall promptly notify the Lenders
of the contents of each such notice. In the event that the Company fails to
select the duration of any Interest Period for any Eurodollar Loans within the
time period and otherwise as provided in this Section 5.05, such Loans (if
outstanding as Eurodollar Loans) will be automatically converted into Base Rate
Loans on the last day of the then current Interest Period for such Loans or (if
outstanding as Base Rate Loans) will remain as, or (if not then outstanding)
will be made as, Base Rate Loans.
5.06 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which such Lender is to make payment to the
Administrative Agent of the proceeds of a Loan to be made by it hereunder (or
the proceeds of a drawing to be paid by such Lender under any Syndicated Letter
of Credit or the payment of any amount by such Lender to reimburse Chase for a
drawing under any Participation Letter of Credit) or the Company is to make a
payment to the Administrative Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Payor does not
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intend to make the Required Payment to the Administrative Agent, the
Administrative Agent may assume that the Required Payment has been made and may,
in reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Administrative Agent, the recipient
of such payment (or, if such recipient is the beneficiary of a Letter of Credit,
the Company and, if the Company fails to pay the amount thereof to the
Administrative Agent forthwith upon demand, the Lenders ratably in proportion to
their respective Working Capital Percentages) shall, on demand, pay to the
Administrative Agent the amount made available to it together with interest
thereon in respect of the period commencing on the date such amount was so made
available by the Administrative Agent until the date the Administrative Agent
receives such amount at a rate per annum equal to the Federal Funds Rate for
such period.
5.07 Sharing of Payments, Etc. The Company agrees that, in addition to
(and without limitation of) any right of set-off; bankers' lien or counterclaim
a Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it for the account of the Company at any of its offices,
in Dollars or in any other currency, against any principal of or interest on any
of such Lender's Loans to the Company hereunder, or any Reimbursement Obligation
or other obligation of the Company hereunder, which is not paid when due
(regardless of whether such balances are then due to the Company), in which case
it shall promptly notify the Company and the Administrative Agent thereof,
provided that such Lender's failure to give such notice shall not affect the
validity thereof. If a Lender shall obtain payment of any principal of or
interest on any Loan made by it under this Agreement, or on any Reimbursement
Obligation or other obligation then due to such Lender hereunder, through the
exercise of any right of set-off, banker's lien, counterclaim or similar right,
or otherwise, it shall promptly purchase from the other Lenders participations
in the Loans made, or Reimbursement Obligations or other obligations held, by
the other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro rata in accordance with the
unpaid principal and interest on the Loans and Reimbursement Obligations or
other obligations then due to each of them. To such end all the Lenders shall
make appropriate adjustments among themselves (by the resale of participations
sold or otherwise) if such payment is rescinded or must otherwise be restored.
The Company agrees, to the fullest extent it may effectively do so under
applicable law, that any Person purchasing a participation in the Loans made, or
Reimbursement Obligations or other obligations held, by another Person, whether
or not acquired pursuant to the foregoing arrangements, may exercise all rights
of set-off, bankers' lien,
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counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Loans and Reimbursement Obligations or other
obligations in the amount of such participation. Nothing contained herein shall
require any Lender to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Company.
5.08 Taxes. (a) Any and all payments by the Company hereunder shall be
made, in accordance with Section 5.01, free and clear of and without deduction
for any and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, (i) except as provided in
subsection (h) below, the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.08), such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company shall
make such deductions and (iii) the Company shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Company agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, any
Letter of Credit or any other Basic Document or other document referred to
herein or therein (hereinafter referred to as "Other Taxes").
(c) The Company will indemnify each Lender and the Administrative Agent
for the full amount of Taxes or Other Taxes (including related penalties,
interest and expenses resulting from the Company's failure to pay Taxes or Other
Taxes in accordance with this Section 5.08) imposed by any jurisdiction on
amounts payable under this Section 5.08 paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not
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such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Company
will furnish to the Administrative Agent, at its address referred to in Section
12.02, the original or a certified copy of a receipt evidencing payment thereof.
(e) If any Lender subsequently receives from a taxing authority a refund
of any Tax previously paid by the Company and for which the Company has
indemnified the Lender pursuant to this Section 5.08 or if the Lender takes a
credit for such Tax against taxes otherwise owing by it to the jurisdiction to
which the Company paid the Tax, such Lender shall within 30 days after receipt
of such refund, and to the extent permitted by applicable law, pay to the
Company the net amount of any such recovery after deducting taxes and expenses
attributable thereto.
(f) Not later than the Closing Date or, in the case of any bank or
financial institution that became or becomes a Lender after the Closing Date
pursuant to Section 12.06, the date of the instrument of assignment pursuant to
which such bank or financial institution became a Lender, and annually
thereafter or at such other times as the Administrative Agent or the Company may
request, each Lender organized under the laws of a jurisdiction outside the
United States has provided or shall provide the Administrative Agent and the
Company with duly completed copies of Form 1001 or Form 4224 or any successor
form prescribed by the Internal Revenue Service of the United States certifying
as to such Lender's status as exempt from United States withholding taxes with
respect to all payments to be made to such Lender hereunder or other documents
satisfactory to the Company and the Administrative Agent indicating that all
payments to be made to such Lender hereunder are not subject to such taxes (an
"Exemption Certificate"). In the case of payments to or for any Lender organized
under the laws of a jurisdiction outside the United States, unless the
Administrative Agent has received an Exemption Certificate from such Lender, the
Administrative Agent may withhold taxes from such payments at the applicable
statutory rate.
(g) If the Company is required to pay additional amounts to any Lender
pursuant to this Section 5.08, such Lender shall use reasonable efforts to
designate a different Applicable Lending Office if such designation will
thereafter avoid the need for any additional payments under this Section 5.08
and will not, in the sole judgment of such Lender, be otherwise disadvantageous
to such Lender.
(h) If a Lender organized under the laws of a jurisdiction outside the
United States has not delivered an Exemption Certificate to the Company on or
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before the Closing Date or, in the case of any bank or financial institution
that became or becomes a Lender after the Closing Date pursuant to Section
12.06, the date of the instrument of assignment pursuant to which such bank or
financial institution became a Lender, then the Company shall not have any
obligation to indemnify such Lender for Taxes (including related penalties,
interest and expenses) imposed by the United States or any political subdivision
thereof pursuant to Section 5.08(a) and (c) hereof.
Section 6. Yield Protection and Illegality.
6.01 Additional Costs.
(a) The Company shall pay to the Administrative Agent for the account of
each Lender from time to time such amounts as such Lender may determine to be
necessary to compensate it for any costs incurred by such Lender which such
Lender determines are attributable to its making or maintaining of any
Eurodollar Loans hereunder or its obligation to make any of such Loans
hereunder, or any reduction in any amount receivable by such Lender hereunder in
respect of any of such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"), in
each case resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to such
Lender under this Agreement or its Notes in respect of any of such Loans
(other than changes which affect taxes measured by or imposed on the
overall net income of such Lender or of its Applicable Lending Office for
any of such Loans by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office and other than Taxes
and Other Taxes); or
(ii) imposes or modifies any reserve, special deposit, insurance
assessment or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Lender
(including any of such Loans or any deposits referred to in the definition
of "Eurodollar Base Rate" in Section 1.01 hereof but excluding, with
respect to any such Eurodollar Loan, any such requirements included in the
applicable Reserve Requirement); or
(iii) imposes any other condition affecting this Agreement (or any
of such extensions of credit or liabilities).
Each Lender will notify the Company through the Administrative Agent of
any event occurring after the date of this Agreement which will entitle such
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Lender to compensation pursuant to this Section 6.01(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation, and (if so requested by the Company through the Administrative
Agent) will designate a different Applicable Lending Office for the Eurodollar
Loans of such Lender if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such Lender,
be disadvantageous to such Lender (provided that such Lender shall have no
obligation to so designate an Applicable Lending Office located in the United
States of America). Each Lender will furnish the Company with a statement
setting forth the basis and amount of each request by such Lender for
compensation under this Section 6.01(a). If any Lender requests compensation
from the Company under this Section 6.01(a), the Company may, by notice to such
Lender through the Administrative Agent, suspend the obligation of such Lender
to make additional Eurodollar Loans to the Company until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 6.04 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 6.01, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes Eurodollar
Loans or (ii) becomes subject generally to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Lender so
elects by notice to the Company (with a copy to the Administrative Agent), the
obligation of such Lender to make or continue, or to convert Base Rate Loans
into, Eurodollar Loans hereunder shall be suspended until the date such Lender
withdraws such notice or such Regulatory Change ceases to be in effect (in which
case the provisions of Section 6.04 hereof shall be applicable).
(c) Determinations and allocations by any Lender for purposes of this
Section 6.01 of the effect of any Regulatory Change on its costs of maintaining
its obligations to make Loans or of making or maintaining Loans or on amounts
receivable by it in respect of Loans, and of the additional amounts required to
compensate such Lender in respect of any Additional Costs, shall be conclusive
absent manifest error.
6.02 Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, with respect to any Eurodollar Loans:
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(a) the Administrative Agent determines (which determination shall
be conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof are not being provided by the Reference Lenders in the relevant
amounts or for the relevant maturities for purposes of determining the
rate of interest for such Loans for Interest Periods therefor as provided
in this Agreement; or
(b) the Majority Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the relevant rates of
interest referred to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof upon the basis of which the rates of interest for such
Loans are to be determined do not accurately reflect the cost to such
Lenders of making or maintaining such Loans for Interest Periods therefor;
then the Administrative Agent shall promptly notify the Company and each Lender
thereof, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make Eurodollar Loans or to convert Base Rate Loans into
Eurodollar Loans and the Company shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Loans or convert such Loans into Base Rate Loans in accordance with Section 3.02
hereof.
6.03 Illegality. Notwithstanding any other provision of this Agreement to
the contrary, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar Loans
hereunder, or (b) maintain Eurodollar Loans hereunder, then such Lender shall
promptly notify the Company thereof through the Administrative Agent and such
Lender's obligation to make Eurodollar Loans hereunder shall be suspended until
such time as such Lender may again make and maintain Eurodollar Loans (in which
case the provisions of Section 6.04 hereof shall be applicable).
6.04 Substitute Base Rate Loans. If the obligation of any Lender to make
Eurodollar Loans shall be suspended pursuant to Section 6.01, 6.02 or 6.03
hereof, all Loans which would otherwise be made by such Lender as Eurodollar
Loans shall be made instead as Base Rate Loans (and, if an event referred to in
Section 6.01(b) or 6.03 hereof has occurred and such Lender so requests by
notice to the Company with a copy to the Administrative Agent, each Eurodollar
Loan of such Lender then outstanding shall be automatically converted into a
Base Rate Loan on the date specified by such Lender in such notice) and, to the
extent that Eurodollar Loans are so made as (or converted into) Base Rate Loans,
all payments of principal which would otherwise be applied to such Eurodollar
Loans shall be applied instead to such Base Rate Loans.
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6.05 Compensation. The Company shall pay to the Administrative Agent for
the account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost or
expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a Eurodollar Loan made
by such Lender on a date earlier than the last day of an Interest Period
for such Loan; or
(b) any failure by the Company to borrow a Eurodollar Loan to be
made by such Lender on the date for such borrowing specified in the
relevant notice of borrowing under Section 5.05 hereof;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the principal
amount so paid, prepaid or converted or not borrowed for the period from the
date of such payment, prepayment or conversion or failure to borrow to the last
day of the Interest Period for such Loan (or, in the case of a failure to
borrow, the Interest Period for such Loan which would have commenced on the date
of such failure to borrow) at the applicable rate of interest for such Loan
provided for herein over (ii) the interest component (as reasonably determined
by such Lender) of the amount (as reasonably determined by such Lender) such
Lender would have bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and maturities
comparable to such period.
6.06 Additional Costs in Respect of Letters of Credit. If as a result of
any Regulatory Change there shall be imposed, modified or deemed applicable any
tax, reserve, special deposit or similar requirement against or with respect to
or measured by reference to Letters of Credit issued or to be issued hereunder
or participations therein, and the result shall be to increase the cost to any
Lender of issuing or maintaining any Letter of Credit or any participation
therein, or reduce any amount receivable by any Lender hereunder in respect of
any Letter of Credit (which increase in cost, or reduction in amount receivable,
shall be the result of such Lender's reasonable allocation of the aggregate of
such increases or reductions resulting from such event), then, upon demand by
such Lender, the Company agrees to pay to such Lender, from time to time as
specified by such Lender, such additional amounts as shall be sufficient to
compensate such Lender for such increased costs or reductions in amount. A
statement as to such increased costs or reductions in amount incurred by such
Lender shall be submitted by such Lender to the Company and shall be conclusive
as to the amount thereof absent manifest error.
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6.07 Capital Adequacy. If any Lender shall determine that the adoption or
implementation of any applicable law, rule, regulation or treaty regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or its Applicable Lending Office) with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Lender or any Person controlling
such Lender (a "Parent") as a consequence of its obligations hereunder to a
level below that which such Lender (or its Parent) could have achieved but for
such adoption, change or compliance (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, within 15 days after demand by such Lender (with a copy
to the Administrative Agent), the Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
A statement of any Lender claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive absent manifest error. In determining such amount, such Lender may
use any reasonable averaging and attribution methods.
Section 7. Conditions Precedent to all Loans and Letters of Credit.
7.01 Loans and Letters of Credit. The obligation of each Lender to make
any Loan to be made by it hereunder, or to issue any Letter of Credit hereunder,
is subject to the conditions precedent that, as of the date of such Loan or such
issuance, and before and after giving effect thereto:
(a) no Default shall have occurred and be continuing; and
(b) the representations and warranties made by each of the Company
and its Subsidiaries in each Basic Document to which it is a party shall
be true (or, in the case of Basic Documents which are not Financing
Documents, true in all material respects) on and as of the date of the
making of such Loan or such issuance, with the same force and effect as if
made on and as of such date.
Each notice of borrowing by the Company hereunder, or request for issuance
of a Letter of Credit, shall constitute a certification by the Company to the
effect set forth in the preceding sentence (both as of the date of such notice
and as of the date of such borrowing or issuance).
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Section 8. Representations and Warranties. The Company represents and
warrants to the Lenders and the Administrative Agent as follows:
8.01 Corporate Existence. Each of the Company and its Subsidiaries: (a) is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation; (b) has all requisite corporate
power, and has all governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now being or as
proposed to be conducted, except in the case of such licenses, authorizations,
consents and approvals, where the failure to obtain them would not have a
Material Adverse Effect; and (c) is qualified to do business in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify would have a Material
Adverse Effect.
8.02 Information. (a) Each of the Offering Memorandum and the projections
referred to in Section 13.01(g) hereof (the "Company Projections") did not as of
the date thereof and will not as of the Effective Date contain any untrue
statement of a material fact or assumption or omit to state a material fact or
assumption necessary in order to make the statements contained therein not
misleading; provided that (i) although the management of the Company believed as
of the Effective Date that the Company Projections are reasonable, the Company
makes no representation as to their attainability, and (ii) it is understood
that the Offering Memorandum is not intended to, and does not, contain all the
information that would be contained in a prospectus prepared in accordance with
the requirements of the Securities Act of 1933, as amended.
(b) Without limiting the generality of paragraph (a):
(i) The audited consolidated balance sheets of the Company and its
Subsidiary as of September 30, 1997 and the related consolidated
statements of operations, stockholders' equity and cash flows for the year
then ended (the "Company Audited Statements"), have been prepared in
accordance with generally accepted accounting principles consistently
applied. The Company Audited Statements fairly present the financial
position of the Company and its Subsidiary at September 30, 1997 and the
results of their operations and cash flows for the year then ended in
conformity with generally accepted accounting principles.
(ii) The Company and its Subsidiaries did not on the date of the
balance sheet referred to in clause (i) above, and will not on the
Effective Date, have any material contingent liabilities, material
liabilities for taxes, unusual and material forward or long-term
commitments or material
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unrealized or anticipated losses from any unfavorable commitments, except
as referred to or reflected or provided for in said balance sheet.
(c) The Company has disclosed to the Lenders in writing in or pursuant to
this Agreement and in the Offering Memorandum any and all facts (other than
general economic and industry conditions) which have or pose a material risk of
having a Material Adverse Effect.
(d) Since September 30, 1997 no event has occurred and no condition has
come into existence which has had, or is reasonably likely to have, a Material
Adverse Effect.
8.03 Litigation. There are no legal or arbitral proceedings or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries in which there is a reasonable possibility of
an adverse decision which could have a Material Adverse Effect.
8.04 No Breach. None of the execution and delivery of the Basic Documents,
the consummation of the transactions therein contemplated, or compliance with
the terms and provisions thereof did or will conflict with or result in a breach
of, or require any consent under, the certificate of incorporation or by-laws of
the Company or any of its Subsidiaries, or any applicable law or regulation, or
any order, writ, injunction or decree of any court or governmental authority or
agency, or any Basic Document or other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which it is bound or to
which it is subject, or constitute a default under any such agreement or
instrument, or (except for the Liens created pursuant to the Security Documents)
result in the creation or imposition of any Lien upon any of the revenues or
assets of the Company or any of its Subsidiaries pursuant to the terms of any
such agreement or instrument.
8.05 Corporate Action. Each of the Company and its Subsidiaries has all
necessary corporate power and authority to execute, deliver and perform its
obligations under the Basic Documents to which it is a party; the execution,
delivery and performance by the Company and its Subsidiaries of the Basic
Documents to which they are parties have been duly authorized by all necessary
corporate action; and this Agreement has been duly and validly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company and, on the Effective Date, each of the other Basic Documents to
which the Company or any of its Subsidiaries is a party will constitute its
legal, valid and binding obligation, in each case enforceable in accordance with
its terms, except as the enforceability thereof may be limited by bankruptcy,
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insolvency, reorganization or moratorium or other similar laws relating to the
enforcement of creditors' rights generally and by general equitable principles.
8.06 Approvals. Each of the Company and its Subsidiaries has obtained all
authorizations, approvals and consents of, and has made all filings and
registrations with, any governmental or regulatory authority or agency and any
third party necessary for the execution, delivery or performance by it of any
Basic Document to which it is a party, or for the validity or enforceability
thereof, except for filings and recordings of the Liens created pursuant to, or
permitted by, the Security Documents.
8.07 Regulations U and X. Neither the Company nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U or X of the Board of Governors of the
Federal Reserve System) and no part of the proceeds of any Loan hereunder will
be used to purchase or carry any such margin stock.
8.08 ERISA. The Company and each member of the Controlled Group have
fulfilled their obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan and are in compliance in all material respects
with the presently applicable provisions of ERISA and the Code with respect to
each Plan. No such Person has (i) sought a waiver of the minimum funding
standard under Section 412 of the 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 result in the imposition of a
Lien or the posting of a bond or other security under ERISA or the 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).
8.09 Taxes. Each of the Company and its Subsidiaries has filed all United
States Federal income tax returns and all other material tax returns which are
required to be filed by it and has paid all taxes due pursuant to such returns
or pursuant to any assessment received by it, except to the extent the same may
be contested as permitted by Section 9.02 hereof. There are no material tax
disputes or contests pending as of the Effective Date. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of taxes
and other governmental charges are, in the opinion of the Company, adequate.
8.10 Subsidiaries; Agreements. (a) Schedule V hereto is a complete and
correct list, as of the Effective Date, of all Subsidiaries of the Company
and of all Investments held by the Company or any of its Subsidiaries in any
joint venture or other Person. Except for the Liens created by the Security
Documents, the
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Company owns, free and clear of Liens, all outstanding shares of its
Subsidiaries and all such shares are validly issued, fully paid and
non-assessable and the Company (or the respective Subsidiary of the Company)
also owns, free and clear of Liens, all such Investments.
(b) Schedule VI hereto is a complete and correct list of all credit
agreements, indentures, capitalized leases, obligations in respect of letters of
credit, guaranties, joint venture agreements, and other material instruments in
effect as of the Effective Date providing for, evidencing, securing or otherwise
relating to any Indebtedness or lease obligations of the Company or any of its
Subsidiaries, and such list correctly sets forth the names of the debtor or
lessee and creditor or lessor with respect to the Indebtedness or lease
obligations outstanding or to be outstanding and the property subject to any
Lien securing such Indebtedness or lease obligation. The Company has heretofore
delivered to the Administrative Agent a complete and correct copy of all such
credit agreements, indentures, capitalized leases, letter of credit obligations,
guaranties, joint venture agreements and other material instruments, including
any modifications or supplements thereto, as in effect on the Effective Date.
8.11 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly, controlled by or
acting on behalf of any Person which is an investment company, within the
meaning of said Act.
8.12 Public Utility Holding Company Act. Neither the Company nor any of
its Subsidiaries 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.
8.13 Ownership and Use of Properties. Each of the Company and its
Subsidiaries will have on the Effective Date and at all times thereafter, legal
title or ownership of, or the right to use pursuant to enforceable and valid
agreements or arrangements, all tangible property, both real and personal and
all franchises, licenses, copyrights, patents and know-how which is material to
the operation of its business as proposed to be conducted.
8.14 Environmental Matters. (a) The Company and each of its Subsidiaries
have obtained all permits, certificates, licenses, approvals, registrations and
other authorizations which are required under all applicable Environmental Laws,
except to the extent failure to have any such permit, certificate, license,
approval, registration or authorization would not have a Material Adverse
Effect. The Company and each of its Subsidiaries are in
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compliance with the terms and conditions of all such permits, certificates,
licenses, approvals, registrations and authorizations, and are also in
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
any applicable Environmental Law or in any notice or demand letter from any
regulatory authority issued, entered, promulgated or approved thereunder, except
to the extent failure to comply would not have a Material Adverse Effect.
(b) In addition, (x) except as described in Schedule VII or (y) to the
extent that the liabilities that would result from the matters (excluding
matters described in Schedule VII) referred to in Sections 8.14(b)(i), (ii),
(iii), (iv), (v)(B), (vi), (vii) and (viii) would not exceed $250,000
individually or $750,000 in the aggregate,
(i) During the last four years, no written notice, notification,
demand, request for information, citation, summons or order has been
issued, no complaint has been filed, no penalty has been assessed and, to
the best knowledge of the Company, no investigation or review is pending
or threatened by any governmental entity or other Person with respect to
(1) any alleged failure by the Company or any of its Subsidiaries to have
any environmental permit, certificate, license, approval, registration or
authorization required in connection with the conduct of the business of
the Company or any of its Subsidiaries, (2) any alleged failure by the
Company or any of its Subsidiaries to comply with the terms and conditions
of any such permit, certificate, license, approval, registration or
authorization or of any other limitation, restriction, condition,
standard, prohibition, requirement, obligation, schedule or timetable
contained in any applicable Environmental Law, (3) any Regulated Activity
or (4) any Release of any Hazardous Substance;
(ii) Neither the Company nor its Subsidiaries nor the businesses
conducted by such Persons nor, to the best knowledge of the Company or any
of its Subsidiaries, any other Person, other than in compliance with
applicable Environmental Laws, has disposed of or placed, held, located or
otherwise handled, any Hazardous Substance on, under or at any property
now or previously owned, operated or leased by the Company or any of its
Subsidiaries, and none of such properties has been used (whether by the
Company or any of its Subsidiaries or, to the best knowledge of the
Company or any of its Subsidiaries, by any other Person) as a dump site or
storage (whether permanent or temporary) site for any Hazardous Substance;
and
(1) no polychlorinated biphenyls (PCBs), radioactive material,
urea formaldehyde or lead is or has been present at any
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property now or previously owned, operated or leased by the
Company or any of its Subsidiaries except in compliance with
applicable Environmental Laws;
(2) no asbestos is or has been present in airborne form in
concentrations in violation of Environmental Laws or in friable form
at any property now or previously owned, operated or leased by the
Company or any of its Subsidiaries;
(3) there are no underground storage tanks, active or
abandoned, which have been used to store or which otherwise contain
or have contained any Hazardous Substance at any property now or
previously owned, operated or leased by the Company or any of its
Subsidiaries; and
(4) except in accordance with the terms of any permit relating
to or required by Environmental Laws held by the Company or any of
its Subsidiaries, no Hazardous Substance has been Released in a
reportable quantity or is present in a threshold planning quantity
(except as a commercial product), where such a quantity has been
established by statute, ordinance, rule, regulation or order, at, on
or under any property now or previously owned, operated or leased by
the Company or any of its Subsidiaries.
(iii) To the best knowledge of the Company, none of the Company, any
of its Subsidiaries, or any of the businesses conducted by such Persons
has transported or arranged for the transportation (directly or
indirectly) of any Hazardous Substance except as a commercial product to
any location which is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA ("NPL"), or the
Comprehensive Environmental Response, Compensation and Liability
Information System ("CERCLIS") or on any similar federal, state, foreign
or local list or which is the subject of federal, state, foreign or local
enforcement actions or other investigations which may lead to claims
against the Company or any of its Subsidiaries for clean-up costs,
remedial work, damages to natural resources or for personal injury claims,
including, but not limited to, claims under CERCLA;
(iv) All oral or written notifications of a Release of a Hazardous
Substance required to be filed under any applicable Environmental Law have
been filed by or on behalf of the Company and its Subsidiaries;
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(v) No property now or previously owned, operated or leased by the
Company or any of its Subsidiaries is listed or, to the best knowledge of
the Company or any of its Subsidiaries, proposed for listing, on (A) the
NPL or (B) on CERCLIS or any similar federal, state, foreign or local list
of sites requiring investigation or clean-up which may lead to claims for
clean-up costs, remedial work, damages to natural resources or for
personal injury claims, including, but not limited to, claims under
CERCLA;
(vi) No Hazardous Substance generated by the Company or any of its
Subsidiaries has been stored (except as a commercial product), recycled,
treated or Released, except in compliance with applicable Environmental
Laws or disposed of by the Company or any of its Subsidiaries at any
location;
(vii) There are no Liens arising under or pursuant to any applicable
Environmental Laws on property owned, operated or leased by the Company or
any of its Subsidiaries, and, to the best knowledge of the Company, no
actions by any governmental entity have been taken or are in process which
could subject any of such properties to such Liens, and no notice or
restriction relating to the presence of any Hazardous Substance at any
such property is required to be placed in any deed to such property; and
(viii) There are no existing liabilities or potential liabilities of
the Company or any Subsidiary identified in any environmental
investigations, studies, audits, tests, reviews or other analyses
conducted by or which are in the possession of the Company or any of its
Subsidiaries in relation to any property or facility now or previously
owned, operated or leased by the Company or any Subsidiary which are not
disclosed in the reports described in Section 7.O1(p) of the Original
Agreement or disclosed in Schedule VII. The Company conducts and has
conducted all such environmental investigations, studies, audits, tests,
reviews or other analyses in relation to all properties and facilities now
or previously owned, operated or leased by the Company or any of its
Subsidiaries which are required under applicable Environmental Laws and
maintains such records and reports for the time periods prescribed under
applicable Environmental Laws.
(c) For purposes of this Section, representations given with respect to
the Company and its Subsidiaries shall be deemed given also with respect to any
matters which could result in Environmental Liabilities, to the extent successor
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liability could be imposed under applicable Environmental Laws on the Company
or any of its Subsidiaries.
8.15 Year 2000 Issue. Any reprogramming and related testing required to
permit the proper functioning of the Company's computer systems (or of computer
systems of others used by or interfacing with those of the Company) in and
following the year 2000 will be completed prior to July 1, 1999, and the cost to
the Company of such reprogramming and testing will not result in a Default or a
Material Adverse Effect. Except for such reprogramming referred to in the
preceding sentence as may be necessary, the computer and management information
systems of the Company and its Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
adequate for the conduct of its business.
Section 9. Covenants. The Company agrees that, so long as any of the
Working Capital Commitments are in effect and until payment in full of all Loans
hereunder, the termination of all Letters of Credit and payment in full of all
Letter of Credit Liabilities, all interest thereon and all other amounts payable
under the Financing Documents, unless the Majority Lenders shall agree otherwise
as contemplated by Section 12.05 hereof:
9.01 Information. The Company shall deliver to each of the Lenders:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, consolidated (and, if the
Company's Subsidiaries, if aggregated and considered as a single
subsidiary, would meet the definition of a "significant subsidiary"
contained as of the date hereof in Regulation S-X of the Securities and
Exchange Commission, consolidating) statements of income, retained
earnings and cash flow of the Company and its Subsidiaries for such year
and the related consolidated (and, if required, consolidating) balance
sheet as at the end of such year, setting forth in each case in
comparative form the corresponding figures (if any) for the preceding
fiscal year, and accompanied, in the case of said consolidated financial
statements, by an opinion thereon of Deloitte & Touche or other
independent certified public accountants of recognized national standing,
which opinion shall state that said consolidated financial statements
fairly present in all material respects the consolidated financial
condition and results of operations of the Company and its Subsidiaries as
at the end of, and for, such fiscal year, and a standard letter from such
accountants stating that, in performing the auditing procedures necessary
for their above-described opinion (but without any special or additional
procedures for that purpose), nothing came to their attention that caused
them to believe, except as specifically
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stated, that (i) the Company was not in compliance with any of the terms,
covenants, provisions or conditions of this Agreement and (ii) the
Company's calculation of the Receivables and Inventory included in the
Borrowing Base as of the end of such fiscal year was not fairly stated, in
all material respects, in relation to the financial statements from which
such information was derived;
(b) as soon as available and in any event within 30 days after the
end of each monthly accounting period of the Company (and as soon as
available and in any event within 45 days after the end of each fiscal
quarter of the Company other than the last fiscal quarter in each fiscal
year) consolidated statements of income, retained earnings and cash flow
of the Company and its Subsidiaries, in each case in a form satisfactory
to the Administrative Agent, for such monthly accounting period and such
fiscal quarter and for the portion of the fiscal year ended at the end of
such monthly accounting period (and such fiscal quarter), and the related
consolidated balance sheet as at the end of such monthly accounting period
(and such fiscal quarter), setting forth in each case in comparative form
the corresponding figures from the Company's operating budget for such
fiscal year, and accompanied, in each case, by (i) a statement of net
sales, sales volume, gross margin and operating profit by product group,
(ii) a certificate of a Senior Officer, which certificate shall state that
said consolidated financial statements fairly present in all material
respects the consolidated financial condition and results of operations of
the Company in accordance with GAAP (except for the absence of footnotes,
other than in the case of financial statements delivered as at the end of
and for a fiscal quarter, which shall contain footnotes of the type
required by the Securities and Exchange Commission to be included in
quarterly reports on Form 10-Q), consistently applied, as at the end of,
and for, such period (subject to normal year-end audit adjustments) and,
in the case of quarterly financial statements, also accompanied by, in
form and detail reasonably satisfactory to the Collateral Monitor, (iii) a
reconciliation, of the Inventory and Receivables figures set forth in such
financial statements as at the end of such fiscal quarter to the Borrowing
Base Certificate previously delivered as at said date pursuant to clause
(c) below and (iv) a summary of aging of receivables and a summary of
aging of accounts payable;
(c) as soon as available and in any event within (i) ten Business
Days after the last day of each calendar month, (ii) if the most recently
delivered Borrowing Base Certificate did not show that the Borrowing Base
equalled or exceeded 150% of the Working Capital Commitments and the
Majority Lenders have so requested, five Business Days after the
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last day of each week (other than a week in which a calendar month ends),
and (iii) five Business Days after receipt of a request therefor (which
may be given from time to time after the occurrence and during the
continuation of a Default) from the Majority Lenders, a Borrowing Base
Certificate as at such day or the date of such request, as the case may
be; provided that, in the case of any Borrowing Base Certificate to be
delivered pursuant to the foregoing clause (ii) or (iii), Eligible
Inventory shall be calculated based on the amount of Eligible Inventory as
of the date of the Borrowing Base Certificate most recently delivered
pursuant to clause (i), adjusted to reflect the Company's best estimate of
changes in Eligible Inventory since the date of such Borrowing Base
Certificate;
(d) (i) within 30 days after the beginning of each fiscal year of
the Company, a copy of the operating budget, including, without
limitation, projection of the anticipated cash flow, of the Company and
its Subsidiaries, divisions and product group for such fiscal year and
each fiscal quarter included in such fiscal year, such budget to be
accompanied by a certificate of a Senior Officer specifying the
assumptions on which such budget was prepared, stating that such officer
has no reason to question the reasonableness of any material assumptions
on which such budget was prepared and providing such other details as the
Administrative Agent may reasonably request, and (ii) as soon as available
and in any event within 45 days after the end of each of the first three
fiscal quarters of the Company in each fiscal year, a projection for each
of the remaining fiscal quarters in such fiscal year of the anticipated
consolidated cash flow of the Company and its Subsidiaries and the related
balance sheets;
(e) (i) if requested by the Collateral Monitor or the Majority
Lenders (to the extent practicable, to be coordinated with the preparation
of the financial statements delivered pursuant to Section 9.01(a)), a
report of the Collateral Monitor or another independent collateral auditor
(which may be, or be affiliated with, one of the Lenders) with respect to
the Receivables and Inventory components included in the Borrowing Base,
which report shall indicate that, based upon a review by such auditor of
the Receivables (including verification with respect to the amount, aging,
identity and credit of the respective account debtors and the billing
practices of the Company conducted in a manner comparable to that employed
by the Company's independent certified public accountants in connection
with audits of the annual financial statements of the Company) and
Inventory (including verification as to the value, location and respective
types), the information set forth in the Borrowing Base Certificate most
recently delivered is accurate and complete in all material
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respects and (ii) if requested by the Administrative Agent or the Majority
Lenders because it or they believe that the values used to determine the
Available PP&E Amount may have changed materially since the date of the
most recent valuation report, a valuation report prepared by the
Appraisers of the plant, property and equipment assets of the Company and
its Subsidiaries, which report shall include the orderly liquidation value
of the machinery and equipment of the Company and its Subsidiaries and the
fair market value of the real property of the Company and its
Subsidiaries; provided that the Company shall pay the cost of no more than
one Receivables and Inventory report and one plant, property and equipment
report in each fiscal year of the Company unless an Event of Default has
occurred and is continuing, in which case the Company shall pay the cost
of up to three additional Receivables and Inventory reports in each fiscal
year;
(f) promptly upon (i) the mailing thereof to the shareholders or
creditors of the Company generally, copies of all financial statements,
reports and proxy statements so mailed or (ii) the delivery thereof to the
holders of or trustee for the Senior Notes, copies of all documents or
notices required to be delivered to such Persons pursuant to the
Indenture;
(g) promptly upon the filing thereof, copies of all registration
statements (other than any registration statements on Form S-8 or its
equivalent) and any reports which the Company shall have filed with the
Securities and Exchange Commission;
(h) if and when the Company or any member of the Controlled 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 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 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 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
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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 result in the imposition of a Lien or the posting of a
bond or other security, a certificate of a Senior Officer setting forth
details as to such occurrence and action, if any, which the Company or
member of the Controlled Group is required or proposes to take;
(i) promptly following the delivery thereof to the Company or to the
Board of Directors or management of the Company, a copy of any management
letter or written report by independent public accountants with respect to
the financial condition, operations, business or prospects of the Company;
(j) promptly after management of the Company knows that any Default
has occurred and is continuing, a notice of such Default, describing the
same in reasonable detail;
(k) once during each fiscal year of the Company, if requested by the
Administrative Agent or the Majority Lenders because it or they believe
that current liabilities and potential sources of future liabilities may
have increased materially since the date of the most recent such report or
update, an update prepared by an independent engineer satisfactory to the
Administrative Agent of the reports delivered pursuant to Section 7.01(p)
of the Original Agreement, reporting any material changes in the estimate
of current liabilities and assessment of potential sources of future
liabilities contained therein;
(l) once during each fiscal year, if requested by the Collateral
Monitor, a list in form satisfactory to the Collateral Monitor, of the
names and addresses of all account debtors of the Company and its
Subsidiaries with accounts aggregating at least $10,000; and
(m) from time to time such other information regarding the
financial condition, operations, prospects or business of the Company as
the Administrative Agent or any Lender through the Administrative Agent
may reasonably request.
The Company will furnish to each Lender, at the time it furnishes each set
of financial statements pursuant to paragraph (a) or (b) above, a certificate of
a Senior Officer (i) to the effect that, to the best of his knowledge after due
inquiry, no Default has occurred and is continuing (or, if any Default has
occurred and is continuing, describing the same in reasonable detail) and (ii)
setting forth in reasonable detail the computations necessary to determine
whether it was in
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compliance with Sections 9.08 to 9.15, inclusive, and 9.18 and 9.20 hereof as of
the end of the respective monthly accounting period, fiscal quarter or fiscal
year.
9.02 Taxes and Claims. The Company will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any property belonging to it (including with respect to the
Mortgages on such properties), prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien upon the
property of the Company or such Subsidiary, provided that neither the Company
nor such Subsidiary shall be required to pay any such tax, assessment, charge,
levy or claim the payment of which is being contested in good faith and by
proper proceedings if (x) it maintains adequate reserves with respect thereto,
(y) such contest, proceedings and reserves have been described in a certificate
of a Senior Officer delivered to the Lenders and (z) foreclosure or realization
upon any Lien on the property of the Company or such Subsidiary has not occurred
and does not appear to be imminent.
9.03 Insurance. The Company will maintain, and will cause each of its
Subsidiaries to maintain, insurance in responsible companies in such amounts and
against such risks as is usually carried by owners of similar businesses and
properties in the same general areas in which the Company and its Subsidiaries
operate, provided that in any event the Company shall maintain insurance not
less favorable than set forth in Schedule VIII.
Such insurance shall be written by financially responsible companies
selected by the Company, having an A.M. Best rating of "A-" or better and in a
financial size category of XV or larger, or by other companies acceptable to the
Majority Lenders, and (other than workers' compensation) shall name the
Administrative Agent as loss payee and/or as additional insured, as its
interests may appear. Each policy referred to in this Section 9.03 shall include
effective waivers by the insurer of all claims for insurance premiums against
the Administrative Agent or any Lender, provide that all insurance proceeds in
excess of $250,000 per claim which would otherwise be payable to the Company or
any Subsidiary of the Company under any of the policies referred to in this
Section 9.03 shall be adjusted with and payable to the Administrative Agent (for
deposit in the Collateral Account maintained pursuant to the Security Documents
and application in accordance with Section 3.02(b)(2)), provide that it will not
be cancelled or reduced or amended except after not less than 30 days' written
notice to the Administrative Agent and provide that the interests of the
Administrative Agent and the Lenders shall not be invalidated by any act or
negligence of the Company or any Person having an interest in the Plants nor by
occupancy or use of the Plants for purposes more hazardous than permitted by
such policy nor by
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any foreclosure or other proceedings relating to the Plants. The Company will
advise the Administrative Agent promptly of any policy cancellation, reduction
or amendment.
On the Closing Date the Company delivered to the Administrative Agent
certificates of insurance satisfactory to the Administrative Agent evidencing
the existence of all insurance required to be maintained by the Company
hereunder and showing the termination or expiry date of such insurance.
Thereafter, not later than five Business Days prior to the termination or expiry
date of any such insurance the Company has delivered and shall deliver to the
Administrative Agent certificates of insurance evidencing that such insurance
has been renewed or replaced, subject only to the payment of premiums as they
become due. The Company shall not obtain or carry separate insurance concurrent
in form or contributing in the event of loss with that required by this Section
unless the Administrative Agent is named as loss payee and insured therein, with
loss payable as provided herein. The Company will immediately notify the
Administrative Agent whenever any such separate insurance is obtained and shall
deliver to the Administrative Agent the certificates evidencing the same.
If, in the opinion of the Company, any of the insurance which it is
required to maintain pursuant to this Section is not available on commercially
reasonable terms, the Company shall so notify the Administrative Agent and the
Lenders and, with the consent of the Majority Lenders, may elect not to purchase
such insurance; provided that if the Company shall not have received notice of
disapproval from the Majority Lenders within 20 days of receipt by the Lenders
of such notice from the Company, the Lenders shall be deemed to have consented,
for the purposes of this Section, to the election not to purchase such
insurance.
9.04 Maintenance of Existence; Conduct of Business. The Company will
preserve and maintain, and will cause each of its Subsidiaries to preserve and
maintain, its corporate existence and all material rights, privileges and
franchises necessary or desirable in the normal conduct of its business, and
will conduct its business in a regular manner; provided that nothing herein
shall prevent the merger and dissolution of any Subsidiary of the Company into
the Company or a Wholly-Owned Subsidiary so long as the Company or such
Wholly-Owned Subsidiary is the surviving corporation.
9.05 Maintenance of and Access to Properties. The Company will keep, and
will cause each of its Subsidiaries to keep, all of its properties necessary in
its business in good working order and condition (having regard to the condition
of such properties at the time such properties were acquired by the Company or
such Subsidiary), ordinary wear and tear excepted, and proper books of record
and account in which entries shall be made in conformity with GAAP of all
dealings
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and transactions in relation to its business activities, and will permit
representatives of the Lenders to inspect such properties and, upon reasonable
notice and at reasonable times, to examine and make extracts and copies from the
books and records of the Company and any such Subsidiary.
9.06 Compliance with Applicable Laws. The Company will comply, and will
cause each of its Subsidiaries to comply, with the requirements of all
applicable laws, rules, regulations and orders of any governmental body or
regulatory authority (including, without limitation, all Environmental Laws), a
breach of which would have a Material Adverse Effect, except where contested in
good faith and by proper proceedings.
9.07 Litigation. The Company will promptly give to the Administrative
Agent (which shall promptly notify each Lender) notice in writing of (i) all
judgments against it or any of its Subsidiaries which individually exceed
$250,000 or in the aggregate exceed $500,000 and (ii) all litigation and of all
proceedings of which it is aware before any courts, arbitrators or governmental
or regulatory agencies affecting the Company or any of its Subsidiaries except
litigation or proceedings which, if adversely determined, would not in the
reasonable opinion of the Company have a Material Adverse Effect.
9.08 Indebtedness. The Company will not, and will not permit any of its
Subsidiaries to, create, incur or suffer to exist any Indebtedness except: (i)
Indebtedness to the Lenders under the Financing Documents, (ii) Indebtedness
outstanding on the Effective Date and identified in Schedule VI hereto and any
renewals, extensions or refinancings of Indebtedness in Part B of such Schedule,
provided that such renewals, extensions or refinancings shall not increase the
amount of such Indebtedness or of the collateral securing it and, in the case of
any renewal, extension or refinancing of the Senior Notes, shall be on terms and
conditions reasonably satisfactory to the Administrative Agent (and in any event
no less favorable to the Administrative Agent and the Lenders than the Senior
Notes), (iii) Indebtedness of any Subsidiary Guarantor to the Company in an
aggregate principal amount at any time outstanding not to exceed $10,000,000, so
long as such Indebtedness is evidenced by a note satisfactory to the
Administrative Agent, (iv) Indebtedness secured by Liens permitted by clause
(ii) of Section 9.13, (v) Indebtedness under or in respect of currency exchange
contracts or Interest Rate Protection Obligations incurred in the ordinary
course of business and (vi) other Indebtedness of the Company in an aggregate
principal amount at any time outstanding not to exceed $1,000,000.
9.09 Net Worth. The Company will not at any date permit Net Worth to be
less than the sum of (i) $90,000,000 plus (ii) 75% of consolidated net income
(if positive) of the Company and its Subsidiaries for each fiscal quarter of the
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Company ended on or prior to such date, commencing with the fiscal quarter
ending on September 30, 1997.
9.10 Interest Coverage Ratio. The Company will not permit the ratio,
calculated as at the end of each fiscal quarter for the four fiscal quarters
then ended, of Cash Flow for such period to Interest Expense for such period to
be less than the ratio set forth below for the period in which such fiscal
quarter ends:
Period Ratio
January 1, 1998 through March 31, 1998 1.50:1
April 1,1998 through September 30, 1998 1.75:1
October 1, 1998 through March 31, 1999 2.00:1
April 1, 1999 through September 30, 1999 2.25:1
October 1, 1999 through September 30, 2000 2.50:1
October 1, 2000 through September 30, 2001 2.75:1
October 1, 2001 through September 30, 2002 3.00:1
and all times thereafter 3.50:1
9.11 Leverage Ratio. The Company will not permit the ratio, calculated as
at the end of each fiscal quarter for the four fiscal quarters then ended, of
(i) Funded Indebtedness as at the end of such period to (ii) Cash Flow for such
period to be greater than the ratio set forth below for the period in which such
fiscal quarter ends:
Period Ratio
January 1, 1998 through June 30, 1998 5,00:1
July 1, 1998 through December 31, 1998 4.50:1
January 1, 1999 through September 30, 1999 4.00:1
October 1, 1999 through September 30, 2000 3.75:1
October 1, 2000 through September 30, 2001 3.50:1
October 1, 2001 through September 30, 2002 3.25:1
and at all times thereafter 3.00:1
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9.12 Mergers, Asset Dispositions, Acquisitions, Etc. Except as expressly
permitted by Section 9.04, the Company will not, and will not permit any of its
Subsidiaries to, be a party to any merger or consolidation, or sell, lease,
assign, transfer or otherwise dispose of any assets, or acquire assets from any
Person, except the following:
(i) dispositions of inventory in the ordinary course of business;
(ii) dispositions of worn out or obsolete tools, machinery or
equipment no longer used or useful in the business of the Company and its
Subsidiaries, provided that the proceeds of such dispositions are applied
to purchase replacement tools, machinery or equipment within 60 days of
such dispositions;
(iii) acquisitions of assets (other than fixed or capital assets) in
the ordinary course of business and expenditures in respect of fixed or
capital assets to the extent permitted under Section 9.18 hereof;
(iv) acquisitions of Investments permitted under Section 9.14
hereof;
(v) acquisitions of any assets by the Company for consideration,
which taken together with all consideration paid for assets acquired
pursuant to this clause (v), shall not exceed $30,000,000 in the
aggregate; provided that (1) such assets are used in the same line or
lines of businesses as the businesses conducted by the Company or any
Subsidiary on the Effective Date; (2) before and after giving effect to
the consummation of the acquisition of such assets, (a) no Default shall
have occurred and be continuing and (b) the sum of the Company's cash on
hand and the aggregate unused amount of the Working Capital Commitments
which the Company would be permitted to use pursuant to Section 2.01(ii)
shall equal or exceed $10,000,000; (3) the Company shall have delivered to
each of the Lenders not less than 30 days prior to the date of the
acquisition of such assets (a) a certificate demonstrating the Company's
compliance with its obligations under Sections 9.09, 9.10 and 9.11, in
each case determined on a pro forma basis after giving effect to the
consummation of the acquisition of such assets, (b) a pro forma
consolidated statement of cash flow of the Company and its Subsidiaries
for the twelve months then most recently ended, after giving effect to the
consummation of the acquisition of such assets, which statement of cash
flow shall show cash flow not less than the cash flow set forth in the
consolidated statement of cash flow most recently delivered prior to such
date pursuant to Section 9.01(a) or (b), and (c) such information as the
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Administrative Agent and each Lender shall have reasonably requested
concerning such acquisition, including information relating to actual or
potential environmental liabilities in respect of such assets; and (4) the
Majority Lenders shall not have disapproved such acquisition on the basis
of such environmental liabilities within 15 days of receipt of such
information referred to in clause (3)(c) above;
(vi) dispositions of any asset having a fair market value not
exceeding $250,000;
(vii) dispositions of assets not otherwise permitted pursuant to
this Section for cash proceeds in an amount not less than the fair market
value of the assets being disposed of (determined in good faith by the
Board of Directors); provided that (x) such cash proceeds, taken together
with all other cash proceeds received for assets disposed of pursuant to
this clause (vi), and net of the amount of such proceeds used to replace
the assets disposed of, shall not exceed $10,000,000 in the aggregate and
(y) the sum of (i) 85% of the aggregate amount of Eligible Receivables,
(ii) 50% of the aggregate amount of Eligible Inventory, (iii) 25% of
Eligible Machinery and Equipment and (iv) 25% of Eligible Real Property,
in each case determined at said date, shall equal or exceed (after giving
effect to such disposition) 150% of the Working Capital Commitments; and
(viii) dispositions of land, building and machinery and equipment
and related assets located in Salem, Massachusetts and of the utility
products manufacturing assets and related equipment currently operated at
the Plant located in Middletown, Delaware, in each case for cash proceeds
in an amount not less than the fair market value thereof (determined in
good faith by the Board of Directors), and subject to the conditions set
forth in clause (vii)(y) above and in Section 3.02(b)(i)(4).
9.13 Liens. The Company will not, and will not permit any of its
Subsidiaries to, create or suffer to exist any Lien upon any property or assets,
now owned or hereafter acquired, securing any Indebtedness or other obligation,
except: (i) the Liens created pursuant to the Security Documents and other Liens
existing on the Effective Date and listed in Schedule VI hereto; (ii) Liens
(including Capital Leases) existing on other assets at the date of acquisition
thereof or which attach to such assets concurrently with or within 90 days after
the acquisition thereof, securing Indebtedness incurred to finance the
acquisition thereof in an aggregate principal amount at any time outstanding not
exceeding $2,000,000; (iii) other Liens arising in the ordinary course of the
business of the Company or such Subsidiary which are not incurred in connection
with the borrowing of money or the obtaining of advances or credit and which do
not
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materially detract from the value of its property or assets or materially impair
the use thereof in the operation of its business; and (iv) the Permitted
Encumbrances referred to in the Mortgages.
9.14 Investments. The Company will not, and will not permit any of its
Subsidiaries to, make or permit to remain outstanding any advances, loans or
other extensions of credit or capital contributions (other than prepaid expenses
in the ordinary course of business) to (by means of transfers of property or
assets or otherwise), or purchase or own any stocks, bonds, notes, debentures or
other securities of, any Person (all such transactions being herein called
"Investments"), except: (i) accounts permitted pursuant to Section 9.20; (ii)
Liquid Investments in the name and under the control of a Lender or the
Administrative Agent (or a collateral sub-agent for the Administrative Agent) as
contemplated by the Security Documents; (iii) subject to Section 9.16 hereof,
Investments in accounts and notes receivable acquired in the ordinary course of
business as presently conducted; (iv) loans by the Company and its Subsidiaries
to employees in the ordinary course of business in an aggregate principal amount
at any time outstanding not exceeding $1,000,000; (v) Investments existing on
the Closing Date in Wholly-Owned Subsidiaries and additional Investments in
Subsidiaries, so long as such Investments are made with cash and are in amounts
reasonably needed to support the operations of such Subsidiaries, in an
aggregate amount (on a cost basis, net of repayments by such Subsidiaries of
such Investments) not to exceed $10,000,000 at any one time outstanding; and
(vi) Investments consisting of acquisitions permitted by Section 9.12(v).
9.15 Restricted Payments. The Company will not, and will not permit any of
its Subsidiaries to, declare or make any Restricted Payment, except that so long
as no Default has occurred and is continuing the Company may make payments to
repurchase or redeem and retire common stock of the Company owned by employees
of the Company or any of its Subsidiaries upon termination of employment
(including death or disability) of such employees in an aggregate amount not to
exceed $1,000,000 in any fiscal year of the Company.
9.16 Transactions with Affiliates. Except as expressly permitted by this
Agreement, the Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly: (i) make any Investment in an Affiliate of the Company;
(ii) transfer, sell, lease, assign or otherwise dispose of any assets to an
Affiliate of the Company; (iii) merge into or consolidate with or purchase or
acquire assets from an Affiliate of the Company; or (iv) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate of
the Company (including, without limitation, Guaranties and assumptions of
obligations of an Affiliate of the Company); provided that (a) any Affiliate of
the Company who is an individual may serve as a director, officer or employee of
the Company and
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receive reasonable compensation or indemnification in connection with his or her
services in such capacity; (b) the Company or a Subsidiary of the Company may
enter into any transaction with an Affiliate of the Company providing for the
leasing of property, the rendering or receipt of services or the purchase or
sale of inventory and other assets in the ordinary course of business if the
monetary or business consideration arising therefrom would be substantially as
advantageous to the Company or such Subsidiary as the monetary or business
consideration which would obtain in a comparable arm's length transaction with a
Person not an Affiliate of the Company.
9.17 Lines of Businesses. Neither the Company nor any of its Subsidiaries
shall engage to any substantial extent in any line or lines of business activity
other than the businesses conducted by it on the Effective Date and the Melt
Blown business (consisting of equipment to be constructed for the manufacture of
filtration products through a plastic extrusion process).
9.18 Capital Expenditures. The Company will not permit the aggregate
amount of Capital Expenditures made in any period referred to below to exceed
the sum of:
(i)(w) for the fiscal year ending September 30, 1998, $39,000,000;
(x) for the fiscal year ending September 30, 1999, $18,000,000; (y) for
the fiscal year ending September 30, 2000, $16,000,000; and (z) for each
fiscal year ending thereafter, $15,000,000; plus
(ii) for each fiscal year ending after September 30, 1997, the
excess (if any) of the amount of Capital Expenditures for the immediately
preceding fiscal year specified pursuant to clause (i) above (or, in the
case of the fiscal year ending September 30, 1998, pursuant to clause (i)
of Section 9.18 of the Original Agreement) over the amount of Capital
Expenditures actually made during such fiscal year pursuant to such clause
(i) (without including any carryover amount from any prior fiscal year);
provided that the Company shall be in compliance with its obligations
under Section 9.11 hereof at the time Capital Expenditures are made
pursuant to this clause (ii).
If any property acquired or constructed by the Company after the date
hereof is not subject to the Lien of the Security Documents, the Company will
execute and deliver such mortgages and other security documents as may be
necessary, or as the Administrative Agent may request, to subject such property
to such a Lien.
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9.19 Modification of Other Agreements. The Company will not, and will not
permit any of its Subsidiaries to, consent to any modification, supplement or
waiver of any of the provisions of any of the Assigned Agreements in any respect
to the extent such modification, supplement or waiver would impair materially
the benefit to the Company or such Subsidiary of such Assigned Agreement, it
being understood that any modification, supplement or waiver of any Assigned
Agreement which adversely affects the amount or timing of any payment by or to
the Company or any of its Subsidiaries thereunder shall be deemed to impair
materially the benefit thereof to the Company for purposes hereof, without the
prior written consent of the Administrative Agent (with the approval of the
Majority Lenders). The Company will not request or consent to any modification,
supplement or waiver of any of the provisions of any Acquisition Document or
amend or modify its certificate of incorporation or by-laws or the Indenture,
the Senior Notes or any other document governing the Senior Notes (or any
renewal, extension or refinancing thereof) or, so long as the IRB Letter of
Credit is outstanding, any document governing obligations secured by the IRB
Letter of Credit, without the prior written consent of the Administrative Agent
(with the approval of the Majority Lenders); provided that if the Company shall
not have received notice of disapproval from the Majority Lenders within 20 days
of receipt by the Lenders of notice from the Company of a proposed modification,
supplement, waiver or amendment, the Lenders shall be deemed to have consented
thereto.
9.20 Bank Accounts. Neither the Company nor any of its Subsidiaries will
maintain any accounts with any bank or other financial institution having
outstanding daily collected balances at any one time exceeding $2,000,000 in the
aggregate except (i) the Collateral Account referred to in the Security
Documents, (ii) any accounts maintained with Lenders, (iii) any accounts with
respect to which a letter substantially in the form of the lockbox letter set
forth in the Security Documents has been executed in favor of the Administrative
Agent, and (iv) any accounts maintained solely to meet payroll disbursements
with respect to employees of the Company or its Subsidiaries, which accounts
shall contain amounts not in excess of two weeks' estimated payroll
disbursements.
9.21 Environmental Matters. The Company will promptly give to the Lenders
notice in writing of any complaint, order, citation, notice or other written
communication from any Person with respect to, or if the Company becomes aware
after due inquiry of, (i) the existence or alleged existence of a violation of
any applicable Environmental Law or Environmental Liability at, upon, under or
within any property now or previously owned, leased, operated or used by the
Company or any of its Subsidiaries or any part thereof, or due to the operations
or activities of the Company, any Subsidiary or any other Person on or in
connection with such property or any part thereof (including receipt by the
Company or any
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Subsidiary of any notice of the happening of any event involving the Release or
cleanup of any Hazardous Substance), (ii) any Release on such property or any
part thereof in a quantity that is reportable under any applicable Environmental
Law, (iii) the commencement of any cleanup pursuant to or in accordance with any
applicable Environmental Law of any Hazardous Substances on or about such
property or any part thereof and (iv) any pending or threatened proceeding for
the termination, suspension or non-renewal of any permit required under any
applicable Environmental Law, in each of cases (i), (ii), (iii) and (iv), (x)
which could reasonably be expected to result in liability or expenses in excess
of $250,000 or (y) which individually or in the aggregate could have a Material
Adverse Effect.
9.22 Senior Notes. The Company shall not, and shall not permit any of its
Subsidiaries to, purchase, redeem, retire or otherwise acquire for value,
deposit any monies with any Person with respect to, or make any voluntary
payment or prepayment of the principal of or interest on, or any other amount
owing in respect of, any Senior Notes other than regularly scheduled payments of
interest in respect thereof required pursuant to the Senior Notes and the
Indenture; provided that (x) the Company may redeem up to $37,500,000 in
aggregate principal amount of the Senior Notes pursuant to and in accordance
with Section 1101 of the Indenture, so long as (i) no Default has occurred and
is continuing and (ii) immediately after such redemption, the sum of the
Company's cash on hand and the aggregate unused amount of the Working Capital
Commitments which the Company would be permitted to use pursuant to Section 2.01
would equal or exceed $10,000,000 and (y) the Company may refinance the Senior
Notes in accordance with Section 9.08(ii).
9.23 Certain Obligations Respecting Guaranties and Collateral. (a) The
Company shall notify the Administrative Agent immediately if it knows, or has
reason to know, that any application or registration relating to any Copyright,
Patent or Trademark that is material to the business of the Company or any of
its Subsidiaries may become abandoned or dedicated, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Copyright Office, the United States Patent and Trademark Office, or any court)
regarding the Company's ownership of any Copyright, Patent or Trademark that is
material to the business of the Company or any of its Subsidiaries, its right to
register or patent the same, or to keep and maintain the same. In the event that
any right to Copyright, Copyright License, Patent, Patent License, Trademark or
Trademark License that is material to the business of the Company or any of its
Subsidiaries is infringed, misappropriated or diluted by a third party, the
Company shall notify the Administrative Agent promptly after it learns thereof
and shall promptly xxx for infringement, misappropriation or dilution or take
such
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other action as is appropriate to recover any and all damages for such
infringement, misappropriation or dilution, and take such other actions as the
Company shall reasonably deem appropriate under the circumstances to protect
such Copyright, Copyright License, Patent, Patent License, Trademark or
Trademark License; provided that the Company shall not be obligated to take any
action if, in its reasonable business judgment, the cost of such action exceeds
the benefit to be derived therefrom. Capitalized terms not otherwise defined in
this subsection (a) shall have the meanings ascribed to them in the Security
Documents.
(b) The Majority Lenders shall have the right from time to time to require
the Company, pursuant to a written request from the Administrative Agent, to
cause any domestic Subsidiary of the Company as may be specified in such request
to become a party to the Subsidiary Guaranty or to execute and deliver such
other guaranties, in form and substance satisfactory to the Majority Lenders,
guaranteeing payment of the Company's obligations hereunder and to provide, or
to cause such Subsidiary to provide, Liens upon such assets as may be specified
in such request to secure the obligations of the Company and such Subsidiary
hereunder and under the Subsidiary Guaranty or such other guaranties. Any such
request shall be made by the Majority Lenders in the good faith exercise of
their discretion. Within 30 days after any such request, the Company shall, and
shall cause such Subsidiary of the Company to, (i) execute and deliver to the
Administrative Agent such number of copies as the Administrative Agent may
specify of documents creating such guaranties and Liens and (ii) do all other
things which may be necessary or which the Administrative Agent may reasonably
request in order to confer upon and confirm to the Lenders the benefits of such
security. Within 45 days after a request for security pursuant hereto, the
Company shall, and shall cause such Subsidiary of the Company to, deliver such
legal opinions, certificates, evidences of corporate action or other documents
as the Administrative Agent may reasonably request, all in form and substance
satisfactory to the Administrative Agent, relating to the satisfaction of the
Company's obligations under this Section.
Section 10. Defaults.
10.01 Events of Default. If one or more of the following events (herein
called "Events of Default") shall occur and be continuing:
(a) default in the payment of (i) the principal of any Loan or any
Reimbursement Obligation when due or of (ii) interest or any other amount
payable under the Financing Documents within three Business Days after the
due date thereof; or
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(b) the Company or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on Indebtedness having an
aggregate outstanding principal amount of at least $1,000,000 (other than
the Loans); or any event or condition shall occur which results in the
acceleration of the maturity of any such Indebtedness or enables (or, with
the giving of notice or lapse of time or both, would enable) the holder of
any such Indebtedness or any Person acting on such holder's behalf to
accelerate the maturity thereof; or
(c) any representation or warranty made or deemed made by the
Company or any of its Subsidiaries in any Financing Document or in any
certificate furnished to any Lender or the Administrative Agent pursuant
to the provisions of any Financing Document, shall prove to have been
false or misleading in any material respect as of the time made or
furnished; or
(d)(i) the Company shall default in the performance of any of its
obligations under clauses (c) or (j) of Section 9.01, or Section 9.03 or
Sections 9.08 through 9.22 hereof; (ii) any Subsidiary Guarantor shall
default in the performance of any of its obligations under the Subsidiary
Guaranty; or (iii) the Company or any Subsidiary Guarantor shall default
in the performance of any of its other obligations in any Basic Document,
and such default described in this subclause (iii) shall continue
unremedied for a period of 30 days after notice thereof to the Company by
the Administrative Agent or the Majority Lenders (through the
Administrative Agent); or
(e) the Company or any of its Subsidiaries shall admit in writing
its inability to, or be generally unable to, pay its debts as such debts
become due; or
(f) the Company or any of its Subsidiaries shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part
of its property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv)
file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Bankruptcy Code, or (vi) take any corporate or
partnership action for the purpose of effecting any of the foregoing; or
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(g) a proceeding or case shall be commenced, without the application
or consent of the Company or any of its Subsidiaries in any court of
competent jurisdiction, seeking (i) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its
debts, (ii) the appointment of a trustee, receiver, custodian, liquidator
or the like of such Person or of all or any substantial part of its
assets, or (iii) similar relief in respect of such Person under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and
in effect, for a period of 60 days; or an order for relief against such
Person shall be entered in an involuntary case under the Bankruptcy Code;
or
(h) a final judgment or judgments for the payment of money shall be
rendered by a court or courts against the Company or any of its
Subsidiaries in excess of $250,000 in the aggregate, and the same shall
not be discharged (or provision shall not be made for such discharge), or
a stay of execution thereof shall not be procured, within 10 days from the
date of entry thereof, or the Company or such Subsidiary shall not, within
said period of 10 days, or such longer period during which execution of
the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) the Company or any member of the Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess of $250,000 which
it shall have become liable under Title IV of ERISA; or notice of intent
to terminate a Plan or Plans having aggregate Unfunded Liabilities in
excess of $250,000 shall be filed under Title IV of ERISA by the Company
or any member of the Controlled 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 such Plan or Plans; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans 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 could cause the Company or one or more
members of the Controlled Group to incur a current payment obligation in
excess of $250,000; or
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(j) any of the Assigned Agreements shall be terminated prior to the
end of its stated term, or shall cease to be in full force and effect
prior to the end of its stated term, for whatever reason, without the
prior consent of the Majority Lenders; or
(k)(i) as a result of one or more transactions after the date of
this Agreement, any "person" or "group" of persons (other than Xxxx
Xxxxxx, his lineal descendants or trusts established by Xxxx Xxxxxx for
his lineal descendants) shall have "beneficial ownership" (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended, and the applicable rules and regulations thereunder) of 30% or
more of the outstanding common stock of the Company; or (ii) without
limiting the generality of the foregoing, during any period of 12
consecutive months, commencing after the date of this Agreement,
individuals who at the beginning of such 12-month period were directors of
the Company shall cease for any reason to constitute a majority of the
board of directors of the Company; or (iii) Xxxx Xxxxxx, his lineal
descendants and trusts established by Xxxx Xxxxxx for his lineal
descendants shall have "beneficial ownership" of 40% or more of the
outstanding common stock of the Company; or
(l)(i) any Security Document or the Subsidiary Guaranty shall cease,
for any reason, to be in full force and effect or any party thereto (other
than the Lenders) shall so assert in writing; or (ii) any Security
Document shall cease to be effective to xxxxx x Xxxx on the collateral
described therein with the priority purported to be created thereby.
THEREUPON: the Administrative Agent may (and, if directed by the Majority
Lenders, shall) (a) declare the Working Capital Commitments terminated
(whereupon the Working Capital Commitments shall be terminated) and/or (b)
terminate any Letter of Credit providing for such termination by sending a
notice of termination as provided therein (and/or, in the case of the IRB Letter
of Credit, notify the trustee for the bonds secured by the IRB Letter of Credit
of such Event of Default and direct the trustee to declare an event of default
with respect to and accelerate such bonds, draw under the IRB Letter of Credit
and exercise remedies under the bond documents, and/or by notice to the Company,
the trustee and remarketing agent for such bonds, terminate the liquidity period
therefor) and/or (c) declare the principal amount then outstanding of and the
accrued interest on the Loans and Reimbursement Obligations and commitment fees,
letter of credit fees and all other amounts payable hereunder and under the
Notes to be forthwith due and payable, whereupon such amounts shall be and
become immediately due and payable, without notice (including, without
limitation, notice of intent to accelerate), presentment, demand, protest or
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other formalities of any kind, all of which are hereby expressly waived by the
Company and/or (d) exercise any or all rights and remedies authorized or
provided for in the Security Documents or under applicable law; provided that in
the case of the occurrence of an Event of Default with respect to the Company
referred to in clause (f) or (g) of this Section 10.01, the Working Capital
Commitments shall be automatically terminated and the principal amount then
outstanding of and the accrued interest on the Loans and Reimbursement
Obligations and commitment fees, letter of credit fees and all other amounts
payable hereunder and under the Notes shall be and become automatically and
immediately due and payable, without notice (including, without limitation,
notice of intent to accelerate), presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company.
10.02 Collateral Account. The Company hereby agrees, in addition to the
provisions of Section 10.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Administrative Agent or the Majority Lenders, pay (and, in the case of any Event
of Default with respect to the Company referred to in clause (f) or (g) of
Section 10.01 hereof, forthwith, without any demand or the taking of any other
action by the Lenders, it shall automatically be obligated to pay) to the
Administrative Agent an amount in immediately available funds equal to the then
aggregate amount available for drawings under all Letters of Credit issued for
the account of the Company, which funds shall be held by the Administrative
Agent in the Collateral Account maintained by the Company pursuant to the
Security Documents, and be subject to investment and withdrawal only as provided
therein.
Section 11. The Administrative Agent.
11.01 Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes the Administrative Agent to act as its agent hereunder
and under the Letters of Credit and the other Basic Documents with such powers
as are specifically delegated to the Administrative Agent by the terms hereof
and thereof, together with such other powers as are reasonably incidental
thereto. The Administrative Agent (which term as used in this Section 11 shall
include reference to its affiliates and its and its affiliates' officers,
directors, employees and agents and to Chase acting in its individual capacity
hereunder as issuer of Participation Letters of Credit): (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement,
the Letters of Credit and the other Basic Documents, and shall not by reason of
this Agreement, the Letters of Credit or any other Basic Document be a trustee
for any Lender; (b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement, the
Letters of Credit or any other Basic Document, or in any certificate or other
document referred to or provided for in,
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or received by any of them under, this Agreement, the Letters of Credit or any
other Basic Document, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, the Letters of Credit or any
other Basic Document or any other document referred to or provided for herein or
therein or for any failure by the Company or any of its Subsidiaries or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Basic Document except to the extent
requested by the Majority Lenders, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under the Letters of
Credit, any other Basic Document or any other document or instrument referred to
or provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. The Administrative Agent may
employ agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Without in any way limiting any of the foregoing, each
Lender acknowledges that the Administrative Agent shall have no greater
responsibility in the operation of Letters of Credit than is specified in the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500 (or any replacement or
revision thereof in effect from time to time).
11.02 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Administrative Agent.
As to any matters not expressly provided for by this Agreement, the Letters of
Credit or any other Basic Document, the Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions signed by the Majority Lenders and
such instructions of the Majority Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
11.03 Defaults. The Administrative Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans or Reimbursement Obligations) unless the
Administrative Agent has received notice from a Lender or the Company specifying
such Default and stating that such notice is a "Notice of Default". In the event
that the Administrative Agent receives such a notice of the occurrence of a
Default, the Administrative Agent shall give prompt notice thereof to the
Lenders (and shall give each Lender prompt notice of each such non-payment). The
Administrative Agent shall (subject to Section 11.07 hereof) take such action
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with respect to such Default as shall be directed by the Majority Lenders,
provided that, unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interests of the Lenders.
11.04 Rights as a Lender. With respect to its Working Capital Commitments
and the Loans made and Letter of Credit Liabilities held by it, Chase in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent may (without having to account therefor to
any Lender) accept deposits from, lend money to and generally engage in any kind
of banking, trust or other business with the Company (and any of its Affiliates)
as if it were not acting as the Administrative Agent, and the Administrative
Agent may accept fees and other consideration from the Company (in addition to
the agency fees and arrangement fees heretofore agreed to between the Company,
the Administrative Agent for services in connection with this Agreement or
otherwise without having to account for the same to the Lenders.
11.05 Indemnification. The Lenders agree to indemnify the Administrative
Agent (to the extent not reimbursed under Section 2.02(g), 12.03 or 12.04
hereof, but without limiting the obligations of the Company under said Sections
2.02(g), 12.03 and 12.04), ratably in accordance with their respective Working
Capital Commitments, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement, the Letters of Credit or any other Basic Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including, without limitation, the costs and
expenses which the Company is obligated to pay under Sections 2.02(g), 12.03 and
12.04 hereof but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
11.06 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Administrative
Agent or any other Lender, and based on such documents and
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information as it has deemed appropriate, made its own credit analysis of the
Company and decision to enter into this Agreement and that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement, the Letters of Credit or any of the other
Basic Documents. The Administrative Agent shall not be required to keep itself
informed as to the performance or observance by the Company (other than
maintaining records of payments by the Company to it) or any other Person of
this Agreement or any of the other Basic Documents or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Company or any other Person. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, under the Letters of Credit or the other
Basic Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the affairs, financial condition or business of the Company or any
other Person (or any of their affiliates) which may come into the possession of
the Administrative Agent.
11.07 Failure to Act. Except for action expressly required of the
Administrative Agent hereunder, under the Letters of Credit and under the other
Basic Documents, the Administrative Agent shall in all cases be fully justified
in failing or refusing to act hereunder and thereunder unless it shall receive
further assurances to its satisfaction by the Lenders of their indemnification
obligations under Section 11.05 hereof against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.
11.08 Resignation or Removal of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided
below, the Administrative Agent may resign at any time by giving notice thereof
to the Lenders and the Company and the Administrative Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Administrative Agent reasonably acceptable to the Company. If no
successor Administrative Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation or the Majority
Lenders' removal of the retiring Administrative Agent (the "Notice Date"), then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent reasonably acceptable to the Company. Any
successor Administrative Agent shall be (i) a Lender or (ii) if no Lender has
accepted such appointment within 40 days after the Notice Date, a bank which has
an office in New York, New York with a combined capital and surplus of at least
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$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation or removal
hereunder as Administrative Agent, the provisions of this Section 11 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Administrative Agent.
11.09 Collateral Sub-Agents. Each Lender by its execution and delivery of
this Agreement agrees, as contemplated by the Security Documents, that, in the
event it shall hold any Liquid Investments referred to therein, such Liquid
Investments shall be held in the name and under the control of such Lender and
such Lender shall hold such Liquid Investments as a collateral sub-agent for the
Administrative Agent thereunder.
Section 12. Miscellaneous.
12.01 Waiver. No failure on the part of the Administrative Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any Basic Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege thereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided in
the Basic Documents are cumulative and not exclusive of any remedies provided by
law.
12.02 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, telecopy,
cable or other writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to the Company and the
Administrative Agent given in accordance with this Section 12.02. Except as
otherwise provided in this Agreement, all such communications shall be deemed to
have been duly given when transmitted by telex or telecopier, delivered to the
telegraph or cable office or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or reimburse each of the
Lenders and the Administrative Agent for paying: (a) the reasonable fees and
expenses of Xxxxx Xxxx & Xxxxxxxx, special counsel to the Xxxxxxxxxxxxxx Xxxxx,
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and special local counsel to the Administrative Agent in the States in which the
Mortgages are recorded in connection with (i) the preparation, execution and
delivery of this Agreement (including the Exhibits hereto) and the Security
Documents and the making of the Loans and issuance of Letters of Credit
hereunder and (ii) any modification, supplement or waiver of any of the terms of
this Agreement, the Letters of Credit or any other Basic Document; (b) if an
Event of Default occurs, all costs and expenses of each of the Lenders and the
Administrative Agent (including reasonable counsels' fees) incurred as a result
of such Event of Default and collection, enforcement, bankruptcy, insolvency and
other proceedings resulting therefrom; (c) all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any lien or security interest
contemplated by this Agreement, any Security Document or any document referred
to herein or therein; and (d) all costs, expenses and other charges in respect
of title insurance procured with respect to the Liens created pursuant to the
Mortgages.
12.04 Indemnification. The Company shall indemnify the Administrative
Agent, the Lenders and each affiliate thereof and their respective directors,
officers, employees, attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims or damages to which any of them
may become subject, insofar as such losses, liabilities, claims or damages arise
out of or result from (i) any actual or proposed use by the Company of the
proceeds of any extension of credit (whether a Loan or a Letter of Credit) by
any Lender hereunder or breach by the Company of this Agreement or any other
Basic Document, (ii) any Environmental Liabilities, (iii) any accident, injury
to or death of Persons or loss of or damage to property occurring in, on or
about any of the Plants or on any sidewalks, curbs, property or parking areas
adjoining the Plants, (iv) the performance of any labor or services or the
furnishing of any materials or other property in respect of any of the Plants,
or (v) any investigation, litigation or other proceeding (including any
threatened investigation or proceeding) relating to the foregoing, whether or
not the indemnified Person is a party thereto, and the Company shall reimburse
the Administrative Agent and each Lender, and each affiliate thereof and their
respective directors, officers, employees and agents, upon demand for any
expenses (including legal fees and fees of engineers, environmental consultants
and similar technical personnel) incurred in connection with any such
investigation or proceeding; but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified or as a result of a successful suit
by the Company seeking to enforce its rights against such Person under the
Financing Documents.
12.05 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes or any other Financing Document, nor any consent to
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any departure by the Company therefrom, shall in any event be effective unless
the same shall be agreed or consented to by the Majority Lenders and the
Company, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following: (i) increase any Working Capital Commitment of
any of the Lenders or subject the Lenders to any additional obligations; (ii)
reduce the principal of, or interest on, any Loan, Reimbursement Obligation or
fees hereunder; (iii) postpone any date fixed for any payment of principal of,
or interest on, any Loan, Reimbursement Obligation or fee hereunder pursuant to
Sections 2.02, 2.04, 4.01 or 4.02 hereof; (iv) change the percentage of any of
the Working Capital Commitments or of the aggregate unpaid principal amount of
any of the Loans and Letter of Credit Liabilities, or the number of Lenders,
which shall be required for the Lenders or any of them to take any action under
this Agreement; (v) change any provision contained in Sections 2.08, 6, 12.03 or
12.04 hereof or this Section 12.05 or Section 12.08 hereof; or (vi) release all
or a substantial portion of the security for the obligations of the Company
under this Agreement or any Note. Notwithstanding anything in this Section 12.05
to the contrary, no amendment, waiver or consent shall be made with respect to
Section 11 without the consent of the Administrative Agent.
12.06 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns except that the Company may not assign its rights or obligations
hereunder or under the Notes without the prior written consent of all of the
Lenders. Each Lender may assign any Loan or Loans or Letter of Credit
Liabilities or all or any part of its Working Capital Commitments (i) to any
affiliate thereof, (ii) to any other Lender, or (iii) with the consent of the
Administrative Agent, which consent shall not be unreasonably withheld, to any
other bank or financial institution or fund; provided that any assignment shall
not be less than $5,000,000 or, if less, shall constitute an assignment of all
of such Lender's Working Capital Commitments, Loans and Letter of Credit
Liabilities. Upon execution by the assignor and the assignee of an instrument
pursuant to which the assignee assumes such rights and obligations, payment by
such assignee to such assignor of an amount equal to the purchase price agreed
between such assignor and such assignee and delivery to the Administrative Agent
and the Company of an executed copy of such instrument together with payment by
such assignee to the Administrative Agent of a processing fee of $2,500, such
assignee shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights and benefits as it would have if it were a Lender
hereunder and the assignor shall be, to the extent of such assignment (unless
otherwise provided therein) released from its obligations under this Agreement.
Upon the consummation of such assignment, the Company shall make appropriate
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arrangements so that, if required, new Notes are issued to the assignor and the
assignee. If such assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the date of the
applicable instrument of assumption, deliver to the Company and the
Administrative Agent certification as to exemption from deduction or withholding
of any United States federal income taxes in accordance with Section 5.08(f).
Each Lender may (without the consent of any other party to this Agreement) sell
participations in all or any part of any Loan or Loans made or Letter of Credit
Liabilities held by it to another bank or other entity, in which event the
participant shall not have any rights under this Agreement (except as provided
in the next succeeding sentence hereof), or in the case of a Loan, such Lender's
Note (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto, which agreement shall not give the
participant the right to consent to any modification, amendment or waiver other
than one described in clause (i), (ii), (iii) or (vi) of Section 12.05 hereof).
The Company agrees that each participant shall be entitled to the benefits of
Sections 5.07 and 6 with respect to its participation; provided that no
participant shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such participant had no such transfer occurred. Each Lender may furnish any
information concerning the Company and its Subsidiaries in the possession of
such Lender from time to time to assignees and participants (including
prospective assignees and participants) which have agreed in writing to be bound
by the provisions of Section 12.07 hereof. The Administrative Agent and the
Company may, for all purposes of this Agreement, treat any Lender as the holder
of any Note drawn to its order (and owner of the Loans evidenced thereby) until
written notice of assignment or other transfer shall have been received by them
from such Lender. Notwithstanding anything to the contrary, any Lender may at
any time assign all or any portion of its rights under this Agreement, its Notes
and the other Financing Documents to a Federal Reserve Bank. No such assignment
shall release the transferor Lender from its obligations under the Financing
Documents.
12.07 Confidentiality. Each Lender agrees to exercise all reasonable
efforts to keep confidential any information delivered or made available by the
Company to it which is clearly indicated to be confidential information;
provided that nothing herein shall prevent any Lender from disclosing such
information (i) to any other Lender, (ii) to its officers, directors, employees,
agents, attorneys and accountants who have a need to know such information in
accordance with customary banking practices and who receive such information
having been made aware of the restrictions set forth in this Section, (iii) upon
the order of any court or administrative agency, (iv) upon the request or demand
of any regulatory
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agency or authority having jurisdiction over such Lender, (v) which has been
publicly disclosed, (vi) to the extent reasonably required in connection with
any litigation to which the Administrative Agent, any Lender, the Company or
their respective affiliates may be a party, (vii) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (viii) to such
Lender's legal counsel and independent auditors, and (ix) to any actual or
proposed participant or assignee of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section 12.07.
12.08 Survival. The obligations of the Company under Sections 2.02(g),
5.08, 6.01, 6.05, 6.06, 6.07, 12.03 and 12.04 hereof and the obligations of the
Lenders under Section 11.05 shall survive the repayment of the Loans and
Reimbursement Obligations and the termination of the Working Capital Commitments
and the Letters of Credit.
12.09 Captions. The table of contents and the captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
12.10 Counterparts; Integration. 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. This Agreement constitutes the entire agreement
and understanding among the parties hereto and supersedes any and all prior
agreements and understandings, oral and written, relating to the subject matter
hereof (except to the extent specific reference is made to any such agreement in
Section 2.04 hereof).
12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. THE COMPANY 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. THE COMPANY 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. EACH
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OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS 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.
Section 13. Conditions Precedent to Effectiveness.
13.01 Effectiveness. This Amended Agreement shall become effective on the
date (the "Effective Date") on which all of the following conditions precedent
shall have been fulfilled to the satisfaction of the Administrative Agent:
(a) Corporate Action. The Administrative Agent shall have received
certified copies of the certificate of incorporation and by-laws of the
Company and each Subsidiary and of all corporate action taken by the
Company and such Subsidiary authorizing the execution, delivery and
performance of, in the case of the Company, this Amended Agreement, and in
the case of each Subsidiary Guarantor, the Guarantor Acknowledgment
(including, without limitation, a certificate of the Company and such
Subsidiary Guarantor setting forth the resolutions of its Board of
Directors authorizing the transactions contemplated thereby).
(b) Incumbency. The Company and each Subsidiary shall have delivered
to the Administrative Agent a certificate in respect of the name and
signature of each of the officers (i) who is authorized to sign on its
behalf, in the case of the Company, this Amended Agreement, and in the
case of each Subsidiary Guarantor, the Guarantor Acknowledgment and (ii)
who will, until replaced by another officer or officers duly authorized
for that purpose, act as its representative for the purposes of signing
documents and giving notices and other communications in connection with
the Basic Documents. The Administrative Agent and each Lender may
conclusively rely on such certificates until it receives notice in writing
from the Company to the contrary.
(c) Notes. The Administrative Agent shall have received a new
Working Capital Note for each Lender, duly completed and executed.
(d) Fees and Expenses. The Company shall have paid to the
Administrative Agent, for its account and for the account of the Lenders,
fees in the amounts previously agreed upon among the Company and the
Administrative Agent; and shall have in addition paid to the
Administrative Agent all amounts payable under Section 12.03 hereof on or
before the Effective Date.
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(e) Opinions of Counsel to the Company. The Administrative Agent
shall have received opinions of Xxxxxx X. Xxxxxx XX, General Counsel and
Secretary of the Company, and Ropes & Xxxx, Massachusetts counsel to the
Company, together substantially to the effect of Exhibit D hereto and
covering such other matters relating to the transactions contemplated
hereby as the Majority Lenders may reasonably request.
(f) Opinion of Special Counsel to the Administrative Agent. The
Administrative Agent shall have received an opinion of Xxxxx Xxxx &
Xxxxxxxx, substantially in the form of Exhibit E hereto, with such changes
as are satisfactory to the Administrative Agent, and covering such other
matters relating to the transactions contemplated hereby as the Majority
Lenders may reasonably request.
(g) Projections. Each of the Lenders shall have received a copy of,
and shall be satisfied with, projections of the financial condition,
income and cash flow of the Company and its Subsidiaries for the fiscal
years 1998 through 2002 prepared by management of the Company.
(h) Machinery and Equipment Certificate. The Lenders shall have
received a certificate of a Senior Officer satisfactory to the
Administrative Agent setting forth the cost of all material machinery and
equipment of the Company and its Subsidiaries acquired since April 7, 1994
that is operational on the Effective Date.
(i) Counterparts. The Administrative Agent shall have received
counterparts of this Amended Agreement and the Guarantor Acknowledgment
executed and delivered by or on behalf of each of the parties thereto (or,
in the case of any Lender as to which the Administrative Agent shall not
have received such a counterpart, the Administrative Agent shall have
received evidence satisfactory to it of the execution and delivery by such
Lender of a counterpart of this Amended Agreement).
(j) Other Documents. The Administrative Agent shall have received
such other documents relating to the transactions contemplated hereby as
the Administrative Agent may reasonably request.
On the Effective Date the Original Agreement will be automatically amended
and restated in its entirety to read as set forth herein. On and after the
Effective Date (i) the rights and obligations of the parties hereto shall be
governed by this Amended Agreement; provided that rights and obligations of the
parties hereto with respect to the period prior to the Effective Date shall
continue to be
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governed by the provisions of the Original Agreement as in effect prior to the
Effective Date, and (ii) each reference to "the date hereof" shall mean "the
Effective Date". From and including the Effective Date, the "Term Commitment"
(as defined in the Original Agreement) of each Lender shall, for administrative
convenience, be incorporated in the Working Capital Commitment of such Lender;
each "Term Loan" (as defined in the Original Agreement) of each Lender shall,
for administrative convenience, be treated as a Loan made under the Working
Capital Commitment of such Lender, and it is agreed that there has been no
permanent reduction in respect of any such "Term Loan" (as so defined) as a
result thereof; and the Working Capital Commitment of each Lender shall be the
amount set forth opposite the name of such Lender on the signature pages hereof,
as such amount may be reduced from time to time pursuant to Section 2.03 hereof.
Upon the reasonable request of the Company, and with the consent of the Majority
Lenders (not to be unreasonably withheld), the Lenders will enter into an
amendment to this Agreement which will again segregate the "Term Loans" (as so
defined) from the Loans.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
APPLIED EXTRUSION TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Title: Chief Financial Officer
Address for Notices:
Applied Extrusion Technologies, Inc.
0 Xxxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopy Number: 000-000-0000
Copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxx
Telecopy Number: 000-000-0000
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Working Capital THE CHASE MANHATTAN BANK
Commitment:
$13,000,000
By: /s/ Xxxx Xxxxxxxxx Xxxxx
----------------------------------
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx Xxxxxxxxx Xxxxx
Telecopy Number: (000) 000-0000
Copy to:
The Chase Manhattan Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
Lending Offices for all Loans:
The Chase Manhattan Bank
1 Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Loan & Agency Services
Telecopy Number: (000) 000-0000
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87
Working Capital LASALLE BUSINESS CREDIT, INC.
Commitment:
$15,500,000
By: /s/ J. Xxxxx Xxxxxxxx
----------------------------------
Title: First Vice President
Address for Notices:
LaSalle Business Credit, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopy Number: (000) 000-0000
Lending Offices for all Loans:
LaSalle Business Credit, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopy Number: (000) 000-0000
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88
Working Capital FLEET NATIONAL BANK
Commitment:
$15,500,000
By: /s/ H. Xxxxxx Xxxxxxxxx
----------------------------------
Title: Assistant Vice President
Address for Notices:
Fleet National Bank
MAOFD04G
0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: H. Xxxxxx Xxxxxxxxx
Telecopy Number: (000) 000-0000
Lending Office for all Loans:
Fleet National Bank
MAOFD047E
0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: ABL Services
Telecopy Number: (000) 000-0000
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Working Capital PNC BANK, N.A.
Commitment:
$13,000,000
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Title: Vice President
Address for Notices:
PNC Bank, National Association
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
Lending Office for all Loans:
PNC Bank, National Association
Xxx Xxxxx Xxxxxx
Xxxxxxxxx - Xxxxxx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Nikky Oyeniya or
Xxxxxxxxx Xxxxxx
Telecopy Number: (000) 000-0000
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90
Working Capital FIRST UNI0N NATIONAL BANK
Commitment: successor by Merger to Signet Bank
$13,000,000
By: /s/ Xxxx Xxxxxx
----------------------------------
Title: Vice President
Address for Notices:
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
Telecopy Number: (000) 000-0000
Lending Office for all Loans:
First Union National Bank
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxx
Telecopy Number: (000) 000-0000
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91
Total Working Capital Commitments
$70,000,000
THE CHASE MANHATTAN BANK,
as Administrative Agent
By: /s/ Xxxx Xxxxxxxxx Xxxxx
------------------------------------
Title: Vice President
Address for Notices:
The Chase Manhattan Bank
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Loan & Agency Services
Telecopy Number: (000) 000-0000
Copies to:
Chase Securities Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Telecopy Number: (000) 000-0000
The Chase Manhattan Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
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SCHEDULE I
ASSIGNED AGREEMENTS
1. Sale and Purchase Agreement between Hercules Incorporated and Applied
Extrusion Technologies, Inc., dated as of March 8, 1994.
93
SCHEDULE II
Security Documents
Title Insurance
Mortgage/Deed of Trust Amount
Mortgage, Assignment of Leases and $8,375,000
Rents, Security Agreement and (Lawyers Title Insurance Corporation
Financing Statement dated as of April Policy # 135-00-097521)
6, 1994 between the Company and the
Administrative Agent, relating to U.S.
Highway 41N, Terre Haute, Indiana,
recorded April 7, 1994 in Mortgage
Record P-20, Page 1528 in the records
of Recorder's Office of Vigo County,
Indiana, as amended by Amendment
No. 1 to Mortgage, Assignment of
Leases and Rents, Security Agreement
and Financing Statement dated as of
January 29, 1998
Deed of Trust, Assignment of Leases $5,875,000
and Rents, Security Agreement and (Lawyers Title Insurance Corporation
Financing Statement dated as of April Policy # 135-00-217790)
6, 1994 between the Company and the
Administrative Agent, relating to
Xxxxxx Plant, Edgemont Drive,
Covington, Virginia, recorded in Deed
Book 337, Page 589 in the Clerk's
Office of Circuit Court for County of
Allegheny, Commonwealth of
Virginia, as amended by Amendment
No. 1 to Deed of Trust, Assignment of
Leases and Rents, Security Agreement
and Financing Statement dated as of
January 29, 1998
94
Title Insurance
Mortgage/Deed of Trust Amount
Mortgage, Assignment of Leases and $5,312,500
Rents, Security Agreement and (Commonwealth Land Title Insurance
Financing Statement dated as of April Company Policy # 940587-BOS)
6, 1994 between the Company and the
Administrative Agent, relating to 00
Xxxxxxxxxx Xxxx, Xxxxx,
Xxxxxxxxxxxxx 00000, filed in Essex
South Registry District of the Land
Court on April 4, 1994 as Document
No. 297526 and noted on the
Certificate of Title No. 60656, as
amended by Amendment No. 1 to
Mortgage, Assignment of Leases and
Rents, Security Agreement and
Financing Statement dated as of
January 29, 1998
Mortgage, Assignment of Leases and $3,875,000
Rents, Security Agreement and (Lawyers Title Insurance Corporation
Financing Statement dated as of April Policy # 112-01-349546)
6, 1994 between the Company and the
Administrative Agent, relating to
Industrial Drive and Haveg Road,
Middletown, Delaware, recorded on
April 8, 1994 in Mortgage Book 3368,
Page 19 with the New Castle County
Recorder of Deeds, as amended by
Amendment No. 1 to Mortgage,
Assignment of Leases and Rents,
Security Agreement and Financing
Statement dated as of January 29,
1998
2
95
Title Insurance
Mortgage/Deed of Trust Amount
Deed of Movable and Immovable $1,603,913
Hypothec dated April 7, 1994 between (First America Title Insurance
Applied Extrusion Technologies Company Policy # PQLOOOOOOO2)
(Canada) Inc. and the Administrative
Agent, relating to 0000 Xxxxxx xx xx
Xxxxxxxx, Xxxxxxxx, Xxxxxx, as
amended by a Supplemental Deed of
Movable and Immovable Hypothec
dated January 29, 1998 between
Applied Extrusion Technologies
(Canada), Inc. and the Administrative
Agent relating to the said property.
3
96
SCHEDULE III
[intentionally deleted]
97
SCHEDULE IV
Special Account Debtors
Receivables due from each of the following account debtors may be included in
Eligible Receivables without regard to the limitation imposed by clause (i) of
the definition of Eligible Receivables:
Printpack, Inc.
Bryce Corp.
Xxxxx River Corporation
Alusuisse Flexible Packaging, Inc.
Jaite Packaging
Xxxxxxx & Xxxxxxx
The Administrative Agent (with the consent of the Majority Lenders) may notify
the Company from time to time of additions to or deletions from this Schedule
or of the maximum percentage of the aggregate of all Receivables for which the
account debtors set forth above are approved.
98
SCHEDULE V
Investments
Subsidiaries of Applied Extrusion Technologies, Inc.
1. Applied Extrusion Technologies (Canada), Inc.
2. Applied Extrusion Technologies, Limited
Investments
1. Secured Note dated July 19, 1993 by NMC of North America, Inc. in favor
of the Company in the original principal amount of $800,000.
2. Secured Note dated July 19, 1993 by NMC of North America, Inc. in favor
of the Company in the original principal amount of $200,000.
Note: As of the date of this Agreement, $200,000 was still owed to AET by NMC;
maturity is 7/19/98.
99
SCHEDULE VI
Credit Agreements, Letters of Credit, Liens, etc.
1. Provident National Leasing Corporation 60-month telephone
equipment lease dated 6/17/92 at a monthly rental of $l,883.21.
2. IBM Credit Corporation 30-month computer equipment lease (term
lease supplement) dated 6/2/93 at a monthly rental of $1,289.
3. AT&T Capital Canada -- Expires 12/31/99
Rental of telephone system $10,650.00/year, monthly payments.
4. Xerox Canada, Inc. - Expires 12/02/95
Rental of 2 photocopiers 1065/5052 at a rental of $12,700/year,
Quarterly payments.
100
SCHEDULE VII
Environmental Matters
1. Asbestos is present throughout the facility located in Covington,
Virginia ("Xxxxxxxxx").
2. There is an ongoing investigation being conducted by the EPA at
Covington relating to the asbestos removal program involving the
abandoned Fibers Building.
3. Three USTs were removed from the area adjacent to the powerhouse
at Covington in 1986. The Commonwealth of Virginia has been
notified of a potential release in this area.
4. The Covington facility has three wastewater lagoons which are
permitted by the VPDES. Phase II testing at and near the site of
the lagoons indicates that there may be levels of 1,1-dichloroethene
and heptachlor epoxide exceeding levels of state regulatory concern.
5. The Xxxxxxxxx facility is listed on CERCLIS with the notation "no
further action". The Company is aware that two disposal sites used
in connection with the Xxxxxxxxx facility, Cyanokem, in Detroit,
Michigan and Chem Met Services in Wyandotte, Michigan are listed
on the Michigan State Priority List.
6. There is a former on-site solid waste disposal area at Xxxxxxxxx
(not including the area to be retained by Hercules, Inc. known as
the Hercules Industrial Landfill) located near the wastewater
lagoon. Results of testing conducted at or near this area are
described in no. 4 above.
7. Approximately 2,400 gallons of no. 2 fuel oil were released as a
result of the overfill of an aboveground fuel oil storage tank at
Terre Haute.
8. The facility located in Varennes, Quebec has conducted training at
a "fire practice area" where small amounts of gasoline, no. 2 fuel
oil and kerosene were ignited. It is possible that some of the
101
petroleum compounds were spilled and/or spread on the soils in the
area.
9. The Company has received an information request with respect to
the Solvent Recovery Services of New England Site in Southington,
Connecticut. A predecessor entity has assumed responsibility for
that notice.
2
102
SCHEDULE VIII
Insurance
Type: Property & Boiler
Insurer: Industrial Risk Insurers (IRI)
Effective Date: 10/1/97 - 10/1/98
$799,092,000 Blanket
$100,000,000 Earthquake (Annual Aggregate)
$100,000,000 Flood (Annual Aggregate)
Note #1: Additional sublimits apply. Refer to policy forms.
Note #2: Coverage includes U.S. and Canada
Note #3: Coverage includes Business Interruption and Boiler and
Machinery coverages
--------------------------------------------------------------------------------
Type: Workers' Compensation
Insurer: Travelers Insurance Company
Effective Date: 10/1/97 - 10/1/98
Statutory Benefits (Workers' Compensation)
$500,000 (Employer's Liability)
--------------------------------------------------------------------------------
Type: Comprehensive General Liability (including premises and
operations liability as well as products and completed
operations liability coverage, including Canada operations)
Insurer: Travelers Insurance Company
Effective Date: 10/1/97 - 10/1/98
Limit: $1,000,000 Each Occurrence
$2,000,000 Products/Completed Operations
$2,000,000 General Aggregate (Per Location).
103
--------------------------------------------------------------------------------
Type: Automobile Liability
Insurer: Travelers Insurance Company
Effective Date: 10/1/97 - 10/1/98
Limit: $1,000,000 each occurrence; includes Canada (Combined Single
Limit)
--------------------------------------------------------------------------------
Type: Comprehensive Crime Coverage
Insurer: National Union Fire Insurance Company
Effective Date: 10/1/97 - 10/1/98
Limit: $3,000,000 single loss limit
--------------------------------------------------------------------------------
Type: Ocean Cargo and Inland Marine
Insurer: American International Group (AIG)
Effective Date: April 7, 1994 until canceled
Limit: $1,000,000 limit per shipment; covers shipments in transit,
worldwide coverage
--------------------------------------------------------------------------------
Type: Foreign Liability (excluding U.S. and Canada)
Insurer: Chubb - Great Northern
Effective Date: 10/1/97 - 10/1/98
$1,000,000 CSL Commercial General Liability including
Products
$1,000,000 CSL Automobile DIC/Excess Liability
Foreign Voluntary Workers' Compensation
$100,000 Employer's Liability
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Type: Umbrella/Excess Liability
Insurer: Fireman's Fund Insurance Company
Effective Date: 10/1/97 - 10/1/98
Limit: $25,000,000 each occurrence/aggregate
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