Exhibit 10.1
EXECUTION VERSION
OMNIBUS AMENDMENT TO
REVOLVING CREDIT AGREEMENT
AND
GUARANTEE AND COLLATERAL AGREEEMENT
dated as of October 12, 2006
among
THE PACIFIC LUMBER COMPANY
and
XXXXX LUMBER CO., INC.,
as Borrowers
THE LENDERS PARTY HERETO,
MARATHON STRUCTURED FINANCE FUND L.P.,
as Administrative Agent
and
MARATHON STRUCTURED FINANCE FUND L.P.,
as Sole Bookrunner and Sole Lead Arranger
and
LASALLE BUSINESS CREDIT, LLC,
as Collateral Agent
and
LASALLE BANK NATIONAL ASSOCIATION
as
Issuing Bank
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS..........................................................
SECTION 2 RECITALS.............................................................
SECTION 3 AMENDMENTS TO THE CREDIT AGREEMENT...................................
SECTION 4 AMENDMENTS TO THE GUARANTEE AND COLLATERAL AGREEMENT.................
SECTION 5 CONDITIONS...........................................................
SECTION 6 REPRESENTATIONS AND WARRANTIES.......................................
SECTION 7 REAFFIRMATION........................................................
SECTION 8 NO WAIVER............................................................
SECTION 9 GENERAL PROVISIONS...................................................
THIS OMNIBUS AMENDMENT TO REVOLVING CREDIT AGREEMENT AND GUARANTEE AND
COLLATERAL AGREEMENT is dated as of October 12, 2006 (this "Amendment"), among
THE PACIFIC LUMBER COMPANY ("PALCO"), a Delaware corporation and XXXXX LUMBER
CO., INC. ("Xxxxx"), a California corporation, the Lenders (as such term is
defined in the Credit Agreement described below), MARATHON STRUCTURED FINANCE
FUND L.P., as administrative agent (in such capacity and together with its
successors, the "Administrative Agent"), LASALLE BUSINESS CREDIT, LLC, as
collateral agent (in such capacity and together with its successors, the
"Collateral Agent", and together with the Administrative Agent, the "Agents"),
and LASALLE BANK NATIONAL ASSOCIATION ("LaSalle Bank") in its capacity as
Issuing Bank, and amends the Credit Agreement (as defined below). PALCO and
Xxxxx are sometimes referred to herein collectively as the "Borrowers" and
individually as a "Borrower").
WHEREAS, the Administrative Agent, the Borrowers and the Lenders are party
to that certain Credit Agreement dated as of July 18, 2006 (as the same has been
amended, restated, supplemented or otherwise modified as of the date hereof, the
"Credit Agreement"), pursuant to which the Lenders have made certain loans,
advances and other accommodations to the Borrowers and the Borrowers have
granted to the Administrative Agent, for the benefit of the Lenders and any
other lenders who from time to time may become party to the Credit Agreement, a
lien on and a security interest in all of the Borrowers' real, personal and
intellectual property to secure the Borrowers' liabilities arising under the
Credit Agreement (collectively, the "Existing Obligations");
WHEREAS, the Administrative Agent, the Borrowers, Maxxam Group Inc.,
("Holdings") Salmon Creek LLC ("Salmon") and Scotia Inn Inc. ("Scotia Inn," and
together with Salmon and the Borrowers, the "Grantors") are also party to that
certain Guarantee and Collateral Agreement dated as of July 18, 2006 (as the
same has been amended, restated, supplemented or otherwise modified as of the
date hereof, the "Guarantee and Collateral Agreement"), pursuant to which, among
other things, (i) Salmon and Scotia Inn guaranteed the prompt and complete
payment and performance by the Borrowers of all of the Borrower Obligations (as
defined therein), (ii) each Grantor granted to the Administrative Agent, for the
benefit of the Lenders and any other lenders who from time to time may become
party to the Credit Agreement, a lien on and a security interest in all of the
Grantor's assets, and (iii) Holdings granted to the Administrative Agent, for
the benefit of the Lenders and any other lenders who from time to time may
become party to the Credit Agreement, a security interest in all equity
interests in PALCO;
WHEREAS the Borrowers have requested that the Administrative Agent and the
Lenders amend the Credit Agreement and the Guarantee and Collateral Agreement,
to, among other things, (i) reflect the addition of LaSalle Business Credit, LLC
("LaSalle") as a lender; (ii) assign certain duties of the Administrative Agent
to LaSalle and appoint LaSalle as the collateral agent under the Credit
Agreement (iii) appoint LaSalle Bank National Association as the Issuing Bank,
and (iv) make other modifications to the Credit Agreement and the Guarantee and
Collateral Agreement, in each case, upon the terms and conditions set forth
herein; and
WHEREAS, it is the intention of the Borrowers, the Lenders, the
Administrative Agent and the Collateral Agent that the amendment of the Credit
Agreement pursuant to this Amendment shall not effect a refinancing or novation
of the Existing Obligations which shall remain outstanding under the Credit
Agreement and shall remain secured by the "Collateral" (as defined in the Credit
Agreement).
The parties hereto agree as follows:
SECTION 1 DEFINITIONS. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the applicable meaning ascribed to such
terms in the Credit Agreement and/or the Guarantee and Collateral Agreement.
SECTION 2 RECITALS. The foregoing Recitals are hereby made a part of this
Amendment.
SECTION 3 AMENDMENTS TO THE CREDIT AGREEMENT. Subject to the terms and
conditions set forth herein and in reliance upon each respective Borrower's
representations, acknowledgments and warranties herein contained, the Credit
Agreement is hereby amended as follows:
SECTION 3.1 Section 1.01 of the Credit Agreement is hereby amended to add
the following definitions in their appropriate alphabetical position within such
Section:
"Administrative Fee Letter" shall mean that certain Fee Letter dated
as of the Closing Date between PALCO and Marathon Structured Finance Fund
L.P., as amended, supplemented, restated or otherwise modified from time to
time.
"Agents" shall have the meaning assigned to such term in the preamble.
"Cash Collateral" means to deliver cash collateral to the Collateral
Agent in an amount equal to 105% of the L/C Exposure as of such date, to be
held as cash collateral for outstanding Letters of Credit, pursuant to
documentation satisfactory to the Collateral Agent. Derivatives of such
term have corresponding meanings.
"Collateral Agent" shall have the meaning assigned to such term in the
preamble.
"Collateral Agent Fee Letter" shall mean that certain Collateral Agent
Fee Letter dated as of October 12, 2006 between PALCO and LaSalle Business
Credit, LLC, as amended, supplemented, restated or otherwise modified from
time to time.
"LaSalle" has the meaning assigned such term in the recitals.
"LaSalle Bank" has the meaning assigned such term in the preamble.
"L/C Application" means, with respect to any request for the issuance
of a Letter of Credit, a letter of credit application in the form being
used by the Issuing Bank at the time of such request for the type of letter
of credit requested.
"L/C Fee Rate" shall mean 2.75% per annum.
"Master Letter of Credit Agreement" means, at any time, with respect
to the issuance of Letters of Credit, a master letter of credit agreement
or reimbursement agreement in the form, if any, being used by the Issuing
Bank at such time.
SECTION 3.2 The definition of each of "Appraisal," "Borrowing
Availability," "Borrowing Base," "Borrowing Base Certificate," "Borrowing
Request," "Eligible Accounts," "Eligible Inventory," "Excluded Taxes," "Federal
Funds Effective Rate," "Fees," "Issuing Bank," ""L/C Exposure," "Lenders,"
"Letter of Credit," "LIBO Rate," "Loan Documents," "Material Adverse Effect,"
"Net Cash Proceeds," "Net Orderly Liquidation Value," "Prime Rate," "Reserves,"
"Statutory Reserve," and "Swingline Lender" set forth in Section 1.01 of the
Credit Agreement are hereby amended and restated in their entirety to read as
follows:
"Appraisal" means an appraisal delivered by Administrative Borrower,
at Borrowers' expense, to Administrative Agent prior to the Closing Date
and thereafter Collateral Agent pursuant to Section 5.04(k) setting forth
the Net Orderly Liquidation Value of the Inventory of each Borrower, in
form and substance and prepared by an independent appraiser reasonably
acceptable to Collateral Agent.
"Borrowing Availability" means as of any time of determination the
lesser of (i) the Total Revolving Credit Commitment at such time and (ii)
the Borrowing Base at such time, in each case, less the sum of (a) the
Loans then outstanding (including, without duplication, the outstanding
balance of the Swingline Loan then outstanding), (b) aggregate L/C Exposure
at such time (excluding any Letters of Credit which have been Cash
Collateralized) and (c) Reserves established by either Agent in its
reasonable credit judgment.
"Borrowing Base" means, at any time, an amount equal to the sum of:
(i) at all times other than during the Seasonal Overadvance Period
eighty-five percent (85%) of the Net Amount of Eligible Accounts or (ii)
during the Seasonal Overadvance Period ninety-five percent (95%) of the Net
Amount of Eligible Accounts; plus
(i) at all times other than during the Seasonal Overadvance Period the
lesser of (x) eighty percent (80%) of the value (being the lower of cost
(on a first-in first-out basis) or market) of Eligible Inventory or (y)
eighty-five percent (85%) of the Net Orderly Liquidation Value at such time
of the value (being the lower of cost (on a first-in first-out basis) or
market) of Eligible Inventory or (ii) during the Seasonal Overadvance
Period the lesser of (x) ninety percent (90%) of the value (being the lower
of cost (on a first-in first-out basis) or market) of Eligible Inventory or
(y) ninety-five percent (95%) of the Net Orderly Liquidation Value at such
time of the value (being the lower of cost (on a first-in first-out basis)
or market) of Eligible Inventory; less
Reserves from time to time established by either Agent in its
reasonable credit judgment.
"Borrowing Base Certificate" means a certificate by a Responsible
Officer of PALCO, substantially in the form of Exhibit H (or another form
acceptable to the Collateral Agent) setting forth the calculation of the
Borrowing Base, including a calculation of each component thereof, all in
such detail as shall be reasonably satisfactory to the Collateral Agent.
All calculations of the Borrowing Base in connection with the preparation
of any Borrowing Base Certificate shall originally be made by PALCO and
certified to the Collateral Agent; provided, that the Collateral Agent
shall have the right to review and adjust, in the exercise of its
reasonable credit judgment, any such calculation (1) to reflect its
reasonable estimate of declines in value of any of the Collateral described
therein, and (2) to the extent that such calculation is not in accordance
with this Agreement.
"Borrowing Request" shall mean a request by the Administrative
Borrower in accordance with the terms of Section 2.03 and substantially in
the form of Exhibit D, or such other form as shall be approved by the
Collateral Agent.
"Eligible Accounts" shall mean the Accounts which the Collateral Agent
in the exercise of its reasonable commercial discretion determines to be
Eligible Accounts. Without limiting the discretion of the Collateral Agent
to establish other criteria of ineligibility, Eligible Accounts shall not,
unless the Collateral Agent in its sole discretion elects, include any
Account:
(a) with respect to which more than 60 days have elapsed since the
date of the original invoice therefor or which is more than 30 days past
due, provided, that during the period from November 1 through March 31 in
any year any Account that is subject to an Extended Terms Invoice and with
respect to which no more than 120 days have elapsed since the date of the
original invoice therefor or which is no more than 30 days past due shall
be eligible, provided, that when such Account is aggregated with the gross
amount of all other such Accounts then outstanding, such aggregated amount
shall not exceed $2,500,000;
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Security Documents are incorrect
or have been breached;
(c) with respect to which Account (or any other Account due from such
Account Debtor), in whole or in part, a check, promissory note, draft,
trade acceptance or other instrument for the payment of money has been
received, presented for payment and returned uncollected for any reason;
(d) which represents a progress billing (as hereinafter defined) or as
to which the applicable Borrower has extended the time for payment without
the consent of the Collateral Agent; for the purposes hereof, "progress
billing" means any invoice for goods sold or leased or services rendered
under a contract or agreement pursuant to which the Account Debtor's
obligation to pay such invoice is conditioned upon the applicable
Borrower's completion of any further performance under the contract or
agreement;
(e) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: death or judicial
declaration of incompetency of an Account Debtor who is an individual; the
filing by or against the Account Debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts, adjudication
as a bankrupt, winding-up, or other relief under the bankruptcy,
insolvency, or similar laws of the United States, any state or territory
thereof, or any foreign jurisdiction, now or hereafter in effect; the
making of any general assignment by the Account Debtor for the benefit of
creditors; the appointment of a receiver or trustee for the Account Debtor
or for any of the assets of the Account Debtor, including, without
limitation, the appointment of or taking possession by a "custodian," as
defined in the Federal Bankruptcy Code; the institution by or against the
Account Debtor of any other type of insolvency proceeding (under the
bankruptcy laws of the United States or otherwise) or of any formal or
informal proceeding for the dissolution or liquidation of, settlement of
claims against, or winding up of affairs of, the Account Debtor; the sale,
assignment, or transfer of all or any material part of the assets of the
Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor
as a going concern;
(f) if fifty percent (50%) or more of the aggregate Dollar amount of
outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under clause (a) above;
(g) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States of America or Canada (other than the
Province of Newfoundland); or (ii) is not organized under the laws of the
United States of America or Canada or any state or province thereof; or
(iii) is the government of any foreign country or sovereign state, or of
any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof; except to the extent that such Account is secured or payable by a
letter of credit satisfactory to the Collateral Agent in its discretion;
(h) owed by an Account Debtor which is an Affiliate or employee of the
applicable Borrower;
(i) except as provided in clause (k) below, with respect to which
either the perfection, enforceability, or validity of the Administrative
Agent's Liens in such Account, or the Administrative Agent's right or
ability to obtain direct payment to the Administrative Agent of the
proceeds of such Account, is governed by any federal, state, or local
statutory requirements other than those of the UCC;
(j) owed by an Account Debtor to which the applicable Borrower or any
of its Subsidiaries, is indebted in any way, or which is subject to any
right of setoff or recoupment by the Account Debtor, unless the Account
Debtor has entered into an agreement acceptable to the Administrative Agent
to waive setoff rights; or if the Account Debtor thereon has disputed
liability or made any claim with respect to any other Account due from such
Account Debtor; but in each such case only to the extent of such
indebtedness, setoff, recoupment, dispute, or claim;
(k) owed by the government of the United States of America, or any
department, agency, public corporation, or other instrumentality thereof,
unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C.
ss. 3727 et seq.), and any other steps necessary to perfect the
Administrative Agent's Liens therein, have been complied with to the
Collateral Agent's satisfaction with respect to such Account;
(l) owed by any state, municipality, or other political subdivision of
the United States of America, or any department, agency, public
corporation, or other instrumentality thereof and as to which the
Collateral Agent determines that its Lien therein is not or cannot be
perfected;
(m) which represents a sale on a xxxx-and-hold, guaranteed sale, sale
and return, sale on approval, consignment, or other repurchase or return
basis;
(n) which is evidenced by a promissory note or other instrument or by
chattel paper;
(o) if the Collateral Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such Account is
impaired or that the Account may not be paid by reason of the Account
Debtor's financial inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a Notice of Business Activities Report or similar
report in order to permit the applicable Borrower to seek judicial
enforcement in such State of payment of such Account, unless such Borrower
has qualified to do business in such state or has filed a Notice of
Business Activities Report or equivalent report for the then current year;
(q) which arises out of a sale not made in the ordinary course of the
applicable Borrower's business;
(r) with respect to which the goods giving rise to such Account have
not been shipped and delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by the
applicable Borrower, and, if applicable, accepted by the Account Debtor, or
the Account Debtor revokes its acceptance of such goods or services;
(s) owed by an Account Debtor or a group of affiliated Account Debtors
which is obligated to the applicable Borrower respecting Accounts the
aggregate unpaid balance of which exceeds fifteen percent (15%) of the
aggregate unpaid balance of all Accounts owed to such Borrower at such time
by all of the Borrower's Account Debtors, but only to the extent of such
excess;
(t) which is not subject to a first priority and perfected security
interest in favor of the Administrative Agent for the benefit of the
Secured Parties;
(u) as to which any Borrower is not able to bring suit or otherwise
enforce its remedies against the Account Debtor through judicial process;
(v) that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for merchandise sold to or services
rendered and accepted by the applicable Account Debtor;
(w) with respect to which an invoice, reasonably acceptable to the
Collateral Agent in form and substance, has not been sent to the applicable
Account Debtor;
(x) that (i) is not owned by any Borrower or (ii) is subject to any
Lien of any other person, other than Liens in favor of the Administrative
Agent, on behalf of itself and the Lenders;
(y) to the extent such Account exceeds any credit limit established by
the Collateral Agent, in its reasonable credit judgment, following prior
notice of such limit by the Collateral Agent to the Administrative
Borrower; and
(z) that is payable in any currency other than dollars.
In addition, (i) to the extent that the amounts in respect of any
Account in the general ledger are lower than the amounts in respect of such
Account in the monthly aging reports submitted to the Collateral Agent, the
difference between such amounts shall be excluded from the calculation of
Eligible Accounts and (ii) if PALCO does not own any Equity Interest in
Xxxxx, no Account of Xxxxx shall constitute an Eligible Account.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible
Accounts.
"Eligible Inventory" means Inventory which the Collateral Agent, in
its reasonable discretion, determines to be Eligible Inventory. Without
limiting the discretion of the Collateral Agent to establish other criteria
of ineligibility, Eligible Inventory shall not, unless the Collateral Agent
in its sole discretion elects, include any Inventory:
(a) that is not owned by the applicable Borrower;
(b) that is not subject to the Administrative Agent's Liens, which are
perfected as to such Inventory, or that are subject to any other Lien
whatsoever (other than the Liens described in clause (d) of Section 6.02
provided that such Permitted Liens (i) are junior in priority to the
Administrative Agent's Liens or subject to Reserves and (ii) do not impair
directly or indirectly the ability of the Administrative Agent to realize
on or obtain the full benefit of the Collateral);
(c) that does not consist of finished goods or raw materials;
(d) that consists of chemicals, samples, prototypes, supplies, or
packing and shipping materials;
(e) that is not in good condition, is unmerchantable, or does not meet
all standards imposed by any Governmental Authority, having regulatory
authority over such goods, their use or sale;
(f) that is not currently either usable or salable, at prices
approximating at least cost, in the normal course of the applicable
Borrower's business, or that is slow moving or stale;
(g) that is obsolete or returned or repossessed or used goods taken in
trade;
(h) that is located outside the placecountry-regionUnited States of
America (or that is in-transit from vendors or suppliers);
(i) that is located in a public warehouse or in possession of a bailee
or in a facility leased by the applicable Borrower, if the warehouseman, or
the bailee, or the lessor has not delivered to the Collateral Agent, if
requested by the Collateral Agent, a subordination agreement in form and
substance satisfactory to the Collateral Agent or if a Reserve for rents or
storage charges has not been established for Inventory at that location;
(j) that contains or bears any proprietary rights licensed to the
applicable Borrower by any Person, if the Collateral Agent is not satisfied
that the Administrative Agent may sell or otherwise dispose of such
Inventory in accordance with the terms of the Security Documents and
Section 6.05 without infringing the rights of the licensor of such
proprietary rights or violating any contract with such licensor (and
without payment of any royalties other than any royalties due with respect
to the sale or disposition of such Inventory pursuant to the existing
license agreement), and, as to which the applicable Borrower has not
delivered to the Collateral Agent a consent or sublicense agreement from
such licensor in form and substance acceptable to the Collateral Agent if
requested;
(k) that is Inventory placed on consignment;
(l) that consists of the difference between any Borrower's first-in,
first-out log costs and estimated market value log costs;
(m) that consists of the difference between any Borrower's first-in,
first-out lumber costs and reported market value lumber costs;
(n)(i) is not located on premises owned, leased or rented by Borrowers
and set forth in Disclosure Schedule 3.20 or (ii) is located at an owned
location subject to a mortgage in favor of a lender other than the
Administrative Agent, unless a reasonably satisfactory mortgagee waiver has
been delivered to the Collateral Agent;
(o) that is covered by a negotiable document of title, unless such
document has been delivered to the Collateral Agent with all necessary
endorsements, free and clear of all Liens except those in favor of the
Administrative Agent and Lenders;
(p) that is not of a type held for sale in the ordinary course of the
applicable Borrower's business;
(q) that breaches any of the representations or warranties pertaining
to Inventory set forth in the Loan Documents;
(r) that consists of any costs associated with "freight in" charges;
(s) that consists of Hazardous Materials or goods that can be
transported or sold only with licenses that are not readily available; or
(t) that is not covered by casualty insurance reasonably acceptable to
the Collateral Agent.
In addition, (i) to the extent that the amounts in respect of any
Inventory in the general ledger are lower than the amounts in respect of
such Inventory in the monthly aging reports submitted to the Collateral
Agent, the difference between such amounts shall be excluded from the
calculation of Eligible Inventory and (ii) to the extent that PALCO does
not own an Equity Interest in Xxxxx, no Inventory of Xxxxx shall constitute
Eligible Inventory.
If any Inventory at any time ceases to be Eligible Inventory, such
Inventory shall promptly be excluded from the calculation of Eligible
Inventory.
"Excluded Taxes" shall mean, with respect to any Agent, any Lender, or
any other recipient of any payment to be made by or on account of any
obligation of the Borrowers hereunder, (a) taxes imposed on (or measured
by) its net income as a result of a connection between such recipient and
the jurisdiction imposing such tax (or any political subdivision thereof),
other than any such connection arising solely from such recipient having
executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document and (b) in
the case of a Foreign Lender (other than an assignee pursuant to a request
by the Administrative Borrower under Section 2.21(a)), any United States
withholding tax that is imposed on amounts payable to such Foreign Lender
at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign
Lender's failure to comply with Section 2.20(d), except to the extent that
such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from PALCO with respect to such withholding tax pursuant to Section
2.20(a).
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
quotations for the day for such transactions received by the Collateral
Agent from three Federal funds brokers of recognized standing selected by
it.
"Fees" shall mean the Commitment Fees, the Administrative Agent Fees,
the Collateral Agent Fees and the Issuing Bank Fees.
"Issuing Bank" shall mean, LaSalle Bank National Association, in its
capacity as the issuer of Letters of Credit.
"L/C Exposure" shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all Letters of Credit at such time and (b) the aggregate
amount of all unreimbursed payments and disbursements under such Letters of
Credit. The L/C Exposure of any Lender at any time shall equal its Pro Rata
Percentage of the aggregate L/C Exposure at such time.
"Lenders" shall mean (a) the persons that deliver a Lender Addendum
(other than any such person that has ceased to be a party hereto pursuant
to an Assignment and Acceptance), (b) any person that has become a party
hereto pursuant to an Assignment and Acceptance, and (c) the Collateral
Agent; provided, that such designation with respect to the Collateral Agent
is solely for purposes of enabling its claims against under the Loan
Documents to be secured by liens under the Security Documents, and the
Collateral Agent shall have no other rights or obligations as a "Lender"
under the Loan Documents, including rights to approve or disapprove
amendments or modifications or rights to receive payments from collateral,
except in accordance with Section 6.5 of the Guarantee and Security
Agreement or except as otherwise set forth in such Loan Document. . Unless
the context otherwise requires, the term "Lenders" shall include the
Swingline Lender and the Issuing Bank to the extent that LaSalle Bank (or
any Successor Issuing Bank) may have rights or obligations in addition to
those of the other Lenders due to its status as Issuing Bank.
"Letter of Credit" shall have the meaning assigned to such term in
Section 2.01 (b).
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate per annum determined by the Collateral Agent
at approximately 11:00 a.m., London time, on the date that is two Business
Days prior to the commencement of such Interest Period by reference to the
British Bankers' Association Interest Settlement Rates for deposits in
dollars (as set forth by the Bloomberg Information Service or any successor
thereto or any other service selected by the Collateral Agent which has
been nominated by the British Bankers' Association as an authorized
information vendor for the purpose of displaying such rates) for a period
equal to such Interest Period; provided that, to the extent that an
interest rate is not ascertainable pursuant to the foregoing provisions of
this definition, the "LIBO Rate" shall be the interest rate per annum
determined by the Collateral Agent to be the average of the rates per annum
at which deposits in dollars are offered for such relevant Interest Period
to major banks in the London interbank market in London, England by the
Collateral Agent at approximately 11:00 a.m. (London time) on the date that
is two Business Days prior to the beginning of such Interest Period.
"Loan Documents" shall mean this Agreement, the Master Letter of
Credit Agreement and the Security Documents. "Material Adverse Effect"
shall mean a material adverse condition or material adverse change in or
materially affecting (a) the business, assets, liabilities, operations or
condition (financial or otherwise) or prospects of PALCO and the
Subsidiaries, taken as a whole, or (b) the validity or enforceability of
any of the Loan Documents or the rights and remedies of the Arranger, the
Collateral Agent, the Administrative Agent, or the Secured Parties
thereunder.
"Material Adverse Effect" shall mean a material adverse condition or
material adverse change in or materially affecting (a) the business,
assets, liabilities, operations or condition (financial or otherwise) or
prospects of PALCO and the Subsidiaries, taken as a whole, or (b) the
validity or enforceability of any of the Loan Documents or the rights and
remedies of the Arranger, the Collateral Agent, the Administrative Agent,
or the Secured Parties thereunder.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale or
Recovery Event, the proceeds thereof in the form of cash (including any
such proceeds subsequently received (as and when received) in respect of
noncash consideration initially received), net of (i) selling expenses
(including reasonable and customary broker's fees or commissions, legal
fees, transfer and similar taxes incurred by the Borrowers and the
Subsidiaries in connection therewith and the Borrowers' good faith estimate
of income taxes paid or payable in connection with such sale, after taking
into account any available tax credits or deductions and any tax sharing
arrangements), (ii) amounts provided as a reserve, in accordance with GAAP
and acceptable to each Agent, against any liabilities under any
indemnification obligations or purchase price adjustment associated with
such Asset Sale (provided that, to the extent and at the time any such
amounts are released from such reserve, such amounts shall constitute Net
Cash Proceeds), (iii) the principal amount, premium or penalty, if any,
interest and other amounts on any Indebtedness for borrowed money which is
secured by the asset sold in such Asset Sale and which is required to be
repaid with such proceeds (other than Indebtedness hereunder or any such
Indebtedness assumed by the purchaser of such asset) and (iv) to the extent
not otherwise included in clause (i) above, Capital Expenditures associated
with the preparation and sale of non-core assets, not to exceed $5,000,000
in the aggregate; and (b) with respect to any issuance or disposition of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all
taxes and reasonable and customary fees, commissions, costs and other
expenses incurred by the Borrowers and the Subsidiaries in connection
therewith.
"Net Orderly Liquidation Value" means at any time, with respect to
Inventory, the orderly liquidation value (expressed as a percentage of the
book value and on a non-conversion basis), if any, of such Inventory (less
estimated liquidation expenses) at such time, as determined by reference to
the most recent Appraisal thereof delivered to Collateral Agent pursuant to
Section 5.04(k), which is reasonably satisfactory to Collateral Agent.
"Prime Rate" shall mean the rate of interest per annum announced from
time to time by XX Xxxxxx Xxxxx Bank, N.A as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall
be effective as of the opening of business on the date such change is
announced as being effective. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually available.
"Reserves" shall mean reserves that limit the availability of credit
hereunder, consisting of reserves against the Commitments, Eligible
Accounts or Eligible Inventory, established by either Agent from time to
time in such Agent's reasonable credit judgment. Without limiting the
generality of the foregoing, the following reserves shall be deemed to be a
reasonable exercise of each Agent's credit judgment: (a) a reserve for
accrued, unpaid interest on the Obligations, (b) reserves for rent at
leased locations subject to statutory or contractual landlord liens, (c)
reserves for any lumberman's liens, logger's liens or other priming liens,
(d) Inventory shrinkage, (e) environmental compliance reserves, (f)
dilution, and (g) warehousemen's or bailees' charges.
"Statutory Reserves" shall mean 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 and any other banking
authority, domestic or foreign, to which any Agent or any Lender (including
any branch, Affiliate or other fronting office making or holding a Loan) is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. Statutory Reserves shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Swingline Lender" shall mean LaSalle, in its capacity as lender of
Swingline Loans hereunder.
SECTION 3.2 The definition of each of "Fee Letter," "L/C
Disbursement," "L/C Fee Payment Date," "L/C Guaranty Fee," and "Letter of
Credit Guaranty" set forth in Section 1.01 of the Credit Agreement are
hereby deleted their entirety.
SECTION 3.3 Article II of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"ARTICLE II
THE CREDITS
SECTION 2.01 Commitments.
(a) Subject to the terms and conditions hereof and relying upon
the representations and warranties set forth herein, each Lender
agrees, severally and not jointly, to make Loans to the Borrowers, at
any time and from time to time on or after the Closing Date and until
the earlier of the Maturity Date and the termination of the Commitment
of such Lender in accordance with the terms hereof, in an aggregate
principal amount at any time outstanding that (i) will not result in
such Lender's Revolving Credit Exposure exceeding such Lender's
Revolving Credit Commitment and (ii) will not result in the Aggregate
Revolving Credit Exposure exceeding the Borrowing Base, subject to the
Administrative Agent's authority, to make Protective Advances pursuant
to the terms of Section 2.24. Within the limits set forth in clause
(ii) of the preceding sentence and subject to the terms, conditions
and limitations set forth herein, the Borrowers may borrow, pay or
prepay and reborrow Loans.
(b) L/C Commitment. Subject to Section 2.23, the Issuing Bank
agrees to issue letters of credit, in each case containing such terms
and conditions as are permitted by this Agreement and are reasonably
satisfactory to the Issuing Bank (each, a "Letter of Credit"), at the
request of and for the account of the Borrowers from time to time
before the Maturity Date and, as more fully set forth in Section 2.23,
each Lender agrees to purchase a participation in each such Letter of
Credit; provided that (a) the aggregate Stated Amount of all Letters
of Credit shall not at any time exceed $ 20,000,000 and (b) the
Aggregate Revolving Credit Exposure shall not at any time exceed the
Borrowing Availability.
SECTION 2.02 Loans.
(a) Each Loan (other than Swingline Loans) shall be made as part
of a Borrowing consisting of Loans of the same Type made by the
Lenders ratably in accordance with their respective Commitments;
provided, however, that the failure of any Lender to make any Loan
required to be made by it shall not in itself relieve any other Lender
of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other
Lender to make any Loan required to be made by such other Lender).
Except for Loans deemed made pursuant to Section 2.02(f) or Section
2.24, and subject to Section 2.22 relating to Swingline Loans, the
Loans comprising any Borrowing shall be in an aggregate principal
amount that is (i) an integral multiple of $250,000 and not less than
$750,000 or (ii) equal to the remaining available balance of the
applicable Commitments.
(b) Subject to Sections 2.08, 2.15 and 2.24, each Borrowing shall
be comprised entirely of ABR Loans or Eurodollar Loans as the
Administrative Borrower may request pursuant to Section 2.03; provided
that all Borrowings made on the Closing Date and during the period
ending seven days thereafter must be made as ABR Borrowings (and may
not be converted into Eurodollar Borrowings until the end of such
seven-day period), and no Borrowings may be converted into or
continued as a Eurodollar Borrowing having an Interest Period in
excess of one month prior to the date which is 60 days after the
Closing Date. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender
to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrowers to repay such Loan in
accordance with the terms of this Agreement. Borrowings of more than
one Type may be outstanding at the same time; provided, however, that
the Administrative Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than five (5) Eurodollar
Borrowings outstanding hereunder at any time. For purposes of the
foregoing, Borrowings having different Interest Periods, regardless of
whether they commence on the same date, shall be considered separate
Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f)
or Section 2.24 and subject to Section 2.22 relating to Swingline
Loans, each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available
funds to such account in New York City as the Administrative Agent may
designate not later than 2:00 p.m., New York City time, and the
Administrative Agent shall promptly credit the amounts so received to
an account in the name of the applicable Borrower, designated by the
Administrative Borrower in the applicable Borrowing Request or, if a
Borrowing shall not occur on such date because any condition precedent
herein specified shall not have been met, return the amounts so
received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion
of such Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on
the date of such Borrowing in accordance with paragraph (c) of this
Section and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrowers on such date a
corresponding amount. If the Administrative Agent shall have so made
funds available then, to the extent that such Lender shall not have
made such portion available to the Administrative Agent, such Lender
and the Borrowers severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to
the Borrowers to but excluding the date such amount is repaid to the
Administrative Agent at (i) in the case of the Borrowers, the interest
rate applicable at the time to the Loans comprising such Borrowing or
(ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short term
funds (which determination shall be conclusive absent manifest error).
If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan
as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the
Administrative Borrower shall not be entitled to request any Borrowing
if the Interest Period requested with respect thereto would end after
the Maturity Date.
SECTION 2.03 Borrowing Procedure. In order to request a Borrowing
(other than a Swingline Loan or a deemed Borrowing pursuant to Section
2.02(f) or Section 2.24, as to which this Section 2.03 shall not
apply), the Administrative Borrower shall hand deliver or fax to the
Collateral Agent a duly completed Borrowing Request (a) in the case of
a Eurodollar Borrowing, not later than 2:00 p.m., New York City time,
three Business Days before a proposed Borrowing and (b) in the case of
an ABR Borrowing, not later than 2:00 p.m., New York City time, one
Business Day before a proposed Borrowing. Each Borrowing Request shall
be irrevocable, shall be signed by or on behalf of the Administrative
Borrower and shall specify the following information: (i) whether the
Borrowing then being requested is to be a Eurodollar Borrowing or an
ABR Borrowing; (ii) the date of such Borrowing (which shall be a
Business Day); (iii) the number and location of the account to which
funds are to be disbursed (which shall be an account that complies
with the requirements of Section 2.02(c)); (iv) the amount of such
Borrowing; (v) if such Borrowing is to be a Eurodollar Borrowing, the
initial Interest Period with respect thereto and (vi) a Borrowing Base
Certificate as of such date; provided, however, that, notwithstanding
any contrary specification in any Borrowing Request, each requested
Borrowing shall comply with the requirements set forth in Section
2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing.
If no Interest Period with respect to any Eurodollar Borrowing is
specified in any such notice, then the Administrative Borrower shall
be deemed to have selected an Interest Period of one month's duration.
The Collateral Agent shall promptly advise the applicable Lenders of
any notice given in accordance with this Section 2.03 (and the
contents thereof), and of each Lender's portion of the requested
Borrowing.
SECTION 2.04 Repayment of Loans; Evidence of Debt.
(a) The Borrowers hereby unconditionally promise to pay to the
Collateral Agent for the account of each Lender the then unpaid
principal amount of each Loan of such Lender made to the Borrowers on
the Maturity Date. The Borrowers hereby unconditionally promise to pay
to the Swingline Lender the then unpaid principal amount of each
Swingline Loan made to the Borrowers on the Maturity Date or the last
day of each calendar month.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrowers to such Lender resulting from each Loan made by such Lender
to the Borrowers from time to time, including the amounts of principal
and interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Collateral Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof
and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable
from the Borrowers to each Lender hereunder and (iii) the amount of
the sum received by the Collateral Agent hereunder from the Borrowers
or any Guarantor and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section shall be prima facie evidence
of the existence and amounts of the obligations therein recorded;
provided, however, that the failure of any Lender or any Agent to
maintain such accounts or any error therein shall not in any manner
affect the obligations of the Borrowers to repay the Loans made to the
Borrowers in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it hereunder be
evidenced by a promissory note. In such event, the Borrowers shall
execute and deliver to such Lender a promissory note payable to such
Lender and its registered assigns and in a form and substance
reasonably acceptable to the Collateral Agent. Notwithstanding any
other provision of this Agreement, in the event any Lender shall
request and receive such a promissory note, the interests represented
by such note shall at all times (including after any assignment of all
or part of such interests pursuant to Section 9.04) be represented by
one or more promissory notes payable to the payee named therein or its
registered assigns.
SECTION 2.05 Fees.
(a) The Borrowers agree to pay to each Lender, through the
Collateral Agent, on the last Business Day of each calendar month in
each year and on each date on which any Commitment of such Lender
shall expire or be terminated as provided herein, a commitment fee (a
"Commitment Fee") equal to the Commitment Fee Rate on the average
daily unused amount of the Commitment of such Lender (other than the
Swingline Commitment) during the preceding month (or other period
commencing with the date hereof or ending with the Maturity Date or
the date on which the Commitments of such Lender shall expire or be
terminated). All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. The Commitment
Fee due to each Lender shall commence to accrue on the date hereof and
shall cease to accrue on the date on which the Commitment of such
Lender shall expire or be terminated as provided herein. For purposes
of calculating Commitment Fees, no portion of the Commitments shall be
deemed utilized under Section 2.22 as a result of outstanding
Swingline Loans.
(b) The Borrowers agree to pay to the Administrative Agent and
the Arranger, for its own account, the fees in the amounts and at the
times from time to time agreed to in writing by the Borrowers (or any
Affiliate) and the Administrative Agent, including pursuant to the
Administrative Fee Letter (the "Administrative Agent Fees"). The
Borrowers agree to pay to the Collateral Agent, for its own account,
the fees in the amounts and at the times from time to time agreed to
in writing by the Borrowers (or any Affiliate) and the Collateral
Agent, including pursuant to the Collateral Agent Fee Letter (the
"Collateral Agent Fees").
(c) The Borrowers agree to pay to the Collateral Agent for the
account of each Lender a letter of credit fee for each Letter of
Credit equal to the L/C Fee Rate in effect from time to time of such
Lender's Pro Rata Percentage (as adjusted from time to time) of the
undrawn amount of such Letter of Credit (computed for the actual
number of days elapsed on the basis of a year of 360 days); provided
that, upon the election of either Agent or the Required Lenders, the
rate applicable to each Letter of Credit shall be increased by 2% at
any time that an Event of Default exists (without duplication of any
default interest charge imposed on such letter of credit fee, if any,
pursuant to Section 2.07). Such letter of credit fee shall be payable
in arrears on the last day of each calendar quarter and on the earlier
of the Maturity Date or the termination of all the Commitments (or
such later date on which such Letter of Credit expires or is
terminated) for the period from the date of the issuance of each
Letter of Credit (or the last day on which the letter of credit fee
was paid with respect thereto) to the date such payment is due or, if
earlier, the date on which such Letter of Credit expired or was
terminated. In addition, with respect to each Letter of Credit, the
Borrowers agree to pay to the Issuing Bank, for its own account, (i)
such fees and expenses as the Issuing Bank customarily requires in
connection with the issuance, negotiation, processing and/or
administration of letters of credit in similar situations and (ii) a
letter of credit fronting fee in the amount and at the times agreed to
by the Borrowers and the Issuing Bank (clause (i) and (ii) referred to
herein collectively, as the "Issuing Bank Fees").
(d) If, on or prior to the second anniversary of the Closing
Date, the Revolving Credit Commitment of any Lender is reduced or
terminated, the Borrowers agree to pay to the Collateral Agent for the
benefit of such Lender on the date of such reduction or termination a
fee equal to the Applicable Percentage (as defined below) multiplied
by the amount of each reduction (or the entire amount of such
Revolving Credit Commitment in the event of a termination thereof). As
used herein, the term "Applicable Percentage" shall mean (w) 3%, in
the case of a reduction or termination of the Revolving Credit
Commitment on or prior to the first anniversary of the Closing Date,
(x) 2%, in the case of a reduction or termination of the Revolving
Credit Commitment after the first anniversary of the Closing Date but
on or prior to the second anniversary thereof, (y) 1% in the case of a
reduction or termination of the Revolving Credit Commitment after the
second anniversary of the Closing Date or on or prior to the third
anniversary of the Closing Date, and (z) 0%, in the case of a
prepayment after the third anniversary of the Closing Date.
(e) All Fees shall be paid on the dates due, in immediately
available funds, to the Collateral Agent for distribution, if and as
appropriate, among the Lenders, except that the Issuing Bank Fees
shall be paid for the account of the Issuing Bank. Once paid, none of
the Fees shall be refundable under any circumstances.
SECTION 2.06 Interest on Loans.
(a) Subject to the provisions of Section 2.07, the Loans
comprising each ABR Borrowing, including each Swingline Loan, shall
bear interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin in effect from time to
time.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on
the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable
Margin in effect from time to time.
(c) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in
this Agreement. The applicable Alternate Base Rate or Adjusted LIBO
Rate for each Interest Period or day within an Interest Period, as the
case may be, shall be determined by the Collateral Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.07 Default Interest. If an Event of Default has
occurred and is continuing and either Agent or the Required Lenders so
elect, the Borrowers shall on written demand from time to time pay
interest, to the extent permitted by law, on all Obligations, to but
excluding the date of actual payment (after as well as before
judgment) at the rate otherwise applicable to Loans pursuant to
Section 2.06 plus 2.00% per annum.
SECTION 2.08 Alternate Rate of Interest. In the event, and on
each occasion, that prior to the commencement of any Interest Period
for a Eurodollar Borrowing (a) the Collateral Agent shall have
determined that adequate and reasonable means do not exist for
determining the Adjusted LIBO Rate for such Interest Period or (b) the
Collateral Agent is advised by the Required Lenders in respect of the
Facility that the Adjusted LIBO Rate for such Interest Period will not
adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest
Period, the Collateral Agent shall, as soon as practicable thereafter,
give written or fax notice of such determination to the Borrowers and
the Lenders. In the event of any such determination, until the
Collateral Agent shall have advised the Borrowers and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any
request by the Administrative Borrower for a Eurodollar Borrowing
pursuant to Section 2.03 or 2.10 shall be deemed to be a request for
an ABR Borrowing and (ii) any Interest Period election that requests
the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be ineffective. Each determination by
the Collateral Agent under this Section 2.08 shall be conclusive
absent manifest error.
SECTION 2.09 Termination and Reduction of Commitments.
(a) Unless previously terminated in accordance with the terms
hereof, the Commitments shall automatically terminate on the Maturity
Date. Notwithstanding the foregoing, all the Commitments shall
automatically terminate at 5:00 p.m., New York City time, on
July 18, 2006, if the initial Credit Event shall not have occurred by
such time.
Upon at least three Business Days' prior irrevocable written or
fax notice to the Collateral Agent, the Borrowers may at any time in
whole permanently terminate, or from time to time in part permanently
reduce, the Commitments; provided, however, that (i) each partial
reduction of the Commitments shall be in an integral multiple of
$1,000,000 and in a minimum amount of $1,000,000 and (ii) the
Commitments shall not be reduced to an amount that is less than the
Aggregate Revolving Credit Exposure then in effect.
(b) Each reduction in the Commitments hereunder shall be made
ratably among the applicable Lenders in accordance with their Pro Rata
Percentages. The Borrowers shall pay to the Collateral Agent for the
account of the applicable Lenders, on the date of each termination or
reduction, the Commitment Fees on the amount of the Commitments so
terminated or reduced accrued to but excluding the date of such
termination or reduction.
SECTION 2.10 Conversion and Continuation of Borrowings. The
Administrative Borrower shall have the right at any time upon prior
irrevocable notice to the Collateral Agent (a) not later than 12:00
p.m., New York City time, one Business Day prior to conversion, to
convert any Eurodollar Borrowing of the Borrowers into an ABR
Borrowing, (b) not later than 2:00 p.m., New York City time, three
Business Days prior to conversion or continuation, to convert any ABR
Borrowing of the Borrowers into a Eurodollar Borrowing or to continue
any Eurodollar Borrowing of the Borrowers as a Eurodollar Borrowing
for an additional Interest Period and (c) not later than 2:00 p.m.,
New York City time, three Business Days prior to conversion, to
convert the Interest Period with respect to any Eurodollar Borrowing
of the Borrowers to another permissible Interest Period, subject in
each case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued
Borrowing;
(ii) if less than all the outstanding principal amount of
any Borrowing shall be converted or continued, then each
resulting Borrowing shall satisfy the limitations specified in
Sections 2.02(a) and 2.02(b) regarding the principal amount and
maximum number of Borrowings of the relevant Type;
(iii) each conversion shall be effected by each Lender and
the Collateral Agent by recording for the account of such Lender
the new Loan of such Lender resulting from such conversion and
reducing the Loan (or portion thereof) of such Lender being
converted by an equivalent principal amount; accrued interest on
any Eurodollar Loan (or portion thereof) being converted shall be
paid by the Borrowers at the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time
other than the end of the Interest Period applicable thereto, the
Borrowers shall pay, upon demand, any amounts due to the Lenders
pursuant to Section 2.16;
(v) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or
continued as a Eurodollar Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be
converted into or continued as a Eurodollar Borrowing by reason
of the immediately preceding clause shall be automatically
converted at the end of the Interest Period in effect for such
Borrowing into an ABR Borrowing;
(vii) after the occurrence and during the continuance of a
Default or Event of Default, no outstanding Loan may be converted
into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable
and shall refer to this Agreement and specify (i) the identity and
amount of the Borrowing that the Administrative Borrower request be
converted or continued, (ii) whether such Borrowing is to be converted
to or continued as a Eurodollar Borrowing or an ABR Borrowing, (iii)
if such notice requests a conversion, the date of such conversion
(which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest
Period with respect thereto. If no Interest Period is specified in any
such notice with respect to any conversion to or continuation as a
Eurodollar Borrowing, the Administrative Borrower shall be deemed to
have selected an Interest Period of one month's duration. The
Collateral Agent shall advise the Lenders of any notice given pursuant
to this Section 2.10 and of each Lender's portion of any converted or
continued Borrowing. If the Administrative Borrower shall not have
given notice in accordance with this Section 2.10 to continue any
Borrowing into a subsequent Interest Period (and shall not otherwise
have given notice in accordance with this Section 2.10 to convert such
Borrowing), such Borrowing shall, at the end of the Interest Period
applicable thereto (unless repaid pursuant to the terms hereof),
automatically be converted or continued into an ABR Borrowing.
SECTION 2.11 [Reserved]
SECTION 2.12 Prepayment.
(a) The Borrowers shall, subject to the requirements of Section
2.05(b), have the right at any time and from time to time to prepay
any Borrowing, in whole or in part, upon at least three Business Days'
prior written or fax notice (or telephone notice promptly confirmed by
written or fax notice) in the case of Eurodollar Loans, or written or
fax notice (or telephone notice promptly confirmed by written or fax
notice) at least one Business Day prior to the date of prepayment in
the case of ABR Loans, to the Collateral Agent before 2:00 p.m., New
York City time; provided, however, that each partial prepayment shall
be in an amount that is an integral multiple of $250,000 and not less
than $750,000.
(b) Each notice of prepayment shall specify the prepayment date
and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrowers to prepay
such Borrowing by the amount stated therein on the date stated
therein. All prepayments under this Section 2.12 shall be subject to
Section 2.16, but otherwise without premium or penalty. All
prepayments under this Section 2.12 shall be accompanied by accrued
and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment.
SECTION 2.13 Mandatory Prepayments.
(a) In the event of any termination of all the Commitments, the
Borrowers shall, on the date of such termination, repay or prepay all
its outstanding Borrowings and all its outstanding Swingline Loans and
replace all its outstanding Letters of Credit and/or shall Cash
Collateralize in full all obligations arising with respect to the
Letters of Credit. If as a result of any partial reduction of the
Commitments the Aggregate Revolving Credit Exposure would exceed the
Commitments after giving effect thereto, then the Borrowers shall, on
the date of such reduction, repay or prepay Borrowings or Swingline
Loans (or a combination thereof) and/or shall Cash Collateralize in
full all obligations arising with respect to the Letters of Credit in
an amount sufficient to eliminate such excess.
(b) In the event and on each occasion that Aggregate Revolving
Credit Exposure (other than amounts constituting Protective Advances)
exceeds the Borrowing Base, the Borrowers shall immediately repay
Loans and/or Cash Collateralize outstanding Letters of Credit to the
extent necessary to cause the Aggregate Revolving Credit Exposure not
to exceed the Borrowing Base.
(c) In connection with any Asset Sale which consists of (i) the
sale of all of the Equity Interests in Xxxxx or (ii) the sale of
Eligible Accounts and/or Eligible Inventory (or the sale of certain of
such assets and other assets of a Borrower), the Borrowers shall apply
the Net Cash Proceeds of such sale to repay outstanding Revolving
Loans and/or shall Cash Collateralize in full all obligations arising
with respect to the Letters of Credit in an amount equal to the lesser
of (i) the amount necessary to cause the Borrowers to comply with
Section 2.13(b) or (ii) the sum of (a) 85% of the Net Amount of the
Eligible Accounts sold in such Asset Sale plus (b) 75% of the value
(being the lower of cost (on a first-in first out basis) or market) of
the Eligible Inventory sold in such Asset Sale.
SECTION 2.14 Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision of this Agreement, if any
Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, any Lender or any
Agent (except any such reserve requirement which is reflected in
the Adjusted LIBO Rate) or
(ii) (impose on any Lender or any Agent or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein, and the result of any of the foregoing
shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to any Lender or
any Agent of issuing or maintaining any Letter of Credit or
Letter of Credit Guaranty or purchasing or maintaining a
participation therein or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal,
interest or otherwise) by an amount deemed by such Lender or such
Agent to be material, then the Borrowers will pay to such Lender
or such Agent, as the case may be, upon demand such additional
amount or amounts as will compensate such Lender, such Agent or
the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.
(b) If any Lender or any Agent shall have determined that any Change
in Law regarding capital adequacy has or would have the effect of reducing
the rate of return on such Lender's or such Agent's capital or on the
capital of such Lender's or such Agent's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit purchased by, such Lender to a level below that which
such Lender, any Agent or such Lender's or such Agent's holding company
could have achieved but for such Change in Law (taking into consideration
such Lender's or such Agent's policies and the policies of such Lender's or
such Agent's holding company with respect to capital adequacy) by an amount
deemed by such Lender or such Agent to be material, then from time to time
the Borrowers shall pay to such Lender or such Agent, as the case may be,
such additional amount or amounts as will compensate such Lender or such
Agent or such Lender's or such Agent's holding company for any such
reduction suffered.
(c) A certificate of a Lender or any Agent setting forth the amount or
amounts necessary to compensate such Lender or such Agent or its holding
company, as applicable, as specified in paragraph (a) or (b) of this
Section 2.14 shall be delivered to the Borrowers and shall be conclusive
absent manifest error. The Borrowers shall pay such Lender or such Agent,
as the case may be, the amount or amounts shown as due on any such
certificate delivered by it within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or any Agent to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's or the such Agent's right to demand such compensation; provided
that the Borrowers shall not be under any obligation to compensate any
Lender or any Agent under paragraph (a) or (b) above for increased costs or
reductions with respect to any period prior to the date that is 180 days
prior to such request if such Lender or such Agent knew or could reasonably
have been expected to know of the circumstances giving rise to such
increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased
costs or reductions; provided further that the foregoing limitation shall
not apply to any increased costs or reductions arising out of the
retroactive application of any Change in Law within such 180-day period.
The protection of this Section shall be available to each Lender and each
Agent regardless of any possible contention of the invalidity or
inapplicability of the Change in Law that shall have occurred or been
imposed.
SECTION 2.15 Change in Legality.
(a) Notwithstanding any other provision of this Agreement, if any
Change in Law shall make it unlawful for any Lender to make or maintain any
Eurodollar Loan or to give effect to its obligations as contemplated hereby
with respect to any Eurodollar Loan, then, by written notice to the
Administrative Borrower and to the Collateral Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such
Lender hereunder (or be continued for additional Interest Periods and
ABR Loans will not thereafter (for such duration) be converted into
Eurodollar Loans), whereupon any request for a Eurodollar Borrowing
(or to convert an ABR Borrowing to a Eurodollar Borrowing or to
continue a Eurodollar Borrowing for an additional Interest Period)
shall, as to such Lender only, be deemed a request for an ABR Loan (or
a request to continue an ABR Loan as such for an additional Interest
Period or to convert a Eurodollar Loan into an ABR Loan, as the case
may be), unless such declaration shall be subsequently withdrawn; and
(ii) such Lender may require that all outstanding Eurodollar
Loans made by it be converted to ABR Loans, in which event all such
Eurodollar Loans shall be automatically converted to ABR Loans as of
the effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii)
above, all payments and prepayments of principal that would otherwise have
been applied to repay the Eurodollar Loans that would have been made by
such Lender or the converted Eurodollar Loans of such Lender shall instead
be applied to repay the ABR Loans made by such Lender in lieu of, or
resulting from the conversion of, such Eurodollar Loans. Any such
conversion of a Eurodollar Loan under (i) above shall be subject to Section
2.16.
(b) For purposes of this Section 2.15, a notice to the Administrative
Borrower by any Lender shall be effective as to each Eurodollar Loan made
by such Lender, if lawful, on the last day of the Interest Period then
applicable to such Eurodollar Loan; in all other cases such notice shall be
effective on the date of receipt by the Borrowers.
SECTION 2.16 Indemnity. The Borrowers shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of (a) any event, other than a default by such Lender in the
performance of its obligations hereunder, which results in (i) such Lender
receiving or being deemed to receive any amount on account of the principal
of any Eurodollar Loan prior to the end of the Interest Period in effect
therefor, (ii) the conversion of any Eurodollar Loan to an ABR Loan, or the
conversion of the Interest Period with respect to any Eurodollar Loan, in
each case other than on the last day of the Interest Period in effect
therefor or (iii) any Eurodollar Loan to be made by such Lender (including
any Eurodollar Loan to be made pursuant to a conversion or continuation
under Section 2.10) not being made after notice of such Loan shall have
been given by the Administrative Borrower hereunder (any of the events
referred to in this clause (a) being called a "Breakage Event") or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an
amount equal to the excess, as reasonably determined by such Lender, of (i)
its cost of obtaining funds for the Eurodollar Loan that is the subject of
such Breakage Event for the period from the date of such Breakage Event to
the last day of the Interest Period in effect (or that would have been in
effect) for such Loan over (ii) the amount of interest likely to be
realized by such Lender in redeploying the funds released or not utilized
by reason of such Breakage Event for such period. A certificate of any
Lender setting forth any amount or amounts which such Lender is entitled to
receive pursuant to this Section 2.16 shall be delivered to the Borrowers
and shall be conclusive absent manifest error.
SECTION 2.17 Pro Rata Treatment. Except as provided below in this
Section 2.17 with respect to Swingline Loans and as required under Section
2.15, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the
Commitment Fees, each reduction of the Commitments and each conversion of
any Borrowing to or continuation of any Borrowing as a Borrowing of any
Type shall be allocated pro rata among the Lenders in accordance with their
respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal
amounts of their outstanding Loans). For purposes of determining the
available Revolving Credit Commitments of the Lenders at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Revolving
Credit Commitments of the Lenders (including those Lenders which shall not
have made Swingline Loans) pro rata in accordance with such respective
Revolving Credit Commitments. Each Lender agrees that in computing such
Lender's portion of any Borrowing to be made hereunder, the Collateral
Agent may, in its discretion, round each Lender's percentage of such
Borrowing to the next higher or lower whole dollar amount.
SECTION 2.18 Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrowers or any other Loan Party, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other
security or interest arising from, or in lieu of, such secured claim,
received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment
(voluntary or involuntary) in respect of any Loan or Loans or participation
in all Letters of Credit as a result of which the unpaid principal portion
of its Loans and participations in all Letters of Credit shall be
proportionately less than the unpaid principal portion of the Loans and
participations in the Letters of Credit of any other Lender, it shall be
deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for,
a participation in the Loans and L/C Exposure of such other Lender, so that
the aggregate unpaid principal amount of the Loans and L/C Exposure and
participations in Loans and L/C Exposure held by each Lender shall be in
the same proportion to the aggregate unpaid principal amount of all Loans
and L/C Exposure then outstanding as the principal amount of its Loans and
L/C Exposure prior to such exercise of banker's lien, setoff or
counterclaim or other event was to the principal amount of all Loans and
L/C Exposure outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that if any such purchase
or purchases or adjustments shall be made pursuant to this Section 2.18 and
the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustment restored
without interest. The Borrowers expressly consent to the foregoing
arrangements and agrees that any Lender holding a participation in a Loan
or Letter of Credit deemed to have been so purchased may exercise any and
all rights of banker's lien, setoff or counterclaim with respect to any and
all moneys owing by the Borrowers to such Lender by reason thereof as fully
as if such Lender had made a Loan directly to the Borrowers in the amount
of such participation.
SECTION 2.19 Payments.
(a) The Borrowers shall make each payment (including principal of or
interest on any Borrowing reimbursement obligations under a Letter of
Credit or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 (noon), placeCityNew York City time, on the
date when due in immediately available dollars, without setoff, defense or
counterclaim. Each such payment (other than principal of and interest on
Swingline Loans, which shall be paid directly to the Swingline Lender
except as otherwise provided in Section 2.21(e)) shall be made to the
Collateral Agent at its offices at addressStreet135 X. XxXxxxx Street,
Suite 425, CityChicago, StateIllinois PostalCode60603. All payments
hereunder and under each other Loan Document shall be made in dollars.
(b) Except as otherwise expressly provided herein, whenever any
payment (including principal of or interest on any Borrowing or any Fees or
other amounts) hereunder or under any other Loan Document shall become due,
or otherwise would occur, on a day that is not a Business Day, such payment
may be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of interest or Fees, if
applicable.
SECTION 2.20 Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrowers or any other Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if any Indemnified Taxes or
Other Taxes are required to be withheld or deducted from such payments,
then (i) the sum payable by the Borrowers shall be increased as necessary
so that after all required deductions or withholding (including deductions
or withholdings applicable to additional sums payable under this Section
2.20) the Collateral Agent, the Administrative Agent or such Lender (as the
case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrowers or such other Loan Party
shall make (or cause to be made) such deductions and (iii) the Borrowers or
such other Loan Party shall pay (or cause to be paid) the full amount
deducted to the relevant Governmental Authority in accordance with
applicable law. In addition, the Borrowers or any other Loan Party
hereunder shall pay (or cause to be paid) any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(b) The Borrowers shall indemnify the Collateral Agent, the
Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid
by the Collateral Agent or such Lender, as the case may be, or any of their
respective Affiliates, on or with respect to any payment by or on account
of any obligation of any Loan Party hereunder or under any other Loan
Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any penalties,
interest and expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed
or asserted by the relevant Governmental Authority. A certificate as to the
amount of such payment or liability delivered to the Borrowers by a Lender,
or by the Collateral Agent on its behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(c) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes pursuant to Section 2.20(a), and in any event within 30 days of
any such payment being due, the Borrowers shall deliver (or cause to be
delivered) to each Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Collateral Agent.
(d) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrowers is located, or any treaty to which such jurisdiction is a party,
with respect to payments under this Agreement shall deliver to the
Administrative Borrower (with a copy to each Agent), at the reasonable
written request of the Administrative Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate; provided that
such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender's judgment such completion, execution or
delivery would not materially prejudice the legal position of such Lender.
In addition, each Foreign Lender shall (i) furnish on or before it becomes
a party to the Agreement either (a) two accurate and complete originally
executed U.S. Internal Revenue Service Form W-8BEN (or successor form) or
(b) an accurate and complete U.S. Internal Revenue Service Form W-8ECI (or
successor form), certifying, in either case, to such Foreign Lender's legal
entitlement to an exemption or reduction from U.S. Federal withholding tax
with respect to all interest payments hereunder, and (ii) provide a new
Form W 8BEN (or successor form) or U.S. Internal Revenue Service Form
W-8ECI (or successor form) upon the expiration or obsolescence of any
previously delivered form to reconfirm any complete exemption from, or any
entitlement to a reduction in, U.S. Federal withholding tax with respect to
any interest payment hereunder; provided that any Foreign Lender that is
not a "bank" within the meaning of Section 881(c)(3)(A) of the Tax Code and
is relying on the so-called "portfolio interest exemption" shall also
furnish a "Non-Bank Certificate" in the form of Exhibit G together with a
U.S. Internal Revenue Service Form W 8BEN. Notwithstanding any other
provision of this paragraph, a Foreign Lender shall not be required to
deliver any form pursuant to this paragraph that such Foreign Lender is not
legally able to deliver.
(e) Any Lender that is a United States person, as defined in Section
7701(a)(30) of the Tax Code, and is not an exempt recipient within the
meaning of Treasury Regulations Section 1.6049-4(c) shall deliver to the
Borrowers (with a copy to each Agent) two accurate and complete original
signed copies of Internal Revenue Service Form W-9, or any successor form
that such person is entitled to provide at such time in order to comply
with United States back-up withholding requirements.
(f) Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 2.20 shall survive the payment in full of all
amounts due hereunder.
SECTION 2.21 Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate.
(a) In the event (i) any Lender delivers a certificate requesting
compensation pursuant to Section 2.14, (ii) any Lender delivers a notice
described in Section 2.15, (iii) the Borrowers are required to pay any
additional amount to any Lender or any Governmental Authority on account of
any Lender pursuant to Section 2.20 or (iv) any Lender does not consent to
a proposed amendment, modification or waiver of this Agreement requested by
the Administrative Borrower which requires the consent of all of the
Lenders or all of the Lenders under any Facility to become effective (and
which is approved by at least the Required Lenders), the Borrowers may, at
their sole expense and effort (including with respect to the processing and
recordation fee referred to in Section 9.04(b)), upon notice to such Lender
and each of the Agents, require such Lender to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all of its interests, rights and obligations under this
Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment);
provided that (x) such assignment shall not conflict with any law, rule or
regulation or order of any court or other Governmental Authority having
jurisdiction, (y) solely with respect to replacements of Lenders pursuant
to clauses (i), (ii) or (iii) of this Section, the Borrowers shall have
received the prior written consent of each of the Agents (and, if a
Revolving Credit Commitment is being assigned, of the Swingline Lender),
which consent shall not unreasonably be withheld, and (z) the Borrowers or
such assignee shall have paid to the affected Lender in immediately
available funds an amount equal to the sum of the principal of and interest
accrued to the date of such payment on the outstanding Loans or
participations in all Letters of Credit of such Lender, plus all Fees and
other amounts accrued for the account of such Lender hereunder (including
any amounts under Section 2.14 and Section 2.16); provided further that, if
prior to any such transfer and assignment the circumstances or event that
resulted in such Lender's claim for compensation under Section 2.14 or
notice under Section 2.15 or the amounts paid pursuant to Section 2.20, as
the case may be, cease to cause such Lender to suffer increased costs or
reductions in amounts received or receivable or reduction in return on
capital, or cease to have the consequences specified in Section 2.15, or
cease to result in amounts being payable under Section 2.20, as the case
may be (including as a result of any action taken by such Lender pursuant
to paragraph (b) below), or if such Lender shall waive its right to claim
further compensation under Section 2.14 in respect of such circumstances or
event or shall withdraw its notice under Section 2.15 or shall waive its
right to further payments under Section 2.20 in respect of such
circumstances or event, as the case may be, then such Lender shall not
thereafter be required to make any such transfer and assignment hereunder.
In connection with any such replacement, if the replaced Lender does not
execute and deliver to the Collateral Agent a duly completed Assignment and
Acceptance reflecting such replacement within five Business Days of the
date on which the replacement Lender executes and delivers such Assignment
and Acceptance to the replaced Lender, then such replaced Lender shall be
deemed to have executed and delivered such Assignment and Acceptance.
(b) If (i) any Lender shall request compensation under Section 2.14,
(ii) any Lender delivers a notice described in Section 2.15 or (iii) the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority on account of any Lender, pursuant to Section 2.20,
then such Lender shall use reasonable efforts (which shall not require such
Lender to incur an unreimbursed loss or unreimbursed cost or expense or
otherwise take any action inconsistent with its internal policies or legal
or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Administrative Borrower or (y) to assign its
rights and delegate and transfer its obligations hereunder to another of
its offices, branches or affiliates, if such filing or assignment would
reduce its claims for compensation under Section 2.14 or enable it to
withdraw its notice pursuant to Section 2.15 or would reduce amounts
payable pursuant to Section 2.20, as the case may be, in the future. The
Borrowers hereby agree to pay all reasonable costs and expenses incurred by
any Lender in connection with any such filing or assignment, delegation and
transfer.
SECTION 2.22 Swingline Loans.
(a) Swingline Commitment. Subject to the terms and conditions hereof
and relying upon the representations and warranties set forth herein, the
Swingline Lender agrees to make loans to the Borrowers, at any time and
from time to time after the Closing Date, and until the earlier of the
Maturity Date and the termination of the Commitments in accordance with the
terms hereof, in an aggregate principal amount at any time outstanding that
will not result in (i) the aggregate principal amount of all Swingline
Loans exceeding $2,000,000 in the aggregate or (ii) the Aggregate Revolving
Credit Exposure, after giving effect to any Swingline Loan, exceeding the
Commitment. Each Swingline Loan shall be in a principal amount that is an
integral multiple of $100,000. The Swingline Commitment may be terminated
or reduced from time to time as provided herein. Within the foregoing
limits, the Borrowers may borrow, pay or prepay and reborrow Swingline
Loans hereunder, subject to the terms, conditions and limitations set forth
herein.
(b) Swingline Loans. The Administrative Borrower shall notify the
Collateral Agent by fax, or by telephone (confirmed by fax), not later than
11:00 a.m., New York City time, on the day of a proposed Swingline Loan to
be made to it. Such notice shall be delivered on a Business Day, shall be
irrevocable and shall refer to this Agreement and shall specify the
requested date (which shall be a Business Day) and amount of such Swingline
Loan. The Collateral Agent will promptly advise the Swingline Lender of any
notice received from the Administrative Borrower pursuant to this paragraph
(b). The Swingline Lender shall make each Swingline Loan available to the
Borrowers by means of a credit to the general deposit account of the
Borrowers with the Swingline Lender by 3:00 p.m. on the date such Swingline
Loan is so requested.
(c) Prepayment. The Borrowers shall have the right at any time and
from time to time to prepay any Swingline Loan, in whole or in part, upon
giving written or fax notice (or telephone notice promptly confirmed by
written or fax notice) to the Swingline Lender and to the Collateral Agent
before 12:00 (noon), New York City time, on the date of prepayment at the
Swingline Lender's address for notices specified in the Lender Addendum
delivered by the Swingline Lender. All principal payments of Swingline
Loans shall be accompanied by accrued interest on the principal amount
being repaid to the date of payment.
(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to
the provisions of Section 2.07, shall bear interest as provided in Section
2.06(a).
(e) Participations. The Swingline Lender may by written notice given
to the Collateral Agent not later than 10:00 a.m., New York City time, on
any Business Day require the Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which
Lenders will participate. The Collateral Agent will, promptly upon receipt
of such notice, give notice to each Lender, specifying in such notice such
Lender's Pro Rata Percentage of such Swingline Loan or Loans. In
furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to
the Collateral Agent, for the account of the Swingline Lender, such
Lender's Pro Rata Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or an Event of Default, and that
each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation under
this paragraph by wire transfer of immediately available funds, in the same
manner as provided in Section 2.02(c) with respect to Loans made by such
Lender (and Section 2.02(c) shall apply, mutatis mutandis, to the payment
obligations of the Lenders under this Section) and the Collateral Agent
shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Collateral Agent shall notify the Borrowers of any
participations in any Swingline Loan acquired pursuant to this paragraph
and thereafter payments in respect of such Swingline Loan shall be made to
the Collateral Agent and not to the Swingline Lender. Any amounts received
by the Swingline Lender from the Borrowers (or other party on behalf of the
Borrowers) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Collateral Agent; any such amounts received by the
Collateral Agent shall be promptly remitted by the Collateral Agent to the
Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not
relieve the Borrowers (or other party liable for obligations of the
Borrowers) of any default in the payment thereof.
SECTION 2.23 Letters of Credit.
(a) L/C Applications. The Borrowers shall execute and deliver to the
Issuing Bank the Master Letter of Credit Agreement from time to time in
effect. The Borrowers shall give notice to the Collateral Agent and the
Issuing Bank of the proposed issuance of each Letter of Credit on a
Business Day which is at least three Business Days (or such lesser number
of days as the Collateral Agent and the Issuing Bank shall agree in any
particular instance in their sole discretion) prior to the proposed date of
issuance of such Letter of Credit. Each such notice shall be accompanied by
an L/C Application, duly executed by the applicable Borrower and in all
respects satisfactory to the Collateral Agent and the Issuing Bank,
together with such other documentation as the Collateral Agent or the
Issuing Bank may request in support thereof, it being understood that each
L/C Application shall specify, among other things, the date on which the
proposed Letter of Credit is to be issued, the expiration date of such
Letter of Credit (which shall not be later than the Maturity Date (unless
such Letter of Credit is Cash Collateralized)) and whether such Letter of
Credit is to be transferable in whole or in part. Any Letter of Credit
outstanding after the Maturity Date which is Cash Collateralized for the
benefit of the Issuing Bank shall be the sole responsibility of the Issuing
Bank. So long as the Issuing Bank has not received written notice that the
conditions precedent set forth in Section 4 with respect to the issuance of
such Letter of Credit have not been satisfied, the Issuing Bank shall issue
such Letter of Credit on the requested issuance date. The Issuing Bank
shall promptly advise the Collateral Agent of the issuance of each Letter
of Credit and of any amendment thereto, extension thereof or event or
circumstance changing the amount available for drawing thereunder. In the
event of any inconsistency or conflict between the terms of the Master
Letter of Credit Agreement, any L/C Application and the terms of this
Agreement, the terms of this Agreement shall control.
(b) Participations in Letters of Credit. Concurrently with the
issuance of each Letter of Credit, the Issuing Bank shall be deemed to have
sold and transferred to each Lender with a Revolving Credit Commitment, and
each such Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Bank, without recourse or warranty,
an undivided interest and participation, to the extent of such Lender's Pro
Rata Percentage, in such Letter of Credit and the Borrowers' reimbursement
obligations with respect thereto. If the Borrowers do not pay any
reimbursement obligation when due, the Borrowers shall be deemed to have
immediately requested that the Lenders make a Revolving Loan which is a
Base Rate Loan in a principal amount equal to such reimbursement
obligations. The Collateral Agent shall promptly notify such Lenders of
such deemed request and, without the necessity of compliance with the
requirements of Section 2, Section 4 or otherwise such Lender shall make
available to the Collateral Agent its Pro Rata Percentage of such Loan. The
proceeds of such Loan shall be paid over by the Collateral Agent to the
Issuing Bank for the account of the Borrowers in satisfaction of such
reimbursement obligations. For the purposes of this Agreement, the
unparticipated portion of each Letter of Credit shall be deemed to be the
Issuing Bank's "participation" therein. The Issuing Bank hereby agrees,
upon request of any Agent or any Lender, to deliver to such Agent or such
Lender a list of all outstanding Letters of Credit issued by the Issuing
Bank, together with such information related thereto as such Agent or such
Lender may reasonably request.
(c) Reimbursement Obligations.
(i) The Borrowers hereby unconditionally and irrevocably agree to
reimburse the Issuing Bank for each payment or disbursement made by
the Issuing Bank under any Letter of Credit honoring any demand for
payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed
on the date of such payment or disbursement shall bear interest from
the date of such payment or disbursement to the date that the Issuing
Bank is reimbursed by the Borrowers therefor, payable on demand, at a
rate per annum equal to the Alternate Base Rate from time to time in
effect plus the Applicable Margin from time to time in effect plus,
upon the election of the Issuing Bank, any Agent or the Required
Lenders, 2% (without duplication of any default interest charge
imposed on such unreimbursed amounts, if any, pursuant to Section
2.07). The Issuing Bank shall notify the Borrowers and the Collateral
Agent whenever any demand for payment is made under any Letter of
Credit by the beneficiary thereunder; provided that the failure of the
Issuing Bank to so notify the Borrowers or the Collateral Agent shall
not affect the rights of the Issuing Bank or the Lenders in any manner
whatsoever.
(ii) The Borrower's reimbursement obligations hereunder shall be
irrevocable and unconditional under all circumstances, including (a)
any lack of validity or enforceability of any Letter of Credit, this
Agreement or any other Loan Document, (b) the existence of any claim,
set-off, defense or other right which any Loan Party may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee
may be acting), any Agent, the Issuing Bank, any Lender or any other
Person, whether in connection with any Letter of Credit, this
Agreement, any other Loan Document, the transactions contemplated
herein or any unrelated transactions (including any underlying
transaction between any Loan Party and the beneficiary named in any
Letter of Credit), (c) the validity, sufficiency or genuineness of any
document which the Issuing Bank has determined complies on its face
with the terms of the applicable Letter of Credit, even if such
document should later prove to have been forged, fraudulent, invalid
or insufficient in any respect or any statement therein shall have
been untrue or inaccurate in any respect, or (d) the surrender or
impairment of any security for the performance or observance of any of
the terms hereof. Without limiting the foregoing, no action or
omission whatsoever by any Agent or any Lender (excluding any Lender
in its capacity as the Issuing Bank) under or in connection with any
Letter of Credit or any related matters shall result in any liability
of any Agent or any Lender to the Borrowers, or relieve the Borrowers
of any of its obligations hereunder to any such Person.
(d) Funding by Lenders to Issuing Bank. If the Issuing Bank makes
any payment or disbursement under any Letter of Credit and (a) the
Borrowers have not reimbursed the Issuing Bank in full for such
payment or disbursement by 11:00 A.M., Chicago time, on the date of
such payment or disbursement, (b) a Loan may not be made in accordance
with Section 2 or (c) any reimbursement received by the Issuing Bank
from the Borrowers is or must be returned or rescinded upon or during
any bankruptcy or reorganization of the Borrowers or otherwise, each
Lender with a Revolving Credit Commitment shall be obligated to pay to
the Collateral Agent for the account of the Issuing Bank, in full or
partial payment of the purchase price of its participation in such
Letter of Credit, its Pro Rata Percentage of such payment or
disbursement (but no such payment shall diminish the obligations of
the Borrowers under Section 2.01(c)(3)), and, upon notice from the
Issuing Bank, the Collateral Agent shall promptly notify each other
Lender thereof. Each Lender irrevocably and unconditionally agrees to
so pay to the Collateral Agent in immediately available funds for the
Issuing Bank's account the amount of such other Lender's Pro Rata
Percentage of such payment or disbursement. If and to the extent any
Lender shall not have made such amount available to the Collateral
Agent by 2:00 P.M., Chicago time, on the Business Day on which such
Lender receives notice from the Collateral Agent of such payment or
disbursement (it being understood that any such notice received after
noon, Chicago time, on any Business Day shall be deemed to have been
received on the next following Business Day), such Lender agrees to
pay interest on such amount to the Collateral Agent for the Issuing
Bank's account forthwith on demand, for each day from the date such
amount was to have been delivered to the Collateral Agent to the date
such amount is paid, at a rate per annum equal to (a) for the first
day after demand, the Federal Funds Effective Rate from time to time
in effect and (b) thereafter, the Alternate Base Rate from time to
time in effect. Any Lender's failure to make available to the
Collateral Agent its Pro Rata Percentage of any such payment or
disbursement shall not relieve any other Lender of its obligation
hereunder to make available to the Collateral Agent such other
Lender's Pro Rata Percentage of such payment, but no Lender shall be
responsible for the failure of any other Lender to make available to
the Collateral Agent such other Lender's Pro Rata Percentage of any
such payment or disbursement.
(e) Commitments Several. The failure of any Lender to make a
requested Loan on any date shall not relieve any other Lender of its
obligation (if any) to make a Loan on such date, but no Lender shall
be responsible for the failure of any other Lender to make any Loan to
be made by such other Lender.
(f) Certain Conditions. Except as otherwise provided in Sections
2.22, 2.23(d) and 2.24 of this Agreement, no Lender shall have an
obligation to make any Loan, or to permit the continuation of or any
conversion into any Eurodollar Loans, and the Issuing Bank shall not
have any obligation to issue any Letter of Credit, if a Default or an
Event of Default exists.
(g) The Issuing Bank hereby agrees to not exercise or seek
remedies with respect to the security interest granted to it by the
Borrowers pursuant to Section 10.1 of the Master Letter of Credit
Agreement unless either Agent accelerates the Loans pursuant to
Article VII hereof.
SECTION 2.24 Protective Advances.
(a) Subject to the limitations set forth below, each of the
Agents is authorized by the Borrowers and the Lenders, from time to
time (but shall have absolutely no obligation to), to make Loans, on
behalf of all Lenders, at the request of Administrative Borrower or
otherwise in its Permitted Discretion, which such Agent, in its
Permitted Discretion, deems necessary or desirable (i) to preserve or
protect the Collateral, or any portion thereof, (ii) to enhance the
likelihood of, or maximize the amount of, repayment of the Loans and
other Obligations, or (iii) to pay any other amount chargeable to or
required to be paid by the Borrowers pursuant to the terms of this
Agreement, including payments of principal, interest, reimbursements
with respect to any Letter of Credit, fees, premiums, reimbursable
expenses (including costs, fees, and expenses as described in Section
9.05) and other sums payable under the Loan Documents (any of such
Loans are herein referred to as "Protective Advances"); provided that,
the aggregate amount of Protective Advances outstanding at any time,
which were made pursuant to clauses (i), (ii) and (iii) above, shall
not cause the Aggregate Revolving Credit Exposure to exceed the
aggregate Commitment of all Lenders and shall not at any time exceed
$5,000,000 in the aggregate. Protective Advances may be made even if
the conditions precedent set forth in Section 4.01 have not been
satisfied. The Protective Advances shall be secured by the Liens in
favor of the Administrative Agent in and to the Collateral and shall
constitute Obligations hereunder. All Protective Advances shall be ABR
Borrowings. Any such revocation must be in writing and shall become
effective prospectively upon the Collateral Agent's receipt thereof.
At any time that there is sufficient Availability and the conditions
precedent set forth in Section 4.01 have been satisfied, the
Collateral Agent may request the Revolving Lenders to make a Revolving
Loan to repay a Protective Advance. At any other time the Collateral
Agent may require the Lenders to fund their risk participations
described in Section 2.24(b).
(b) Upon the making of a Protective Advance by either of the
Agents in accordance with this Agreement (whether before or after the
occurrence of a Default or Event of Default), each Lender shall be
deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from such Agent without
recourse or warranty, an undivided interest and participation in such
Protective Advance in proportion to its Pro Rata Percentage of the
Aggregate Revolving Credit Exposure. From and after the date, if any,
on which any Lender is required to fund its participation in any
Protective Advance purchased hereunder, the Collateral Agent shall
promptly distribute to such Lender such Lender's Pro Rata Percentage
of all payments of principal and interest and all proceeds of
Collateral received by the Collateral Agent in respect of such
Protective Advance.
SECTION 2.25 Relationship Between the Borrowers.
(a) Administrative Borrower. Xxxxx hereby appoints PALCO, and
PALCO (in such capacity, the "Administrative Borrower") shall act
under this Agreement, as the agent, attorney-in-fact and legal
representative of Xxxxx for all purposes, including requesting Loans
and receiving account statements and other notices and communications
to the Borrowers (or any of them) from any Agent or any Lender. The
Administrative Agent, the Collateral Agent and the Lenders may rely,
and shall be fully protected in relying, on any Borrowing request,
request for a Letter of Credit, disbursement instruction, report,
information or any notice or communication made or given by the
Administrative Borrower, whether in its own name, as Borrowers' agent,
on behalf of Xxxxx or on behalf of the Borrowers, and no Agent or
Lender shall have any obligation to make any inquiry or request any
confirmation from or on behalf of any other Borrower as to the binding
effect on it of any such notice, request, instruction, report,
information, other notice or communications, nor shall the joint and
several character of the Borrowers' obligations hereunder be affected,
provided that the provisions of this Section 2.25 shall not be
construed so as to preclude either Borrower from taking actions
permitted to be taken by a "Borrower" hereunder.
(b) Joint and Several Obligations. The obligations of the
Borrowers pursuant to the Loan Documents shall be joint and several.
Each Borrower hereby irrevocably and unconditionally guaranties, as
primary obligor and not merely as surety, the due and punctual payment
in full of all Obligations of the other Borrower when the same shall
become due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including amounts that
would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss. 362(a)).
(c) Obligations Absolute. The obligations of each Borrower under
this Section 2.25 are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which
constitutes a legal or equitable discharge of a guarantor or surety
other than payment in full of the Obligations. In furtherance of the
foregoing and without limiting the generality thereof, each Borrower
agrees that: (i) its obligation under this Section 2.25 with respect
to the obligations of the other Borrower is a guaranty of payment when
due and not of collectibility; (ii) the Administrative Agent, the
Collateral Agent and any Lender may enforce this obligation upon the
occurrence of an Event of Default hereunder notwithstanding the
existence of any dispute between the other Borrower and the
Administrative Agent, the Collateral Agent or any Lender with respect
to the existence of such Event of Default; (iii) the obligations of
each Borrower hereunder are independent of each of the obligations of
the other Borrower under the Loan Documents and the obligations of any
other Person and a separate action or actions may be brought and
prosecuted against each Borrower whether or not any action is brought
against the other Borrower or any other Person and whether or not the
other Borrower or any other Person is joined in any such action or
actions; and (iv) a payment of a portion, but not all, of the
Obligations by any Borrower shall in no way limit, affect, modify or
abridge the liability of such or any other Borrower for any portion of
the Obligations that has not been paid. Each Borrower agrees that its
obligation under this Section 2.25 with respect to the obligations of
the other Borrower is a continuing guaranty and shall be binding upon
each Borrower and its successors and assigns, and each Borrower
irrevocably waives any right to revoke its obligations under this
Section 2.25 as to future transactions giving rise to any Obligations.
(d) Actions by the Agents and the Lenders. The Agents and any
Lender may from time to time, without notice or demand and without
affecting the validity or enforceability of this Section 2.25 or
giving rise to any limitation, impairment or discharge of any
Borrower's liability hereunder, but subject to the provisions of
Section 2.25 (i) renew, extend, accelerate or otherwise change the
time, place, manner or terms of payment of the Obligations of the
other Borrower with the consent of such other Borrower, (ii) settle,
compromise, release or discharge, or accept or refuse any offer of
performance with respect to, or substitutions for, the Obligations of
the other Borrower or any agreement relating thereto and/or
subordinate the payment of the same to the payment of any other
obligations, (iii) request and accept other guaranties of the
Obligations of the other Borrower and take and hold security for the
payment of such Obligations, (iv) release, exchange, compromise,
subordinate or modify, with or without consideration, any security for
payment of the Obligations of the other Borrower, any other guaranties
of such Obligations, or any other obligation of any Person with
respect to such Obligations, (v) enforce and apply any security now or
hereafter held from the other Borrower by or for the benefit of the
Agents or any Lender in respect of the Obligations of the other
Borrower and direct the order or manner of sale thereof, or exercise
any other right or remedy that the Agents or the Lenders, or any of
them, may have against any such security, in each case as the Agents
or the Lenders in their discretion may determine consistent with this
Agreement and any applicable security agreement, including foreclosure
on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially
reasonable, and (vi) exercise any other rights available to the Agents
or the Lenders, or any of them, under the Loan Documents.
(e) No Discharge. The obligations of each Borrower under this
Section 2.25 shall be valid and enforceable and shall not be subject
to any limitation, impairment or discharge for any reason (other than
payment in full of the Obligations), including the occurrence of any
of the following, whether or not any Borrower shall have had notice or
knowledge of any of them: (i) any failure to assert or enforce or
agreement not to assert or enforce, or the stay or enjoining, by order
of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy with
respect to the Obligations of the other Borrower or any agreement
relating thereto, or with respect to any other guaranty of or security
for the payment of such Obligations, (ii) any waiver or modification
of, or any consent to departure from, any of the terms or provisions
of this Agreement or any of the other Loan Documents or any agreement
or instrument executed pursuant thereto, or of any other guaranty or
security for the Obligations of the other Borrower, (iii) the
Obligations of the other Borrower, or any agreement relating thereto,
at any time being found to be illegal, invalid or unenforceable in any
respect, (iv) the application of payments received from any source to
the payment of indebtedness other than the Obligations of the other
Borrower, even though the Collateral Agent or the Lenders, or any of
them, might have elected to apply such payment to any part or all of
the Obligations of the other Borrower, (v) any failure to perfect or
continue perfection of a security interest in any collateral which
secures any of the Obligations of the other Borrower, (vi) any
defenses, set-offs or counterclaims which the other Borrower or any
other Person may assert against the any Agent or any Lender in respect
of the Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds, statute
of limitations, accord and satisfaction and usury and (vii) any other
act or thing or omission, or delay to do any other act or thing, which
may or might in any manner or to any extent vary the risk of any
Borrower as an obligor in respect of the Obligations.
(f) Waivers. Each Borrower waives, for the benefit of each Agent
and each Lender: (i) any right to require the any Agent or any Lender,
as a condition of payment or performance by such Borrower, to (A)
proceed against the other Borrower or any other Person, (B) proceed
against or exhaust any security held from the other Borrower or any
other Person, (C) proceed against or have resort to any balance of any
deposit account or credit on the books of the any Agent or any Lender
in favor of the other Borrower or any other Person, or (D) pursue any
other remedy in the power of any Agent or any Lender; (ii) any defense
arising by reason of the incapacity, lack of authority or any
disability or other defense of the other Borrower including any
defense based on or arising out of the lack of validity or the
unenforceability of the Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of the
other Borrower from any cause other than payment in full of the
Obligations; (iii) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither larger
in amount nor in other respects more burdensome than that of the
principal; (iv) any defense based upon any Agent's or any Lender's
errors or omissions in the administration of the Obligations, except
behavior that amounts to gross negligence or willful misconduct; (v)
(A) any principles or provisions of law, statutory or otherwise, that
are or might be in conflict with the terms of this Section 2.25 and
any legal or equitable discharge of such Borrower's obligations
hereunder, (B) the benefit of any statute of limitations affecting
such Borrower's liability hereunder or the enforcement hereof, (C) any
rights to set-offs, recoupments and counterclaims and (D) promptness,
diligence and any requirement that the any Agent or any Lender
protect, secure, perfect or insure any Lien or any property subject
thereto; (vi) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Section 2.25, notices of default under
this Agreement or any agreement or instrument related thereto, notices
of any renewal, extension or modification of the Obligations or any
agreement related thereto, notices of any extension of credit to the
other Borrower and notices of any of the matters referred to in
Sections 2.24(d) and (e) and any right to consent to any thereof; and
(vii) to the fullest extent permitted by law, any defenses or benefits
that may be derived from or afforded by law which limit the liability
of or exonerate guarantors or sureties, or which may conflict with the
terms of this Section 2.25.
As used in this paragraph, any reference to "the principal"
includes each Borrower and any reference to "the creditor" includes
each Agent and each of the Lenders. In accordance with Section 2856 of
the California Civil Code each Borrower waives any and all rights and
defenses available to it by reason of Sections 2787 to 2855,
inclusive, 2899 and 3433 of the California Civil Code, including any
and all rights or defenses such Borrower may have because the
Obligations are secured by real property or by reason of protection
afforded to the principal with respect to any of the Obligations, or
to any other guarantor of any of the Obligations with respect to any
of such guarantor's obligations under its guaranty, in either case
pursuant to the antideficiency or other laws of the State of
California limiting or discharging the principal's indebtedness or
such guarantor's obligations, including Section 580a, 580b, 580d or
726 of the California Code of Civil Procedure. Consequently, among
other things: (1) the creditor may collect from such Borrower without
first foreclosing on any real or personal property collateral pledged
by the principal; and (2) if the creditor forecloses on any real
property collateral pledged by the principal: (x) the amount of the
Obligations may be reduced only by the price for which the collateral
is sold at the foreclosure sale, even if the collateral is worth more
than the sale price and (y) the creditor may collect from such
Borrower even if the creditor, by foreclosing on the real property
collateral, has destroyed any right such Borrower may have to collect
from the principal. This is an unconditional and irrevocable waiver of
any rights and defenses such Borrower may have because the Obligations
are secured by real property. Each Borrower also waives all rights and
defenses arising out of an election of remedies by the creditor, even
though that election of remedies, such as a nonjudicial foreclosure
with respect to security for an Obligation, has destroyed such
Borrower's rights of subrogation and reimbursement against the
principal by the operation of Section 580d of the Code of Civil
Procedure or otherwise; and even though that election of remedies by
the creditor, such as nonjudicial foreclosure with respect to security
for an obligation of any other guarantor of any of the Obligations,
has destroyed such Borrower's rights of contribution against such
other Borrower or any other guarantor. No other provision of this
Section 2.25 shall be construed as limiting the generality of any of
the covenants and waivers set forth in this paragraph.
(g) Borrowers' Rights of Subrogation, Contribution, Etc.;
Subordination of Other Obligations. Each Borrower waives any claim,
right or remedy, direct or indirect, that such Borrower now has or may
hereafter have against the other Borrower or any of its assets in
connection with this Section 2.25 or the performance by such Borrower
of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute (including
under California Civil Code Section 2847, 2848 or 2849), under common
law or otherwise and including (i) any right of subrogation,
reimbursement or indemnification that such Borrower now has or may
hereafter have against the other Borrower, (ii) any right to enforce,
or to participate in, any claim, right or remedy that any Agent or any
Lender now have or may hereafter have against the other Borrower and
(iii) any benefit of, and any right to participate in, any collateral
or security now or hereafter held by any Agent or any Lender. In
addition, until the Obligations shall have been paid in full, the
Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled, each Borrower shall withhold the exercise
of any right of contribution such Borrower may have against the other
Borrower. Each Borrower further agrees that, to the extent the waiver
or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is
found by a court of competent jurisdiction to be void or voidable for
any reason, any rights of subrogation, reimbursement or
indemnification such Borrower may have against the other Borrower or
against any collateral or security, and any rights of contribution
such Borrower may have against such other Borrower, shall be junior
and subordinate to any rights the any Agent or any Lender may have
against such Borrower to all right, title and interest the any Agent
or any Lender may have in any such collateral or security, and to any
right the any Agent or any Lender may have against such other
Borrower.
Any indebtedness of any Borrower now or hereafter held by any
Borrower is subordinated in right of payment to the Obligations, and
any such indebtedness of the other Borrower to such Borrower collected
or received by such Borrower after an Event of Default has occurred
and is continuing, and any amount paid to a Borrower on account of any
subrogation, reimbursement, indemnification or contribution rights
referred to in the preceding paragraph when all Obligations have not
been paid in full, shall be held in trust for the Agents and the
Lenders and shall forthwith be paid over to the Collateral Agent for
the benefit of the Lenders to be credited and applied against the
Obligations.
(h) Fraudulent Transfer Laws. Anything contained in this Section
2.25 to the contrary notwithstanding, the obligations of each Borrower
under this Section 2.25 shall be limited to a maximum aggregate amount
equal to the largest amount that would not render its obligations
hereunder subject to avoidance as a fraudulent transfer or conveyance
under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the
"Fraudulent Transfer Laws"), in each case after giving effect to all
other liabilities of such Borrower, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws and after giving effect as
assets to the value (as determined under the applicable provisions of
the Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement, indemnification or contribution of such Borrower
pursuant to applicable law or pursuant to the terms of any agreement.
(i) Related Guaranties. Each Borrower under this Section 2.25 and
any other guaranties, if any, relating to the Agreement (the "Related
Guaranties") that contain a contribution provision similar to that set
forth in this Section 2.25, together desire to allocate among
themselves (collectively, the "Contributing Guarantors"), in a fair
and equitable manner, their obligations arising under this Section
2.25 and the Related Guaranties. Accordingly, in the event any payment
or distribution is made on any date by any Borrower under this Section
2.25 or a guarantor under a Related Guaranty, each such Borrower or
such guarantor shall be entitled to a contribution from each of the
other Contributing Guarantors in the maximum amount permitted by law
so as to maximize the aggregate amount of the Obligations paid to the
Collateral Agent and the Lenders.
SECTION 2.26 COLLECTIONS.
(a) On or before November 27, 2006, each Borrower shall direct all of
its existing Account Debtors (and thereafter shall make such direction to
all future Account Debtors) to make all payments on the Accounts directly
to a post office box (the "Lock Box") designated by, and under the
exclusive control of, the Collateral Agent (as the sub-agent for the
Administrative Agent), at LaSalle Bank. Each Borrower shall establish an
account (the "Lock Box Account") in the Collateral Agent's name (for the
benefit of such Borrower) with LaSalle Bank, into which all payments
received in the Lock Box shall be deposited, and into which each Borrower
will immediately deposit all payments received by such Borrower on Accounts
in the identical form in which such payments were received, whether by cash
or check. If any Borrower, any Subsidiary or any Affiliate of a Borrower,
any shareholder, officer, director, employee or agent of any of the
foregoing or any other person acting for or in concert with any Borrower
shall receive any monies, checks, notes, drafts or other payments relating
to or as Proceeds (as defined in the Guarantee and Collateral Agreement,
the "Proceeds") of Accounts, such Borrower or such other person shall
receive all such items in trust for, and as the sole and exclusive property
of, the Collateral Agent (as the sub-agent of the Administrative Agent)
and, immediately upon receipt thereof, shall remit the same (or cause the
same to be remitted) in kind to the Lock Box Account. LaSalle Bank shall
acknowledge and agree, in a manner satisfactory to the Collateral Agent,
that the amounts on deposit in such Lock Box and Lock Box Account are the
sole and exclusive property of the Collateral Agent (as the sub-agent for
the Administrative Agent), that it will follow the instructions of the
Collateral Agent with respect to disposition of funds in the Lock Box and
Lock Box Account without further consent from any Borrower, that it has no
right to setoff against the Lock Box or Lock Box Account or against any
other account maintained by it into which the contents of the Lock Box or
Lock Box Account are transferred, and that it shall wire, or otherwise
transfer in immediately available funds to the Collateral Agent in a manner
satisfactory to the Collateral Agent, funds deposited in the Lock Box
Account on a daily basis as such funds are collected. Each Borrower and
each Agent hereby agree that all payments made to such Lock Box Account or
otherwise received by the Collateral Agent, whether in respect of the
Accounts or as Proceeds of other Revolving Collateral or otherwise, will be
applied on account of the Obligations in accordance with the terms of this
Agreement. Borrowers agree to pay all reasonable and customary fees, costs
and expenses in connection with opening and maintaining the Lock Box and
Lock Box Account. All of such fees, costs and expenses if not paid by
Borrowers, may be paid by the Collateral Agent and in such event all
amounts paid by the Collateral Agent shall constitute Obligations
hereunder, and shall be charged to Borrowers' accounts or shall be funded
with Loans advanced hereunder; provided that, if the Collateral Agent is
not able to charge such accounts or advance Loans to pay such fees, costs
and expenses, the unpaid amount thereof shall be payable by Borrowers to
the Collateral Agent on demand and, until paid, shall bear interest at the
highest rate then applicable to Loans hereunder. All checks, drafts,
instruments and other items of payment or Proceeds of Accounts shall be
endorsed by the applicable Borrower to the Collateral Agent, and, if that
endorsement of any such item shall not be made for any reason, the
Collateral Agent is hereby irrevocably authorized to endorse the same on
such Borrower's behalf. For the purpose of this section, each Borrower
irrevocably hereby makes, constitutes and appoints the Collateral Agent
(and all persons designated by the Collateral Agent for that purpose) as
such Borrower's true and lawful attorney and agent-in-fact (i) to endorse
such Borrower's name upon said items of payment and/or Proceeds of
Accounts, Collateral and upon any Chattel Paper, Document, Instrument,
(each as defined in the Guarantee and Collateral Agreement) invoice or
similar document or agreement relating to any Account of such Borrower or
Goods (as defined in the Guarantee and Collateral Agreement) pertaining
thereto; (ii) to take control in any manner of any item of payment or such
Proceeds thereof and (iii) to have access to any lock box or postal box
into which any of any Borrower's mail is deposited, and open and process
all mail addressed to any Borrower and deposited therein.
(b) For purposes of calculating interest and fees, Collateral Agent
shall, within one and one-quarter Business Days after receipt by Collateral
Agent at its office in Chicago, Illinois of (i) checks and (ii) cash or
other immediately available funds from collections of items of payment and
Proceeds of any Revolving Collateral, apply the whole or any part of such
collections or Proceeds against the Obligations in accordance with this
Agreement. For purposes of determining the amount of Loans available for
borrowing purposes, checks and cash or other immediately available funds
from collections of items of payment shall be applied in whole or in part
against the Obligations in accordance with this Agreement on the day of
receipt, subject to actual collection.
(c) On a monthly basis, the Collateral Agent shall deliver to
Administrative Borrower an account statement showing all Loans, charges and
payments, which, absent manifest error, shall be deemed final, binding and
conclusive upon Borrowers unless Administrative Borrower notifies Agent in
writing, specifying any error therein, within 30 days of the date such
account statement is sent to Administrative Borrower and any such notice
shall only constitute an objection to the items specifically identified.
The Collateral Agent shall be deemed to have delivered any such account
statement made available by Collateral Agent to Administrative Borrower by
means of e-mail, e-mail attachments, data submitted on web-based forms or
any other communication method that delivers machine readable data or
information to Administrative Borrower.
(d) The Administrative Agent may at any time or from time to time
appoint Collateral Agent to act as its agent on behalf of the Secured
Parties. For purposes of this Section 2.26 or otherwise to manage, take and
hold Collateral on behalf of the Secured Parties and apply such Collateral
to the Obligations of the Borrowers as set forth herein, the Administrative
Agent hereby irrevocably appoints the Collateral Agent to act as its agent
on behalf of the Secured Parties with such powers and authority as may be
necessary for the effectual operation of the provisions of this Agreement,
including this Section 2.26. The Collateral Agent hereby accepts such
appointment."
SECTION 3.4 Article III of the Credit Agreement is hereby amended to
amend and restate the first sentence thereof in its entirety to read as
follows:
"Each of the Borrowers, jointly and severally represents and
warrants to the Arranger, each of the Agents and each of the Lenders
that:"
SECTION 3.5 Section 3.15 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"SECTION 3.15 No Material Misstatements. Each of the Loan Parties has
disclosed to the Arranger, the Administrative Agent, the Collateral Agent
and the Lenders all agreements, instruments and corporate or other
restrictions to which any Loan Party is subject, and all other matters
known to any of them, that, individually or in the aggregate, would
reasonably be expected to result in a Material Adverse Effect. No other
information, report, financial statement, exhibit or schedule furnished by
or on behalf of any Loan Party to the Arranger, the Administrative Agent,
the Collateral Agent or any Lender for use in connection with the
transactions contemplated by the Loan Documents or in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material misstatement of
fact or omitted, omits or will omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they were, are or will be made, not misleading; provided that to the extent
any such information, report, financial statement, exhibit or schedule was
based upon or constitutes a forecast or projection, the Borrowers represent
only that they acted in good faith and utilized reasonable assumptions and
due care in the preparation of such information, report, financial
statement, exhibit or schedule."
SECTION 3.5 The first sentence of Article IV and Section 4.01 of the
Credit Agreement are hereby amended and restated in their entirety to read
as follows:
"ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans, and the agreement
of the Issuing Bank to issue Letters of Credit in accordance with
Section 2.23, are subject to the satisfaction of the following
conditions:
SECTION 4.01 All Credit Events. On the date of each Borrowing,
including each Borrowing of a Swingline Loan, and on the date of each
issuance, amendment, extension or renewal of a Letter of Credit (each
such event being called a "Credit Event"):
(a) The Collateral Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been
deemed given in accordance with Section 2.03) or, in the case of the
issuance, amendment, extension or renewal of a Letter of Credit, the
Collateral Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required
by Section 2.23 or, in the case of the Borrowing of a Swingline Loan,
the Swingline Lender and the Collateral Agent shall have received a
notice requesting such Swingline Loan as required by Section 2.22(b).
(b) The representations and warranties set forth in each Loan
Document shall be true and correct in all material respects on and as
of the date of such Credit Event with the same effect as though made
on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date, in which case such
representations and warranties shall be true and correct in all
material respects on and as of such earlier date.
(c) The Borrowers and each other Loan Party shall be in
compliance with all the terms and provisions set forth in each Loan
Document on its part to be observed or performed, and, at the time of
and immediately after such Credit Event, no Event of Default or
Default shall have occurred and be continuing.
Each Credit Event shall be deemed to constitute a joint and
several representation and warranty by each of the Borrowers on the
date of such Credit Event as to the matters specified in paragraphs
(b) and (c) of this Section 4.01."
SECTION 3.6 Section 5.04 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"SECTION 5.04 Financial Statements, Reports, etc. Furnish to each
Agent and each Lender:
(a) within 90 days after the end of each fiscal year, the balance
sheet and related statements of income, stockholders' equity and cash
flows showing the financial condition of the Borrowers on a combined
basis as of the close of such fiscal year and the results of its
operations and the operations of the Borrowers on a combined basis
during such year, together with comparative figures for the
immediately preceding fiscal year, all audited by an independent
public accountant of recognized national standing and accompanied by
an opinion of such accountants (which shall not be qualified in any
material respect except for a going concern qualification and as
indicated below) to the effect that such financial statements fairly
present the financial condition and results of operations of the
Borrowers in accordance with GAAP (except for the exclusion of Scotia
Pacific, Salmon Creek and Scotia Inn except as losses in excess of
investments in subsidiaries as a component of stockholder's equity
unless otherwise indicated or the context indicates otherwise)
consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, the balance sheet and related
statements of income, stockholders' equity and cash flows showing the
financial condition of the Borrowers on a combined basis as of the
close of such fiscal quarter and the results of its operations and the
operations of the Borrowers during such fiscal quarter and the then
elapsed portion of the fiscal year, and commencing April, 2006,
comparative figures for the same periods in the immediately preceding
fiscal year, all certified by one of PALCO's Financial Officers as
fairly presenting the financial condition and results of operations of
the Borrowers on a combined basis in accordance with GAAP (except for
the exclusion of Scotia Pacific, Salmon Creek and Scotia Inn except as
losses in excess of investments in subsidiaries as a component of
stockholder's equity and consolidating the financial statements
thereof, and inventory presented on a FIFO basis) consistently
applied, subject to normal year-end audit adjustments and the absence
of footnotes;
(c) within 30 days after the end of each fiscal month of each
fiscal quarter, (i) the combined balance sheet and related statements
of income and cash flows showing the financial condition of the
Borrowers during such fiscal month and the then elapsed portion of the
fiscal year, all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of the
Borrowers in accordance with GAAP (except for the exclusion of Scotia
Pacific, Salmon Creek and Scotia Inn except as losses in excess of
investments in subsidiaries as a component of stockholder's equity and
consolidating the financial statements thereof, and inventory
presented on a FIFO basis) consistently applied, subject to normal
year-end audit adjustments and the absence of footnotes and (ii) the
separate, internally prepared entity-only balance sheet and related
statements of income and cash flows showing the financial condition of
each Borrower, and the eliminations reflected in the corresponding
financial statements delivered pursuant to the preceding clause (i),
for such month and the then-elapsed portion of the fiscal year (and,
commencing with such financial statements for the month of April,
2006, for the corresponding month and elapsed portion of the preceding
fiscal year) all certified by one of its Financial Officers as fairly
presenting the financial condition and results of operations of the
Borrowers in accordance with GAAP (except for the exclusion of PALCO's
wholly owned subsidiaries Scotia Pacific, Salmon Creek and Scotia Inn
except as losses in excess of investments in subsidiaries as a
component of stockholder's equity and consolidating the financial
statements thereof, and inventory presented on a FIFO basis)
consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;
(d) concurrently with any delivery of financial statements under
paragraph (a), (b) or (c) above, (i) a certificate of the accounting
firm (in the case of paragraph (a)) or Financial Officer (in the case
of paragraph (b)) opining on or certifying such statements and
certifying that no Event of Default or Default has occurred or, if
such an Event of Default or Default has occurred, specifying the
nature and extent thereof and any corrective action taken or proposed
to be taken with respect thereto (which certificate, when furnished by
an accounting firm, may be limited to providing negative assurances
regarding financial covenants related to accounting matters and
disclaim responsibility for legal interpretations), (ii) a certificate
executed by any officer of PALCO setting forth computations in
reasonable detail satisfactory to the Agents demonstrating compliance
with the covenants contained in Sections 6.10, 6.11, 6.12 and 6.13,
(iii) (x) a management report, in reasonable detail, signed by the
chief financial officer of PALCO, describing the operations and
financial condition of the Loan Parties and their Subsidiaries for the
month and the portion of the fiscal year then ended (or for the fiscal
year then ended in the case of annual financial statements) and (y) a
report setting forth in comparative form the corresponding figures for
the corresponding periods of the previous fiscal year and the
corresponding figures from the most recent budget for the applicable
periods delivered to the Agents (and discussing the reasons for any
significant variations from such budget), (iv) a report, in form
reasonably acceptable to the Agents, setting forth the Asset Sales
which have occurred during such period and since the Closing Date and
a description of the status of the sale process with respect to all
other Assets Sales and (v) (v) a report, in form reasonably acceptable
to the Agents, in reasonable detail, signed by the chief financial
officer of PALCO, describing (A) the occurrence of any matter that
could reasonably be expected to result in Environmental Liability to
Holdings, the Borrower or its Subsidiaries in excess of $5,000,000,
(B) the status of Borrower's and its Subsidiaries' compliance with the
matters discussed in the "Water Quality" subsection of Schedule 3.17,
including without limitation (1) TMDL's, (2) waste discharge
reporting, (3) operational requirements and (4) WWDR's (including the
results of the required monitoring program and any modifications or
amendments thereto), and (C) the occurrence of any Environmental
Liability pursuant to Senate Xxxx 810 or related to a violation of the
Borrower's Habitat Conservation Plan or other plans and/or Permits
related to listed species and (v) a report, in form reasonably
acceptable to the Agents, with respect to the Annexation process
listing all applicable material objections, milestones, changes in
scheduling, new governmental requirements and all other issues
material to the Annexation process, and generally setting forth the
status and progress of the Annexation since the delivery of the prior
financial statements;
(e) at least 30 days prior to the end of each fiscal year of
PALCO, a detailed consolidated budget for the following fiscal year
(including a projected consolidated and consolidating balance sheet
and related statements of projected operations and cash flows as of
the end of and for such following fiscal year and setting forth the
assumptions used for purposes of preparing such budget) and, promptly
when available, any significant revisions of such budget;
(f) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by PALCO or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of
the functions of said Commission, or with any national securities
exchange;
(g) promptly after the receipt thereof by either PALCO or any of
the Subsidiaries, a copy of any final "management letter" received by
any such person from its certified public accountants and the
management's response thereto (it being understood that the term
"management letter" does not include communications from such public
accountants to an audit committee that by their terms expressly state
that they may not be provided to third parties);
(h) promptly, upon the Collateral Agent's request, and in any
event no less frequently than noon New York time on the third (3rd)
Business Day after the end of each week, each of the following
reports, each of which shall be prepared by Borrowers as of the last
day of the immediately preceding week: (A) a Borrowing Base
Certificate with respect to each Borrower, accompanied by such
supporting detail and documentation as shall be requested by the
Collateral Agent in its reasonable discretion; (B) with respect to
each Borrower, a summary of Inventory by location and type with a
supporting perpetual Inventory report, in each case accompanied by
such supporting detail and documentation as shall be requested by the
Collateral Agent in its reasonable discretion; and (C) with respect to
each Borrower, a trial balance showing Accounts outstanding aged from
invoice date as follows: 1 to 30 days, 31 to 60 days, 61 to 90 days,
91 days to 120 days and 120 days or more, accompanied by such
supporting detail and documentation as shall be requested by the
Collateral Agent in its reasonable discretion;
(i) on a weekly basis or at such more frequent intervals as the
Collateral Agent may request from time to time (together with a copy
of all or any part of such delivery requested by any Lender in writing
after the Closing Date), collateral reports with respect to each
Borrower, including all additions and reductions (cash and non-cash)
with respect to Accounts of each Borrower, in each case accompanied by
such supporting detail and documentation as shall be requested by
Collateral Agent in its reasonable discretion each of which shall be
prepared by the applicable Borrower as of the last day of the
immediately preceding week or the date 2 days prior to the date of any
request;
(j) at the time of delivery of each of the monthly financial
statements delivered pursuant to Section 5.04(c): (A) a reconciliation
of the most recent monthly Borrowing Base, general ledger and
month-end Inventory reports of each Borrower to each Borrower's
general ledger and monthly financial statements delivered pursuant to
Section 5.04(c), in each case accompanied by such supporting detail
and documentation as shall be requested by the Collateral Agent in its
reasonable discretion; (B) a reconciliation of the perpetual inventory
by location to each Borrower's most recent monthly Borrowing Base
Certificate, general ledger and monthly financial statements delivered
pursuant to Section 5.04(c), in each case accompanied by such
supporting detail and documentation as shall be requested by the
Collateral Agent in its reasonable discretion; (C) an aging of
accounts payable and a reconciliation of that accounts payable aging
to each Borrower's general ledger and monthly financial statements
delivered pursuant to Section 5.04(c), in each case accompanied by
such supporting detail and documentation as shall be requested by the
Collateral Agent in its reasonable discretion; and (D) a
reconciliation of the outstanding Loans to each Borrower's general
ledger and monthly financial statements delivered pursuant to Section
5.04(c), in each case accompanied by such supporting detail and
documentation as shall be requested by the Collateral Agent in its
reasonable discretion;
(k) from time to time, if Collateral Agent determines in its sole
discretion that obtaining appraisals is necessary or appropriate for
any reason, the Collateral Agent will, at Borrower's expense, obtain
appraisal reports in form and substance and from appraisers
satisfactory to the Collateral Agent stating the then current market
values of all or any portion of the Real Property and personal
property, including Appraisals of Borrowers' Inventory, owned by any
of the Loan Parties;
(l) Borrowers, at their own expense, shall deliver to the
Collateral Agent the results of each physical verification, if any,
that any Loan Party may in their discretion have made, or caused any
other person to have made on their behalf, of all or any portion of
their Inventory (and, if a Default or an Event of Default has occurred
and is continuing, Borrowers shall, upon the request of the Collateral
Agent, conduct, and deliver the results of, such physical
verifications as the Collateral Agent may require); and
(m) promptly, from time to time, such other information regarding
the operations, business affairs and financial condition of any Loan
Party or Scotia Pacific, or compliance with the terms of any Loan
Document, as the Administrative Agent, the Collateral Agent or any
Lender may reasonably request."
SECTION 3.7 Section 5.05 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Section 5.05 Litigation and Other Notices. Furnish to the,
Agents and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to
be taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any arbitrator
or Governmental Authority, against any Loan Party or Scotia Pacific
that would reasonably be expected to result in a Material Adverse
Effect;
(c) the occurrence of any ERISA Event described in clause (b) of
the definition thereof or any other ERISA Event that, alone or
together with any other ERISA Events that have occurred, would
reasonably be expected to result in liability of any Loan Party or
Scotia Pacific in an aggregate amount exceeding $1,000,000; and
(d) any development that has resulted in, or would reasonably be
expected to result in, a Material Adverse Effect."
SECTION 3.8 Section 5.06 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"SECTION 5.06 Information Regarding Collateral.
(a) Furnish to each Agent prompt written notice of any change (i)
in any Loan Party's corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Loan Party's chief executive
office, its principal place of business, any office in which it
maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located
(including the establishment of any such new office or facility),
(iii) in any Loan Party's identity or corporate structure or (iv) in
any Loan Party's Federal Taxpayer Identification Number. Each of the
Borrowers agrees not to effect or permit any change of its corporate
or identity or state of organization unless all filings have been made
under the UCC or otherwise and all other actions have been taken that
are required in order for the Administrative Agent to continue at all
times following such change to have a valid, legal and perfected
security interest in all the Collateral. The Administrative Borrower
also agrees promptly to notify the Agents if any material portion of
the Collateral is damaged or destroyed.
(b) Deliver to each Agent, each year, at the time of delivery of
the annual financial statements with respect to the preceding fiscal
year pursuant to Section 5.04(a), a certificate of a Financial Officer
setting forth the information required pursuant to Section I of the
Perfection Certificate or confirming that there has been no change in
such information since the date of the Perfection Certificate
delivered on the Closing Date or the date of the most recent
certificate delivered pursuant to this Section."
SECTION 3.9 Section 5.07 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"SECTION 5.07 Maintaining Records; Access to Properties and
Inspections; Environmental Assessments.
(a) Keep proper books of record and account in which full, true
and correct entries in conformity with GAAP and all requirements of
law are made of all dealings and transactions in relation to its
business and activities. Each of the Borrowers will, and will cause
each of the Subsidiaries to, permit any representatives designated by
any Agent or any Lender to visit and inspect the financial records and
the properties of the Loan Party, and conduct field examinations
relating to the Collateral, at reasonable times and as often as
reasonably requested and to make extracts from and copies of such
financial records, and permit any representatives designated by any
Agent or any Lender to discuss the affairs, finances and condition of
the Loan Parties with the officers thereof and independent accountants
therefor.
(b) In the event that any Agent or any Lender shall have reason
to believe that Hazardous Materials have been Released or are
threatened to be Released on or from any Mortgaged Property or other
facility of any Loan Party or that any such property or facility is
not being operated in compliance with applicable Environmental Law,
either Agent may, at its election and after reasonable notice to the
Administrative Borrower, retain an independent engineer or other
qualified environmental consultant to evaluate whether Hazardous
Materials are present in the soil, groundwater, or surface water at
such Mortgaged Property or facility or whether the facilities or
properties are being operated and maintained in compliance with
applicable Environmental Laws; provided however that, no Agent shall
retain a consultant to evaluate a particular Release to the extent the
other Agent shall have already retained such a consultant. Such
environmental assessments may include detailed visual inspections of
the Mortgaged Property or facility, including any and all storage
areas, storage tanks, drains, dry xxxxx and leaching areas, and the
taking of soil samples, surface water samples and groundwater samples
as well as such other reasonable investigations or analyses as are
necessary. The scope of any such environmental assessments under this
paragraph shall be determined in the sole discretion of either Agent.
Each of the Borrowers shall, and shall cause each of the Subsidiaries
to, cooperate in the performance of any such environmental assessment
and permit any such engineer or consultant designated by either Agent
to have full access to each property or facility at reasonable times
and after reasonable notice to the Administrative Borrower of the
plans to conduct such an environmental assessment. All environmental
assessments conducted pursuant to this paragraph shall be at the
Borrowers' sole cost and expense."
SECTION 3.10 Section 5.09 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"SECTION 5.09 Additional Collateral, etc.
(a) With respect to any Collateral acquired after the Closing
Date (other than the Settlement Property) or, in the case of inventory
or equipment, any Collateral (having a value in excess of $25,000)
moved after the Closing Date by any other Loan Party (other than any
Collateral described in paragraphs (b) or (c) of this Section 5.09) as
to which the Administrative Agent, for the benefit of the Secured
Parties, does not have a perfected security interest, promptly (and,
in any event, within 10 days following the date of such acquisition)
(i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement or such other Security
Documents as the Administrative Agent or the Collateral Agent deems
necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such Collateral
and (ii) take all actions necessary or advisable to grant to, or
continue on behalf of, the Administrative Agent, for the benefit of
the Secured Parties, a perfected security interest in such Collateral,
including the filing of UCC financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law
or as may be requested by the Administrative Agent or the Collateral
Agent.
(b) With respect to any fee interest in any Collateral consisting
of Real Property (other than the Settlement Property) or any material
lease of Collateral consisting of Real Property acquired or leased
after the Closing Date by the Borrowers or any other Loan Party,
promptly (and, in any event, within 10 days following the date of such
acquisition) (i) execute and deliver a first priority Mortgage in
favor of the Administrative Agent (subject only to Liens permitted by
Section 6.02), for the benefit of the Secured Parties, covering such
real property and complying with the provisions herein and in the
Security Documents, (ii) provide the Secured Parties with title and
extended coverage insurance in an amount at least equal to the
purchase price of such Real Property (or such other amount as the
Agents shall reasonably specify), surveys, and if applicable, flood
insurance, lease estoppel certificates, memoranda or amendments, all
in accordance with the standards for deliveries contemplated on the
Closing Date, (iii) if requested by any Agent, deliver to the Agents
legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably
satisfactory to the Agents and (iv) deliver to the Agents a notice
identifying, and upon any Agent's request, provide a copy of, the
consultant's reports, environmental site assessments or other
documents relied upon by any Loan Party to determine that any such
real property included in such Collateral does not contain Hazardous
Materials of a form or type or in a quantity or location that could
reasonably be expected to result in a material Environmental
Liability.
(c) With respect to any Subsidiary created or acquired after the
Closing Date by any Loan Party, promptly (and, in any event, within 10
days following such creation or the date of such acquisition) (i)
execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement as the Administrative Agent or the
Collateral Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a valid,
perfected first priority security interest in the Equity Interests in
such new Subsidiary that are owned by any Loan Party (subject only to
Liens permitted by Section 6.02), (ii) deliver to the Administrative
Agent the certificates, if any, representing such Equity Interests,
together with undated stock powers, in blank, executed and delivered
by a duly authorized officer of the Borrowers or such Subsidiary, as
the case may be, (iii) cause such new Subsidiary (A) to become a party
to the Guarantee and Collateral Agreement (and provide Guarantees of
the Obligations) and the Intellectual Property Security Agreements and
(B) to take such actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Collateral described
in the Guarantee and Collateral Agreement and the Intellectual
Property Security Agreement with respect to such new Subsidiary,
including the recording of instruments in the United States Patent and
Trademark Office and the United States Copyright Office and the filing
of UCC financing statements in such jurisdictions as may be required
by the Guarantee and Collateral Agreement, the Intellectual Property
Security Agreement or by law or as may be requested by the
Administrative Agent or the Collateral Agent and (iv) if requested by
the Administrative Agent or the Collateral Agent, deliver to the
Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent or the
Collateral Agent, as applicable."
SECTION 3.11 Section 5.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"SECTION 5.10 Further Assurances. From time to time duly
authorize, execute and deliver, or cause to be duly authorized,
executed and delivered, such additional instruments, certificates,
financing statements, agreements or documents, and take all such
actions (including filing UCC and other financing statements), as the
Administrative Agent or the Collateral Agent may reasonably request,
for the purposes of implementing or effectuating the provisions of
this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the
Secured Parties with respect to the Collateral (or with respect to any
additions thereto or replacements or proceeds or products thereof or
with respect to any other property or assets hereafter acquired by or
any of the Loan Parties which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent, the Collateral Agent, or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the
other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, each of
the Borrowers will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and
other documents and papers that the Administrative Agent, the
Collateral Agent or such Lender may be required to obtain from any
Loan Party for such governmental consent, approval, recording,
qualification or authorization."
SECTION 3.12 Section 5.13 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"SECTION 5.13 Landlords' Agreements, Mortgagee Agreements, Bailee
Letters and Real Estate Purchases. Upon the request of the
Administrative Agent or the Collateral Agent, each Loan Party shall
use reasonable efforts to obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each
leased property (other than the lessor of the leased property which
the mill owned by Xxxxx on the Closing Date is on), mortgagee of owned
property or bailee with respect to any warehouse, processor or
converter facility or other location where Collateral is stored or
located, which agreement or letter shall contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to the
Administrative Agent. With respect to such locations or warehouse
space leased, owned or where Collateral is stored or located as of the
Closing Date and thereafter, if the Administrative Agent has not
received a landlord or mortgagee agreement or bailee letter as of the
Closing Date (or, if later, as of the date such location is acquired,
leased or Collateral stored or located), the Eligible Inventory at
that location shall, in either Agent's discretion, be subject to such
Reserves as may be established by such Agent in its reasonable credit
judgment. After the Closing Date, no real property or warehouse space
shall be leased by any Loan Party and no Inventory shall be shipped to
a processor or converter under arrangements established after the
Closing Date (excluding renewals of existing leases and arrangements)
without the prior written consent of the Agents (which consent, in
either Agent's discretion, may be conditioned upon the establishment
of Reserves acceptable to either Agent) or, unless and until a
satisfactory landlord agreement or bailee letter, as appropriate,
shall first have been obtained with respect to such location. Each
Loan Party shall and shall cause its Subsidiaries to timely and fully
pay and perform their obligations under all leases and other
agreements with respect to each leased location or public warehouse
where any Collateral is or may be located (other than Collateral in an
aggregate amount for all such locations not to exceed $100,000 in the
aggregate)."
SECTION 3.13 Article VII of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events
of Default"):
(a) any representation or warranty made or deemed made in or in
connection with any Loan Document or the Borrowings or issuances of
Letters of Credit hereunder, or any representation, warranty,
statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with
or pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or
furnished;
(b) default shall be made in the payment of any principal of any
Loan or the reimbursement with respect to any Letter of Credit when
and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration
thereof in accordance with the Loan Documents;
(c) default shall be made in the payment of any interest on any
Loan or reimbursement with respect to any Letter of Credit or any Fee
or any other amount (other than an amount referred to in (b) above)
due under any Loan Document, when and as the same shall become due and
payable, and such default shall continue unremedied for a period of
three Business Days;
(d) default shall be made in the due observance or performance by
any Loan Party of any covenant, condition or agreement contained in
Section 5.01(a), 5.02 (other than a default which arises as a result
of the downgrade in the rating of an insurance carrier), 5.05 or 5.08
or in Article VI;
(e) default shall be made in the due observance or performance by
any Loan Party of any covenant, condition or agreement contained in
Section 5.04(c), 5.04(h), 5.04(i) or 5.04(j) and such default shall
continue unremedied for a period of 5 days;
(f) default shall be made in the due observance or performance by
any Loan Party or Holdings of any covenant, condition or agreement
contained in any Loan Document (other than those specified in clauses
(b), (c) or (d) above) and such default shall continue unremedied for
a period of 30 days;
(g) any Loan Party shall (i) fail to pay any principal or
interest, regardless of amount, due in respect of any Material
Indebtedness, when and as the same shall become due and payable, or
(ii) any other event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Material Indebtedness or
any trustee or agent on its or their behalf to cause any Material
Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (ii) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of any Loan Party (other
than Salmon Creek), or of a substantial part of the property or assets
of any Loan Party (other than Salmon Creek), under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership
or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Loan
Party (other than Salmon Creek)or for a substantial part of the
property or assets of any Loan Party (other than Salmon Creek)or (iii)
the winding-up or liquidation of any Loan Party (other than Salmon
Creek); and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the
foregoing shall be entered;
(i) any Loan Party (other than Salmon Creek) shall (i)
voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in (g) above,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for any Loan
Party (other than Salmon Creek)or for a substantial part of the
property or assets of any Loan Party (other than Salmon Creek), (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors or (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $5,000,000 or other judgments that,
individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect shall be rendered against any Loan
Party or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which
execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to levy upon assets or properties
of any Loan Party to enforce any such judgment;
(k) an ERISA Event described in clause (b) of the definition
thereof shall have occurred or any other ERISA Event shall have
occurred that, when taken together with all other such ERISA Events,
would reasonably be expected to result in liability of any Loan Party
and their ERISA Affiliates in an aggregate amount exceeding
$5,000,000;
(l) any Guarantee under the Guarantee and Collateral Agreement
for any reason shall cease to be in full force and effect (other than
in accordance with its terms), or any Guarantor shall deny that it has
any further liability under its Guarantee (other than as a result of
the discharge of such Guarantor in accordance with the terms of the
Loan Documents);
(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party or Holdings
not to be, a valid, perfected and, with respect to the Secured
Parties, first priority (except as otherwise expressly provided in
this Agreement or such Security Document) Lien on any material
Collateral covered thereby, except to the extent that any such loss of
perfection or priority results from the failure of the Administrative
Agent to maintain possession of certificates representing Equity
Interests pledged under the Guarantee and Collateral Agreement; or
(n) there shall have occurred a Change in Control; then, and in
every such event (other than an event with respect to any Loan Party
described in paragraph (h) or (i) above), and at any time thereafter
during the continuance of such event either or both of the following
actions may be taken: (i) the Administrative Agent may, and at the
request of the Required Lenders with respect to the Facility shall,
and the Collateral Agent may, solely with respect to an event
described in paragraph (b), (c) or (g) above or in the event of any
default in the due observance or performance by any Loan Party of any
covenant, condition or agreement contained in Sections 6.10, 6.11,
6.12 or 6.13 hereof, in each case, by notice to the Administrative
Borrower, terminate forthwith the Revolving Credit Commitments and the
Swingline Commitment and (ii) the Administrative Agent may, and at the
request of the Required Lenders shall, , and the Collateral Agent may,
solely with respect to an event described in paragraph (b), (c) or (g)
above or in the event of any default in the due observance or
performance by any Loan Party of any covenant, condition or agreement
contained in Sections 6.10, 6.11, 6.12 or 6.13 hereof, in each case,
by notice to the Administrative Borrower, declare the Loans then
outstanding to be forthwith due and payable in whole or in part,
whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrowers accrued hereunder and
under any other Loan Document, shall become forthwith due and payable,
and, upon such declaration, the Borrowers shall become immediately
obligated to Cash Collateralize all Letters of Credit, all without
presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrowers, anything contained
herein or in any other Loan Document to the contrary notwithstanding,
and the Collateral Agent and the Administrative Agent, as applicable,
shall have the right to take all or any actions and exercise any
remedies available to a secured party under the Security Documents or
applicable law or in equity; and in any event with respect to any Loan
Party described in paragraph (h) or (i) above, the Revolving Credit
Commitments and the Swingline Commitment shall automatically terminate
and the principal of the Loans then outstanding, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities
of the Borrowers accrued hereunder and under any other Loan Document,
shall automatically become due and payable, and the Borrowers shall
become immediately obligated to Cash Collateralize all Letters of
Credit, all without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein or in any other Loan Document to
the contrary notwithstanding, and the Administrative Agent and the
Collateral Agent, as applicable, shall have the right to take all or
any actions and exercise any remedies available to a secured party
under the Security Documents or applicable law or in equity. Any cash
collateral delivered hereunder shall be held by the Collateral Agent
(without liability for interest thereon) and applied to the
liabilities of the Borrowers arising in connection with any drawings
under a Letter of Credit. Other than any interest earned on the
investment of such deposits in Permitted Investments, which
investments shall be made at the option and sole discretion of the
Collateral Agent, such deposits shall not bear interest. After the
expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Collateral Agent to any remaining
liabilities of the Borrowers accrued hereunder and any excess shall be
delivered to the Borrowers or as a court of competent jurisdiction may
elect."
SECTION 3.14 Article VIII of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"ARTICLE VIII
THE AGENTS AND THE ARRANGER
Each of the Lenders hereby irrevocably appoints each of the
Agents its agent and authorizes each Agent to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by
the terms of the Loan Documents, together with such actions and powers
as are reasonably incidental thereto. Without limiting the generality
of the foregoing, the Administrative Agent is hereby expressly
authorized by the Lenders to execute any and all documents (including
releases and the Security Documents) with respect to the Collateral
and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this
Agreement and the Security Documents.
Each Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as
though it were not the Administrative Agent or the Collateral Agent,
as applicable, and such bank and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of business with
Holdings, the Borrowers or any Subsidiary or any of their respective
Affiliates as if it were not the Administrative Agent hereunder.
Neither the Administrative Agent nor the Collateral Agent shall
have any duties or obligations except those expressly set forth in the
Loan Documents. Without limiting the generality of the foregoing, (a)
the Agents shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is
continuing, (b) the Agents shall not have any duty to take any
discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated hereby that
such Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08), and
(c) except as expressly set forth in the Loan Documents, the Agents
shall not have any duty to disclose, nor shall it be liable for the
failure to disclose, any information relating to Holdings, the
Borrowers or any of the Subsidiaries that is communicated to or
obtained by the bank serving as the Administrative Agent or the
Collateral Agent, as applicable, or any of its respective Affiliates
in any capacity. The Agents shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required
Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.08) or in
the absence of its own gross negligence or willful misconduct. The
Agents shall not be deemed to have knowledge of any Default unless and
until written notice thereof is given to such Agent by Holdings, the
Borrowers, the other Agent or a Lender, and the Agents shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with
any Loan Document, (ii) the contents of any certificate, report or
other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or
other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan
Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent or the Collateral
Agent, as applicable.
Each of the Agents shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by the
proper person. Each of the Agents may also rely upon any statement
made to it orally or by telephone and believed by it to have been made
by the proper person, and shall not incur any liability for relying
thereon. Each of the Agents may consult with legal counsel (who may be
counsel for Holdings or the Borrowers), independent accountants and
other experts selected by it, and shall not be liable for any action
taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
Each of the Agents may perform any and all its duties and
exercise its rights and powers by or through any one or more
sub-agents appointed by it. Each of the Agents and any sub-agent of
such Agent may perform any and all its duties and exercise its rights
and powers by or through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any
such sub-agent and to the Related Parties of each Agent and any such
sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for
herein as well as activities as the Administrative Agent and the
Collateral Agent, as applicable.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided below, the Administrative Agent may
resign at any time by notifying the Lenders and the Borrowers. Upon
any such resignation of the Administrative Agent, the Required Lenders
shall have the right, in consultation with the Borrowers, to appoint a
successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30
days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may, on behalf of
the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York, New York, or an Affiliate of any such
bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder. The
fees payable by the Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise
agreed between the Borrowers and such successor. After an
Administrative Agent's resignation hereunder, the provisions of this
Article and Section 9.05 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted
to be taken by any of them while acting as the Administrative Agent.
The Collateral Agent may resign at any time by notifying the
Administrative Agent and the Borrowers. Upon any such resignation of
the Collateral Agent, the Administrative Agent shall have the right,
in consultation with the Borrowers, to appoint a successor. Upon the
acceptance of its appointment as Collateral Agent hereunder by a
successor, such successor shall succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral
Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrowers to
a successor Collateral Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrowers and such
successor. After an Collateral Agent's resignation hereunder, the
provisions of this Article and Section 9.05 shall continue in effect
for the benefit of such retiring Collateral Agent, its sub-agents and
their respective Related Parties in respect of any actions taken or
omitted to be taken by any of them while acting as the Collateral
Agent.
The Arranger, in its capacity as such, shall have no duties or
responsibilities, and shall incur no liability, under this Agreement
or any other Loan Document.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent, the Collateral Agent, the
Arranger, or any Lender and based on such documents and information as
it has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative
Agent, the Collateral Agent, the Arranger, or any Lender and based on
such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement or any other Loan
Document, any related agreement or any document furnished hereunder or
thereunder.
To the extent required by any applicable law, the Administrative
Agent and the Collateral Agent, as applicable may withhold from any
interest payment to any Lender an amount equivalent to any applicable
withholding tax. If the Internal Revenue Service or any other
Governmental Authority asserts a claim that the Administrative Agent
or the Collateral Agent, as applicable, did not properly withhold tax
from amounts paid to or for the account of any Lender because the
appropriate form was not delivered or was not properly executed or
because such Lender failed to notify the Administrative Agent and the
Collateral Agent of a change in circumstance which rendered the
exemption from, or reduction of, withholding tax ineffective or for
any other reason, such Lender shall indemnify the Administrative Agent
and the Collateral Agent fully for all amounts paid, directly or
indirectly, by such Agent as tax or otherwise, including any penalties
or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expenses) incurred.
Each Agent hereby agrees to promptly give the other Agent copies
of each (i) material notice, report, document and other writing
received by it from the Borrower, Holdings or any Loan Party in its
capacity as the Administrative Agent or Collateral Agent hereunder,
and (ii) material notice, report, document or other writing delivered
by such Agent to the Borrower, Holdings or any Loan Party (in each
case of clause (i) and (ii) above, other than in connection with
periodic borrowings by Borrowers and notices of Borrowing, except as
otherwise set forth herein)."
SECTION 3.15 Section 9.01 is hereby amended to (i) delete the
period at the end of clause (c) and substitute a semi-colon and the
word "or" therefore and (ii) add the following new clause (d)
immediately following clause (c):
"(d) if to the Collateral Agent, to
LaSalle Business Credit, LLC
Xxx Xxxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopy No.: 000-000-0000.
SECTION 3.16 Section 9.02 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.02 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the certificates or
other instruments prepared or delivered in connection with or pursuant
to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and shall survive the making by
the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or
on their behalf, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any Fee or
any other amount payable under this Agreement or any other Loan
Document is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not been terminated.
The provisions of Sections 2.14, 2.16, 2.20 and 9.05 shall remain
operative and in full force and effect regardless of the expiration of
the term of this Agreement, the consummation of the transactions
contemplated hereby, the repayment of any of the Loans, the expiration
of the Commitments, the expiration of any Letter of Credit, the
invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document or any investigation made by or
on behalf of the Administrative Agent, the Collateral Agent, the
Arranger, any Lender or the Issuing Bank."
SECTION 3.17 Section 9.04 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.04 Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the permitted
successors and assigns of such party; and all covenants, promises and
agreements by or on behalf of the Borrowers, the Administrative Agent,
the Collateral Agent or the Lenders that are contained in this
Agreement shall bind and inure to the benefit of their respective
successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the
time owing to it); provided, however, that (i) the Administrative
Agent must give its prior written consent to such assignment (which
consent shall not be unreasonably withheld or delayed), (ii) in the
case of any assignment of a Revolving Credit Commitment, the Swingline
Lender and each of the Borrowers must give its prior written consent
to such assignment (which consent shall not be unreasonably withheld
or delayed); provided that the consent of the Borrowers shall not be
required to any such assignment so long as an Event of Default exists,
(iii) the amount of the Commitment of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 (or, if less,
the entire remaining amount of such Lender's Commitment) and shall be
in an amount that is an integral multiple of $1,000,000 (or the entire
remaining amount of such Lender's Commitment), (iv) the parties to
each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance (such Assignment and Acceptance to
be manually executed and delivered together with a processing and
recordation fee of $3,500 payable to the Administrative Agent and (v)
the assignee, if it shall not be a Lender immediately prior to the
assignment, shall deliver to the Administrative Agent an
Administrative Questionnaire. Upon acceptance and recording pursuant
to paragraph (e) of this Section 9.04, from and after the effective
date specified in each Assignment and Acceptance, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees accrued for
its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties
hereto as follows: (i) such assigning Lender warrants that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Commitment, and the
outstanding balances of its Loans, in each case without giving effect
to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in
(i) above, such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan
Document or any other instrument or document furnished pursuant
hereto, or the financial condition of Holdings, the Borrowers or any
Subsidiary or the performance or observance by Holdings, the Borrowers
or any Subsidiary of any of its obligations under this Agreement, any
other Loan Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and Acceptance;
(iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial
statements referred to in Section 3.05(a) or delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (v) such assignee will independently
and without reliance upon the Administrative Agent, the Arranger, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations
which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent
of the Borrowers, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive and the Borrowers, the
Administrative Agent, and the Lenders may treat each person whose name
is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary. The Register shall be available for inspection by the
Borrowers, and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an
Administrative Questionnaire completed in respect of the assignee
(unless the assignee shall already be a Lender hereunder) and the
written consent of the Swingline Lender and the Administrative Agent
to such assignment, the Administrative Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
Lenders and the Swingline Lender. No assignment shall be effective
unless it has been recorded in the Register as provided in this
paragraph (e).
(f) Each Lender may without the consent of the Borrowers, the
Swingline Lender, the Issuing Bank, the Administrative Agent or the
Collateral Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the
Loans); provided, however, that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection provisions
contained in Sections 2.14, 2.16 and 2.20 to the same extent as if
they were Lenders (but, with respect to any particular participant, to
no greater extent than the Lender that sold the participation to such
participant) and (iv) the Borrowers, the Administrative Agent, the
Collateral Agent and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrowers relating to the
Loans or reimbursement obligations under any Letter of Credit and to
approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing
any fees payable hereunder or the amount of principal of or the rate
at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on
the Loans, increasing or extending the Commitments or releasing any
Guarantor or all or any substantial part of the Collateral).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation
pursuant to this Section 9.04, disclose to the assignee or participant
or proposed assignee or participant any information relating to the
Borrowers furnished to such Lender by or on behalf of the Borrowers;
provided that, prior to any such disclosure of information designated
by the Borrowers as confidential, each such assignee or participant or
proposed assignee or participant shall execute an agreement whereby
such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential
information on terms no less restrictive than those applicable to the
Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of its
rights under this Agreement to secure extensions of credit to such
Lender or in support of obligations owed by such Lender; provided that
no such assignment shall release a Lender from any of its obligations
hereunder or substitute any such assignee for such Lender as a party
hereto.
(i) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special purpose
funding vehicle (an "SPC"), identified as such in writing from time to
time by the Granting Lender to the Administrative Agent and the
Borrowers, the option to provide to the Borrowers all or any part of
any Loan that such Granting Lender would otherwise be obligated to
make to the Borrowers pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any
Loan and (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting
Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such
Loan were made by such Granting Lender. Each party hereto hereby
agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender). In furtherance of the foregoing,
each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one
year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not
institute against, or join any other person in instituting against,
such SPC any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary
contained in this Section 9.04, any SPC may (i) with notice to, but
without the prior written consent of, the Borrowers and the
Administrative Agent and without paying any processing fee therefor,
assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Borrowers
and Administrative Agent) providing liquidity and/or credit support to
or for the account of such SPC to support the funding or maintenance
of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC.
(j) The Borrowers shall not assign or delegate any of its rights
or duties hereunder without the prior written consent of the
Administrative Agent and each Lender, and any attempted assignment
without such consent shall be null and void."
SECTION 3.18 Section 9.05 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.05 Expenses; Indemnity.
(a) The Borrowers agree, to pay all out-of-pocket costs and
expenses incurred by the Administrative Agent, the Collateral Agent,
the Arranger and the Swingline Lender in connection with the
syndication of the Facility and the preparation and administration of
this Agreement and the other Loan Documents or in connection with any
amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions hereby or thereby
contemplated shall be consummated) or incurred by the Administrative
Agent, the Collateral Agent, the Arranger or any Lender in connection
with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents or in connection with the
Loans made or Letters of Credit issued hereunder, including in each
case the fees, disbursements and other charges of counsel, Xxxxxx
& Xxxxxxx LLP and Winston & Xxxxxx LLP, for the Arranger and
the Administrative Agent, and, in connection with any such enforcement
or protection, the reasonable fees, disbursements and other charges of
any counsel for the Administrative Agent, the Collateral Agent, the
Arranger or any Lender.
(b) The Borrowers agree to indemnify the Administrative Agent,
the Collateral Agent, the Arranger, the Issuing Bank, each Lender and
each Related Party of any of the foregoing persons (each such person
being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and
related costs and expenses, including reasonable counsel fees,
disbursements and other charges, incurred by or asserted against any
Indemnitee arising out of, in any way connected with, or as a result
of (i) the execution or delivery of this Agreement or any other Loan
Document or any agreement or instrument contemplated thereby, the
performance by the parties thereto of their respective obligations
thereunder or the consummation of the Transactions and the other
transactions contemplated thereby, (ii) the use of the proceeds of the
Loans or issuances of Letters of Credit, (iii) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether
or not any Indemnitee is a party thereto, or (iv) any actual or
alleged presence or Release of Hazardous Materials on any property
owned or operated by any Loan Party, or any Environmental Liability
related in any way to any Loan Party; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related costs and expenses are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from primarily the gross
negligence or willful misconduct of such Indemnitee (and, upon any
such determination, any indemnification payments with respect to such
losses, claims, damages, liabilities or related costs and expenses
previously received by such Indemnitee shall be subject to
reimbursement by such Indemnitee).
(c) To the extent that the Borrowers fail to pay any amount
required to be paid by them to the Administrative Agent, the
Collateral Agent, the Arranger, the Issuing Bank or the Swingline
Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, Collateral Agent,
the Arranger, the Issuing Bank or the Swingline Lender, as the case
may be, such Lender's pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the
case may be, was incurred by or asserted against the Administrative
Agent, the Collateral Agent, the Arranger, the Issuing Bank or the
Swingline Lender in its capacity as such.
(d) To the extent permitted by applicable law, neither of the
Borrowers shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.
(e) Either Agent may, at its option, from time to time, at any
time on or after an Event of Default and for so long as the same is
continuing or upon any other failure of a condition precedent to the
Loans and Letter of Credit accommodations hereunder, make such
disbursements and advances ("Special Agent Advances") which such
Agent, in its sole discretion, (i) deems necessary or desirable either
to preserve or protect the Collateral or any portion thereof or (ii)
to enhance the likelihood or maximize the amount of repayment by any
Loan Party of the Loans and other Obligations or (iii) to pay any
other amount chargeable to any Loan Party pursuant to the terms of
this Agreement or any of the other Loan Documents consisting of costs,
fees and expenses and payments to the Issuing Bank. Special Agent
Advances shall be repayable on demand and be secured by the
Collateral. Special Agent Advances shall constitute Obligations
hereunder. Each Lender agrees that it shall make available to the
Collateral Agent, upon the Collateral Agent's demand, in immediately
available funds, the amount equal to such Lender's Pro Rata Percentage
of each such Special Agent Advance. If such funds are not made
available to the Collateral Agent by such Lender, the Collateral Agent
shall be entitled to recover such funds, on demand from such Lender
together with interest thereon for each day from the date such payment
was due until the date such amount is paid to the Collateral Agent at
the Federal Funds Rate for each day during such period (as published
by the Federal Reserve Bank of New York or at the Collateral Agent's
option based on the arithmetic mean determined by the Collateral Agent
of the rates for the last transaction in overnight Federal funds
arranged prior to 9:00 a.m. (New York City time) on that day by each
of the three leading brokers of Federal funds transactions in New York
City selected by the Collateral Agent) and if such amounts are not
paid within three (3) days of the Collateral Agent's demand, at the
Alternative Base Rate plus the Applicable Margin.
(f) The provisions of this Section 9.05 shall remain operative
and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the Transactions or the other
transactions contemplated hereby, the repayment of any of the Loans,
the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of
this Agreement or any other Loan Document, or any investigation made
by or on behalf of the Administrative Agent, the Collateral Agent, the
Arranger, any Lender or the Issuing Bank. All amounts due under this
Section 9.05 shall be payable on written demand therefor."
SECTION 3.19 Section 9.08 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.08 Waivers; Amendment.
(a) No failure or delay of the Administrative Agent, the
Collateral Agent or any Lender in exercising any power or right
hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a
right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent and the Lenders hereunder
and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or any other Loan Document
or consent to any departure by the Borrowers or any other Loan Party
therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on the Borrowers in any case
shall entitle the Borrowers to any other or further notice or demand
in similar or other circumstances.
(b) Neither this Agreement, any other Loan Document, nor any
provision hereof or thereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the
Borrowers and the Required Lenders. No such waiver, amendment,
modification or consent shall (i) decrease the principal amount of, or
extend the maturity of or any scheduled principal payment date or date
for the payment of any interest on any Loan or any date for
reimbursement of any Letter of Credit, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any
Loan or reimbursement obligation of any Letter of Credit, without the
prior written consent of each Lender affected thereby, (ii) increase
or extend the Commitment or decrease or extend the date for payment of
any Fees of any Lender without the prior written consent of such
Lender, (iii) amend or modify the pro rata requirements of Section
2.17, the provisions of Section 9.04(j), the provisions of this
Section or the definition of the term "Required Lenders," or release
any Guarantor, without the prior written consent of each Lender, (iv)
release all or any substantial part of the Collateral without the
prior written consent of each Lender, or (v) modify the protections
afforded to an SPC pursuant to the provisions of Section 9.04(i)
without the written consent of such SPC; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties
of the Administrative Agent, the Collateral Agent, the Swingline
Lender, the Issuing Bank or the Arranger hereunder or under any other
Loan Document without the prior written consent of the Administrative
Agent, the Collateral Agent, the Swingline Lender, the Issuing Bank or
Arranger, as applicable."
SECTION 3.20 Section 9.09 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.09 Interest Rate Limitation. Notwithstanding anything
herein to the contrary, if at any time the interest rate applicable to
any Loan or any participation in any Letter of Credit, together with
all fees, charges and other amounts which are treated as interest on
such Loan or any participation in any Letter of Credit under
applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or
participation in accordance with applicable law, the rate of interest
payable in respect of such Loan or participation hereunder, together
with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that
would have been payable in respect of such Loan or participation but
were not payable as a result of the operation of this Section 9.09
shall be cumulated and the interest and Charges payable to such Lender
in respect of other Loans or participations or periods shall be
increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds
Effective Rate to the date of repayment, shall have been received by
such Lender."
SECTION 3.21 Section 9.10 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.10 Entire Agreement. This Agreement, the
Administrative Fee Letter, the Collateral Fee Letter and the other
Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any other previous agreement
among the parties with respect to the subject matter hereof is
superseded by this Agreement and the other Loan Documents. Nothing in
this Agreement or in the other Loan Documents, expressed or implied,
is intended to confer upon any person (other than the parties hereto
and thereto, their respective successors and assigns permitted
hereunder and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Collateral
Agent, the Arranger and the Lenders) any rights, remedies, obligations
or liabilities under or by reason of this Agreement or the other Loan
Documents."
SECTION 3.22 Section 9.15 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.15 Jurisdiction; Consent to Service of Process.
(a) Each of the Borrowers hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction
of any New York State court or Federal court of the United States of
America sitting in New York City, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to
this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby
irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Agreement shall affect any right that the
Administrative Agent, the Collateral Agent, the Arranger or any Lender
may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrowers or their
properties in the courts of any jurisdiction.
(b) Each of the Borrowers hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so,
any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to
this Agreement or the other Loan Documents in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement
to serve process in any other manner permitted by law."
SECTION 3.23 Section 9.16 is hereby amended and restated in its entirety to
read as follows:
"SECTION 9.16 Confidentiality. Each of the Administrative Agent,
the Collateral Agent and the Lenders agrees to maintain the
confidentiality of the Information, except that Information may be
disclosed (a) to its and its Affiliates' officers, directors,
employees and agents, including accountants, legal counsel and other
advisors (it being understood that the persons to whom such disclosure
is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b)
to the extent requested by any regulatory authority or
quasi-regulatory authority (such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (d)
in connection with the exercise of any remedies hereunder or under the
other Loan Documents or any suit, action or proceeding relating to the
enforcement of its rights hereunder or thereunder, (e) subject to an
agreement containing provisions substantially the same as those of
this Section 9.16, to (i) any actual or prospective assignee of or
participant in any of its rights or obligations under this Agreement
and the other Loan Documents or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction
relating to any Loan Party or any of their respective obligations, (f)
with the consent of the Borrowers or (g) to the extent such
Information becomes publicly available other than as a result of a
breach of this Section 9.16. For the purposes of this Section,
"Information" shall mean all information received from the Borrowers
and related to the Borrowers or their business, other than any such
information that was available to the Administrative Agent, the
Collateral Agent or any Lender on a nonconfidential basis prior to its
disclosure by Holdings or the Borrowers; provided that, in the case of
Information received from the Borrowers after the date hereof, such
information is clearly identified at the time of delivery as
confidential. Any person required to maintain the confidentiality of
Information as provided in this Section 9.16 shall be considered to
have complied with its obligation to do so if such person has
exercised the same degree of care to maintain the confidentiality of
such Information as such person would accord its own confidential
information. Notwithstanding any other express or implied agreement,
arrangement or understanding to the contrary, each of the parties
hereto agrees that each other party hereto (and each of its employees,
representatives or agents) are permitted to disclose to any persons,
without limitation, the tax treatment and tax structure of the Loans
and the other transactions contemplated by the Loan Documents and all
materials of any kind (including opinions and tax analyses) that are
provided to the Loan Parties, the Lenders, the Arranger, the
Administrative Agent or the Collateral Agent related to such tax
treatment and tax aspects. To the extent not inconsistent with the
immediately preceding sentence, this authorization does not extend to
disclosure of any other information or any other term or detail not
related to the tax treatment or tax aspects of the Loans or the
transactions contemplated by the Loan Documents."
SECTION 3.24 All references in the Credit Agreement to Exhibit D Form of
Borrowing Request and to Exhibit H Form of Borrowing Base Certificate shall be
deemed to be references to the Form of Borrowing Request and Form of Borrowing
Base Certificate attached hereto as Exhibits A and B, respectively.
SECTION 4 AMENDMENTS TO THE GUARANTEE AND COLLATERAL AGREEMENT. Subject to
the terms and conditions set forth herein and in reliance upon Holdings and each
respective Loan Party's representations, acknowledgments and warranties herein
contained, the Guarantee and Collateral Agreement is hereby amended as follows:
SECTION 4.1 The definition of "Secured Parties" set forth in Section 1.1 of
the Guarantee and Collateral Agreement is hereby amended and restated in its
entirety to read as follows:
"Secured Parties" shall mean, collectively, the Administrative Agent,
the Collateral Agent, the Lenders and, with respect to any Specified
Hedge Agreement, any Qualified Counterparty that has agreed to be
bound by the provisions of Article VIII of the Credit Agreement as if
it were a Lender party thereto; provided that no Qualified
Counterparty shall have any rights in connection with the management
or release of any Collateral or the obligations of any Guarantor under
this Agreement or any other Loan Document."
SECTION 4.2 Section 6.5 of the Guarantee and Collateral Agreement is hereby
amended and restated in its entirety to read as follows:
"6.5 Application of Proceeds. If an Event of Default shall have
occurred and be continuing, at any time at either Agent's election,
the Collateral Agent, as sub- agent of the Administrative Agent may
apply all or any part of the net Proceeds (after deducting fees and
expenses as provided in Section 6.6) constituting Collateral realized
through the exercise by the Administrative Agent of its remedies
hereunder, whether or not held in any Collateral Account, and any
proceeds of the guarantee set forth in Section 2, in payment of the
Obligations in the following order:
FIRST, to the payment of all fees, costs, and expenses of the Secured
Parties which constitute Obligations, until paid in full;
SECOND, to the payment of all of the Obligations in respect of the
Swingline Loans to the Swingline Lender, until paid in full;
THIRD, to the payment of all of the Obligations (other than
Obligations arising under any Specified Hedge Agreement) consisting of
accrued and unpaid interest owing to any Lender, pro-rata, until paid
in full;
FOURTH, to the payment of all Obligations (other than Obligations
arising under any Specified Hedge Agreement) consisting of principal
owing to any Lender, pro-rata, until paid in full;
FIFTH, to the Collateral Agent for the benefit of the Issuing Bank an
amount equal to all Obligations in respect of outstanding Letters of
Credit to be held as cash collateral in respect of such obligations;
SIXTH, to the payment of all Obligations arising under any Specified
Hedge Agreement owing to any Lender or its Affiliates, pro-rata, until
paid in full;
SEVENTH, to the payment of all other Obligations owing to each Secured
Party, pro-rata, until paid in full; and
EIGHTH, to the payment of any remaining Proceeds, if any, to whomever
may be lawfully entitled to receive such amounts."
SECTION 5 CONDITIONS. The effectiveness of this Amendment is subject to the
satisfaction of the following conditions precedent (unless specifically waived
in writing by the Administrative Agent):
SECTION 5.1 The Administrative Agent shall have received fully executed
copies of this Amendment executed by the Administrative Agent, the Collateral
Agent, the Lenders and the Loan Parties.
SECTION 5.2 The Administrative Agent shall have received all other
instruments, documents, certificates and agreements set forth on the Closing
Document List attached hereto as Exhibit I.
SECTION 5.3 All of the representations and warranties set forth in Section
6 of this Amendment shall be true and correct.
SECTION 5.4 No Default or Event of Default is outstanding.
SECTION 6 REPRESENTATIONS AND WARRANTIES. The Loan Parties represent and
warrant to the Agents that:
SECTION 6.1 Authorization. The Loan Parties are duly authorized to execute
and deliver this Amendment and are and will continue to be duly authorized to
borrow monies under the Credit Agreement, as amended hereby, and to perform
their respective obligations under the Credit Agreement, as amended hereby.
SECTION 6.2 No Conflicting Agreements. The execution and delivery of this
Amendment and the performance by the Borrowers of their obligation under the
Credit Agreement, as amended hereby, do not and will not conflict with any
provision of law or of the governing documents of the Borrowers or any agreement
binding upon the Borrowers.
SECTION 6.3 Validity and Binding Effect. The Credit Agreement, as amended
hereby, and this Amendment are legal, valid and binding obligations of the
Borrowers, enforceable against the Borrowers in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the availability of equitable
remedies.
SECTION 6.4 Compliance with Credit Agreement. The representations and
warranties set forth in Section 3 of the Credit Agreement, are true and correct
with the same effect as if such representations and warranties had been made on
the date hereof. In addition, the Borrowers have complied with and are in
compliance with all of the covenants set forth in the Credit Agreement, as
amended hereby.
SECTION 6.5 No Event of Default. As of the date hereof, no Default or Event
of Default under Section 7 of the Credit Agreement, as amended hereby, or event
or condition which, with the giving of notice or the passage of time, or both,
would constitute an Event of Default, has occurred or is continuing.
SECTION 7 REAFFIRMATION.
The Loan Parties expressly reaffirm and assume all of their obligations and
liabilities to the Administrative Agent and the Lenders as set forth in the
Credit Agreement and the Loan Documents and agree to be bound by and abide by
and operate and perform under and pursuant to and comply fully with all of the
terms, conditions, provisions, agreements, representations, undertakings,
warranties, indemnities, grants of security interests and covenants contained in
the Credit Agreement and the Loan Documents, in so far as such obligations and
liabilities may be modified by this Amendment, as though such Credit Agreement
and Loan Documents were being re-executed on the date hereof, except to the
extent that such terms expressly relate to an earlier date. The Loan Parties
ratify, confirm and affirm without condition, all liens and security interests
granted to the Administrative Agent pursuant to the Credit Agreement and the
Loan Documents and such liens and security interests shall continue to secure
the Obligations, including but not limited to, the Loans made by the
Administrative Agent and the Lenders to the Borrowers under the Credit Agreement
as amended by this Amendment, and all extensions renewals, refinancings,
amendments or modifications of any of the foregoing.
SECTION 8 NO WAIVER.
This Amendment shall not be deemed to constitute a waiver or release of any
existing Default or Event of Default by the Loan Parties under the Credit
Agreement or the Loan Documents or any remedies or rights of the Administrative
Agent with respect thereto, all of which are hereby reserved by the
Administrative Agent.
SECTION 9 GENERAL PROVISIONS.
SECTION 9.1 No Changes. Except as expressly provided in this Amendment, the
terms and provisions of the Credit Agreement and the Guarantee and Collateral
Agreement and each of the other Loan Documents shall remain in full force and
effect and are hereby affirmed, confirmed and ratified in all respects.
SECTION 9.2 Compliance. The Borrowers hereby acknowledge that their failure
to comply with the terms of this Amendment will constitute an Event of Default
under the Credit Agreement.
SECTION 9.3 Attorney's Fees and Costs. The Loan Parties hereby agree to
reimburse the Administrative Agent and the Collateral Agent for all of its
out-of-pocket legal fees and expenses incurred in the preparation and
documentation of this Amendment and related documents.
SECTION 9.4 Governing Law. This Amendment shall be construed in accordance
with and governed by the internal laws (as distinguished from the conflicts of
law provisions) of the State of placeStateNew York.
SECTION 9.5 Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument. This Amendment may also be
executed by facsimile and each facsimile signature hereto shall be deemed for
all purposes to be an original signatory page.
SECTION 9.6 Further Assurances. Each Loan Party covenants and agrees that
it will at any time and from time to time do, execute, acknowledge and deliver,
or will cause to be done, executed, acknowledged and delivered, all such further
acts, documents and instruments as reasonably may be required by the
Administrative Agent, the Collateral Agent or the Lenders to effectuate fully
the intent of this Amendment.
SECTION 9.7 Captions. The captions in this Amendment are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Amendment or any of the provisions hereof.
SECTION 9.8 References. On or after the effective date hereof, each
reference in the Credit Agreement, the Guarantee and Collateral Agreement to
this "Agreement" or words of like import, and all references in any other Loan
Document to the Credit Agreement or the Guaranty and Collateral Agreement shall,
in each case, unless the context otherwise requires, be deemed to refer to the
Credit Agreement or the Guaranty and Collateral Agreement, respectively, as
amended hereby.
SECTION 9.9 Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
SECTION 9.10 Successors and Assigns. This Amendment shall inure to the
benefit of the Administrative Agent, the Collateral Agent, the Issuing Bank, the
Arranger and the Lenders, their respective successors and assigns and be binding
upon the Loan Parties, their successors and assigns.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
[Signature Page to Omnibus Amendment to Revolving Credit Agreement and
Guarantee and Collateral Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.
THE PACIFIC LUMBER COMPANY
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: VP Finance & Administration and CFO
XXXXX LUMBER CO., INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: VP Finance & Administration and CFO
SALMON CREEK LLC
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: President and CEO
SCOTIA INN INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: VP Finance & Administration and CFO
MAXXAM GROUP INC.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: VP Finance & Administration and CFO
MARATHON STRUCTURED FINANCE FUND L.P.,
as Administrative Agent and Lender
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Title: Managing Director
LASALLE BUSINESS CREDIT, LLC.,
as Collateral Agent, Swingline Lender and Lender
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as Issuing Bank
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice President