EXECUTION COPY
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CREDIT AGREEMENT
among
GENTEK INC.,
NOMA ACQUISITION CORP.,
The Several Lenders
from Time to Time Parties Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
THE BANK OF NOVA SCOTIA,
as Syndication Agent,
and
BANKERS TRUST COMPANY,
as Documentation Agent
Dated as of April 30, 1999
CHASE SECURITIES INC.,
as Arranger and Book Manager
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TABLE OF CONTENTS
Pages
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SECTION 1. DEFINITIONS AND INTERPRETATION................................................2
1.1 Defined Terms............................................................2
1.2 Other Definitional Provisions...........................................29
1.3 Conflict Between Credit Agreement and other Loan Documents..............29
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS..............................................29
2.1 Revolving Credit Commitments............................................29
2.2 Procedure for Revolving Credit Borrowing................................30
2.3 Term Loan Commitments...................................................30
2.4 Procedure for Term Loan Borrowings......................................30
2.5 Repayment of Term Loans.................................................31
2.6 Repayment of Loans; Evidence of Debt....................................32
2.7 Commitment Fee..........................................................33
2.8 Optional Termination or Reduction of Revolving Credit Commitments.......34
2.9 Optional Prepayments; Mandatory Prepayments and Commitment Reductions...34
2.10 Conversion and Continuation Options....................................38
2.11 Minimum Amounts of Tranches............................................38
2.12 Interest Rates and Payment Dates.......................................39
2.13 Computation of Interest and Fees.......................................39
2.14 Inability to Determine Interest Rate...................................39
2.15 Pro Rata Treatment and Payments........................................40
2.16 Illegality.............................................................41
2.17 Requirements of Law....................................................41
2.18 Taxes..................................................................43
2.19 Indemnity..............................................................45
2.20 Change of Lending Office...............................................46
2.21 Replacement of Lenders under Certain Circumstances.....................46
SECTION 3. LETTERS OF CREDIT............................................................47
3.1. L/C Commitment.........................................................47
3.2. Procedure for Issuance of Letters of Credit............................47
3.3. Fees, Commissions and Other Charges....................................47
3.4. L/C Participations.....................................................48
3.5. Reimbursement Obligation of the Company................................49
3.6. Obligations Absolute...................................................49
3.7. Letter of Credit Payments..............................................50
3.8. Application............................................................50
SECTION 4. REPRESENTATIONS AND WARRANTIES...............................................50
4.1 Financial Condition.....................................................50
4.2 No Change...............................................................51
4.3 Corporate Existence; Compliance with Law................................51
4.4 Corporate Power; Authorization; Enforceable Obligations.................51
4.5 No Legal Bar............................................................52
4.6 No Material Litigation..................................................52
4.7 No Default..............................................................52
4.8 Ownership of Property; Liens............................................53
4.9 Intellectual Property...................................................53
4.10 Taxes..................................................................53
4.11 Federal Regulations....................................................53
4.12 ERISA; Canadian Benefit and Pension Plans..............................53
4.13 Investment Company Act; Other Regulations..............................54
4.14 Subsidiaries...........................................................55
4.15 Purpose of Loans.......................................................55
4.16 Environmental Matters..................................................55
4.17 Solvency...............................................................56
4.18 Labor Matters..........................................................56
4.19 Accuracy of Information, etc...........................................56
4.20 Security Documents.....................................................57
4.21 Year 2000..............................................................57
4.22 GenTek Business........................................................57
4.23 Senior Indebtedness....................................................58
SECTION 5. CONDITIONS PRECEDENT.........................................................58
5.1 Conditions to Effectiveness.............................................58
5.2 Conditions to Initial Loans and Letters of Credit.......................60
5.3 Conditions to Each Extension of Credit..................................60
SECTION 6. AFFIRMATIVE COVENANTS........................................................61
6.1 Financial Statements....................................................61
6.2 Certificates; Other Information.........................................62
6.3 Payment of Obligations..................................................63
6.4 Conduct of Business and Maintenance of Existence........................63
6.5 Maintenance of Property; Insurance......................................63
6.6 Inspection of Property; Books and Records; Discussions..................63
6.7 Notices.................................................................64
6.8 Environmental Laws......................................................65
6.9 Further Assurances......................................................65
6.10 Additional Collateral..................................................65
6.11 Canadian Pension Plans and Benefit Plans...............................67
6.12 Noma Acquisition and Restructurings....................................67
SECTION 7. NEGATIVE COVENANTS...........................................................67
7.1 Financial Condition Covenants...........................................68
7.2 Limitation on Indebtedness..............................................68
7.3 Limitation on Liens.....................................................70
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7.4 Limitation on Guarantee Obligations.....................................72
7.5 Limitation on Fundamental Changes.......................................72
7.6 Limitation on Sale of Assets............................................73
7.7 Amendments to Spin-Off Documents, Noma Acquisition Documentation, etc...73
7.8 Limitation on Restricted Payments.......................................73
7.9 Limitation on Capital Expenditures......................................75
7.10 Limitation on Investments, Loans and Advances..........................76
7.11 Limitations on Optional Payments and Modifications of Agreements.......77
7.12 Limitation on Transactions with Affiliates.............................77
7.13 Limitation on Sales and Leasebacks.....................................78
7.14 Limitation on Changes in Fiscal Year...................................78
7.15 Limitation on Negative Pledge Clauses..................................78
7.16 Limitation on Lines of Business........................................79
SECTION 8. EVENTS OF DEFAULT............................................................79
8.1 Events of Default.......................................................79
8.2 Certain Provisions Applicable to Letters of Credit......................82
8.3 Certain Waivers.........................................................83
SECTION 9. THE ADMINISTRATIVE AGENT.....................................................83
9.1 Appointment.............................................................83
9.2 Delegation of Duties....................................................83
9.3 Exculpatory Provisions..................................................83
9.4 Reliance by Administrative Agent........................................84
9.5 Notice of Default.......................................................84
9.6 Non-Reliance on Administrative Agent and Other Lenders..................85
9.7 Indemnification.........................................................85
9.8 Administrative Agent in Its Individual Capacity.........................86
9.9 Successor Administrative Agent..........................................86
9.10 Documentation Agent and Syndication Agent..............................86
9.11 Intercreditor Risk-Sharing Agreement...................................86
SECTION 10. MISCELLANEOUS...............................................................87
10.1 Amendments and Waivers.................................................87
10.2 Notices................................................................88
10.3 No Waiver; Cumulative Remedies.........................................89
10.4 Survival of Representations and Warranties.............................90
10.5 Payment of Expenses and Taxes..........................................90
10.6 Successors and Assigns; Participations and Assignments.................91
10.7 Set-Off................................................................93
10.9 Severability...........................................................94
10.10 Integration...........................................................94
10.11 GOVERNING LAW.........................................................94
10.12 Submission To Jurisdiction; Waivers...................................94
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10.13 Acknowledgments.......................................................95
10.14 WAIVERS OF JURY TRIAL.................................................95
10.15 Confidentiality.......................................................95
10.16 Conversion of Currencies..............................................96
ANNEX A PRICING GRID
SCHEDULES
Schedule I Lenders, Commitments and Addresses
Schedule II Subsidiaries of the Company
Schedule III Outstanding Indebtedness; Existing Liens
Schedule IV Existing Letters of Credit
Schedule V Canadian Benefit Plans and Canadian Pension Plans
EXHIBITS
Exhibit A-1 Form of Opinion of Debevoise & ▇▇▇▇▇▇▇▇
Exhibit A-2 Form of Opinion of Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Exhibit A-3 Form of Opinion of General Counsel of GenChem
Exhibit B Form of Compliance Certificate
Exhibit C Form of Assignment and Acceptance
Exhibit D Form of Confidentiality Agreement
Exhibit E-1 Form of Guarantee and Pledge Agreement
Exhibit E-2 Form of Canadian Guarantee and Pledge Agreement
Exhibit F-1 Form of Revolving Credit Note
Exhibit F-2 Form of Term Note
Exhibit G Form of Prepayment Option Notice
Exhibit H Form of U.S. Tax Compliance Certificate
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CREDIT AGREEMENT, dated as of April 30, 1999, among GENTEK INC., a
Delaware corporation (the "Company"), NOMA ACQUISITION CORP., an Ontario
corporation (as further defined in Section 1.1, the "Canadian Borrower"), the
several banks and other financial institutions from time to time parties to this
Agreement (the "Lenders"), THE CHASE MANHATTAN BANK, as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"), THE BANK OF NOVA
SCOTIA, as syndication agent for the Lenders (in such capacity, the "Syndication
Agent"), and BANKERS TRUST COMPANY, as documentation agent for the Lenders (in
such capacity, the "Documentation Agent").
RECITALS
WHEREAS, pursuant to the Separation Agreement dated as of April 15,
1999 (as amended, modified or supplemented from time to time in accordance with
subsection 7.12, the "Separation Agreement") between The General Chemical Group
Inc., a Delaware corporation ("Holdings"), and the Company, which is an indirect
wholly-owned Subsidiary (such term and the other capitalized terms used in these
recitals having the meaning set forth in this Agreement unless the context
otherwise requires) of Holdings, Holdings has agreed to separate and divide the
existing businesses of Holdings (the "Separation") so that (a) the industrial
chemical businesses of Holdings shall be owned directly and indirectly by
General Chemical Industrial Products Inc., a Delaware corporation ("GCIP"), and
(b) the manufacturing and performance products businesses (the "GenTek
Business") of Holdings shall be owned directly and indirectly by the Company;
WHEREAS, following the separation and division described in the
preceding paragraph, Holdings shall distribute, as a dividend to the holders of
the shares of its common stock, all of the Capital Stock of the Company (the
transactions described in paragraph 1 above and this paragraph 2, all as more
particularly described in the Form 10 Filing, the "Spin-Off");
WHEREAS, pursuant to the Separation Agreement and in connection with
the Spin-Off, certain pre-existing indebtedness of Holdings, GCIP, the Company
and their respective Subsidiaries will be paid in full and canceled and certain
other transactions will be consummated (the Spin-Off and the other transactions
to be performed pursuant to and in connection with the Spin-Off, the "Spin-Off
Transactions");
WHEREAS, the Canadian Borrower has acquired approximately 95% of the
Capital Stock of Noma Industries Limited, an Ontario corporation (as further
defined in Section 1.1, "Noma"), is currently acquiring the remaining shares of
Capital Stock of Noma and will be amalgamating with Noma (the "Amalgamation"),
scheduled for consummation on or about May 7, 1999;
WHEREAS, the Company has requested that the Lenders make available (a)
to the Company, a $300,000,000 six-year revolving credit facility (as
hereinafter defined, the "Revolving Credit Facility") and a $100,000,000
six-year term loan facility (as hereinafter defined, the "Tranche A Term Loan
Facility"), and (b) to the Canadian Borrower, a $150,000,000 eight-year term
loan facility (as hereinafter defined, the "Tranche B Term Loan Facility"), the
proceeds of which will be used by the Borrowers for working capital and general
corporate purposes, including financing Permitted Acquisitions and Permitted
Investments, and funding the
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Spin-Off Transactions (including the refinancing of certain existing
indebtedness in connection therewith and the payment of fees and expenses in
connection therewith); and
WHEREAS, the Lenders are willing to make available the Revolving
Credit Facility, the Tranche A Term Loan Facility and the Tranche B Term Loan
Facility pursuant to this Agreement upon the terms and conditions hereinafter
set forth.
NOW THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime
Rate in effect on such day, (b) the Base CD Rate in effect on such day plus
1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest
per annum publicly announced from time to time by Chase as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by Chase in
connection with extensions of credit to debtors); "Base CD Rate" shall mean
the sum of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) a fraction, the numerator of which is one and the denominator of which
is one minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"Three-Month Secondary CD Rate" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being in
effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it; and "Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Base
CD Rate or the Federal Funds Effective Rate, or both, for
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any reason, including the inability or failure of the Administrative
Agent to obtain sufficient quotations in accordance with the terms thereof,
the ABR shall be determined without regard to clause (b) or (c), or both,
of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in
the ABR due to a change in the Prime Rate, the Three-Month Secondary CD
Rate or the Federal Funds Effective Rate shall be effective as of the
opening of business on the effective day of such change in the Prime Rate,
the Three- Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Acquired Business": as defined in the definition of "Acquired
Capital Expenditure Amount."
"Acquired Capital Expenditure Amount": with respect to any
business acquired pursuant to a Permitted Acquisition in accordance with
this Agreement (an "Acquired Business"), the average annual amount of
capital expenditures made in connection with such business for the three
most recent full fiscal years ending prior to the date of consummation of
such Permitted Acquisition.
"Adjustment Date": as defined in the Pricing Grid.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, whether or not
exercised, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise or
through the direct or indirect ownership of 10% (or, for purposes of the
definition of "Approved Fund" and subsection 10.6, 50%) or more of any
class of Capital Stock of such Person.
"Agents": the collective reference to the Administrative Agent,
the Documentation Agent and the Syndication Agent.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii)
the amount of such Lender's Revolving Credit Commitment then in effect or,
if the Revolving Credit Commitments have been terminated, the amount of
such Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such
time.
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"Agreement": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Amalgamation": as defined in the recitals to this Agreement.
"Applicable Margin": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
ABR Eurodollar
Loans Loans
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Revolving Credit Loans 0.25% 1.50%
Tranche A Term Loans 0.25% 1.50%
Tranche B Term Loans 1.25% 2.50%
provided, that on and after the first Adjustment Date after September 30,
1999, the Applicable Margin will be determined pursuant to the Pricing
Grid.
"Application": an application, in such form as the relevant
Issuing Bank may specify from time to time, requesting such Issuing Bank to
open a Letter of Credit.
"Approved Fund": with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans which is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Asset Sale": (i) the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way
of a sale and leaseback) other than sales of inventory in the ordinary
course of business consistent with past practices and other than obsolete
assets, and (ii) the issue or sale by the Borrower or any of its
Subsidiaries of Equity Interests of any of the Borrower's Subsidiaries, in
the case of either clause (i) or (ii), whether in a single transaction or a
series of related transactions (a) that have a fair market value in excess
of $2,000,000 or (b) for net proceeds in excess of $2,000,000.
Notwithstanding the foregoing, the following items shall not be deemed to
be Asset Sales: (i) a transfer of assets by (A) the Company to the Canadian
Borrower or a Subsidiary Guarantor, (B) a Subsidiary to the Company, the
Canadian Borrower or a Subsidiary Guarantor and (C) a Subsidiary (other
than the Canadian Borrower) that is not a Subsidiary Guarantor to any
Subsidiary that is not a Subsidiary Guarantor, (ii) an issuance of Equity
Interests by (A) a Subsidiary to the Company, to the Canadian Borrower or
to a Subsidiary Guarantor and (B) a Subsidiary (other than the Canadian
Borrower) that is not a Subsidiary Guarantor to any other Subsidiary that
is not a Subsidiary Guarantor, (iii) a Restricted Payment that is permitted
by subsection 7.8, (iv) exchanges, swaps and similar transactions involving
like-kind or similar assets in an aggregate principal amount not to exceed
$20,000,000 in any twelve-month period, (v) a Lien that is permitted under
subsection 7.3 and (vi) the making of any Permitted Investments.
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"Assignee": as defined in subsection 10.6(c).
"Assignment and Acceptance": as defined in subsection 10.6(c).
"Available Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of (a)
such Lender's Revolving Credit Commitment then in effect over (b) such
Lender's Revolving Extensions of Credit then outstanding.
"Board": the Board of Governors of the Federal Reserve System and
any successor thereto.
"Borrowers": the collective reference to the Company and the
Canadian Borrower; either of them, a Borrower.
"Borrowing Date": any Business Day specified in a notice pursuant
to subsection 2.2, 2.4 or 3.2 as a date on which a Borrower requests the
Lenders to make Loans hereunder or an Issuing Bank to issue a Letter of
Credit hereunder.
"Business": as defined in subsection 4.16.
"Business Day": (i) for all purposes other than as covered by
clause (ii) below, a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close and (ii) with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in Dollar deposits in the interbank eurodollar
market.
"Canadian Benefit Plans": all material employee benefit plans of
any nature or kind whatsoever that are not Canadian Pension Plans and are
maintained or contributed to by any Borrower or any of its respective
Subsidiaries, in each case covering employees in Canada.
"Canadian Borrower": (a) as defined in the preamble, (b) the
entity to be formed upon the consummation of the Amalgamation and (c) the
entity to be formed pursuant to clause (i) of the definition of "Noma
Restructurings" upon the consummation of the Noma Restructurings.
"Canadian Borrower Obligations": the unpaid principal of and
interest on (including, without limitation, interest accruing after the
maturity of the Tranche B Term Loans and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Canadian Borrower,
whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding) the Tranche B Term Loans and all other obligations and
liabilities of the Canadian Borrower to the Administrative Agent or to any
Lender (or, in the case of Interest Rate Protection Arrangements or
Currency Agreements, any Affiliate
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of any Lender), whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan
Document, any Interest Rate Protection Arrangement or any Currency
Agreement entered into with any Lender or any Affiliate of any Lender or
any other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Canadian Borrower pursuant hereto) or
otherwise.
"Canadian Dollars" lawful currency of Canada.
"Canadian Guarantee and Pledge Agreement": the Canadian Guarantee
and Pledge Agreement to be executed and delivered by the Canadian Borrower
and each Canadian Subsidiary Guarantor, substantially in the form of
Exhibit E-2, as the same may be amended, supplemented or otherwise modified
from time to time.
"Canadian Pension Plan": each plan which is considered to be a
pension plan for the purposes of any applicable pension benefits standards
statute and/or regulation in Canada established, maintained or contributed
to by any Borrower or any of its respective Subsidiaries for its employees
or former employees.
"Canadian Security Documents": the collective reference to the
Canadian Guarantee and Pledge Agreement and all other documents or
instruments hereafter delivered to or for the benefit of the Administrative
Agent (solely for the benefit of the Tranche B Term Loan Lenders) granting
a Lien on any asset or assets of any Person to secure the Canadian Borrower
Obligations or to secure any guarantee thereof by any Subsidiaries of the
Canadian Borrower.
"Canadian Subsidiary Guarantors": (a) each Subsidiary of the
Canadian Borrower 80% or more of the common Equity Interests of which is
owned by the Canadian Borrower, directly or indirectly, and (b) each
Subsidiary of the Canadian Borrower that is or becomes a party to the
Canadian Guarantee and Pledge Agreement.
"Capital Expenditures": as defined in subsection 7.9.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants, options or other rights to purchase
any of the foregoing.
"Cash": money, currency or a credit balance in a deposit account,
in each case which is free of Liens (except Liens in favor of the
Administrative Agent and Liens consisting of bankers' set-off rights).
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"Cash Equivalents: (i) any evidence of Indebtedness with a
maturity of two years or less issued or directly and fully guaranteed or
insured by the United States of America, Canada (or any province thereof)
or any agency or instrumentality of any of the foregoing (provided that the
full faith and credit of the United States of America or Canada, as
applicable, is pledged in support thereof); (ii) certificates of deposit or
acceptances with a maturity of one year or less of any Lender or any
financial institution that is a member of the Federal Reserve System (or is
a chartered bank incorporated in Canada) having combined capital and
surplus and undivided profits of not less than $500,000,000; (iii) master
notes, loan participations and commercial paper with a maturity of two
years or less issued by any Lender or any corporation (except an Affiliate
or Subsidiary of the Company) organized under the laws of any State of the
United States or the District of Columbia (or under the laws of Canada or
any province thereof) and rated at least A-1 by S&P or at least P-1 by
▇▇▇▇▇'▇; (iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally
guaranteed by the United States Government or Canada (or any province
thereof) or issued by any agency of any of the foregoing and backed by the
full faith and credit of the United States of America (or Canada, as
applicable), in each case maturing within one year from the date of
acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985; (v) time deposits of
foreign banks having a combined capital and surplus of not less than
$500,000,000; (vi) repurchase agreements with nationally recognized
securities dealers having total capital funds in excess of $100,000,000;
provided that the terms of such agreements comply with the guidelines set
forth in the Federal Financial Agreements of Depository Institutions With
Securities Dealers and Others, as adopted by the Comptroller of the
Currency on October 31, 1985; and (vii) institutional money market funds
investing principally in obligations permitted in clauses (i)-(vi) above.
"C/D Assessment Rate": for any day as applied to any ABR Loan,
the annual assessment rate in effect on such day which is payable by a
member of the Bank Insurance Fund classified as well-capitalized and within
supervisory subgroup "B" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. 327.3(d) (or any successor
provision) to the Federal Deposit Insurance Corporation (or any successor)
for such Corporation's (or such successor's) insuring time deposits at
offices of such institution in the United States.
"C/D Reserve Percentage": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars of $100,000 or more
having a maturity of 30 days or more.
"Change in Control": (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders in the aggregate or an ESOP, is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 35% of the total voting power of the
8
Voting Stock of the Company at any time that the Permitted Holders in the
aggregate "beneficially own" (as so defined), directly or indirectly, in
the aggregate a lesser percentage of the total voting power of the Voting
Stock of the Company than such other person and do not have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors of the Company (for the
purposes of this clause (i), such other person shall be deemed to
beneficially own any Voting Stock of a specified corporation held by a
parent corporation, if such other person beneficially owns (as so defined),
directly or indirectly, more than 35% of the total voting power of the
Voting Stock of such parent corporation and the Permitted Holders in the
aggregate beneficially own (as so defined), directly or indirectly, in the
aggregate a lesser percentage of the total voting power of the Voting Stock
of such parent corporation and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a majority
of the board of directors of such parent corporation); (ii) during any
period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any
new directors whose election by such Board of Directors or whose nomination
for election by the shareholders of the Company was approved by either (A)
a vote of 66-2/3% of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved or (B) a vote of
Permitted Holders who beneficially own, directly or indirectly, a majority
in the aggregate of the total voting power of the Voting Stock of the
Company) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office; or (iii) the occurrence of a
"change of control" (however denominated) under and as defined in any
credit agreement, indenture or similar agreement to which the Company or
any of its Subsidiaries is a party providing for commitments of credit in
excess of $10,000,000, if the occurrence of such change of control results
in a default or event of default under such credit agreement, indenture or
similar agreement pursuant to the terms thereof (and such default or event
of default has not been cured within any applicable period set forth in
such credit agreement, indenture or similar agreement), or the lenders,
noteholders or other creditors have a right to have their loans, notes or
other extensions of credit repaid or repurchased by the Company or such
Subsidiary prior to the stated maturity thereof by reason of such change of
control (and such repayment or repurchase has not occurred in accordance
with such credit agreement, indenture or similar agreement).
"Chase": The Chase Manhattan Bank.
"Closing Date": as defined in subsection 5.2.
"Code": the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral": all assets of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any
Security Document.
9
"Commitment": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment and the Revolving
Credit Commitment of such Lender.
"Commitment Fee Rate": 0.45% per annum; provided, that on and
after the first Adjustment Date after September 30, 1999, the Commitment
Fee Rate will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Company and which is treated as a single employer under Section 414(b) or
(c) of the Code.
"Company": as defined in the preamble to this Agreement.
"Company Loans": the collective reference to the Revolving Credit
Loans and the Tranche A Term Loans.
"Company Obligations": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans made to the Company and all other obligations and
liabilities of the Company to the Administrative Agent or to any Lender
(or, in the case of Interest Rate Protection Arrangements or Currency
Agreements, any Affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Interest
Rate Protection Arrangement or any Currency Agreements entered into with
any Lender or any Affiliate of any Lender or any other document made,
delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that
are required to be paid by the Company pursuant hereto) or otherwise.
"Company Pro Forma Balance Sheet": as defined in subsection
4.1(b).
"Compliance Certificate": a certificate substantially in the form
of Exhibit B.
"Confidential Information Memorandum": the Confidential
Information Memorandum dated March 1999 prepared in connection with the
Facilities.
"Consolidated Adjusted Net Income": for any period, Consolidated
Net Income for such period adjusted by excluding (i) any net gains or
losses in respect of sales of Capital Stock or dispositions of assets out
of the ordinary course of business, (ii) any net
10
income of any Person accrued during any period during which such Person was
not a Subsidiary of the Company, except to the extent of dividends or other
distributions actually paid to the Company or any Subsidiary out of such
net income and except to the extent utilized in determining pro forma
compliance for Permitted Acquisitions and (iii) non-cash gains or losses
resulting from fluctuations in currency exchange rates.
"Consolidated Cash Flow": for any period, the aggregate of (i)
Consolidated Net Income for such period plus (ii) Consolidated Interest
Expense deducted in computing such Consolidated Net Income plus (iii)
Consolidated Tax Expense deducted in computing such Consolidated Net Income
plus (iv) Consolidated Non-Cash Charges deducted in computing such
Consolidated Net Income minus (v) the net gain incurred in the retirement
of Indebtedness plus (vi) the net loss incurred in the retirement of
Indebtedness minus (vii) Consolidated Non-Cash Gains included in computing
such Consolidated Net Income minus (viii) cash gains from sales of assets
(other than inventory) to the extent included in computing such
Consolidated Net Income plus (ix) cash losses from sales of assets (other
than inventory) to the extent deducted in computing such Consolidated Net
Income minus (x) solely for purposes of subsection 7.8(a) the aggregate
amount of principal payments of the Loans scheduled to come due during such
period.
"Consolidated Interest Expense: for any period, the aggregate of
the interest expense of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP, including
amortization of original issue discount and the interest portion of any
deferred payment obligations, excluding, to the extent included in
computing interest expense, any amortization or write-off of debt issuance
costs.
"Consolidated Net Income": for any period, net income of the
Company and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, but excluding (i) any item related to, or
arising in connection with, the Spin-Off that is classified as an
extraordinary, unusual or nonrecurring gain, loss or charge, (ii) any other
item classified as an extraordinary, unusual or nonrecurring non-cash gain,
loss or charge, (iii) any amortization of deferred financing costs, and
(iv) all deferred financing costs written off and premiums paid in
connection with any extinguishment of Indebtedness.
"Consolidated Net Worth": as of the date of determination, all
items which in accordance with GAAP would be included under shareholders'
equity on a consolidated balance sheet of the Company and its Subsidiaries
at such date.
"Consolidated Non-Cash Charges": for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company and
its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP.
11
"Consolidated Non-Cash Gains": for any period, the aggregate
non-cash revenue items of the Company and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Tax Expense": for any period, the aggregate of the
U.S. federal, state and local income tax expense and foreign tax expense of
the Company and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Total Indebtedness": as of the date of
determination and without duplication, all Indebtedness and Guarantee
Obligations of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP, except that Indebtedness and
Guarantee Obligations of the Company and its Subsidiaries in respect of
reclamation bonds, performance bonds, letters of credit (other than Letters
of Credit) and surety bonds (in each of the foregoing cases, except to the
extent financed by Indebtedness under this Agreement) required by the
applicable statutes or laws of the relevant jurisdiction or by relevant
Government Authorities (or, in the case of such letters of credit, issued
for insurance purposes) shall be excluded for purposes of determining
Consolidated Total Indebtedness.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CSI": Chase Securities Inc., the arranger of the Facilities.
"Currency Agreement": with respect to any Person, any foreign
exchange contract, currency swap or option agreement or other similar
agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values.
"Defiance Acquisition": the acquisition of Defiance, Inc., a
Delaware corporation, by Holdings through its Wholly-Owned Subsidiary, New
Hampshire Oak, Inc., a Delaware corporation.
"Default": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
"Designated Issuer": Chase Manhattan Bank Delaware, a Delaware
banking corporation, in its individual capacity.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
12
"Domestic Subsidiary": any Subsidiary organized under the laws of
the United States or any jurisdiction therein or thereof.
"Effective Date": as defined in subsection 5.1.
"Environmental Laws": any and all foreign, Federal, state,
provincial, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, guidelines, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of health, safety or the environment, as now or may at any time
hereafter be in effect.
"Equity Interests": Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ESOP": an employee stock ownership plan for the benefit of the
Company's or a Subsidiary's employees.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of
the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum equal
to the rate at which Chase is offered Dollar deposits at or about 10:00
A.M., New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange options in respect of its Eurodollar Loans
are then being conducted for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable
to the amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
13
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin
on the same date and end on the same later date (whether or not such Loans
shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8,
provided that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Excluded Issuer": any Subsidiary of the Company that is a direct
or indirect Subsidiary of a Foreign Subsidiary, a Foreign Subsidiary
Holding Company.
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement": the Credit Agreement, dated as of
June 15, 1998, among Holdings, the lenders parties thereto, Chase, as
administrative agent, and the other agents parties thereto.
"Facility": each of (a) the Tranche A Term Loan Commitments and
the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Tranche B Term Loan Commitments and the Tranche B Term
Loans made thereunder (the "Tranche B Term Loan Facility"), and (c) the
Revolving Credit Commitments and the extensions of credit made thereunder
(the "Revolving Credit Facility").
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"Five-Year Anniversary Date": as defined in subsection 2.9(i).
"Five-Year Threshold Amount": as defined in subsection 2.9(i).
"Foreign Subsidiary": any Subsidiary other than a Domestic
Subsidiary.
"Foreign Subsidiary Holding Company": any Domestic Subsidiary
that has no material assets other than the Capital Stock or other
securities of one or more Foreign Subsidiaries or other Foreign Subsidiary
Holding Companies, and other assets relating solely to an ownership
interest in such Capital Stock or other securities.
"Form 10 Filing": the Registration Statement on Form 10 (file
number 001-14789), together with all Exhibits thereto, initially filed by
the Company with the Securities and Exchange Commission on January 27,
1999, as amended by Amendment
14
No. 1 filed with the Securities and Exchange Commission on March 22, 1999
and by Amendment No. 2 filed with the Securities and Exchange Commission on
April 8, 1999, with respect to the Spin-Off.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time; provided, however, that with
respect to the consolidated financial statements of the Canadian Borrower
referred to in subsections 4.1. and 6.1., "GAAP" shall mean generally
accepted accounting principles in Canada in effect from time to time.
Notwithstanding the foregoing, for purposes of subsection 7.1, GAAP shall
be determined on the basis of such principles in effect on the date hereof
and consistent with those used in the preparation of the most recent
audited financial statements delivered pursuant to subsection 4.1(a). In
the event that any "Accounting Change" (as defined below) shall occur and
such change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Company and the
Administrative Agent agree to enter into negotiations in order to amend
such provisions of this Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
the Company's financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such time as
such an amendment shall have been executed and delivered by the Company,
the Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the
Financial Accounting Standards Board of the American Institute of Certified
Public Accountants or, if applicable, the SEC.
"GC Canada": General Chemical Canada Ltd., a Canadian
corporation.
"GC Canada Senior Notes": the 9.09% Senior Notes of GC Canada due
May 20, 1999 in the original principal amount of $52,000,000, as the same
may be amended, modified, supplemented, replaced or refinanced from time to
time.
"GCIP": as defined in the recitals to this Agreement.
"GenChem": General Chemical Corporation, a Delaware corporation.
"GenTek Business": as defined in the recitals to this Agreement.
"GenTek Canada": General Chemical Performance Products Ltd., a
Canadian corporation.
"GenTek Canada Working Capital Facility": the credit facility to
be provided to GenTek Canada by banks or other financial institutions, as
the same may be amended, supplemented or otherwise modified from time to
time.
15
"Governmental Authority": any nation or government, any state or
other political subdivision thereof and any entity (including the National
Association of Insurance Commissioners or a Minister of the Crown)
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee and Pledge Agreement": the Guarantee and Pledge
Agreement to be executed and delivered by the Borrowers and each Subsidiary
Guarantor, substantially in the form of Exhibit E-1, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of credit)
to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends
or other obligations (the "primary obligations") of any other third Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or
any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements
of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Company in
good faith.
"Hazardous Materials": any hazardous materials, hazardous wastes,
hazardous constituents, pollutant, contaminant, waste or hazardous or toxic
substances defined or regulated as such in or under any Environmental Law,
and including, without limitation, petroleum products (including crude oil
or any fraction thereof), asbestos in friable form, polychlorinated
biphenyls, and urea formaldehyde insulation.
"Holdings": as defined in the recitals to this Agreement.
16
"Indebtedness": of any Person at any date, (a) all indebtedness
of such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (d) all obligations of such
Person under Financing Leases, (e) all obligations of such Person in
respect of acceptances issued or created for the account of such Person,
(f) for the purposes of subsections 7.2 and 8(e) only, all net Interest
Rate Protection Obligations of such Person and all net obligations of such
Person in respect of Currency Agreements, and (g) the lesser of (i) all
liabilities secured by any Lien on any property owned by such Person when
such Person has not assumed or otherwise become liable for the payment
thereof and (ii) the fair market value of any such property; provided that
Indebtedness shall not be deemed to include any indebtedness which has been
"economically defeased" or "in-substance defeased" within the meaning of
and in accordance with Standard No. 76 of the Financial Accounting
Standards Board.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Risk-Sharing Agreement": the Intercreditor
Risk-Sharing Agreement (as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof)
among the Lenders and the Administrative Agent and referred to in
subsection 9.11, which generally provides for the purchase and sale of
participating interests (or, in certain circumstances, the assignment of
interests) in the Tranche A Term Loans, the Revolving Credit Loans and the
Tranche B Term Loans by and among the Tranche A Term Loan Lenders, the
Revolving Credit Lenders and the Tranche B Term Loan Lenders upon the
acceleration of the maturity of any Loans under this Agreement in order to
effect a ratable sharing of exposure with respect to all such Loans.
"Interest Coverage Ratio": as at the last day of any fiscal
quarter of the Company, the Pro Forma Ratio of (a) Consolidated Cash Flow
for the period of four fiscal quarters ending on such day to (b)
Consolidated Interest Expense for the period of four fiscal quarters ending
on such day.
"Interest Payment Date": (a) as to any ABR Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding (or, if such a day is not a Business Day, the next succeeding
Business Day), (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period, (c) as to any
Eurodollar Loan having an Interest Period longer than three months, each
day which is three months, or a whole multiple thereof, after the first day
of such Interest Period and the last day of such Interest Period, (d) as to
any Loan (other than any Revolving Credit Loan that is an ABR Loan), the
date on which such Loan is converted
17
into another Type of Loan or on which any repayment or prepayment is made
in respect thereof and (e) as to any Revolving Credit Loan, the Revolving
Credit Termination Date or such earlier date as the Commitments shall
terminate as provided herein.
"Interest Period": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the
borrowing or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months thereafter,
as selected by the applicable Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto;
and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months thereafter,
as selected by the applicable Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of then current Interest Period with respect thereto;
provided that, each of the foregoing provisions relating to Interest
Periods is subject to the following:
(1) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(2) any Interest Period that would otherwise extend
beyond the Revolving Credit Termination Date or beyond the date final
payment is due on the Tranche A Term Loans or the Tranche B Term
Loans, as the case may be, shall end on the Revolving Credit
Termination Date or such due date, as applicable;
(3) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a calendar
month; and
(4) the Borrowers shall select Interest Periods so as
not to require a payment or prepayment of any Eurodollar Loan during
an Interest Period for such Loan.
"Interest Rate Protection Arrangement": as defined in the
definition of "Interest Rate Protection Obligations" below.
"Interest Rate Protection Obligations": the obligations of any
Person pursuant to any arrangement (an "Interest Rate Protection
Arrangement") with any other Person
18
whereby, directly or indirectly, such Person is entitled to receive from
time to time periodic payments calculated by applying either a floating or
a fixed rate of interest on a stated notional amount in exchange for
periodic payments made by such Person calculated by applying a fixed or a
floating rate of interest on the same notional amount and shall include
without limitation, interest rate swaps, caps, floors, collars and similar
agreements.
"Investment": as defined in subsection 7.10.
"IRS Ruling": the private letter ruling of the Internal Revenue
Service, dated March 16, 1999 and received by Holdings on March 18, 1999,
to the effect that the Spin- Off generally will be tax free to Holdings and
its shareholders as more fully described in the Form 10 Filing.
"Issuing Bank": Chase or any Affiliate thereof, including the
Designated Issuer, or any successor thereto, each in its capacity as issuer
of any Letter of Credit.
"L/C Commitment": $50,000,000, as such amount may be reduced from
time to time in accordance with this Agreement.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit
which have not then been reimbursed pursuant to subsection 3.5(a).
"Letters of Credit": as defined in subsection 3.1(a).
"Leverage Ratio": as at the last day of any fiscal quarter of the
Company, the Pro Forma Ratio of (a) Consolidated Total Indebtedness as at
such day to (b) Consolidated Cash Flow for the period of four fiscal
quarters ending on such day.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"Loan Documents": the collective reference to this Agreement, the
Notes, the Applications and the Security Documents.
19
"Loan Parties": the Borrowers and each of their Subsidiaries
party to a Loan Document.
"Loans": any loan made by any Lender pursuant to this Agreement.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the
Term Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments).
"Majority Revolving Credit Facility Lenders": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"Management Agreement": the Management Agreement dated as of
April __, 1999 between the Borrower and ▇▇▇▇▇▇ Associates Inc., as such
agreement may be amended, supplemented or otherwise modified or replaced
from time to time in accordance with subsection 7.11.
"Material Adverse Effect": a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole, or (b) the
validity or enforceability of this Agreement, any of the Notes, any
Application or any of the other Loan Documents or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder.
"Material Foreign Subsidiary": any Material Subsidiary organized
under the laws of any jurisdiction (other than the United States or any
jurisdiction therein).
"Material Subsidiary": at any date of determination, any
Subsidiary of the Company (i) the gross revenues of which aggregated at
least 5% of the aggregate gross revenues of the Company and its
Subsidiaries for the most recent period of twelve consecutive months ending
prior to such date or (ii) the book value of the assets of which aggregated
at least 10% of the aggregate book value of the assets of the Company and
its Subsidiaries as at the last day of the most recently ended fiscal month
of the Company.
"▇▇▇▇▇'▇": ▇▇▇▇▇'▇ Investors Services, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) when used in respect of any Asset Sale
or Recovery Event by or with respect to the Company or any of its
Subsidiaries, the gross proceeds received by such Person in Cash and Cash
Equivalents (including payment in respect of deferred payment obligations
but only when received in the form of Cash and Cash Equivalents), from such
Asset Sale or Recovery Event less (i) all legal, accounting, title,
20
recording and transfer tax expenses, commissions and other customary fees
and expenses incurred, and all other federal, state and local taxes
assessed, in connection therewith, (ii) the principal amount of, premium,
if any, and interest on, any Indebtedness (other than the Loans and L/C
Obligations) which is secured by the assets which are the subject of such
Asset Sale or Recovery Event and which is required to be repaid in
connection with such Asset Sale or Recovery Event and (iii) amounts to be
provided by such Person as a reserve, in accordance with GAAP, against any
liabilities associated with any such Asset Sale or Recovery Event and
retained by such Person after such Asset Sale or Recovery Event, including,
without limitation, pension and other post-employment benefit liabilities
and liabilities related to environmental matters or against any
indemnification obligations associated with such Asset Sale or Recovery
Event, and (b) when used in respect of the incurrence of Indebtedness by
the Company or any of its Subsidiaries, the gross proceeds received by such
Person in Cash and Cash Equivalents from such incurrence less all legal
expenses, commissions and other fees and expenses incurred or to be
incurred in connection therewith.
"NHO Distribution": the distribution of all of the Capital Stock
of the Company by New Hampshire Oak, Inc., a Delaware corporation, to
Holdings.
"1998 10-K": Holdings' annual report on Form 10-K filed with the
Securities and Exchange Commission for its fiscal year ended December 31,
1998.
"Noma": prior to the Noma Acquisition, as defined in the fourth
recital hereto, and upon and following the Noma Acquisition, the Canadian
Borrower.
"Noma Acquisition": the acquisition of all of the Capital Stock
of Noma by the Canadian Borrower and the amalgamation of Noma and the
Canadian Borrower.
"Noma Acquisition Agreement": the Acquisition Agreement, dated as
of February 26, 1999, among Holdings, the Canadian Borrower and Noma.
"Noma Acquisition Documentation": collectively, the Noma
Acquisition Agreement and all schedules, exhibits and annexes thereto, as
amended, supplemented or otherwise modified from time to time in accordance
with subsection 7.7.
"Noma Credit Facility": the credit facility provided or to be
provided to Noma and/or its Subsidiaries by banks or other financial
institutions and/or any receivables purchasing arrangements entered or to
be entered into by Noma and/or its Subsidiaries, as the same may be
amended, supplemented or otherwise modified from time to time.
"Noma Restructurings": (i) the series of mergers, consolidations
and/or amalgamations resulting in the consolidations and/or amalgamations
of the Canadian Borrower, Noma Inc., a Canadian corporation, and ▇▇▇▇▇
Manufacturing Inc., a Canadian corporation, and (ii) the distribution of
the Capital Stock of Noma Corporation, a Delaware corporation, by the
Canadian Borrower to GenChem.
21
"Non-Excluded Taxes": as defined in subsection 2.18.
"Notes": the collective reference to any promissory notes
evidencing the Loans.
"Obligations": the collective reference to the Company
Obligations and the Canadian Borrower Obligations.
"Participant": as defined in subsection 10.6(b).
"Participating Bank": any Revolving Credit Lender (other than the
Issuing Bank) with respect to its participating interest in each Letter of
Credit; provided that each Revolving Credit Lender (including the Issuing
Bank, if a Lender) shall be deemed to be a Participating Bank with respect
to any Letter of Credit issued by the Designated Issuer.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": any acquisition made pursuant to
subsection 7.10(f).
"Permitted Designee": with respect to any Permitted Holder, (i) a
spouse or a child (in the case of an individual) of such Permitted Holder,
(ii) any trust for the benefit of such Permitted Holder or a spouse or
child of such Permitted Holder, (iii) in the event of the death or
incompetence of such Permitted Holder, such Permitted Holder's estate,
heirs, executor, administrator, committee or other court appointed
representative, (iv) any foundation or not for profit organization
established by a Permitted Holder or (v) any Person so long as the
Permitted Holders, individually or jointly, are the "beneficial owner" (as
defined in clause (i) of the definition of "Change in Control") of at least
51% of the Voting Stock of such Person.
"Permitted Holders": ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ and their Permitted Designees.
"Permitted Investments": Investments permitted by subsection
7.10.
"Permitted Subordinated Indebtedness": unsecured Indebtedness of
the Company which (i) is subordinated in right of payment to all Company
Obligations on terms no less favorable to the Lenders than the
subordination terms governing the Senior Subordinated Notes or on terms
otherwise reasonably satisfactory to the Required Lenders (and, if such
Indebtedness is guaranteed by any Subsidiary of the Company, such guarantee
is subordinated in right of payment to all obligations of such Subsidiary
under the Loan Documents on terms no less favorable to the Lenders than the
subordination terms governing the Senior Subordinated Notes or on terms
otherwise reasonably satisfactory to the Required Lenders), (ii) contains
covenants and events of default which (x) taken as a whole, are no less
favorable to the Company than the covenants and events of default governing
the Senior Subordinated Notes or (y) are otherwise reasonably satisfactory
to
22
the Required Lenders and (iii) has no scheduled or mandatory payments in
respect of principal (whether by scheduled amortization, redemption,
purchase or otherwise, other than an obligation by the Company to offer to
purchase such Indebtedness upon a change of control of the Company or,
subject to compliance with Section 7 hereof, upon certain sales of assets
by the Company or its Subsidiaries) prior to May 15, 2007.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledged Stock": as defined in the Guarantee and Pledge
Agreement.
"Pricing Grid": the pricing grid attached hereto as Annex A, and
"Pricing Ratio" has the meaning given to it in the Pricing Grid.
"Productive Assets": assets (including Capital Stock of a Person
that directly or indirectly owns assets) of a kind used or usable in the
Company's business, or related to such business, as conducted on the date
of the relevant Asset Sale or Recovery Event.
"Pro Forma Ratio": as used in the definitions of "Interest
Coverage Ratio", "Leverage Ratio", "Pricing Ratio" and "Senior Leverage
Ratio", the ratio indicated determined using Consolidated Cash Flow,
Consolidated Interest Expense, Funded Debt and Consolidated Total
Indebtedness, as the case may be, each calculated (as provided herein as
though this Agreement had been effective at such time) for the period
indicated giving pro forma effect (as determined in good faith by the Chief
Financial Officer of the Company, based on reasonable assumptions) to any
of the following transactions that shall have occurred after the beginning
of such period as if such transaction had occurred at the beginning of such
period: (a) the Spin-Off and the Refinancing Transactions; (b) any
transaction pursuant to which any Person becomes a Subsidiary of the
Company or the Company or any Subsidiary acquires all or substantially all
of the assets of any Person; or (c) any transaction of the type described
in the preceding clauses (a) and (b) by any Person that, since the
beginning of such period became a Subsidiary of the Company or was merged
with or into the Company or any Subsidiary of the Company.
"Properties": as defined in subsection 4.16.
"Qualifying ESOP Purchases": at any time, an amount equal to the
aggregate Net Cash Proceeds theretofore received by the Company from the
issuance or sale of shares of its Capital Stock (excluding Redeemable
Stock) to an ESOP after April 1, 1998; provided that if such ESOP issues
any Indebtedness for which the Company or any of its
23
Subsidiaries has a Guarantee Obligation or is otherwise liable, such
aggregate Net Cash Proceeds shall be counted only to the extent of any
increase in the Consolidated Net Worth of the Company theretofore resulting
from principal repayments made by such ESOP with respect to Indebtedness
issued by it to finance the purchase of such shares.
"Recovery Event": any settlement of or payment in excess of
$500,000 in any transaction or series of related transactions in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Company or any of its Subsidiaries.
"Redeemable Stock": any class or series of Capital Stock that (i)
by its terms or otherwise is required to be redeemed prior to June 30,
2007, (ii) is redeemable at the option of the holder thereof at any time
prior to June 30, 2007 or (iii) is exchangeable into any Capital Stock
described in clause (i) or (ii) above.
"Refinancing Indebtedness": as defined in subsection 7.2(o).
"Refinancing Transactions": the collective reference to (a) the
issue and sale of senior subordinated notes by GCIP, (b) the distribution
by GCIP to Holdings of a portion of the proceeds of the issue and sale of
such senior subordinated notes, (c) the initial borrowings by GCIP and GC
Canada under their credit facility with Chase, as administrative agent, and
the other agents and lenders named therein, and the repayment in full of
the GC Canada Senior Notes with the proceeds of such borrowing, (d) the
initial borrowings hereunder by the Borrowers, (e) the loan by the Company
to GenChem of the proceeds of its initial borrowings hereunder, and the
repayment in full of outstanding amounts due Holdings from GenChem, (f) the
repayment in full of outstanding amounts due Holdings from the Canadian
Borrower from the proceeds of its borrowings hereunder, and (f) the
repayment in full by Holdings (or the applicable Subsidiary, as the case
may be) of all amounts owing under, and the termination of, the Existing
Credit Agreement and all other long-term Indebtedness of the Company and
its Subsidiaries (other than Indebtedness permitted to exist under
subsection 7.2), and the termination of all Liens thereunder (other than
Liens permitted to exist under subsection 7.3).
"Register": as defined in subsection 10.6(d).
"Regulation U": Regulation U of the Board as in effect from time
to time.
"▇▇▇▇▇▇ Ireland Credit Facility": the credit facility provided or
to be provided to ▇▇▇▇▇▇ Ireland by banks or other financial institutions,
as the same may be amended, supplemented or otherwise modified from time to
time.
"Reimbursement Obligation": the obligation of the Company to
reimburse the Issuing Banks pursuant to subsection 3.5(a) for amounts drawn
under Letters of Credit.
24
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Company or any of
its Subsidiaries in connection therewith which are not applied to prepay
the Term Loans or reduce the Revolving Credit Commitments pursuant to
subsection 2.9(d) as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect
of which the Company has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and
that the Company (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an
Asset Sale or Recovery Event to acquire Productive Assets.
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less
any amount expended prior to the relevant Reinvestment Prepayment Date to
acquire Productive Assets.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring 360 days after such
Reinvestment Event and (b) the date on which the Company shall have
determined not to acquire Productive Assets with all or any portion of the
relevant Reinvestment Deferred Amount.
"Related Business": any business that is similar or reasonably
related to any business engaged in by the Company or any Subsidiary, or any
other business complementary or incidental thereto, or a reasonably related
development thereof.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35
of PBGC Reg. 'SS' 4043.
"Required Lenders": at any time, Lenders the Total Credit
Percentages of which aggregate more than 50%.
"Requirement of Law": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
25
"Responsible Officer": the chief executive officer, the president
or any vice president of the relevant Borrower or, with respect to
financial matters, the chief financial officer of such Borrower.
"Restricted Investment": any Investment other than those
permitted by clauses (a) - (h) of subsection 7.10.
"Restricted Payment": as defined in subsection 7.8.
"Revolving Credit Commitment": as to any Lender, the obligation
of such Lender, if any, to make Revolving Credit Loans and participate in
Letters of Credit, in an aggregate principal and/or face amount not to
exceed the amount set forth under the heading "Revolving Credit Commitment"
opposite such Lender's name on Schedule I, as the same may be changed from
time to time pursuant to the terms hereof.
"Revolving Credit Commitment Period": the period from and
including the Effective Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each Lender which has a Revolving
Credit Commitment or which is the holder of Revolving Credit Loans.
"Revolving Credit Loans": as defined in subsection 2.1.
"Revolving Credit Percentage": as to any Revolving Credit Lender
at any time, the percentage which such Lender's Revolving Credit Commitment
then constitutes of the Total Revolving Credit Commitments (or, at any time
after the Revolving Credit Commitments shall have expired or terminated,
the percentage which the aggregate principal amount of such Lender's
Revolving Credit Loans then outstanding constitutes of the aggregate
principal amount of the Revolving Credit Loans then outstanding).
"Revolving Credit Termination Date": April 30, 2005.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding and (b) such Lender's Revolving Credit Percentage of the L/C
Obligations then outstanding.
"Sandco": Sandco Automotive Ltd., an Ontario corporation.
"Sandco Credit Facility": the Credit Facility dated as of
February 6, 1998 in the original principal amount of C$10,000,000 by and
between Sandco and The Bank of Nova Scotia, as the same may be amended,
supplemented or otherwise modified from time to time.
"Security Documents": the collective reference to the Guarantee
and Pledge Agreement and all other documents or instruments hereafter
delivered to or for the benefit
26
of the Administrative Agent and the Lenders, including the Canadian
Security Documents, granting a Lien on any asset or assets of any Person to
secure the obligations and liabilities of the Borrowers hereunder, under
the Notes and/or under any of the other Loan Documents or to secure any
guarantee of any such obligations and liabilities.
"Senior Leverage Ratio": as at the last day of any fiscal quarter
of the Company, the Pro Forma Ratio of (a) Consolidated Total Indebtedness
less the sum of the amount of Permitted Subordinated Indebtedness and the
aggregate outstanding principal amount of the Senior Subsordinated Notes
(if any) as at such day to (b) Consolidated Cash Flow for the period of
four fiscal quarters ending on such day.
"Senior Subordinated Note Indenture": the Indenture entered into
by the Company (and, if applicable, certain of its Subsidiaries) in
connection with any issuance of the Senior Subordinated Notes, together
with all instruments and other agreements entered into by the Company (or
such Subsidiaries, as the case may be) in connection therewith, as the same
may be amended, supplemented or otherwise modified from time to time in
accordance with subsection 7.12.
"Senior Subordinated Notes": unsecured Indebtedness of the
Company in an aggregate principal amount of approximately $250,000,000
which (i) is subordinated in right of payment to all Company Obligations
on terms reasonably satisfactory to the Administrative Agent, (ii)
contains customary covenants and events of default that reflect prevailing
market terms at the time of issuance of such Indebtedness for "high-yield"
securities issued by companies of comparable size, credit rating and
capitalization to the Company and (iii) has no scheduled or mandatory
payments in respect of principal (whether by scheduled amortization,
redemption, purchase or otherwise, other than an obligation by the Company
to offer to purchase such Indebtedness upon a change of control of the
Company or, subject to compliance with Section 7 hereof, upon certain sales
of assets by the Company or its Subsidiaries) prior to May 15, 2007.
"Separation": as defined in the recitals to this Agreement.
"Separation Agreement": as defined in the recitals to this
Agreement.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as
of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the
amount of all "liabilities of such Person, contingent or otherwise", as of
such date, as such quoted terms are determined in accordance with
applicable federal and state laws governing determinations of the
insolvency of debtors, (b) the present fair saleable value of the assets of
such Person will, as of such date, be greater than the amount that will be
required to pay the liability of such Person on its debts as such debts
become absolute and matured, (c) such Person will not have, as of such
date, an unreasonably small amount of capital with which to conduct
27
its business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
"Spin-Off": as defined in the recitals to this Agreement.
"Spin-Off Documents": the collective reference to (i) the
Separation Agreement and (ii) other than the Management Agreement, the
Ancillary Agreements (as defined in the Separation Agreement as in effect
on the date hereof), as the same may be amended, modified or supplemented
from time to time.
"Spin-Off Transactions": as defined in the recitals to this
Agreement.
"S&P": Standard & Poor's Ratings Services Group, a division of
The ▇▇▇▇▇▇- ▇▇▇▇ Companies, Inc.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company.
"Subsidiary Guarantors": (a) each Domestic Subsidiary of the
Company (other than any Foreign Subsidiary Holding Company) 80% or more of
the common Equity Interests of which is owned by the Company, directly or
indirectly (other than indirectly through any Foreign Subsidiary), (b) each
Canadian Subsidiary Guarantor, (c) each Subsidiary of the Company that is
or becomes a party to the Guarantee and Pledge Agreement and (d) each other
Subsidiary of the Company that is designated by the Company as a Subsidiary
Guarantor and becomes a party to the Guarantee and Pledge Agreement or the
Canadian Guarantee and Pledge Agreement.
"Termination Date": April 30, 2007.
"Term Loan Lenders": the collective reference to the Tranche A
Term Loan Lenders and the Tranche B Term Loan Lenders.
28
"Term Loans": the collective reference to the Tranche A Term
Loans and Tranche B Term Loans.
"Total Credit Percentage": as to any Lender at any time, the
percentage of the aggregate Revolving Credit Commitments, outstanding
Tranche A Term Loans and outstanding Tranche B Term Loans then constituted
by its Revolving Credit Commitment, outstanding Tranche A Term Loans and
outstanding Tranche B Term Loans (or, if the Revolving Credit Commitments
have terminated or expired, the percentage of the aggregate outstanding
Revolving Credit Loans, outstanding Term Loans and interests in the
outstanding L/C Obligations then constituted by its outstanding Revolving
Credit Loans, outstanding Term Loans and interests in outstanding L/C
Obligations).
"Total Revolving Credit Commitments": at any time, the aggregate
amount of the Revolving Credit Commitments then in effect. The original
amount of the Total Revolving Credit Commitments is $300,000,000.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Credit Lenders outstanding at such time.
"Tranche A Term Loan": as defined in Section 2.3(a).
"Tranche A Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche A Term Loan to the
Company hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche A Term Loan Commitment" opposite such Lender's
name on Schedule I. The original aggregate amount of the Tranche A Term
Loan Commitments is $100,000,000.
"Tranche A Term Loan Lender": each Lender which has a Tranche A
Term Loan Commitment or is the holder of a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan
Lender at any time, the percentage which such Lender's Tranche A Term Loan
Commitment then constitutes of the aggregate Tranche A Term Loan
Commitments (or, at any time after the Closing Date, the percentage which
the aggregate principal amount of such Lender's Tranche A Term Loans then
outstanding constitutes of the aggregate principal amount of the Tranche A
Term Loans then outstanding).
"Tranche B Term Loan": as defined in Section 2.3(b).
"Tranche B Term Loan Commitment": as to any Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to the
Canadian Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Tranche B Term Loan Commitment" opposite such
Lender's name on Schedule I thereto. The original aggregate amount of the
Tranche B Term Loan Commitments is $150,000,000.
29
"Tranche B Term Loan Lender": each Lender which has a Tranche B
Term Loan Commitment or which is the holder of a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time,
the percentage which such Lender's Tranche B Term Loan Commitment then
constitutes of the aggregate Tranche B Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender's Tranche B Term Loans then outstanding constitutes
of the aggregate principal amount of the Tranche B Term Loans then
outstanding); provided, that solely for purposes of calculating the amount
of each installment of Tranche B Term Loans (other than the last
installment) payable to a Tranche B Term Loan Lender pursuant to Section
2.5(b), such Term Loan Lender's Tranche B Term Loan Percentage shall be
calculated without giving effect to any portion of any prior mandatory or
optional prepayment attributable to such Term Loan Lender's Tranche B Term
Loans which shall have been declined by such Term Loan Lender pursuant to
Section 2.5(b) (or, in the case of any Tranche B Term Loan Lender which
shall have acquired its Tranche B Term Loans by assignment from another
Person, by such other Person).
"Transferee": as defined in subsection 10.6(f).
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Voting Stock": Capital Stock of a Person normally entitled to
vote in the election of directors (or other persons exercising similar
functions) of such Person.
"Wholly Owned Subsidiary": of any Person, a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares and other de minimis
interests as required by the laws of the jurisdiction of organization of
such Subsidiary) shall at the time be owned by such Person or by one or
more Wholly Owned Subsidiaries of such Person and one or more Wholly Owned
Subsidiaries of such Person.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the Notes and the other Loan Documents or any certificate or other
document made or delivered pursuant hereto.
(b) As used herein and in the Notes and the other Loan Documents, and
any certificate or other document made or delivered pursuant hereto, accounting
terms relating to the Company and its Subsidiaries not defined in subsection 1.1
and accounting terms partly defined in subsection 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP.
30
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
1.3 Conflict Between Credit Agreement and other Loan Documents. If
there is any conflict between this Agreement and any other Loan Document, this
Agreement and such other Loan Document shall be interpreted and construed, if
possible, so as to avoid or minimize such conflict but, to the extent (and only
to the extent) of such conflict, this Agreement shall prevail and control.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Company from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of then outstanding L/C Obligations, does not exceed the
amount of such Lender's Revolving Credit Commitment. During the Revolving Credit
Commitment Period the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i) Eurodollar
Loans, (ii) ABR Loans or (iii) a combination thereof, as determined by the
Company and notified to the Administrative Agent in accordance with subsections
2.2 and 2.10, provided that no Loan shall be made as a Eurodollar Loan after the
day that is one month prior to the Revolving Credit Termination Date.
2.2 Procedure for Revolving Credit Borrowing. The Company may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, provided that the Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 11:00 A.M., New York City time, (a) three Business
Days prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit Loans are to be initially Eurodollar Loans or (b) one Business
Day prior to the requested Borrowing Date, otherwise), specifying (i) the amount
to be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing
is to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the amounts of such
Type of Loan and the lengths of the initial Interest Periods therefor. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal to
(x) in the case of ABR Loans, $1,000,000 or a whole multiple thereof (or, if
then Available Revolving
31
Credit Commitments are less than $1,000,000, such lesser amount) and (y) in the
case of Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Upon receipt of any such notice from the Company, the Administrative
Agent shall promptly notify each Lender thereof. Each Revolving Credit Lender
will make the amount of its pro rata share of each borrowing available to the
Administrative Agent for the account of the Company at the office of the
Administrative Agent specified in subsection 10.2 prior to 12:00 Noon, New York
City time, on the Borrowing Date requested by the Company in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account of
the Borrower on the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Credit Lenders and in
like funds as received by the Administrative Agent.
2.3 Term Loan Commitments. Subject to the terms and conditions hereof
(a) each Tranche A Term Loan Lender severally agrees to make a term loan (a
"Tranche A Term Loan") to the Company on the Closing Date in an amount not to
exceed the amount of the Tranche A Term Loan Commitment of such Lender and (b)
each Tranche B Term Loan Lender severally agrees to make a term loan (a "Tranche
B Term Loan") to the Canadian Borrower on the Closing Date in an amount not to
exceed the amount of the Tranche B Term Loan Commitment of such Lender. The
Tranche A Term Loans and Tranche B Term Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the relevant Borrower and
notified to the Administrative Agent in accordance with subsections 2.4 and
2.10.
2.4 Procedure for Term Loan Borrowings. (a) The Company shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business Day
prior to the anticipated Closing Date) requesting that the Tranche A Term Loan
Lenders make the Tranche A Term Loans on the Closing Date and specifying the
amount to be borrowed. Upon receipt of such notice the Administrative Agent
shall promptly notify each Tranche A Term Loan Lender thereof. Not later than
12:00 Noon, New York City time, on the Closing Date each Tranche A Term Loan
Lender shall make available to the Administrative Agent at the office of the
Administrative Agent specified in subsection 10.2 an amount in immediately
available funds equal to the Tranche A Term Loan or Tranche A Term Loans to be
made by such Lender. The Administrative Agent shall credit to the account of the
Company on the books of such office the aggregate of the amounts made available
to the Administrative Agent by the Tranche A Term Loan Lenders in immediately
available funds.
(b) The Canadian Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 10:00 A.M., New York City time, one Business Day prior to the
anticipated Closing Date) requesting that the Tranche B Term Loan Lenders make
the Tranche B Term Loans on the Closing Date and specifying the amount to be
borrowed. Upon receipt of such notice the Administrative Agent shall promptly
notify each Tranche B Term Loan Lender thereof. Not later than 12:00 Noon, New
York City time, on the Closing Date each Tranche B Term Loan Lender shall make
available to the Administrative Agent at the office of the Administrative Agent
specified in subsection 10.2 an amount in immediately available funds equal to
the Tranche B Term Loan or Tranche B Term Loans to be made by such Lender. The
Administrative Agent shall credit to the account of the
32
Canadian Borrower on the books of such office the aggregate of the amounts made
available to the Administrative Agent by the Tranche B Term Loan Lenders in
immediately available funds.
2.5 Repayment of Term Loans. (a) The Tranche A Term Loan of each
Tranche A Term Loan Lender shall mature in consecutive quarterly installments on
the dates set forth below, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the amount set forth below
opposite such installment:
Installment Principal Amount
----------- ----------------
September 30, 2000 $625,000
December 31, 2000 625,000
March 31, 2001 625,000
June 30, 2001 625,000
September 30, 2001 1,250,000
December 31, 2001 1,250,000
March 31, 2002 1,250,000
June 30, 2002 1,250,000
September 30, 2002 3,125,000
December 31, 2002 3,125,000
March 31, 2003 3,125,000
June 30, 2003 3,125,000
September 30, 2003 7,500,000
December 31, 2003 7,500,000
March 31, 2004 7,500,000
June 30, 2004 7,500,000
September 30, 2004 12,500,000
December 31, 2004 12,500,000
March 31, 2005 12,500,000
April 30, 2005 12,500,000
(b) The Tranche B Term Loan of each Tranche B Term Loan Lender shall
mature in consecutive quarterly installments on the dates set forth below, each
of which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
September 30, 1999 $ 375,000
December 31, 1999 375,000
March 31, 2000 375,000
June 30, 2000 375,000
September 30, 2000 375,000
December 31, 2000 375,000
March 31, 2001 375,000
June 30, 2001 375,000
33
September 30, 2001 375,000
December 31, 2001 375,000
March 31, 2002 375,000
June 30, 2002 375,000
September 30, 2002 375,000
December 31, 2002 375,000
March 31, 2003 375,000
June 30, 2003 375,000
September 30, 2003 375,000
December 31, 2003 375,000
March 31, 2004 375,000
June 30, 2004 375,000
September 30, 2004 375,000
December 31, 2004 375,000
March 31, 2005 375,000
June 30, 2005 375,000
September 30, 2005 375,000
December 31, 2005 375,000
March 31, 2006 375,000
June 30, 2006 375,000
September 30, 2006 34,875,000
December 31, 2006 34,875,000
March 31, 2007 34,875,000
April 30, 2007 34,875,000
2.6 Repayment of Loans; Evidence of Debt. (a) The Company (or, in the
case of the Tranche B Term Loans, the Canadian Borrower) hereby unconditionally
promises to pay to the Administrative Agent for the account of the appropriate
Revolving Credit Lender or Term Loan Lender, as the case may be, (i) the then
unpaid principal amount of each Revolving Credit Loan of such Revolving Credit
Lender on the Revolving Credit Termination Date (or such earlier date on which
the Loans become due and payable pursuant to Section 8) and (ii) the principal
amount of each Term Loan of such Term Loan Lender in installments according to
the amortization schedule set forth in subsection 2.5 (or on such earlier date
on which the Loans become due and payable pursuant to Section 8). The Company
(or, in the case of the Tranche B Term Loans, the Canadian Borrower) hereby
further agrees to pay interest on the unpaid principal amount of the Loans from
time to time outstanding from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in subsection 2.12.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrowers to such Lender
resulting from each Loan of such Lender 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 Administrative Agent, on behalf of the Borrowers, shall
maintain the Register pursuant to subsection 10.6(d), and a subaccount therein
for each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the
34
Type thereof and each 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) both the amount of any sum received
by the Administrative Agent hereunder from the Borrowers and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.6(b) shall, to the extent permitted by
applicable law in the absence of manifest error, be prima facie evidence of the
existence and amounts of the obligations of the Borrowers therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of either Borrower to repay (with applicable
interest) the Loans made to such Borrower by such Lender in accordance with the
terms of this Agreement.
(e) The Company (or, in the case of the Tranche B Term Loans, the
Canadian Borrower) agrees that, upon the request to the Administrative Agent by
any Lender, the relevant Borrower will execute and deliver to such Lender a
promissory note of such Borrower evidencing any Term Loans or Revolving Credit
Loans, as the case may be, of such Lender, substantially in the forms of Exhibit
F-1 or F-2, respectively, with appropriate insertions as to date and principal
amount.
2.7 Commitment Fee. (a) Subject to subsection 2.15(b)(ii), the Company
agrees to pay to the Administrative Agent for the account of each Revolving
Credit Lender a commitment fee for the period from and including the first day
of the Revolving Credit Commitment Period to the Revolving Credit Termination
Date, computed at the Commitment Fee Rate on and after the Effective Date, on
the average daily amount of the Available Revolving Credit Commitment of such
Lender during the period for which payment is made, payable quarterly in arrears
on the last day of each March, June, September and December and on the Revolving
Credit Termination Date or such earlier date as the Revolving Credit Commitments
shall terminate as provided herein, commencing on the first of such dates to
occur after the Effective Date.
(b) The Company agrees to pay to the Agents the fees in the amounts
and on the dates from time to time agreed to in writing by Holdings and or the
Company and the respective Agents.
2.8 Optional Termination or Reduction of Revolving Credit Commitments.
The Company shall have the right, upon not less than five Business Days' notice
to the Administrative Agent, to terminate the Revolving Credit Commitments or,
from time to time, to reduce the amount of the Revolving Credit Commitments,
provided that no such termination or reduction shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Credit Loans made
on the effective date thereof, the aggregate principal amount of the Revolving
Credit Loans then outstanding, when added to then outstanding L/C Obligations,
would exceed the Revolving Credit Commitments then in effect. Any such partial
reduction shall be in an amount equal to $1,000,000 or a whole multiple thereof
and shall reduce permanently the Revolving Credit Commitments then in effect.
35
2.9 Optional Prepayments; Mandatory Prepayments and Commitment
Reductions. (a) (i) The Company may on the last day of any Interest Period with
respect thereto, in the case of Eurodollar Loans, or at any time and from time
to time, in the case of ABR Loans, prepay the Company Loans, in whole or in
part, without premium or penalty, upon at least three Business Days' irrevocable
notice in the case of Eurodollar Loans, and upon at least one Business Day's
irrevocable notice in the case of ABR Loans, to the Administrative Agent,
specifying the date and amount of prepayment and whether the prepayment is of
(x) Tranche A Term Loans, Revolving Credit Loans or a combination thereof and
(y) Eurodollar Loans, ABR Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each.
(ii) The Canadian Borrower may on the last day of any Interest Period
with respect thereto, in the case of Eurodollar Loans, or at any time and from
time to time, in the case of ABR Loans, prepay the Tranche B Term Loans, in
whole or in part, without premium or penalty, upon at least three Business Days'
irrevocable notice in the case of Eurodollar Loans, and upon at least one
Business Day's irrevocable notice in the case of ABR Loans, to the
Administrative Agent, specifying the date and amount of prepayment and whether
the prepayment is of Eurodollar Loans, ABR Loans or a combination thereof, and,
if of a combination thereof, the amount allocable to each.
(iii) Upon receipt of any such notice referred to in the foregoing
clauses (i) and (ii), the Administrative Agent shall promptly notify each
affected Lender thereof. If any such notice is given, the amount specified in
such notice shall be due and payable on the date specified therein, together
with any amounts payable pursuant to subsection 2.19 and, in the case of
prepayments of the Term Loans only, accrued interest to such date on the amount
prepaid. Subject to Section 2.9(e), optional prepayment of the Tranche B Term
Loans shall be accompanied by a ratable prepayment of the Tranche A Term Loans
(based on the respective outstanding principal amounts thereof) until the
Tranche A Term Loans are paid in full and then by a ratable reduction in the
Revolving Credit Commitments (based on the respective outstanding principal
amounts of the Tranche B Term Loans and the aggregate amount of the Revolving
Credit Commitments). Partial prepayments of the Term Loans shall be applied pro
rata to the respective installments of principal thereof; provided, however,
that Revolving Credit Loans and Tranche A Term Loans may be prepaid without
prepayment of Tranche B Term Loans. Partial prepayments shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof.
(b) If, at any time during the Revolving Credit Commitment Period, the
aggregate Revolving Extensions of Credit exceed the aggregate Revolving Credit
Commitments then in effect, the Company shall, without notice or demand,
immediately repay the Revolving Credit Loans in an aggregate principal amount
equal to such excess, together with interest accrued to the date of such payment
or prepayment and any amounts payable under subsection 2.19. To the extent that
after giving effect to any prepayment of the Revolving Credit Loans required by
the preceding sentence, the aggregate Revolving Extensions of Credit exceed the
aggregate Revolving Credit Commitments then in effect, the Company shall,
without notice or demand, immediately cash collateralize the then outstanding
L/C Obligations in an amount equal to such excess in accordance with paragraph
(g) below.
36
(c) If any Indebtedness shall be incurred by the Company or any of its
Subsidiaries (other than Indebtedness permitted to be incurred under subsection
7.2, including Indebtedness the proceeds of which are used to finance Permitted
Acquisitions), an amount equal to 100% of the Net Cash Proceeds thereof shall be
applied on the date of such issuance or incurrence toward the prepayment of the
Term Loans and the reduction of the Revolving Credit Commitments as set forth in
subsection 2.9(f) and subject to subsection 2.9(e).
(d) If on any date the Company or any of its Subsidiaries shall
receive Net Cash Proceeds in excess of $20,000,000 from any Asset Sale or
Recovery Event then (i) unless a Reinvestment Notice shall be delivered in
respect thereof, such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in subsection 2.9(f) and subject to subsection 2.9(e)
or (ii) if a Reinvestment Notice has been delivered in respect thereof, on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in subsection 2.9(f) and subject to subsection 2.9(e).
Notwithstanding the foregoing, all Net Cash Proceeds in excess of $50,000,000
received in any fiscal year during which the Leverage Ratio reflected on any
Compliance Certificate delivered pursuant to subsection 6.2(b) is greater than
4:00 to 1:00 (and in any fiscal year thereafter) shall be applied toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in subsection 2.9(f) and subject to subsection 2.9(e).
(e) Notwithstanding anything to the contrary in this subsection 2.9,
so long as any Tranche A Term Loans are outstanding, each Tranche B Term Loan
Lender may, at its option, decline the portion of any optional prepayment or
mandatory payment applicable to the Tranche B Term Loans of such Lender;
accordingly, with respect to the amount of any mandatory prepayment described in
this subsection 2.9 that is allocated to Tranche B Term Loans (such amounts, the
"Tranche B Prepayment Amount") at any time when Tranche A Term Loans remain
outstanding, the Canadian Borrower will, (i) in the case of any optional
prepayment which the Canadian Borrower wishes to make, not later than 20
Business Days prior to the date on which the Canadian Borrower wishes to make
such optional prepayment, and (ii) in the case of any mandatory prepayment
required to be made pursuant to this subsection 2.9, in lieu of applying such
amount to the prepayment of Tranche B Term Loans, as provided in subsection
2.9(f), on the date specified in this subsection 2.9 for such prepayment, give
the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent prepare and provide to each Tranche B
Term Loan Lender a notice (each, a "Prepayment Option Notice") as described
below. As promptly as practicable after receiving such notice from the Canadian
Borrower, the Administrative Agent will send to each Tranche B Term Loan Lender
a Prepayment Option Notice, which shall be in the form of Exhibit G, and shall
include an offer by the Canadian Borrower to prepay on the date (each a
"Prepayment Date") that is 10 Business Days after the date of the Prepayment
Option Notice the Tranche B Term Loans of such Lender by an amount equal to the
portion of the Tranche B Prepayment Amount indicated in such Lender's Prepayment
Option Notice as being applicable to such Lender's Tranche B Term Loans. On the
Prepayment Date (i) the Canadian Borrower shall pay to the Administrative Agent
the aggregate amount necessary to prepay that portion of the outstanding Tranche
B Term Loans in
37
respect of which Tranche B Term Loan Lenders have accepted prepayment as
described above (such Lenders, the "Accepting Lenders"), and such amount shall
be applied to reduce the Tranche B Prepayment Amounts with respect to each
Accepting Lender and (ii) the Canadian Borrower shall pay to the Administrative
Agent an amount equal to the portion of the Tranche B Prepayment Amount not
accepted by the Accepting Lenders, and such amount shall be applied to the
prepayment of the Tranche A Term Loans and the Tranche B Term Loans held by
Tranche B Term Loan Lenders who are Accepting Lenders (ratably based on the
respective outstanding principal amounts thereof); provided that any Tranche B
Term Loan Lender that has not, prior to the applicable Prepayment Date, accepted
or rejected a prepayment in response to the delivery of the applicable
Prepayment Option Notice shall be deemed to be an Accepting Lender with respect
to such prepayment. Notwithstanding anything in this subsection 2.9(e) to the
contrary, the procedures set forth in this subsection 2.9(e) shall not be
applied in connection with a prepayment pursuant to subsection 2.9(c) or (d) on
or prior to the Five-Year Anniversary Date at any time after the Five- Year
Threshold Amount has been prepaid to the Tranche B Term Loan Lenders.
(f) Subject to subsections 2.9(e) and (i), amounts to be applied in
connection with prepayments and Revolving Credit Commitment reductions made
pursuant to subsection 2.9(c) or (d) shall be applied, first, to the prepayment
of the Term Loans and, second, to reduce permanently the Revolving Credit
Commitments; provided that the Net Cash Proceeds of the Senior Subordinated
Notes may be used to prepay the Revolving Credit Loans and such prepayment will
not reduce the Revolving Credit Commitments. Any such reduction of the Revolving
Credit Commitments shall be accompanied by prepayment of the Revolving Credit
Loans to the extent, if any, that the Total Revolving Extensions of Credit
exceed the amount of the Total Revolving Credit Commitments as so reduced,
provided that if the aggregate principal amount of Revolving Credit Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Company shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Administrative Agent
for the benefit of the Lenders in accordance with paragraph (g) below. Unless
otherwise instructed by the Company, the application of any prepayment pursuant
to this subsection shall be made first to ABR Loans and second to Eurodollar
Loans. Each prepayment of the Loans under this subsection 2.9 (except in the
case of Revolving Credit Loans that are ABR Loans) shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid and any
amounts payable under subsection 2.19.
(g) The cash collateralization of L/C Obligations shall be
accomplished by the Company depositing an amount equal to such L/C Obligations
in a cash collateral account opened by the Administrative Agent. This account
shall bear interest which shall, so long as no Event of Default has occurred and
is continuing, be payable to the Company (and, if an Event of Default shall have
occurred, such interest shall remain in such account until such Event of Default
ceases to exist or the Administrative Agent has applied such interest to payment
of the Obligations). The Company shall have no right to withdraw any amount from
such cash collateral account; provided that, so long as no Default or Event of
Default has occurred and is continuing or would result therefrom, the
Administrative Agent shall, at the request of the Company, from time to time,
release an amount of cash collateral equal to the excess of all cash
38
collateral then on deposit in such cash collateral account over the then
outstanding L/C Obligations and accrued interest thereon. The Company hereby
grants to the Administrative Agent, for the benefit of the Issuing Banks and the
Participating Banks, a security interest in such cash collateral account and the
cash collateral (in whatever form) therein and the proceeds thereof to secure
all such L/C Obligations. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of such L/C Obligations. The
Company shall execute and deliver to the Administrative Agent, for the account
of the Issuing Banks and the Participating Banks, such further documents and
instruments as the Administrative Agent may reasonably request to evidence the
creation and perfection of such security interest in such cash collateral
account.
(h) Each payment (including each prepayment) by the Borrowers on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Loan Lenders (except as otherwise provided in paragraphs (a)
and (e) above and paragraph (i) below). The amount of each principal prepayment
of the Term Loans shall be applied to reduce the then remaining installments of
the Tranche A Term Loans and Tranche B Term Loans, as the case may be, pro rata
based upon the then remaining principal amount thereof. Amounts prepaid on
account of the Term Loans may not be reborrowed.
(i) Notwithstanding anything to the contrary in this subsection 2.9,
unless an Event of Default shall have occurred and be continuing, in no event
shall the Net Cash Proceeds required to be applied to the prepayment of Tranche
B Term Loans pursuant to subsection 2.9(c) or (d) during the period from and
after the Closing Date to and including the date which is five years after the
Closing Date (the "Five-Year Anniversary Date") be applied so that the aggregate
principal amount of the Tranche B Term Loans so prepaid, taken together with any
repayments in respect of Tranche B Term Loans required to be made during such
period pursuant to subsection 2.5(b), exceed 25% of the aggregate principal
amount of Tranche B Term Loans made by the Tranche B Term Loan Lenders on the
Closing Date (the "Five-Year Threshold Amount"). If, on or before the Five-Year
Anniversary Date, the Five-Year Threshold Amount has been prepaid to the Tranche
B Term Loan Lenders and no other Obligations remain outstanding to which
mandatory prepayments may be allocated in accordance with subsection 2.9 (f),
then the amount of any mandatory prepayment which would be required but for the
application of the foregoing terms of this subsection 2.9(i) shall be deemed to
be an excess mandatory prepayment (an "Excess Mandatory Prepayment"). Upon the
occurrence and during the continuance of any Event of Default and, in any event,
on the first Business Day following the Five-Year Anniversary Date, all Excess
Mandatory Prepayments (net of the aggregate amount of mandatory prepayments made
to the Tranche A Term Loan Lenders and the Revolving Credit Lenders and
reductions of Revolving Credit Commitments as a result of the operation of this
subsection 2.9(i) during the period commencing with the date on which the
Five-Year Threshold Amount has been prepaid to the Tranche B Term Loan Lenders
and ending on the date on which such Event of Default occurred (or the Five-Year
Anniversary Date, as the case may be)) shall become immediately due and payable
and shall be applied to prepay on a pro rata basis all then remaining scheduled
repayments of principal of Tranche B Term Loans set forth in subsection 2.5(b).
39
2.10 Conversion and Continuation Options. (a) The applicable Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent at least two Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The applicable
Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each affected Lender thereof. All or any part of outstanding Eurodollar Loans
and ABR Loans may be converted as provided herein, provided that (i) no Loan may
be converted into a Eurodollar Loan under a particular Facility when any Event
of Default has occurred and is continuing and the Administrative Agent has or
the Majority Facility Lenders under such Facility have determined not to permit
such conversions and (ii) no Loan under a particular Facility may be converted
into a Eurodollar Loan after the date that is one month prior to the final
scheduled termination or maturity date of such Facility.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of then current Interest Period with respect thereto by the applicable Borrower
giving notice to the Administrative Agent, in accordance with the applicable
provisions of the term "Interest Period" set forth in subsection 1.1, of the
length of the next Interest Period to be applicable to such Loans, provided that
no Eurodollar Loan under a particular Facility may be continued as such (i) when
any Event of Default has occurred and is continuing and the Administrative Agent
has or the Majority Facility Lenders under such Facility have determined not to
permit such continuations or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility and provided,
further, that if the applicable Borrower shall fail to give any required notice
as described above in this paragraph or if such continuation is not permitted
pursuant to the preceding proviso such Loans shall be automatically converted to
ABR Loans on the last day of such then expiring Interest Period.
2.11 Minimum Amounts of Tranches. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of the Loans
comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof.
2.12 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount
40
shall bear interest at a rate per annum which is (x) in the case of overdue
principal, the rate that would otherwise be applicable thereto pursuant to the
foregoing provisions of this subsection plus 2% or (y), to the extent permitted
by applicable law, in the case of overdue interest, commitment fee or other
amount, the rate described in paragraph (b) for the applicable Facility (or, if
there is no applicable Facility, for the Revolving Credit Facility) of this
subsection plus 2%, in each case from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.13 Computation of Interest and Fees. (a) Commitment fees,
commissions and interest shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, interest thereon
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrowers and the affected Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrowers and the affected Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of either Borrower, deliver to such
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to subsection 2.12(a).
2.14 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar
41
Loans under the relevant Facility requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans under the relevant
Facility that were to have been converted on the first day of such Interest
Period to Eurodollar Loans under the relevant Facility shall be converted to or
continued as ABR Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the first day of such Interest Period,
to ABR Loans. Until such notice has been withdrawn by the Administrative Agent,
no further Eurodollar Loans under the relevant Facility shall be made or
continued as such, nor shall either Borrower have the right to convert Loans
under the relevant Facility to Eurodollar Loans.
2.15 Pro Rata Treatment and Payments. (a) Each borrowing by the
relevant Borrower from the Lenders hereunder, each payment by the Company on
account of any commitment fee hereunder and any reduction of the Commitments of
the Lenders shall be made pro rata according to the respective Tranche A Term
Loan Percentages, Tranche B Term Loan Percentages or Revolving Credit Commitment
Percentages, as the case may be, of the relevant Lenders. Each payment (other
than prepayments) on account of principal of and interest on the Loans, each
payment in respect of fees payable hereunder and each payment in respect of
Reimbursement Obligations shall be applied to the amounts of such obligations
owing to the Lenders pro rata according to the respective amounts then due and
owing to the Lenders, except to the extent otherwise required by subsection
2.9(e), by clause (ii) of subsection 2.15(b), by subsection 2.18 or by
subsection 2.21. All payments (including prepayments) to be made by the
Borrowers hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Administrative Agent's office
specified in subsection 10.2, in Dollars and in immediately available funds. The
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be payable at then
applicable rate during such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent
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submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error. If such Lender's share of
such borrowing is not made available to the Administrative Agent by such Lender
(any such Lender, a "Non-Funding Lender") within three Business Days of such
Borrowing Date, (i) the Administrative Agent shall also be entitled to recover
such amount with interest thereon at the rate per annum applicable to ABR Loans
under the relevant Facility, on demand, from the relevant Borrower (provided
that, in any such case, any amount made available by the Administrative Agent to
the Canadian Borrower for the account of such Non-Funding Lender shall not
constitute the making available of a Tranche B Term Loan if the Canadian
Borrower refunds such amount pursuant to this clause (i)) , (ii) the commitment
fee of such Non-Funding Lender referred to in subsection 2.7 shall not accrue
during the period commencing on such Borrowing Date and ending on the date on
which such Non-Funding Lender makes available to the Administrative Agent its
share of such borrowing and (iii) the relevant Borrower shall have the right to
replace such Non-Funding Lender in accordance with subsection 2.21.
2.16 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof by any central bank or other Governmental Authority shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans
to Eurodollar Loans shall forthwith be cancelled; provided that any request by
the relevant Borrower pursuant to subsection 2.2, 2.4 or 2.10 for a Eurodollar
Loan shall, as to such Lender, be deemed to be a request for an ABR Loan, and
(b) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to ABR Loans on the respective last days of then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of then current Interest Period with respect thereto,
the relevant Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.19.
2.17 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof by any
central bank or other Governmental Authority or compliance by any Lender with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof
(or, if later, the date on which such Lender becomes a Lender):
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes and changes in the rate of net income taxes, branch
profits taxes or franchise taxes imposed in lieu of net income taxes of
such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
43
acquisition of funds by, any office of such Lender which is not otherwise
included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to
such Lender, by an amount which such Lender reasonably deems to be
material, of making, converting into, continuing or maintaining
Eurodollar Loans or issuing or participating in Letters of Credit
or to reduce any amount receivable hereunder in respect thereof,
then, in any such case, the relevant Borrower shall promptly pay
such Lender, within 15 days after receipt by such Borrower of a
certificate referred to in the second succeeding sentence, any
additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. If any Lender becomes
entitled to claim any additional amounts pursuant to this subsection,
it shall promptly notify the relevant Borrower, through the Administrative
Agent, of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this
subsection (setting forth in reasonable detail the calculations of
such amounts) submitted by such Lender, through the Administrative
Agent, to the relevant Borrower shall be conclusive in the absence of
manifest error. This covenant shall survive for one hundred eighty (180)
days after the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof by any Governmental Authority or
compliance by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof (or,
if later, the date on which such Lender becomes a Lender) does or shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder or under any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender to be material, then from time to time,
after submission by such Lender to the relevant Borrower (with a copy to the
Administrative Agent) of a written request therefor (setting forth in reasonable
detail the calculations of amounts to be paid hereunder as a result thereof),
such Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender for such reduction.
2.18 Taxes. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes or branch profits taxes or franchise taxes
imposed in lieu of net income taxes imposed on any Agent or any Lender as a
result of a present or former connection between such Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority
44
thereof or therein (other than any such connection arising solely from such
Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to any Agent or any Lender
hereunder, the amounts so payable to such Agent or such Lender shall be
increased to the extent necessary to yield to such Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes, provided, however, that the Borrowers shall be
entitled to deduct and withhold any Non-Excluded Taxes and neither Borrower
shall be required to increase any such amounts payable to any Lender that
fails to comply with the requirements of paragraph (b) of this subsection.
Each Lender shall promptly notify each Borrower of a change in such
Lender's tax status that would require the Borrower to withhold and/or pay
any amounts under this paragraph (a). Whenever any Non-Excluded Taxes are
payable by either Borrower, as promptly as possible thereafter such
Borrower shall send to the Applicable Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an original
official receipt received by such Borrower showing payment thereof. If
either Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to such Agent the required
receipts or other required documentary evidence within 30 days of the later
of written request therefor by any Agent or such Lender and the date such
receipt or evidence first becomes available to such Borrower, such Borrower
shall indemnify the Agents and the Lenders for any incremental taxes,
interest or penalties that may become payable by any Agent or any Lender as
a result of any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender that is not a United States person as defined in
Section 7701(a)(30) of the Code shall:
(X) (i) before the first payment date after it becomes a
party to this Agreement deliver to the Borrowers and the Administrative
Agent two duly completed copies of (A) Internal Revenue Service Form
W-8BEN, in the case of a Lender claiming treaty benefits with respect to
payments under this Agreement and any Notes, or Internal Revenue Service
Form W-8ECI, in the case of a Lender claiming payments under this Agreement
and any Notes are effectively connected with the conduct of a trade or
business within the United States, or successor applicable form, as the
case may be, covering all amounts receivable by it under this Agreement and
any Notes, together with such other forms, documentation or certifications
as may be necessary to establish an available exemption from deduction or
withholding of U.S. federal income taxes with respect to payments under
this Agreement and any Notes;
(ii) deliver to the Borrowers and the Administrative
Agent two further copies of any such form or certification on or before the
date that any such form, documentation, or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Borrowers; and
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(iii) obtain such extensions of time for filing and file
such forms, documentation or certifications as may reasonably be requested
by the Borrowers or the Administrative Agent; and
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and that cannot comply with
the requirements of subsection 2.18(b)(X) above, (i) represent to the
Borrowers (for the benefit of the Borrowers and the Agents) that it is not
a bank within the meaning of Section 881(c)(3)(A) of the Code, (ii) agree
to furnish to the Borrowers on or before the date of any payment by either
Borrower, with a copy to the Administrative Agent, (A) a certificate
substantially in the form of Exhibit H (any such certificate a "U.S. Tax
Compliance Certificate") and (B) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN, or successor applicable
form certifying to such Lender's legal entitlement at the date of such
certificate to an exemption from U.S. withholding tax under the provisions
of Section 871(h) or 881(c) of the Code with respect to payments to be made
under this Agreement and any Notes (and to deliver to the Borrowers and the
Administrative Agent two further copies of such form on or before the date
it expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recently provided form, and, if necessary,
obtain any extensions of time reasonably requested by the Borrowers or the
Administrative Agent for filing and completing such forms), and (iii)
agree, to the extent legally entitled to do so, upon reasonable request by
the Borrowers, to provide to the Borrowers (for the benefit of the
Borrowers and the Agents) such other forms, documentation or certification
as may be reasonably required in order to establish the legal entitlement
of such Lender to an exemption from withholding with respect to payments
under this Agreement and any Notes;
unless in any such case any change in treaty, law or regulation has occurred
after the date on which such Lender becomes a Lender under this Agreement which
renders all such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises the Borrowers and the Administrative Agent. Such Lender shall certify
(i) in the case of a Lender claiming treaty benefits with respect payments under
this Agreement and any Notes, or in the case of a Lender claiming amounts
receivable by it under this Agreement any Notes are effectively connected with
the conduct of a trade or business within the United States, that it is entitled
to receive payments under this Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (ii) that it is
entitled to an exemption from United States backup withholding tax. Each Person
that shall become a Lender or a Participant pursuant to subsection 10.6 shall,
upon the effectiveness of the related transfer, be required to provide all of
the forms, documentation or certifications required pursuant to this subsection,
provided that in the case of a Participant such Participant shall furnish all
such required forms, documentation or certifications to the Lender from which
the related participation shall have been purchased, and such Lender shall in
turn furnish all such required forms (including without limitation Internal
Revenue Service Form W-81MY), documentation and certifications to the Borrowers
and the Administrative Agent, together with such other forms, documentation or
certifications as may be necessary to establish
46
an available exemption from deduction or withholding of U.S. federal income
taxes on payments under this Agreement and any Notes. Notwithstanding the
foregoing, a Lender (or a Participant) that becomes a Lender (or a Participant)
pursuant to the Intercreditor Risk-Sharing Agreement will not be required to
provide any such forms, documentation or certification that it is not legally
able to deliver.
(c) If any Lender or the Administrative Agent shall become aware in
its sole and good faith judgement that it is entitled to receive a refund in
respect of Non-Excluded Taxes as to which it has received additional amounts
from either Borrower pursuant to subsection 2.18(a), it shall promptly notify
such Borrower of the availability of such refund and within 30 days after
receipt of a request by such Borrower, apply for such refund at such Borrower's
expense. If any Lender or the Administrative Agent receives a refund in respect
of Non-Exluded Taxes as to which it has received additional amounts from either
Borrower pursuant to subsection 2.18(a), it shall promptly repay such refund to
such Borrower, provided, however, that if any Lender or the Administrative Agent
receives a refund which it must subsequently return to the applicable taxing
authority after such Borrower has already been repaid, such Borrower agrees to
promptly return the amount of such repayment to the Lender or Administrative
Agent.
(d) For the purposes of this subsection 2.18 and subsection 2.17, a
change in treaty, law, rule or regulation shall not include (i) the ratification
or entry into force of the income tax treaty between the United States and
Luxembourg or (ii) the new United States withholding regulations (Treasury
Decision 8734 and Treasury Decision 8804) which become effective on January 1,
2000.
2.19 Indemnity. Each Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any reasonably foreseeable loss or expense which
such Lender may sustain or incur caused by (a) default by such Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
such Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by such Borrower in making any
prepayment after such Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a payment or prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification shall include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurodollar market. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
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2.20 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of subsection 2.17 or
2.18(a) with respect to such Lender, it will, if requested by the Borrowers, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event, including avoiding the need
for, or reducing the amounts of, additional costs of the Borrowers pursuant to
subsection 2.17 or 2.18(a); provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this subsection shall affect or postpone any of the
obligations of either Borrower or the rights of any Lender pursuant to
subsection 2.17 or 2.18(a).
2.21 Replacement of Lenders under Certain Circumstances. The Borrowers
shall be permitted to replace any Lender which (a) requests reimbursement for
amounts owing pursuant to Section 2.17 or 2.18 or (b) defaults in its obligation
to make Loans hereunder, with a replacement financial institution; provided that
(i) such replacement does not conflict with any Requirement of Law, (ii) no
Event of Default shall have occurred and be continuing at the time of such
replacement, (iii) prior to any such replacement, such Lender shall not have
designated a different lending office under subsection 2.20 so as to eliminate
the continued need for payment of amounts owing pursuant to Section 2.17 or
2.18, (iv) the replacement financial institution shall purchase, at par, all
Loans and other amounts owing to such replaced Lender on or prior to the date of
replacement, (v) the relevant Borrower or Borrowers shall be liable to such
replaced Lender under subsection 2.19 if any Eurodollar Loan owing to such
replaced Lender shall be purchased other than on the last day of the Interest
Period relating thereto, (vi) the replacement financial institution, if not
already a Lender, shall be reasonably satisfactory to the Administrative Agent,
(vii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of subsection 10.6 (provided that the relevant
Borrower or Borrowers shall be obligated to pay the registration and processing
fee referred to therein), (viii) until such time as such replacement shall be
consummated, the relevant Borrower or Borrowers shall pay all additional amounts
(if any) required pursuant to subsection 2.17 or 2.18, as the case may be, and
(ix) any such replacement shall not be deemed to be a waiver of any rights which
either Borrower, the Administrative Agent or any other Lender shall have against
the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1. L/C Commitment. (a) Subject to the terms and conditions hereof,
each Issuing Bank, in reliance on the agreements of the Lenders set forth in
subsection 3.4(a), agrees to issue letters of credit ("Letters of Credit") for
the account of the Company on any Business Day during the Revolving Credit
Commitment Period in such form as may be approved from time to time by such
Issuing Bank; provided that neither Issuing Bank shall have any obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate Available
Revolving Credit Commitments would be less than zero.
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(b) Each Letter of Credit shall be denominated in Dollars and shall
expire no later than the earlier of (i) 365 days after its date of issuance and
(ii) five Business Days prior to the Revolving Credit Termination Date, provided
that any Letter of Credit with a one-year term may provide for an annual renewal
(which shall in no event extend beyond the date referred to in clause (ii)
above) if such renewal is consented to by the applicable Issuing Bank and all
conditions precedent to the issuance of Letters of Credit are met at the time of
such renewal.
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(d) No Issuing Bank shall at any time be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with, or cause such Issuing
Bank or any Participating Bank to exceed any limits imposed by, any applicable
Requirement of Law.
(e) The letters of credit listed on Schedule IV shall be deemed to be
Letters of Credit issued under this Agreement on the Closing Date.
3.2. Procedure for Issuance of Letters of Credit. The Company may from
time to time request that an Issuing Bank issue a Letter of Credit by delivering
to such Issuing Bank at its address for notices specified herein an Application
therefor, completed to the satisfaction of such Issuing Bank, and such other
certificates, documents and other papers and information as such Issuing Bank
may reasonably request. Upon receipt of any Application, such Issuing Bank will
process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall an Issuing Bank be required to issue any Letter
of Credit earlier than three Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by such Issuing Bank
and the Company. The Issuing Bank shall furnish a copy of such Letter of Credit
to the Company and to each Participating Bank promptly following the issuance
thereof.
3.3. Fees, Commissions and Other Charges. (a) The Company will pay a
fee on all outstanding Letters of Credit at a per annum rate equal to the
Applicable Margin then in effect with respect to Eurodollar Loans under the
Revolving Credit Facility, shared ratably among the Revolving Credit Lenders and
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, the Company shall pay to the Issuing Lender for its own
account a fronting fee of 1/10 of 1% per annum, payable quarterly in arrears on
each L/C Fee Payment Date after the Issuance Date.
(b) In addition to the foregoing fees and commissions, the Company
shall pay or reimburse each Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by such Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit;
provided that such costs and expenses are not paid by the Company under
subsections 2.19, 3.5 and/or 10.5 of this Agreement.
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3.4. L/C Participations. (a) Each Issuing Bank irrevocably agrees to
grant and hereby grants to each Participating Bank, and, to induce the Issuing
Banks to issue Letters of Credit hereunder, each Participating Bank irrevocably
agrees to accept and purchase and hereby accepts and purchases from each Issuing
Bank, on the terms and conditions hereinafter stated, for such Participating
Bank's own account and risk an undivided interest equal to such Participating
Bank's Revolving Credit Percentage in the relevant Issuing Bank's obligations
and rights under each Letter of Credit issued by it hereunder in accordance with
the terms hereof and the amount of each draft paid by such Issuing Bank
thereunder. Each Participating Bank unconditionally and irrevocably agrees with
each Issuing Bank that, if a draft is paid under any Letter of Credit for which
such Issuing Bank is not reimbursed in full by the Company in accordance with
the terms of this Agreement, such Participating Bank shall pay to such Issuing
Bank upon demand at such Issuing Bank's address for notices specified herein an
amount equal to such Participating Bank's Revolving Credit Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any Participating Bank to an
Issuing Bank pursuant to paragraph 3.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Bank under any Letter of Credit is paid to
such Issuing Bank after the date such payment is due, such Participating Bank
shall pay to such Issuing Bank on demand an amount equal to the product of (i)
such amount, times (ii) the daily average Federal funds rate, as quoted by such
Issuing Bank, during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Bank, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. A
certificate of an Issuing Bank submitted to any Participating Bank with respect
to any amounts owing under this subsection shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after an Issuing Bank has made payment under
any Letter of Credit and has received from any Participating Bank its pro rata
share of such payment in accordance with subsection 3.4(a), the Issuing Bank
receives any payment related to such Letter of Credit (whether directly from the
Company or otherwise, including proceeds of collateral applied thereto by such
Issuing Bank), or any payment of interest on account thereof, such Issuing Bank
will distribute to such Participating Bank its pro rata share thereof; provided,
however, that in the event that any such payment received by an Issuing Bank
shall be required to be returned by such Issuing Bank, such Participating Bank
shall return to such Issuing Bank the portion thereof previously distributed by
such Issuing Bank to it.
3.5. Reimbursement Obligation of the Company. (a) The Company agrees
to reimburse each Issuing Bank on each date on which such Issuing Bank notifies
the Company of the date and amount of a draft presented under any Letter of
Credit and paid by such Issuing Bank for the amount of (i) such draft so paid
and (ii) any stamp taxes, fees, charges or other costs or expenses incurred by
such Issuing Bank in connection with such payment. Each such payment shall be
made to such Issuing Bank at its address for notices specified herein in lawful
money of the United States of America and in immediately available funds.
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(b) Subject to paragraph (c) immediately below, interest shall be
payable on any and all amounts remaining unpaid by the Company under this
subsection from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding ABR Loans under the Revolving Credit
Facility which were then overdue.
(c) So long as each of the conditions precedent specified in
subsection 5.3 is satisfied at such time, each drawing under any Letter of
Credit shall constitute a request by the Company to the Administrative Agent for
a borrowing pursuant to subsection 2.2 of ABR Loans under the Revolving Credit
Facility in an amount equal to the lesser of (i) the then aggregate Available
Revolving Credit Commitments and (ii) the amount of such drawing. The Borrowing
Date with respect to such borrowing shall be the date of such drawing. Each
Revolving Credit Lender will make the amount of its pro rata share of such
borrowing available to the Administrative Agent at its office specified in
subsection 10.2 by the close of business on such Borrowing Date (if such Lender
receives notice of such borrowing in sufficient time to fund its portion of such
borrowing on such Date, and otherwise on the next Business Day) in funds
immediately available to the Administrative Agent. Such funds will then be made
available by the Administrative Agent to the relevant Issuing Bank in
satisfaction of the Company's obligation to reimburse such Issuing Bank pursuant
to clause (a) above. All ABR Loans deemed to be made pursuant to this paragraph
(c) shall constitute Revolving Credit Loans for all purposes of this Agreement.
3.6. Obligations Absolute. (a) The Company's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Company may have or have had against any Issuing Bank or any beneficiary of a
Letter of Credit.
(b) The Company also agrees with each Issuing Bank that such Issuing
Bank shall not be responsible for, and the Company's Reimbursement Obligations
under subsection 3.5(a) shall not be affected by, among other things, (i) the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or (ii)
any dispute between or among the Company and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
(iii) any claims whatsoever of the Company against any beneficiary of such
Letter of Credit or any such transferee.
(c) No Issuing Bank shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by the Issuing Bank's gross negligence or willful
misconduct.
(d) The Company agrees that any action taken or omitted by an Issuing
Bank under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Company and shall not
result in any liability of such Issuing Bank to the Company.
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3.7. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the relevant Issuing Bank shall promptly
notify the Company of the date and amount thereof. The responsibility of any
Issuing Bank to the Company in connection with any draft presented for payment
under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with the requirements of such
Letter of Credit.
3.8. Application. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, each
Borrower hereby represents and warrants to the Agents and each Lender that:
4.1 Financial Condition. (a) The balance sheets as at December 31,
1998 and December 31, 1997 included in the "F-pages" of the Form 10 Filing, and
the related combined statements of operations, changes in equity (deficit) and
cash flows for the fiscal years ended on December 31, 1998, December 31, 1997
and December 31, 1996, reported on by Deloitte & Touche LLP, copies of which
have heretofore been furnished to each Lender, present fairly in all material
respects the consolidated financial condition of the GenTek Business as at such
dates, and the consolidated results of its operations and its changes in equity
(deficit) and consolidated cash flows for the fiscal years then ended.
(b) The pro forma balance sheet of the GenTek Business as of December
31, 1998 (the "Company Pro Forma Balance Sheet") included in the Form 10 Filing
presents fairly in all material respects the financial condition of the GenTek
Business as of December 31, 1998 after giving effect to the Spin-Off
Transactions, the Noma Acquisition and the Defiance Acquisition.
(c) The consolidated balance sheets of the Canadian Borrower and its
consolidated Subsidiaries as at December 31, 1998 and December 31, 1997 and the
related consolidated statements of operations, changes in equity (deficit) and
cash flows for the fiscal years ended on December 31, 1998, December 31, 1997
and December 31, 1996, reported on by Deloitte & Touche LLP, copies of which
have heretofore been furnished to each Lender, present fairly in all material
respects the consolidated financial condition of the Canadian Borrower and its
consolidated Subsidiaries as at such dates, and the consolidated results of
their operations and their changes in equity (deficit) and consolidated cash
flows for the fiscal years then ended.
(d) All financial statements referred to in the preceding paragraphs
(a), (b) and (c), including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as approved by such
52
accountants or Responsible Officer, as the case may be, and as disclosed
therein). Neither the Company nor any of its consolidated Subsidiaries had, at
the date of the Company Pro Forma Balance Sheet and after giving effect to the
Spin-Off Transactions, the Noma Acquisition and the Defiance Acquisition, any
material Guarantee Obligation, contingent liability or liability for taxes, or
any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, except as reflected in the Company Pro Forma Balance Sheet or in
the notes thereto or as disclosed in the Form 10 Filing. Except as disclosed in
the 1998 10-K, the Confidential Information Memorandum or the Form 10 Filing,
during the period from December 31, 1998 to and including the date hereof there
has been no sale, transfer or other disposition by the Company or any of its
consolidated Subsidiaries of any material part of its business or property and
no purchase or other acquisition of any business or property (including any
capital stock of any other Person) material in relation to the consolidated
financial condition of the Company and its consolidated Subsidiaries at December
31, 1998.
4.2 No Change. Since December 31, 1998 there has been no development
or event which has had or could reasonably be expected to have a Material
Adverse Effect.
4.3 Corporate Existence; Compliance with Law. Each of the Company and
its Subsidiaries (other than any Foreign Subsidiary which is not a Material
Foreign Subsidiary) (a) is duly organized, validly existing and, if applicable,
in good standing under the laws of the jurisdiction of its organization, (b) has
the power and authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing, if applicable, under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to be so
qualified and in good standing could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and (in the case of each
Borrower) to borrow hereunder and (in the case of the Company) have the Letters
of Credit issued for its account and has taken all necessary action to authorize
the borrowings (in the case of the Borrowers) and the issuance of the Letters of
Credit (in the case of the Company) for its account on the terms and conditions
of this Agreement and the Applications and (in the case of each Loan Party) to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. No consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents. This
Agreement has been, and each other Loan Document will be, duly executed and
delivered on behalf of the Loan Parties party thereto. This Agreement
constitutes, and each other Loan Document when executed and delivered will
constitute, a legal, valid and binding obligation of the Loan Parties party
thereto enforceable against such Loan Parties in accordance with its terms,
53
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. (a) The execution, delivery and performance of the
Loan Documents, the borrowings hereunder and the use of the proceeds thereof,
after giving effect to the Spin-Off Transactions, will not violate any
Requirement of Law or material Contractual Obligation of the Company or of any
of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such Requirement of Law or Contractual Obligation, other than
any violations or Liens that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(b) As of the Closing Date, (i) all governmental and third-party
approvals necessary in connection with the Spin-Off Transactions and the
financing contemplated in connection therewith and for the GenTek Business to be
conducted after the Spin-Off by the Company and its Subsidiaries as conducted
prior to the Spin-Off have been obtained, other than any approvals that, if not
obtained, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect, and (ii) all applicable waiting periods have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on the
Spin-Off Transactions or the financing thereof.
4.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrowers, threatened by or against the Company or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to any of the Loan Documents or any of the transactions
contemplated hereby or (b) which could reasonably be expected to have a Material
Adverse Effect.
4.7 No Default. Neither the Company nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Company and its
Subsidiaries has (or upon the consummation of the Spin-Off Transactions will
have) good record and insurable title (and, with respect to real property
located in Canada, good and marketable title) in fee simple to, or a valid
leasehold interest in, all its material real property, and good title to, or a
valid leasehold interest in, all its other material property, and none of their
respective property is subject to any Lien except as permitted by subsection
7.3.
4.9 Intellectual Property. The Company and each of its Subsidiaries
owns, or is licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of its business as currently
conducted except for those the failure to
54
own or license which could not reasonably be expected to have a Material Adverse
Effect (the "Intellectual Property"). No claim has been asserted and is pending
by any Person challenging or questioning the use of any such Intellectual
Property or the validity or effectiveness of any such Intellectual Property, nor
do the Borrowers know of any valid basis for any such claim, in each case, other
than those claims which, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect. The use of such Intellectual
Property by the Borrowers and their Subsidiaries does not infringe on the rights
of any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
4.10 Taxes. Each of the Company and its Subsidiaries has filed or
caused to be filed all U.S. federal income tax returns and all other material
tax returns which, to the knowledge of the Company, are required to be filed and
has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than those not yet delinquent, those with respect to which the failure to
pay would not have a Material Adverse Effect and those the amount or validity of
which are currently being contested in good faith by appropriate proceedings
diligently conducted and with respect to which reserves in conformity with GAAP
have been provided on the books of the Company or its Subsidiaries, as the case
may be); no tax Lien has been filed or registered, and, to the knowledge of the
Company, no claim is being asserted, with respect to any such tax, fee or other
charge.
4.11 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or for any purpose which
violates the provisions of the Regulations of the Board. If requested by any
Lender or the Administrative Agent, each Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation U.
4.12 ERISA; Canadian Benefit and Pension Plans. (a) Other than the
Reportable Events resulting from the Spin-Off Transactions, neither a Reportable
Event nor an "accumulated funding deficiency" (within the meaning of Section 412
of the Code or Section 302 of ERISA) has occurred and is continuing on the date
on which this representation is made or deemed made with respect to any Single
Employer Plan, and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code. No termination of a Single Employer
Plan has occurred, and no Lien in favor of the PBGC or a Plan has arisen and
remains in effect against the assets of the Company or any Commonly Controlled
Entity, as of each date on which this representation is made or deemed made. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by an amount in excess of $25,000,000. Neither the Company nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Company nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the
55
Company or any such Commonly Controlled Entity were to withdraw completely from
all Multiemployer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. No such Multiemployer Plan
is in Reorganization or Insolvent. Notwithstanding the foregoing, there shall be
no breach of the representations set forth in this subsection 4.12(a) or (b)
unless the amount of any liability of the Company or any Commonly Controlled
Entity which arises or which could reasonably be expected to arise in connection
with the matters giving rise to such breach, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(b) Schedule V sets forth, as of the Closing Date, all Canadian
Benefit Plans (other than, for greater certainty, universal plans created by and
to which the Borrowers and their respective Subsidiaries are obligated to
contribute by statute) and Canadian Pension Plans adopted by the Borrowers and
their respective Subsidiaries. The Canadian Pension Plans are duly registered
under the Income Tax Act (Canada) and all other applicable laws which require
registration and no event has occurred which is reasonably likely to cause the
loss of such registered status. All material obligations of the Borrowers and
their respective Subsidiaries (including fiduciary, funding, investment and
administration obligations) required to be performed in connection with the
Canadian Pension Plans and the funding agreements therefor have been performed
in a timely fashion. There have been no improper withdrawals or applications of
the assets of the Canadian Pension Plans or the Canadian Benefit Plans. There
are no outstanding disputes concerning the assets of the Canadian Pension Plans
or the Canadian Benefit Plans which could reasonably be expected to have a
Material Adverse Effect. On a solvency basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with the
applicable Governmental Authorities and which are consistent with generally
accepted actuarial principles), none of the Canadian Pension Plans is
under-funded by more than $5,000,000.
4.13 Investment Company Act; Other Regulations. Neither Borrower is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. Neither
Borrower is subject to regulation under any Federal or State statute or
regulation which limits its ability to incur Indebtedness.
4.14 Subsidiaries. Schedule II sets forth all the Subsidiaries of the
Company as of the Closing Date.
4.15 Purpose of Loans. The proceeds of the Revolving Credit Loans and
Letters of Credit shall be used by the Company for working capital and general
corporate purposes of the Company, including financing Permitted Acquisitions
and Permitted Investments, and to finance the Spin-Off Transactions (including
the refinancing of certain existing indebtedness in connection therewith) and to
pay related fees and expenses. The proceeds of the Term Loans shall be used by
the Borrowers to finance the Spin-Off Transactions (including the refinancing
certain existing indebtedness in connection therewith) and to pay related fees
and expenses.
4.16 Environmental Matters. (a) To the best knowledge of the
Borrowers, the facilities and properties owned, leased or operated by the
Company or any of its Subsidiaries (the
56
"Properties") do not contain any Hazardous Materials in amounts or
concentrations which constitute or constituted a violation of any Environmental
Law except in either case insofar as such violations in the aggregate could not
reasonably be expected to have a Material Adverse Effect.
(b) To the best knowledge of the Borrowers, the Properties and all
operations at the Properties are in compliance with all applicable Environmental
Laws except for instances of noncompliance that individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect, and there is
no contamination at, under or about the Properties nor any violation of any
Environmental Law with respect to the Properties or the business operated by the
Company or any of its Subsidiaries (the "Business") which in the aggregate could
reasonably be expected to have a Material Adverse Effect.
(c) Neither the Company nor any of its Subsidiaries has received any
written notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the Business, nor do
the Borrowers have knowledge that any such notice will be received or is being
threatened, except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that could reasonably
be expected to have a Material Adverse Effect.
(d) To the best knowledge of the Borrowers, no Hazardous Materials
have been transported or disposed of from the Properties in violation of any
Environmental Law, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of the Properties in violation of any
applicable Environmental Law except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, could not reasonably
be expected to have a Material Adverse Effect.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrowers, threatened, under any
Environmental Law to which the Company or any Subsidiary is or will be named as
a party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business except insofar
as such proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to have a Material Adverse
Effect.
(f) To the best knowledge of the Borrowers, there has been no release
or threat of release of Hazardous Materials at or from the Properties, or
arising from or related to the operations of the Company or any Subsidiary in
connection with the Properties or otherwise in connection with the Business, in
violation of or in amounts or in a manner that could reasonably give rise to
liability under Environmental Laws except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, could not
reasonably be expected to have a Material Adverse Effect.
57
4.17 Solvency. The Company, individually and together with its
Subsidiaries, is Solvent. As of the Closing Date, the Canadian Borrower is
Solvent.
4.18 Labor Matters. There are no strikes or other labor disputes
against the Company or any of its Subsidiaries pending or, to the knowledge of
the Borrowers, threatened that in the aggregate could reasonably be expected to
have a Material Adverse Effect. Hours worked by and payment made to employees of
the Company and its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters that in the aggregate could reasonably be expected to have a Material
Adverse Effect. All payments due from the Company or any of its Subsidiaries on
account of employee income taxes (including source deductions), employment
insurance, workers safety and insurance, employers' health tax, vaction pay,
employee health and welfare insurance and other social security or statutory
obligations that in the aggregate could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the Company or the relevant Subsidiary, as and to the extent
required by GAAP.
4.19 Accuracy of Information, etc. None of this Agreement, any other
Loan Document, the Confidential Information Memorandum, the Form 10 Filing or
any other document, certificate, information or statement furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated by this Agreement
or the other Loan Documents, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any
untrue statement of a material fact or, all such material taken together as a
whole, omitted to state a material fact necessary in order to make the
statements contained herein or therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of the
Company to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum, in the Form 10 Filing or in any other documents,
certificates and statements furnished to the Administrative Agent and the
Lenders for use in connection with the transactions contemplated hereby and by
the other Loan Documents.
4.20 Security Documents. (a) The Guarantee and Pledge Agreement is
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
described in the Guarantee and Pledge Agreement, when stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Pledge
Agreement, when financing statements in appropriate form are filed in the
offices specified in the Guarantee and Pledge Agreement, the Guarantee and
Pledge Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and the proceeds thereof, as
58
security for the Obligations (as defined in the Guarantee and Pledge Agreement),
in each case prior and superior in right to any other Person.
(b) Each of the Canadian Security Documents is effective to create in
favor of the Administrative Agent, for the benefit of the Tranche B Term Loan
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. Upon completion of the actions set forth
in each Canadian Security Document, such Canadian Security Document shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Canadian Borrower Obligations, in each case prior and superior
in right to any other Person.
4.21 Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) the Company's and its
Subsidiaries' material computer systems and material equipment containing
embedded microchips (including systems and equipment supplied by others) and the
testing of all such material systems and equipment, as so reprogrammed, are
expected by the Company to be completed by June 30, 1999, and (ii) the Company's
and its Subsidiaries' other computer systems and equipment containing embedded
microchips, and the testing of such systems and equipment, as so reprogrammed,
are expected by the Company to be completed by December 15, 1999. The cost to
the Company of such reprogramming and testing and of the reasonably foreseeable
consequences of year 2000 to the Company (including, without limitation,
reprogramming errors, but excluding costs and consequences resulting from
non-year 2000 compliance by suppliers to, customers of or service providers to
the Company or its Subsidiaries) will not result in a Material Adverse Effect.
Except for such of the reprogramming referred to in this subsection 4.21 as may
be necessary, the computer and management information systems of the Company and
its Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be able to interpret dates after
December 31, 1999.
4.22 GenTek Business. On the Closing Date (after giving effect to the
Spin-Off Transactions that have occurred on or before the Closing Date), (a) the
GenTek Business will be conducted by the Company and its Subsidiaries, and (b)
the Company and its Subsidiaries will be conducting no business other than the
GenTek Business.
4.23 Senior Indebtedness. From and after the date of effectiveness of
the Senior Subordinated Note Indenture, (i) the Company Obligations will
constitute senior Indebtedness of the Company under the Senior Subordinated Note
Indenture and (ii) the obligations of each Subsidiary Guarantor under the
Guarantee and Pledge Agreement will constitute senior Indebtedness of such
Subsidiary Guarantor under the Senior Subordinated Note Indenture.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Effectiveness. The effectiveness of this Agreement
is subject to the satisfaction of the following conditions precedent (the date
of effectiveness, the "Effective Date"):
59
(a) Loan Documents. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of
each Borrower, (ii) each Security Document, executed and delivered by a
duly authorized officer of each Loan Party party thereto, and (iii) for the
account of each relevant Lender, Notes conforming to the requirements
hereof and executed by a duly authorized officer of the applicable
Borrower.
(b) Related Agreements. The Administrative Agent shall have
received, with a copy for each Lender, true and correct copies, certified
as to authenticity by the Company, of the Spin-Off Documents (including,
without limitation, the Management Agreement) and such other documents or
instruments as may be reasonably requested by the Administrative Agent,
including, without limitation, a copy of any debt instrument, security
agreement or other material contract to which the Company or its
Subsidiaries may be a party.
(c) Corporate Proceedings of each Loan Party. The Administrative
Agent shall have received, with a counterpart for each Lender, a copy of
the resolutions (or comparable authorizing document), in form and substance
satisfactory to the Administrative Agent, of the Board of Directors (or
comparable governing body) of each Loan Party authorizing (i) the
execution, delivery and performance of the Loan Documents to which it is a
party, and (ii) the granting by it of the Liens created pursuant to the
Security Documents, certified by the Secretary or an Assistant Secretary of
such Loan Party as of the Effective Date, which certificate shall be in
form and substance reasonably satisfactory to the Administrative Agent and
shall state that the resolutions thereby certified have not been amended,
modified, revoked or rescinded.
(d) Loan Party Incumbency Certificate. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of
each Loan Party, dated the Effective Date, as to the incumbency and
signature of the officers of such Loan Party executing any Loan Document
reasonably satisfactory in form and substance to the Administrative Agent,
executed by the President or any Vice President and the Secretary or any
Assistant Secretary of such Loan Party.
(e) Actions to Perfect Liens. The Administrative Agent shall have
received evidence in form and substance reasonably satisfactory to it that
all filings, recordings, registrations and other actions (including actions
required under Canadian Law), including, without limitation, the filing of
duly executed financing statements on form UCC-1, the payment of all
applicable filing and recording fees and expenses and the delivery of stock
certificates, necessary or, in the opinion of the Administrative Agent,
desirable to perfect the Liens created by the Security Documents shall have
been completed.
(f) Lien Searches. The Administrative Agent shall have received
the results of a recent search by a Person reasonably satisfactory to the
Administrative Agent of the Uniform Commercial Code, judgment and tax lien
filings (and equivalent searches under Canadian law) which may have been
filed with respect to personal property of the
60
Company and its Subsidiaries, and such search shall reveal no Liens other
than Liens permitted by subsection 7.3 or otherwise satisfactory to the
Lenders.
(g) Financial Statements. The Lenders shall have received the
financial statements of the Company and the Canadian Borrower referred to
in subsection 4.1.
(h) Solvency. The Administrative Agent shall have received a
certificate from American Appraisal Associates, in form and substance
reasonably satisfactory to the Lenders, as to the Solvency of the Company
and its Subsidiaries after giving effect to the Spin-Off Transactions and
the other transactions contemplated hereby.
(i) Business Plan. The Lenders shall have received a certificate
of a Responsible Officer of the Company confirming that there has been no
material change to the detailed business plan for each fiscal year from
1999 through and including 2003 and the written analysis of the business
and prospects of each Borrower and its Subsidiaries through the Termination
Date previously delivered to the Lenders.
(j) Environmental Information. The Administrative Agent shall
have received from the Company information in form and substance reasonably
satisfactory to the Administrative Agent with respect to environmental
matters affecting the Canadian Borrower and Defiance Inc.
(k) Conditions to Spin-Off. The Separation shall have been
completed and each of the other conditions to the consummation of the
Spin-Off set forth in Section 3.06 of the Separation Agreement (other than
the completion of the Refinancing Transactions and the NHO Distribution)
shall have been satisfied, including, but not limited to, the condition
that the IRS Ruling shall not have been withdrawn or modified and shall be
in full force and effect.
(l) Ratings Letter. The Administrative Agent shall have received
a copy (with a copy for each Lender) of a letter from S&P or ▇▇▇▇▇'▇, as
the case may be, addressed to the Company and confirming that the
Facilities have been assigned a rating of at least BB by S&P or at least
Ba2 by ▇▇▇▇▇'▇.
5.2 Conditions to Initial Loans and Letters of Credit. The obligation
of each Lender to make its initial Loans and the obligation of each Issuing
Lender to issue its initial Letter of Credit are subject to the satisfaction,
immediately prior to or concurrently with the making of such Loans or the
issuance of such Letter of Credit, as the case may be, of the following
conditions precedent (the date of the initial extensions of credit, the "Closing
Date"):
(a) Effective Date. The conditions set forth in subsection 5.1
shall have been satisfied in accordance with the terms hereof.
(b) Consummation of Spin-Off. Concurrently with the initial
borrowing hereunder, the Refinancing Transactions shall be completed and
thereupon the NHO
61
Distribution shall be effected and the Spin-Off shall be consummated, in
all material respects in accordance with the Form 10 Filing and the
Separation Agreement, and neither the Form 10 Filing nor the Separation
Agreement shall have been amended in any manner which has had a material
adverse effect on the structure or syndication of, or the credit analysis
with respect to, the Facilities without the consent of the Required
Lenders. Upon the consummation of the Spin-Off the corporate and capital
structure of each Loan Party shall be, in all material respects, as
described in the Form 10 Filing.
(c) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Debevoise &
▇▇▇▇▇▇▇▇, special counsel to the Borrowers and the other Loan Parties,
substantially in the form of Exhibit A-1;
(ii) the executed legal opinion of Blake, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, special counsel to the Canadian Borrower and the other Loan
Parties, substantially in the form of Exhibit A-2; and
(iii) the executed legal opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
General Counsel of GenChem, substantially in the form of Exhibit A-3.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(d) Fees. The Administrative Agent, the Syndication Agent, the
Documentation Agent and the Lenders shall have received all fees to be
received from, or reimbursed to them by, Holdings or the Borrowers on the
Closing Date.
5.3 Conditions to Each Extension of Credit. The agreement of each
Lender and each Issuing Bank to make any extension of credit requested to be
made by it on any date (including, without limitation, its initial extension of
credit) is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations
and warranties made by the Borrowers and the other Loan Parties in or
pursuant to the Loan Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date (except
for changes permitted by this Agreement and except that representations and
warranties made as of a specified date need only be true and correct as of
such specified date).
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
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Each borrowing by a Borrower hereunder, each issuance, amendment or extension of
a Letter of Credit hereunder and the effectiveness of this Agreement under
subsection 5.1, shall constitute a representation and warranty by each Borrower
as of the date of such extension of credit or such initial effectiveness under
subsection 5.1, as the case may be, that the conditions contained in this
subsection 5.3 have been satisfied. No event shall be deemed an extension of
credit unless such event results in an increase in the total principal amount of
Loans outstanding or in the total face amount of Letters of Credit outstanding.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrowers hereby agree that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Administrative Agent hereunder, each
Borrower shall and (except in the case of delivery of financial information,
reports and notices) shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Company, a copy of the consolidated
balance sheet of the Company and its consolidated Subsidiaries as at the
end of such year and the related consolidated statements of operations,
changes in equity (deficit) and cash flows for such year, setting forth in
each case in comparative form the figures for the previous year, and
reported on without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by Deloitte &
Touche LLP or other independent certified public accountants of nationally
recognized standing;
(b) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal
year of the Company, the unaudited consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such quarter and
the related unaudited consolidated statements of operations, changes in
equity (deficit) and cash flows for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments) and as having been prepared
in accordance with GAAP applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such
officer and disclosed therein); and
(c) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Canadian Borrower, a copy of the
consolidated balance sheet of the Canadian Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of operations, changes in equity (deficit) and cash flows for
such year, setting forth in each case in comparative form the figures for
the previous year.
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All such financial statements shall present fairly in all material respects the
consolidated financial condition of the Company (or the Canadian Borrower, as
the case may be) and its consolidated Subsidiaries as at the applicable dates,
and the consolidated results of their operations, their changes in equity
(deficit) and their consolidated cash flows for the periods reflected therein,
and shall be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).
6.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor such accountants obtained
no knowledge of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and 6.1(b), a Compliance Certificate,
executed by a Responsible Officer, (i) demonstrating compliance with the
covenants contained in subsections 7.1, 7.2(j), 7.2(m), 7.2(o), 7.6, 7.8,
7.9, 7.10(f), 7.10(h) and 7.11(a), (ii) setting forth calculations of the
Interest Coverage Ratio, the Leverage Ratio and the Senior Leverage Ratio
as of the last day of the most recent fiscal quarter covered by such
financial statements and (iii) stating that, to the best of such
Responsible Officer's knowledge, the Company during such period has
observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and in the other
Loan Documents to which it is a party to be observed, performed or
satisfied by it, and that such Officer has obtained no knowledge of any
Default or Event of Default except as specified in such certificate;
(c) within five days after the same are filed, copies of all
financial statements and reports which the Company may make to, or file
with, the Securities and Exchange Commission or any successor or analogous
Governmental Authority; and promptly, all press releases and other written
statements made available generally by the Company or any of its
Subsidiaries to the public concerning material developments in the business
of the Company or any of its Subsidiaries;
(d) promptly upon receipt thereof, copies of all reports
submitted to the Company by its independent certified public accountants in
connection with each annual, interim or special audit of the financial
statements of the Company made by such accountants, including, without
limitation, the comment letter submitted by such accountants to management
in connection with their annual audit; and the Company agrees to obtain
such a letter in connection with each of its annual audits;
(e) if requested by the Administrative Agent, promptly after the
filing thereof by a Borrower or any of its Subsidiaries with any applicable
Governmental Authority, copies
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of each annual and other material return, report or valuation with respect
to each Canadian Pension Plan; and
(f) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
diligently conducted and reserves in conformity with GAAP with respect thereto
have been provided on the books of the Company or its Subsidiaries, as the case
may be.
6.4 Conduct of Business and Maintenance of Existence. Continue to
engage in business primarily of the same general types as now conducted by it,
or in Related Businesses, and preserve, renew and keep in full force and effect
the corporate existence of each Borrower and each Material Subsidiary; and take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except as
otherwise permitted pursuant to subsection 7.5, and comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to
maintain such rights, privileges and franchises and to comply with Contractual
Obligations and Requirements of Law could not, in the aggregate, be reasonably
expected to have a Material Adverse Effect.
6.5 Maintenance of Property; Insurance. Keep all material property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance (to
the extent available at commercially reasonable rates) on all its property in at
least such amounts and against at least such risks as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and furnish to each Lender, upon written request, full information as
to the insurance carried.
6.6 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender upon reasonable prior notice and at reasonable
times to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Company and its Subsidiaries with officers
and employees of the Company and its Subsidiaries and with its independent
certified public accountants (each Lender will, in accordance with subsection
10.15, maintain the confidentiality of all information obtained by it pursuant
to this subsection 6.6).
6.7 Notices. Promptly give notice to the Administrative Agent and each
Lender of:
(a) the occurrence of any Default or Event of Default;
65
(b) any default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries which if not cured
could reasonably be expected to have a Material Adverse Effect;
(c) any litigation, investigation or proceeding affecting the
Company or any of its Subsidiaries (i) which is reasonably likely to
involve a payment of $10,000,000 or more not covered by insurance, (ii) in
which injunctive or similar relief reasonably likely to have a Material
Adverse Effect is reasonably likely to be obtained or (iii) which if not
cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;
(d) (i) the following events, as soon as possible and in any
event within 30 days after the Company knows or has reason to know thereof:
(x) the occurrence or expected occurrence of any Reportable Event (other
than the Reportable Events resulting from the Spin-Off Transactions) with
respect to any Plan, a failure to make any required contribution to a Plan,
the creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (y) the institution of proceedings or the taking of
any other action by the PBGC or the Company or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or
the terminating, Reorganization or Insolvency of, any Plan and (ii) (w) any
failure to make a contribution to any Canadian Pension Plan required by the
terms of such plan or applicable law, in a timely manner, (x) any
termination of any Canadian Pension Plan, (y) any material direction,
order, notice, ruling or opinion that the Borrowers or any of their
Subsidiaries shall receive from any applicable Governmental Authority
indicating that any Canadian Pension Plan is in default under any
applicable law, together with a copy thereof, and (z) if requested by the
Administrative Agent, a copy of any actuarial report prepared in respect of
any Canadian Pension Plan; and
(e) any development or event known to the Company which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply with, and ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and ensure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except for such instances of noncompliance that, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities
66
regarding Environmental Laws, except for instances in which the obligation to
comply or to conduct such investigations, studies, sampling, testing or remedial
actions is being contested in good faith before a court or administrative body
of competent jurisdiction or in which the failure to so comply or to conduct
such activities in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
6.9 Further Assurances. At any time and from time to time, upon the
Administrative Agent's request and at the expense of the Company, promptly and
duly execute and deliver or cause to be executed and delivered any and all
further instruments and documents and take such further action as the
Administrative Agent may reasonably request to effect the purpose of the
Security Documents, including, without limitation, the filing of any financing
or continuation statements under the Uniform Commercial Code or other applicable
laws in effect in any jurisdiction.
6.10 Additional Collateral. (a) With respect to any new Subsidiary
(other than a Foreign Subsidiary or a Foreign Subsidiary Holding Company)
created or acquired after the Closing Date (which, for the purposes of this
paragraph, shall include any existing Subsidiary that ceases to be a Foreign
Subsidiary or a Foreign Subsidiary Holding Company or that becomes a Subsidiary
described in clause (a) of the definition of "Subsidiary Guarantor"), by the
Company or any Subsidiary Guarantor (other than as set forth in subsections
6.10(b) and (c)), promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Pledge Agreement as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Company or any
Subsidiary Guarantor, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Company or such
Subsidiary Guarantor, as the case may be, (iii) if 80% or more of the Equity
Interests of such new Subsidiary are owned, directly or indirectly (other than
indirectly through a Foreign Subsidiary) by the Company or any Subsidiary
Guarantor, cause such new Subsidiary (A) to become a party to the Guarantee and
Pledge Agreement and (B) to take such actions necessary or advisable to grant to
the Administrative Agent for the benefit of the Lenders a perfected first
priority security interest in the Collateral described in the Guarantee and
Pledge Agreement with respect to such new Subsidiary, including, without
limitation, the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Pledge Agreement or by law
or as may be requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in the form
attached to the Guarantee and Pledge Agreement (or otherwise in form and
substance reasonably satisfactory to the Administrative Agent).
(b) With respect to any new Foreign Subsidiary or Foreign Subsidiary
Holding Company (other than an Excluded Issuer) created or acquired after the
Closing Date by the Company or any Subsidiary Guarantor, promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Pledge Agreement as the Administrative Agent deems necessary or advisable in
order to grant to the Administrative Agent, for the benefit of the
67
Lenders, a perfected first priority security interest in the Capital Stock of
such new Foreign Subsidiary which is owned by the Company or any Subsidiary
Guarantor (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Company or such Subsidiary
Guarantor, as the case may be, and take such other action as may be necessary
or, in the reasonable opinion of the Administrative Agent, desirable under
applicable law to perfect the Lien of the Administrative Agent thereon, and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in the form attached to the Guarantee and Pledge Agreement (or
otherwise in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent).
(c) With respect to any new Subsidiary created or acquired after the
Closing Date (which, for the purposes of this paragraph, shall include any
existing Subsidiary that becomes a Subsidiary described in clause (a) of the
definition of "Canadian Subsidiary Guarantor") by the Canadian Borrower or any
Canadian Subsidiary Guarantor (other than as set forth in subsection 6.10(d)),
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Canadian Guarantee and Pledge Agreement as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Tranche B Term Loan Lenders, a perfected first priority security
interest in the Capital Stock of such new Subsidiary which is owned by the
Canadian Borrower or any Canadian Subsidiary Guarantor, (ii) if 80% or more of
the Equity Interests of such new Subsidiary are owned by the Canadian Borrower
or any Canadian Subsidiary Guarantor, cause such new Subsidiary (A) to become a
party to the Canadian Guarantee and Pledge Agreement, (B) to comply with the
terms and provisions of the Canadian Guarantee and Pledge Agreement with respect
to the registration of shares of such Capital Stock and the delivery to the
Administrative Agent of certificates representing such Capital Stock, and (C) to
take such other actions as may be necessary or advisable to grant to the
Administrative Agent for the benefit of the Tranche B Term Loan Lenders a
perfected first priority security interest in the Collateral described in the
Canadian Guarantee and Pledge Agreement with respect to such new Subsidiary, and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in the form attached to the Canadian Guarantee and Pledge Agreement (or
otherwise in form and substance reasonably satisfactory to the Administrative
Agent).
(d) With respect to any new Capital Stock created or acquired after
the Closing Date by the Company or any of its Subsidiaries (other than a Foreign
Subsidiary or a Foreign Subsidiary Holding Company) in connection with a
transaction described in the last sentence of subsection 7.6, if the creation or
acquisition of such Capital Stock is a Restricted Investment, promptly (i)
execute and deliver to the Administrative Agent such amendments to the Guarantee
and Pledge Agreement as the Administrative Agent deems necessary or advisable in
order to grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in such Capital Stock (provided that
in no event shall more than 65% of the total outstanding Capital Stock of any
new Subsidiary be required to be so pledged if such Subsidiary
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is a Foreign Subsidiary or a Foreign Subsidiary Holding Company), (ii) deliver
to the Administrative Agent the certificates representing such Capital Stock,
together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the Company or such Subsidiary, as the case may be, and
take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Lien of the Administrative Agent
thereon, and (iii) if requested by the Administrative 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.
6.11 Canadian Pension Plans and Benefit Plans. (a) For each Canadian
Pension Plan existing on the Effective Date, ensure that such plan retains its
registered status (except to the extent that the Borrowers shall have given
notice of the termination of such plan in accordance with subsection 6.7(d))
under and is administered in a timely manner in all respects in accordance with
the applicable pension plan text, funding agreement, the Income Tax Act (Canada)
and all other applicable laws.
(b) For each Canadian Pension Plan hereafter adopted by the Borrowers
and their Subsidiaries which is required to be registered under the Income Tax
Act (Canada) or any other applicable laws, use its best efforts to seek and
receive confirmation in writing from the applicable Governmental Authorities to
the effect that such plan is unconditionally registered under the Income Tax Act
(Canada) and such other applicable laws.
(c) For each Canadian Pension Plan and Canadian Benefit Plan hereafter
adopted by the Borrowers and their Subsidiaries, in a timely fashion perform in
all material respects all obligations (including fiduciary, funding, investment
and administration obligations) required to be performed in connection with such
plan and the funding media therefor.
6.12 Noma Acquisition and Restructurings. (a) On or prior to June 15,
1999, fully consummate the Noma Acquisition (including, without limitation, the
Amalgamation), and (b) on or prior to December 31, 1999, fully consummate the
Noma Restructurings.
SECTION 7. NEGATIVE COVENANTS
Each Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note or any Letter of Credit remains outstanding and unpaid or any
other amount is owing to any Lender or the Administrative Agent hereunder, such
Borrower shall not, and (except with respect to subsection 7.1) shall not permit
any of its Subsidiaries to, directly or indirectly:
7.1 Financial Condition Covenants.
(a) Senior Leverage Ratio. Permit the Senior Leverage Ratio as at
the last day of any fiscal quarter of the Company (commencing with the
fiscal quarter ending September 30, 1999) to be greater than 3.75 : 1:00.
69
(b) Leverage Ratio. Permit the Leverage Ratio as at the last day
of any fiscal quarter of the Company (commencing with the fiscal quarter
ending September 30, 1999) to be greater than 5.00 : 1.00.
(c) Interest Coverage Ratio. Permit the Interest Coverage Ratio
as at the last day of any fiscal quarter of the Company (commencing with
the fiscal quarter ending September 30, 1999) to be less than 2.50 : 1.00.
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness under this Agreement and the other Loan
Documents;
(b) Indebtedness of up to $10,000,000 in the aggregate at any
time outstanding of Sandco under the Sandco Credit Facility;
(c) Indebtedness of up to $7,000,000 in the aggregate at any time
outstanding of ▇▇▇▇▇▇ Ireland under the ▇▇▇▇▇▇ Ireland Credit Facility;
(d) Indebtedness of up to $10,000,000 in the aggregate at any
time outstanding of GenTek Canada under the GenTek Canada Working Capital
Facility;
(e) Indebtedness of up to $20,000,000 in the aggregate at any
time outstanding under the Noma Credit Facility;
(f) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary; provided that any such
Indebtedness of a Subsidiary (other than the Canadian Borrower or any
Subsidiary Guarantor) to the Company or a Subsidiary Guarantor shall be
evidenced by a non-negotiable senior promissory note having terms
reasonably satisfactory to the Administrative Agent;
(g) Indebtedness of a Person which becomes a Subsidiary after the
date hereof, provided that (i) such Indebtedness existed at the time such
corporation became a Subsidiary and was not created in anticipation thereof
and (ii) immediately after giving effect to the acquisition of such Person
by the Company, no Default or Event of Default shall have occurred and be
continuing;
(h) (i) Interest Rate Protection Obligations of the Company
entered into to hedge actual interest rate exposure and not for speculative
purposes to the extent that the notional principal amount thereof does not
exceed the amount of Indebtedness being hedged, (ii) Interest Rate
Protection Obligations of the Canadian Borrower entered into to hedge
actual interest rate exposure and not for speculative purposes to the
extent that the notional principal amount thereof does not exceed the
amount of Indebtedness being hedged and (iii) Guarantee Obligations (x) by
Subsidiaries of the Company in respect of the Company's obligations
described in the preceding clause (i) and (y) by the Company
70
or any Subsidiary of the Canadian Borrower's obligations described in the
preceding clause (ii) as long as the aggregate amount of such Guarantee
Obligations described in this clause (iii) (as measured by the relevant
swap termination values) does not exceed $5,000,000;
(i) Indebtedness under Currency Agreements; provided that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company or the Canadian
Borrower outstanding other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(j) Indebtedness of the Company or any of its Subsidiaries (other
than such Indebtedness permitted by subsection 7.2(o)) incurred to finance
the acquisition of fixed or capital assets (whether pursuant to a loan, a
Financing Lease or otherwise) in an aggregate principal amount not
exceeding as to the Company and its Subsidiaries $30,000,000 at any time
outstanding;
(k) Indebtedness of the Company or any of its Subsidiaries at any
time outstanding incurred in the ordinary course of business in respect of
reclamation bonds, performance bonds, letters of credit and surety bonds
provided by the Company or any of its Subsidiaries required by and in
compliance with the applicable statutes or laws of the relevant
jurisdiction or by relevant Governmental Authorities;
(l) Indebtedness outstanding on the date hereof and listed on
Schedule III and, until the Closing Date, Indebtedness outstanding under
the Existing Credit Agreement;
(m) Indebtedness of the Company or any of its Subsidiaries not
otherwise permitted under this subsection 7.2 in an aggregate principal
amount not to exceed $20,000,000 at any time outstanding;
(n) any Indebtedness ("Refinancing Indebtedness") incurred in
connection with the extension, renewal, substitution, refinancing or
replacement of any Indebtedness referred to in clauses (b) through (l)
above and clause (o) below; provided that (i) the principal amount of such
Refinancing Indebtedness does not exceed the aggregate principal amount of,
plus accrued interest on, the Indebtedness being extended, renewed,
substituted, refinanced or replaced, plus the reasonable amount of fees,
underwriting discount, premiums and other costs and expenses reasonably
incurred in connection therewith, (ii) such Refinancing Indebtedness does
not require an increase in amortization payments payable by the Company or
its Subsidiaries at any time prior to June 30, 2007, (iii) such Refinancing
Indebtedness contains terms which, taken as a whole, are not less favorable
to the Company and its Subsidiaries than the terms of the Indebtedness
being extended, renewed, substituted, refinanced or replaced and (iv) the
only obligors on the applicable Refinancing Indebtedness are the obligors
on the Indebtedness being refinanced unless otherwise permitted by
subsections 7.2 and 7.4; and
71
(o) other Indebtedness of the Company or its Subsidiaries as long
as, at the time of the incurrence of such Indebtedness, (i) no Event of
Default shall have occurred and be continuing or would occur after giving
effect thereto and (ii) the Company delivers to the Administrative Agent a
certificate from its chief financial officer demonstrating that it would be
in compliance with subsection 7.1 for the most recent period for which a
Compliance Certificate has been delivered pursuant to subsection 6.2(b)
after giving effect to the incurrence of such Indebtedness (and the
application of the proceeds thereof including the effects of acquired
businesses and assets) and recalculating the Senior Leverage Ratio as if
such Indebtedness had been incurred on the first day of such period and
remained outstanding during such period.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in
good faith by appropriate proceedings diligently conducted, provided that
adequate reserves with respect thereto are maintained on the books of the
Company or its Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
which secure amounts not overdue for a period of more than 60 days or which
are being contested in good faith by appropriate proceedings diligently
conducted or which do not exceed $1,000,000 in the aggregate at any time;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation; and any
attachment, judgment or similar Lien, unless the writ, judgment or other
process it secures shall not, within 60 days after the entry thereof, have
been discharged or the execution thereof stayed pending appeal, or shall
not have been discharged within 60 days after the expiration of any such
stay;
(d) (i) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business, and (ii) purchase-money
Liens on inventory and Liens on inventory held by third parties on
consignment or a similar basis, in each case incurred in the ordinary
course of business, provided that the aggregate fair market value of all
inventory at any time subject to Liens described in this clause (ii) shall
not exceed $10,000,000;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which exist on the
date hereof or which do not materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct
of the business of the Company or such Subsidiary;
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(f) (i) until the Closing Date, Liens securing Indebtedness under
the Existing Credit Agreement and (ii) Liens in existence on the date
hereof listed on Schedule III, provided that no such Lien is spread to
cover any additional property after the Closing Date and that the amount of
Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Company and its
Subsidiaries permitted by subsection 7.2(j) incurred in the ordinary course
of business to finance the acquisition of fixed or capital assets, provided
that (i) such Liens shall be created within 180 days after the acquisition
of such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any such
Lien shall at no time exceed 80% of the fair value (as determined in good
faith by the Company and evidenced by a certificate of a Responsible
Officer) of such property at the time it was acquired;
(h) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness permitted
by subsection 7.2(g), provided that (i) such Liens existed at the time such
corporation became a Subsidiary and were not created in anticipation
thereof, (ii) any such Lien is not spread to cover any property or assets
of such corporation after the time such corporation becomes a Subsidiary
(except after-acquired property to the extent such Lien includes after-
acquired property) and (iii) the amount of Indebtedness secured thereby is
not increased;
(i) (i) Liens on the assets of Sandco and its Subsidiaries which
secure obligations of Sandco under the Sandco Credit Facility, (ii) Liens
on the assets of ▇▇▇▇▇▇ Ireland and its Subsidiaries which secure
obligations of ▇▇▇▇▇▇ Ireland under the ▇▇▇▇▇▇ Ireland Credit Facility,
(iii) Liens on the assets of GenTek Canada and its Subsidiaries which
secure obligations of GenTek Canada under the GenTek Canada Working Capital
Facility and (iv) Liens on the assets of the Canadian Borrower and its
Subsidiaries which secure obligations of the Canadian Borrower or its
Subsidiaries under the Noma Credit Facility, so long as no such Lien
encumbers any Collateral;
(j) Liens created pursuant to the Security Documents;
(k) Liens securing Refinancing Indebtedness permitted by
subsection 7.2(n); provided that (i) such Liens cover only the property
securing the Indebtedness being refinanced and (ii) the principal amount of
Indebtedness secured thereby is not increased (except as permitted by
subsection 7.2(n)); and
(l) other Liens (other than on property constituting Collateral)
securing up to $15,000,000 of obligations.
7.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation, unless such obligation would be
permitted to be incurred as Indebtedness of such Person pursuant to subsection
7.2.
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7.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) (i) any Subsidiary of the Company may be merged or
consolidated with or into the Company (provided that the Company shall be
the continuing or surviving corporation), (ii) any Subsidiary of the
Company may be merged, consolidated or amalgamated with or into a
Subsidiary Guarantor (provided that a Subsidiary Guarantor shall be the
continuing or surviving corporation or, if such Subsidiary is the Canadian
Borrower, that the Canadian Borrower shall be the continuing or surviving
corporation), and (iii) any Subsidiary of the Company (other than the
Canadian Borrower) that is not a Subsidiary Guarantor may be merged,
consolidated or amalgamated with or into another Subsidiary that is not a
Subsidiary Guarantor;
(b) (i) any Subsidiary may sell, lease, transfer or otherwise
dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Company, the Canadian Borrower or a
Subsidiary Guarantor and (ii) any Subsidiary of the Company (other than the
Canadian Borrower) that is not a Subsidiary Guarantor may sell, lease,
transfer or otherwise dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to another Subsidiary that is not
a Subsidiary Guarantor; provided that, subject to clauses (d) and (e)
below, prior to the consummation of the Noma Restructurings, a Subsidiary
of the Canadian Borrower may only sell, lease, transfer or otherwise
dispose of all or substantially all of its assets (upon voluntary
liquidation or otherwise) to the Canadian Borrower or a Canadian Subsidiary
Guarantor;
(c) in order to consummate an acquisition permitted by subsection
7.10(f), the Company or a Subsidiary may be merged with the acquired
company as long as the surviving company is (i) the Company (if the Company
consummates any such transaction), the Canadian Borrower (if the Canadian
Borrower consummates any such transaction) or a Subsidiary Guarantor (if a
Subsidiary Guarantor consummates any such transaction) or (ii) otherwise, a
Subsidiary of the Company;
(d) the Canadian Borrower and Noma may consummate the
Amalgamation as contemplated on the date hereof; and
(e) the Canadian Borrower and its Subsidiaries may be merged,
consolidated or amalgamated in connection with, and to effect, the Noma
Restructurings (provided that the Canadian Borrower shall be the continuing
or surviving corporation) and the Canadian Borrower may distribute the
Capital Stock of Noma Corporation as described in clause (ii) of the
definition of Noma Restructurings.
7.6 Limitation on Sale of Assets. Consummate an Asset Sale unless (i)
the Company (or applicable Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in good faith by the
74
Company and evidenced by a certificate of a Responsible Officer) of the assets
or Equity Interests issued or sold or otherwise disposed of and (ii) at least
75% of the consideration therefor received by the Company or such Subsidiary is
in the form of cash or Cash Equivalents; provided that the amount of (x) any
liabilities (as shown on the Company's or such Subsidiary's most recent balance
sheet) of the Company or any Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Obligations or any
guarantee thereof) are assumed by the transferee of any such assets pursuant to
a customary novation agreement that releases the Company or such Subsidiary from
further liability and (y) any securities, notes or other obligations received by
the Company or any such Subsidiary from such transferee that are converted by
the Company or such Subsidiary into cash (to the extent of the cash received)
within 90 days following such receipt, shall be deemed to be cash for purposes
of this provision. Notwithstanding the preceding clause (ii), the Company and
its Subsidiaries may consummate one or more Asset Sales by making contributions
of assets to joint ventures in exchange for consideration consisting of Capital
Stock of such joint ventures engaged in businesses described in subsection 7.16
as long as (a) if the acqusition of such Capital Stock is a Restricted
Investment, such Capital Stock is pledged to the Lenders in accordance with
subsection 6.10(d), and (b) such contributions are permitted by subsection 7.10.
7.7 Amendments to Spin-Off Documents, Noma Acquisition Documentation,
etc. Amend, supplement or otherwise modify the terms and conditions of the
Spin-Off Documents or the Noma Acquisition Documentation except for any such
amendment, supplement or modification that could not reasonably be expected to
have a Material Adverse Effect or materially adversely affect the ability of the
Loan Parties to perform their respective obligations under the Loan Documents.
7.8 Limitation on Restricted Payments. (a)(i) Declare or pay any
dividend or make any distribution on, or purchase, redeem or otherwise acquire
or retire for value, or make or permit any of its Subsidiaries to declare or pay
any dividend or make any distribution on or payment on account of the purchase,
redemption, defeasance or other acquisition or retirement for value of, any
Capital Stock of the Company or of any Subsidiary of the Company (other than
Capital Stock of a Subsidiary which Capital Stock is owned by the Company, a
Wholly-Owned Subsidiary or a Subsidiary Guarantor), other than through the
issuance solely of the Company's own Capital Stock (other than Redeemable
Stock), (ii) make any principal payment on, or redeem, repurchase or defease, or
otherwise acquire or retire for value, or permit any of its Subsidiaries to,
directly or indirectly, make any principal payment on, or redeem, repurchase or
defease, or otherwise acquire or retire for value, prior to any scheduled
principal payment, scheduled sinking fund payment or scheduled maturity, any
Indebtedness or Guarantee Obligations which are subordinated to the Obligations
(or, if applicable, any guarantee thereof) (other than as permitted by
subsection 7.11), (iii) make, or permit any of its Subsidiaries to make, any
Restricted Investment or (iv) make or commit to make Capital Expenditures
pursuant to clause (b)(ii) of subsection 7.9 (such payments or any other actions
described in clauses (i), (ii), (iii) and (iv) are collectively referred to as
"Restricted Payments") unless at the time of and after giving effect to the
proposed Restricted Payment, (A) no Default or Event of Default (including,
without limitation, any Default or Event of Default under subsection 7.1(c))
shall have occurred and be continuing; and (B) the aggregate amount of all
Restricted Payments made after the date
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of this Agreement shall not exceed the sum of (1) the aggregate Net Cash
Proceeds received by the Company or Subsidiary Guarantors from the issuance or
sale (other than to a Subsidiary or an ESOP) after the Closing Date of shares of
its Capital Stock, plus (2) the aggregate net proceeds received by the Company
or Subsidiary Guarantors from the issuance or sale (other than to a Subsidiary
or an ESOP) after January 1, 1999 of any debt securities or Redeemable Stock
that have been converted into or exchanged for Capital Stock (excluding
Redeemable Stock) of the Company, plus (3) Qualifying ESOP Purchases, plus (4)
proceeds from the disposition of Restricted Investments, plus (5) the lesser of
(X) 50% of the Consolidated Adjusted Net Income (or, in the case of a deficit
Consolidated Adjusted Net Income, minus 100% of such deficit) of the Company
accrued on a cumulative basis for the period commencing on January 1, 1999 to
the last day of the fiscal quarter immediately preceding the date of the
proposed Restricted Payment and (Y) 50% of the Consolidated Cash Flow (or, in
the case of a deficit Consolidated Cash Flow, minus 100% of such deficit
Consolidated Cash Flow) of the Company accrued on a cumulative basis for the
period commencing on January 1, 1999 to the last day of the fiscal quarter
immediately preceding the date of the proposed Restricted Payment plus (6)
$50,000,000.
For purposes of this subsection 7.8, the "net proceeds" from the
issuance of shares of Capital Stock of the Company issued upon conversion or
exchange of debt securities or Redeemable Stock shall be deemed to be the net
book value of such debt securities or Redeemable Stock at the date of conversion
(plus the additional amount required to be paid upon such conversion, if any)
less any cash payment made by the Company on account of fractional shares. For
purposes of this paragraph, the "net book value" of a security shall be the
amount received by the Company on the issuance of such security, as adjusted in
accordance with GAAP on the books of the Company to the date of conversion or
exchange. The foregoing shall not be interpreted to limit the authority of the
Board of Directors of the Company, as set forth above, to determine the value of
other securities of the Company or other property received as net proceeds.
(b) Notwithstanding anything in subsection 7.8(a) to the contrary, the
following shall not be included in the calculation of the aggregate amount of
Restricted Payments made after the date of this Agreement: (1) the redemption,
repurchase or other acquisition or retirement of any shares of any class of
Capital Stock of the Company or of any Subsidiary of the Company in exchange for
(including any such exchange pursuant to the exercise of a conversion right or
privilege in connection with which cash is paid in lieu of the issuance of
fractional shares or scrip), or out of the proceeds of a substantially
concurrent issue and sale (other than to a Subsidiary or an ESOP) of, other
shares of Capital Stock (other than Redeemable Stock) of the Company; (2) to the
extent otherwise permitted pursuant to this Agreement, the purchase or
redemption of subordinated Indebtedness made in exchange for, or out of the
proceeds of a substantially concurrent issue and sale (other than to a
Subsidiary or an ESOP) of, other subordinated Indebtedness which (A) is
subordinated to the Loans and all other obligations of the Company hereunder to
at least the same extent as the subordinated Indebtedness being purchased or
redeemed and (B) does not require any increase in amortization payments payable
by the Company at any time prior to June 30, 2007; (3) payments by the Company
pursuant to its equity incentive plans to the extent such payments are reflected
as expenses in the calculation of Consolidated Net Income; (4) the payment of
any dividend by a Subsidiary of the Company to the holders of its common Equity
Interests on a pro rata basis; (5)
76
the repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Subsidiary of the Company held by any
member of the Company's (or any of its Subsidiaries') management, consultants or
advisors pursuant to any management equity subscription agreement or stock
option agreement in effect as of the Closing Date; provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $1,000,000 in any twelve-month period and no Default
or Event of Default shall have occurred and be continuing immediately after such
transaction; (6) payments of any amounts to an ESOP or other stock plan for
employees in an amount not to exceed $1,000,000; (7) payments to public
shareholders of Noma upon the Amalgamation, as required by applicable law; (8)
payments to former shareholders of Defiance, Inc. in connection with the
Defiance Acquisition in an amount not to exceed $500,000 in the aggregate during
the term of this Agreement; and (9) Restricted Payments by any Subsidiary to the
Company, the Canadian Borrower or a Subsidiary Guarantor; Restricted Payments by
the Company or the Canadian Borrower to a Subsidiary Guarantor; Restricted
Payments by the Company to the Canadian Borrower or by the Canadian Borrower to
the Company; and Restricted Payments by any Subsidiary (other than the Canadian
Borrower) that is not a Subsidiary Guarantor to any other Subsidiary that is not
a Subsidiary Guarantor. Solely for purposes of any calculation that is required
to be made pursuant to this covenant within 60 days after the declaration of a
dividend or other distribution in respect of Capital Stock by the Company or any
of its Subsidiaries, such dividend or other distribution in respect of Capital
Stock shall be deemed to be paid at the date of declaration, and the subsequent
payment of such dividend or other distribution in respect of Capital Stock
during such 60-day period shall not be treated as an additional Restricted
Payment; provided that no such dividend may be paid or distribution made if a
Default or an Event of Default has occurred and is continuing or would result
therefrom.
7.9 Limitation on Capital Expenditures. Make or commit to make (by way
of the acquisition of securities of a Person or otherwise) any expenditure in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) ("Capital
Expenditures") except (a) from the proceeds of any Reinvestment Deferred Amount
and (b) for expenditures in the ordinary course of business not exceeding, in
the aggregate for the Company and its Subsidiaries, the sum of (i) $80,000,000
during any fiscal year of the Company plus, beginning with the 2000 fiscal year,
up to $40,000,000 of such amount that was not so expended in the prior fiscal
year (provided that Capital Expenditures made pursuant to this clause (i) during
any fiscal year shall be deemed made, first, in respect of amounts permitted for
such fiscal year as provided above and, second, in respect of amounts carried
over from the prior fiscal year), (ii) in any fiscal year of the Company, the
amount of additional Capital Expenditures which the Company and its Subsidiaries
are permitted to make and commit to make pursuant to subsection 7.8, and (iii)
in any fiscal year of the Company, the aggregate Acquired Capital Expenditure
Amount of all Acquired Businesses.
7.10 Limitation on Investments, Loans and Advances. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person (each of the
foregoing an "Investment"), except:
77
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash and Cash Equivalents;
(c) loans and advances to employees of the Company or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business;
(d) (i) Investments of the Company and its Subsidiaries in
Subsidiaries of the Company as such investments are in effect upon the
consummation of the Spin-Off Transactions and (ii) loans and advances by
Subsidiaries of the Company to the Company;
(e) (i) Investments by the Company in the Canadian Borrower or a
Subsidiary Guarantor, (ii) Investments by Subsidiaries of the Company in
the Company, the Canadian Borrower or a Subsidiary Guarantor and (iii)
Investments by Subsidiaries of the Company (other than the Canadian
Borrower) that are not Subsidiary Guarantors in other Subsidiaries that are
not Subsidiary Guarantors;
(f) Investments consisting of the acquisition of all or
substantially all of the assets of, or Capital Stock of, a Person or
division or line of business of a Person if immediately after giving effect
thereto (i) no Default or Event of Default shall have occurred and be
continuing or would result therefrom, (ii) the Company shall be in
compliance, on a pro forma basis after giving effect to such acquisition,
with the covenants contained in subsection 7.1 recomputed as at the last
day of the most recently ended fiscal quarter of the Company as if such
acquisition had occurred on the first day of each relevant period for
testing such compliance, and the Company shall have delivered to the
Administrative Agent, a certificate of its chief financial officer to such
effect accompanied by all relevant financial information for such
acquisition and (iii) if such acquisition is of assets other than Capital
Stock, the acquiring Person shall be a Guarantor under the Guarantee and
Pledge Agreement (and/or other applicable Security Documents); provided
that no acquisition may be made of more than 5% of the Capital Stock of any
public company unless the Board of Directors (or other governing body) of
such company approves such acquisition at the time it is commenced;
(g) Capital Expenditures made pursuant to and in accordance with
subsection 7.9;
(h) additional Investments not to exceed $50,000,000 in the
aggregate if immediately after giving effect thereto (i) no Default or
Event of Default shall have occurred and be continuing or would result
therefrom, and (ii) the Company shall be in compliance on a pro forma basis
after giving effect to such Investment, with the covenants contained in
subsection 7.1 recomputed as at the last day of the most recently ended
fiscal quarter of the Company as if such Investment had occurred on the
first day of each relevant period for testing such compliance, and the
Company shall have delivered to the Administrative Agent, a certificate of
its chief financial officer to such effect accompanied by all relevant
financial information for such acquisition; provided
78
that no acquisition may be made of more than 5% of the Capital Stock of any
public company unless the Board of Directors (or other governing body) of
such company approves such acquisition at the time it is commenced; and
(i) Restricted Investments made in accordance with subsection
7.8.
7.11 Limitations on Optional Payments and Modifications of Agreements.
(a) Make any optional payment or prepayment on or redemption, defeasance or
purchase of any Indebtedness or Guarantee Obligations, in each case, which are
subordinated to the Obligations (or, if applicable, any guarantee thereof),
except, so long as no Default or Event of Default has occurred and is continuing
or would result therefrom (i) in connection with the extension, renewal,
substitution, refinancing or replacement of any such Indebtedness with
Refinancing Indebtedness (as defined in and to the extent permitted by
subsection 7.2(n)) and (ii) as permitted by subsection 7.8, (b) amend, modify or
change, or consent or agree to any amendment, modification or change to, any of
the terms of any Indebtedness which is subordinated to any of the Obligations
(or any guarantee thereof) in any material respect or in any way that is
materially adverse to the interests of the Lenders or either Borrower, or (c)
amend, modify or change, or consent to any amendment, modification or change to
(i) any of the terms of the Management Agreement in any way that is in the
aggregate materially adverse to the interests of the Lenders or either Borrower
or (ii) any of the terms of the Security Documents except pursuant to the terms
hereof and thereof. The Company shall provide the Administrative Agent and each
Lender with prior written notice of (i) any payment, prepayment, redemption,
defeasance or purchase of any Indebtedness or Guarantee Obligation pursuant to
clause (a) above and (ii) any amendment, modification or change to any of the
terms of any Indebtedness of the Company and its Subsidiaries or of any
agreement referred to in clause (c) above.
(b) Notwithstanding paragraph (a) above, consent to any amendment,
modification or change to the Senior Subordinated Notes or the Senior
Subordinated Note Indenture which adversely affects the Lenders.
7.12 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement or, in the case
of any of the Spin-Off Transactions, described in the Form 10 Filing, (b) in the
ordinary course of the Company's or such Subsidiary's business and (c) upon fair
and reasonable terms in the aggregate no less favorable to the Company or such
Subsidiary, as the case may be, than it would obtain in a comparable arm's
length transaction with a Person which is not an Affiliate; provided that (i)
the Company may enter into the Management Agreement and renewals, modifications,
replacements or amendments of the Management Agreement permitted by subsection
7.11 and (ii) the Company and its Subsidiaries may enter into the other Spin-Off
Documents and renewals, modifications, replacements or amendments thereof
permitted by subsection 7.7.
7.13 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Company or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Company or such Subsidiary to such Person
79
(or to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of the Company or
such Subsidiary), unless (a) such arrangement (or any portion thereof), if an
Asset Sale, is permitted by subsection 7.6 and (b) at the time of consummation
of such arrangement, the Company delivers to the Administrative Agent a
certificate from its chief financial officer demonstrating that it would be in
pro forma compliance with subsections 7.1 and 7.2 for the most recent period for
which a Compliance Certificate is required to have been delivered pursuant to
subsection 6.2(b) after giving effect to such arrangement (including the
proceeds from such sale and the lease payments from the leasing of the property)
as if such arrangement had been entered into on the first day of such period.
7.14 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Company to end on a day other than December 31, unless this Agreement shall
have been amended as necessary to restore the parties hereto as nearly as
possible to their respective positions prior to such change in fiscal year.
7.15 Limitation on Negative Pledge Clauses. Enter into with any Person
any agreement which prohibits or limits the ability of the Company or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than (a) this Agreement and the other Loan Documents, (b) any agreement of any
Person which becomes a Subsidiary of the Company or to which the Company or any
Subsidiary becomes subject after the date hereof in connection with a Permitted
Acquisition, which agreement was not created in anticipation thereof, including,
but not limited to, any such agreement governing acquired Indebtedness permitted
under Subsection 7.2(g), provided that any agreement so permitted in accordance
with this clause (b) shall apply only to the property or assets acquired,
directly or indirectly, by the Company pursuant to such Permitted Acquisition,
(c) agreements that restrict in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license or similar
contract, or the assignment or transfer of any lease, license or other contract,
(d) customary provisions restricting dispositions of real property interests set
forth in any easement or similar agreements, (e) agreements in connection with
the sale or disposition of any assets of the Company or the sale or disposition
of a Subsidiary (or any of its property or assets), in any such case as
permitted under this Agreement, pending the closing of such sale or disposition,
(f) any industrial revenue bonds, purchase money mortgages or Financing Leases
permitted by this Agreement (in which cases, any prohibition or limitation shall
only be effective against the assets financed thereby) and (g) agreements
creating Liens permitted to be incurred pursuant to subsection 7.3, so long as
such agreements do not prohibit or limit in any manner the ability of the
Company or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien on any Collateral.
7.16 Limitation on Lines of Business. Enter into any significant
business, either directly or through any Subsidiary, except for those businesses
which are primarily of the same general types as those in which the Company and
its Subsidiaries are engaged on the date of this Agreement or which are Related
Businesses.
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SECTION 8. EVENTS OF DEFAULT
8.1 Events of Default. If any of the following events shall occur and
be continuing:
(a) The applicable Borrower shall fail to pay any principal of
any Loan or Reimbursement Obligation when due in accordance with the terms
thereof; or the applicable Borrower shall fail to pay any interest on any
Loan or Reimbursement Obligation, or any other amount payable hereunder or
under any other Loan Document, within three Business Days after any such
interest or other amount becomes due in accordance with the terms hereof or
thereof; or
(b) Any representation or warranty made or deemed made by the
Company or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or statement furnished by
it at any time under or in connection with this Agreement or any such other
Loan Document shall prove, either individually or in the aggregate, to have
been incorrect or misleading in any material respect on or as of the date
made or deemed made; or
(c) Either Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 7 hereof
(other than subsection 7.3 (in the case of any such default resulting from
the existence of an involuntary or inchoate Lien) and subsection 7.7); or
(d) Either Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days after written notice to the Company by
the Administrative Agent; or
(e) The Company or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other than the
Loans and the Reimbursement Obligations) or in the payment of any Guarantee
Obligation, aggregating $10,000,000 or more, beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness or Guarantee Obligation was created; or (ii)
default in the observance or performance of any other agreement or
condition following any applicable grace periods relating to any
Indebtedness or Guarantee Obligation referred to in clause (i) immediately
above or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to
permit the holder or holders of any Indebtedness referred to in clause (i)
immediately above or beneficiary or beneficiaries of such Guarantee
Obligation referred to in clause (i) immediately above (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries)
to cause, with the giving of notice, lapse of time or both if required,
such Indebtedness to become due prior to its stated maturity or such
Guarantee Obligation to become payable, provided, however, that if the
default described
81
in this clause (e) is cured, the Event of Default under this clause (e)
shall be simultaneously cured; or
(f) (i) (A) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (B) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise
on the assets of the Company or any Commonly Controlled Entity, (C) a
Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be appointed, to administer
or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (D) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (E) the
Company or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
a Multiemployer Plan or (F) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (A)
through (F) above, such event or condition, together with all other such
events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
(ii) (A) a Borrower or any of its Subsidiaries fails to remit in
a timely manner any amount payable to a Canadian Pension Plan, (B) a
Borrower or any of its Subsidiaries receives, directly or indirectly,
payment of any amount from a Canadian Pension Plan, (C) any Canadian
Pension Plan is terminated, wound up or otherwise ceases to be registered
under the Income Tax Act (Canada) or the applicable provincial pension
benefits standards legislation, or (D) any other similar event or condition
shall occur or exist with respect to a Canadian Pension Plan; and in each
case in clauses (A) through (D) above, such event or condition, together
with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect; or
(g) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability
(to the extent not paid or covered by insurance less any applicable and
customary retention or deductible) of $10,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 60 days from the entry thereof; or
(h) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect (other than pursuant to the terms
hereof or thereof), or the Company, the Canadian Borrower or any other Loan
Party which is a party to any of the Security Documents shall so assert in
writing or (ii) the Lien created by any of the Security Documents on any
material portion of the Collateral shall cease to be enforceable and of the
same effect and priority purported to be created thereby and, if such
condition is correctable, such condition is not corrected within 30 days;
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(i) any guarantee under the Guarantee and Pledge Agreement or the
Canadian Guarantee and Pledge Agreement shall cease for any reason to be in
full force and effect (other than pursuant to the terms hereof or thereof)
or any Loan Party shall so assert in writing; or
(j) a Change in Control shall have occurred; or
(k) except as permitted by subsection 7.5, the Company shall
cease to beneficially own, directly or indirectly through Subsidiary
Guarantors, 100% of each class of Capital Stock of GenChem and the Canadian
Borrower, in each case free of Liens (except for Liens created pursuant to
the Security Documents); or
(l) at any time following the date of their issuance, the Senior
Subordinated Notes shall cease, for any reason, to be validly subordinated
to the Company Obligations, as provided in the Senior Subordinated Note
Indenture, or any Loan Party, the trustee in respect of the Senior
Subordinated Notes or the holders of at least 25% in aggregate principal
amount of the Senior Subordinated Notes shall so assert and, in the event
of such assertion by the trustee or such holders, the Company does not
within 30 days thereof deliver to the Administrative Agent an opinion of
counsel (such counsel and such opinion to be reasonably satisfactory to the
Administrative Agent) stating that the subordination provisions of the
Senior Subordinated Note Indenture are legal, valid and binding; or
(m) (i) The Company or any of its Material Subsidiaries or the
Canadian Borrower shall commence any case, proceeding or other action (A)
under any existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it, or seeking
to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the Company or
any of its Material Subsidiaries or the Canadian Borrower shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Company or any of its Material Subsidiaries or the
Canadian Borrower any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against the Company or any of its Material Subsidiaries or the
Canadian Borrower any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Company or any of its Material Subsidiaries or the Canadian
Borrower shall take any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the
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Company or any of its Material Subsidiaries or the Canadian Borrower shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
then, and in any such event:
(A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (m) above with respect to either Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable; and
(B) if such event is any other Event of Default specified in this
subsection 8.1, either or both of the following actions may be taken: (i) with
the consent of the Majority Revolving Facility Lenders, the Administrative Agent
may, or upon the request of the Majority Revolving Facility Lenders, the
Administrative Agent shall, by notice to the Company declare the Revolving
Commitments to be terminated forthwith, whereupon the Revolving Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Company, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
8.2 Certain Provisions Applicable to Letters of Credit. With respect
to all Letters of Credit with respect to which presentment for honor shall not
have occurred at the time of an acceleration pursuant to this Section, the
Company shall at such time deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the aggregate then undrawn and unexpired
amount of such Letters of Credit. The Company hereby grants to the
Administrative Agent, for the benefit of the Issuing Banks and the Participating
Banks, a security interest in such cash collateral to secure all obligations of
the Company in respect of such Letters of Credit under this Agreement and the
other Loan Documents. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay other obligations of the Borrowers hereunder and under the Notes. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrowers hereunder and under the other Loan Documents shall have been paid
in full, the balance, if any, in such cash collateral account shall be returned
to the Company. The Company shall execute and deliver to the Administrative
Agent, for the account of the Issuing Banks and the Participating Banks, such
further documents and instruments as the Administrative Agent may request to
evidence the creation and perfection of such security interest in such cash
collateral account.
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8.3 Certain Waivers. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind with
respect to the matters set forth in this Section are hereby expressly waived.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints Chase as the Administrative Agent of such Lender under this Agreement
and the other Loan Documents, and each such Lender irrevocably authorizes Chase,
as the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein and in the other Loan Documents, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. The Designated Issuer in its capacity as such shall be
entitled to the same rights under this Section 9 as accrue to the Administrative
Agent as if it were named in place of the Administrative Agent, provided that
the Term Loan Lenders shall not be required to indemnify the Designated Issuer
in connection with any Letter of Credit issued by it.
9.2 Delegation of Duties. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by either Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the Notes or any
other Loan Document or for any failure of either Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of either Borrower.
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9.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders as it deems appropriate against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement and the Notes and the other Loan Documents if acting in accordance
with a request of the Required Lenders (or, if so specified by this Agreement,
all Lenders) as it deems appropriate, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
9.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Company referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default, or any
acceleration of any amounts due hereunder, as shall be reasonably directed by
the Required Lenders (or, if so specified by this Agreement, all Lenders or the
applicable Majority Facility Lenders, as the case may be); provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default, Event of Default
or acceleration as it shall deem advisable in the best interests of the Lenders.
To the extent that, as a result of the exercise by it of any remedies with
respect to any Collateral, the Administrative Agent shall receive or realize any
amounts, it shall distribute such amounts ratably among the Lenders by reference
to the aggregate amounts accrued and unpaid that are outstanding under the
Agreement and the other Loan Documents and owing to the respective Lenders
(after deducting and applying any amounts then owing to the Administrative Agent
or on account of expenses of the Administrative Agent previously paid by any
Lender), and if the portion to be so distributed to any Lenders shall exceed the
sum then due and payable to such Lenders, such excess shall be held by the
Administrative Agent in a collateral account for such Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it
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and that no act by the Administrative Agent hereafter taken, including any
review of the affairs of any Loan Party, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrowers and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrowers. Each Lender
acknowledges and agrees to comply with the provisions of subsection 10.6
applicable to such Lender. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of either Borrower which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrowers and
without limiting the obligation of the Borrowers and the other Loan Parties to
do so), ratably according to their respective Total Credit Percentages in effect
on the date on which indemnification is sought under this subsection (or, if
indemnification is sought after the date upon which the Revolving Credit
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Total Credit Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of this Agreement, any of the other Loan Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or willful
misconduct. The obligations to indemnify the Issuing Lender shall be ratable
among the Revolving Credit Lenders in accordance with their respective Revolving
Credit Commitments (or, if the Revolving Credit Commitments have been
terminated, the outstanding principal amount of their respective Revolving
Credit Loans and L/C Obligations and their respective participating interests in
the outstanding Letters of Credit). The agreements in this subsection shall
survive the payment of the Loans and all other amounts payable hereunder.
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9.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrowers and the other
Loan Parties as though the Administrative Agent were not the Administrative
Agent hereunder and under the other Loan Documents. With respect to its Loans
made or renewed by it and any Note issued to it and with respect to any Letter
of Credit issued or participated in by it, the Administrative Agent shall have
the same rights and powers under this Agreement and the other Loan Documents as
any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrowers. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the Company (such approval only to be
required if no Event of Default shall have occurred and be continuing and, in
any event, not to be unreasonably withheld), whereupon such successor agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor agent effective upon
such appointment and approval, and the former Administrative Agent's rights,
powers and duties as Administrative Agent shall be terminated, without any other
or further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loan. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this subsection shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Loan Documents.
9.10 Documentation Agent and Syndication Agent. Neither the
Documentation Agent nor the Syndication Agent shall have any rights or
obligations under the Loan Documents in their capacities as such.
9.11 Intercreditor Risk-Sharing Agreement. By signing this Agreement,
each Agent, each Issuing Bank and each Lender (and, by signing the Assignment
and Acceptance to which it is a party, each Assignee) hereby agree to the terms
and provisions of the Intercreditor Risk-Sharing Agreement, which shall apply to
the Agents and the Lenders (and their successors and assigns) in all respects as
set forth therein. It is hereby understood that the Borrowers shall have the
rights and obligations set forth in this Agreement and the other Loan Documents,
but in no event shall either Borrower have any rights or obligations pursuant
to, or be deemed to be a party to or a beneficiary of, the Intercreditor
Risk-Sharing Agreement.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement or any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a)
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enter into with the Borrowers and the other Loan Parties written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding or modifying any provisions to this Agreement or the other
Loan Documents or changing in any manner the rights of the Lenders or of the
Borrowers and the other Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Administrative Agent,
as the case may be, may specify in such instrument, any of the requirements of
this Agreement or the other Loan Documents or any Default or Event of Default
and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall:
(i)(x) reduce the amount or extend the scheduled date of
maturity of any Loan or any Reimbursement Obligation or of any scheduled
installment thereof, or (y) reduce the stated rate of any interest or fee
payable hereunder or extend the scheduled date of any payment thereof or
increase the amount or (z) extend the expiration date of any Lender's
Revolving Credit Commitment, in each case, without the written consent of
each Lender directly affected thereby,
(ii) amend, modify or waive any provision of subsection
9.5 or this subsection 10.1 or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by
any Loan Party of any of its rights and obligations under this Agreement
and the other Loan Documents (other than pursuant to a transaction
permitted by subsection 7.5 or as expressly permitted by such other Loan
Document), in each case, without the written consent of all the Lenders,
(iii) release the Company, the Canadian Borrower or any
Loan Party that is a Material Subsidiary from its obligations under any
Security Document or release all or substantially all of the Collateral, in
either case without the consent of each Lender, in each case except as
expressly permitted hereby or by the other Loan Documents,
(iv) amend, modify or waive any provision of Section 9
without the written consent of the then Administrative Agent and, if
affected thereby, the Designated Issuer,
(v) amend, modify or waive any provision with respect
to the application of prepayments specified in subsection 2.9 without the
written consent of the Majority Facility Lenders under each Facility
adversely affected thereby,
(vi) amend, modify or waive the provisions of Section 3,
any Letter of Credit or any L/C Obligation without the written consent of
each relevant Issuing Lender,
(vii) amend the first two sentences of subsection 2.15(a)
without the written consent of each Lender adversely affected thereby,
(viii) reduce the percentage specified in the definition
of Majority Facility Lenders with respect to any Facility without the
consent of all Lenders under such Facility, or
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(ix) amend, modify or waive any condition precedent to
any extension of credit under the Revolving Credit Facility set forth in
subsection 5.3 (including in connection with any waiver of an existing
Default or Event of Default) without the consent of the Majority Facility
Lenders in respect of the Revolving Credit Facility.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrowers, the
Lenders, the Administrative Agent and all future holders of the Notes. In the
case of any waiver, the Borrowers, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Notes and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or four days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received (provided it is also mailed), addressed as follows in the case of the
Borrowers and the Administrative Agent, and as set forth in Schedule I in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Company: GenTek Inc.
c/o General Chemical Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GenTek Inc.
c/o General Chemical Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Canadian Borrower: Noma Acquisition Corp.
c/o Noma Industries Limited
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Chief Executive Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: GenTek Inc.
c/o General Chemical Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GenTek Inc.
c/o General Chemical Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Chase Manhattan Bank
c/o The Loan and Agency Services Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Issuing Banks: Chase Manhattan Bank Delaware
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent,
the Issuing Banks or the Lenders pursuant to subsection 2.2, 2.4, 2.8, 2.9, 2.10
or 3.2 shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
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privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
extensions of credit hereunder.
10.5 Payment of Expenses and Taxes. The Borrowers agree (a) to pay or
reimburse the Administrative Agent and the Issuing Banks for all their
reasonable out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and the Issuing Banks in the amounts agreed to with such
counsel, (b) to pay or reimburse the Issuing Banks, the Administrative Agent
and, following the occurrence and during the continuance of a Default or Event
of Default, each Lender, for all their reasonable out-of-pocket costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel to the Administrative Agent and to the Issuing Banks and, following
the occurrence and during the coninuance of a Default or Event of Default, to
the several Lenders, (c) to pay, indemnify, and hold each Lender, the Issuing
Banks and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting directly
from any delay not caused by the Administrative Agent or any Lenders in paying,
stamp, excise and other documentary taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender, the Issuing Banks
and the Administrative Agent and each of their respective officers, directors,
employees, affiliates and agents harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, out-of-pocket expenses or disbursements of any kind or nature whatsoever
incurred in connection with the execution, delivery, enforcement, performance
and administration of this Agreement, the other Loan Documents and any such
other documents, including, without limitation, any of the foregoing relating to
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrowers, any of its Subsidiaries or any of
the Properties (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), provided, that the Borrowers shall have no
obligation hereunder to the Administrative Agent, any Issuing Bank or any Lender
with respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Administrative Agent, such Issuing Bank or any such
Lender, (ii) legal proceedings commenced against the Administrative Agent, any
Issuing Bank or any such Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such or (iii) legal proceedings commenced
against the Administrative Agent, any Issuing Bank or
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any Lender by the Borrowers or any Affiliate, in which the Borrowers or such
Affiliate are the prevailing parties (unless the Administrative Agent, Issuing
Bank or such Lender is also a prevailing party, in which case the
indemnification obligations of the Borrowers hereunder shall be adjusted to
reflect the relative recoveries and faults of the parties to such litigation).
The Borrowers shall have no obligation under this subsection 10.5 for the
consequential damages of the Administrative Agent, any Issuing Bank or any
Lender. The agreements in this subsection shall survive repayment of the Loans,
and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrowers, the
Lenders, the Issuing Banks, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that a Borrower may
not assign or transfer any of its rights or obligations under this Agreement
(except in a transaction permitted by subsection 7.5) without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("Participants") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Revolving Credit Commitment or L/C
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Agreement
and the other Loan Documents, and the Borrowers and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents; provided that such Lender shall reserve solely unto itself, and shall
not grant to any Participant, any part or all of its right to agree to the
amendment, modification or waiver of any of the terms of this Agreement or other
Loan Document or any document related thereto, except for any such amendment,
modification or waiver that would reduce the principal of, or interest on the
Loans, participating interests in the Letters of Credit or any fees payable
hereunder, in each case subject to such participation, or postpone the date of
the final maturity of, or any scheduled date fixed for payment of interest on,
the Loans or any Reimbursement Obligation, in each case to the extent subject to
such participation. Each Borrower agrees that if amounts outstanding under this
Agreement are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement or any Note, provided
that, in purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the Lenders the proceeds thereof as provided
in subsection 10.7(a) as fully as if it were a Lender hereunder. Each Borrower
also agrees that each Participant shall be entitled to the benefits of
subsections 2.17, 2.18 and 2.19 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if it were a Lender;
provided that, in the case of subsection 2.18, such Participant shall have
complied with the requirements of said subsection as if it were a Lender, except
with respect to the furnishing of forms, documentation
93
and certifications, in which case such Participant shall have complied with the
requirements of subsection 2.18(b), and provided, further, except in a case of a
Participant that becomes a Participant pursuant to the Intercreditor
Risk-Sharing Agreement, that no Participant shall be entitled to receive any
greater amount pursuant to any such subsection than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in accordance with applicable law, at any time and
from time to time assign to any Lender or any Affiliate thereof or to an
Approved Fund, or, with the consent of the Company, the Issuing Banks (in the
case of assignments under the Revolving Credit Commitments) and the
Administrative Agent (which in each case shall not be unreasonably withheld), to
an additional bank, fund (as long as such fund invests in bank loans) or other
financial institution (an "Assignee") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit C, executed by such Assignee (an
"Assignment and Acceptance"), such assigning Lender (and, in the case of an
Assignee that is not then a Lender or an Affiliate thereof or an Approved Fund,
by the Company, the Issuing Banks (in the case of assignments under the
Revolving Credit Commitments) and the Administrative Agent) and delivered to the
Administrative Agent for its acceptance and recording in the Register. Any such
assignment by any Lender to any Person which is not then a Lender or an
Affiliate thereof or an Approved Fund shall be in a minimum aggregate amount
equal to at least $5,000,000 (or, if less, all of a Lender's interest under this
Agreement), unless otherwise agreed by the Company and the Administrative Agent.
Upon such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x) the
Assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Revolving Credit Commitment and/or Loans as set forth therein, and (y)
the assigning Lender thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this subsection to the contrary, the consent of the Company to an
assignment shall not be required at any time when an Event of Default under
paragraphs (a) or (m) of subsection 8.1 shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address referred to
in subsection 10.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Loans owing to,
each Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrowers, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register as
the owner of the Loans and any Notes evidencing such Loans recorded therein for
all purposes of this Agreement. Any assignment of any Loan, whether or not
evidenced by a Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration of
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assignment or transfer of the Note evidencing such Loan, accompanied by a duly
executed Assignment and Acceptance; thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the designated Assignee, and the
old Notes shall be returned by the Administrative Agent to the relevant Borrower
marked "cancelled". The Register shall be available for inspection by either
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an Affiliate thereof or an Approved Fund, by the Company, the
Issuing Banks (in the case of assignments under the Revolving Credit
Commitments) and the Administrative Agent) together with payment to the
Administrative Agent of a registration and processing fee of $3,500 (which fee
shall not be payable in connection with an assignment by a Lender to an
Affiliate thereof or pursuant to the Intercreditor Risk-Sharing Agreement), the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Borrowers. On or prior to such effective date, each such
Borrower, at its own expense, upon request, shall execute and deliver to the
Administrative Agent (in exchange for the Notes of the assigning Lender) new
Notes to the order of such Assignee in an amount equal to the Revolving Credit
Commitment and/or applicable Term Loans, as the case may be, assumed or acquired
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Revolving Credit Commitment and/or Term Loans, as the case may
be, upon request, new Notes to the order of the assigning Lender in an amount
equal to the Revolving Credit Commitment and/or applicable Term Loans, as the
case may be, retained by it hereunder. Such new Notes shall be dated the
Effective Date and shall otherwise be in the form of the Notes replaced thereby.
(f) Each Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of subsection 10.15, any and all financial information
in such Lender's possession concerning the Borrowers and their Affiliates which
has been delivered to such Lender by or on behalf of the Borrowers pursuant to
this Agreement or which has been delivered to such Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrowers
and their Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
10.7 Set-Off. In addition to any rights and remedies of the Lenders
provided by law, so long as a Default or an Event of Default shall have occurred
and be continuing, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by each Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by either
Borrower hereunder (whether at the stated maturity, by
95
acceleration or otherwise) to set-off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of such Borrower. Each Lender
agrees promptly to notify the applicable Borrower and the Administrative Agent
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
10.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Company and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Agents, the Issuing Banks and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agents, the Issuing Banks or
any Lender relative to subject matter hereof not expressly set forth or referred
to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY STATED OTHERWISE IN A LOAN DOCUMENT) AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY STATED OTHERWISE IN A LOAN DOCUMENT) SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof and
the courts of the Province of Ontario;
96
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Borrower at its address set forth in subsection 10.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary, punitive or
consequential damages; provided that any such waiver shall not apply with
respect to claims arising from the gross negligence or willful misconduct
of the Administrative Agent, any Issuing Bank or any Lender.
10.13 Acknowledgments. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to such Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and
such Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among such Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE BORROWERS, THE ADMINISTRATIVE AGENT,
THE ISSUING BANKS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
97
10.15 Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by either Borrower or any Loan Party
pursuant to this Agreement or any Loan Document or in connection with the
transactions contemplated by this Agreement or any Loan Document that is
designated by such Borrower in writing as confidential; provided that nothing
herein shall prevent any Lender from disclosing any such information (i) to the
Administrative Agent or any other Lender, (ii) to any Transferee which executes
a Confidentiality Agreement substantially in the form of Exhibit D hereto, (iii)
to its employees, directors, agents, attorneys, accountants and other
professional advisors, (iv) upon the request or demand of any Governmental
Authority (including, without limitation, the National Association of Insurance
Commissioners) having jurisdiction over such Lender, (v) in response to any
order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (vi) which has been publicly
disclosed other than in breach by such Lender of this Agreement, (vii) in
connection with the exercise of any remedy hereunder, (viii) in connection with
periodic regulatory examinations, (ix) in connection with any litigation to
which such Lender may be a party, (x) to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty (A) has been approved in writing by such Borrower
and (B) agrees in a writing enforceable by such Borrower to be bound by the
provisions of this subsection 10.15) and (xi) if, prior to such information
having been so provided or obtained, such information was already in the
Administrative Agent's or a Lender's possession on a nonconfidential basis
without a duty of confidentiality to such Borrower or Loan Party being violated.
10.16 Conversion of Currencies. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum due hereunder or under
any other Loan Document in Dollars or Canadian Dollars into another currency,
the parties hereto agree, to the fullest extent that they may legally and
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars or Canadian Dollars, as the case may be, with such other
currency in New York, New York on the Business Day immediately preceding the day
on which final judgment is given.
(b) The obligation of each Borrower in respect of any sum due to the
Administrative Agent, any Lender or any Issuing Bank hereunder or under any
other Loan Document in Dollars shall, to the extent permitted by applicable law,
notwithstanding any judgment in a currency other than Dollars, be discharged
only to the extent that on the Business Day following receipt of any sum
adjudged to be so due in the judgment currency the Administrative Agent, such
Lender or such Issuing Bank may in accordance with normal banking procedures
purchase Dollars in the amount originally due to the Administrative Agent, such
Lender or such Issuing Bank with the judgment currency. If the amount of Dollars
so purchased is less than the sum originally due to the Administrative Agent,
such Lender or such Issuing Bank, the applicable Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent, such Lender or such Issuing Bank against the resulting
loss, and if the amount of Dollars so purchased exceeds the sum originally due
to such Person in Dollars, such Person shall remit such excess to the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
GENTEK INC.
By:______________________________________________
Title:
NOMA ACQUISITION CORP.
By:______________________________________________
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent, as an
Issuing Bank and as a Lender
By:______________________________________________
Title:
CHASE MANHATTAN BANK DELAWARE,
as an Issuing Bank
By:______________________________________________
Title:
THE BANK OF NOVA SCOTIA, as
Syndication Agent and as a
Lender
By:______________________________________________
Title:
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BANKERS TRUST COMPANY, as
Documentation Agent and as a
Lender
By:______________________________________________
Title:
Annex A
PRICING GRID FOR LOANS AND COMMITMENT FEES
Revolving Credit and Tranche B Term Loan Facility
Tranche A Term Loan
Facilities
----------------------------------------------------------------------------------------------
Pricing Ratio Applicable Applicable Applicable Applicable Commitment
Margin for Margin for Margin for Margin for Fee Rate
Eurodollar ABR Loans Eurodollar ABR Loans
Loans Loans
----------------------------------------------------------------------------------------------
> 4.25 2.00% 0.75% 2.75% 1.50% 0.50%
>3.75 4.25 1.75 0.50 2.75 1.50 0.50
>3.25 3.75 1.50 0.25 2.50 1.25 0.45
>2.75 3.25 1.25 0.00 2.25 1.00 0.40
2.75 1.00 0.00 2.25 1.00 0.35
Changes in the Applicable Margin and Commitment Fee Rate resulting from changes
in the Pricing Ratio (as defined below) shall become effective on the date (the
"Adjustment Date") on which financial statements are delivered to the Lenders
pursuant to subsection 6.1 (but in any event not later than the 60th day after
the end of each of the first three quarterly periods of each fiscal year or the
90th day after the end of each fiscal year, as the case may be), beginning with
the financial statements delivered for the fiscal quarter ending September 30,
1999, and shall remain in effect until the next change to be effected pursuant
to this paragraph. If any financial statements referred to above are not
delivered within the time periods specified above, then, until such financial
statements are delivered, the Pricing Ratio as at the end of the fiscal period
that would have been covered thereby shall for the purposes of this definition
be deemed to be greater than 4.25 to 1. In addition, at all times while an Event
of Default shall have occurred and be continuing, the Pricing Ratio shall for
the purposes of this definition be deemed to be greater than 4.25 to 1. Each
determination of the Pricing Ratio pursuant to this definition shall be made
with respect to the period of four consecutive fiscal quarters of the Company
ending at the end of the period covered by the relevant financial statements.
"Pricing Ratio" means, as at the last day of any fiscal quarter of the Company,
the Pro Forma Ratio of (a) Funded Debt as at such day to (b) Consolidated Cash
Flow for the period of four fiscal quarters ending on such day.
"Funded Debt" means, as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within one
year from such date but is renewable
2
or extendible, at the option of such Person, to a date more than one year from
such date or arises under a revolving credit or similar agreement that obligates
the lender or lenders to extend credit during a period of more than one year
from such date, including all current maturities and current sinking fund
payments in respect of such Indebtedness whether or not required to be paid
within one year from the date of its creation and, in the case of a Borrower,
Indebtedness in respect of the Loans. Notwithstanding anything in the foregoing
to the contrary, Funded Debt shall exclude Indebtedness and Guarantee
Obligations of a Person in respect of reclamation bonds, performance bonds,
letters of credit and surety bonds required by the applicable statutes or laws
of the relevant jurisdiction or by relevant Government Authorities (or, in the
case of such letters of credit, issued for insurance purposes).