Exhibit 10.6
EXECUTION COPY
================================================================================
$250,000,000
SENIOR TERM LOAN AND GUARANTEE AGREEMENT
among
GENTEK INC.,
as Borrower,
The Subsidiaries of GenTek Inc. Parties Hereto, as Guarantors,
The Several Lenders from Time to Time Parties Hereto,
and
BNY ASSET SOLUTIONS LLC,
as Administrative Agent
Dated as of November 10, 2003
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS.................................................1
1.1 Defined Terms...............................................1
1.2 Other Definitional Provisions..............................15
SECTION 2. AMOUNT AND TERMS OF LOANS..................................16
2.1 Loans......................................................16
2.2 Repayment of Loans.........................................16
2.3 Fees, etc..................................................16
2.4 Optional Prepayments.......................................16
2.5 Mandatory Prepayments......................................16
2.6 Conversion and Continuation Options........................17
2.7 Limitations on Eurodollar Tranches.........................17
2.8 Interest Rates and Payment Dates...........................18
2.9 Computation of Interest and Fees...........................18
2.10 Inability to Determine Interest Rate.......................18
2.11 Pro Rata Treatment and Payments............................19
2.12 Requirements of Law........................................19
2.13 Taxes......................................................20
2.14 Indemnity..................................................22
SECTION 3. REPRESENTATIONS AND WARRANTIES.............................22
3.1 Existence; Compliance with Law.............................22
3.2 Power; Authorization; Enforceable Obligations..............23
3.3 No Legal Bar...............................................23
3.4 Litigation.................................................23
3.5 No Default.................................................23
3.6 Ownership of Property; Liens...............................23
3.7 Intellectual Property......................................23
3.8 Taxes......................................................24
3.9 Investment Company Act; Other Regulations..................24
3.10 Subsidiaries...............................................24
3.11 Accuracy of Information, etc...............................24
3.12 Security Documents.........................................24
3.13 Certain Documents..........................................25
SECTION 4. CONDITIONS PRECEDENT.......................................25
4.1 Conditions to Closing Date.................................25
SECTION 5. AFFIRMATIVE COVENANTS......................................27
5.1 Financial Statements.......................................27
5.2 Certificates; Other Information............................28
5.3 Payment of Obligations.....................................28
5.4 Maintenance of Existence; Compliance.......................29
5.5 Maintenance of Property; Insurance.........................29
5.6 Inspection of Property; Books and Records; Discussions.....29
i
5.7 Notices....................................................29
5.8 Environmental Laws.........................................30
5.9 Additional Collateral, etc.................................30
SECTION 6. NEGATIVE COVENANTS.........................................32
6.1 Consolidated Fixed Charge Coverage Ratio...................32
6.2 Indebtedness...............................................32
6.3 Liens......................................................33
6.4 Fundamental Changes........................................35
6.5 Disposition of Property....................................35
6.6 Restricted Payments........................................35
6.7 Capital Expenditures.......................................35
6.8 Investments................................................36
6.9 Optional Payments and Modifications of Certain Debt
Instruments...............................................36
6.10 Transactions with Affiliates...............................37
6.11 Sales and Leasebacks.......................................37
6.12 Swap Agreements............................................37
6.13 Changes in Fiscal Periods..................................37
6.14 Clauses Restricting Subsidiary Distributions...............37
6.15 Lines of Business..........................................37
SECTION 7. EVENTS OF DEFAULT..........................................38
SECTION 8. GUARANTEE..................................................40
8.1 Guarantee..................................................40
8.2 Right of Contribution......................................40
8.3 No Subrogation.............................................41
8.4 Amendments, etc. with respect to the Obligations...........41
8.5 Guarantee Absolute and Unconditional.......................41
8.6 Reinstatement..............................................42
8.7 Payments...................................................42
SECTION 9. THE ADMINISTRATIVE AGENT...................................42
9.1 Appointment................................................42
9.2 Delegation of Duties.......................................42
9.3 Exculpatory Provisions.....................................43
9.4 Reliance by Administrative Agent...........................43
9.5 Notice of Default..........................................43
9.6 Non-Reliance on Administrative Agent and Other Lenders.....43
9.7 Indemnification............................................44
9.8 Administrative Agent in Its Individual Capacity............44
9.9 Successor Administrative Agent.............................44
SECTION 10. MISCELLANEOUS..............................................45
10.1 Amendments and Waivers.....................................45
10.2 Notices....................................................46
10.3 No Waiver; Cumulative Remedies.............................47
10.4 Survival of Representations and Warranties.................47
10.5 Payment of Expenses and Taxes..............................47
ii
10.6 Successors and Assigns; Participations and Assignments.....48
10.7 Adjustments; Set-off.......................................50
10.8 Counterparts...............................................51
10.9 Severability...............................................51
10.10 Integration................................................51
10.11 GOVERNING LAW..............................................51
10.12 Submission To Jurisdiction; Waivers........................51
10.13 Acknowledgements...........................................52
10.14 No Requirement of Lender Signatures........................52
10.15 Releases of Guarantees and Liens...........................52
10.16 Confidentiality............................................52
10.17 WAIVERS OF JURY TRIAL......................................53
iii
SCHEDULES:
1.1A Loans
1.1B Mortgaged Property
3.2 Consents, Authorizations, Filings and Notices
3.8 Taxes
3.10 Subsidiaries
3.12(a) UCC Filing Jurisdictions
3.12(b) Mortgage Filing Jurisdictions
6.2(d) Existing Indebtedness
6.3(f) Existing Liens
6.3(n) Existing Intellectual Property Liens
6.8(i) Existing Investments
6.10 Affiliate Transactions
EXHIBITS:
A Form of Security Agreement
B Form of Pledge Agreement
C Form of Intercreditor Agreement
D Form of Compliance Certificate
E Form of Closing Certificate
F Form of Assignment and Assumption
G Form of Legal Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
H Form of Exemption Certificate
iv
SENIOR TERM LOAN AGREEMENT (this "Agreement"), dated as of
November 10, 2003, among GENTEK INC., a Delaware corporation (the "Borrower"),
the Subsidiaries of the Borrower designated as a Guarantor on Schedule 3.10
hereto and which may become a Guarantor pursuant to Section 5.9 (collectively,
the "Guarantors"), the several banks and other financial institutions or
entities from time to time parties to this Agreement (the "Lenders"), and BNY
ASSET SOLUTIONS LLC, a Delaware limited liability company, as administrative
agent.
On October 11, 2002 (the "Petition Date"), the Borrower and
certain of its domestic Subsidiaries (collectively, the "Debtors") filed
voluntary petitions under Chapter 11 of Title 11 of the United States Code (the
"Bankruptcy Code") with the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court") and continued in the possession of their
assets and in the management of their businesses pursuant to Sections 1107 and
1108 of the Bankruptcy Code.
On October 7, 2003, the Bankruptcy Court entered an order (the
"Confirmation Order") confirming the Joint Plan of Reorganization, dated as of
August 28, 2003 (as amended, modified and supplemented prior to the date of the
Confirmation Order and as in effect on the date of confirmation thereof pursuant
to the Confirmation Order, the "Plan of Reorganization"), proposed by the
Debtors.
In connection with the confirmation and implementation of the
Plan of Reorganization, and in partial satisfaction of the Existing Lender
Claims (as defined in the Plan of Reorganization), the holders of the Existing
Lender Claims have agreed, subject to the terms and conditions hereof, to enter
into this Agreement.
Accordingly, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms
listed in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.
"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 and (b) 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 The Bank of New York
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 BONY in
connection with extensions of credit to debtors). Any change in the ABR due to a
change in the Prime 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 or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is
based upon the ABR.
"Administrative Agent": BNYAS, together with its affiliates, as
the administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person that, 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, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Adjusted Net Earnings from Operations": with respect to any
period, the net income of the Group Members after provision for income taxes for
such period, as determined in accordance with GAAP on a consolidated basis and
reported on the financial statements for such period delivered pursuant to
Section 5.1, excluding any and all of the following included in such net income:
(a) gain or loss arising from the sale of any capital assets; (b) gain or loss
arising from any write-up or write-down in the book value of any asset; (c)
earnings of any Person, substantially all the assets of which have been acquired
by any Group Member in any manner, to the extent realized by such other Person
prior to the date of acquisition; (d) earnings of any Person (other than a
Subsidiary) in which any Group Member has an ownership interest unless (and only
to the extent) such earnings shall actually have been received by any Group
Member in the form of cash distributions; (e) earnings of any Person to which
assets of any Group Member shall have been sold, transferred or disposed of or
into which any Group Member shall have been merged or which has been a party
with any Group Member to any consolidation or other form of reorganization,
prior to the date of such transaction; (f) gain arising from the acquisition of
debt or equity securities of any Group Member or from cancellation or
forgiveness of Indebtedness; and (g) gain or loss arising from extraordinary
items, as determined in accordance with GAAP, or from any other non-recurring
transaction (including restructuring charges).
"Agreement": as defined in the preamble hereto.
"Applicable Margin": for each Loan, a rate per annum equal to
(a) 4.5%, in the case of Eurodollar Loans, and (b) 3.5%, in the case of ABR
Loans.
"Approved Fund": as defined in Section 10.6(b).
"Asset Sale": any Disposition of property or series of related
Dispositions of property (other than Excluded Dispositions) that yields gross
proceeds to any Group Member (valued at the initial principal amount thereof in
the case of non-cash proceeds consisting of notes or other debt securities and
valued at fair market value in the case of other non-cash proceeds) in excess of
$3,000,000.
"Assignee": as defined in Section 10.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit F.
"Bankruptcy Court": as defined in the introductory statement
hereto.
"Benefitted Lender": as defined in Section 10.7(a).
"Board": the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"BONY": The Bank of New York, a New York banking corporation.
"BNY": BNY Asset Solutions LLC, a Delaware limited liability
company.
"Borrower": as defined in the preamble hereto.
"Business Day": 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, provided, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
2
"Capital Expenditures": for any period, with respect to any
Person, any expenditures made or costs incurred by such Person and its
Subsidiaries for the acquisition, maintenance or repair of fixed or capital
assets (which are required to be capitalized on the balance sheet of such Person
in accordance with GAAP), including, without limitation, the incurrence or
assumption of any Indebtedness (including, without limitation, Capital Lease
Obligations) in respect of such fixed or capital asset, and, without double
counting, any payment made in respect of such incurrence or assumption.
"Capital Lease Obligations": as to any Person, the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"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, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or Canada (or any
province thereof) or issued by any agency or instrumentality of any of the
foregoing and backed by the full faith and credit of the United States or
Canada, as applicable, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time
deposits or overnight bank deposits having maturities of one year or less from
the date of acquisition issued by any Lender, by any commercial bank organized
under the laws of the United States or any state thereof or by a chartered bank
incorporated in Canada having combined capital and surplus of not less than
$100,000,000; (c) commercial paper of an issuer 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-2 by Standard & Poor's
Ratings Services ("S&P") or P-2 by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"),
or carrying an equivalent rating by a nationally recognized rating agency, if
both of the two named rating agencies cease publishing ratings of commercial
paper issuers generally, and maturing within one year from the date of
acquisition; (d) repurchase obligations of any Lender or of any commercial bank
satisfying the requirements of clause (b) of this definition, having a term of
not more than 90 days, with respect to securities issued or fully guaranteed or
insured 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 (or Canada, as applicable); (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody's; (f)
securities with maturities of one year or less from the date of acquisition
backed by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; (g) money market
mutual or similar funds that invest substantially all of their assets in assets
satisfying the requirements of clauses (a) through (f) of this definition; or
(h) money market funds that (i) comply with the criteria set forth in SEC Rule
2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by
S&P and Aaa by Moody's and (iii) have portfolio assets of at least
$5,000,000,000.
"Closing Date": the date on which the conditions precedent set
forth in Section 4.1 shall have been satisfied, which date is November 10, 2003.
3
"Code": the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit D.
"Conduit Lender": any special purpose corporation organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument;
provided, that the designation by any Lender of a Conduit Lender shall not
relieve the designating Lender of any of its obligations to fund a Loan under
this Agreement if, for any reason, its Conduit Lender fails to fund any such
Loan, and the designating Lender (and not the Conduit Lender) shall have the
sole right and responsibility to deliver all consents and waivers required or
requested under this Agreement with respect to its Conduit Lender, and provided,
further, that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.12, 2.13, 2.14 or 10.5 than the designating Lender
would have been entitled to receive in respect of the extensions of credit made
by such Conduit Lender or (b) be deemed to have any commitment hereunder.
"Confirmation Order": as defined in the introductory statement
hereto.
"Consolidated Current Assets": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Group Members at such date.
"Consolidated Current Liabilities": at any date, all amounts
that would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Group Members at such date, but excluding the current portion of any Funded
Debt of the Group Members.
"Consolidated EBITDA": for any period, Adjusted Net Earnings
from Operations, plus, to the extent deducted in the determination of Adjusted
Net Earnings from Operations for such period, interest expenses, Federal, state,
local and foreign income taxes, depreciation and amortization.
"Consolidated Fixed Charge Coverage Ratio": for any period, the
ratio of (i) Consolidated EBITDA for such period minus Capital Expenditures of
the Group Members paid in cash during such period to (ii) Consolidated Fixed
Charges for such period.
"Consolidated Fixed Charges": for any period, on a consolidated
basis, without duplication, the sum of (a) all payments and prepayments of
principal on Indebtedness (other than of Indebtedness under the Exit Facility
Agreement and payments and prepayments under other revolving credit facilities
that do not constitute permanent payments under any such facility, whether upon
termination of such facility or otherwise, and do not result in a permanent
reduction in any revolving credit commitment under any such facility) of any
Group Member made or required to be during such period (and, excluding in any
event, all payments, prepayments, repurchases and redemptions of Indebtedness
under this Agreement made during such period), (b) net cash interest expense of
the Group Members for such period and (c) income taxes paid by the Group Members
in cash during such period.
4
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of the Group Members, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the any Group Member, (b) the income (or
deficit) of any Person (other than a Subsidiary) in which any Group Member has
an ownership interest, except to the extent that any such income is actually
received by such Group Member in the form of dividends or similar distributions
and (c) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Continuing Directors": the directors of the Borrower on the
Closing Date, after giving effect to the Plan of Reorganization and the other
transactions contemplated hereby, and each other director, if, in each case,
such other director's nomination for election to the board of directors of the
Borrower is recommended by at least 66-2/3% of the then Continuing Directors.
"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.
"Debtors": as defined in the introductory statement hereto.
"Default": any of the events specified in Section 7, whether or
not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DIP Facility": the credit facility provided to the Borrower and
Noma Company pursuant to the Credit, Guarantee and Security Agreement, dated as
of March 21, 2003, among the Borrower, the other Debtors and Noma Company, the
lenders from time to time party thereto, and JPMorgan Chase Bank, as
administrative agent for such lenders, as may have been amended, supplemented or
otherwise modified, together with all instruments and other agreements entered
into by the Borrower, any other Debtor or Noma Company in connection therewith.
"Disclosure Statement": the Disclosure Statement, filed with the
Bankruptcy Court on August 28, 2003, as amended, supplemented or otherwise
modified prior to the date of the Confirmation Order, describing the Plan of
Reorganization and distributed to the Lenders in connection with voting on the
Plan of Reorganization.
"Disposition": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United
States.
"Domestic Subsidiary": any Subsidiary organized under the laws
of any jurisdiction within the United States.
"Effective Date": November 10, 2003, being the date on which the
Plan of Reorganization became effective as provided therein.
5
"Environmental Laws": any and all laws, rules, orders,
regulations, statutes, ordinances, guidelines, codes, decrees, requirements of
any Governmental Authority or other Requirements of Law (including without
limitation, common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
or employee safety, as has been, is now or may at any time hereafter be in
effect.
"Environmental Permits": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any Environmental Law. For purposes of this Agreement,
Environmental Permits shall include permits, licenses, approvals, registrations,
notifications, exemptions and other authorizations for which renewals/transfers
have been filed with the appropriate Governmental Authority on a timely basis
under the applicable Environmental Laws.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including 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 determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such rate
does not appear on Page 3750 of the Telerate screen (or otherwise on such
screen), the "Eurodollar Base Rate" shall be determined by reference to such
other comparable publicly available service for displaying eurodollar rates as
may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., New York City time, two Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where its eurodollar and foreign currency and exchange operations are
then being conducted for delivery on the first day of such Interest Period for
the number of days comprised therein.
"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%):
Eurodollar Base Rate
-----------------------------------------------
1.00 - Eurocurrency Reserve Requirements
provided, however, that if at any time, the Eurodollar Rate as calculated
pursuant to the preceding formula is less than 1.50%, the Eurodollar Rate shall,
for all purposes under this Agreement, be 1.50%.
"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.
6
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) decreases in Consolidated Working Capital for such fiscal year,
(iv) the aggregate net amount of non-cash loss on the Disposition of property by
the Group Members during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income and (v) amounts paid in respect of liabilities which
were deducted in arriving at Consolidated Net Income for a prior period, over
(b) the sum, without duplication, of (i) the amount of all non-cash credits
included in arriving at such Consolidated Net Income, (ii) the aggregate amount
actually paid by the Group Members in cash during such fiscal year on account of
Capital Expenditures and other non-current assets (other than Investments)
(excluding the principal amount of Indebtedness incurred in connection with such
expenditures), (iii) the aggregate amount of all repayments and prepayments
(whether optional, scheduled or mandatory) of Indebtedness made during such
fiscal year (other than in respect of any revolving credit facility to the
extent there is not an equivalent permanent reduction in commitments
thereunder), (iv) increases in Consolidated Working Capital for such fiscal
year, and (vi) the aggregate net amount of non-cash gain on the Disposition of
property by the Group Members during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income.
"Excess Cash Flow Application Date": as defined in Section
2.5(c).
"Excluded Dispositions": (a) the Disposition of obsolete or worn
out property in the ordinary course of business; (b) the sale of inventory in
the ordinary course of business; (c) Dispositions permitted by Section
6.4(b)(i); and (d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor.
"Excluded Foreign Subsidiary": (a) any Foreign Subsidiary in
respect of which either (i) the pledge of all of the Capital Stock of such
Subsidiary as Collateral or (ii) the guaranteeing by such Subsidiary of the
Obligations, would, in the good faith judgment of the Borrower, result in
adverse tax consequences to the Borrower, (b) Noma Company, (c) each Foreign
Subsidiary Holding Company and (d) Krone Holding Inc.
"Exit Facility": the revolving credit facility provided to the
Borrower and certain of its Subsidiaries party thereto on the Closing Date
pursuant to the Exit Facility Agreement and any refinancings, renewals or
extensions thereof in accordance with Section 6.2.
"Exit Facility Agent": Bank of America, N.A., in its capacity as
agent under the Exit Facility Agreement, and any successor agent thereto.
"Exit Facility Agreement": the Credit Agreement, dated as of the
date hereof, among the Borrower, Noma Company, the domestic Subsidiaries of the
Borrower from time to time party thereto, the financial institutions named
therein, and Bank of America, N.A., as agent and syndication agent, Fleet
Capital Corporation, as documentation agent, and Banc of America Securities LLC,
as sole book runner and lead arranger, together with all instruments and other
agreements entered into by any Group Member in connection therewith, in each
case, as in effect on the date hereof and as hereafter amended, supplemented, or
otherwise modified from time to time in accordance with Section 6.9 or
refinanced, renewed or extended in accordance with Section 6.2.
7
"Exit Facility Availability": at any time, the aggregate
principal amount available to be borrowed by all the borrowers under the Exit
Facility Agreement at such time.
"Federal Funds Effective Rate": 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 that is a Business Day, the average of
the quotations for the day of such transactions received by BONY from three
federal funds brokers of recognized standing selected by it.
"Foreign Subsidiary": any Subsidiary that is not a Domestic
Subsidiary.
"Foreign Subsidiary Holding Company": any Subsidiary of the
Borrower engaged in no business other than ownership of Capital Stock of one or
more Foreign Subsidiaries or other Foreign Subsidiary Holding Companies.
"Funded Debt": 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 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 the Borrower, Indebtedness in respect of the
Loans.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 6.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof. 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 Borrower and the
Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to reflect equitably such Accounting Changes
with the desired result that the criteria for evaluating the Borrower'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 Borrower, 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.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"Group Members": the collective reference to the Borrower and
its Subsidiaries.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation, including a reimbursement, counterindemnity or similar
obligation, of the guaranteeing Person that guarantees or in effect guarantees,
or which is given to induce the creation of a separate obligation by another
Person (including any bank under any letter of credit) that guarantees or in
effect guarantees, any
8
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 any obligation of the guaranteeing person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) 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 (d) 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 (x) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (y) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guarantor": each Subsidiary other than (a) any Excluded Foreign
Subsidiary, (b) any Subsidiary engaged in no business other than ownership of
the Capital Stock of one or more Subsidiaries and (c) any Subsidiary in which
less than 80% of the Capital Stock of such Subsidiary is owned directly or
indirectly by the Borrower.
"Immaterial Non-Loan Party": any Non-Loan Party that has total
net worth of $1,000,000 or less.
"Indebtedness": of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses (a)
through (f) above, (i) all obligations of the kind referred to in clauses (a)
through (g) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation, and
(j) for the purposes of Section 7(e) only, all obligations of such Person in
respect of Swap Agreements. Any obligation that is economically defeased shall
not constitute Indebtedness hereunder.
"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.
9
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Intercompany Foreign Investments": Investments by any Loan
Party in a Non-Loan Party.
"Intercreditor Agreement": an Intercreditor Agreement executed
and delivered by the Borrower, each Guarantor, the Exit Facility Agent and the
Administrative Agent, substantially in the form of Exhibit C, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Interest Payment Date": (a) as to any ABR Loan, the first day
of each calendar month to occur while such Loan is outstanding and the final
maturity date of such Loan, (b) as to any Eurodollar Loan, the first day of each
calendar month and (c) as to any Loan, the date of any repayment or prepayment
made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the Closing Date or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as set forth in Section 2.1 or as selected by the Borrower in its
notice of conversion, as the case may be, given with respect thereto; and (b)
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 Borrower by irrevocable notice to the
Administrative Agent not later than 11:00 A.M., New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) 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;
(ii) the Borrower may not select an Interest Period that
would extend beyond the date final payment is due on the Loans;
(iii) 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
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"Investments": as defined in Section 6.8.
"Lenders": as defined in the preamble hereto; provided, that
unless the context otherwise requires, each reference herein to the Lenders
shall be deemed to include any Conduit Lender.
10
"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 any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement,
including without limitation, the loans deemed to be made under Section 2.1.
"Loan Documents": this Agreement, the Security Documents, the
Notes, the Intercreditor Agreement and any amendment, waiver, supplement or
other modification to any of the foregoing.
"Loan Parties": each Group Member that is a party to a Loan
Document.
"Material Adverse Effect": (a) a material adverse change in,
or a material adverse effect upon, the operations, business, assets, properties,
liabilities (actual or contingent), condition (financial or otherwise) or
prospects of the Loan Parties and Noma Company, taken as a whole, or of the
Group Members, taken as a whole or on the Collateral; (b) a material legal
impairment of the ability of any Loan Party to perform under any Loan Document
to which it is a party; or (c) a material legal adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"Material Environmental Loss": (a) costs to the Borrower and/or
its Subsidiaries, in the aggregate, for investigative and remedial costs,
compliance costs, compensatory damages, natural resource damages, punitive
damages, fines, penalties, and (b) any other losses to the Borrower and/or its
Subsidiaries, that, in the case of each of the foregoing clauses (a) and (b), in
the aggregate would have a Material Adverse Effect, arising out of any
Environmental Law or any liabilities or obligations with respect to any
Materials of Environmental Concern.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, molds,
pollutants, contaminants, radioactivity, and any other substances that are
regulated pursuant to or could give rise to liability under any Environmental
Law.
"Maturity Date": November 10, 2008.
"Mortgaged Properties": the real properties listed on Schedule
1.1B, as to which the Administrative Agent for the benefit of the Lenders shall
be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative Agent or
the Lenders, in form and substance reasonably satisfactory to the Administrative
Agent.
"Multiemployer Plan": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale, the
proceeds thereof in the form of cash and Cash Equivalents (including any such
proceeds received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise, but
only as and when received) of such Asset Sale, net of attorneys' fees,
accountants' fees,
11
investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that
is the subject of such Asset Sale (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of Capital Stock or any incurrence of Indebtedness, the cash
proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 2.13(a).
"Non-Loan Party": a Subsidiary of the Borrower that is not a
Loan Party.
"Non-U.S. Lender": as defined in Section 2.13(d).
"Notes": the collective reference to any promissory note
evidencing Loans.
"Obligations": the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to any Loan Party,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of the Loan
Parties to the Administrative Agent or to 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 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 all fees, charges and disbursements of counsel to the Administrative
Agent or any Lender that are required to be paid by the Loan Parties pursuant
hereto) or otherwise.
"Original Holder": a Person who holds more than 2.5% of the
outstanding common stock of the Borrower as of the date of this Agreement.
"Other Taxes": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Participant": as defined in Section 10.6(c).
"Payment Office": the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its payment office by written notice to the
Borrower and the Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Pennsylvania Tort Claim Note": the promissory note, dated the
date hereof in the original principal amount of $675,000 issued to the
Pennsylvania Tort Claim Representative (as defined in the Plan of
Reorganization) by GenTek Holding Corporation (formerly known as General
Chemical Corporation) pursuant to the Plan of Reorganization.
12
"Person": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Petition Date": as defined in the introductory statement
hereto.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Plan of Reorganization": as defined in the introductory
statement hereto.
"Pledge Agreement": the Pledge Agreement to be executed and
delivered by each Loan Party, substantially in the form of Exhibit B.
"Prepetition Credit Agreement": the Credit Agreement, dated as
of April 30, 1999, as amended and restated as of August 9, 2000 and as of August
1, 2001, among the Borrower, Noma Company, the several lenders from time to time
parties thereto, The Bank of Nova Scotia, as syndication agent, Bankers Trust
Company, as documentation agent, and JPMorgan Chase Bank (formerly known as The
Chase Manhattan Bank), as administrative agent for such lenders.
"Register": as defined in Section 10.6(b).
"Regulation U": Regulation U of the Board as in effect from time
to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) 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. Section 4043.
"Required Lenders": at any time, the holders of more than 50% of
the aggregate unpaid principal amount of the Loans then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer": the chief executive officer, president,
chief financial officer, treasurer or vice president of finance of the Borrower,
but in any event, with respect to financial matters, the chief financial officer
of the Borrower.
"Restricted Payments": as defined in Section 6.6.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
13
"Security Agreement": the Security Agreement to be executed and
delivered by each Loan Party, substantially in the form of Exhibit A.
"Security Documents": the collective reference to the Security
Agreement, the Pledge Agreement, the Mortgages and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any property
of any Person to secure the obligations and liabilities of any Loan Party under
any Loan Document.
"Single Employer Plan": any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"Specified Change of Control": so long as an Exit Facility is
outstanding and in effect, a "Change of Control" (or any other defined term
having a similar purpose) as defined in the Exit Facility Agreement.
"Subsidiary": as to any Person, a corporation, partnership,
limited liability company 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 Borrower.
"Swap Agreement": any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of any Group Member shall be a "Swap Agreement".
"Term Percentage": as to any Lender at any time, the percentage
which the aggregate principal amount of such Lender's Loans then outstanding
constitutes of the aggregate principal amount of the Loans then outstanding.
"Test Date": with respect to a Triggering Event, each of (a) the
last day of each fiscal quarter most recently ended after the occurrence of such
Triggering Event and (b) the last day of each fiscal quarter thereafter ending
prior to or during the Triggering Event Compliance Period for such Triggering
Event.
"Test Period": for each Test Date set forth below, the period
set forth below opposite such Test Date:
Test Date Fiscal Period
--------- -------------
March 31, 2004 Closing Date through and including fiscal
quarter ending on March 31, 2004
June 30, 2004 Closing Date through and including fiscal
quarter ending on June 30, 2004
September 30, 2004 Closing Date through and including fiscal
quarter ending on September 30, 2004
14
Test Date Fiscal Period
--------- -------------
December 31, 2004 and Four consecutive fiscal
last day of each fiscal quarter period ending on
quarter thereafter the Test Date
"Transferee": any Assignee or Participant.
"Triggering Event": for any reason the Exit Facility
Availability is less than or equal to $20,000,000 at any time.
"Triggering Event Compliance Period": the period commencing upon
the occurrence of a Triggering Event and continuing until such time as the Exit
Facility Availability is greater than $20,000,000 for ninety consecutive days.
"Type": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"United States": the United States of America.
"Wholly Owned Non-Loan Party": a Non-Loan Party that is a wholly
owned Subsidiary of the Borrower.
"Wholly Owned Subsidiary": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Guarantor that is a
Wholly Owned Subsidiary of the Borrower.
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 other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP, (ii) the words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation", (iii) the word "incur" shall be construed to mean incur, create,
issue, assume, become liable in respect of or suffer to exist (and the words
"incurred" and "incurrence" shall have correlative meanings), (iv) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights, and (v) references to agreements or other
Contractual Obligations shall, unless otherwise specified, be deemed to refer to
such agreements or Contractual Obligations as amended, supplemented, restated or
otherwise modified from time to time.
(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,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
15
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF LOANS
2.1 Loans. Subject to the terms and conditions hereof and to
give effect to the Plan of Reorganization and provide for the repayment, in
part, of the Existing Lender Claims (as defined in the Plan of Reorganization),
each Lender shall be deemed to have made a term loan to the Borrower on the
Closing Date in an amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1A. The Loans deemed made pursuant to the preceding
sentence shall be made without any actual funding and shall initially be
Eurodollar Loans with Interest Periods of one month. After the Closing Date, the
Loans may from time to time be Eurodollar Loans or ABR Loans, as determined by
the Borrower and notified to the Administrative Agent in accordance with Section
2.4.
2.2 Repayment of Loans. The Loan of each Lender shall
mature, and be paid on, the Maturity Date.
2.3 Fees, etc. The Borrower agrees to pay to the
Administrative Agent the fees in the amounts and on the dates as set forth in
any fee agreements with the Administrative Agent and to perform any other
obligations contained therein.
2.4 Optional Prepayments. The Borrower may at any time and
from time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent no later
than 11:00 A.M., New York City time, three Business Days prior thereto, in the
case of Eurodollar Loans, and no later than 11:00 A.M., New York City time, one
Business Day prior thereto, in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.14. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant 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 accrued interest
to such date on the amount prepaid. Partial prepayments of Loans shall be in an
aggregate principal amount of $1,000,000 or a whole multiple thereof.
2.5 Mandatory Prepayments. (a) If any Indebtedness that is
senior and is secured by the same assets securing the obligations under this
Agreement shall be issued or incurred after the Closing Date by any Loan Party
(excluding any Indebtedness incurred in accordance with Section 6.2(a) through
(m)), an amount equal to 100% of the Net Cash Proceeds thereof shall be applied,
on the date of such issuance or incurrence or, if later, the date on which such
payment may be applied to the Loans in accordance with the terms of the Exit
Facility Agreement, in either case, toward the prepayment of the Loans as set
forth in Section 2.5(d).
(b) If on any date any Loan party shall receive Net Cash
Proceeds from any Asset Sale then such Net Cash Proceeds shall be applied no
later than three (3) Business Days following such date or, if later, the date on
which such payment may be applied to the Loans in accordance with the terms of
the Exit Facility Agreement, in either case, toward the prepayment of the Loans
as set forth in Section 2.5(d).
(c) If, for any fiscal year of the Borrower, commencing with the
fiscal year ending December 31, 2004, there shall be Excess Cash Flow in excess
of $5,000,000, the Borrower shall, on the relevant Excess Cash Flow Application
Date, apply 75% of such Excess Cash Flow in excess of
16
$7,500,000 toward the prepayment of the Loans as set forth in Section 2.5(d).
Each such prepayment shall be made on a date (an "Excess Cash Flow Application
Date") no later than five days after the latest to occur of (i) the date on
which the financial statements of the Borrower referred to in Section 5.1(a),
for the period with respect to which such prepayment is made, are required to be
delivered to the Lenders, (ii) the date such financial statements are actually
delivered and (iii) the date on which such payment may be applied to the Loans
in accordance with the terms of the Exit Facility Agreement.
(d) Amounts to be applied in connection with prepayments made
pursuant to this Section 2.5 shall be applied to the prepayment of the Loans in
accordance with Section 2.11(b). The application of any prepayment pursuant to
this Section 2.5 shall be made, first, to ABR Loans and, second, to Eurodollar
Loans. Each prepayment of the Loans under this Section 2.5 shall be accompanied
by accrued interest to the date of such prepayment on the amount prepaid.
2.6 Conversion and Continuation Options. (a) The Borrower
may elect from time to time to convert Eurodollar Loans to ABR Loans by giving
the Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the Business Day preceding the proposed
conversion date, provided that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the third Business Day preceding the proposed
conversion date (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing unless the
Administrative Agent or the Required Lenders have determined in its or their
sole discretion to permit such conversions. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan may be continued as such when any Event
of Default has occurred and is continuing unless the Administrative Agent has or
the Required Lenders have determined in its or their sole discretion to permit
such continuations, and provided, further, that if the 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. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.7 Limitations on Eurodollar Tranches. Notwithstanding
anything to the contrary in this Agreement, all conversions and continuations of
Eurodollar Loans and all selections of Interest Periods shall be in such amounts
and be made pursuant to such elections so that, (a) after giving effect thereto,
the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be at least $5,000,000 and (b) no more than ten
Eurodollar Tranches shall be outstanding at any one time.
2.8 Interest Rates and Payment Dates. (a) Each Eurodollar
Loan shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR plus the Applicable Margin.
17
(c) (i) If all or a portion of the principal amount of any Loan
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Loans (whether or not overdue) shall bear interest
at a rate per annum equal to the rate that would otherwise be applicable thereto
pursuant to the foregoing provisions of this Section 2.8 plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or 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 shall bear interest
at a rate per annum equal to the rate then applicable to ABR Loans plus 2%, in
each case, with respect to clauses (i) and (ii) above, 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
Section 2.8 shall be payable from time to time on demand.
2.9 Computation of Interest and Fees. (a) Interest and fees
payable pursuant hereto 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, the 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 Borrower and the relevant 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
Borrower and the relevant 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 Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.8(a).
2.10 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) 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 Required Lenders that the Eurodollar Rate determined or to be
determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the last day of the then-current Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
18
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert Loans to Eurodollar Loans.
2.11 Pro Rata Treatment and Payments. (a) Each payment by the
Borrower on account of any fee payable to the Lenders shall be made pro rata
according to the respective Term Percentages of the Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Loans shall be made pro rata
according to the respective outstanding principal amounts of the Loans then held
by the Lenders. The amount of each principal prepayment of the Loans shall be
applied to reduce the Loans pro rata based upon the respective then remaining
principal amounts thereof. Amounts prepaid on account of the Loans may not be
reborrowed.
(c) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff 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 Payment Office, 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. 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.
(d) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by the
Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing herein
shall be deemed to limit the rights of the Administrative Agent or any Lender
against the Borrower.
2.12 Requirements of Law. (a) If the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender 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:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement or any Eurodollar Loan made by
it, or change the basis of taxation of payments to such Lender in
respect thereof (except, in either case, for Non-Excluded Taxes covered
by Section 2.13, net income taxes and franchise taxes);
(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
19
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender that is not
otherwise included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, 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
paragraph, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof 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 to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request
therefor, the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such corporation for such reduction.
(c) A certificate as to any additional amounts payable pursuant
to this Section 2.12 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section 2.12, the Borrower
shall not be required to compensate a Lender pursuant to this Section 2.12 for
any amounts incurred more than nine months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor;
provided that, if the circumstances giving rise to such claim have a retroactive
effect, then such nine-month period shall be extended to include the period of
such retroactive effect. The obligations of the Borrower pursuant to this
Section 2.12 shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
2.13 Taxes. (a) All payments made by the Borrower 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 and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative 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") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded
20
Taxes and Other Taxes) interest or any such other amounts payable hereunder at
the rates or in the amounts specified in this Agreement, provided, however, that
the Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to such
Lender's failure to comply with the requirements of paragraph (d) or (e) of this
Section 2.13 or (ii) that are United States withholding taxes imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Lender from which the related participation shall have been purchased)
two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit H and a Form W-8BEN, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction
of non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate, provided that such Lender
is legally entitled to complete, execute and deliver such documentation and in
such Lender's judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
21
(f) If the Administrative Agent or any Lender determines, in its
sole discretion, that it has received a refund of any Non-Excluded Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 2.13,
it shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.13 with respect to the Non-Excluded Taxes or Other Taxes giving rise
to such refund), net of all out-of-pocket expenses of the Administrative Agent
or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of the Administrative Agent or such Lender, agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
This paragraph shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrower or any other Person.
(g) The agreements in this Section 2.13 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.14 Indemnity. The Borrower agrees to indemnify each Lender
for, and to hold each Lender harmless from, any loss or expense that such Lender
may sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that 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) that 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. A certificate as to any
amounts payable pursuant to this Section 2.14 submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement, each Loan Party hereby represents and warrants to the
Administrative Agent and each Lender that:
3.1 Existence; Compliance with Law. Each Group Member (a) is
duly organized, validly existing and 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) in the
case of the Loan Parties, is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (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.
22
3.2 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 the
Borrower, to obtain extensions of credit hereunder. Each Loan Party has taken
all necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the extensions of credit on the terms and conditions of
this Agreement. 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 effectiveness of the Plan of Reorganization and
the extensions of credit hereunder or with the execution, delivery, performance,
validity or enforceability of this Agreement or any of the Loan Documents,
except (i) consents, authorizations, filings and notices described in Schedule
3.2, which consents, authorizations, filings and notices have been obtained or
made and are in full force and effect and (ii) the filings referred to in
Section 3.12. Each Loan Document has been duly executed and delivered on behalf
of each Loan Party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party thereto, enforceable against each such Loan Party in
accordance with its terms, 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).
3.3 No Legal Bar. The execution, delivery and performance of
this Agreement and the other Loan Documents, and the Loans deemed made hereunder
will not violate any Requirement of Law or any Contractual Obligation of any
Group Member and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to any Group Member could reasonably be expected to have a
Material Adverse Effect.
3.4 Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against any Group Member or against
any of their respective properties or revenues (a) with respect to any of the
Loan Documents or any of the transactions contemplated hereby or thereby, or (b)
that could reasonably be expected to have a Material Adverse Effect.
3.5 No Default. No Group Member is in default under or with
respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
3.6 Ownership of Property; Liens. (i) Each Group Member has
title in fee simple to, or a valid leasehold interest in, all its real property,
and good title to, or a valid leasehold interest in, all its other property,
except as could not reasonably be expected to have a Material Adverse Effect and
(ii) none of such property is subject to any Lien except as permitted by Section
6.3.
3.7 Intellectual Property. Each Group Member owns, or is
licensed to use, all material Intellectual Property necessary for the conduct of
its business as currently conducted. No material claim has been asserted and is
pending by any Person challenging or questioning the use of any material
Intellectual Property by any Group Member or the validity or effectiveness of
any material Intellectual Property owned by any Group Member, nor does the
Borrower know of any valid basis for any such claim. To the knowledge of the
Borrower, the use of Intellectual Property by each Group Member does not
infringe on the rights of any Person in any material respect.
23
3.8 Taxes. Except as set forth on Schedule 3.8, each Group
Member has filed or caused to be filed all Federal, state and other material tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other material taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the relevant Group Member); to the knowledge of the
Borrower, no tax Lien has been filed and no claim is being asserted, with
respect to any such tax, fee or other charge.
3.9 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
3.10 Subsidiaries. (a) Schedule 3.10 sets forth the name and
jurisdiction of incorporation of each Subsidiary and, as to each such
Subsidiary, the percentage of Capital Stock owned by any Loan Party and whether
such Subsidiary is a Guarantor and (b) except as set forth on Schedule 3.10,
there are no outstanding subscriptions, options, warrants, calls, rights or
other agreements or commitments (other than stock options granted to employees
or directors and directors' qualifying shares) of any nature relating to any
Pledged Collateral (as defined in the Pledge Agreement), except as created by
the Loan Documents, the Exit Facility Agreement and pursuant to the Plan of
Reorganization.
3.11 Accuracy of Information, etc. No factual statement or
information set forth in this Agreement, any other Loan Document or the
Disclosure Statement contained, as of the date such statement or document was
furnished, any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
misleading.
3.12 Security Documents. (a) The Security Documents are
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 Pledge Agreement, when stock certificates representing such
Pledged Stock are delivered to the Administrative Agent (or its designee or
bailee), and in the case of the other Collateral described in the Collateral
Agreement Security Documents, when financing statements and other filings
specified on Schedule 3.12(a) in appropriate form are filed in the offices
specified on Schedule 3.12(a) and the filing of the Intellectual Property
Security Agreement is made in the U.S. Patent and Trademark Office within three
months of the date hereof and in the U.S. Copyright Office within one month of
the date hereof against the U.S. issued registrations and applications for the
U.S. Intellectual Property included in the Collateral (provided that the
registration of unregistered copyrights in the U.S. Copyright Office may be
required in order to perfect the Lien therein), the Security Documents shall
constitute a perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Collateral (provided, however, that
subsequent recordations in the U.S. Parent and Trademark Office and the U.S.
Copyright Office, as applicable, may be necessary to perfect the security
interest in issued registrations and applications for other U.S. Intellectual
Property acquired by a Group Member after the date hereof) and the proceeds
thereof, as security for the Obligations (as defined in the Security Documents),
in each case prior and superior in right to any other Person (with respect to
Intellectual Property rights to the extent such perfection and priority may be
achieved by filings made in the U.S. Patent and Trademark Office and the U.S.
Copyright Office), except for Liens securing the Exit Facility and Liens
permitted under Section 6.3 which arise by operation of law. Notwithstanding the
foregoing, the taking of actions outside the U.S. may be required in order to
perfect the Lien in Intellectual Property included in the Collateral which is
protected under non-U.S. law.
24
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
3.12(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Guarantee
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person, except for Liens securing the Exit
Facility and Liens permitted under Section 6.3 which arise by operation of law.
3.13 Certain Documents. The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Plan of Reorganization
and the Exit Facility Agreement, including any amendments, supplements or
modifications with respect to any of the foregoing.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing Date. The agreement of each Lender
to enter into this Agreement is subject to the satisfaction of the following
conditions precedent:
(a) Term Loan Agreement; Security Documents. The
Administrative Agent shall have received (i) this Agreement, executed
and delivered by the Administrative Agent and the Borrower; (ii) the
Security Agreement, executed and delivered by each Loan Party; (iii) the
Pledge Agreement, executed and delivered by each Loan Party; (iv) an
Acknowledgement and Consent in the form attached to the Pledge
Agreement; (v) the Intellectual Property Security Agreement, executed
and delivered by each Loan Party and (vi) the Intercreditor Agreement,
executed and delivered by each party thereto.
(b) DIP Credit Facility. The Administrative Agent shall have
received satisfactory evidence that (i) the DIP Credit Facility shall
have been terminated and all amounts thereunder shall have been paid or
otherwise satisfied in full and (ii) satisfactory arrangements shall
have been made for the termination of all Liens granted in connection
therewith.
(c) Exit Facility. The Administrative Agent and the Required
Lenders shall be reasonably satisfied with the form and substance of the
Exit Facility Agreement, all conditions precedent to the effectiveness
thereof shall have been satisfied or waived and no less than $60,000,000
of commitments shall have been made available thereunder on the Closing
Date.
(d) Plan of Reorganization; Confirmation Order. The Plan of
Reorganization shall have been consummated, and no provision of the Plan
of Reorganization shall have been waived, amended, supplemented or
otherwise modified since the entry of the Confirmation Order. A copy of
the Confirmation Order, certified by a Responsible Officer to be a true,
complete and correct copy of such document, which (i) shall be in full
force and effect, and shall not have been stayed, reversed, modified or
amended and (ii) shall approve and authorize the transactions
contemplated by this Agreement, the other Loan Documents and the Plan of
Reorganization and otherwise shall not be inconsistent with the
provisions hereof and thereof.
(e) Approvals. All governmental and third party approvals
necessary in connection with this Agreement and the Plan of
Reorganization, the continuing operations of the Group Members and the
transactions contemplated hereby shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority
that would restrain, prevent or otherwise impose adverse conditions on
the Plan of Reorganization or the transactions contemplated hereby.
25
(f) Lien Searches. The Administrative Agent shall have
received the results of a recent lien search in each of the
jurisdictions where assets of the Loan Parties are located, and such
search shall reveal no liens on any of the assets of the Loan Parties
except for liens permitted by Section 6.3 or discharged on or prior to
the Closing Date pursuant to documentation satisfactory to the
Administrative Agent; it being understood that the Administrative Agent
shall cooperate with the administrative agent under the Exit Facility to
avoid any duplication of effort with respect to such Lien searches.
(g) Environmental Audit. The Administrative Agent shall have
received each Phase 1 environmental report required to be delivered
under the Exit Facility.
(h) Fees. The Lenders and the Administrative Agent shall
have received all fees required to be paid pursuant to this Agreement,
and all expenses for which invoices have been presented (including the
reasonable fees and expenses of legal counsel and financial advisors)
and are required to be paid pursuant to this Agreement, on or before the
Closing Date.
(i) Closing Certificate; Certified Certificate of
Incorporation; Good Standing Certificates. The Administrative Agent
shall have received (i) a certificate of each Loan Party, dated the
Closing Date, substantially in the form of Exhibit E, with appropriate
insertions and attachments, including the certificate of incorporation
of each Loan Party that is a corporation certified by the relevant
authority of the jurisdiction of organization of such Loan Party, and
(ii) a long form good standing certificate for each Loan Party from its
jurisdiction of organization. The Administrative Agent and the Lenders
shall be reasonably satisfied with the form and substance of the
certificates of incorporation and by-laws or other applicable
organizational documents of each Loan Party.
(j) Legal Opinions. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP counsel to the Group Members, substantially
in the form of Exhibit G; and
(ii) the legal opinion of local counsel as required
under the Exit Facility Agreement.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(k) Pledged Stock; Stock Powers; Pledged Notes. The
Administrative Agent (or its designee or bailee) shall have received (i)
the certificates representing the shares of Capital Stock pledged
pursuant to the Pledge Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer
of the pledgor thereof and (ii) each promissory note (if any) pledged to
the Administrative Agent pursuant to the Pledge Agreement endorsed
(without recourse) in blank (or accompanied by an executed transfer form
in blank) by the pledgor thereof.
(l) Filings, Registrations and Recordings. Each document
(including any Uniform Commercial Code financing statement) required by
the Security Documents or under law or reasonably requested by the
Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with
26
respect to Liens expressly permitted by Section 6.3), shall be in proper
form for filing, registration or recordation.
(m) Mortgages, etc. The Administrative Agent shall have
received (i) a Mortgage with respect to each Mortgaged Property,
executed and delivered by a duly authorized officer of each party
thereto and (ii) such surveys, flood insurance policies and such other
documents with respect to such Mortgaged Property (other than title
insurance policies) as is being requested by or delivered to the Exit
Facility Agent.
(n) Deposit Account Control Agreements; Landlord Waivers;
Bailee Letters. The Administrative Agent shall have received deposit
account control agreements, landlord waivers and bailee letters from
deposits banks, landlords and public warehousemen which are delivering
deposit account control agreements, landlord waivers and bailee letters
to the Exit Facility Agent on the Closing Date, in each case in form and
substance reasonably satisfactory to the Administrative Agent, duly
executed by the parties thereto.
(o) Insurance. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 26 of the
Security Agreement.
(p) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct on and as of the Closing
Date.
(q) No Default. No Default or Event of Default shall have
occurred and be continuing on the Closing Date or after giving effect to
the Loans deemed made on the Closing Date.
SECTION 5. AFFIRMATIVE COVENANTS
Each Loan Party hereby agrees that, so long as any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, such Loan
Party shall and shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to the Administrative
Agent and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, copies of the audited
consolidated balance sheets of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by Deloitte & Touche or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheets
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related unaudited consolidated statements of income and
of 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
27
(c) at any time when an Event of Default shall have occurred
and is continuing, as soon as available, but in any event not later than
35 days after the end of each month occurring during each fiscal year of
the Borrower (other than the third, sixth, ninth and twelfth such
month), the unaudited consolidated balance sheets of the Borrower and
its consolidated Subsidiaries as at the end of such month and the
related unaudited consolidated statements of income and of cash flows
for such month and the portion of the fiscal year through the end of
such month, 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).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied (except as approved by such accountants or officer, as the case may be,
and disclosed in reasonable detail therein) consistently throughout the periods
reflected therein and with prior periods.
5.2 Certificates; Other Information. Furnish to the
Administrative Agent:
(a) concurrently with the delivery of the financial
statements referred to in Section 5.1(a), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default with respect
to a finanancial covenant, except as specified in such certificate;
(b) concurrently with the delivery of any financial
statements pursuant to Section 5.1, (i) a certificate of a Responsible
Officer stating that, such Responsible Officer has obtained no knowledge
of any Default or Event of Default existing during the period covered by
such financial statements except as specified in such certificate and
(ii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information and calculations
necessary for determining compliance by each Group Member with the
provisions of this Agreement referred to therein as of the last day of
the fiscal quarter or fiscal year of the Borrower, as the case may be,
and (y) to the extent not previously disclosed to the Administrative
Agent, a description of any change in the jurisdiction of organization
of any Loan Party;
(c) promptly after the effectiveness thereof, copies of
substantially final drafts of any proposed amendment, supplement, waiver
or other modification with respect to the Exit Facility Agreement or the
Pennsylvania Tort Claim Note;
(d) within five Business Days after the same are sent,
copies of all financial statements and reports that the Borrower sends
to the holders of any class of its public debt or equity securities and,
within five days after the same are filed, copies of all financial
statements and reports that the Borrower may make to, or file with, the
SEC; and
(e) promptly, such additional financial and other
information as the Administrative Agent or any Lender, through the
Administrative Agent, may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books
28
of the relevant Group Member and except where the failure to pay, discharge or
otherwise satisfy such obligations could not reasonably be expected to have a
Material Adverse Effect.
5.4 Maintenance of Existence; Compliance. (a) (i) Preserve,
renew and keep in full force and effect its organizational existence and (ii)
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 6.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
5.5 Maintenance of Property; Insurance. (a) Keep all
property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
5.6 Inspection of Property; Books and Records; Discussions.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP (to the extent applicable) and all Requirements
of Law shall be made of all dealings and transactions in relation to its
business and activities and (b) no more than once per calendar year at any
reasonable time during normal business hours and as soon as may be reasonably be
desired upon reasonably advance notice, permit representatives of the
Administrative Agent (or any Person engaged by the Administrative Agent) to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records to discuss the business, operations, properties and
financial and other condition of the Group Members with officers of the Group
Members and with their independent certified public accountants; provided that
at any time after the occurrence and during the continuance of an Event of
Default, there shall not be any limit to the number of visits and inspections by
the Administrative Agent (or any Person engaged by the Administrative Agent) and
the costs and expenses of the Administrative Agent in respect of such inspection
shall be at the expense of the Borrower. The Administrative Agent shall not be
required by this Agreement or any of the other Loan Documents to undertake any
inspections but will, upon request from the Required Lenders, engage such
Persons as designated by the Required Lenders to undertake such inspections.
5.7 Notices. Promptly after becoming aware thereof, give
notice to the Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of any Group Member in excess of $1,000,000 or
(ii) litigation, investigation or proceeding that may exist at any time
between any Group Member and any Governmental Authority, that in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member
(i) in which it could reasonably be expected to give rise to a Material
Adverse Effect or (ii) which relates to any Loan Document;
29
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan;
(e) (i) any development, event, or condition that,
individually or in the aggregate with other developments, events or
conditions, could reasonably be expected to result in the Group Members
sustaining, in the aggregate, a Material Environmental Loss; (ii) any
written notice that any governmental authority intends to deny any
application for a material Environmental Permit sought by, or revoke or
refuse to renew any material Environmental Permit held by, any Group
Member; and (iii) any governmental authority has identified any Group
Member as a potentially responsible party under any Environmental Law
for the cleanup of Materials of Environmental Concern at any location,
whether or not owned, leased or operated by the Borrower which could
reasonably be expected to result in the Group Members sustaining, in the
aggregate, a Material Environmental Loss;
(f) Exit Facility Availability being below $20,000,000; and
(g) any development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 5.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the relevant Group Member proposes to take with
respect thereto.
5.8 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 use reasonable
efforts to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all Environmental Permits, 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 with all lawful orders and directives of
all Governmental Authorities 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.
5.9 Additional Collateral, etc. (a) At any time while the
Exit Facility is in effect, each Group Member (other than an Excluded Foreign
Subsidiary) shall grant to the Administrative Agent, for the benefit of the
Lenders, security interests and/or mortgages on any property (real or personal)
acquired by any such Group Member to the extent security interests or mortgages
on such property are required under the Exit Facility (including, without
limitation with respect to landlord waivers and bailee letters).
(b) At any time when no Exit Facility is in effect,
30
(i) With respect to any property acquired after the Closing
Date by any Loan Party (other than (x) any property described in
paragraph (ii), (iii) or (iv) below, (y) any property subject to a Lien
expressly permitted by Sections 6.3(g) and (m) and (z) property acquired
by any Excluded Foreign Subsidiary) as to which the Administrative
Agent, for the benefit of the Lenders, does not have a perfected Lien,
promptly (i) execute and deliver to the Administrative Agent such
amendments to the Security Documents or such other documents as the
Administrative Agent or the Administrative Agent deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a security interest in such property and (ii) take all actions
necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected security interest in such property,
including the filing of Uniform Commercial Code financing statements in
such jurisdictions as may be required by the Security Documents or by
law or as may be requested by the Administrative Agent.
(ii) With respect to any fee interest in any real
property having a value (together with improvements thereof) of at least
$2,000,000 acquired after the Closing Date by any Group Member (other
than (x) any such real property subject to a Lien expressly permitted by
Section 6.3(g) and (m) and (z) real property acquired by any Excluded
Foreign Subsidiary), promptly (i) execute and deliver a Mortgage, in
favor of the Administrative Agent, for the benefit of the Lenders,
covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with title and extended coverage insurance
covering such real property in an amount at least equal to the purchase
price of such real property (or such other amount as shall be reasonably
specified by the Administrative Agent), as well as a current ALTA survey
thereof, together with a surveyor's certificate, each of the foregoing
in form and substance reasonably satisfactory to the Administrative
Agent 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.
(iii) With respect to any new Subsidiary (other than
an Excluded Foreign Subsidiary) created or acquired after the Closing
Date by any Group Member (which, for the purposes of this paragraph
(iii), shall include any existing Subsidiary that ceases to be an
Excluded Foreign Subsidiary), promptly (i) execute and deliver to the
Administrative Agent such amendments to the Security Documents as the
Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected
security interest in the Capital Stock of such new Subsidiary that is
owned by any Group Member, (ii) if such Capital Stock is in certificate
form, deliver to the Administrative Agent (or its bailee or designee)
the certificates representing such Capital Stock, together with undated
stock powers, in blank, executed and delivered by a duly authorized
officer of the relevant Group Member, (iii) cause such new Subsidiary
(A) to become a party to this Agreement and the Security Documents, (B)
to take such actions necessary or advisable to grant to the
Administrative Agent for the benefit of the Lenders a perfected security
interest in the Collateral described in the Security Documents with
respect to such new Subsidiary, including the filing of Uniform
Commercial Code financing statements in such jurisdictions as may be
required by the Security Documents or by law or as may be requested by
the Administrative Agent and (C) to deliver to the Administrative Agent
a certificate of such Subsidiary, substantially in the form of Exhibit
E, with appropriate insertions and attachments, and (iv) if requested by
the Administrative Agent, deliver to the Administrative Agent legal
31
opinions relating to the matters described above, which opinions shall
be in form and substance, and from counsel, reasonably satisfactory to
the Administrative Agent.
(iv) With respect to any new Excluded Foreign
Subsidiary created or acquired after the Closing Date by any Group
Member (other than by any Group Member that is an Excluded Foreign
Subsidiary), promptly (i) execute and deliver to the Administrative
Agent such amendments to the Security Documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent,
for the benefit of the Lenders, a perfected security interest in the
Capital Stock of such new Subsidiary that is owned by any such Group
Member (provided that in no event shall more than 65% of the total
outstanding voting Capital Stock of any such new Subsidiary be required
to be so pledged), (ii) if such Capital Stock is in certificate form,
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 relevant Group Member,
and take such other action as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Administrative Agent's
security interest therein, 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.
SECTION 6. NEGATIVE COVENANTS
Each Loan Party hereby agrees that so long as any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, such Loan
Party shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
6.1 Consolidated Fixed Charge Coverage Ratio. If a
Triggering Event shall occur and any one or more Test Dates for such Triggering
Event shall be a Test Date set forth below, permit the Consolidated Fixed Charge
Coverage Ratio for the Test Period applicable to any such Test Date to be less
than the ratio set forth below opposite such Test Date:
Fixed Charge
Test Date Coverage Ratio
--------- --------------
March 31, 2004, June 30, 2004
and September 30, 2004 0.85:1.00
December 31, 2004 and the last
day of each fiscal quarter
thereafter 1.00:1.00
6.2 Indebtedness. Create, issue, incur, assume, become
liable in respect of or (except as to clause (m) below) suffer to exist any
Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of (i) the Borrower to any Subsidiary and
of any Subsidiary Guarantor to the Borrower or any other Subsidiary; and
(ii) any Non-Loan Party to any other Non-Loan Party;
(c) Guarantee Obligations incurred by any Group Member of
obligations of any Subsidiary Guarantor;
32
(d) Indebtedness outstanding on the date hereof and listed
on Schedule 6.2(d) and any refinancings, refundings, renewals or
extensions thereof (without increasing, or shortening the maturity of,
the principal amount thereof);
(e) Indebtedness (including, without limitation, Capital
Lease Obligations) secured by Liens permitted by Section 6.3(g), which
in the case of Loan Parties, in an aggregate principal amount not to
exceed $20,000,000 at any one time outstanding;
(f) Indebtedness of the Borrower in respect of the
Pennsylvania Tort Claim Note in an aggregate principal amount not to
exceed $675,000;
(g) Indebtedness of the Borrower pursuant to the Exit
Facility in an aggregate principal amount not to exceed $175,000,000 and
any refinancings, renewals or extensions thereof (without increasing, or
shortening the maturity of, the principal amount thereof);
(h) Intercompany Foreign Investments permitted under Section
6.8;
(i) Indebtedness of Non-Loan Parties not to exceed
$50,000,000 in the aggregate outstanding at any time;
(j) Indebtedness of a Person acquired in an acquisition
permitted under Section 6.8, provided that such Indebtedness was not
incurred in anticipation of such acquisition;
(k) Indebtedness of any Group Member consisting of deferred
purchase price payments and earnouts in connection with acquisitions
permitted under Section 6.8;
(l) additional Indebtedness of any Loan Party in an
aggregate amount not to exceed $10,000,000 at any time outstanding;
(m) additional Indebtedness of any Group Member which, when
incurred, together with any other consolidated Indebtedness for borrowed
money and Capital Leases of the Group Members then outstanding, in an
amount not to exceed the product of (i) Consolidated EBITDA for the most
recently ended fiscal period for which financial statements have been
delivered pursuant to Section 5.1(a) or (b), and (ii) 2.5.
6.3 Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, whether now owned or hereafter acquired, except:
(a) Liens for taxes not yet due or that are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Borrower or its Subsidiaries, as the case may be, in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, processor's or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30
days or that are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation;
33
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of any
Group Member;
(f) Liens in existence on the date hereof listed on Schedule
6.3(f), securing Indebtedness permitted by Section 6.2(d), 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 any Group Member incurred
pursuant to Section 6.2(e) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created
substantially simultaneously with 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 and (iii) the
amount of Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease
entered into by the Borrower or any other Subsidiary in the ordinary
course of its business and covering only the assets so leased;
(j) Liens created pursuant to or in connection with the Exit
Facility Agreement;
(k) Liens on assets and Capital Stock (other than Capital
Stock owned by any Loan Party) of Non-Loan Parties so long as none of
such Liens secure any Indebtedness or other obligations of any Loan
Party;
(l) Liens arising from judgments and attachments in
connection with court proceedings provided that the attachment or
enforcement of such Liens would not result in an Event of Default
hereunder and such Liens are being contested in good faith by
appropriate proceedings, adequate reserves have been set aside and no
material assets or property of any Loan Party is subject to a material
risk of loss or forfeiture and the claims in respect of such Liens are
fully covered by insurance (subject to ordinary and customary
deductibles) and a stay of execution pending appeal or proceeding for
review is in effect;
(m) Liens securing Indebtedness outstanding under Section
6.2(j), provided that such Liens were not incurred in anticipation of
such acquisition;
(n) Liens set forth on Schedule 6.3(n); and
(o) Liens not otherwise permitted by this Section 6.3 so
long as the lesser of (i) the aggregate outstanding principal amount of
the obligations secured thereby and (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject
thereto does not exceed (as to all Group Members) $5,000,000 at any one
time.
34
6.4 Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its property or business, except that:
(a) any Subsidiary may be merged or consolidated with or
into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor
(provided that a Subsidiary Guarantor shall be the continuing or
surviving corporation);
(b) any Subsidiary may Dispose of any or all of its assets
(i) to the Borrower or any Subsidiary Guarantor (upon voluntary
liquidation or otherwise) or (ii) pursuant to a Disposition permitted by
Section 6.5;
(c) any Non-Loan Parties may be merged or consolidated with
or into any other Non-Loan Party;
(d) any Non-Loan Party may Dispose of any or all of its
assets property to any other Non-Loan Party;
(e) the winding up, liquidation or dissolution of (i) any
Non-Loan Party or (ii) any Subsidiary of the Borrower so long as the
result of such transaction is a transfer of the assets of such
Subsidiary in a manner that would be permitted by another clause of this
Section 6.4; and
(f) any Investment expressly permitted by Section 6.8 may be
structured as a merger, consolidation or amalgamation.
6.5 Disposition of Property. In the case of the Loan Parties
only, Dispose of any of its property, whether now owned or hereafter acquired,
or, in the case of any Subsidiary whose Capital Stock constitutes Pledged
Collateral under and as defined in the Pledge Agreement, issue or sell any
shares of such Subsidiary's Capital Stock to any Person, except any Disposition
of property, or the sale of Capital Stock, the Net Cash Proceeds of which are
applied to the extent required by Section 2.5.
6.6 Restricted Payments. Declare or pay any dividend (other
than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of any Group Member,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of any Group Member (collectively, "Restricted Payments"), except
that (a) the Borrower may make payments in connection with the exercise of the
put options under the Class A Warrants issued pursuant to the Plan of
Reorganization on the Effective Date and (b) any Subsidiary may make Restricted
Payments to the Borrower or any Subsidiary and pro rata dividends to any
minority interest holder.
6.7 Capital Expenditures. Make or commit to make any Capital
Expenditure (other than those funded with insurance proceeds), except Capital
Expenditures of the Group Members not exceeding $70,000,000 in any fiscal year
of the Borrower; provided, that (a) any such amount referred to above, if not so
expended in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year and (b) Capital Expenditures made
pursuant to this Section 6.7 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 pursuant
to clause (a) above.
35
6.8 Investments. Make any advance, loan, extension of credit
(by way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of
business;
(b) Investments in Cash Equivalents;
(c) Indebtedness permitted by Section 6.2;
(d) loans and advances to employees of any Group Member in
the ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not to
exceed $1,000,000 at any one time outstanding;
(e) intercompany Investments by any Group Member in the
Borrower or any Person that, prior to such investment, is a Subsidiary
Guarantor;
(f) Intercompany Foreign Investments in an amount not to
exceed $75,000,000 at any time outstanding;
(g) Investments consisting of non-cash consideration for
asset sales permitted under Section 6.5;
(h) Investments in securities received in bankruptcy or
similar proceedings in satisfaction of claims;
(i) Investments outstanding on the Closing Date and listed
on Schedule 6.8(i);
(j) Investments by Non-Loan Parties in other Non-Loan
Parties;
(k) Investments by Non-Loan Parties that are substantially
similar to Cash Equivalents under the laws of its jurisdiction of
organization or principal place of business;
(l) Investments by the Borrower or any Subsidiary of the
Borrower consisting of acquisitions of assets constituting a business
unit or all or substantially all of the assets or Capital Stock of any
other Person so long as (i) on a pro forma basis after giving effect to
any such acquisition, the Borrower is in compliance with Section 6.1
(without regard to whether a Triggering Event has occurred) and (ii) the
Borrower has complied with Section 5.9 with respect to such Person or
assets so acquired;
(m) Swap Agreements permitted under Section 6.12; and
(n) in addition to Investments otherwise expressly permitted
by this Section 6.8, Investments by the Group Members in an aggregate
amount (valued at cost) not to exceed $20,000,000 during the term of
this Agreement.
6.9 Optional Payments and Modifications of Certain Debt
Instruments. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of or otherwise optionally or voluntarily
defease or segregate funds with respect to the Pennsylvania Tort Claim Note or
at any time when a Default or Event of Default shall have occurred and is
continuing, make any payment
36
with respect to the Pennsylvania Tort Claim Note; or (b)(i) amend, modify, waive
or otherwise change, or consent or agree to any amendment, modification, waiver
or other change to, any of the terms of the Pennsylvania Tort Claim Note or any
other Pennsylvania Tort Claim Document (other than any such amendment,
modification, waiver or other change that (x) would not extend the maturity or
reduce the amount of any payment of principal thereof or reduce the rate or (y)
would extend any date for payment of interest thereon and does not involve the
payment of a consent fee) and (ii) amend, supplement or modify, or consent or
agree to any amendment, supplement or other modification of, the Exit Facility
Agreement in a manner that would amend, supplement or modify the effect of
Sections 7.12(i)(B) or Section 7.16 of the Exit Facility Agreement (or any of
the defined terms directly or indirectly used therein), to further restrict,
relative to the effect of such Sections on the Closing Date, the (x) payments of
dividends by any Subsidiary of the Borrower for purposes of paying principal and
interest on the Loans or (y) payments and prepayments of the Loans; it being
understood that an amendment, supplement or modification of any provision of the
Exit Facility Agreement (other than Sections 7.12(i)(B) or Section 7.16 of the
Exit Facility Agreement) will not constitute a further restriction under this
Section 6.9(b)(ii) solely by reason of the fact that a breach of any such
amended, supplemented or modified provision could result in a default or event
of default under the Exit Facility Agreement.
6.10 Transactions with Affiliates. Enter into any
transaction, including any purchase, sale, lease or exchange of property, the
rendering of any service or the payment of any management, advisory or similar
fees, with any Affiliate (other than the Borrower or any Wholly Owned
Subsidiary) unless such transaction is (i)(a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of the relevant Group Member,
and (c) upon fair and reasonable terms no less favorable to the relevant Group
Member than it would obtain in a comparable arm's length transaction with a
Person that is not an Affiliate or (ii) described in Schedule 6.10.
6.11 Sales and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by any Loan Party of real or personal
property owned by such Loan Party for more than 30 days that has been or is to
be sold or transferred by such Loan Party to such Person 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 such Loan Party, except any such sale or
transfer the Net Cash Proceeds of which are applied to the extent required by
Section 2.5.
6.12 Swap Agreements. Enter into any Swap Agreement, except
(a) Swap Agreements entered into to hedge or mitigate risks to which any Group
Member has actual or anticipated exposure (other than those in respect of
Capital Stock) and (b) Swap Agreements entered into in order to effectively cap,
collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of any Group Member.
6.13 Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
6.14 Clauses Restricting Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Loan Party to make Restricted Payments in respect of any
Capital Stock of such Subsidiary held by any Group Member in a manner that would
limit any Restricted Payment being made to the Borrower to repay the
Obligations.
6.15 Lines of Business. Enter into any significant business,
either directly or through any Subsidiary, except for those businesses of the
same general type in which the Group Members are engaged on the date of this
Agreement or that are reasonably related thereto.
37
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan
when due in accordance with the terms hereof; or the Borrower shall fail
to pay any interest on any Loan 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
(b) any representation or warranty made or deemed made by
any Loan Party herein or in any other Loan Document or that is contained
in any certificate, document or financial or other statement furnished
by it at any time under or in connection with this Agreement or any such
other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
5.4(a) (with respect to the Borrower only), Section 5.7(a) or Section 6
of this Agreement, and such default shall continue unremedied for a
period of 10 days; or
(d) any 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 7), and such default shall continue unremedied for a
period of 30 days after (x) notice by Administrative Agent to the
Borrower of any such default or (y) any Loan Party has knowledge of such
default; or
(e) any Group Member shall (i) default in making any payment
of any principal of any Indebtedness (including any Guarantee
Obligation, but excluding the Loans) on the scheduled or original due
date with respect thereto; or (ii) default in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness
was created; or (iii) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness 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 beneficiary of such Indebtedness (or a trustee or
agent on behalf of such holder or beneficiary) to cause, with the giving
of notice if required, such Indebtedness to become due prior to its
stated maturity or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a default, event
or condition described in clause (i), (ii) or (iii) of this paragraph
(e) shall not at any time constitute an Event of Default unless, at such
time, one or more defaults, events or conditions of the type described
in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred
and be continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $10,000,000; or
(f) (i) any Group Member (other than Waterside Urban Renewal
Corporation and Immaterial Non-Loan Parties) 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 any such Group
38
Member shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against any such Group Member any case,
proceeding or other action of a nature referred to in clause (i) above
that (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 any such Group Member 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 that
results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60
days from the entry thereof; or (iv) any such Group Member 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) any such Group Member shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts
as they become due; or
(g) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of any Group Member or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) any Group Member 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 (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or
conditions, if any, could, in the sole judgment of the Required Lenders,
reasonably be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered
against any Loan Party involving in the aggregate a liability (not paid
or fully covered by insurance as to which the relevant insurance company
has acknowledged coverage) of $10,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any
reason, to be in full force and effect, or any Loan Party or any
Affiliate of any Loan Party shall so assert, or any Lien created by any
of the Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby; or
(j) the guarantee contained in Section 8 shall cease, for
any reason, to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert; or
(k) (i) (A) any "person" or "group"(as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), other than Original Holders, shall
become, or obtain rights (whether by means or warrants, options or
otherwise) to become, the "beneficial owner" (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
more than 50% of the outstanding common stock of the Borrower and (B)
the board of directors of the Borrower shall cease to consist of a
majority of Continuing Directors; or (ii) a Specified Change of Control
shall occur;
39
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Loans (with accrued interest thereon) and all other amounts
owing under this Agreement and the other Loan Documents shall immediately become
due and payable, and (B) if such event is any other Event of Default, 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 Borrower, declare the Loans (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
Except as expressly provided above in this Section 7, presentment, demand,
protest and all other notices of any kind are hereby expressly waived by the
Borrower.
SECTION 8. GUARANTEE
8.1 Guarantee. (a) Each of the Guarantors hereby, jointly
and severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 8.2).
(c) Each Guarantor agrees that the Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 8 or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
(d) The guarantee contained in this Section 8 shall remain
in full force and effect until all the Obligations and the obligations of each
Guarantor under the guarantee contained in this Section 8 shall have been
satisfied by payment in full.
(e) No payment made by the Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the
Administrative Agent or any Lender from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment (other than any payment made by such
Guarantor in respect of the Obligations or any payment received or collected
from such Guarantor in respect of the Obligations), remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder until the
Obligations are paid in full
8.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 8.3. The
provisions of this Section 8.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and
40
the Lenders, and each Guarantor shall remain liable to the Administrative Agent
and the Lenders for the full amount guaranteed by such Guarantor hereunder.
8.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Borrower or any other Guarantor
in respect of payments made by such Guarantor hereunder, until all amounts owing
to the Administrative Agent and the Lenders by the Borrower on account of the
Obligations are paid in full. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by such Guarantor in trust
for the Administrative Agent and the Lenders, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Administrative Agent in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Administrative Agent, if required), to
be applied against the Obligations, whether matured or unmatured, in such order
as the Administrative Agent may determine.
8.4 Amendments, etc. with respect to the Obligations. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Obligations made
by the Administrative Agent or any Lender may be rescinded by the Administrative
Agent or such Lender and any of the Obligations continued, and the Obligations,
or the liability of any other Person upon or for any part thereof, or any
collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and this Agreement and the other Loan
Documents and any other documents executed and delivered in connection therewith
may be amended, modified, supplemented or terminated, in whole or in part, as
the Administrative Agent (or the Required Lenders or all Lenders, as the case
may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor any Lender shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Obligations or for the guarantee contained in
this Section 8 or any property subject thereto.
8.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guarantee contained in this Section 8 or acceptance
of the guarantee contained in this Section 8; the Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon the guarantee contained
in this Section 8; and all dealings between the Borrower and any of the
Guarantors, on the one hand, and the Administrative Agent and the Lenders, on
the other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 8. Each
Guarantor waives diligence, presentment, protest, demand for payment and notice
of default or nonpayment to or upon the Borrower or any of the Guarantors with
respect to the Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 8 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement or any other Loan Document, any of
the Obligations or any other collateral security therefor or guarantee or right
of offset with respect thereto at any time or from time to time held by the
Administrative Agent or any Lender, (b) any defense, set-off or
41
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower or any other Person against
the Administrative Agent or any Lender, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Obligations, or of such Guarantor under the
guarantee contained in this Section 8, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the Administrative Agent or any Lender may, but
shall be under no obligation to, make a similar demand on or otherwise pursue
such rights and remedies as it may have against the Borrower, any other
Guarantor or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any failure
by the Administrative Agent or any Lender to make any such demand, to pursue
such other rights or remedies or to collect any payments from the Borrower, any
other Guarantor or any other Person or to realize upon any such collateral
security or guarantee or to exercise any such right of offset, or any release of
the Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
8.6 Reinstatement. The guarantee contained in this Section 8
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
8.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Payment Office.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, 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, 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.
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.
42
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 to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from 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 any Loan Party 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 any other Loan
Document or for any failure of any Loan Party a party thereto 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 any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any instrument, 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 counsel to the Borrower), 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 against any and all liability and
expense that 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 other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), 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 Loans.
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 unless the Administrative Agent has received notice from a Lender, the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, if so specified by this Agreement, all
Lenders); provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the 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
have made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of a
Loan Party or any affiliate of a 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,
43
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
Loan Parties and their affiliates 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 Loan Parties and their affiliates. 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 any Loan Party or any
affiliate of a Loan Party that 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 Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Term Percentages in effect on the date on
which indemnification is sought under this Section 9.7 (or, if indemnification
is sought after the date upon which the Loans shall have been paid in full,
ratably in accordance with such Term 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 that may at any time (whether before or after 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 that are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section 9.7 shall survive the payment of the Loans and all other amounts
payable hereunder.
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 any Loan Party as though the
Administrative Agent were not the Administrative Agent. With respect to its
Loans deemed made or renewed 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 10 days' notice to the Lenders and the
Borrower. 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 (unless an Event of Default shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), 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
44
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 Loans. If no successor agent has accepted
appointment as Administrative Agent by the date that is 10 days following a
retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Section 9 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.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1 or as required by Section 5 of the Intercreditor Agreement. The
Required Lenders and each Loan Party to the relevant Loan Document may, or, with
the written consent of the Required Lenders, the Administrative Agent (who shall
execute amendments, supplements, modifications and waivers if all of the Lenders
affected thereby or the Required Lenders, as applicable, have consented to such
amendment, modification, supplement or waiver, subject to clause (iv) below) and
each Loan Party to the relevant Loan Document may, from time to time, (a) enter
into written amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the 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) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, reduce the stated rate of any
interest or fee payable hereunder (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates (which waiver shall
be effective with the consent of the Required Lenders) and (y) that any
amendment or modification of defined terms used in the financial covenants in
this Agreement shall not constitute a reduction in the rate of interest or fees
for purposes of this clause (i)) or extend the scheduled date of any payment
thereof, in each case without the written consent of each Lender directly
affected thereby; (ii) eliminate or reduce the voting rights of any Lender under
this Section 10.1 without the written consent of such Lender; (iii) reduce any
percentage specified in the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents, release all or substantially
all of the Collateral or release all or substantially all of the Guarantors from
their obligations under the Security Documents, in each case without the written
consent of all Lenders; or (iv) amend, modify or waive any provision of Section
9 or amend, modify or waive any other provision of any Loan Document in a manner
that would increase the responsibilities, liabilities or obligations of the
Administrative Agent, in each case without the written consent of the
Administrative Agent. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the 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.
45
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, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of any Loan Party and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
Loan Party: c/o GenTek Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Administrative Agent: BNY Asset Solutions LLC
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Risk Management
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
BNY Asset Solutions
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or any
Loan Party may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
46
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
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 Loans.
10.5 Payment of Expenses and Taxes. Each of the Loan Parties,
jointly and severally, agrees (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the 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 hereof and of the transactions contemplated hereby and thereby,
including the reasonable fees and disbursements of counsel and financial
advisors to the Administrative Agent and filing and recording fees and expenses,
with statements with respect to the foregoing to be submitted to the Borrower
prior to the Closing Date (in the case of amounts to be paid on the Closing
Date) and from time to time thereafter on a periodic basis as the Administrative
Agent shall deem appropriate, (b) to pay or reimburse each Lender and the
Administrative Agent for all its 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 the fees and
disbursements of counsel (including the allocated fees and expenses of in-house
counsel) to each Lender and of counsel and financial advisors to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration hereof and 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 and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "Indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans or the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of any Group Member or
any property at any time owned, leased, or in any way used by any Group Member
or any entity for which any of them is alleged to be responsible, and the
reasonable fees and expenses of legal counsel in connection with claims, actions
or proceedings by any Indemnitee against any Loan Party under any Loan Document
(all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrower shall have no obligation hereunder to
any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, each Loan Party agrees not to assert and
to cause its Subsidiaries not to assert, and hereby waives and agrees to cause
its Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and
47
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee. All
amounts due under this Section 10.5 shall be payable promptly after written
demand therefor. Statements payable by Loan Parties pursuant to this Section
10.5 shall be submitted to Chief Financial Officer (Telephone No. (973)
▇▇▇-▇▇▇▇) (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇), at the address of the Borrower set
forth in Section 10.2, or to such other Person or address as may be hereafter
designated by the Borrower in a written notice to the Administrative Agent. The
agreements in this Section 10.5 shall survive repayment of the Loans and all
other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that (i) no Loan Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by any Loan Party without
such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this
Section 10.6. No confidential information regarding any Group Member may be
provided to any prospective Tranferee unless it has agreed in writing to be
bound by Section 10.16.
(b) (i) Subject to the conditions set forth in paragraph
(b)(ii) below, any Lender may assign to one or more assignees (each, an
"Assignee") all or a portion of its rights and obligations under this Agreement
(including all or a portion of the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:
(A) the Borrower, provided that no consent of the Borrower
shall be required for an assignment to a Lender, an affiliate of a
Lender, an Approved Fund (as defined below) or, if an Event of Default
has occurred and is continuing, any other Person; and
(B) the Administrative Agent, provided that no consent of
the Administrative Agent shall be required for an assignment of all or
any portion of a Loan to a Lender, an Affiliate of a Lender or an
Approved Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an
affiliate of a Lender or an Approved Fund or an assignment of the entire
remaining amount of the assigning Lender's Loans, the amount of the
Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect to
such assignment is delivered to the Administrative Agent) shall not be
less than $1,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, provided that (1) no such consent of the
Borrower shall be required if an Event of Default has occurred and is
continuing and (2) such amounts shall be aggregated in respect of each
Lender and its affiliates or Approved Funds, if any;
(B) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500; and
(C) the Assignee, if it shall not be a Lender, shall deliver
to the Administrative Agent an administrative questionnaire.
For the purposes of this Section 10.6, the term "Approved Fund"
has the following meaning:
48
"Approved Fund" means any Person (other than a natural person)
that is engaged in making, purchasing, holding or investing in bank
loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in
each Assignment and Assumption the Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of
Sections 2.12, 2.13, 2.14 and 10.5). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not
comply with this Section 10.6 shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section 10.6.
(iv) The Administrative Agent shall maintain at one of its
offices a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders,
and principal amount of the Loans owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, and the Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable
prior notice.
(v) Upon its receipt of a duly completed Assignment and
Assumption executed by an assigning Lender and an Assignee, the
Assignee's completed administrative questionnaire (unless the Assignee
shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) of this Section 10.6 and any written
consent to such assignment required by paragraph (b) of this Section
10.6, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register.
No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower
or the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of the Loans owing
to it); provided that (A) such Lender's obligations under this Agreement shall
remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement. Any agreement pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that (1) requires the consent of each Lender
directly affected thereby pursuant to the proviso to the second sentence of
Section 10.1 and (2) directly affects such Participant. Subject to paragraph
(c)(ii) of this Section 10.6, the
49
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.12, 2.13 and 2.14 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section
10.6. To the extent permitted by law, each Participant also shall be entitled to
the benefits of Section 10.7(b) as though it were a Lender, provided such
Participant shall be subject to Section 10.7(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.12 or 2.13 than the applicable Lender
would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's prior written consent. Any
Participant that is a Non-U.S. Lender shall not be entitled to the
benefits of Section 2.13 unless such Participant complies with Section
2.13(d).
(d) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 10.6 shall not apply to
any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or Assignee for such
Lender as a party hereto.
(e) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may
assign any or all of the Loans it may have funded hereunder to its designating
Lender without the consent of the Borrower or the Administrative Agent and
without regard to the limitations set forth in Section 10.6(b). Each of the
Borrower, each Lender and the Administrative Agent hereby confirms that it will
not institute against a Conduit Lender or join any other Person in instituting
against a Conduit Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding under any state bankruptcy or similar law, for one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.
10.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular
Lender, if any Lender (a "Benefitted Lender") shall receive any payment of all
or part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of the Obligations owing to such other Lender, such
Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or
shall provide such other Lenders with the benefits of any such collateral, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
50
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to any
Loan Party, any such notice being expressly waived by each Loan Party to the
extent permitted by applicable law, upon any amount becoming due and payable by
the Borrower or any other Loan Party hereunder (whether at the stated maturity,
by acceleration or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower or any other
Loan Party. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff 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,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
the parties shall be lodged with the Borrower and the Administrative Agent.
10.9 Severability. Any provision of this Agreement that 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 entire agreement of the Loan Parties, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to the 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 RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT 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 Loan Party
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 judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
51
(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 Loan Party at its address set forth in Section 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 Section 10.12 any special, exemplary, punitive or
consequential damages.
10.13 Acknowledgements. Each Loan Party 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 any Loan Party 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 the Loan Parties, 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 the Loan Parties and the Lenders.
10.14 No Requirement of Lender Signatures. Each Lender listed
on Schedule 1.1A shall be a party hereto in accordance with the Plan of
Reorganization and, pursuant to the Plan of Reorganization, is bound hereby
notwithstanding the failure of any such Lender to execute a signature page
hereto.
10.15 Releases of Guarantees and Liens. (a) Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or guarantee obligations (i) to the extent necessary
to permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 10.1, (ii) to the extent
required pursuant to the Intercreditor Agreement or (iii) under the
circumstances described in paragraph (b) below.
(b) At such time as the Loans and the other obligations
under the Loan Documents shall have been paid in full, the Collateral shall be
released from the Liens created by the Security Documents, and the Security
Documents and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party under the Security
Documents shall terminate, all without delivery of any instrument or performance
of any act by any Person.
10.16 Confidentiality. Each of the Administrative Agent and
the Lenders agree to keep confidential all non-public information provided to it
by any Loan Party, the Administrative Agent or any Lender pursuant to or in
connection with this Agreement that is designated by the provider thereof as
confidential; provided that nothing herein shall prevent the Administrative
Agent or any Lender from
52
disclosing any such information (a) to the Administrative Agent, any other
Lender or any affiliate thereof, (b) subject to an agreement to comply with the
provisions of this Section 10.16, to any actual or prospective Transferee or any
direct or indirect counterparty to any Swap Agreement (or any professional
advisor to such counterparty), (c) to its employees, directors, agents,
attorneys, accountants and other professional advisors or those of any of its
affiliates, (d) upon the request or demand of any Governmental Authority, (e) in
response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g)
that has been publicly disclosed, (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, or (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document. Notwithstanding anything herein to the contrary, any party subject to
confidentiality obligations hereunder or under any other related document (and
any employee, representative, or other agent of such party) may disclose to any
and all Persons, without limitation of any kind, such party's U.S. federal
income tax treatment and U.S. federal income tax structure of the transactions
contemplated by this Agreement relating to such party and all materials of any
kind (including opinions or other tax analyses) that are provided to it relating
to such tax treatment and tax structure. However, no such party shall disclose
any information relating to such tax treatment or tax structure to the extent
nondisclosure is reasonably necessary in order to comply with applicable
securities law.
10.17 WAIVERS OF JURY TRIAL. EACH LOAN PARTY, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
53
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.
BORROWER:
GENTEK INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
GUARANTORS:
GENTEK HOLDING CORPORATION
(formerly known as General
Chemical Corporation)
GENERAL CHEMICAL PERFORMANCE
PRODUCTS LLC
NOMA HOLDING INC.
GENTEK TECHNOLOGIES MARKETING INC.
VIGILANT NETWORKS LLC
BIG T-2 COMPANY LLC
KRONE DIGITAL COMMUNICATIONS INC.
PRINTING DEVELOPMENTS, INC.
KRONE INTERNATIONAL HOLDING INC.
GENERAL CHEMICAL WEST LLC
GENERAL CHEMICAL LLC
FINI ENTERPRISES, INC.
▇▇▇▇▇▇, INC.
NOMA CORPORATION
NOMA DELAWARE INC.
BALCRANK PRODUCTS INC.
TOLEDO TECHNOLOGIES INC.
DEFIANCE, INC.
▇▇▇▇▇▇ HOLDINGS INC.
NOMA O.P., INC.
NOMA TECHNOLOGIES LIMITED
PARTNERSHIP
TOLEDO TECHNOLOGIES MANAGEMENT LLC
DEFIANCE PRECISION PRODUCTS, INC.
HY-FORM PRODUCTS, INC.
DEFIANCE TESTING AND ENGINEERING
SERVICES, INC.
DEFIANCE PRECISION PRODUCTS
MANAGEMENT LLC
DEFIANCE PRECISION PRODUCTS
MANUFACTURING LLC
DEFIANCE KINEMATICS INC.
BINDERLINE DRAFTLINE, INC.
KRONE USA INCORPORATED
KRONE INCORPORATED
KRONE HOLDING INC.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CON-X CORPORATION
KRONE OPTICAL SYSTEMS INC.
By:
--------------------------------
Name: ▇▇▇▇▇ ▇'▇▇▇▇▇▇
Title: Vice President
TOLEDO TECHNOLOGIES MANUFACTURING
LLC
By:
--------------------------------
Name:
Title:
KRONE HOLDING LLC
By its Sole Member and Manager,
Krone Holding Inc.
By:
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
ADMINISTRATIVE AGENT:
BNY ASSET SOLUTIONS LLC,
as Administrative Agent
By:
--------------------------------
Name:
Title: