EXHIBIT 10.1
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of September 29, 2003
among
PACKAGING DYNAMICS OPERATING COMPANY,
as Borrower,
PACKAGING DYNAMICS CORPORATION,
and
The Domestic Subsidiaries of the Borrower
from time to time party hereto,
as Guarantors,
BANK OF AMERICA, N.A.,
as Administrative Agent and L/C Issuer,
NATIONAL CITY BANK,
as Syndication Agent
LASALLE BANK NATIONAL ASSOCIATION,
as Documentation Agent,
and
The other Lenders party hereto
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Runner
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS..................................................................... 1
1.1 Definitions.................................................................................. 1
1.2 Other Interpretive Provisions................................................................ 31
1.3 Accounting Terms............................................................................. 32
1.4 Rounding..................................................................................... 33
1.5 References to Agreements and Laws............................................................ 33
1.6 Times of Day................................................................................. 33
1.7 Letter of Credit Amounts..................................................................... 33
SECTION 2 THE COMMITMENTS AND CREDIT EXTENSIONS................................................................ 33
2.1 Revolving Loans and Term Loans............................................................... 33
2.2 Borrowings, Conversions and Continuations of Loans........................................... 35
2.3 Letters of Credit............................................................................ 37
2.4 Prepayments.................................................................................. 47
2.5 Termination or Reduction of Aggregate Revolving Commitments.................................. 49
2.6 Repayment of Loans........................................................................... 50
2.7 Interest..................................................................................... 52
2.8 Fees......................................................................................... 52
2.9 Computation of Interest and Fees............................................................. 53
2.10 Evidence of Debt............................................................................. 53
2.11 Payments Generally........................................................................... 54
2.12 Sharing of Payments.......................................................................... 56
SECTION 3 TAXES, YIELD PROTECTION AND ILLEGALITY............................................................... 56
3.1 Taxes........................................................................................ 56
3.2 Illegality................................................................................... 58
3.3 Inability to Determine Rates................................................................. 58
3.4 Increased Cost and Reduced Return; Capital Adequacy; Reserves on Eurodollar Rate Loans....... 59
3.5 Funding Losses............................................................................... 60
3.6 Matters Applicable to all Requests for Compensation.......................................... 61
3.7 Survival..................................................................................... 61
SECTION 4 GUARANTY............................................................................................. 61
4.1 Guaranty of Payment.......................................................................... 61
4.2 Credit Party Obligations Unconditional....................................................... 62
4.3 Reinstatement................................................................................ 63
4.4 Certain Additional Waivers................................................................... 63
4.5 Remedies..................................................................................... 64
4.6 Rights of Contribution....................................................................... 64
4.7 Guarantee of Payment; Continuing Guarantee................................................... 64
SECTION 5 CONDITIONS PRECEDENT................................................................................. 64
5.1 Closing Conditions........................................................................... 64
5.2 Conditions to All Extensions of Credit....................................................... 69
i
SECTION 6 REPRESENTATIONS AND WARRANTIES....................................................................... 69
6.1 Financial Condition.......................................................................... 69
6.2 No Material Change........................................................................... 70
6.3 Organization and Good Standing............................................................... 70
6.4 Due Authorization............................................................................ 71
6.5 No Conflicts................................................................................. 71
6.6 Consents..................................................................................... 71
6.7 Enforceable Credit Party Obligations......................................................... 71
6.8 No Default................................................................................... 72
6.9 Ownership.................................................................................... 72
6.10 Indebtedness................................................................................. 72
6.11 Litigation................................................................................... 72
6.12 Taxes........................................................................................ 72
6.13 Compliance with Law.......................................................................... 72
6.14 ERISA........................................................................................ 73
6.15 Subsidiaries as of the Closing Date.......................................................... 74
6.16 Use of Proceeds.............................................................................. 74
6.17 Government Regulation........................................................................ 74
6.18 Environmental Matters........................................................................ 75
6.19 Intellectual Property........................................................................ 76
6.20 Solvency..................................................................................... 76
6.21 Investments.................................................................................. 76
6.22 Location of Collateral....................................................................... 77
6.23 Disclosure................................................................................... 77
6.24 Licenses, etc................................................................................ 77
6.25 Collateral Documents......................................................................... 77
6.26 Burdensome Restrictions...................................................................... 78
6.27 Labor Contracts and Disputes................................................................. 78
6.28 Broker's Fees................................................................................ 78
6.29 Classification as Senior Indebtedness........................................................ 78
6.30 Tax Shelter Regulations...................................................................... 78
SECTION 7 AFFIRMATIVE COVENANTS................................................................................ 79
7.1 Information Covenants........................................................................ 79
7.2 Financial Covenants.......................................................................... 82
7.3 Preservation of Existence and Franchises..................................................... 83
7.4 Books and Records............................................................................ 83
7.5 Compliance with Law.......................................................................... 84
7.6 Payment of Taxes and Claims.................................................................. 84
7.7 Insurance.................................................................................... 84
7.8 Maintenance of Property...................................................................... 86
7.9 Collateral................................................................................... 86
7.10 Use of Proceeds.............................................................................. 86
7.11 Audits/Inspections........................................................................... 87
7.12 Additional Subsidiaries...................................................................... 87
7.13 Post-Closing Covenant........................................................................ 88
ii
SECTION 8 NEGATIVE COVENANTS................................................................................... 89
8.1 Indebtedness................................................................................. 89
8.2 Liens........................................................................................ 90
8.3 Nature of Business........................................................................... 90
8.4 Consolidation; Merger; Dissolution; Liquidation; Winding Up.................................. 90
8.5 Disposition of Assets........................................................................ 91
8.6 Sale Leasebacks.............................................................................. 92
8.7 Investments.................................................................................. 92
8.8 Restricted Payments.......................................................................... 92
8.9 Restrictions on Modifications to and Payments of Certain Indebtedness........................ 92
8.10 Transactions with Affiliates................................................................. 93
8.11 Fiscal Year; Organizational Documents........................................................ 93
8.12 No Limitations............................................................................... 93
8.13 Ownership of Subsidiaries; Limitations on Operations of Borrower............................. 94
8.14 No Other Negative Pledges.................................................................... 94
8.15 No Foreign Subsidiaries...................................................................... 95
SECTION 9 EVENTS OF DEFAULT.................................................................................... 95
9.1 Events of Default............................................................................ 95
9.2 Acceleration; Remedies....................................................................... 98
9.3 Allocation of Payments After Event of Default................................................ 99
SECTION 10 ADMINISTRATIVE AGENT................................................................................ 100
10.1 Appointment and Authorization of Administrative Agent........................................ 100
10.2 Delegation of Duties......................................................................... 101
10.3 Liability of Administrative Agent............................................................ 101
10.4 Reliance by Administrative Agent............................................................. 101
10.5 Notice of Default............................................................................ 102
10.6 Credit Decision; Disclosure of Information by Administrative Agent........................... 102
10.7 Indemnification of Administrative Agent...................................................... 103
10.8 Administrative Agent in its Individual Capacity.............................................. 103
10.9 Successor Administrative Agent............................................................... 104
10.10 Administrative Agent May File Proofs of Claim................................................ 104
10.11 Collateral and Guaranty Matters.............................................................. 105
10.12 Other Agents; Arrangers and Managers......................................................... 106
SECTION 11 MISCELLANEOUS....................................................................................... 106
11.1 Amendments, Etc.............................................................................. 106
11.2 Notices and Other Communications; Facsimile Copies........................................... 109
11.3 No Waiver; Cumulative Remedies............................................................... 110
11.4 Attorney Costs, Expenses and Taxes........................................................... 110
11.5 Indemnification by the Borrower.............................................................. 111
11.6 Payments Set Aside........................................................................... 112
11.7 Successors and Assigns....................................................................... 112
11.8 Confidentiality.............................................................................. 115
11.9 Set-off...................................................................................... 116
11.10 Interest Rate Limitation..................................................................... 116
11.11 Counterparts................................................................................. 117
iii
11.12 Integration; Effectiveness; Continuing Agreement............................................. 117
11.13 Survival of Representations and Warranties................................................... 118
11.14 Severability................................................................................. 118
11.15 Tax Forms.................................................................................... 118
11.16 Replacement of Lenders....................................................................... 120
11.17 Governing Law................................................................................ 121
11.18 Waiver of Right to Trial by Jury............................................................. 121
iv
SCHEDULES
Schedule 1.1(a) Investments
Schedule 1.1(b) Permitted Liens
Schedule 1.1(c) Existing Letters of Credit
Schedule 2.1 Pro Rata Shares
Schedule 5.1(e) Mortgage Properties
Schedule 5.1(h) Corporate Structure
Schedule 6.10 Indebtedness
Schedule 6.15 Subsidiaries
Schedule 6.19 Intellectual Property
Schedule 6.22(a) Real Property Locations
Schedule 6.22(b) Personal Property Locations
Schedule 6.22(c) Chief Executive Offices
Schedule 6.27 Labor Contract and Disputes
Schedule 7.7 Insurance
Schedule 7.10 Indebtedness Repaid at Closing
Schedule 11.2 Notices
EXHIBITS
Exhibit A Form of Loan Notice
Exhibit B Form of Pledge Agreement
Exhibit C Form of Security Agreement
Exhibit D-1 Form of Revolving Note
Exhibit D-2 Form of Tranche A Term Note
Exhibit D-3 Form of Tranche B Term Note
Exhibit E Form of Officer's Certificate
Exhibit F Form of Joinder Agreement
Exhibit G Form of Assignment and Assumption
v
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement"),
is entered into as of September 29, 2003 among PACKAGING DYNAMICS OPERATING
COMPANY, a Delaware corporation (the "Borrower"), PACKAGING DYNAMICS
CORPORATION, a Delaware corporation ("Parent"), and each of the Domestic
Subsidiaries of the Borrower, as Guarantors, the Lenders (as defined herein) and
BANK OF AMERICA, N.A., as Administrative Agent for the Lenders.
RECITALS
WHEREAS, Packaging Dynamics, L.L.C. and International Converter, Inc.,
as borrowers, Packaging Holdings, L.L.C. and the Domestic Subsidiaries of the
Packaging Dynamics, L.L.C., as guarantors, the lenders party thereto and Bank of
America, N.A., as agent, are parties to that certain Credit Agreement dated as
of November 20, 1998 (as amended and modified, the "Existing Credit Agreement");
WHEREAS, the Lenders have agreed to refinance the Existing Credit
Agreement on the terms and conditions hereinafter set forth; and
WHEREAS, in connection with the refinancing of the Existing Credit
Agreement in accordance with the terms hereof, Packaging Dynamics, L.L.C. and
Packaging Holdings, L.L.C. will be merged, and the surviving limited liability
company will be converted to a corporation and renamed Packaging Dynamics
Operating Company.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Acquisition", by any Person, means the acquisition by such
Person of all of the Capital Stock or all or substantially all of the
Property or a division or business unit of another Person, whether or
not involving a merger or consolidation with such other Person.
1
"Administrative Agent" or "Agent" means Bank of America in its
capacity as administrative agent under any of the Credit Documents, or
any successor administrative agent.
"Administrative Agent's Office" means the Administrative
Agent's address and, as appropriate, account as set forth on Schedule
11.2, or such other address or account as the Administrative Agent may
from time to time notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to
all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power (a) to vote 10% or more of the securities having
ordinary voting power for the election of directors, managing general
partners, members or the equivalent of such Person or (b) to direct or
cause direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent-Related Persons" means the Administrative Agent,
together with its Affiliates (including, in the case of Bank of America
in its capacity as the Administrative Agent, the Arranger), and the
officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Aggregate Revolving Commitments" means the Revolving
Commitments of all the Lenders. The initial amount of the Aggregate
Revolving Commitments in effect on the Closing Date is FORTY MILLION
DOLLARS ($40,000,000).
"Applicable Percentage" means the appropriate applicable
percentages corresponding to the Leverage Ratio in effect as of the
most recent Calculation Date as shown below:
2
Applicable Percentage
----------------------------------------------------------------------------------------------------
Eurodollar Rate Loans Base Rate Loans
--------------------------------------------------------------
Revolving Revolving
Loans and Loans and Standby Commercial
Pricing Leverage Tranche A Term Tranche B Term Tranche A Term Tranche B Term Letter of Letter of Commitment
Level Ratio Loans Loans Loans Loans Credit Fee Credit Fee Fee
------------------------------------------------------------------------------------------------------------------------------------
I < or = 1.5 to 1.0 2.25% 3.50% 1.25% 2.50% 2.25% 1.125% 0.375%
II < or = 2.0 to 1.0 2.50% 3.50% 1.50% 2.50% 2.50% 1.250% 0.500%
but
> 1.5 to 1.0
III < or = 2.75 to 1.0 2.75% 3.50% 1.75% 2.50% 2.75% 1.375% 0.500%
but
> 2.0 to 1.0
IV < or = 3.50 to 1.0 3.00% 3.50% 2.00% 2.50% 3.00% 1.500% 0.500%
but
> 2.75 to 1.0
V > 3.50 to 1.0 3.25% 3.50% 2.25% 2.50% 3.25% 1.625% 0.500%
The Applicable Percentage for purposes of calculating the
applicable interest rate for any day for any Loan, the Applicable
Percentage of the Commitment Fee for any day for purposes of Section
2.8(a), the Applicable Percentage of the Standby Letter of Credit Fees
for any day for purposes of Section 2.3(i)(i) and the Commercial Letter
of Credit Fees for any day for purposes of Section 2.3(i)(ii) shall, in
each case, be determined and adjusted quarterly on the date (each a
"Calculation Date") five (5) Business Days after the date by which the
Borrower is required to provide the officer's certificate in accordance
with the provisions of Section 7.1(c); provided that (a) if the
Borrower fails to provide the officer's certificate required by Section
7.1(c) on or before the most recent Calculation Date, the Applicable
Percentages for such Calculation Date shall be based on Pricing Level V
from such Calculation Date until such time that an appropriate
officer's certificate is provided whereupon the Pricing Level shall be
determined by the then current Leverage Ratio and (b) the initial
Pricing Level on the Closing Date shall be set at Level IV and shall
remain at Level IV until the first Calculation Date following the
Closing Date. Each Applicable Percentage shall be effective from one
Calculation Date until the next Calculation Date. Any adjustment in the
Applicable Percentages shall be applicable to all existing Loans and
Letters of Credit as well as any new Loans made or Letters of Credit
issued.
The Borrower shall promptly deliver to the Administrative
Agent, at the Administrative Agent's Office, at the time the officer's
certificate is required to be delivered by Section 7.1(c), information
regarding any change in the Leverage Ratio that would change the
existing Pricing Level pursuant to the preceding paragraph.
"Application Period", in respect of any Asset Disposition, has
the meaning set forth in Section 8.5.
"Approved Fund" means any Fund 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.
3
"Arranger" means BAS, in its capacity as sole lead arranger
and sole book runner.
"Asset Disposition" means any disposition, other than pursuant
to an Excluded Asset Disposition, of any or all of the Property
(including without limitation the Capital Stock of a Subsidiary) of any
Credit Party whether by sale, lease, transfer or otherwise.
"Asset Disposition Prepayment Event" means, with respect to
any Asset Disposition, the failure of the Credit Parties to apply (or
cause to be applied) the Net Cash Proceeds of such Asset Disposition to
Eligible Reinvestments during the Application Period for such Asset
Disposition.
"Assignment and Assumption" means an Assignment and Assumption
substantially in the form of Exhibit G.
"Attorney Costs" means and includes all reasonable fees,
expenses and disbursements of any law firm or other external counsel.
"Availability Period" means, with respect to the Revolving
Commitments, the period from the Closing Date to the earliest of (a)
the Maturity Date for the Revolving Loans, (b) the date of termination
of the Aggregate Revolving Commitments pursuant to Section 2.5 and (c)
the date of termination of the commitment of each Lender to make Loans
and of the obligation of the L/C Issuer to make L/C Credit Extensions
pursuant to Section 9.2.
"Bank of America" means Bank of America, N.A. or any successor
thereto.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" has the meaning set forth in Section
9.1(f).
"BAS" means Banc of America Securities LLC.
"Base Rate" means for any day a fluctuating rate per annum
equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and
(b) the rate of interest in effect for such day as publicly announced
from time to time by Bank of America as its "prime rate." The "prime
rate" is a rate set by Bank of America based upon various factors
including Bank of America's costs and desired return, general economic
conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such
announced rate. Any change in such rate announced by Bank of America
shall take effect at the opening of business on the day specified in
the public announcement of such change.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
4
"▇▇▇▇▇▇ Springs" means the City of ▇▇▇▇▇▇ Springs, Kansas.
"▇▇▇▇▇▇ Springs Debt" means the Indebtedness described in
Schedule 6.10.
"▇▇▇▇▇▇ Springs Intercreditor Agreement" means that certain
Intercreditor Agreement dated as of November 20, 1998 among the Agent,
the Borrower (as successor to Packaging Dynamics, L.L.C., a Delaware
limited liability company, and assignee of Bagcraft Corporation of
America, a Delaware corporation), Bagcraft Acquisition, LLC, ▇▇▇▇▇▇
Springs and KDOCH, as amended or modified prior to the date hereof, as
amended or modified in connection with the amendment and restatement of
the Existing Credit Agreement pursuant to this Credit Agreement, and as
further amended, modified, restated or supplemented from time to time.
"Borrower" has the meaning set forth in the introductory
paragraph hereto and shall include any successors or permitted assigns
thereof.
"Borrowing" means a borrowing consisting of simultaneous
Revolving Loans of the same Type and, in the case of Eurodollar Rate
Loans, having the same Interest Period made by each of the Revolving
Lenders pursuant to Section 2.1.
"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized
or required by Law or other governmental action to close in Charlotte,
North Carolina, Chicago, Illinois or New York, New York; provided that
in the case of Eurodollar Rate Loans, such day is also a day on which
dealings between banks are carried on in U.S. dollar deposits in the
London interbank market.
"Calculation Date" has the meaning set forth in the definition
of Applicable Percentage.
"Capital Expenditures" means all expenditures of the Credit
Parties and their Subsidiaries on a consolidated basis which, in
accordance with GAAP, would be classified as capital expenditures, but
excluding in any event all obligations of the Credit Parties and their
Subsidiaries under Capital Leases.
"Capital Lease" means, as applied to any Person, any lease of
any Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person and the amount of
such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations or rights, in each case
constituting equity interests that is the equivalent of Capital Stock
in such association or business entity, or any other equity interest in
such association or business entity that is the equivalent of capital
stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
5
company, membership interests and (v) any other interest or
participation that confers on a Person the right to receive a share of
the profits and losses of, or distributions of Property of, the issuing
Person.
"Cash Collateralize" means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the L/C Issuer
and the Lenders, as collateral for the L/C Obligations, cash or deposit
account balances pursuant to documentation in form and substance
reasonably satisfactory to the Administrative Agent and the L/C Issuer
(which documents are hereby consented to by the Lenders). Derivatives
of such term have corresponding meanings.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve (12) months from the date of
acquisition, (b) U.S. dollar denominated time and demand deposits and
certificates of deposit of (i) any Lender, (ii) any domestic commercial
bank having capital and surplus in excess of $500,000,000 or (iii) any
bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each
case with maturities of not more than 270 days from the date of
acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any
variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing
within six (6) months of the date of acquisition, (d) repurchase
agreements entered into by any Person with a bank or trust company
(including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which
such Person shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the
repurchase obligations, (e) investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at
least $500,000,000 and the portfolios of which are limited to
Investments of the character described in the foregoing subdivisions
(a) through (d) and subdivision (f), and (f) securities with maturities
of one (1) 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 the time of the acquisition thereof at least A-1 by
S&P or P-1 by Moody's or carrying an equivalent rating by an
internationally recognized rating agency.
"Cash Tax Payments" means, for any period, any payments of
federal, state and other income taxes made by the Credit Parties and
their Subsidiaries in cash.
6
"Change of Control" means:
(a) an event or series of events by which any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding any employee benefit plan of the Parent or
any of its Subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any
such plan) other than members of the Sponsor Group becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, directly or indirectly, of 35% or more of the Voting
Stock of the Parent on a fully-diluted basis; or
(b) during any period of twenty-four (24) consecutive
months, a majority of the members of the board of directors or other
equivalent governing body of the Parent cease to be composed of
individuals (i) who were members of that board or equivalent governing
body on the first day of such period, (ii) whose election or nomination
to that board or equivalent governing body was approved by individuals
referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent
governing body or (iii) whose election or nomination to that board or
other equivalent governing body was approved by individuals referred to
in clauses (i) and (ii) above constituting at the time of such election
or nomination at least a majority of that board or equivalent governing
body; or
(c) the Parent ceases to own and control 100% of the
Voting Stock of the Borrower on a fully-diluted basis; or
(d) the occurrence of a "change of control" under or as
defined in the documents entered into in connection with the issuance
of any Subordinated Indebtedness.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986 and the rules
and regulations promulgated thereunder, as amended, modified, succeeded
or replaced from time to time.
"Collateral" means all Property of the Credit Parties in
which, pursuant to the Collateral Documents, a Lien has been granted in
favor of the Administrative Agent (on behalf of the Lenders).
"Collateral Documents" means the Security Agreement, the
Pledge Agreement, the Mortgage Documents and such other documents
executed and delivered in connection with the attachment and perfection
of the Lenders' security interests in the Property of the Credit
Parties, including without limitation, UCC financing statements and
patent and trademark filings with respect to the Intellectual Property
of the Credit Parties.
"Commercial Letter of Credit Fee" has the meaning set forth in
Section 2.3(i)(ii).
"Commitment Fee" has the meaning set forth in Section 2.8(a).
7
"Commitments" means, with respect to each Lender, (a) the
Revolving Commitment of such Lender, (b) the Tranche A Term Loan
Commitment of such Lender, (c) the Tranche B Term Loan Commitment of
such Lender, and (d) the obligation of such Lender to purchase
participations in L/C Obligations and make L/C Advances.
"Construction Loan Documents" shall have the meaning assigned
to such term in the ▇▇▇▇▇▇ Springs Intercreditor Agreement.
"Credit Agreement" has the meaning set forth in the preamble
hereto.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement, the Collateral Documents, the Letter of Credit
Application, and all other related agreements and documents issued or
delivered by any Credit Party hereunder or thereunder or pursuant
hereto or thereto.
"Credit Extension" means (a) a Borrowing or (b) an L/C Credit
Extension.
"Credit Parties" means the Borrower and the Guarantors and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders (including the
L/C Issuer) and the Administrative Agent, whenever arising, under this
Credit Agreement, the Notes, the Collateral Documents or any of the
other Credit Documents to which any Credit Party is a party (including,
but not limited to, any interest accruing after the occurrence of a
Bankruptcy Event with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code)
and (b) all liabilities and obligations owing from such Credit Party
arising under Secured Swap Contracts.
"Debt Issuance" means the issuance of any Indebtedness for
borrowed money by a Credit Party, other than Indebtedness permitted by
Section 8.1.
"Debtor Relief Laws" means the Bankruptcy Code, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or
other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Default Rate" means an interest rate equal to (a) the Base
Rate plus (b) the Applicable Percentage applicable to Base Rate Loans
plus (c) 2% per annum; provided, however, that with respect to a
Eurodollar Rate Loan, the Default Rate shall be an interest rate equal
to the interest rate (including any Applicable Percentage) otherwise
applicable
8
to such Loan plus 2% per annum, in each case to the fullest extent
permitted by applicable Laws.
"Defaulting Lender" means, at any time, any Lender that, (a)
has failed to make a Loan or purchase participations in L/C Obligations
required pursuant to the terms of this Credit Agreement (but only for
so long as such Loan is not made or such participation is not
purchased), (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this
Credit Agreement (but only for so long as such amount has not been
repaid) or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or
similar official.
"Detroit Paper Mill" means the paper mill owned by IPMC
Acquisition, L.L.C. and located in or near Detroit, Michigan.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Subsidiary" means any Subsidiary that is organized
under the Laws of the United States or any political subdivision of the
United States.
"DPM Losses/Gains" has the meaning set forth in the definition
of Net Income.
"EBITDA" means, for any period, with respect to the Parent and
its Subsidiaries on a consolidated basis, the sum of, without
duplication,
(a) Net Income for such period, excluding the effect of
the following:
(i) any extraordinary or other non-recurring
gains or losses (including any gain or loss from the sale of
Property, but excluding (i.e. including in Net Income for
purposes of this clause (a)) any gain or loss from the sale or
closure of the Detroit Paper Mill); and
(ii) any non-cash gains or losses (including any
non-cash gain or loss resulting from the Stock Option Plan,
but excluding (i.e. including in Net Income for purposes of
this clause (a)) any non-cash gain or loss from the sale or
closure of the Detroit Paper Mill), plus
(b) an amount which, in the determination of Net Income
for such period, has been deducted for:
(i) Interest Expense for such period;
(ii) total Federal, state, foreign or other
income or franchise taxes for such period;
(iii) all depreciation and amortization for such
period; and
9
(iv) cash and non-cash charges and/or losses with
respect to the sale of all or part of the Detroit Paper Mill
and/or the closure of the Detroit Paper Mill or any part
thereof (including, without limitation, severance payments
related thereto) in an aggregate amount up to $35,000,000;
provided that such charges shall have been incurred on or
prior to December 31, 2004, all as determined in accordance
with GAAP, minus
(c) cash expenditures related to non-cash charges
previously added back to Net Income in determining EBITDA (excluding
any such non-cash charges incurred in connection with the sale or
closure of the Detroit Paper Mill), plus
(d) the write off of capitalized financing costs existing
as of the Closing Date.
"Eligible Assets" means any assets or any business (or any
substantial part thereof) used or useful in the same or a similar line
of business as the Borrower and its Subsidiaries were engaged in on the
Closing Date (or any reasonable extensions or expansions thereof).
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent and the L/C
Issuer, and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed (it being understood that the Borrower may refuse
to consent to an assignment to a potential competitor of the
Borrower)); provided that notwithstanding the foregoing, "Eligible
Assignee" shall not include the Borrower or any of the Borrower's
Affiliates (other than accounts managed by Oak Hill Advisors, Inc. or
its Affiliates) or Subsidiaries.
"Eligible Reinvestment" means (a) an acquisition (whether or
not constituting a capital expenditure, but not constituting an
Acquisition) of Eligible Assets and (b) a Permitted Acquisition.
"Environmental Laws" means any current or future legal
requirement of any Governmental Authority pertaining to (a) the
protection of health and the environment, (b) the conservation,
management, or use of natural resources and wildlife, (c) the
protection or use of surface water and groundwater or (d) the
management, manufacture, possession, presence, use, generation,
transportation, treatment, storage, disposal, release, threatened
release, abatement, removal, remediation or handling of, or exposure
to, any hazardous or toxic substance or material or (e) pollution
(including any release to land surface water and groundwater) and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid
Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984,
42 USC 6901 et seq., Federal Water Pollution Control Act, as amended by
the Clean Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of
1966, as amended, 42 USC 7401 et seq., Toxic Substances Control Act of
1976, 15
10
USC 2601 et seq., Hazardous Materials Transportation Act, 49 USC App.
1801 et seq., Occupational Safety and Health Act of 1970, as amended,
29 USC 651 et seq., Oil Pollution Act of 1990, 33 USC 2701 et seq.,
Emergency Planning and Community Right-to-Know Act of 1986, 42 USC
11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321
et seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et
seq., any analogous implementing or successor Law, and any amendment,
rule, regulation, order, or directive issued thereunder.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower, any
other Credit Party or any of their respective Subsidiaries directly or
indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure
to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract,
agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"Equity Issuance" means any issuance by a Credit Party to any
Person (other than a Credit Party or, with respect to any issuance by
the Parent, a member of the Sponsor Group) of (a) shares of its Capital
Stock or (b) with respect to the Parent, any shares of its Capital
Stock pursuant to (i) the exercise of options or warrants or (ii) the
conversion of any debt securities to equity (other than, in each case,
stock or options issued to managers, officers or directors pursuant to
stock or option plans or equity plans). The term "Equity Issuance"
shall not include (A) any Asset Disposition or (B) any Capital Stock of
the Parent issued (1) as consideration in connection with a Permitted
Acquisition or (2) where and to the extent the Net Cash Proceeds of
such issuance are used as consideration in connection with a Permitted
Acquisition within six (6) months after such issuance; provided that
75% of such Net Cash Proceeds shall be deposited in an interest bearing
account (such interest to be for the account of the applicable Credit
Party) with the Administrative Agent and shall be released (x) to the
Borrower to consummate such Permitted Acquisition if such Permitted
Acquisition is consummated within such six (6) month period or (y) if
such Net Cash Proceeds are not used to consummate such Permitted
Acquisition, to the Administrative Agent and applied as a mandatory
prepayment in accordance with the terms of Section 2.4(b)(iv) and
Section 2.4(c).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with any Credit Party
within the meaning of Section 4001(a)(14) of ERISA, or is a member of a
group which includes any Credit Party and which is treated as a single
employer under Sections 414(b), (c), (m), or (o) of the Code.
11
"Eurodollar Rate" means for any Interest Period with respect
to any Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by
the Administrative Agent to be the offered rate that appears on the
page of the Telerate screen (or any successor thereto) that displays an
average British Bankers Association Interest Settlement Rate for
deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period, determined as
of approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of such Interest Period, or
(b) if the rate referenced in the preceding clause (a)
does not appear on such page or service or such page or service shall
not be available, the rate per annum equal to the rate determined by
the Administrative Agent to be the offered rate on such other
comparable publicly available page or service that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day
of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a)
and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest at which deposits in
Dollars for delivery on the first day of such Interest Period in same
day funds in the approximate amount of the Eurodollar Rate Loan being
made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of
America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 4:00 p.m. (London
time) two (2) Business Days prior to the first day of such Interest
Period.
"Eurodollar Rate Loan" means a Loan bearing interest based at
a rate determined by reference to the Eurodollar Rate.
"Event of Default" means any of the events or circumstances
specified in Section 9.1.
"Excess Cash Flow" means, with respect to any fiscal year
period of the Parent and its Subsidiaries on a consolidated basis, an
amount equal to, without duplication, (a) EBITDA for such period minus
(b) Capital Expenditures for such period minus (c) the aggregate cash
consideration paid during such period for Permitted Acquisitions minus
(d) Interest Expense for such period minus (e) Cash Tax Payments made
during such period minus (f) Scheduled Funded Debt Payments for such
period minus (g) voluntary prepayments made with respect to the Term
Loans or (to the extent accompanied by a permanent reduction in the
Revolving Commitment) the Revolving Loans (other than a prepayment
required under Section 2.4(b)) made during such period minus (h) the
amount of any dividends paid in cash by the Parent to the extent
permitted by Section 8.8 minus (i) to the extent added back to Net
Income in calculating EBITDA for such period
12
pursuant to clause (b)(iv) of the definition of EBITDA, cash and
non-cash charges and/or losses with respect to the sale of all or any
part of the Detroit Paper Mill or closure of the Detroit Paper Mill or
any part thereof (including, without limitation, severance payments
related thereto) minus (j) losses from discontinued operations and,
prior to the date on which DPM Losses/Gains consisting of operating
losses are treated as losses from discontinued operations, such DPM
Losses/Gains plus (k) gains from discontinued operations and, prior to
the date on which DPM Losses/Gains consisting of operating gains are
treated as gains from discontinued operations, such DPM Losses/Gains.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as
amended, modified, succeeded or replaced from time to time.
"Excluded Asset Disposition" means (a) the sale of inventory
in the ordinary course of business, (b) the sale or disposition of
machinery and equipment no longer used or useful in the conduct of such
Person's business, (c) any Asset Disposition by one Credit Party to
another Credit Party other than the Parent if (i) the Credit Parties
shall cause to be executed and delivered such documents, instruments
and certificates as the Administrative Agent may request so as to cause
the Credit Parties to be in compliance with the terms of Section 7.9
after giving effect to such Asset Disposition and (ii) after giving
effect to such Asset Disposition, no Default or Event of Default
exists, (d) the lease or sublease of real property interests in the
ordinary course of business, (e) the license of Intellectual Property
in the ordinary course of business or by one Credit Party to another
Credit Party, (f) any casualty or condemnation event provided that the
Borrower shall comply with Section 7.7, (g) the transfer of Property
constituting a Permitted Investment or permitted pursuant to Section
8.4, (h) any Equity Issuance, (i) any Restricted Payment and (j) the
sale or other disposition of all or part of the Detroit Paper Mill or
any assets comprising the Detroit Paper Mill to the extent that the Net
Cash Proceeds of such sale or other disposition do not exceed
$1,500,000.
"Exempt Affiliate Transactions" means (a) advances of working
capital to any Credit Party other than the Parent, (b) transfers of
cash and assets to any Credit Party other than the Parent (including
without limitation transfers of the types referred to in clause (c) of
the definition of "Excluded Asset Dispositions" set forth in this
Section 1.1), (c) transactions permitted by Section 8.1, Section 8.4,
Section 8.7 or Section 8.8, (d) normal compensation and reimbursement
of expenses of officers and directors and (e) the license of
Intellectual Property by one Credit Party to another Credit Party.
"Existing Credit Agreement" has the meaning set forth in the
recitals hereto.
"Existing Letters of Credit" means the Letters of Credit set
forth on Schedule 1.1(c) hereto.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve
13
System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average
rate charged to Bank of America on such day on such transactions as
determined by the Administrative Agent.
"Fee Letter" means that certain letter agreement among the
Borrower, BAS and the Bank of America dated as of July 23, 2003, as
amended, restated or otherwise modified from time to time.
"Fixed Charge Coverage Ratio" means, for the Parent and its
Subsidiaries as of the last day of any fiscal quarter for the twelve
(12) month period then ended, the ratio of (a) EBITDA minus Capital
Expenditures (except Capital Expenditures made in connection with
Eligible Reinvestments and repairs and replacements pursuant to Section
7.7 to the extent financed from insurance and/or condemnation proceeds
or proceeds from any disposition of Property) minus Cash Tax Payments,
to (b) cash Interest Expense plus Scheduled Funded Debt Payments.
"Foreign Lender" means (a) each Lender (or the Administrative
Agent) that is a foreign person as defined in Treasury Regulations
Section 1.1441-1(c)(2) or (b) each Lender (or the Administrative Agent)
that is a wholly-owned domestic entity that is disregarded for United
States federal tax purposes under Treasury Regulations Section
301.7701-2(c)(2) as an entity separate from its owner and whose single
owner is a foreign person within the meaning of Treasury Regulations
Section 1.1441-1(c)(2).
"Foreign Subsidiary" means any Subsidiary that is not a
Domestic Subsidiary.
"Fully Satisfied" means, with respect to the Credit Party
Obligations as of any date, that, as of such date, (a) all principal of
and interest accrued to such date which constitute Credit Party
Obligations shall have been irrevocably paid in full in immediately
available funds, (b) all fees, expenses and other amounts then due and
payable which constitute Credit Party Obligations shall have been
irrevocably paid in immediately available funds, (c) all outstanding
Letters of Credit shall have been (i) terminated, (ii) fully and
irrevocably Cash Collateralized or (iii) secured by one or more letters
of credit on terms and conditions, and with one or more financial
institutions, reasonably satisfactory to the L/C Issuer and (d) the
Commitments shall have expired or been terminated in full.
"Fund" means any Person (other than a natural person) that is
(or will be) engaged in making, purchasing, holding or otherwise
investing in commercial loans and similar extensions of credit in the
ordinary course of its business.
"Funded Debt" of any Person means, without duplication, (a)
all Indebtedness of such Person for borrowed money, excluding
intercompany items, (b) all purchase money
14
Indebtedness of such Person, (c) the principal portion of all
obligations of such Person under (i) Capital Leases and (ii) any
Synthetic Lease, (d) all obligations of such Person, contingent or
otherwise, relative to the face amount of all letters of credit (other
than letters of credit supporting trade payables in the ordinary course
of business), whether or not drawn, and banker's acceptances issued for
the account of such Person (it being understood that, to the extent an
undrawn letter of credit supports another obligation consisting of
Funded Debt, in calculating aggregated Funded Debt only such other
obligation shall be included), (e) all Guaranty Obligations of such
Person with respect to Funded Debt of another Person, (f) all Funded
Debt of another Person secured by a Lien on any Property of such Person
but only to the extent of the value of such Property, whether or not
such Funded Debt has been assumed and (g) all Funded Debt of any
partnership or unincorporated joint venture to the extent such Person
is legally obligated or has a reasonable expectation of being liable
with respect thereto, net of the fair market value of any Property of
such partnership or joint venture.
"GAAP" means generally accepted accounting principles in the
United States in effect from time to time unless otherwise provided in
Section 1.3.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any agency, authority,
instrumentality, regulatory body, court, administrative tribunal,
central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of
or pertaining to government.
"Guarantor" means each of the Persons identified as a
"Guarantor" on the signature pages hereto and each Person which may
hereafter execute a Joinder Agreement pursuant to Section 7.12.
"Guaranty" means the Guaranty made by the Guarantors in favor
of the Administrative Agent and the Lenders pursuant to Section 4
hereof.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or
collection and other than customary indemnification obligations under
leases and other contracts) guaranteeing any Indebtedness, leases,
dividends or other obligations of any other Person in any manner,
whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such
Indebtedness or other obligation or any Property constituting security
therefor, (b) to advance or provide funds or other support for the
payment or purchase of such Indebtedness or obligation or to maintain
working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, maintenance agreements,
comfort letters, take or pay arrangements, put agreements or similar
agreements or arrangements) for the benefit of the holder of
Indebtedness of such other Person, (c) to lease or purchase Property,
securities or services primarily for the purpose of assuring the owner
of such Indebtedness or obligation of the payment or performance of
such Indebtedness or obligations or (d) to otherwise assure or hold
harmless the owner of such Indebtedness or obligation against loss
15
in respect thereof. The amount of any Guaranty Obligation hereunder
shall (subject to any limitations set forth therein) be deemed to be an
amount equal to the lesser of (i) the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of
which such Guaranty Obligation is made or (ii) the maximum amount for
which the guarantor or other applicable Person may be liable pursuant
to the terms of the instrument governing such Guaranty Obligation or,
if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guarantor or other
applicable Person in good faith.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or
other pollutants, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls,
radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.
"Honor Date" has the meaning set forth in Section 2.3(c).
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person under conditional sale
or other title retention agreements relating to Property purchased by
such Person to the extent of the value of such Property (other than
customary reservations or retentions of title under agreements with
suppliers entered into in the ordinary course of business), (d) all
obligations, including without limitation intercompany items, of such
Person issued or assumed as the deferred purchase price of Property or
services purchased by such Person which would appear as liabilities on
a balance sheet of such Person (other than trade debt incurred in the
ordinary course of business and due within six (6) months of the
incurrence thereof), (e) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, Property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (f)
all Guaranty Obligations of such Person with respect to Indebtedness of
another Person, (g) the principal portion of all obligations of such
Person under (i) Capital Leases and (ii) any Synthetic Lease, (h) all
net obligations of such Person in respect of hedging agreements,
foreign currency exchange obligations, and commodity futures
agreements, (i) the maximum face amount of all performance and standby
letters of credit issued or bankers' acceptances facilities created for
the account of such Person and, without duplication, all drafts drawn
thereunder (to the extent unreimbursed), (j) all preferred stock issued
by such Person and required by the terms thereof to be redeemed, or for
which mandatory sinking fund payments are due by a fixed date, in each
case prior to the date that this is six (6) months after final Maturity
Date, (k) the aggregate amount of uncollected accounts receivable of
such Person subject at such time to a sale of receivables (or similar
transaction) regardless of whether such transaction is effected without
recourse to such Person or in a manner that would not be reflected on
the balance sheet of such Person in accordance with GAAP and (l) all
preferred Capital Stock issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise)
subject to mandatory sinking fund
16
payments, redemption or other acceleration, in each case prior to the
date that is six (6) months after the final Maturity Date. The
Indebtedness of any Person shall include the Indebtedness of any
partnership or unincorporated joint venture in which such Person is
legally obligated net of any tangible Property of such partnership or
joint venture.
"Indemnified Liabilities" has the meaning set forth in Section
11.5.
"Indemnitees" has the meaning set forth in Section 11.5.
"Intellectual Property" has the meaning set forth in Section
6.19.
"Intercreditor Agreement" means any Intercreditor Agreement
entered into by the Administrative Agent, on behalf of the Lenders,
with the holders (or representative thereof) of any Subordinated
Indebtedness, as amended, modified, restated or supplemented from time
to time.
"Interest Expense" means, for any period, with respect to the
Parent and its Subsidiaries on a consolidated basis, all cash interest
expense (paid or accrued to be paid), including the interest component
of payments made under Capital Leases, as determined in accordance with
GAAP.
"Interest Payment Date" means, (a) as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to such
Loan and the applicable Maturity Date; provided, however, that if any
Interest Period for a Eurodollar Rate Loan exceeds three (3) months,
the respective dates that fall every three (3) months after the
beginning of such Interest Period shall also be Interest Payment Dates;
and (b) as to any Base Rate Loan, the last Business Day of each March,
June, September and December and the applicable Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the
period commencing on the date such Eurodollar Rate Loan is disbursed or
converted to or continued as a Eurodollar Rate Loan and ending on the
date one (1) , two (2) , three (3) or six (6) months thereafter, as
selected by the Borrower in its Loan Notice; provided that:
(i) any Interest Period that would otherwise end
on a day that is not a Business Day shall be extended to the
next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii) 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 the calendar month at the end of such Interest
Period;
(iii) no Interest Period shall extend beyond the
applicable Maturity Date; and
17
(iv) with regard to Term Loans, no Interest
Period shall extend beyond any Principal Amortization Payment
Date for such Term Loan unless the portion of applicable Term
Loans comprised of Base Rate Loans, together with the portion
of applicable Term Loans comprised of Eurodollar Rate Loans
with Interest Periods expiring prior to such Principal
Amortization Payment Date is greater than or equal to the
Principal Amortization Payment due for such Term Loan on such
Principal Amortization Payment Date.
"Investment" in any Person means (a) the Acquisition (whether
for cash, Property, services, assumption of Indebtedness, securities or
otherwise) of such Person or any other acquisition of shares of Capital
Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of such other Person, (b) any
deposit with, or advance, loan or other extension of credit to, such
Person (other than deposits made in connection with the purchase of
equipment or other Property in the ordinary course of business and
other than prepaid expenses in the ordinary course of business), or (c)
any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligation (including any
support for a letter of credit (including, without limitation, a Letter
of Credit) issued on behalf of such Person) incurred for the benefit of
such Person.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit F.
"KDOCH" means the Kansas Department of Commerce & Housing.
"Laws" means, collectively, all international, foreign,
Federal, state and local statutes, treaties, rules, regulations,
ordinances and codes, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable
administrative orders, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or
not having the force of Law.
"L/C Advance" means, with respect to each Revolving Lender,
such Revolving Lender's funding of its participation in any L/C
Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a
drawing under any Letter of Credit which has not been reimbursed on the
date when made or refinanced as a Borrowing of Revolving Loans.
"L/C Credit Extension" means, with respect to any Letter of
Credit, the issuance thereof or extension of the expiry date thereof,
or the renewal or increase of the amount thereof.
18
"L/C Documents" means the Letters of Credit, the Letter of
Credit Applications and any other documents or agreements executed,
issued or delivered in connection therewith.
"L/C Issuer" means Bank of America in its capacity as issuer
of Letters of Credit hereunder and any other Revolving Lender in its
capacity as issuer of Letters of Credit hereunder who has been selected
by the Borrower and has agreed to be an L/C Issuer hereunder in
allowance with the terms hereof, or any successor issuer of Letters of
Credit hereunder.
"L/C Obligations" means, as at any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings.
"Leasehold Mortgage" has the meaning set forth in Section
5.1(e).
"Leasehold Mortgage Properties" has the meaning set forth in
Section 5.1(e).
"Lender" means each Person identified on Schedule 2.1 (so long
as such Person remains a party hereto in such capacity), and any
Eligible Assignee which may become a Lender by way of assignment in
accordance with the terms hereof, together with their successors and
permitted assigns, individually or collectively, as appropriate.
"Lender Affiliate" means, with respect to any Lender, any
other Person directly or indirectly controlling, controlled by or under
direct or indirect common control with such Lender. A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power (a) to vote 25% or more of the securities having
ordinary voting power for the election of directors, managing general
partners, members or the equivalent of such Person or (b) to direct or
cause direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Lending Office" means, as to any Lender, the office or
offices of such Lender described as such in such Lender's
Administrative Questionnaire, or such other office or offices as a
Lender may from time to time notify the Borrower and the Administrative
Agent.
"Letter of Credit" means any letter of credit issued
hereunder, including any Existing Letter of Credit. A Letter of Credit
may be a standby letter of credit or a commercial letter of credit.
"Letter of Credit Application" means an application and
agreement for the issuance or amendment of a Letter of Credit in the
form from time to time in use by the L/C Issuer.
19
"Letter of Credit Expiration Date" means the day that is seven
(7) days prior to the applicable Maturity Date then in effect (or, if
such day is not a Business Day, the next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to
$5,000,000. The Letter of Credit Sublimit is part of, and not in
addition to, the Aggregate Revolving Commitments.
"Leverage Ratio" means, as of the last day of any fiscal
quarter, the ratio of (a) total Funded Debt of the Parent and its
Subsidiaries on a consolidated basis as of such date, to (b) EBITDA of
the Parent and its Subsidiaries on a consolidated basis for the twelve
(12) month period then ended.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind, including,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, and any financing
lease having the same economic effect as any of the foregoing.
"Loan" or "Loans" means the Revolving Loans and the Term Loans
(or a portion of any Revolving Loan or Term Loan), individually or
collectively, as appropriate.
"Loan Notice" means a notice of (a) a Borrowing, (b) a
conversion of Loans from one Type to the other, or (c) a continuation
of Eurodollar Rate Loans, pursuant to Section 2.2(a), which, if in
writing, shall be substantially in the form of Exhibit A.
"Material Adverse Effect" means a material adverse effect,
after taking into account applicable insurance, if any, on (a) the
operations, financial condition, business or prospects of the Credit
Parties taken as a whole, (b) the ability of a Credit Party to perform
in any material respect its obligations under this Credit Agreement or
any of the other Credit Documents to which it is a party, or (c) the
validity or enforceability of this Credit Agreement, any of the other
Credit Documents, or the rights and remedies of the Lenders hereunder
or thereunder taken as a whole.
"Maturity Date" means (a) as to the Revolving Loans, Letters
of Credit (and the related L/C Obligations) and Tranche A Term Loans,
September 29, 2008, and (b) as to the Tranche B Term Loans, September
29, 2009.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgage Documents" means the Mortgages and the Leasehold
Mortgages.
"Mortgage Policies" has the meaning set forth in Section
5.1(e).
"Mortgages" has the meaning set forth in Section 5.1(e).
20
"Mortgage Properties" has the meaning set forth in Section
5.1(e).
"Multiemployer Plan" means a Plan covered by Title IV of ERISA
which is a multiemployer plan as defined in Section 3(37) or 4001(a)(3)
of ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of
ERISA, other than a Multiemployer Plan, which any Credit Party or any
ERISA Affiliate and at least one employer other than a Credit Party or
any ERISA Affiliate are contributing sponsors.
"Net Cash Proceeds" means the aggregate cash proceeds received
from an Asset Disposition, an Equity Issuance or a Debt Issuance net of
(a) reasonable transaction costs payable to third parties, (b) taxes
paid or a good faith estimate of the taxes payable with respect to such
proceeds (including, without duplication, withholding taxes and Cash
Tax Payments) and (c) with respect to any Asset Disposition, (i) the
outstanding Indebtedness (including any premium, penalty or make-whole
amounts related thereto, but excluding the Loans) required to be repaid
as a result of such Asset Disposition and (ii) appropriate amounts to
be provided by such Credit Party as a reserve in accordance with GAAP
against any liabilities associated with the assets sold or disposed of
in such Asset Disposition and retained by such Credit Party after such
Asset Disposition, including (A) pension and other post-employment
benefit liabilities, (B) liabilities related to environmental matters
and (C) liabilities under any indemnification obligation associated
with the assets sold or disposed of in such Asset Disposition; provided
that "Net Cash Proceeds" shall include an amount equal to any reserves
previously taken against any liabilities associated with any such Asset
Disposition immediately upon those reserves being determined to be in
excess of such liabilities.
"Net Income" means, for any period, the net income after taxes
from continuing operations for such period of the Parent and its
Subsidiaries on a consolidated basis and, prior to the date on which
operating losses and gains related to the Detroit Paper Mill ("DPM
Losses/Gains") are treated as losses and gains, respectively, from
discontinued operations, Net Income shall exclude the effect of such
DPM Losses/Gains, as determined in accordance with GAAP.
"Net Worth" means, as of the last day of any fiscal quarter,
shareholders' equity or net worth of the Parent and its Subsidiaries on
a consolidated basis as of such date (excluding the effect of (a) any
cash and non-cash charges and/or losses that are added back to Net
Income for all applicable periods in determining EBITDA in accordance
with the terms of clause (b)(iv) of the definition of EBITDA, (b)
losses and gains from discontinued operations related to the Detroit
Paper Mill and (c) prior to the date on which DPM Losses/Gains are
treated as losses or gains, as applicable, from discontinued
operations, the DPM Losses/Gains), as determined in accordance with
GAAP.
"Note" or "Notes" means the Revolving Notes and the Term
Notes, individually or collectively, as appropriate.
21
"Outstanding Amount" means (a) with respect to Revolving Loans
on any date, the aggregate outstanding principal amount thereof after
giving effect to any borrowings and prepayments or repayments of
Revolving Loans, as the case may be, occurring on such date; and (b)
with respect to any L/C Obligations on any date, the outstanding amount
of such L/C Obligations on such date after giving effect to any L/C
Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a
result of any reimbursements of outstanding unpaid drawings under any
Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.
"Parent" has the meaning set forth in the introductory
paragraph hereto and shall include any successors or permitted assigns
thereof.
"Participant" has the meaning set forth in Section 11.7(d).
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Permitted Acquisition" means any Acquisition by the Borrower
or any of its Subsidiaries; provided that (a) the Property acquired (or
the Property of the Person acquired) in such Acquisition is used or
useful in the same or a similar line of business as the Borrower and
its Subsidiaries were engaged in on the Closing Date (or any reasonable
extensions or expansions thereof), (b) the Administrative Agent shall
have received all items in respect of the Capital Stock or Property
acquired in such Acquisition (and/or the seller thereof) required to be
delivered by the terms of Section 7.9 and/or Section 7.12, (c) in the
case of an Acquisition of the Capital Stock of another Person, the
board of directors (or other comparable governing body) or
stockholders, as appropriate, of such Person shall have approved such
Acquisition, (d) the Borrower shall have delivered to the
Administrative Agent a Pro Forma Compliance Certificate demonstrating
that, upon giving effect to such Acquisition on a Pro Forma Basis, the
Credit Parties shall be in compliance with all of the covenants set
forth in Section 7.2, (e) the representations and warranties made by
the Credit Parties in any Credit Document shall be true and correct in
all material respects at and as if made as of the date of such
Acquisition (after giving effect thereto) except to the extent such
representations and warranties expressly relate to an earlier date, (f)
if such transaction involves the purchase of an interest in a
partnership between the Borrower (or a Subsidiary of the Borrower) as a
general partner and entities unaffiliated with the Borrower or such
Subsidiary as the other partners, such transaction shall be effected by
having such equity interest acquired by a corporate holding company
directly or indirectly wholly-owned by the Borrower newly formed for
the sole purpose of effecting such transaction, (g) after giving effect
to such Acquisition, there shall be at least $10,000,000 of
availability existing under the Aggregate Revolving Commitments, (h)
with respect to any such Acquisition, (i) the aggregate cash
consideration for such Acquisition (excluding cash proceeds from Equity
Issuances made and Subordinated Indebtedness incurred in connection
with such Acquisition) shall not exceed $20,000,000 and (ii) the total
consideration (including cash and non-cash consideration and any
22
assumption of liabilities (other than current working capital
liabilities not constituting Indebtedness)) for such Acquisition shall
not exceed $25,000,000, and (i) with respect to all such Acquisitions
during the term of this Credit Agreement, (i) the aggregate cash
consideration for such Acquisitions (excluding cash proceeds from
Equity Issuances made and Subordinated Indebtedness incurred in
connection with such Acquisitions) shall not exceed $30,000,000 and
(ii) the total consideration (including cash and non-cash consideration
and any assumption of liabilities (other than current working capital
liabilities not constituting Indebtedness)) for such Acquisitions shall
not exceed $50,000,000.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable or notes receivable
created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms and
Investments received in satisfaction or partial satisfaction thereof
from financially troubled account debtors to the extent reasonably
necessary or desirable in order to prevent or limit loss, (c)
inventory, raw materials and general intangibles acquired in the
ordinary course of business, (d) Investments by a Credit Party in
another Credit Party other than the Parent, (e) to the extent permitted
by Law, loans to directors, officers or employees (i) in the ordinary
course of business for reasonable business expenses, not to exceed
$1,000,000 in aggregate principal amount at any one time outstanding
and (ii) in connection with their acquisition of Capital Stock of the
Parent, not to exceed $1,000,000 in aggregate principal amount at any
one time outstanding; (f) Investments in Capital Expenditures, (g)
Permitted Acquisitions, (h) Investments existing as of the Closing Date
and set forth on Schedule 1.1(a), (i) any deposit arrangement permitted
by Section 8.2, (j) other Investments not to exceed $5,000,000 in the
aggregate (determined on an incurrence basis and such amount shall be
increased by the amount of any cash received from such Investments) and
(k) guaranties of any obligation of another Credit Party (other than
the Parent) to the extent the incurrence of such primary obligation is
not prohibited by the terms of this Credit Agreement.
"Permitted Liens" means (a) Liens securing Credit Party
Obligations, (b) Liens for taxes, assessments or other governmental
charges or levies not yet due or such Liens which are being contested
in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to
which the Property subject to any such Lien is not yet subject to
foreclosure, sale, collection, levy or loss on account thereof), (c)
Liens in respect of Property imposed by Law arising in the ordinary
course of business such as materialmen's, mechanics', warehousemen's,
carrier's, landlords' and other nonconsensual statutory Liens which are
not yet due and payable or which are being contested in good faith by
appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the
Property subject to any such Lien is not yet subject to foreclosure,
sale or loss on account thereof), (d) pledges or deposits made in the
ordinary course of business to secure payment of worker's compensation
insurance, unemployment insurance, pensions or social security
programs, (e) Liens arising from good faith deposits or other Liens
granted in the ordinary course of business in connection with or to
secure performance of tenders, bids, leases, government contracts,
performance and return-of-money bonds and other similar
23
obligations incurred in the ordinary course of business (other than
obligations in respect of the payment of borrowed money), (f) Liens
arising from good faith deposits or other Liens granted in the ordinary
course of business in connection with or to secure performance of
statutory obligations and surety and appeal bonds, (g) easements,
rights-of-way, restrictions (including zoning restrictions),
restrictive covenants, matters of plat, minor defects or irregularities
in title and other similar charges or encumbrances not, in any material
respect, impairing the use of the encumbered Property for its intended
purposes, (h) Liens securing judgments that would not constitute an
Event of Default, (i) Liens on Property of any Person securing purchase
money Indebtedness (including Capital Leases and Synthetic Leases) of
such Person to the extent permitted under Section 8.1(d); provided that
any such Lien attaches to such Property concurrently with or within
ninety (90) days after the acquisition, construction or improvement
thereof and any such Lien does not at any time encumber Property other
than the Property financed by such purchase money Indebtedness, (j)
Liens arising by virtue of any statutory or common law provision
relating to banker's liens, rights of setoff or similar rights as to
deposit accounts or other funds maintained with a creditor depository
institution, (k) Liens existing on the date hereof and identified on
Schedule 1.1(b); provided that no such Lien shall extend to any
Property other than the Property subject thereto on the Closing Date,
(l) any Lien granted in connection with any amendment, restatement,
supplement, refinancing, renewal, replacement, extension or refunding
(or successive amendments, restatements, refinancings, supplements,
extensions or refundings) in whole or in part of any Indebtedness
permitted by Section 8.1(b) other than the ▇▇▇▇▇▇ Springs Debt;
provided that (i) the principal amount of Indebtedness secured by any
such Lien does not exceed the principal amount of such Indebtedness
outstanding immediately prior to such amendment, restatement,
refinancing, supplement, renewal, replacement, extension or refunding
and (ii) no such Lien shall extend to any Property other than the
Property subject thereto on the Closing Date or Property of equivalent
value, (m) licenses, leases or subleases granted to others (including
those constituting Excluded Asset Dispositions) not interfering in any
material respect with the business of any Credit Party, (n) any
interest or title of a licensor, lessor or sublessor under, leases or
licenses permitted by this Credit Agreement, (o) Liens deemed to exist
in connection with Investments in repurchase agreements permitted under
Section 8.7, (p) Liens on any assets acquired in connection with a
Permitted Acquisition, provided that such Liens existed at the time of
consummation of such Permitted Acquisition, were not created in
contemplation thereof and are not spread to cover other assets, and (q)
other Liens not otherwise permitted hereunder which secure or relate to
obligations not exceeding $5,000,000 in the aggregate at any one time
outstanding.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Credit Party or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" within the meaning of Section 3(5) of ERISA.
24
"Pledge Agreement" means the Amended and Restated Pledge
Agreement dated as of the Closing Date, substantially in the form of
Exhibit B, to be executed in favor of the Agent by each of the Credit
Parties, as amended, modified, restated or supplemented from time to
time.
"Principal Amortization Payment" means a principal payment on
the Term Loans as set forth in Sections 2.6(b) and (c).
"Principal Amortization Payment Date" means the date a
Principal Amortization Payment is due.
"Pro Forma Basis" means, for purposes of calculating
(utilizing the principles set forth in the second paragraph of Section
1.3) compliance with each of the financial covenants set forth in
Section 7.2 in respect of a proposed Acquisition, that such Acquisition
shall be deemed to have occurred as of the first day of the four
fiscal-quarter period ending as of the most recent fiscal quarter end
preceding the date of such Acquisition with respect to which the
Administrative Agent has received the financial statements and
officer's certificate required to be delivered pursuant to Section
7.1(a) or (b), as applicable, and Section 7.1(c). For purposes of any
such calculation of the financial covenants set forth in Section 7.2 in
respect of a proposed Acquisition:
(i) any Indebtedness incurred by any Credit
Party in connection with such Acquisition (A) shall be deemed
to have been incurred as of the first day of the applicable
period and (B) if such Indebtedness has a floating or formula
rate, shall have an implied rate of interest for the
applicable period for purposes of this definition determined
by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of
determination; and
(ii) income statement items (whether positive or
negative) attributable to the Capital Stock or Property
acquired in such Acquisition shall be included to the extent
relating to the relevant period.
"Pro Forma Compliance Certificate" means a certificate of the
chief financial officer or treasurer of the Borrower delivered to the
Administrative Agent in connection with any proposed Acquisition and
containing reasonably detailed calculations, upon giving effect to such
Acquisition on a Pro Forma Basis, of each of the financial covenants
set forth in Section 7.2 as of the most recent fiscal quarter end
preceding the date of such Acquisition with respect to which the
Administrative Agent shall have received the financial statements and
officer's certificate required to be delivered pursuant to Section
7.1(a) or (b), as applicable, and Section 7.1(c).
"Pro Rata Share" means as to each Lender (a) with respect to
such Lender's Revolving Commitment at any time, a fraction (expressed
as a percentage, carried out to the ninth decimal place), the numerator
of which is the amount of the Revolving Commitment of such Lender at
such time and the denominator of which is the amount of the Aggregate
Revolving Commitments at such time; provided that if the commitment of
25
each Lender to make Revolving Loans and the obligation of the L/C
Issuer to make L/C Credit Extensions have been terminated pursuant to
Section 9.2, then the Pro Rata Share of such Lender shall be determined
based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof, (b) with respect to such Lender's
outstanding Tranche A Term Loan at any time, a fraction (expressed as a
percentage, carried out to the ninth decimal place), the numerator of
which is the principal amount of the Tranche A Term Loan held by such
Lender at such time and the denominator of which is the aggregate
principal amount of the Tranche A Term Loan at such time and (c) with
respect to such Lender's outstanding Tranche B Term Loan at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal
place), the numerator of which is the principal amount of the Tranche B
Term Loan held by such Lender at such time and the denominator of which
is the aggregate principal amount of the Tranche B Term Loan at such
time. The initial Pro Rata Share of each Lender as of the Closing Date
is set forth opposite the name of such Lender on Schedule 2.1.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Real Properties" means the Mortgage Properties, the Leasehold
Mortgage Properties and such other real properties as the Credit
Parties may own or lease (as lessee or sublessee) from third parties
from time to time.
"Register" has the meaning set forth in Section 11.7(c).
"Regulation U, T or X" means Regulation U, T or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Reportable Event" means a "reportable event" as defined in
Section 4043 of ERISA with respect to which the notice requirements to
the PBGC have not been waived.
"Request for Credit Extension" means (a) with respect to a
Borrowing, conversion or continuation of Loans, a Loan Notice and (b)
with respect to an L/C Credit Extension, a Letter of Credit
Application.
"Required Lenders" means, at any time, Lenders holding in the
aggregate more than 50% of (a) the unfunded Commitments (and
participations therein) and the outstanding Loans, L/C Obligations and
participations therein or (b) if the Commitments have been terminated,
the outstanding Loans, L/C Obligations and participations therein. The
unfunded Commitments of, and the outstanding Loans held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.
"Required Revolving Lenders" means, at any time, Revolving
Lenders holding in the aggregate more than 50% of (a) the unfunded
Revolving Commitments (and
26
participations therein) and the outstanding Revolving Loans, L/C
Obligations and participations therein or (b) if the Revolving
Commitments have been terminated, the outstanding Revolving Loans, L/C
Obligations and participations therein. The unfunded Revolving
Commitments of, and the outstanding Revolving Loans held or deemed held
by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Revolving Lenders.
"Responsible Officer" means the chief executive officer,
president or chief financial officer of a Credit Party. Any document
delivered hereunder that is signed by a Responsible Officer of a Credit
Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership, limited liability company and/or
other action on the part of such Credit Party and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such
Credit Party.
"Restricted Payment" means (i) any dividend or other similar
payment or distribution, direct or indirect, on account of any shares
of any Capital Stock, now or hereafter outstanding, in any Credit
Party, or to the holders, in their capacity as such, of any shares of
any Capital Stock, now or hereafter outstanding, in any Credit Party
(other than dividends or distributions payable in the same class of
Capital Stock in the applicable Person or dividends or distributions
payable to any Credit Party other than the Parent (directly or
indirectly through Subsidiaries)), (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any Capital Stock, now or
hereafter outstanding, in any Credit Party, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any Capital Stock, now or
hereafter outstanding, in any Credit Party and (iv) any payment or
prepayment of any obligations (including without limitation principal,
interest, premiums and fees) evidenced by, arising under or relating to
any Subordinated Indebtedness.
"Revolving Lender" means any Lender holding a Revolving
Commitment, as identified on Schedule 2.1, greater than zero, together
with permitted successors and assigns.
"Revolving Commitment" means, with respect to each Revolving
Lender, the commitment of such Lender to make its portion of the
Revolving Loans in a principal amount equal to such Lender's "Revolving
Commitment" as set forth opposite the name of such Lender on Schedule
2.1 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable, in each case as increased or
decreased from time to time by any assignment with respect thereto
pursuant to Section 11.7(b).
"Revolving Loans" means the Revolving Loans made to the
Borrower pursuant to Section 2.1(a).
"Revolving Note" has the meaning set forth in Section 2.10(a).
27
"S&P" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor or assignee of the
business of such division in the business of rating securities.
"Scheduled Funded Debt Payments" means, as of the end of each
fiscal quarter of the Borrower, for the Credit Parties and their
Subsidiaries on a consolidated basis, the sum of all scheduled payments
of principal on Funded Debt for the applicable period ending on such
date (including the principal component of payments due on Capital
Leases and Synthetic Leases during the applicable period ending on such
date); it being understood that Scheduled Funded Debt Payments shall
not include voluntary prepayments or the mandatory prepayments of the
Loans required pursuant to Section 2.4(b).
"Secured Swap Contract" means any Swap Contract between any
Credit Party and any Lender or Affiliate of a Lender.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as amended,
modified, succeeded or replaced from time to time.
"Security Agreement" means the Amended and Restated Security
Agreement dated as of the Closing Date, substantially in the form of
Exhibit C, to be executed in favor of the Agent by each of the Credit
Parties, as amended, modified, restated or supplemented from time to
time.
"Senior Leverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of (a) total Funded Debt (other than
Subordinated Indebtedness) of the Parent and its Subsidiaries on a
consolidated basis as of such date, to (b) EBITDA of the Parent and its
Subsidiaries on a consolidated basis for the twelve (12) month period
then ended.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is to engage, (d) the fair value of the assets of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (e) the present
fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is
28
intended that such liabilities will be computed at the amount which, in
light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Sponsor Group" means any of FW Strategic Partners, L.P. (or
its designee), Keystone, Inc. (or its designee), Packaging Investors,
LLC, DCBS Investors, L.L.C. and members of the executive management and
directors of any Credit Party.
"Standby Letter of Credit Fee" has the meaning set forth in
Section 2.3(i)(i).
"Stock Option Plan" means any stock option plan, phantom stock
option plan or similar plan of the Borrower or the Parent, the terms of
which have been approved by the Administrative Agent.
"Subordinated Debt Payment" means any scheduled payment or
repayment of principal of, premium or interest on, or on account of any
other obligations arising under, relating to or in respect of, any
Subordinated Indebtedness.
"Subordinated Indebtedness" means any Indebtedness incurred by
the Parent, on terms and conditions reasonably satisfactory to the
Administrative Agent, that is specifically subordinated in right of
payment to the prior payment of the Credit Party Obligations (pursuant
to an Intercreditor Agreement, if required by the Administrative Agent,
in form and substance reasonably satisfactory to the Administrative
Agent) on terms and conditions reasonably satisfactory to the Required
Lenders; provided that the subordination terms of any such Indebtedness
shall only be subject to the approval of the Administrative Agent (and
not the Required Lenders) to the extent such Indebtedness (and the
terms thereof) (a) does not exceed $10,000,000, (b) matures more than
six (6) months after the final Maturity Date, (c) limits cash interest
payments with respect to such Indebtedness to 6%, (d) does not require
any principal payment or prepayment prior to six (6) months after the
final Maturity Date and (e) prohibits cash payments of such
Indebtedness if a Default or an Event of Default exists either before
or after giving effect to any such payment. The term "Subordinated
Indebtedness" shall not include any of the ▇▇▇▇▇▇ Springs Debt.
"Subsidiary" of a Person means a corporation, partnership,
limited liability company or other business entity of which a majority
of the shares of Capital Stock having ordinary voting power for the
election of directors or other governing body (other than Capital Stock
having such power only by reason of the happening of a contingency) are
at the time owned, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified,
all references herein to a "Subsidiary" or to "Subsidiaries" shall
refer to a Subsidiary or Subsidiaries of the Borrower.
"Swap Contract" means (a) any and all rate swap transactions,
basis swaps, credit derivative transactions, forward rate transactions,
commodity swaps, commodity options, forward commodity contracts, equity
or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward
29
bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any
options to enter into any of the foregoing), whether or not any such
transaction is governed by or subject to any master agreement, and (b)
any and all transactions of any kind, and the related confirmations,
which are subject to the terms and conditions of, or governed by, any
form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"),
including any such obligations or liabilities under any Master
Agreement.
"Synthetic Lease" means any synthetic lease, tax retention
lease, off-balance sheet loan or similar off-balance sheet financing
product of such Person where such transaction is considered borrowed
money indebtedness for tax purposes but is not classified as a Capital
Lease in accordance with GAAP.
"Term Loans" means, collectively, the Tranche A Term Loans and
the Tranche B Term Loans.
"Term Note" means any of the Tranche A Term Notes and the
Tranche B Term Notes and "Term Notes" means collectively the Tranche A
Term Notes and the Tranche B Term Notes.
"Termination Event" means (a) with respect to any Single
Employer Plan, the occurrence of a Reportable Event or the substantial
cessation of operations (within the meaning of Section 4062(e) of
ERISA); (b) the withdrawal of any Credit Party or any ERISA Affiliate
from a Multiple Employer Plan during a plan year in which it was a
substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (c) the
distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(d) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (e) any
event or condition which might reasonably constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan; or (f) the complete or partial
withdrawal of any Credit Party or any ERISA Affiliate from a
Multiemployer Plan.
"Title Insurance Company" means Chicago Title Insurance
Company.
"Total Revolving Outstandings" means the aggregate Outstanding
Amount of all Revolving Loans and all L/C Obligations.
"Tranche A Term Lender" means any Lender holding a Tranche A
Term Loan Commitment greater than zero, together with permitted
successors and assigns.
"Tranche A Term Loan" has the meaning set forth in Section
2.1(b).
30
"Tranche A Term Loan Commitment" means, with respect to each
Tranche A Term Lender, the commitment of such Lender to make its
portion of the Tranche A Term Loan in a principal amount equal to such
Lender's Pro Rata Share of the Tranche A Term Loan.
"Tranche A Term Note" has the meaning set forth in Section
2.10(a).
"Tranche B Term Lender" means any Lender holding a Tranche B
Term Loan Commitment greater than zero, together with permitted
successors and assigns.
"Tranche B Term Loan" has the meaning set forth in Section
2.1(c).
"Tranche B Term Loan Commitment" means, with respect to each
Tranche B Term Lender, the commitment of such Lender to make its
portion of the Tranche B Term Loan in a principal amount equal to such
Lender's Pro Rata Share of the Tranche B Term Loan.
"Tranche B Term Note" has the meaning set forth in Section
2.10(a).
"Type" means, with respect to a Loan, its character as a Base
Rate Loan or a Eurodollar Rate Loan.
"UCC" has the meaning set forth in Section 5.1(d).
"Unreimbursed Amount" has the meaning set forth in Section
2.3(c).
"Voting Stock" of a corporation means all classes of the
Capital Stock of such corporation then outstanding and ordinarily
entitled to vote in the election of directors (or persons performing
similar functions).
"Wholly-Owned Subsidiary" of any Person means any Subsidiary
100% of whose Voting Stock is at the time owned by such Person directly
or indirectly through other Wholly-Owned Subsidiaries.
1.2 OTHER INTERPRETIVE PROVISIONS.
With reference to this Credit Agreement and each other Credit Document,
unless otherwise specified herein or in such other Credit Document:
(a) The meanings of defined terms are equally applicable
to the singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and
"hereunder" and words of similar import when used in any Credit
Document shall refer to such Credit Document as a whole and not to any
particular provision thereof.
31
(ii) Article, Section, Exhibit and Schedule
references are to the Credit Document in which such reference
appears.
(iii) The term "including" is by way of example
and not limitation.
(iv) The term "documents" includes any and all
instruments, documents, agreements, certificates, notices,
reports, financial statements and other writings, however
evidenced, whether in physical or electronic form.
(c) Section headings herein and in the other Credit
Documents are included for convenience of reference only and shall not
affect the interpretation of this Credit Agreement or any other Credit
Document.
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP as in effect from time to
time; provided that all calculations made for the purposes of determining
compliance with this Credit Agreement shall (except as otherwise expressly
provided herein) be made by application of GAAP applied on a basis consistent
with the most recent annual or quarterly financial statements delivered pursuant
to Section 7.1 (or, prior to the delivery of the first financial statements
pursuant to Section 7.1, consistent with the financial statements described in
Section 6.1(a)); provided, however, if (a) the Borrower shall object to
determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto or (b) the Administrative Agent or the Required Lenders shall so
object in writing within thirty (30) days after delivery of such financial
statements, then such calculations shall be made on a basis consistent with GAAP
as in effect as of the date of the most recent financial statements delivered by
the Borrower to the Administrative Agent to which no such objection shall have
been made.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made under the financial covenants set
forth in Section 7.2 and for purposes of the definition of "Applicable
Percentage" set forth in Section 1.1, (i)(A) income statement items (whether
positive or negative) attributable to the property disposed of in any Asset
Disposition as contemplated by Section 8.5 shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and (B)
Indebtedness which is retired in connection with any such Asset Disposition
shall be excluded and deemed to have been retired as of the first day of the
applicable period and (ii) income statement items (whether positive or negative)
attributable to any Person or property acquired in any Acquisition contemplated
by the definition of "Permitted Acquisition" set forth in Section 1.1 shall, to
the extent not otherwise included in such income statements items for the Credit
Parties in accordance with GAAP or in accordance with any defined terms set
forth in Section 1.1, be included to the extent relating to any period
applicable in such calculations.
32
1.4 ROUNDING.
Any financial ratios required to be maintained by the Borrower pursuant
to Section 7.2 shall be calculated by dividing the appropriate component by the
other component, carrying the result to one place more than the number of places
by which such ratio is expressed herein and rounding the result up or down to
the nearest number (with a rounding-up if there is no nearest number).
1.5 REFERENCES TO AGREEMENTS AND LAWS.
Unless otherwise expressly provided herein, (a) references to
organization documents, agreements (including the Credit Documents) and other
contractual instruments shall be deemed to include all subsequent amendments,
restatements, extensions, supplements and other modifications thereto, but only
to the extent that such amendments, restatements, extensions, supplements and
other modifications are not prohibited by any Credit Document; and (b)
references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
1.6 TIMES OF DAY.
Unless otherwise specified, all references herein to times of day shall
be references to Eastern time (daylight or standard, as applicable).
1.7 LETTER OF CREDIT AMOUNTS.
Unless otherwise specified, all references herein to the amount of a
Letter of Credit at any time shall be deemed to mean the maximum face amount of
such Letter of Credit after giving effect to all increases or decreases thereof
contemplated by such Letter of Credit or the Letter of Credit Application
therefor, whether or not such maximum face amount is in effect at such time.
SECTION 2
THE COMMITMENTS AND CREDIT EXTENSIONS
2.1 REVOLVING LOANS AND TERM LOANS.
(a) Revolving Loans. Subject to the terms and conditions
set forth herein, each Revolving Lender severally agrees to make loans
(each such loan, a "Revolving Loan") to the Borrower from time to time,
on any Business Day during the Availability Period, in an aggregate
amount not to exceed at any time outstanding the amount of such
Revolving Lender's Revolving Commitment; provided, however, that after
giving effect to any Borrowing of Revolving Loans, (i) the Total
Revolving Outstandings shall not exceed the Aggregate Revolving
Commitments, and (ii) the aggregate Outstanding Amount of the Revolving
Loans of any Revolving Lender, plus such Revolving Lender's Pro Rata
Share of the Outstanding Amount of all L/C Obligations shall not exceed
such
33
Revolving Lender's Revolving Commitment. Within the limits of each
Revolving Lender's Revolving Commitment, and subject to the other terms
and conditions hereof, the Borrower may borrow under this Section
2.1(a), prepay under Section 2.4(a), and reborrow under this Section
2.1(a). Revolving Loans may be Base Rate Loans or Eurodollar Rate
Loans, as further provided herein; provided, however, all Borrowings
made on the Closing Date shall be made as Base Rate Loans unless the
Borrower delivers a Loan Notice and a funding indemnity letter to the
Administrative Agent three (3) Business Days prior to the Closing Date
in form and substance reasonably satisfactory to the Administrative
Agent.
(b) Tranche A Term Loan. Subject to the terms and
conditions set forth herein, each Tranche A Lender severally agrees to
make its Pro Rata Share of a term loan (the "Tranche A Term Loan") to
the Borrower on the Closing Date in an aggregate principal amount of
THIRTY MILLION DOLLARS ($30,000,000). Amounts repaid on the Tranche A
Term Loan may not be reborrowed. The Tranche A Term Loan may consist of
Base Rate Loans or Eurodollar Rate Loans, as further provided herein;
provided, however, the Tranche A Term Loan shall be made as a Base Rate
Loan on the Closing Date unless the Borrower delivers a funding
indemnity letter to the Administrative Agent prior to the Closing Date
in form and substance reasonably satisfactory to the Administrative
Agent.
(c) Tranche B Term Loan. Subject to the terms and
conditions set forth herein, each Tranche B Lender severally agrees to
make its Pro Rata Share of a term loan (the "Tranche B Term Loan") to
the Borrower on the Closing Date in an aggregate principal amount of
FORTY MILLION DOLLARS ($40,000,000). Amounts repaid on the Tranche B
Term Loan may not be reborrowed. The Tranche B Term Loan may consist of
Base Rate Loans or Eurodollar Rate Loans, as further provided herein;
provided, however, the Tranche B Term Loan shall be made as a Base Rate
Loan on the Closing Date unless the Borrower delivers a funding
indemnity letter to the Administrative Agent prior to the Closing Date
in form and substance reasonably satisfactory to the Administrative
Agent.
(d) Reserve for ▇▇▇▇▇▇ Springs Debt. Until such time as
all of the obligations of the Borrower under the Construction Loan
Documents shall have been paid in full and ▇▇▇▇▇▇ Springs shall have
released all of its Liens in any Property of the Borrower or any of the
other Credit Parties, a portion of the Aggregate Revolving Commitments
in an amount equal to the Reserve Amount shall be reserved to finance
amounts which become due and payable under the Construction Loan
Documents as provided in paragraph 19 of the ▇▇▇▇▇▇ Springs
Intercreditor Agreement. For purposes of this subsection (d), the term
"Reserve Amount" shall mean, at any time, an amount equal to the lesser
of (i) the then outstanding principal amount of the Indebtedness under
the Construction Loan Documents and (ii) $700,000. The Reserve Amount
shall not be available for Revolving Loans made pursuant to Section
2.2(a). The Reserve Amount shall not be reduced by the making of any
Revolving Loans pursuant to Section 2.2(b) (except, as contemplated by
the immediately preceding sentence, to the extent that the making of
such Revolving Loans reduces the outstanding principal amount of the
Indebtedness under the Construction Loan Documents).
34
2.2 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Borrowing, each conversion of Loans from one
Type to the other, and each continuation of Eurodollar Rate Loans shall
be made upon the irrevocable notice (except as provided in Section 3.3)
from the Borrower to the Administrative Agent, which may be given by
telephone (provided that such telephonic notice complies with the
information requirements of the form of Loan Notice attached hereto).
Each such notice must be received by the Administrative Agent not later
than 11:00 a.m. (i) three (3) Business Days prior to the requested date
of any Borrowing of, conversion to or continuation of Eurodollar Rate
Loans, and (ii) on the requested date of any Borrowing of Base Rate
Loans. Each telephonic notice by the Borrower pursuant to this Section
2.2(a) must be confirmed promptly by delivery to the Administrative
Agent of a written Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. Except in the case of a Revolving
Loan borrowing the proceeds of which are to be applied to make a
payment under the Construction Loan Documents on behalf of the Borrower
in accordance with the terms of Section 2.2(b), each Borrowing of,
conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $500,000 in
excess thereof. Except as provided in Section 2.3(c) or in the case of
a Borrowing of the then entire unborrowed amount of the Aggregate
Revolving Commitment or in the case of a Revolving Loan borrowing the
proceeds of which are to be applied to make a payment under the
Construction Loan Documents on behalf of the Borrower in accordance
with the terms of Section 2.2(b), each Borrowing of or conversion to
Base Rate Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Loan Notice (whether
telephonic or written) shall specify (A) whether the Borrower is
requesting a Borrowing, a conversion of Loans from one Type to the
other, or a continuation of Eurodollar Rate Loans, (B) the requested
date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (C) the principal amount of Loans to
be borrowed, converted or continued, (D) the Type of Loans to be
borrowed or to which existing Loans are to be converted, and (E) if
applicable, the duration of the Interest Period with respect thereto.
If the Borrower fails to specify a Type of Loan in a Loan Notice or if
the Borrower fails to give a timely notice requesting a conversion or
continuation, then the applicable Loans shall be made as, or converted
to, Base Rate Loans. Any such automatic conversion to Base Rate Loans
shall be effective as of the last day of the Interest Period then in
effect with respect to the applicable Eurodollar Rate Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of
Eurodollar Rate Loans in any such Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period
of one (1) month.
(b) Subject to the other terms and conditions set forth
herein (including without limitation satisfaction of the conditions
precedent set forth in Section 5.2), the Borrower hereby agrees that,
until such time as all of the obligations of the Borrower under the
Construction Loan Documents shall have been paid in full and ▇▇▇▇▇▇
Springs shall have released all of its Liens in any Property of the
Borrower or any of the other Credit Parties, ▇▇▇▇▇▇ Springs (or KDOCH
on behalf of ▇▇▇▇▇▇ Springs) shall be authorized to request
35
that Revolving Loans be made on behalf of the Borrower for application
to any obligations which are past due under the Construction Loan
Documents. Requests for Revolving Loans pursuant to this Section 2.2(b)
shall be made pursuant to a written Loan Notice signed by either the
Mayor of ▇▇▇▇▇▇ Springs or the Secretary of KDOCH, substantially in
accordance with the terms of Section 2.2(a) above. The proceeds of each
Revolving Loan made pursuant to this Section 2.2(b) shall be paid to
the account and in accordance with the wiring instructions set forth in
the related Loan Notice for application to the past due obligations of
the Borrower under the Construction Loan Documents. Revolving Loans
made pursuant to this Section 2.2(b) on any day shall not exceed the
aggregate amount of amounts which are past due under the Construction
Loan Documents on such date. On the date that any Revolving Loans are
to be made pursuant to this Section 2.2(b), the Administrative Agent
shall so notify the Borrower and shall send to the Borrower a copy of
the related Loan Notice. The Borrower hereby agrees (A) that the
Administrative Agent shall be entitled to rely upon, and shall be fully
protected in acting upon and in accordance with, any Loan Notice
delivered by or on behalf of ▇▇▇▇▇▇ Springs pursuant to this Section
2.2(b) and believed in good faith by the Administrative Agent to be
genuine and correct and to have been signed, sent or made by or on
behalf of the Mayor of ▇▇▇▇▇▇ Springs or the Secretary of KDOCH, even
if such Loan Notice should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged, (B) that the
Administrative Agent shall not be required to confirm or verify with
the Borrower or any other Person the appropriateness or accuracy of any
Loan Notice delivered by or on behalf of ▇▇▇▇▇▇ Springs pursuant to
this Section 2.2(b), (C) to hold the Administrative Agent and the
Lenders harmless in respect of any Revolving Loan advances made
available to ▇▇▇▇▇▇ Springs pursuant to and in accordance with the
terms of this Section 2.2(b), (D) that as between the Borrower and the
Administrative Agent and the Lenders, the Borrower shall assume all
risks of the acts of ▇▇▇▇▇▇ Springs or KDOCH pursuant to this Section
2.2(b), (E) that any action taken or omitted by the Administrative
Agent or any Lender pursuant to or in connection with any Loan Notice
delivered by or on behalf of ▇▇▇▇▇▇ Springs pursuant to this Section
2.2(b), if taken or omitted in good faith, shall not put the
Administrative Agent or such Lender under any resulting liability to
the Borrower or any other Credit Party and (F) the provisions of this
Section 2.2(b) shall be construed and applied to protect and exculpate
the Administrative Agent and the Lenders against any and all risks
involved in the making of Revolving Loan advances pursuant to this
Section 2.2(b), all of which risks are hereby assumed by the Borrower
(on behalf of itself and each of the other Credit Parties), provided
that such provisions shall not be deemed to protect or exculpate the
Administrative Agent or any Lender in respect of any action or inaction
of such Person constituting gross negligence or willful misconduct.
(c) Following receipt of a Loan Notice, the
Administrative Agent shall promptly notify each Revolving Lender of the
amount of its Pro Rata Share of the applicable Revolving Loans, and if
no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each applicable Lender
of the details of any automatic conversion to Base Rate Loans described
in the preceding subsection. In the case of a Borrowing, each Revolving
Lender shall make the amount of its Revolving Loan available to the
Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 1:00 p.m. on the Business
Day
36
specified in the applicable Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 5.2 (and, if such Borrowing
is the initial Credit Extension, Section 5.1), the Administrative Agent
shall make all funds so received available to the Borrower in like
funds as received by the Administrative Agent either by (i) crediting
the account of the Borrower on the books of Bank of America with the
amount of such funds or (ii) wire transfer of such funds, in each case
in accordance with instructions provided to (and reasonably acceptable
to) the Administrative Agent by the Borrower; provided, however, that
if, on the date a Loan Notice with respect to a Borrowing consisting of
Revolving Loans is given by the Borrower, there are L/C Borrowings
outstanding, then the proceeds of such Borrowing shall be applied,
first, to the payment in full of any such L/C Borrowings, and second,
to the Borrower as provided above.
(d) Subject to Section 3.5, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for
such Eurodollar Rate Loan. During the existence of a Default or an
Event of Default, no Loans may be requested as, converted to or
continued as Eurodollar Rate Loans without the consent of the Required
Lenders.
(e) The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any
Interest Period for Eurodollar Rate Loans upon determination of such
interest rate. The determination of the Eurodollar Rate by the
Administrative Agent shall be conclusive in the absence of manifest
error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any
change in Bank of America's prime rate used in determining the Base
Rate promptly following the public announcement of such change.
(f) After giving effect to all Borrowings, all
conversions of Loans from one Type to the other, and all continuations
of Loans as the same Type, there shall not be more than (i) five
Interest Periods in effect with respect to Revolving Loans, and (ii)
four Interest Periods in effect with respect to the Term Loans.
2.3 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set
forth herein, (A) the L/C Issuer agrees, in reliance upon the
agreements of the Revolving Lenders set forth in this Section
2.3, (1) from time to time on any Business Day during the
period from the Closing Date until the Letter of Credit
Expiration Date, to issue Letters of Credit for the account of
the Borrower or, subject to the terms of Section 2.3(l), any
Subsidiary designated by the Borrower, and to amend or renew
Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drafts under the
Letters of Credit; and (B) the Revolving Lenders severally
agree to participate in Letters of Credit issued for the
account of the Borrower; provided that the L/C Issuer shall
not be obligated to make any L/C Credit Extension with respect
to any Letter of Credit, and no Revolving Lender shall be
37
obligated to participate in any Letter of Credit if as of the
date of such L/C Credit Extension, (x) the Total Revolving
Outstandings would exceed the Aggregate Revolving Commitments,
(y) the aggregate Outstanding Amount of the Revolving Loans of
any Revolving Lender, plus such Revolving Lender's Pro Rata
Share of the Outstanding Amount of all L/C Obligations would
exceed such Revolving Lender's Revolving Commitment, or (z)
the Outstanding Amount of the L/C Obligations would exceed the
Letter of Credit Sublimit. Within the foregoing limits, and
subject to the terms and conditions hereof, the Borrower's
ability to obtain Letters of Credit shall be fully revolving,
and accordingly the Borrower may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit that
have expired or that have been drawn upon and reimbursed. Each
Letter of Credit shall be either (x) a standby letter of
credit issued to support the obligations (including pension or
insurance obligations), contingent or otherwise, of a Credit
Party, or (y) a commercial letter of credit in respect of the
purchase of goods or services by the Borrower or any of its
Subsidiaries in the ordinary course of business. All Existing
Letters of Credit shall be deemed to have been issued pursuant
hereto, and from and after the Closing Date shall be subject
to and governed by the terms and conditions hereof.
(ii) The L/C Issuer shall be under no obligation
to issue any Letter of Credit if:
(A) any order, judgment or decree of
any Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the L/C Issuer
from issuing such Letter of Credit, or any Law
applicable to the L/C Issuer or any request or
directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction
over the L/C Issuer shall prohibit, or request that
the L/C Issuer refrain from, the issuance of letters
of credit generally or such Letter of Credit in
particular or shall impose upon the L/C Issuer with
respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in
effect on the Closing Date, or shall impose upon the
L/C Issuer any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and
which the L/C Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to
it;
(B) subject to Section 2.3(b)(iii), the
expiry date of such requested Letter of Credit would
occur more than twelve (12) months after the date of
issuance unless all of the Revolving Lenders have
approved such expiry date;
(C) the expiry date of such requested
Letter of Credit would occur after the Letter of
Credit Expiration Date, unless such Letter of Credit
has been Cash Collateralized to the reasonable
satisfaction of the Administrative Agent and the L/C
Issuer or unless all of the Required Revolving
Lenders have approved such expiry date;
38
(D) the issuance of such Letter of
Credit would violate one or more written policies of
the L/C Issuer;
(E) if such Letter of Credit (1) is a
standby Letter of Credit, such standby Letter of
Credit is in an initial amount less than $500,000 or
(2) is a commercial Letter of Credit, such commercial
Letter of Credit is in an initial amount less than
$250,000; or
(F) such Letter of Credit is to be used
for a purpose other than as specified in Section
2.3(a) or is to be denominated in a currency other
than Dollars.
(iii) The L/C Issuer shall be under no obligation
to amend any Letter of Credit if (A) the L/C Issuer would have
no obligation at such time to issue such Letter of Credit in
its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the
proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of
Credit; Automatic Renewal of Letters of Credit.
(i) Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrower
delivered to the L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of
the Borrower. Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not
later than 11:00 a.m. at least two (2) Business Days (or such
later date and time as the L/C Issuer may agree in a
particular instance in its sole discretion) prior to the
proposed issuance date or date of amendment, as the case may
be. In the case of a request for an initial issuance of a
Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer: (A)
the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the amount thereof; (C)
the expiry date thereof; (D) the name of the account party
thereof and the name and address of the beneficiary thereof;
(E) the documents to be presented by such beneficiary in case
of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any
drawing thereunder; and (G) such other matters as the L/C
Issuer may reasonably require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of
Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (1) the Letter of Credit to be
amended; (2) the proposed date of amendment thereof (which
shall be a Business Day); (3) the nature of the proposed
amendment; and (4) such other matters as the L/C Issuer may
reasonably require.
39
(ii) Promptly after receipt of any Letter of
Credit Application, the L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of
Credit Application from the Borrower and, if not, the L/C
Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the L/C Issuer of confirmation from
the Administrative Agent that the requested issuance or
amendment is permitted in accordance with the terms hereof,
then, subject to the terms and conditions hereof, the L/C
Issuer shall, on the requested date, issue a Letter of Credit
for the account of the Borrower or, subject to the terms of
Section 2.3(l), any Subsidiary designated by the Borrower, or
enter into the applicable amendment, as the case may be, in
each case in accordance with the L/C Issuer's usual and
customary business practices for commercial and standby
letters of credit, as applicable. Immediately upon the
issuance of each Letter of Credit, each Revolving Lender shall
be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer without recourse a
risk participation in such Letter of Credit and the
obligations arising thereunder and any collateral relating
thereto in an amount equal to the product of such Revolving
Lender's Pro Rata Share times the amount of such Letter of
Credit. On the Closing Date, each Revolving Lender shall be
deemed to have purchased from the L/C Issuer without recourse
a risk participation in each Existing Letter of Credit and the
obligations arising thereunder and any collateral relating
thereto in an amount equal to the product of such Revolving
Lender's Pro Rata Share times the amount of such Existing
Letter of Credit.
(iii) If the Borrower so requests in any
applicable Letter of Credit Application, the L/C Issuer may,
in its sole and absolute discretion, agree to issue a Letter
of Credit that has automatic renewal provisions (each, an
"Auto Renewal Letter of Credit"); provided that any such Auto
Renewal Letter of Credit must permit the L/C Issuer to prevent
any such renewal at least once in each twelve (12) month
period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the Borrower and the
beneficiary thereof not later than the day, in each such
twelve (12) month period, agreed upon at the time such Letter
of Credit is issued (the "Nonrenewal Notice Date"). Unless
otherwise directed by the L/C Issuer, the Borrower shall not
be required to make a specific request to the L/C Issuer for
any such renewal. Once an Auto Renewal Letter of Credit has
been issued, the Revolving Lenders shall be deemed to have
authorized (but may not require) the L/C Issuer to permit the
renewal of such Letter of Credit at any time to an expiry date
not later than the Letter of Credit Expiration Date (unless
such Letter of Credit has been Cash Collateralized to the
reasonable satisfaction of the Administrative Agent and the
L/C Issuer in which case such Letter of Credit may be extended
beyond the Letter of Credit Expiration Date); provided,
however, that the L/C Issuer shall not permit any such renewal
if (A) the L/C Issuer has determined that it would have no
obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the
provisions of Section 2.3(a)(ii) or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on
or before the day that is five (5)
40
Business Days before the Nonrenewal Notice Date (1) from the
Administrative Agent, any Lender or the Borrower that one or
more of the applicable conditions specified in Section 5.2 is
not then satisfied or (2) from the Borrower electing not to
agree to such renewal.
(iv) Promptly after its delivery of any Letter of
Credit or any amendment to a Letter of Credit to an advising
bank with respect thereto or to the beneficiary thereof, the
L/C Issuer will also deliver to the Borrower and the
Administrative Agent a true and complete copy of such Letter
of Credit or amendment. Upon the request of any Lender, the
Administrative Agent will deliver to such Lender a list of the
Letters of Credit then outstanding.
(c) Drawings and Reimbursements; Funding of
Participations.
(i) Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter
of Credit, the L/C Issuer shall notify the Borrower and the
Administrative Agent thereof. Not later than 11:00 a.m. (or if
the notice of drawing on such Letter of Credit is given after
11:00 a.m., then not later than 12:00 noon on the next
succeeding Business Day) on the date of any payment by the L/C
Issuer under a Letter of Credit (each such date, an "Honor
Date"), the Borrower shall reimburse the L/C Issuer through
the Administrative Agent in an amount equal to the amount of
such drawing. If the Borrower fails to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly
notify each Revolving Lender of the Honor Date, the amount of
the unreimbursed drawing (the "Unreimbursed Amount"), and the
amount of such Revolving Lender's Pro Rata Share thereof. In
such event, the Borrower shall be deemed to have requested a
Borrowing of Revolving Loans that are Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and
multiples specified in, or the notice requirement of, Section
2.2 for the principal amount of Base Rate Loans, but subject
to the amount of the unutilized portion of the Aggregate
Revolving Commitments and the conditions set forth in Section
5.2 (other than the delivery of a Loan Notice). Any notice
given by the L/C Issuer or the Administrative Agent pursuant
to this Section 2.3(c)(i) may be given by telephone if
immediately confirmed in writing; provided that the lack of
such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(ii) Each Revolving Lender (including the
Revolving Lender acting as L/C Issuer) shall upon any notice
pursuant to Section 2.3(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the
Administrative Agent's Office in an amount equal to its Pro
Rata Share of the Unreimbursed Amount not later than 1:00 p.m.
on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of
Section 2.3(c)(i) and (iii), each Revolving Lender that so
makes funds available shall either (A) be deemed to have made
a Revolving Loan that is a Base Rate Loan to the Borrower in
such amount in accordance with the terms of Section
41
2.3(c)(i) or (B) be deemed to have made an L/C Advance to fund
its participation interest in an L/C Borrowing in such amount
in accordance with the terms of Section 2.3(c)(iii). The
Administrative Agent shall remit the funds so received to the
L/C Issuer.
(iii) With respect to any Unreimbursed Amount that
is not fully refinanced by a Borrowing of Revolving Loans that
are Base Rate Loans because the conditions set forth in
Section 5.2 cannot be satisfied (other than delivery of a Loan
Notice) or for any other reason, the Borrower shall be deemed
to have incurred from the L/C Issuer a L/C Borrowing in the
amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand
(together with interest) and shall bear interest at the
Default Rate. In such event, each Revolving Lender's payment
to the Administrative Agent for the account of the L/C Issuer
pursuant to Section 2.3(c)(ii) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Revolving Lender in
satisfaction of its participation obligation under this
Section 2.3.
(iv) Until each Revolving Lender funds its
Revolving Loan or L/C Advance pursuant to this Section 2.3(c)
to reimburse the L/C Issuer for any Unreimbursed Amount under
any Letter of Credit, interest in respect of such Revolving
Lender's Pro Rata Share of such amount shall be solely for the
account of the L/C Issuer.
(v) Each Revolving Lender's obligation to make
Revolving Loans or L/C Advances to reimburse the L/C Issuer
for amounts drawn under Letters of Credit, as contemplated by
this Section 2.3(c), shall be absolute and unconditional and
shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right
which such Revolving Lender may have against the L/C Issuer,
the Borrower or any other Person for any reason whatsoever;
(B) the occurrence or continuance of a Default or Event of
Default, (C) the failure to satisfy any condition set forth in
Section 5.2 or (D) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided,
however, that each Revolving Lender's obligation to make
Revolving Loans pursuant to this Section 2.3(c) is subject to
the conditions set forth in Section 5.2 (other than delivery
by the Borrower of a Loan Notice). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of
the Borrower to reimburse the L/C Issuer for the amount of any
payment made by the L/C Issuer under any Letter of Credit,
together with interest as provided herein.
(vi) If any Revolving Lender fails to make
available to the Administrative Agent for the account of the
L/C Issuer any amount required to be paid by such Revolving
Lender pursuant to the foregoing provisions of this Section
2.3(c) by the time specified in Section 2.3(c)(ii), the L/C
Issuer shall be entitled to recover from such Revolving Lender
(acting through the Administrative Agent), on demand, such
amount with interest thereon for the
42
period from the date such payment is required to the date on
which such payment is immediately available to the L/C Issuer
at a rate per annum equal to the Federal Funds Rate from time
to time in effect. A certificate of the L/C Issuer submitted
to any Revolving Lender (through the Administrative Agent)
with respect to any amounts owing under this clause (vi) shall
be conclusive absent manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a
payment under any Letter of Credit and has received from any
Revolving Lender such Revolving Lender's L/C Advance in
respect of such payment in accordance with Section 2.3(c), if
the Administrative Agent receives for the account of the L/C
Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrower
or otherwise, including proceeds of Cash Collateral applied
thereto by the Administrative Agent), the Administrative Agent
will distribute to such Revolving Lender its Pro Rata Share
thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such
Revolving Lender's L/C Advance was outstanding) in the same
funds as those received by the Administrative Agent.
(ii) If any payment received by the
Administrative Agent for the account of the L/C Issuer
pursuant to Section 2.3(c)(i) is required to be returned under
any of the circumstances described in Section 11.6 (including
pursuant to any settlement entered into by the L/C Issuer in
its discretion), each Revolving Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro
Rata Share thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such
amount is returned by such Revolving Lender, at a rate per
annum equal to the Federal Funds Rate from time to time in
effect.
(e) Credit Party Obligations Absolute. The obligation of
the Borrower to reimburse the L/C Issuer for each drawing under each
Letter of Credit and to repay each L/C Borrowing shall be absolute,
unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of this Credit Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of
such Letter of Credit, this Credit Agreement, or any other
agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim,
set-off, defense or other right that the Borrower may have at
any time against any beneficiary or any transferee of such
Letter of Credit (or any Person for whom any such beneficiary
or any such transferee may be acting), the L/C Issuer or any
other Person, whether in connection with this Credit
Agreement, the transactions contemplated hereby or by such
Letter of Credit or any agreement or instrument relating
thereto, or any unrelated transaction;
43
(iii) any draft, demand, certificate or other
document presented under such Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such
Letter of Credit;
(iv) any payment by the L/C Issuer under such
Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of
such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other
representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including any other circumstance that might otherwise
constitute a defense (other than payment) available to, or a
discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of
Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with the Borrower's instructions or
other irregularity, the Borrower will promptly notify the L/C Issuer.
The Borrower shall be conclusively deemed to have waived any such claim
against the L/C Issuer and its correspondents unless such notice is
given as aforesaid.
(f) Role of L/C Issuer. Each Revolving Lender and the
Borrower agree that, in paying any drawing under a Letter of Credit,
the L/C Issuer shall not have any responsibility to obtain any document
(other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the
validity or accuracy of any such document or the authority of the
Person executing or delivering any such document. None of the L/C
Issuer, any Agent-Related Person nor any of the respective
correspondents, participants or assignees of the L/C Issuer shall be
liable to any Revolving Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders
or the Required Revolving Lenders, as applicable; (ii) any action taken
or omitted in the absence of gross negligence or willful misconduct; or
(iii) the due execution, effectiveness, validity or enforceability of
any document or instrument related to any Letter of Credit or Letter of
Credit Application. The Borrower hereby assumes all risks of the acts
or omissions of any beneficiary or transferee with respect to its use
of any Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower's pursuing such
rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of the L/C Issuer,
any Agent-Related Person, nor any of the respective correspondents,
participants or assignees of the L/C Issuer, shall be liable or
44
responsible for any of the matters described in clauses (i) through (v)
of Section 2.3(e); provided, however, that anything in such clauses to
the contrary notwithstanding, the Borrower may have a claim against the
L/C Issuer or any such Agent-Related Person, correspondent, participant
or assignee, and the L/C Issuer or any such Agent-Related Person,
correspondent, participant or assignee may be liable to the Borrower,
to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the
Borrower proves were caused by such party's willful misconduct or gross
negligence or, with respect to the L/C Issuer only, the L/C Issuer's
willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and
certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary, and the L/C
Issuer shall not be responsible for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign a Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason.
(g) Cash Collateral. Upon the request of the
Administrative Agent, (i) if the L/C Issuer has honored any full or
partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (ii) if, as of the Letter of Credit
Expiration Date, any Letter of Credit may for any reason remain
outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined
as of the date of such L/C Borrowing or the Letter of Credit Expiration
Date, as the case may be). The Borrower hereby grants to the
Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing. Cash collateral
shall be maintained in blocked, non-interest bearing deposit accounts
at Bank of America.
(h) Applicability of ISP98 and UCP. Unless otherwise
expressly agreed by the applicable L/C Issuer and the Borrower when a
Letter of Credit is issued (including any such agreement applicable to
an Existing Letter of Credit), (i) the rules of the "International
Standby Practices 1998" published by the Institute of International
Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of
Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International
Chamber of Commerce (the "ICC") at the time of issuance shall apply to
each commercial Letter of Credit.
(i) Letter of Credit Fees.
(i) The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender in accordance
with its Pro Rata Share a fee (the "Standby Letter of Credit
Fee") for each standby Letter of Credit equal to the
45
Applicable Percentage times the daily maximum amount available
to be drawn under such standby Letter of Credit (whether or
not such maximum amount is then in effect under such standby
Letter of Credit). The Standby Letter of Credit Fees shall be
computed on a quarterly basis in arrears, and shall be due and
payable on the first Business Day after the end of each March,
June, September and December, commencing with the first such
date to occur after the issuance of such standby Letter of
Credit, on the Letter of Credit Expiration Date and thereafter
on demand. If there is any change in the Applicable Percentage
during any quarter, the daily maximum amount of each standby
Letter of Credit shall be computed and multiplied by the
Applicable Percentage separately for each period during such
quarter that such Applicable Percentage was in effect.
(ii) The Borrower shall pay to the Administrative
Agent for the account of each Revolving Lender in accordance
with its Pro Rata Share a fee (the "Commercial Letter of
Credit Fee") for each commercial Letter of Credit equal to the
Applicable Percentage times the daily maximum amount available
to be drawn under such commercial Letter of Credit (whether or
not such maximum amount is then in effect under such
commercial Letter of Credit). The Commercial Letter of Credit
Fees shall be computed on a quarterly basis in arrears, and
shall be due and payable on the first Business Day after the
end of each March, June, September and December, commencing
with the first such date to occur after the issuance of such
commercial Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. If there is any
change in the Applicable Percentage during any quarter, the
daily maximum amount of each commercial Letter of Credit shall
be computed and multiplied by the Applicable Percentage
separately for each period during such quarter that such
Applicable Percentage was in effect.
(j) Fronting Fee and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own
account a fronting fee for each Letter of Credit equal to 0.125% times
the daily maximum amount available to be drawn under such Letter of
Credit (whether or not such maximum amount is then in effect under such
Letter of Credit). Such fronting fee for each Letter of Credit shall be
computed on a quarterly basis in arrears, and shall be due and payable
on the first Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the
issuance of such Letter of Credit, on the Letter of Credit Expiration
Date and thereafter on demand. In addition, the Borrower shall pay
directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard
costs and charges, of the L/C Issuer relating to letters of credit as
from time to time in effect. Such customary fees and standard costs and
charges are due and payable on demand and are nonrefundable.
(k) Conflict with Letter of Credit Application. In the
event of any conflict between the terms hereof and the terms of any
Letter of Credit Application, the terms hereof shall control.
46
(l) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, including without limitation Section 2.3(a), a Letter of
Credit issued hereunder (including any Existing Letter of Credit) shall
upon the request of the Borrower be issued for the account of any
Subsidiary of the Borrower, provided that notwithstanding such request,
the Borrower shall be the actual account party for all purposes of this
Credit Agreement for such Letter of Credit and such request shall not
affect the Borrower's reimbursement obligations hereunder with respect
to such Letter of Credit.
2.4 PREPAYMENTS.
(a) Voluntary Prepayments of Loans. The Borrower may,
upon notice to the Administrative Agent, at any time or from time (i)
voluntarily prepay Base Rate Loans in whole or in part without premium
or penalty, and (ii) subject to Section 3.5 hereof, voluntarily prepay
Eurodollar Rate Loans in whole or in part without premium or penalty;
provided that (i) such notice must be received by the Administrative
Agent not later than 11:00 a.m. (A) three (3) Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate
Loans shall be in a principal amount of $1,000,000 or a whole multiple
of $100,000 in excess thereof (or, if less, the entire principal amount
thereof then outstanding); and (iii) any prepayment of Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of
$100,000 in excess thereof (or, if less, the entire principal amount
thereof then outstanding). Any such voluntary prepayment shall be
applied to the outstanding Loans as the Borrower may elect. Each notice
of a voluntary prepayment pursuant to this Section 2.4(a) shall specify
the date and amount of such prepayment and the Type(s) of Loans to be
prepaid. The Administrative Agent will promptly notify each Lender of
its receipt of each such notice, and of the amount of such Lender's Pro
Rata Share of such prepayment. If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied
by all accrued interest thereon, together with any additional amounts
required pursuant to Section 3.5. As among the applicable Lenders, each
such prepayment shall be applied to the Loans of the Lenders in
accordance with their respective Pro Rata Shares.
(b) Mandatory Prepayments.
(i) Aggregate Revolving Commitments. If for any
reason the Total Revolving Outstandings at any time exceed the
Aggregate Revolving Commitments then in effect, the Borrower
shall immediately prepay Revolving Loans and/or Cash
Collateralize the L/C Obligations in an aggregate amount equal
to such excess (such prepayment to be applied as set forth in
Section 2.4(c) below); provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C
Obligations pursuant to this Section 2.4(b)(i) unless after
the prepayment in full of the Revolving Loans the Total
Revolving Outstandings exceed the Letter of Credit Sublimit.
47
(ii) Excess Cash Flow. Within ten (10) Business
Days after the date the audited financial statements are
required to be delivered pursuant to Section 7.1(a) for each
fiscal year, commencing with the fiscal year ending December
31, 2004, the Borrower shall prepay the Loans in an amount
equal to 50% of the Excess Cash Flow earned during the
preceding fiscal year (such prepayment to be applied as set
forth in Section 2.4(c) below).
(iii) (A) Asset Dispositions. Within three
(3) Business Days after the occurrence of any Asset
Disposition Prepayment Event, the Borrower shall
prepay the Loans and Cash Collateralize the L/C
Obligations in an aggregate amount equal to 100% of
the Net Cash Proceeds of the related Asset
Disposition not applied (or caused to be applied) by
the Credit Parties during the related Application
Period to make Eligible Reinvestments as contemplated
by the terms of Section 8.5(e) (such prepayment to be
applied as set forth in Section 2.4(c) below);
provided that up to $1,500,000 of the Net Cash
Proceeds from the sale or other disposition of all or
any portion of the Detroit Paper Mill or any assets
comprising the Detroit Paper Mill shall be excluded
from the foregoing prepayment requirements.
(B) Casualty and Condemnation Events.
Within three (3) Business Days after the occurrence
of any event requiring application of any insurance
proceeds to the prepayment of Loans and Cash
Collateralization of the L/C Obligations pursuant to
Section 7.7(d), the Borrower shall prepay the Loans
and Cash Collateralize the L/C Obligations in the
amount required by such Section 7.7(d) (such
prepayment to be applied as set forth in Section
2.4(c) below).
(iv) Issuances of Equity. Within three (3)
Business Days after the receipt by a Credit Party of proceeds
from any Equity Issuance, the Borrower shall prepay the Loans
and Cash Collateralize the L/C Obligations in an amount equal
to 75% of the Net Cash Proceeds of such Equity Issuance (such
prepayment to be applied as set forth in Section 2.4(c)
below).
(v) Issuance of Debt. Within three (3) Business
Days after receipt by a Credit Party of proceeds from any Debt
Issuance, the Borrower shall prepay the Loans and Cash
Collateralize the L/C Obligations in an amount equal to 100%
of the Net Cash Proceeds of such Debt Issuance (such
prepayment to be applied as set forth in Section 2.4(c)
below).
(c) Application of Prepayments. All amounts required to
be paid pursuant to Section 2.4(b)(i) shall be applied first to
Revolving Loans and second to Cash Collateralize the L/C Obligations.
All amounts required to be paid pursuant to Sections 2.4(b)(ii), (iv)
and (v) above shall be applied first, pro rata to the outstanding
Tranche A Term Loans and the Tranche B Term Loans and within each
tranche pro rata among the remaining Principal Amortization Payments,
until the Term Loans have been paid in full,
48
second, to the Revolving Loans (without a corresponding reduction in
the Aggregate Revolving Commitments), and third, to Cash Collateralize
the outstanding L/C Obligations. All amounts required to be paid
pursuant to Section 2.4(b)(iii) above shall be applied first, pro rata
to the outstanding Revolving Loans (with a corresponding reduction in
the Aggregate Revolving Commitments), Tranche A Term Loans and Tranche
B Term Loans (and within each tranche pro rata among the remaining
Principal Amortization Payments), and second, to Cash Collateralize the
outstanding L/C Obligations. Within the parameters of the applications
set forth above, prepayments shall be applied ratably to Base Rate
Loans and Eurodollar Rate Loans. All prepayments hereunder shall be
subject to Section 3.5 and shall be accompanied by interest on the
principal amount prepaid through the date of prepayment. One or more
holders of the Tranche B Term Loans may decline to accept a mandatory
prepayment under Sections 2.4(b)(ii), (iii), (iv) or (v) to the extent
there are sufficient Tranche A Term Loans outstanding (and/or, in the
case of a mandatory prepayment under Section 2.4(b)(iii), sufficient
Revolving Loans or L/C Obligations outstanding) to be paid with such
prepayment, in which case such declined prepayments shall be allocated
pro rata among the Tranche A Term Loans (and, in the case of a
mandatory prepayment under Section 2.4(b)(iii), the Revolving Loans and
L/C Obligations outstanding) and the Tranche B Term Loans held by
Lenders accepting such prepayments. Notwithstanding anything in this
Section 2.4(c) to the contrary, the Aggregate Revolving Commitments
shall not be reduced below $30,000,000 as a result of any reduction of
the Aggregate Revolving Commitments corresponding to a mandatory
prepayment of Revolving Loans and/or Cash Collateralization of L/C
Obligations hereunder.
(d) Eurodollar Prepayment Account. If the Borrower is
required to make a mandatory prepayment of Eurodollar Rate Loans under
Section 2.4(b), notwithstanding any term of Section 2.4(b) or (c) to
the contrary, the Borrower shall have the right, in lieu of making such
prepayment in full, to deposit an amount equal to such mandatory
prepayment with the Administrative Agent in a cash collateral account
maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
Administrative Agent as collateral for the prepayment of such
Eurodollar Rate Loans and shall be applied to the prepayment of the
applicable Eurodollar Rate Loans at the end of the current Interest
Periods applicable thereto. At the request of the Borrower, amounts so
deposited shall be invested by the Administrative Agent in Cash
Equivalents maturing on or prior to the date or dates on which it is
anticipated that such amounts will be applied to prepay such Eurodollar
Rate Loans; any interest earned on such Cash Equivalents will be for
the account of the Borrower and the Borrower will deposit with the
Administrative Agent the amount of any loss on any such Cash
Equivalents to the extent necessary in order that the amount of the
prepayment to be made with the deposited amounts may not be reduced.
2.5 TERMINATION OR REDUCTION OF AGGREGATE REVOLVING COMMITMENTS.
(a) Voluntary Reductions. The Borrower may, upon notice
to the Administrative Agent, terminate the Aggregate Revolving
Commitments, or from time to
49
time permanently reduce the Aggregate Revolving Commitments; provided
that (i) any such notice shall be received by the Administrative Agent
not later than 11:00 a.m. five (5) Business Days prior to the date of
termination or reduction, (ii) any such partial reduction shall be in
an aggregate amount of $5,000,000 or any whole multiple of $1,000,000
in excess thereof, (iii) the Borrower shall not terminate or reduce the
Aggregate Revolving Commitments if, after giving effect thereto and to
any concurrent prepayments hereunder, the Total Revolving Outstandings
would exceed the Aggregate Revolving Commitments, and (iv) if, after
giving effect to any reduction of the Aggregate Revolving Commitments,
the Letter of Credit Sublimit exceeds the amount of the Aggregate
Revolving Commitments, the Letter of Credit Sublimit shall be
automatically reduced by the amount of such excess.
(b) Mandatory Reductions. The Aggregate Revolving
Commitments automatically shall be permanently reduced from time to
time in accordance with the terms of Section 2.4(c).
(c) General. The Administrative Agent will promptly
notify the Lenders of any such notice of termination or reduction of
the Aggregate Revolving Commitments. Any reduction of the Aggregate
Revolving Commitments shall be applied to the Revolving Commitment of
each Lender according to its Pro Rata Share. All Commitment Fees
accrued until the effective date of any termination of the Aggregate
Revolving Commitments shall be paid on the effective date of such
termination.
2.6 REPAYMENT OF LOANS.
(a) Revolving Loans. The Borrower shall repay to the
Lenders on the applicable Maturity Date the aggregate principal amount
of Revolving Loans outstanding on such date.
(b) Tranche A Term Loan. The Borrower shall repay the
outstanding principal amount of the Tranche A Term Loan in twenty (20)
consecutive quarterly installments (as such installments may hereafter
be adjusted as a result of prepayments made pursuant to Section 2.4) on
the last Business Day of each month set forth below and on the
applicable Maturity Date, unless accelerated sooner pursuant to Section
9.2:
PAYMENT DATES PRINCIPAL AMORTIZATION PAYMENT
-----------------------------------------------------
December, 2003 $1,000,000
-----------------------------------------------------
March, 2004 $1,000,000
-----------------------------------------------------
June, 2004 $1,000,000
-----------------------------------------------------
September, 2004 $1,000,000
-----------------------------------------------------
December, 2004 $1,250,000
-----------------------------------------------------
March, 2005 $1,250,000
-----------------------------------------------------
June, 2005 $1,250,000
-----------------------------------------------------
September, 2005 $1,250,000
50
-------------------------------------------
December, 2005 $1,500,000
-------------------------------------------
March, 2006 $1,500,000
-------------------------------------------
June, 2006 $1,500,000
-------------------------------------------
September, 2006 $1,500,000
-------------------------------------------
December, 2006 $1,750,000
-------------------------------------------
March, 2007 $1,750,000
-------------------------------------------
June, 2007 $1,750,000
-------------------------------------------
September, 2007 $1,750,000
-------------------------------------------
December, 2007 $2,000,000
-------------------------------------------
March, 2008 $2,000,000
-------------------------------------------
June, 2008 $2,000,000
-------------------------------------------
Maturity Date $2,000,000
===========================================
(c) Tranche B Term Loan. The Borrower shall repay the
outstanding principal amount of the Tranche B Term Loan in twenty-four
(24) consecutive quarterly installments (as such installments may
hereafter be adjusted as a result of prepayments made pursuant to
Section 2.4) on the last Business Day of each month set forth below and
on the applicable Maturity Date, unless accelerated sooner pursuant to
Section 9.02:
PAYMENT DATES PRINCIPAL AMORTIZATION PAYMENT
-----------------------------------------------------
December, 2003 $250,000
-----------------------------------------------------
March, 2004 $250,000
-----------------------------------------------------
June, 2004 $250,000
-----------------------------------------------------
September, 2004 $250,000
-----------------------------------------------------
December, 2004 $250,000
-----------------------------------------------------
March, 2005 $250,000
-----------------------------------------------------
June, 2005 $250,000
-----------------------------------------------------
September, 2005 $250,000
-----------------------------------------------------
December, 2005 $250,000
-----------------------------------------------------
March, 2006 $250,000
-----------------------------------------------------
June, 2006 $250,000
-----------------------------------------------------
September, 2006 $250,000
-----------------------------------------------------
December, 2006 $250,000
-----------------------------------------------------
March, 2007 $250,000
-----------------------------------------------------
June, 2007 $250,000
-----------------------------------------------------
September, 2007 $250,000
-----------------------------------------------------
December, 2007 $250,000
-----------------------------------------------------
March, 2008 $250,000
-----------------------------------------------------
June, 2008 $250,000
-----------------------------------------------------
September, 2008 $250,000
-----------------------------------------------------
December, 2008 $250,000
-----------------------------------------------------
March, 2009 $250,000
51
June, 2009 $ 250,000
--------------------------------------------
Maturity Date $34,250,000
============================================
2.7 INTEREST.
(a) Subject to the provisions of subsection (b) below,
(i) each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum
equal to the Eurodollar Rate for such Interest Period plus the
Applicable Percentage; and (ii) each Base Rate Loan shall bear interest
on the outstanding principal amount thereof from the applicable
borrowing date to the payment date at a rate per annum equal to the
Base Rate plus the Applicable Percentage.
(b) If any amount payable by the Borrower under any
Credit Document is not paid when due (after the expiration of any
applicable grace periods), whether at stated maturity, by acceleration
or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times equal to the Default
Rate to the fullest extent permitted by applicable Laws. Furthermore,
while any Event of Default exists, after written notice to the
Borrower, the Borrower shall pay (i) interest on the principal amount
of all outstanding Credit Party Obligations which bear interest at a
fluctuating interest rate per annum at all times equal to the Default
Rate to the fullest extent permitted by applicable Laws and (ii) all
Letter of Credit fees and other fees payable pursuant to Section 2.3(i)
and (j) shall accrue at a per annum rate 2% greater than the rate which
would otherwise be applicable. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and
payable upon demand.
(c) Interest on each Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein. Interest hereunder shall be due
and payable in accordance with the terms hereof before and after
judgment, and before and after the commencement of any proceeding under
any Debtor Relief Law.
2.8 FEES.
In addition to certain fees described in subsections (i) and (j) of
Section 2.3:
(a) Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with
its Pro Rata Share, a commitment fee (the "Commitment Fee") equal to
the Applicable Percentage times the actual daily amount by which the
Aggregate Revolving Commitments exceed the Total Revolving
Outstandings. The Commitment Fee shall accrue at all times during the
Availability Period, including at any time during which one or more of
the conditions in Section 5 is not met, and shall be due and payable
quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur
after the Closing Date, and on the applicable Maturity Date. The
Commitment Fee shall be calculated quarterly in arrears, and if there
is any change in the Applicable
52
Percentage during any quarter, the actual daily amount shall be
computed and multiplied by the Applicable Percentage separately for
each period during such quarter that such Applicable Percentage was in
effect.
(b) Other Fees.
(i) The Borrower shall pay to the Arranger and
the Administrative Agent for their own respective accounts
fees in the amounts and at the times specified in the Fee
Letter. Such fees shall be fully earned when paid and shall
not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such
fees as shall have been separately agreed upon in writing in
the amounts and at the times so specified. Such fees shall be
fully earned when paid and shall not be refundable for any
reason whatsoever.
2.9 COMPUTATION OF INTEREST AND FEES.
All computations of interest for Base Rate Loans when the Base Rate is
determined by Bank of America's "prime rate" shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid; provided that any Loan that is repaid on the same day on which it is
made shall, subject to Section 2.11(a), bear interest for one (1) day.
2.10 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be
evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business. The
accounts or records maintained by the Administrative Agent and each
Lender shall be conclusive absent manifest error of the amount of the
Credit Extensions made by the Lenders to the Borrower and the interest
and payments thereon. Any failure to so record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Credit
Party Obligations. In the event of any conflict between the accounts
and records maintained by any Lender and the accounts and records of
the Administrative Agent in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of
manifest error. Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such
Lender (through the Administrative Agent) a promissory note which shall
evidence such Lender's Loans in addition to such accounts or records.
Each such promissory note shall (i) in the case of Revolving Loans, be
in the form of Exhibit D-1 (as amended, modified, restated,
supplemented, extended, renewed, or replaced from time to
53
time, a "Revolving Note"), (ii) in the case of the Tranche A Term Loan,
be in the form of Exhibit D-2 (as amended, modified, restated,
supplemented, extended, renewed, or replaced from time to time, a
"Tranche A Term Note") and (iii) in the case of the Tranche B Term
Loan, be in the form of Exhibit D-3 (as amended, modified, restated,
supplemented, extended, renewed, or replaced from time to time, a
"Tranche B Term Note"). Each Lender may attach schedules to its Note or
Notes and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to
in subsection (a), each Lender and the Administrative Agent shall
maintain in accordance with its usual practice accounts or records
evidencing the purchases and sales by such Lender of participations in
Letters of Credit. In the event of any conflict between the accounts
and records maintained by the Administrative Agent and the accounts and
records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of
manifest error.
2.11 PAYMENTS GENERALLY.
(a) Subject to Section 3.1, all payments to be made by
the Borrower shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall
be made to the Administrative Agent, for the account of the respective
Lenders or the L/C Issuer to which such payment is owed, at the
Administrative Agent's Office in Dollars and in immediately available
funds, not later than 2:00 p.m. on the date specified herein. The
Administrative Agent will promptly distribute to the L/C Issuer and/or
each Lender its Pro Rata Share (or other applicable share as provided
herein) of such payment in like funds as received by wire transfer to
such Lender's Lending Office. All payments received by the
Administrative Agent after 2:00 p.m. shall be deemed received on the
next succeeding Business Day and any applicable interest or fee shall
continue to accrue.
(b) If any payment to be made by the Borrower shall come
due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the
Administrative Agent, prior to the date any payment is required to be
made by it to the Administrative Agent hereunder, that the Borrower or
such Lender, as the case may be, will not make such payment, the
Administrative Agent may assume that the Borrower or such Lender, as
the case may be, has timely made such payment and may (but shall not be
so required to), in reliance thereon, make available a corresponding
amount to the Person entitled thereto. If and to the extent that such
payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment,
each Lender shall forthwith on demand repay to the
Administrative Agent the portion of such
54
assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in
respect of each day from and including the date such amount
was made available by the Administrative Agent to such Lender
to the date such amount is repaid to the Administrative Agent
in immediately available funds at the Federal Funds Rate from
time to time in effect; and
(ii) if any Lender failed to make such payment,
such Lender shall forthwith on demand pay to the
Administrative Agent the amount thereof in immediately
available funds, together with interest thereon for the period
from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount
is recovered by the Administrative Agent (the "Compensation
Period") at a rate per annum equal to the Federal Funds Rate
from time to time in effect. If such Lender pays such amount
to the Administrative Agent, then such amount shall constitute
such Lender's Loan included in the applicable Borrowing. If
such Lender does not pay such amount forthwith upon the
Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the
Borrower shall pay such amount to the Administrative Agent,
together with interest thereon for the Compensation Period at
a rate per annum equal to the rate of interest applicable to
the applicable Borrowing. Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its
Commitment or to prejudice any rights which the Administrative
Agent or the Borrower may have against any Lender as a result
of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the
Borrower with respect to any amount owing under this subsection (c)
shall be conclusive, absent manifest error.
(d) If any Lender makes available to the Administrative
Agent funds for any Loan to be made by such Lender as provided in the
foregoing provisions of this Section 2, and such funds are not made
available to the Borrower by the Administrative Agent because the
conditions to the applicable Credit Extension set forth in Section 5
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall promptly return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make
Loans and to fund participations in Letters of Credit are several and
not joint. The failure of any Lender to make any Loan or to fund any
such participation on any date required hereunder shall not relieve any
other Lender of its corresponding obligation to do so on such date, and
no Lender shall be responsible for the failure of any other Lender to
so make its Loan or purchase its participation.
(f) Nothing herein shall be deemed to obligate any Lender
to obtain the funds for any Loan in any particular place or manner or
to constitute a representation by any
55
Lender that it has obtained or will obtain the funds for any Loan in
any particular place or manner.
2.12 SHARING OF PAYMENTS.
If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Loans made by it, or the participations in L/C
Obligations held by it, any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its ratable share
(or other share contemplated hereunder) thereof, such Lender shall immediately
(a) notify the Administrative Agent of such fact, and (b) purchase from the
other Lenders such participations in the Loans made by them and/or such
subparticipations in the participations in L/C Obligations held by them, as the
case may be, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Loans or such participations, as the case may
be, pro rata with each of them; provided, however, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender under any
of the circumstances described in Section 11.6 (including pursuant to any
settlement entered into by the purchasing Lender in its discretion), such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered,
without further interest thereon. The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by Law, exercise all its rights of payment (including the right of
set-off, but subject to Section 11.9) with respect to such participation as
fully as if such Lender were the direct creditor of the Borrower in the amount
of such participation. The Administrative Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Lenders following
any such purchases or repayments. Each Lender that purchases a participation
pursuant to this Section shall from and after such purchase have the right to
give all notices, requests, demands, directions and other communications under
this Credit Agreement with respect to the portion of the Credit Party
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Credit Party Obligations purchased.
SECTION 3
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 TAXES.
(a) Any and all payments by any Credit Party to or for
the account of the Administrative Agent or any Lender under any Credit
Document shall be made free and clear of and without deduction for any
and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities
with respect thereto, excluding, in the case of the Administrative
Agent and each Lender,
56
taxes imposed on or measured by its overall net income, branch profit
taxes and franchise taxes imposed on it (in lieu of net income taxes),
by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may
be, is organized or maintains a lending office (all such non-excluded
taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter
referred to as "Taxes"). If any Credit Party shall be required by any
Laws to deduct any Taxes from or in respect of any sum payable under
any Credit Document to the Administrative Agent or any Lender, (i)
except as provided in Section 11.15(a), the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section), each of the Administrative Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions
been made, (ii) such Credit Party shall make such deductions, (iii)
such Credit Party shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable
Laws, and (iv) within thirty (30) days after the date of such payment,
such Credit Party shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy
of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all
present or future stamp, court or documentary taxes and any other
excise or property taxes or charges or similar levies which arise from
any payment made under any Credit Document or from the execution,
delivery, performance, enforcement or registration of, or otherwise
with respect to, any Credit Document (hereinafter referred to as "Other
Taxes").
(c) If the Borrower shall be required to deduct or pay
any Taxes or Other Taxes from or in respect of any sum payable under
any Credit Document to the Administrative Agent or any Lender, the
Borrower shall also pay to the Administrative Agent or to such Lender,
as the case may be, at the time interest is paid, such additional
amount that the Administrative Agent or such Lender specifies is
necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes
or Other Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative
Agent and each Lender for (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any
jurisdiction on amounts payable under this Section) paid by the
Administrative Agent and such Lender with respect to amounts received
under any Credit Document, (ii) amounts payable under Section 3.1(c)
and (iii) any liability (including additions to tax, penalties,
interest and expenses) arising therefrom or with respect thereto;
provided, that the Borrower shall not be required to reimburse the
Administrative Agent or such Lender in respect of interest, penalties
or additions to tax attributable to Taxes if such interest, penalties
or additions to tax are attributable to the gross negligence or willful
misconduct of the Person seeking reimbursement. Payment under this
subsection (d) shall be made within thirty (30) days after the date the
Lender or the Administrative Agent makes demand therefor.
57
(e) If any Lender determines in its reasonable discretion
that it has actually received any refund of Taxes in connection with
any deduction or withholding or payment of any additional amount by the
Borrower pursuant to this Section 3.1, such Person shall reimburse the
Borrower in an amount equal to such refund, on an after-tax basis and
net of all expenses incurred by such Person in connection with
obtaining such refund. The Borrower shall return such amount to the
applicable Person in the event that such Person is required to repay
such refund of Taxes. Nothing contained in this Section 3.1(e) shall
interfere with the right of any Lender to arrange its tax affairs in
whatever manner it deems fit or require such Person to disclose any
information or any computations relating to its tax affairs.
3.2 ILLEGALITY.
If any Lender reasonably determines that as a result of any Law that
becomes effective on or after the Closing Date, or any change on or after the
Closing Date in or in the interpretation of any Law, in each case that is
applicable to or binding up on such Lender, has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
any obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice,
the Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or convert all Eurodollar Rate Loans of such
Lender to Base Rate Loans, either on the last day of the Interest Period
therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate
Loans to such day, or immediately, if such Lender may not lawfully continue to
maintain such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.
Each Lender agrees to designate a different Lending Office if such designation
will avoid the need for such notice and will not, in the good faith judgment of
such Lender, otherwise be materially disadvantageous to such Lender.
3.3 INABILITY TO DETERMINE RATES.
If the Required Lenders reasonably determine that by reason of
circumstances arising after the Closing Date adequate and reasonable means do
not exist for determining the Eurodollar Rate for any requested Interest Period
with respect to a proposed Eurodollar Rate Loan, or that the Eurodollar Rate for
any requested Interest Period with respect to a proposed Eurodollar Rate Loan
does not adequately and fairly reflect the cost to such Lenders of funding such
Loan, the Administrative Agent will promptly so notify the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain Eurodollar
Rate Loans shall be suspended until the Administrative Agent (upon the
instruction of the Required Lenders) revokes such notice. Upon receipt of such
notice, the Borrower may revoke without premium or penalty any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Borrowing of
58
Base Rate Loans in the amount specified therein and any outstanding Eurodollar
Rate Loans shall be converted on the last day of the then current Interest
Period to Base Rate Loans.
3.4 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES
ON EURODOLLAR RATE LOANS.
(a) If any Lender reasonably determines that as a result
of any Law that becomes effective on or after the Closing Date, or any
change on or after the Closing Date in or in the interpretation of any
Law, in each case that is applicable to or binding upon such Lender, or
such Lender's compliance therewith on or after the Closing Date, there
shall be any increase in the cost to such Lender (by an amount deemed
material by such Lender) of agreeing to make or making, funding or
maintaining Eurodollar Rate Loans or (as the case may be) issuing or
participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender (by an amount deemed material by
such Lender) in connection with any of the foregoing (excluding for
purposes of this subsection (a) any such increased costs or reduction
in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.1 shall govern), (ii) changes in the basis of taxation of overall net
income or overall gross income by the United States or any foreign
jurisdiction or any political subdivision of either thereof under the
Laws of which such Lender is organized or has its Lending Office, and
(iii) reserve requirements contemplated by Section 3.4(c)), then from
time to time within twenty (20) days of written demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to
such Lender, subject to Section 3.6(a), such additional amounts as will
compensate such Lender for such increased cost or reduction.
(b) If any Lender reasonably determines that any Law
regarding capital adequacy that becomes effective on or after the
Closing Date, or any change on or after the Closing Date in any Law
regarding capital adequacy or in the interpretation thereof, in each
case that is applicable to or binding upon such Lender, or compliance
by such Lender (or its Lending Office) therewith on or after the
Closing Date, has the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender (by
an amount deemed material by such Lender) as a consequence of such
Lender's obligations hereunder (taking into consideration its policies
with respect to capital adequacy and such Lender's desired return on
capital) below that which such Lender or corporation could have
achieved by for such effectiveness, change or compliance, then from
time to time within twenty (20) days of written demand by such Lender
(which demand such Lender shall deliver a copy of to the Administrative
Agent), the Borrower shall pay to such Lender, subject to Section
3.6(a), such additional amounts as will compensate such Lender for such
reduction.
(c) The Borrower shall pay to each Lender, as long as
such Lender shall be required to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or
deposits (currently known as "Eurocurrency liabilities"), additional
interest on the unpaid principal amount of each Eurodollar Rate Loan
equal to the actual costs of such reserves allocated to such Loan by
such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent manifest
59
error), which shall be due and payable on each date on which interest
is payable on such Loan, provided the Borrower shall have received at
least fifteen (15) days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If
a Lender fails to give notice fifteen (15) days prior to the relevant
Interest Payment Date, such additional interest shall be due and
payable fifteen (15) days from receipt of such notice.
3.5 FUNDING LOSSES.
Within twenty (20) days of written demand by any Lender (with a copy to
the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment
of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than
the failure of such Lender to make a Loan) to borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrower; or
(c) any prepayment of a Eurodollar Rate Loan due to any
assignment of a Eurodollar Rate Loan on a day other than the last day
of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 11.16.
The compensation payable under this Section 3.5 to any applicable Lender shall
be equal to (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrower, convert or continue to
the last day of the applicable 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 Eurodollar Rate Loan provided for herein (excluding, however, the
Applicable Percentage included therein) minus (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. The Borrower shall also pay
any customary administrative fees charged by such Lender in connection with the
foregoing.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.5, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
60
3.6 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) Any request for compensation under this Section 3
shall be accompanied by a certificate of the Administrative Agent or
any Lender claiming compensation under this Section 3 setting forth the
additional amount or amounts to be paid to it hereunder (and, in
reasonable detail, the calculation thereof and/or the basis thereof, to
the extent applicable). Any such certificate shall be conclusive in the
absence of manifest error. In determining such amount, the
Administrative Agent or such Lender may use any reasonable averaging
and attribution methods.
(b) Upon (i) any Lender making a claim for compensation
under Section 3.1 or 3.4 (or the Borrower being required to pay an
additional amount to any Lender or Governmental Authority for the
account of any Lender under Section 3.4), (ii) any Lender giving notice
under Section 3.2 of its inability to make, fund or maintain Eurodollar
Rate Loans, to the extent only such Lender is unable to make, fund or
maintain Eurodollar Rate Loans at such time, (iii) any Lender not
making its ratable share of a Loan borrowing available or any Lender
failing to participate in L/C Obligations or (iv) any Lender becoming
and continuing as a Defaulting Lender, the Borrower may replace such
Lender in accordance with Section 11.16.
(c) If any Credit Party is required to pay additional
amounts to or for the account of any Lender pursuant to Section 3.1 or
Section 3.4, then such Lender will agree to use reasonable efforts to
change the jurisdiction of its applicable Lending Office so as to
eliminate or reduce any such additional payment which may thereafter
accrue if such change, in the good faith, reasonable judgment of such
Lender, is not otherwise materially disadvantageous to such Lender.
(d) The Borrower shall not be obligated to indemnify or
reimburse the Administrative Agent or any Lender for any amounts
pursuant to Section 3.1 or 3.4 for periods occurring prior to the 180th
day before the giving of written demand for compensation of such
amounts by the Administrative Agent or such Lender.
3.7 SURVIVAL.
All of the Borrower's obligations under this Section 3 shall survive
termination of the Commitments and repayment of all other Credit Party
Obligations hereunder.
SECTION 4
GUARANTY
4.1 GUARANTY OF PAYMENT.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, each Affiliate of a Lender that enters into a Secured Swap Contract, and
the Administrative Agent as
61
hereinafter provided, as primary obligor and not as surety, the prompt payment
of the Credit Party Obligations in full when due (whether at stated maturity, as
a mandatory prepayment, by acceleration, as a mandatory cash collateralization
or otherwise, giving effect to any applicable grace periods) strictly in
accordance with the terms thereof. The Guarantors hereby further agree that if
any of the Credit Party Obligations are not paid in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise, giving effect to any applicable grace periods),
the Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Credit Party Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise,
giving effect to any applicable grace periods) in accordance with the terms of
such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Secured Swap Contracts, the obligations of
each Guarantor under this Credit Agreement and the other Credit Documents shall
be limited to an aggregate amount equal to the largest amount that would not
render such obligations subject to avoidance under the Debtor Relief Laws or any
comparable provisions of any applicable state Law.
4.2 CREDIT PARTY OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Secured
Swap Contracts, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Credit Party Obligations, and, to the fullest extent
permitted by applicable Law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the Credit Party Obligations (other than contingent indemnity
obligations which by the terms thereof are stated to survive termination of the
Credit Documents) have been Fully Satisfied. Without limiting the generality of
the foregoing, it is agreed that, to the fullest extent permitted by Law, the
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to
any Guarantor, the time for any performance of or compliance with any
of the Credit Party Obligations shall be extended, or such performance
or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of
any of the Credit Documents, any Secured Swap Contract, or any other
agreement or instrument referred to in the Credit Documents or such
Secured Swap Contracts shall be done or omitted;
62
(c) the maturity of any of the Credit Party Obligations
shall be accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right under
any of the Credit Documents, any Secured Swap Contract, or any other
agreement or instrument referred to in the Credit Documents or such
Secured Swap Contracts shall be waived or any other guarantee of any of
the Credit Party Obligations or any security therefor shall be
released, impaired or exchanged in whole or in part or otherwise dealt
with;
(d) any Lien granted to, or in favor of, the
Administrative Agent or any Lender or Lenders as security for any of
the Credit Party Obligations shall fail to attach or be perfected; or
(e) any of the Credit Party Obligations shall be
determined to be void or voidable (including, without limitation, for
the benefit of any creditor of any Guarantor) or shall be subordinated
to the claims of any Person (including, without limitation, any
creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby
expressly waives diligence, presentment, demand of payment, protest and all
notices whatsoever, and any requirement that the Administrative Agent or any
Lender exhaust any right, power or remedy or proceed against any Person under
any of the Credit Documents, any Secured Swap Contract, or any other agreement
or instrument referred to in the Credit Documents or such Secured Swap
Contracts, or against any other Person under any other guarantee of, or security
for, any of the Credit Party Obligations.
4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar Law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor agrees that such Guarantor shall have no right of
recourse to security for the Credit Party Obligations, except through the
exercise of rights of subrogation pursuant to Section 4.2 and through the
exercise of rights of contribution pursuant to Section 4.6.
63
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by Law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Credit Party Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Credit Party
Obligations being deemed to have become automatically due and payable), the
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of Section
4.1. The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Collateral Documents and that the
Lenders and the Administrative Agent may exercise their remedies thereunder in
accordance with the terms thereof.
4.6 RIGHTS OF CONTRIBUTION.
The Credit Parties agree among themselves that, in connection with
payments made hereunder, each Credit Party shall have contribution rights
against the other Credit Parties as permitted under applicable Law. Such
contribution rights shall be subordinate and subject in right of payment to the
Credit Party Obligations and no Credit Party shall exercise such rights of
contribution until all Credit Party Obligations have been paid in full and the
Commitments terminated.
4.7 GUARANTEE OF PAYMENT; CONTINUING GUARANTEE.
The Guaranty in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Credit Party
Obligations whenever arising.
SECTION 5
CONDITIONS PRECEDENT
5.1 CLOSING CONDITIONS.
The obligation of each Lender to enter into this Credit Agreement and
make the initial Credit Extension is subject to satisfaction (or waiver by each
of the Lenders) of the following conditions:
(a) Executed Credit Documents. Receipt by the
Administrative Agent of duly executed copies of (i) this Credit
Agreement, (ii) the Notes, (iii) the Collateral Documents and (iv) all
other Credit Documents, each in form and substance reasonably
acceptable to the Administrative Agent in its sole discretion.
64
(b) Corporate Documents. Receipt by the Administrative
Agent of the following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation, articles of organization or
other charter documents of each Credit Party certified to be
true and complete as of a recent date by the appropriate
Governmental Authority of the state or other jurisdiction of
its incorporation or organization and certified by a secretary
or assistant secretary of such Credit Party to be true and
correct as of the Closing Date;
(ii) Bylaws; Operating Agreement. A copy of the
bylaws or operating agreement of each Credit Party certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date;
(iii) Resolutions. Copies of resolutions of the
Board of Directors or their equivalent of each Credit Party
approving and adopting the Credit Documents to which it is a
party, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or
assistant secretary of such Credit Party to be true and
correct and in force and effect as of the Closing Date;
(iv) Good Standing. Copies of certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation or organization and each other
jurisdiction in which the failure to so qualify and be in good
standing would have a Material Adverse Effect; and
(v) Incumbency. An incumbency certificate of
each Credit Party certified by a secretary or assistant
secretary to be true and correct as of the Closing Date.
(c) Opinions of Counsel. The Administrative Agent shall
have received, in each case dated as of the Closing Date:
(i) a legal opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) in form and substance reasonably
satisfactory to the Administrative Agent; and
(ii) a legal opinion of special local counsel for
each Credit Party not incorporated or organized in the States
of Delaware or New York, in each case in form and substance
reasonably satisfactory to the Administrative Agent.
(d) Personal Property Collateral. The Administrative
Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent:
(i) searches of Uniform Commercial Code ("UCC")
filings in the jurisdiction of incorporation or organization
of each Credit Party, the jurisdiction of the chief executive
office of each Credit Party and each jurisdiction where any
65
Collateral is located or where a filing would have been made
in order to perfect the Administrative Agent's security
interest in the Collateral under previous versions of Article
9 of the UCC, copies of the financing statements on file in
such jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) UCC financing statements for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's reasonable discretion, to perfect the
Administrative Agent's security interest in the Collateral;
(iii) searches of ownership of intellectual
property in the appropriate governmental offices as reasonably
requested by the Administrative Agent and such patent,
trademark and copyright filings and recordings as are
reasonably necessary to perfect the security interest of the
Administrative Agent therein in the United States of America;
(iv) all certificates, if any, evidencing any
certificated Capital Stock pledged to the Administrative Agent
pursuant to the Pledge Agreement, together with duly executed
in blank undated stock powers attached thereto; and
(v) to the extent valued in excess of $250,000,
each instrument or chattel paper in the possession of a Credit
Party, as required by the Security Agreement, together with
allonges or assignments as may be reasonably necessary to
perfect the Administrative Agent's security interest in such
Collateral.
(e) Real Property Collateral. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to
the Administrative Agent:
(i) Mortgages. Fully executed and notarized
amended and restated mortgages, deeds of trust or deeds to
secure debt (each a "Mortgage" and collectively the
"Mortgages") encumbering the fee interest of the Credit
Parties in each real property asset owned by a Credit Party
set forth on Schedule 5.1(e) (each a "Mortgage Property" and
collectively the "Mortgage Properties"), together with such
UCC-1 financing statements as are necessary with respect to
each such Mortgage Property;
(ii) Leasehold Mortgages. Fully executed and
notarized leasehold mortgages, deeds of trust or deeds to
secure debt, or amendments to leasehold mortgages, deeds of
trust or deeds to secure debt (each a "Leasehold Mortgage" and
collectively the "Leasehold Mortgages") encumbering the
leasehold interest of the Credit Parties in each real property
asset leased by a Credit Party set forth on Schedule 5.1(e)
(each a "Leasehold Mortgage Property" and collectively the
"Leasehold Mortgage Properties"), together with such UCC-1
financing statements as are necessary with respect to each
such Leasehold Mortgage Property;
(iii) Local Counsel Opinions. An opinion of
counsel (which counsel shall be reasonably satisfactory to the
Administrative Agent) in the state in which each
66
Mortgage Property and Leasehold Mortgage Property is located
with respect to the enforceability of the Mortgages and
Leasehold Mortgages, standard remedies with respect thereto
and sufficiency of the form of UCC-1 financing statements to
be recorded or filed in such state and such other matters as
the Administrative Agent may reasonably request, in form and
substance reasonably satisfactory to the Administrative Agent;
(iv) Title Policies. ALTA or other appropriate
form mortgagee title insurance policies (the "Mortgage
Policies"), or datedown endorsements to existing Mortgage
Policies, issued by the Title Insurance Company, in an amount
satisfactory to the Administrative Agent with respect to each
Real Property (which amount shall not, in any event, exceed
the fair market value of such Real Property), assuring the
Administrative Agent that the applicable Mortgages or
Leasehold Mortgages, as applicable, create valid and
enforceable mortgage liens on the respective Real Properties,
free and clear of all defects and encumbrances except
Permitted Liens, which Mortgage Policies shall be in form and
substance reasonably satisfactory to the Administrative Agent
and containing such endorsements as shall be reasonably
satisfactory to the Administrative Agent and for any other
matters that the Administrative Agent may reasonably request,
and providing affirmative insurance and such reinsurance as
the Administrative Agent may request, all of the foregoing in
form and substance reasonably satisfactory to the
Administrative Agent;
(v) Surveys. To the extent required to obtain
Mortgage Policies (or datedown endorsements to existing
Mortgage Policies) containing no survey exception to coverage,
maps or plats of as-built surveys of the sites of the Real
Properties certified to the Administrative Agent and the Title
Insurance Company in a manner reasonably satisfactory to them,
dated a date satisfactory to the Administrative Agent and the
Title Insurance Company by an independent professional
licensed land surveyor reasonably satisfactory to the
Administrative Agent and the Title Insurance Company, which
maps or plats and the surveys on which they are based shall be
sufficient to delete any standard printed survey exception
contained in the applicable title policy and be made in
accordance with the Minimum Standard Detail Requirements for
Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the
generality of the foregoing, there shall be surveyed and shown
on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and
other improvements and the established building setback lines;
(B) the lines of streets abutting the sites and width thereof;
(C) all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site,
whether recorded, apparent from a physical inspection of the
sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building
structures and improvements on the sites; and (F) if the site
is described as being on a filed map, a legend relating the
survey to said map; and
67
(vi) Flood Certificates. Certification from a
registered engineer or land surveyor or other evidence
reasonably acceptable to the Administrative Agent that none of
the improvements on the Real Properties are located within any
area designated by the Director of the Federal Emergency
Management Agency as a "special flood hazard" area or if any
improvements on the Real Properties are located within a
"special flood hazard" area, evidence of a flood insurance
policy from a company and in an amount reasonably satisfactory
to the Administrative Agent for the applicable portion of the
premises, naming the Administrative Agent, for the benefit of
the Lenders, as mortgagee.
(f) Evidence of Insurance. Receipt by the Administrative
Agent of copies of insurance policies or certificates of insurance of
the Credit Parties evidencing liability and casualty insurance meeting
the requirements set forth in the Credit Documents, including, but not
limited to, naming the Administrative Agent as additional insured or
loss payee on behalf of the Lenders.
(g) Consents. Receipt by the Administrative Agent of
evidence reasonably satisfactory to the Administrative Agent that the
representation and warranty set forth in Section 6.6 is true and
correct in all material respects as of the Closing Date.
(h) Corporate Structure. The corporate capital and
ownership structure of the Parent and its Subsidiaries shall be as
described in Schedule 5.1(h).
(i) Officer's Certificates. The Administrative Agent
shall have received a certificate or certificates executed by the chief
financial officer or treasurer of the Borrower as of the Closing Date
stating that, immediately after giving effect to this Credit Agreement,
the other Credit Documents and all the transactions contemplated
therein to occur on such date, (i) no Default or Event of Default
exists, (ii) all representations and warranties contained herein and in
the other Credit Documents are true and correct in all material
respects, and (iii) the Credit Parties are in compliance with each of
the financial covenants set forth in Section 7.2 (calculated using the
amount of Funded Debt outstanding on the Closing Date and the amounts
for all other components of such financial covenant calculations as of
the last day of the most recent month end prior to the Closing Date).
(j) Fees and Expenses. Payment by the Credit Parties of
the fees and expenses due and payable by them to the Lenders and the
Administrative Agent, as set forth herein and in the Fee Letter.
(k) Existing Credit Facility. The outstanding obligations
under the Existing Credit Agreement shall have been refinanced in
accordance with the terms of this Credit Agreement.
(l) Financial Statements. The Lenders shall have received
copies of the financial statements referenced in Section 6.1(a).
68
5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall the L/C Issuer be
required to issue or extend a Letter of Credit unless:
(a) Notice. The Administrative Agent and, if applicable,
the L/C Issuer shall have received a Request for Credit Extension in
accordance with the requirements hereof.
(b) Representations and Warranties. The representations
and warranties made by the Credit Parties in any Credit Document are
true and correct in all material respects at and as if made as of such
date except to the extent they expressly relate to an earlier date.
(c) No Default. No Default or Event of Default shall
exist or be continuing either prior to or after giving effect thereto;
provided, however, that the existence of any Default or Event of
Default resulting from the failure of the Borrower to timely make a
payment under the Construction Loan Documents shall not, in and of
itself, constitute a failure to satisfy the conditions set forth in
this subsection (c) in connection with a requested Revolving Loan the
proceeds of which are to be applied to make such payment under the
Construction Loan Documents on behalf of the Borrower in accordance
with the terms of Section 2.2(b).
(d) No Material Adverse Effect. There shall not have
occurred any Material Adverse Effect since December 31, 2002.
(e) Availability. Immediately after giving effect to the
making of a Loan (and the application of the proceeds thereof) or to
the issuance of a Letter of Credit, as the case may be, the Total
Revolving Outstandings shall not exceed the Aggregate Revolving
Commitments.
The delivery of each Request for Credit Extension (other than a Loan Notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurodollar Rate Loans) shall constitute a representation and warranty by the
Borrower of the correctness of the matters specified in subsections (b), (c),
(d) and (e) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and
each Lender that:
6.1 FINANCIAL CONDITION.
(a) The audited consolidated balance sheets and income
statements of (i) Packaging Holdings, L.L.C. and its Subsidiaries for
fiscal years 2000 and 2001 and
69
(ii) the Parent and its Subsidiaries for fiscal year 2002 have
heretofore been furnished to each Lender. Such financial statements
(including the notes thereto) (i) have been audited by
PricewaterhouseCoopers, (ii) have been prepared in accordance with GAAP
consistently applied throughout the periods covered thereby and (iii)
present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated financial condition, results of
operations and cash flows of the Credit Parties covered by such
financial statements as of such date and for such periods. The
unaudited interim consolidated and consolidating balance sheets of the
Parent and its Subsidiaries as of the end of, and the related unaudited
interim consolidated and consolidating statements of earnings and of
cash flows for, the six (6) month period ended June 30, 2003 have
heretofore been furnished to each Lender. Such interim financial
statements for each such quarterly period, (A) have been prepared in
accordance with GAAP consistently applied throughout the periods
covered thereby and (B) present fairly (on the basis disclosed in the
footnotes to such financial statements) the consolidated and
consolidating financial condition, results of operations and cash flows
of the Parent and its Subsidiaries as of such date and for such
periods, subject to normal year end audit adjustments. During the
period from June 30, 2003 to and including the Closing Date, there has
been no sale, transfer or other disposition by the Parent or any of its
Subsidiaries of any material part of the business or property of the
Parent and its Subsidiaries taken as a whole, and no purchase or other
acquisition by any of them of any business or property (including any
Capital Stock of any other Person) material in relation to the
consolidated financial condition of the Parent and its Subsidiaries
taken as a whole, in each case, which is not reflected in the foregoing
financial statements or in the notes thereto and has not otherwise been
disclosed in writing to the Lenders on or prior to the Closing Date.
(b) The financial statements delivered to the Lenders
pursuant to Section 7.1(a) and (b), (i) have been prepared in
accordance with GAAP and (ii) present fairly (on the basis disclosed in
the footnotes to such financial statements) the consolidated financial
condition, results of operations and cash flows of the Parent and its
Subsidiaries as of such date and for such periods, except in the case
of financial statements delivered pursuant to Section 7.1(b), subject
to normal year end audit adjustments and the absence of footnotes.
6.2 NO MATERIAL CHANGE.
Since December 31, 2002, there has been no development or event
relating to or affecting a Credit Party which has had or would be reasonably
expected to have a Material Adverse Effect.
6.3 ORGANIZATION AND GOOD STANDING.
Each Credit Party (a) is a corporation or limited liability company or
other legal entity duly incorporated or organized, validly existing and in good
standing under the Laws of the State (or other jurisdiction) of its
incorporation or organization, (b) is duly qualified and in good standing as a
foreign organization and authorized to do business in every jurisdiction where
the failure to be so qualified, in good standing or authorized would have a
Material Adverse Effect and (c) has the requisite organizational power and
authority to own its Properties and to carry on its business as now conducted
and as proposed to be conducted.
70
6.4 DUE AUTHORIZATION.
Each Credit Party (a) has the requisite organizational power and
authority to execute, deliver and perform this Credit Agreement and the other
Credit Documents to which it is a party and to incur the obligations herein and
therein provided for and (b) is duly authorized to, and has been authorized by
all necessary organizational action, to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party.
6.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation, bylaws, articles of organization or operating agreement or other
organizational documents, as applicable, (b) materially violate, materially
contravene or materially conflict with any Law (including, without limitation,
Regulation U or Regulation X), order, writ, judgment, injunction, decree or
permit applicable to it, (c) violate, contravene or materially conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation,
contravention or conflict of which, or default under, would have or might be
reasonably expected to have a Material Adverse Effect, or (d) result in or
require the creation of any Lien (other than Permitted Liens and those Liens
contemplated in or created in connection with the Credit Documents) upon or with
respect to its Properties.
6.6 CONSENTS.
Except for consents, approvals and authorizations and orders, filings,
registrations and qualifications (a) which have been obtained or made, (b) as
may be necessary to perfect the security interest of the Administrative Agent in
the Collateral to the extent required under the Collateral Documents and (c) the
failure of which to obtain or make would not reasonably be expected to have a
Material Adverse Effect, no consent, approval, authorization or order of, or
filing, registration or qualification with, any court or Governmental Authority
or third party in respect of any Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by such Credit Party.
6.7 ENFORCEABLE CREDIT PARTY OBLIGATIONS.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization or moratorium Laws or similar Laws relating to or affecting
creditors' rights generally or by general equitable principles.
71
6.8 NO DEFAULT.
No Credit Party is in default in any respect under any contract, lease,
loan agreement, indenture, mortgage, security agreement or other agreement or
obligation to which it is a party or by which any of its Properties is bound
which default would have or would be reasonably expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and continues to
exist except as previously disclosed in writing to the Administrative Agent.
6.9 OWNERSHIP.
Other than Permitted Liens, each Credit Party is the owner of (free and
clear of all Liens) and has good and marketable title to, or has a valid
leasehold interest in or license to use, (a) all of its Mortgage Properties and
Leasehold Mortgage Properties (except as indicated on the Mortgage Policies
accepted by the Administrative Agent) and (b) all of its other Property
necessary for the conduct of its business.
6.10 INDEBTEDNESS.
The Credit Parties have no Indebtedness except (a) as disclosed in the
financial statements referenced in Section 6.1, (b) as set forth on Schedule
6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 LITIGATION.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against any Credit Party which would have or would be reasonably
expected to have a Material Adverse Effect.
6.12 TAXES.
Each Credit Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due and payable (including interest and
penalties) and (b) all other material taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) that are due and payable, except for such taxes (i)
which are not yet delinquent or (ii) that are being contested in good faith and
by proper proceedings, and against which adequate reserves are being maintained
in accordance with GAAP. To the knowledge of the Credit Parties, as of the
Closing Date, there are no material amounts claimed to be due against any of
them by any Governmental Authority.
6.13 COMPLIANCE WITH LAW.
Each Credit Party is in compliance with all Laws (including without
limitation Environmental Laws) applicable to it, or to its Properties, unless
such failure to comply would not have or would not be reasonably expected to
have a Material Adverse Effect.
72
6.14 ERISA.
Except as would not result or be reasonably expected to result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no Termination
Event has occurred, and, to the knowledge of the Credit Parties, no
event or condition has occurred or exists as a result of which any
Termination Event could reasonably be expected to occur, with respect
to any Plan; (ii) no "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, has occurred with respect to any Plan; (iii) each Plan has
been maintained, operated, and funded in compliance with its own terms
and in material compliance with the provisions of ERISA, the Code, and
any other applicable federal or state Laws; and (iv) no lien in favor
of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit
liabilities" under each Single Employer Plan (determined within the
meaning of Section 401(a)(2) of the Code, utilizing the actuarial
assumptions used to fund such Plans), whether or not vested, did not,
as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the current value of the
assets of such Plan allocable to such accrued liabilities.
(c) Neither a Credit Party nor any ERISA Affiliate has
incurred, or, to the knowledge of the Credit Parties, are reasonably
expected to incur, any withdrawal liability under ERISA to any
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower, any
of its Subsidiaries nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning
of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected or is reasonably likely to subject any Credit Party or any
ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which any Credit Party or any ERISA
Affiliate has agreed or is required to indemnify any person against any
such liability.
(e) The present value (determined using actuarial and
other assumptions which are reasonable with respect to the benefits
provided and the employees participating) of the liability of each
Credit Party and each ERISA Affiliate for post-retirement welfare
benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA), net of all assets under all such Plans allocable to such
benefits, are reflected on the most recent audited financial statements
of the Parent
73
and its Subsidiaries delivered pursuant to Section 5.1(l) or Section
7.1(a) in accordance with FASB 106.
(f) Each Plan which is a welfare plan (as defined in
Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Code apply has been administered in material compliance
with such sections.
6.15 SUBSIDIARIES AS OF THE CLOSING DATE.
Set forth on Schedule 6.15 is a complete and accurate list as of the
Closing Date of all Subsidiaries of each Credit Party. Information on Schedule
6.15 includes as of the Closing Date jurisdiction of incorporation or
organization, the number of shares of each class of Capital Stock outstanding,
the number and percentage of outstanding shares of each class owned (directly or
indirectly) by such Credit Party; and the number and effect, if exercised, of
all outstanding options, warrants, rights of conversion or purchase and all
other similar rights with respect thereto as of the Closing Date. The
outstanding Capital Stock of all such Subsidiaries is (to the extent applicable)
validly issued, fully paid and non-assessable and is, to the extent owned by
each such Credit Party, directly or indirectly, free and clear of all Liens
(other than Permitted Liens and than those arising under or contemplated in
connection with the Credit Documents). Other than as set forth in Schedule 6.15,
as of the Closing Date neither any Credit Party nor any Subsidiary thereof has
outstanding any securities convertible into or exchangeable for its Capital
Stock nor does any such Person have outstanding any rights to subscribe for or
to purchase, or any options for the purchase of, or any agreements providing for
the issuance (contingent or otherwise) of, or any calls, commitments or claims
of any character relating to, its Capital Stock. As of the Closing Date, none of
the Credit Parties owns any shares of Capital Stock in any Foreign Subsidiaries.
6.16 USE OF PROCEEDS.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. No proceeds of the Loans hereunder have been
or will be used (a) to acquire, directly or indirectly, any security in any
transaction which is subject to Sections 13 or 14 of the Exchange Act
(including, without limitation, Sections 13(d) and 14(d) thereof) or to
refinance any Indebtedness used to acquire any such securities or (b) for the
Acquisition of another Person unless such Acquisition is a Permitted
Acquisition.
6.17 GOVERNMENT REGULATION.
(a) No part of the Letters of Credit or proceeds of the
Loans will be used, directly or indirectly, (i) for the purpose of
purchasing or carrying any "margin stock" within the meaning of
Regulation U, or (ii) for the purpose of purchasing or carrying or
trading in any securities if, as a result thereof, the Administrative
Agent would be required to take any action under Regulation T. If
requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form U-1
referred to in Regulation U. No Indebtedness being reduced or retired
out of the proceeds of the Loans was or will be incurred for the
purpose of purchasing or
74
carrying any margin stock within the meaning of Regulation U or any
"margin security" within the meaning of Regulation T. "Margin stock"
within the meaning of Regulation U does not constitute more than 25% of
the value of the consolidated assets of the Credit Parties. None of the
transactions contemplated by the Credit Documents (including, without
limitation, the direct or indirect use of the proceeds of the Loans)
will violate or result in a violation of the Securities Act, the
Exchange Act, regulations issued pursuant to the Securities Act or the
Exchange Act, or Regulation T, U or X.
(b) No Credit Party is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940, each as amended. In addition, no
Credit Party is (i) an "investment company" registered or required to
be registered as such under the Investment Company Act of 1940, as
amended, and, to the best of its knowledge, is not controlled (as such
term is defined in the Investment Company Act of 1940, as amended) by
such a company, or (ii) a "holding company", or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.18 ENVIRONMENTAL MATTERS.
(a) Except as would not cause or reasonably be expected
to cause a Material Adverse Effect:
(i) Each of the Real Properties and all
operations at the Real Properties are in compliance with all
applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Real Properties or
the businesses operated by the Credit Parties (the
"Businesses").
(ii) No Credit Party has received any written
notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous Materials
or compliance with Environmental Laws with regard to any of
the Real Properties or the Businesses.
(iii) Hazardous Materials have not been
transported or disposed of from the Real Properties, or
generated, treated, stored or disposed of at, on or under any
of the Real Properties or any other location, in each case by,
or on behalf or with the permission of, a Credit Party in a
manner that would give rise to liability under any applicable
Environmental Laws.
(iv) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of a
Credit Party, threatened, under any Environmental Law to which
a Credit Party is a party, nor are there any consent decrees
or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to a
Credit Party, the Real Properties or the Businesses.
75
(v) There has been no release (including,
without limitation, disposal) or threat of release of
Hazardous Materials at or from the Real Properties, or arising
from or related to the operations of a Credit Party in
connection with the Real Properties or otherwise in connection
with the Businesses, in violation of or in amounts or in a
manner that could give rise to liability under Environmental
Laws.
(vi) To the knowledge of the Credit Parties, no
Credit Party has assumed any liability of any Person (other
than another Credit Party) under any Environmental Law.
(b) Each Credit Party has adopted procedures that are
designed to (i) ensure that such Credit Party, any of its operations
and each of the Real Properties owned or leased by such Credit Party
comply with applicable Environmental Laws and (ii) minimize any
liabilities or potential liabilities that such Credit Party, any of its
operations and each of the Real Properties owned or leased by such
Credit Party may have under applicable Environmental Laws.
6.19 INTELLECTUAL PROPERTY.
Each Credit Party owns, or has the legal right to use, all material
trademarks, service marks tradenames, patents, copyrights, technology, know-how,
processes and other trade secrets (the "Intellectual Property") owned or
licensed by it. Set forth on Schedule 6.19 is a list as of the Closing Date of
all registrations and applications for material Intellectual Property owned by
each Credit Party or that any Credit Party has the right to use and a list of
all license agreements to which a Credit Party is a party relating to material
Intellectual Property that any Credit Party has the right to use as of the
Closing Date. Except as provided on Schedule 6.19 or except as would not result
or be reasonably expected to result in a Material Adverse Effect, no claim has
been asserted by any Person against any Credit Party in writing and is pending
challenging or questioning the use of any Intellectual Property owned by a
Credit Party or that any Credit Party has a right to use or the validity or
effectiveness of any such Intellectual Property, nor does any Credit Party have
knowledge of any such claim, and to the Credit Parties' knowledge the use of any
Intellectual Property by the Credit Parties does not infringe on the rights of
any Person. Except as set forth on Schedule 6.19, as of the Closing Date, none
of the material Intellectual Property owned by a Credit Party is subject to any
licensing or franchise agreement.
6.20 SOLVENCY.
As of the Closing Date, each Credit Party (other than IPMC Acquisition,
L.L.C.) is and, after consummation of the transactions contemplated by this
Credit Agreement, will be Solvent. At any time after the Closing Date, the
Credit Parties on a consolidated basis are Solvent.
6.21 INVESTMENTS.
All Investments of each Credit Party are either Permitted Investments
or otherwise permitted by the terms of this Credit Agreement.
76
6.22 LOCATION OF COLLATERAL.
Set forth on Schedule 6.22(a) is a list as of the Closing Date of all
Real Properties with street address, county and state where located. Set forth
on Schedule 6.22(b) is a list as of the Closing Date of all locations where any
personal property of a Credit Party is located (other than personal property of
the Credit Parties not in excess of $100,000 in the aggregate), including county
and state where located. Set forth on Schedule 6.22(c) is a list as of the
Closing Date of the chief executive office and principal place of business of
each Credit Party.
6.23 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or written statement on the date
as of which such agreement, financial statements, document, certificate or
statement is made, certified or furnished to the Lenders by any Credit Party
(including any officer or director of a Credit Party) in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein (in light of the circumstances in which they were
made), taken as a whole, not misleading; provided that projections and
assumptions expressed in the information, exhibits, reports, certificates,
statements and documents so furnished were reasonable based on the information
available at the time so furnished, but no Credit Party makes any representation
or warranty that such projections or assumptions will prove in the future to be
accurate or that any Credit Party will achieve the financial results reflected
therein.
6.24 LICENSES, ETC.
The Credit Parties have obtained and hold in full force and effect, all
franchises, licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of their respective businesses
as presently conducted, except where the failure to obtain and hold the same
would not have a Material Adverse Effect.
6.25 COLLATERAL DOCUMENTS.
The Collateral Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens shall (upon the making of all filings and recording required) be perfected
security interests and Liens to the extent required under the Collateral
Documents, prior to all other Liens other than Permitted Liens. Each of the
representations and warranties made by the Credit Parties in the Collateral
Documents is true and correct in all material respects. Notwithstanding the
foregoing, it is understood that certain Collateral can only be perfected upon
the filing of adequate financing statements in appropriate filing offices and/or
the filing and/or recording of notices with the applicable Intellectual Property
recording offices.
77
6.26 BURDENSOME RESTRICTIONS.
No Credit Party is a party to any agreement or instrument or any
charter or corporate restriction which, individually or in the aggregate, would
have or be reasonably expected to have a Material Adverse Effect.
6.27 LABOR CONTRACTS AND DISPUTES.
Except as disclosed on Schedule 6.27 or except as would not cause or
reasonably be expected to cause a Material Adverse Effect, (a) there is no
collective bargaining agreement or other labor contract covering employees of
any Credit Party; (b) no union or other labor organization is seeking to
organize, or be recognized as, a collective bargaining unit of employees of any
Credit Party; and (c) there is no pending or, to any Credit Party's knowledge,
threatened strike, work stoppage, material unfair lease practice claim or other
material labor dispute against or affecting any Credit Party or its employees.
6.28 BROKER'S FEES.
None of the Credit Parties or any of their Subsidiaries has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated as of the Closing Date under the Credit Documents other than the
closing and other fees payable pursuant to this Credit Agreement and the Fee
Letter and any other fee consented to by the Administrative Agent.
6.29 CLASSIFICATION AS SENIOR INDEBTEDNESS.
The Credit Party Obligations constitute "Senior Indebtedness" under and
as defined in any agreement governing any outstanding Subordinated Indebtedness.
6.30 TAX SHELTER REGULATIONS.
The Credit Parties do not intend to treat the Loans and/or Letters of
Credit and related transactions as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4). In the event any Credit Party
determines to take any action inconsistent with such intention, it will promptly
notify the Administrative Agent thereof. If any Credit Party so notifies the
Administrative Agent, the Credit Parties acknowledge that one or more of the
Lenders may treat its Loans and/or its interest in Letters of Credit as part of
a transaction that is subject to Treasury Regulation Section 301.6112-1, and
such Lender or Lenders, as applicable, will maintain the lists and other records
required by such Treasury Regulation.
78
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and L/C Obligations, together
with interest and fees and other obligations then due and payable hereunder,
have been paid in full and the Commitments and Letters of Credit hereunder shall
have terminated:
7.1 INFORMATION COVENANTS.
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and (except as otherwise specifically provided below) each
of the Lenders:
(a) Annual Financial Statements. As soon as available,
and in any event within ninety (90) days after the close of each fiscal
year of the Parent, a consolidated and consolidating balance sheet and
income statement of the Parent and its Subsidiaries as of the end of
such fiscal year, together with related consolidated and consolidating
statements of operations and consolidated and consolidating statements
of retained earnings and of cash flows for such fiscal year, setting
forth in comparative form consolidated and consolidating figures for
the preceding fiscal year, all such consolidated and consolidating
financial information described above to be in reasonable form and
detail and audited by independent certified public accountants of
recognized national standing reasonably acceptable to the
Administrative Agent and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP and
shall not be limited or qualified as to the scope of the audit and
shall not be subject to any "going concern" or like qualification.
(b) Quarterly Financial Statements. As soon as available,
and in any event within forty-five (45) days after the close of each
fiscal quarter of the Parent (other than the fourth fiscal quarter, in
which case ninety (90) days after the end thereof), (i) a consolidated
and consolidating balance sheet and income statement of the Parent and
its Subsidiaries as of the end of such fiscal quarter, together with
related consolidated and consolidating statements of operations and
retained earnings and of cash flows for such fiscal quarter in each
case setting forth in comparative form consolidated and consolidating
figures for the corresponding period of the preceding fiscal year, all
such financial information described above to be in reasonable form and
detail and reasonably acceptable to the Administrative Agent, and
accompanied by a management discussion as to such financial information
and a certificate of the chief financial officer or treasurer of the
Parent to the effect that such quarterly financial statements fairly
present in all material respects the financial condition and results of
operations of the Parent and its Subsidiaries and have been prepared in
accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments and the absence of footnotes.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of the chief financial officer or treasurer of the
Borrower substantially in the form of Exhibit E, (i) demonstrating
79
compliance with the financial covenants contained in Section 7.2 by
calculation thereof as of the end of each such period, (ii)
demonstrating compliance with any other terms of this Credit Agreement
as reasonably requested by the Administrative Agent and (iii) stating
that no Default or Event of Default exists, or if any Default or Event
of Default does exist, specifying the nature and extent thereof and
what action the Borrower proposes to take with respect thereto.
(d) Compliance With Certain Provisions of the Credit
Agreement. Within ninety (90) days after the end of each fiscal year of
the Parent, the Borrower shall deliver a certificate containing
information regarding (i) the calculation of Excess Cash Flow, and (ii)
the amount of any Asset Dispositions where the Net Cash Proceeds
received or to be received in connection therewith is in excess of
$1,000,000, Debt Issuances and Equity Issuances that were made during
the prior fiscal year.
(e) Annual Business Plan and Budgets. Within forty-five
(45) days after the end of each fiscal year of the Parent, an annual
business plan and budget of the Parent and its Subsidiaries containing,
among other things, pro forma monthly financial projections for the
next fiscal year.
(f) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section 7.1(a),
a certificate of the accountants conducting the annual audit stating
that they have reviewed this Credit Agreement and stating further
whether, in the course of their audit, they have become aware of any
Default or Event of Default and, if any such Default or Event of
Default exists, specifying the nature and extent thereof.
(g) Auditor's Reports. Promptly upon receipt thereof, a
copy of any "management letter" submitted by independent accountants to
the Parent or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of the Parent and its
Subsidiaries.
(h) Reports. Promptly to the Administrative Agent upon
transmission or receipt thereof, (a) copies of any public filings and
registrations with, and reports to or from, the Securities and Exchange
Commission, or any successor agency, and copies of all financial
statements, proxy statements, notices and reports as the Parent or any
of its Subsidiaries shall send to its shareholders generally and (b)
upon the written request of the Administrative Agent, all written
reports and written information to and from the United States
Environmental Protection Agency, or any state or local agency
responsible for environmental matters, the United States Occupational
Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor agencies or
authorities concerning environmental, health or safety matters.
(i) Notices. Upon a Responsible Officer of a Credit Party
obtaining knowledge thereof, the Borrower will give written notice to
the Administrative Agent (i) immediately of the occurrence of an event
or condition constituting a Default or Event of Default, specifying the
nature and existence thereof and what action the Borrower proposes to
take
80
with respect thereto, and (ii) promptly of the occurrence of any of the
following with respect to any Credit Party or any of its Subsidiaries:
(A) the pendency or commencement of any litigation, arbitral or
governmental proceeding against a Credit Party which would be
reasonably expected to be adversely determined and, if adversely
determined, would have or would be reasonably expected to have a
Material Adverse Effect, or (B) the institution of any proceedings
against a Credit Party with respect to, or the receipt of written
notice by such Person of potential liability or responsibility for
violation, or alleged violation of any Law (including but not limited
to, any Environmental Law) the violation of which would have or would
be reasonably expected to have a Material Adverse Effect.
(j) ERISA. Upon any of the Credit Parties or any ERISA
Affiliate obtaining knowledge thereof, the Borrower will give prompt
written notice to the Administrative Agent promptly (and in any event
within two (2) Business Days) of any of the following which would have
or reasonably be expected to have a Material Adverse Effect: (i) any
event or condition, including, but not limited to, any Reportable
Event, that constitutes, or might reasonably lead to, a Termination
Event; (ii) with respect to any Multiemployer Plan, the receipt of
notice as prescribed in ERISA or otherwise of any withdrawal liability
assessed against the Credit Parties or any of their ERISA Affiliates,
or of a determination that any Multiemployer Plan is in reorganization
or insolvent (both within the meaning of Title IV of ERISA); (iii) the
failure to make full payment on or before the due date (including
extensions) thereof of all amounts which a Credit Party or ERISA
Affiliate is required to contribute to each Plan pursuant to its terms
and as required to meet the minimum funding standard set forth in ERISA
and the Code with respect thereto; or (iv) any change in the funding
status of any Plan; together, with a description of any such event or
condition or a copy of any such notice and a statement by the principal
financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any,
which has been or is being taken or is proposed to be taken by the
Credit Parties with respect thereto. Promptly upon request, a Credit
Party shall furnish the Administrative Agent with such additional
information concerning any Plan as may be reasonably requested (and, in
the case of a Multiemployer Plan, is reasonably available to the Credit
Parties), including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39)
of ERISA).
(k) Environmental.
(i) Upon the written request of the
Administrative Agent following the occurrence of any event or
the discovery of any condition which the Administrative Agent
or the Required Lenders reasonably believe has caused (or
could be reasonably expected to cause) the representations and
warranties set forth in Section 6.18 to be untrue in any
material respect, the Borrower will furnish or cause to be
furnished to the Administrative Agent, at the Borrower's
expense, a report of an environmental assessment of reasonable
scope, form and depth, including, where appropriate, invasive
soil or groundwater sampling, by a consultant reasonably
acceptable to the Administrative Agent as to the nature and
extent of the presence of
81
any Hazardous Materials on any property owned, leased or
operated by a Credit Party and as to the compliance by the
Credit Parties with Environmental Laws. If the Borrower fails
to deliver such an environmental report within seventy-five
(75) days after receipt of such written request, then the
Administrative Agent may arrange for same, and the Credit
Parties hereby grant to the Administrative Agent and its
representatives access to the Real Properties and a license of
a scope reasonably necessary to undertake such an assessment
(including, where appropriate, invasive soil or groundwater
sampling). The reasonable cost of any assessment arranged for
by the Administrative Agent pursuant to this provision will be
payable by the Borrower on demand and added to the Credit
Party Obligations.
(ii) Each Credit Party will conduct and complete
all investigations, studies, sampling, and testing and all
remedial, removal, and other actions reasonably necessary with
respect to all Hazardous Materials on, from, or affecting any
real property owned or leased by a Credit Party to the extent
necessary to be in compliance with all Environmental Laws and
all other applicable federal, state, and local Laws and with
the orders and directives of all Governmental Authorities
exercising jurisdiction over such real property to the extent
any failure to do so would cause or be reasonably expected to
cause a Material Adverse Effect.
(l) Tax Shelter Determination. Promptly after any Credit
Party has notified the Administrative Agent of any intention by such
Credit Party to treat the Loans and/or the Letters of Credit and
related transactions as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4), a duly completed copy
of IRS Form 8886 or any successor form.
(m) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
Properties or financial condition of the Credit Parties and their
Subsidiaries as the Administrative Agent or the Required Lenders may
reasonably request.
7.2 FINANCIAL COVENANTS.
(a) Leverage Ratio. The Credit Parties shall cause the
Leverage Ratio, measured as of the last day of each fiscal quarter of
the Parent, to be less than or equal to the ratio shown below for the
period corresponding thereto:
Period Ratio
--------------------------------------------------------------------------------------
Closing Date through September 30, 2004 4.50 to 1.00
--------------------------------------------------------------------------------------
October 1, 2004 through March 31, 2005 4.25 to 1.00
--------------------------------------------------------------------------------------
April 1, 2005 and thereafter 4.00 to 1.00
--------------------------------------------------------------------------------------
82
(b) Senior Leverage Ratio. The Credit Parties shall cause
the Senior Leverage Ratio, measured as of the last day of each fiscal
quarter of the Parent, to be less than or equal to the ratio shown
below for the period corresponding thereto:
Period Ratio
--------------------------------------------------------------------------------------
Closing Date through September 30, 2004 3.50 to 1.00
--------------------------------------------------------------------------------------
October 1, 2004 through March 31, 2005 3.25 to 1.00
--------------------------------------------------------------------------------------
April 1, 2005 and thereafter 3.00 to 1.00
--------------------------------------------------------------------------------------
(c) Net Worth. The Credit Parties shall cause Net Worth,
measured as of the last day of each fiscal quarter of the Parent, to be
greater than or equal to the sum of the following (determined on a
cumulative basis): (i) 80% of the Net Worth as of September 30, 2003
plus (ii) as of the end of each fiscal quarter of the Borrower
commencing with the fiscal quarter ending December 31, 2003, an amount
equal to 50% of Net Income of the Parent and its Subsidiaries (to the
extent positive) for the fiscal quarter then ended plus (iii) as of the
date of any Equity Issuance, 75% of the amount of Net Cash Proceeds
from such Equity Issuance.
(d) Fixed Charge Coverage Ratio. The Credit Parties shall
cause the Fixed Charge Coverage Ratio, measured as of the last day of
each fiscal quarter of the Parent, to be greater than or equal to the
ratio shown below for the period corresponding thereto:
Period Ratio
--------------------------------------------------------------------------------------
Closing Date through September 30, 2004 1.10 to 1.00
--------------------------------------------------------------------------------------
October 1, 2004 through March 31, 2005 1.15 to 1.00
--------------------------------------------------------------------------------------
April 1, 2005 and thereafter 1.20 to 1.00
--------------------------------------------------------------------------------------
7.3 PRESERVATION OF EXISTENCE AND FRANCHISES.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority except as permitted by
Section 8.4 or Section 8.5 or unless any such Person determines that any such
rights, franchises or authority is no longer necessary to the conduct of its
business or unless the failure to preserve and keep in full force and effect any
such right, franchise and authority would not have or would not be reasonably
expected to have a Material Adverse Effect.
7.4 BOOKS AND RECORDS.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, keep complete and accurate books and records of its
transactions to allow preparation of financial statements in accordance with
GAAP (including the establishment and maintenance of appropriate reserves).
83
7.5 COMPLIANCE WITH LAW.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, comply with all Laws and all restrictions imposed by
Governmental Authorities applicable to it and its property (including, without
limitation, Environmental Laws and ERISA) if non-compliance with any such Law or
restriction would have or would be reasonably expected to have a Material
Adverse Effect.
7.6 PAYMENT OF TAXES AND CLAIMS.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, pay, settle or discharge (a) all taxes, assessments and
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its Properties, before they shall become delinquent and (b) all
lawful claims (including claims for labor, materials and supplies) which, if
unpaid, might give rise to a Lien (other than a Permitted Lien) upon any of its
Properties; provided, however, that a Credit Party or its Subsidiary shall not
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith by appropriate proceedings and as to which
adequate reserves therefor have been established in accordance with GAAP, unless
the failure to make any such payment (i) would give rise to an immediate right
to foreclose or collect on a Lien securing such amounts or (ii) would have or
reasonably be expected to have a Material Adverse Effect.
7.7 INSURANCE.
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect
insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities and with such
deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral
Documents). The Administrative Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with
respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Administrative Agent, that it will give
the Administrative Agent thirty (30) days prior written notice before
any such policy or policies shall be altered or canceled, and that no
act or default of any Credit Party, any of its Subsidiaries or any
other Person shall affect the rights of the Administrative Agent or the
Lenders under such policy or policies. The present insurance coverage
of the Credit Parties is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 7.7.
(b) In case of any material loss of, damage to or
destruction of any Collateral, such Credit Party (i) shall promptly
give written notice thereof to the Administrative Agent generally
describing the nature and extent of such damage or destruction, (ii) in
the event that such Credit Party receives insurance proceeds on account
of any such loss of, damage to or destruction of such Collateral in a
net amount in excess of $1,000,000 (in respect of any insurance event,
the "Excess Proceeds"), such Credit Party will immediately pay over
such Excess Proceeds to the Administrative Agent as cash collateral for
the Credit Party
84
Obligations and (iii) whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient
for that purpose, at such Credit Party's cost and expense, will
promptly repair or replace the Collateral of such Credit Party so lost,
damaged or destroyed; provided, however, that (A) such Credit Party
need not repair or replace the Collateral of such Credit Party so lost,
damaged or destroyed to the extent the failure to make such repair or
replacement (1) is desirable to the proper conduct of the business of
such Credit Party in the ordinary course and otherwise in the best
interest of such Credit Party and (2) would not materially impair the
rights and benefits of the Administrative Agent or the Lenders under
the Collateral Documents, any other Credit Document or any Swap
Contract and (B) in the event that such Credit Party receives insurance
proceeds on account of any such loss of, damage to or destruction of
Collateral in a net amount in excess of $1,000,000, such Credit Party
shall not undertake replacement or restoration of any lost, damaged or
destroyed Collateral of such Credit Party with insurance proceeds in
respect thereof unless the Administrative Agent has received evidence
reasonably satisfactory to it that the Collateral lost, damaged or
destroyed has been or will be replaced or restored to its condition
immediately prior to such loss, destruction or other event giving rise
to the payment of such insurance proceeds; provided, further, however,
if such Credit Party elects not to repair or replace any lost, damaged
or destroyed Collateral in accordance with clause (A) above or is not
permitted to repair or replace such lost, damaged or destroyed
Collateral pursuant to clause (B) above, such Credit Party may apply
any related insurance proceeds to an Eligible Reinvestment.
(c) With respect to any Excess Proceeds deposited with
the Administrative Agent by any Credit Party as provided in the
subsection (b) above, the Administrative Agent agrees to release such
Excess Proceeds to such Credit Party for replacement or restoration of
the portion of the Collateral of such Credit Party lost, damaged or
destroyed or, subject to the terms of such subsection (b), to make an
Eligible Reinvestment; provided that, within ninety (90) days from the
date that the Administrative Agent receives such Excess Proceeds, the
Administrative Agent shall have received a written application for
release of such Excess Proceeds from such Credit Party establishing
satisfaction of the conditions set forth in clause (B) of subsection
(b) above or that, subject to the terms of such subsection (b), such
Credit Party plans to apply such proceeds to make an Eligible
Reinvestment.
(d) Any insurance proceeds received by any Credit Party
on account of any such loss of, damage to or destruction of Collateral
that (i) are not applied pursuant to subsection (b) above within the
period of one hundred eighty (180) days following the date the
applicable Credit Party receives such proceeds to repair or replace the
Collateral or, subject to the terms of such subsection (b), to make an
Eligible Reinvestment, (ii) are not permitted to be applied pursuant to
clause (B) of such subsection (b) to repair or replace the Collateral
and are not otherwise applied to make an Eligible Reinvestment in
accordance with the terms of such subsection (b) within the period of
one hundred eight (180) days following the date the applicable Credit
Party receives such proceeds or (iii) constitute Excess Proceeds which
have been deposited with the Administrative Agent and with respect to
which the conditions for application to replacement or restoration or
for making an Eligible Reinvestment or for release set forth in
subsection (c) above shall not have been met on or before the first
Business Day following the date ninety (90) days from the date the
85
Administrative Agent receives such Excess Proceeds, shall be applied
(by the Credit Parties or, in the case of Excess Proceeds held by the
Administrative Agent, by the Administrative Agent) to prepay the Loans
(and Cash Collateralize the L/C Obligations) in accordance with the
terms of Section 2.4(b)(iii)(B).
(e) All insurance proceeds shall, to the extent set forth
in the Collateral Documents, be subject to the security interest of the
Administrative Agent (for the ratable of the Lenders) under the
Collateral Documents.
7.8 MAINTENANCE OF PROPERTY.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, maintain and preserve its Properties and equipment material to
the conduct of its business in good repair, working order and condition, normal
wear and tear excepted, and will make, or cause to be made, in such Properties
and equipment from time to time all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses
unless any such Credit Party determines any such Properties or equipment are no
longer necessary to the conduct of its business.
7.9 COLLATERAL.
If, subsequent to the Closing Date, a Credit Party or any of its
Subsidiaries shall (a) (i) acquire any Property, any Intellectual Property which
is the subject of any application or registration or any securities, in each
case required to be delivered to the Administrative Agent as Collateral
hereunder or under any of the Collateral Documents or (ii) enter into any lease
agreement with respect to any plant, warehouse or other material real property
that is not part of the Real Properties as of the Closing Date, the Borrower
shall promptly notify the Administrative Agent of same, or (b) enter into any
lease agreement with respect to any real property (other than an office
location) not covered by clause (a)(ii) above, the Borrower shall notify the
Administrative Agent of same within ninety (90) days of entering into such lease
agreement. Each Credit Party will, and will cause each of its Subsidiaries to,
take such action (including, but not limited to, the actions similar in scope to
those set forth in Sections 5.1(d) and (e) and Section 7.12), as reasonably
requested by the Administrative Agent and at its own expense, to ensure that the
Administrative Agent (on behalf of the Lenders) has a perfected Lien in all
owned real property and such personal property of the Credit Parties and their
Subsidiaries as and to the extent set forth in the Collateral Documents (whether
now owned or hereafter acquired), subject only to Permitted Liens. Each Credit
Party will, and will cause each of its Subsidiaries to, adhere to the covenants
regarding changing its legal name or state of incorporation or organization as
set forth in the Security Agreement.
7.10 USE OF PROCEEDS.
The Credit Parties will, and will cause their Subsidiaries to, use the
proceeds of the Loans solely (a) to refinance indebtedness under the Existing
Credit Agreement, (b) to repay certain existing Indebtedness of the Credit
Parties and their Subsidiaries as set forth on Schedule 7.10, (c) to pay fees
and expenses as required by or incurred in connection with this Credit
Agreement, (d) to provide working capital for the Credit Parties and their
Subsidiaries, (e) for capital expenditures,
86
(f) to make any payment when due under the Construction Loan Documents in
accordance with Section 2.2(b) and (g) for general corporate purposes of the
Borrower and its Subsidiaries. The Credit Parties will use the Letters of Credit
solely for the purposes set forth in Section 2.3(a).
7.11 AUDITS/INSPECTIONS.
Upon reasonable notice and during normal business hours, each Credit
Party will, and will cause each of its Subsidiaries to, permit representatives
appointed by the Administrative Agent, including, without limitation,
independent accountants, agents, attorneys and appraisers to visit and inspect
such Person's property, including its books and records, its accounts receivable
and inventory, its facilities and its other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Administrative Agent, the
Required Lenders or their representatives to investigate and verify the accuracy
of information provided to the Lenders, and to discuss all such matters with the
officers, employees and representatives of the Credit Parties; provided that (a)
the Administrative Agent and its representatives shall not be entitled to review
and make photocopies or photographs of any document (or portion of any document)
that the disclosure of which to the Administrative Agent and its representatives
would constitute a breach by the applicable Credit Party or any of its
Subsidiaries of a confidentiality or similar agreement entered into, or
confidential terms agreed to (to the extent such confidentiality or similar
agreement or confidential terms were not entered into or agreed to solely in
order to avoid disclosing such document to the Administrative Agent and its
representatives), by such Credit Party or such Subsidiary with respect to such
document (or portion thereof) and (b) the Borrower shall have the right to be
present during any discussion, conversation or meeting with any accountant of
any Credit Party. The Credit Parties agree that the Administrative Agent and its
representatives may conduct an annual audit of the Collateral (or may audit the
Collateral at any time during the existence of an Event of Default), at the
expense of the Borrower.
7.12 ADDITIONAL SUBSIDIARIES.
At the time any Person becomes a direct or indirect Subsidiary of a
Credit Party, the Borrower shall so notify the Administrative Agent and promptly
thereafter (but in any event within sixty (60) days after the date thereof) the
Credit Parties shall cause such Person to (a) execute a Joinder Agreement in
substantially the same form as Exhibit F, (b) cause all of the Capital Stock (if
any) of such Person to be delivered to the Administrative Agent (together with
undated stock powers signed in blank) and pledged to the Administrative Agent
pursuant to a pledge agreement in substantially the form of the Pledge Agreement
(or a joinder to the existing Pledge Agreement) or otherwise in a form
reasonably acceptable to the Administrative Agent, (c) pledge its Property to
the Administrative Agent pursuant to a security agreement in substantially the
form of the Security Agreement (or a joinder to the existing Security Agreement)
or otherwise in a form reasonably acceptable to the Administrative Agent, (d) if
such Person has any Subsidiaries, (i) deliver all of the Capital Stock (if any)
of such Subsidiaries owned by it (together with undated stock powers signed in
blank) to the Administrative Agent and (ii) execute an appropriate pledge
agreement (or a joinder to the existing Pledge Agreement) and otherwise in a
form acceptable to the Administrative Agent, (e) if such Person owns any real
property, execute any and all necessary mortgages, deeds of trust, deeds to
secure debt or other
87
appropriate real estate collateral documentation, and deliver such title
policies, surveys, environmental reports, flood hazard reports and other
documentation as the Administrative Agent may reasonably request, in each case
in a form reasonably acceptable to the Administrative Agent, (f) if such Person
leases (i) any plant, warehouse or other material real property, to the extent
required by the Administrative Agent, (A) use its commercially reasonable
efforts to obtain the applicable landlord's consent to grant the Administrative
Agent a mortgage Lien on its leasehold interest in such plant warehouse or other
material property and (B) to the extent such landlord's consent is obtained,
execute any and all necessary leasehold mortgages, leasehold deeds of trust,
leasehold deeds to secure debt or other appropriate real estate collateral
documentation, and deliver such title policies, surveys, environmental reports,
flood hazard reports and other documentation as the Administrative Agent may
reasonably request, in each case in a form acceptable to the Administrative
Agent, or (ii) any other real property (other than an office location), use its
commercially reasonable efforts to cause to be delivered to the Administrative
Agent a landlord waiver or estoppel letter with respect thereto in a form
reasonably acceptable to the Administrative Agent and (g) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
certified resolutions and other organizational and authorizing documents of such
Person and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to above), all in form, content and scope reasonably
satisfactory to the Administrative Agent.
7.13 POST-CLOSING COVENANT.
(a) ▇▇▇▇▇▇ Springs Intercreditor Agreement Amendment.
Within sixty (60) days after the Closing Date (or such extended period
of time as agreed to by the Administrative Agent), the Borrower shall
deliver to the Administrative Agent a letter agreement executed by the
parties to the ▇▇▇▇▇▇ Springs Intercreditor Agreement, which letter
agreement shall amend and modify the ▇▇▇▇▇▇ Springs Intercreditor
Agreement to reference this Credit Agreement and shall otherwise be in
form and substance reasonably satisfactory to the Administrative Agent.
(b) Environmental Reports. Within ninety (90) days after
the Closing Date (or such extended period of time as agreed to by the
Administrative Agent), the Borrower shall deliver to the Administrative
Agent environmental reports (or updates to existing environmental
reports) with respect to the Mortgage Properties and the Leasehold
Mortgage Properties, each in form and substance reasonably satisfactory
to the Administrative Agent.
(c) Consignment Letters. Within fifteen (15) days after
the Closing Date (or such extended period of time as agreed to by the
Administrative Agent), the Borrower shall use its commercially
reasonable efforts to deliver to the Administrative Agent
fully-executed consignment letters with respect to those locations
listed on Schedule 4(h) to the Security Agreement.
88
(d) IP Matters. Within ninety (90) days after the Closing
Date (or such extended period of time as agreed to by the
Administrative Agent), the Borrower shall provide evidence to the
Administrative Agent, in form and substance reasonably satisfactory to
the Administrative Agent, that all breaks in the chain of title of the
Intellectual Property of the Credit Parties have been corrected in the
appropriate records of the United States Patent and Trademark Office
and the United States Copyright Office.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and L/C Obligations, together
with interest, fees and other obligations then due and payable hereunder, have
been paid in full and the Commitments and Letters of Credit hereunder shall have
terminated:
8.1 INDEBTEDNESS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except the
following:
(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness of the Parent or any of its Subsidiaries
existing as of the Closing Date and set forth on Schedule 6.10, and
(except in respect of the ▇▇▇▇▇▇ Springs Debt) amendments,
restatements, supplements, refundings, renewals, refinancings,
replacements or extensions thereof on terms and conditions no less
favorable, in the aggregate, to the Parent or such Subsidiary, as
applicable, than such existing Indebtedness and in a principal amount
not in excess of that outstanding as of the date of such amendment,
restatement, supplement, refunding, renewal, refinancing, replacement
or extension;
(c) Indebtedness owing by a Credit Party (other than the
Parent) to another Credit Party (other than the Parent);
(d) purchase money Indebtedness of the Borrower or any of
its Subsidiaries (including Capital Leases and Synthetic Leases) to
finance the purchase, construction or improvement of fixed assets
(including equipment); provided that (i) the total of all such
Indebtedness for all such Persons shall not exceed an aggregate
principal amount of $5,000,000 at any one time outstanding (in addition
to any such Indebtedness referred to in subsection (b) above); (ii) no
such Indebtedness when incurred shall exceed the purchase price or cost
of construction or improvement of the asset(s) financed; and (iii) no
such Indebtedness shall be refinanced for a principal amount in excess
of the principal balance outstanding thereon at the time of such
refinancing;
89
(e) Subordinated Indebtedness of the Parent incurred in
connection with a Permitted Acquisition in an aggregate principal
amount not to exceed $25,000,000;
(f) Indebtedness of any Credit Party arising from Swap
Contracts entered into in the ordinary course of business and not for
speculative purposes;
(g) guaranties of Indebtedness not prohibited by this
Credit Agreement;
(h) Indebtedness of a Person existing at the time such
Person became a Subsidiary of any Credit Party in connection with a
Permitted Acquisition; provided, that (i) such Indebtedness was not
created or incurred in contemplation of such Permitted Acquisition and
(ii) the aggregate outstanding principal amount of such Indebtedness
for all such Persons shall not exceed $5,000,000 at any time; and
(i) other secured or unsecured Indebtedness hereafter
incurred by the Borrower or any of its Subsidiaries; provided that (i)
the credit documentation with respect to such Indebtedness shall not
contain covenants or default provisions relating to any Credit Party
that are materially more restrictive than the covenants and default
provisions contained in the Credit Documents and (ii) the aggregate
outstanding principal amount of such Indebtedness shall not exceed
$5,000,000 at any time.
8.2 LIENS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property of any kind (whether real or personal, tangible or intangible),
whether now owned or after acquired, except for Permitted Liens.
8.3 NATURE OF BUSINESS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
materially alter the character of its business from that conducted as of the
Closing Date or engage in any business other than the business conducted as of
the Closing Date and businesses which are substantially similar or related
thereto or logical extensions thereof.
8.4 CONSOLIDATION; MERGER; DISSOLUTION; LIQUIDATION; WINDING UP.
Except in connection with an Asset Disposition permitted by the terms
of Section 8.5, no Credit Party will, nor will it permit any of its Subsidiaries
to, enter into any transaction of merger or consolidation or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution); provided that,
notwithstanding the foregoing provisions of this Section 8.4, (a) the Borrower
may merge or consolidate with any of its Subsidiaries and any Subsidiary of the
Borrower may merge or consolidate with any other Subsidiary of the Borrower or
with the Borrower; provided that in any such case (i) if such transaction
involves the Borrower, the Borrower shall be the continuing or surviving Person
and (ii) the Credit Parties shall cause to be executed and delivered such
documents, instruments and certificates as the Administrative Agent may
reasonably request so as
90
to cause the Credit Parties to be in compliance with the terms of Section 7.9
after giving effect to such transaction, (b) the Borrower or any Subsidiary of
the Borrower may merge with any Person that is not a Credit Party in connection
with a Permitted Acquisition if (i) the Borrower or such Subsidiary shall be the
continuing or surviving Person or in the case of a Subsidiary, the surviving
Person is or becomes a Subsidiary upon consummation of such merger and (ii) the
Credit Parties shall cause to be executed and delivered such documents,
instruments and certificates as the Administrative Agent may reasonably request
so as to cause the Credit Parties to be in compliance with the terms of Section
7.9 after giving effect to such transaction and (c) any Wholly-Owned Subsidiary
of the Borrower may dissolve, liquidate or wind up its affairs at any time so
long as the Property of such Wholly-Owned Subsidiary is either (i) transferred
to a Credit Party or (ii) sold in accordance with the terms of Section 8.5, in
each case in connection with such dissolution, liquidation or winding up.
8.5 DISPOSITION OF ASSETS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
make any Asset Disposition (including, without limitation, any sale and
leaseback transaction) unless (a) the consideration received in connection
therewith shall be cash and/or Cash Equivalents, (b) if such transaction is a
sale and leaseback transaction, such transaction is permitted by the terms of
Section 8.6, (c) such transaction does not involve the sale or other disposition
of a minority equity interest in any Credit Party, (d) with respect to the sale
or other disposition of all or a portion of the Detroit Paper Mill or any assets
comprising the Detroit Paper Mill, the Net Cash Proceeds therefrom in excess of
$1,500,000 are used to prepay the Loans (and Cash Collateralize L/C Obligations)
in accordance with the terms of Section 2.4(b)(iii)(A), (e) the aggregate net
book value of all Asset Dispositions (other than the sale or other disposition
of all or a portion of the Detroit Paper Mill or any assets comprising the
Detroit Paper Mill) by the Credit Parties in all such transactions after the
Closing Date shall not exceed $5,000,000, (f) no later than thirty (30) days
after any Asset Disposition where the expected Net Cash Proceeds to be received
in connection therewith is in excess of $1,000,000, the Administrative Agent and
the Lenders shall have received a certificate of an officer of the Borrower
specifying the date of such Asset Disposition, briefly describing the assets
sold or otherwise disposed of and setting forth the net book value of such
assets, the aggregate consideration and the Net Cash Proceeds to be received for
such assets in connection with such Asset Disposition, and (g) the Credit
Parties shall, within the period of one hundred eighty (180) days following the
consummation of such Asset Disposition (with respect to any such Asset
Disposition, the "Application Period"), apply (or cause to be applied) an amount
equal to the Net Cash Proceeds of such Asset Disposition to (i) make Eligible
Reinvestments or (ii) prepay the Loans (and Cash Collateralize L/C Obligations)
in accordance with the terms of Section 2.4(b)(iii)(A). Pending final
application of the Net Cash Proceeds of any Asset Disposition, the Credit
Parties may apply such Net Cash Proceeds to temporarily reduce the Revolving
Loans or to make Investments in Cash Equivalents.
Upon a sale of Property permitted by this Section 8.5, the
Administrative Agent shall promptly deliver to the Borrower, upon the Borrower's
request and at the Borrower's expense, such documentation and shall take such
other action as is reasonably necessary to evidence the release of the
Administrative Agent's security interest in such Property, including, without
limitation, any mortgage release, leasehold mortgage release or amendments or
terminations of UCC financing
91
statements. The Lenders hereby authorize the Administrative Agent to deliver
such documentation and to take such actions.
8.6 SALE LEASEBACKS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as guarantor or
other surety with respect to any lease of any Property, whether now owned or
hereafter acquired, (a) which such Credit Party has sold or transferred or is to
sell or transfer to any other Person other than a Credit Party or (b) which such
Credit Party intends to use for substantially the same purpose as any other
Property which has been sold or is to be sold or transferred by such Credit
Party to any Person in connection with such lease.
8.7 INVESTMENTS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
make any Investments except for Permitted Investments.
8.8 RESTRICTED PAYMENTS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
directly or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) the Borrower may make dividends or distributions
to the Parent for the purposes of making (i) Subordinated Debt Payments to the
extent permitted by Section 8.9(c), (ii) Federal, state and other income tax
payments that are due and payable by the Parent and other payments for
corporate, administrative and operating expenses of Parent and (iii) the
purchases and dividends contemplated by clauses (c) and (d) below, (b) as
permitted by Section 8.9 or Section 8.10, (c) the purchase of Capital Stock (or
options to purchase Capital Stock) of the Parent from employees, officers or
directors upon the death, disability or termination (voluntarily or
involuntarily) of their employment with the Parent or any of its Subsidiaries
and (d) so long as no Default or Event of Default exists before or would result
immediately after giving effect to any such dividend, the Parent may pay cash
dividends to its shareholders in an amount not to exceed $3,000,000 during any
twelve (12) month period.
8.9 RESTRICTIONS ON MODIFICATIONS TO AND PAYMENTS OF CERTAIN
INDEBTEDNESS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
(a) if any Default or Event of Default has occurred and is continuing or would
be directly or indirectly caused as a result thereof, (i) amend or modify (or
permit the amendment or modification of) any of the terms of any Indebtedness if
such amendment or modification would add or change any terms in a manner
materially adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof, or (ii) make (or give any notice
with respect thereto) any voluntary or optional payment or prepayment or
optional redemption or optional acquisition for value of (including, without
limitation, by way of depositing money or securities with the trustee with
respect thereto before due for the purpose of paying when due), refund,
refinance or exchange of, any other
92
Indebtedness (including, without limitation, any Subordinated Indebtedness), (b)
amend or modify any of the terms of any Subordinated Indebtedness without the
prior written consent of the Required Lenders or (c) make any Subordinated Debt
Payment; provided, however, the Parent may make a Subordinated Debt Payment if
such payment is not made in violation of the subordination provisions governing
the applicable Subordinated Indebtedness that are approved in accordance with
the terms of the definition of Subordinated Indebtedness. Notwithstanding
anything to the contrary contained in this Section 8.9, the Borrower shall be
permitted to prepay any of the ▇▇▇▇▇▇ Springs Debt at any time that a Default or
Event of Default has occurred and is continuing under Section 9.1(g)(ii)(A)(2)
in respect of the ▇▇▇▇▇▇ Springs Debt and no other Default or Event of Default
is then existing.
8.10 TRANSACTIONS WITH AFFILIATES.
No Credit Party will, nor will it permit any of its Subsidiaries to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder, Subsidiary
or Affiliate other than (i) Exempt Affiliate Transactions and (ii) those
transactions that are on terms and conditions substantially as favorable as
would be obtainable in a comparable arm's-length transaction with a Person other
than an officer, director, shareholder, Subsidiary or Affiliate.
8.11 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
No Credit Party will, nor will it permit any of its Subsidiaries to,
(a) change its fiscal year or (b) in any manner that would (i) cause or
reasonably be expected to cause a Default or an Event of Default or (ii)
reasonably be likely to materially adversely affect the rights of the Lenders,
change its organizational documents.
8.12 NO LIMITATIONS.
Except as contemplated by or in connection with any Indebtedness
permitted by Section 8.1, no Credit Party will, nor will it permit any of its
Subsidiaries to, directly or indirectly create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual encumbrance
or restriction of any kind on the ability of any such Person to (a) pay
dividends or make any other distribution on any of such Person's Capital Stock,
(b) pay any Indebtedness owed to any other Credit Party, (c) make loans or
advances to any other Credit Party or (d) transfer any of its property to any
other Credit Party, except (in respect of any of the matters referred to in
clauses (a)-(d) above) for encumbrances or restrictions existing under or by
reason of (i) customary non-assignment or net worth provisions in any lease
governing a leasehold interest, customary non-assignment provisions in any
license to any Credit Party of intellectual property owned by a third party (or
with respect to which such third party has a right to use) or customary
non-assignment provisions in other contracts which are not material to the
business and operations of the Credit Parties, (ii) this Credit Agreement and
the other Credit Documents, (iii) applicable Law, (iv) any Permitted Lien or any
document or instrument governing any Permitted Lien; provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien, (v) any agreement governing the ▇▇▇▇▇▇ Springs Debt, as in
effect as of the Closing Date and (vi) customary conditions and restrictions
93
contained in any agreement relating to the sale of any Property not prohibited
under the Credit Agreement pending the consummation of such sale, but only with
respect to the Property to be sold.
8.13 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON OPERATIONS OF
BORROWER.
Notwithstanding any other provisions of this Credit Agreement to the
contrary:
(a) The Credit Parties will not permit any direct or
indirect Subsidiary of the Borrower to (i) permit any Person (other
than the Borrower or any Wholly - Owned Subsidiary of the Borrower) to
own any Capital Stock in any Subsidiary of the Borrower, (ii) permit
any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a Wholly - Owned Subsidiary of the Borrower), (iii)
permit, create, incur, assume or suffer to exist any Lien (other than a
Permitted Lien) on any Capital Stock in such Subsidiary, except
pursuant to the Credit Documents and (iv) notwithstanding anything to
the contrary contained in clause (ii) above, permit any Subsidiary of
the Borrower to issue any shares of preferred Capital Stock.
(b) The Parent shall not (i) own or lease any Property
other than the Capital Stock of its Subsidiaries and cash to pay
operating expenses and other obligations permitted under the Credit
Documents, (ii) have any liabilities other than (A) the liabilities
permitted under the Credit Documents, (B) Indebtedness permitted
pursuant to Section 8.1, (C) tax liabilities in the ordinary course of
business, (D) liabilities in connection with the issuance of its
equity, (E) liabilities in connection with Permitted Acquisitions and
(F) corporate, administrative and operating expenses in the ordinary
course of business and (iii) engage in any business other than (A)
owning the Capital Stock of its Subsidiaries, activities incidental or
related thereto and activities required to maintain its status as a
registered public company, (B) acting as a Guarantor hereunder and
pledging its Property to the Administrative Agent, for the benefit of
the Lenders, pursuant to the Collateral Documents to which it is a
party and (C) engaging in activities related to Permitted Acquisitions.
8.14 NO OTHER NEGATIVE PLEDGES.
No Credit Party will, nor will it permit any of its Subsidiaries to,
enter into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its Property, whether
now owned or hereafter acquired, or requiring the grant of any security for any
obligation if security is given for any other obligation, except (a) pursuant to
customary non - assignment or net worth provisions in any lease governing a
leasehold interest or customary non - assignment any other contracts which are
not material to the business and operations of the Credit Parties, (b) pursuant
to this Credit Agreement and the other Credit Documents, (c) in connection with
any Permitted Lien or any document or instrument governing any Permitted Lien;
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (d) pursuant to applicable Law, (e)
pursuant to any agreement governing the ▇▇▇▇▇▇ Springs Debt, as in effect as of
the Closing Date and (f) pursuant to customary restrictions and conditions
contained in any agreement relating to the
94
sale of any Property not prohibited by the Credit Agreement pending the
consummation of such sale, but only with respect to Property to be
sold.
8.15 NO FOREIGN SUBSIDIARIES.
No Credit Party will, nor will it permit any of its Subsidiaries to,
create, acquire or permit to exist any Foreign Subsidiary.
SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence, and during the
continuance, of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall default in the
payment (i) when due of any principal of any of the Loans or any L/C
Obligation or (ii) within three (3) Business Days of when due of any
interest on the Loans or on any L/C Obligation or any fees or other
amounts owing hereunder, under any of the other Credit Documents or in
connection herewith.
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance
of any term, covenant or agreement contained in Sections
7.1(i)(i), 7.2, 7.3, 7.9, 7.10 or Section 8 inclusive;
(ii) default in the due performance or observance
by it of any term, covenant or agreement contained in Section
7.1 (other than Section 7.1(i)(i)) and such default shall
continue unremedied for a period of at least five (5) Business
Days after the earlier of a Responsible Officer of a Credit
Party becoming aware of such default or notice thereof being
given by the Administrative Agent; or
(iii) default in the due performance or observance
by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) or (ii) of this
Section 9.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least
thirty (30) days after the earlier of a
95
Responsible Officer of a Credit Party becoming aware of such
default or notice thereof being given by the Administrative
Agent.
(d) Other Credit Documents; Failure of Agreements. (i)
Any Credit Party shall default in the due performance or observance of
any term, covenant or agreement in any of the other Credit Documents
(other than the Credit Agreement) and such default shall continue
unremedied for a period of at least thirty (30) days after the earlier
of a Responsible Officer of a Credit Party becoming aware of such
default or notice thereof given by the Administrative Agent, or (ii)
any Credit Document shall fail to be in full force and effect or any
Credit Party shall so assert or any Credit Document shall fail to give
the Administrative Agent and/or the Lenders the security interests,
Liens, rights, powers and privileges purported to be created thereby.
(e) Guaranties. Except as the result of or in connection
with a dissolution, merger or disposition of a Subsidiary of any Credit
Party not prohibited by Section 8.4 or Section 8.5, the Guaranty given
by any Guarantor hereunder (including any Person after the Closing Date
in accordance with Section 7.12) or any provision thereof shall cease
to be in full force and effect, or any Guarantor hereunder or any
Person acting by or on behalf of such Guarantor shall deny or disaffirm
such Guarantor's obligations under such Guaranty.
(f) Bankruptcy, etc. The occurrence of any of the
following (each a "Bankruptcy Event"): (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or
order for relief in respect of any Credit Party in an involuntary case
under any applicable bankruptcy, insolvency or other similar Law now or
hereafter in effect, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of any Credit
Party or for any substantial part of its property or ordering the
winding up or liquidation of its affairs; or (ii) an involuntary case
under any applicable bankruptcy, insolvency or other similar Law now or
hereafter in effect is commenced against any Credit Party and such
petition remains unstayed and in effect for a period of sixty (60)
consecutive days; or (iii) any Credit Party shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar Law
now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such Law, or consent to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of such Person or
any substantial part of its property or make any general assignment for
the benefit of creditors; or (iv) any Credit Party shall admit in
writing its inability to pay its debts generally as they become due or
any action shall be taken by such Person in furtherance of any of the
aforesaid purposes.
(g) Defaults under Other Agreements.
(i) A Credit Party shall default in the due
performance or observance (beyond the applicable grace period
with respect thereto) of any material obligation or condition
of any contract or lease to which it is a party and such
default would have or would be reasonably expected to have a
Material Adverse Effect; or
96
(ii) With respect to any Indebtedness in excess
of $1,000,000 (other than Indebtedness outstanding under this
Credit Agreement) of a Credit Party (A) such Person shall (1)
default in any payment (beyond the applicable grace period
with respect thereto, if any) with respect to any such
Indebtedness, or (2) default (after giving effect to any
applicable grace period) in the observance or performance of
any term, condition or agreement relating to such Indebtedness
contained in any instrument or agreement evidencing, securing
or relating thereto, or any other event or condition shall
occur or condition exist, the effect of which default or other
event or condition is to cause, or permit (without regard to
any notice requirement), the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders)
to cause any such Indebtedness to become due prior to its
stated maturity (other than a regularly scheduled payment or
mandatory prepayment); or (B) any such Indebtedness shall be
declared due and payable, or required to be prepaid other than
by a regularly scheduled or required prepayment prior to the
stated maturity thereof; or (C) any such Indebtedness shall
mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of the Credit Parties
involving a liability of $1,000,000 or more in the aggregate (to the
extent not paid or covered by insurance provided by a carrier who has
not denied coverage) and such judgments, orders or decrees (i) are the
subject of any enforcement proceeding commenced by any creditor or (ii)
shall continue unsatisfied, undischarged and unstayed for a period
ending on the first to occur of (A) the last day on which such
judgment, order or decree becomes final and unappealable or (B) sixty
(60) days.
(i) ERISA. The occurrence of any of the following events
or conditions which in the aggregate would have a Material Adverse
Effect: (A) any "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether or
not waived, shall exist with respect to any Plan, or any lien shall
arise on the assets of any Credit Party or any ERISA Affiliate in favor
of the PBGC or a Plan; (B) a Termination Event shall occur with respect
to a Single Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in the termination of such Plan
for purposes of Title IV of ERISA; (C) a Termination Event shall occur
with respect to a Multiemployer Plan or Multiple Employer Plan, which
is, in the reasonable opinion of the Administrative Agent, likely to
result in (i) the termination of such Plan for purposes of Title IV of
ERISA, or (ii) any Credit Party or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency (within
the meaning of Section 4245 of ERISA) of such Plan; or (D) any
prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility shall
occur which may subject any Credit Party or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Credit Party or any ERISA Affiliate has agreed or
is required to indemnify any person against any such liability.
(j) Ownership. There shall occur a Change of Control.
97
(k) Classification as Senior Indebtedness. The Credit
Party Obligations shall at any time fail to constitute "Senior
Indebtedness" under and as defined in any agreement governing any
outstanding Subordinated Indebtedness.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence, and during the continuance, of an Event of
Default, the Administrative Agent shall, upon the request and direction of the
Required Lenders, by written notice to the Borrower, take the following actions
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against the Credit Parties, except as otherwise specifically
provided for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal
of and any accrued interest in respect of all Loans, all L/C
Obligations and any and all other Credit Party Obligations of any and
every kind owing by a Credit Party to any of the Lenders hereunder to
be due whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of a Bankruptcy Event, it will immediately pay) to the
Administrative Agent Cash Collateral to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the L/C Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and any and
all rights under applicable Laws, including, without limitation, all
rights and remedies existing under the Collateral Documents, all rights
and remedies against a Guarantor and all rights of set-off.
Notwithstanding the foregoing, if a Bankruptcy Event shall occur, then the
Commitments shall automatically terminate and all Loans, all L/C Obligations,
all accrued interest in respect thereof, all accrued and unpaid fees and other
Credit Party Obligations owing to the Lenders hereunder and under the other
Credit Documents shall immediately become due and payable without the giving of
any notice or other action by the Administrative Agent or the Lenders, which
notice or other action is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by Law, a
separate right of payment and shall be
98
considered a separate "creditor" holding a separate "claim" within the meaning
of Section 101(5) of the Bankruptcy Code or any other insolvency statute.
9.3 ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement, after
the exercise of remedies by the Administrative Agent or the Lenders pursuant to
Section 9.2 (or after the Commitments shall automatically terminate and the
Loans (with accrued interest thereon) and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall automatically become due and payable
in accordance with the terms of such Section), all amounts collected or received
by the Administrative Agent or any Lender on account of amounts outstanding
under any of the Credit Documents or in respect of the Collateral shall be paid
over or delivered as follows:
FIRST, to the payment of all reasonable out - of - pocket
costs and expenses (including without limitation reasonable Attorney
Costs) of the Administrative Agent or any of the Lenders in connection
with enforcing the rights of the Administrative Agent and the Lenders
under the Credit Documents and any protective advances made by the
Administrative Agent or any of the Lenders with respect to the
Collateral under or pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees, indemnities, expenses and
other amounts (including Attorney Costs and amounts payable under
Section 3) owed to the Administrative Agent, the L/C Issuer or any
Lender;
THIRD, to payment of that portion of the Credit Party
Obligations constituting accrued and unpaid interest on the Loans and
L/C Borrowings, and including with respect to any Secured Swap
Contract, any fees, premiums and scheduled periodic payments due under
such Secured Swap Contract, ratably among the Lenders (and any
Affiliate of a Lender party to a Secured Swap Contract) as set forth
below;
FOURTH, to payment of that portion of the Credit Party
Obligations constituting unpaid principal of the Loans, L/C Borrowings
and any breakage, termination or other payments pursuant to Secured
Swap Contracts, and to Cash Collateralize the undrawn amounts of
Letters of Credit, ratably among the Lenders (and any Affiliate of a
Lender party to a Secured Swap Contract) as set forth below; and
FIFTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders (and Affiliates of Lenders party to
Secured Swap Contracts) shall receive an amount equal to its pro rata share
(based on the proportion that the then outstanding Loans, L/C Obligations and
net payment obligations under Secured Swap Contracts held by such Lender bears
to the aggregate then outstanding Loans, L/C Obligations and obligations under
Secured Swap Contracts) of amounts
99
available to be applied; and (c) to the extent that any amounts available for
distribution pursuant to clause "FOURTH" above are attributable to the issued
but undrawn amount of outstanding Letters of Credit, such amounts shall be held
by the Administrative Agent as Cash Collateral and applied (i) first, to
reimburse the L/C Issuer or, to the extent participated to the Lenders, the
Lenders from time to time for any drawings under such Letters of Credit and (ii)
then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clause "FOURTH" above in the manner
provided in this Section 9.3.
SECTION 10
ADMINISTRATIVE AGENT
10.1 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates
and authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Credit Agreement and each other
Credit Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Credit Agreement or
any other Credit Document, together with such powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere herein or in any other Credit Document, the
Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Administrative
Agent have or be deemed to have any fiduciary relationship with any
Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into
this Credit Agreement or any other Credit Document or otherwise exist
against the Administrative Agent. Without limiting the generality of
the foregoing sentence, the use of the term "agent" herein and in the
other Credit Documents with reference to the Administrative Agent is
not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship
between independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders
with respect to any Letters of Credit issued by it and the documents
associated therewith, and the L/C Issuer shall have all of the benefits
and immunities (i) provided to the Administrative Agent in this Section
10 with respect to any acts taken or omissions suffered by the L/C
Issuer in connection with Letters of Credit issued by it or proposed to
be issued by it and the applications and agreements for letters of
credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this Section 10 and in the definition
of "Agent - Related Person" included the L/C Issuer with respect to
such acts or omissions, and (ii) as additionally provided herein with
respect to the L/C Issuer.
100
10.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Credit Agreement or any other Credit Document by or through agents, employees or
attorneys - in - fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney - in - fact that it selects in the absence of gross
negligence or willful misconduct.
10.3 LIABILITY OF ADMINISTRATIVE AGENT.
No Agent - Related Person shall (a) be liable for any action taken or
omitted to be taken by any of them under or in connection with this Credit
Agreement or any other Credit Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct in connection with
its duties expressly set forth herein), or (b) be responsible in any manner to
any Lender or participant for any recital, statement, representation or warranty
made by any Credit Party or any officer thereof, contained herein or in any
other Credit 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 Credit Agreement or any other Credit Document,
or the validity, effectiveness, genuineness, enforceability or sufficiency of
this Credit Agreement or any other Credit Document, or for any failure of any
Credit Party or any other party to any Credit Document to perform its
obligations hereunder or thereunder. No Agent - Related Person shall be under
any obligation to any Lender or participant to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Credit Agreement or any other Credit Document, or to inspect the
Properties, books or records of any Credit Party or any Affiliate thereof.
10.4 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, electronic mail message, statement or other document or
conversation reasonably 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 any
Credit Party), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under any Credit
Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Credit Agreement or any other Credit Document
in accordance with a request or consent of the Required Lenders (or
such greater number of Lenders as may be expressly required hereby in
any instance) and
101
such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the
conditions specified in Section 5.1, each Lender that has signed this
Credit Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have
received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
10.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default, except with respect to defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower referring
to this Credit Agreement and specifying and describing the Default that has
occurred. The Administrative Agent will notify the Lenders of its receipt of any
such notice. The Administrative Agent shall take such action with respect to
such Default as may be directed by the Required Lenders in accordance with
Section 9; provided, however, that unless and until the Administrative Agent has
received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable or in the best interest of the
Lenders.
10.6 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT.
Each Lender acknowledges that no Agent - Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent - Related
Person to any Lender as to any matter, including whether Agent - Related Persons
have disclosed material information in their possession. Each Lender represents
to the Administrative Agent that it has, independently and without reliance upon
any Agent - Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties and their respective Subsidiaries, and
all applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Credit
Agreement and to extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon any Agent -
Related Person 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 Credit Agreement and the
other Credit Documents, and to make such investigations as it deems necessary to
inform itself as to the business, prospects, operations, property, financial and
other condition and creditworthiness of the Borrower and the other Credit
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not have any duty or
102
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of any of the Credit Parties or any of their
respective Affiliates which may come into the possession of any Agent - Related
Person.
10.7 INDEMNIFICATION OF ADMINISTRATIVE AGENT.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand each Agent - Related Person (to the
extent not reimbursed by or on behalf of any Credit Party and without limiting
the obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent - Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent - Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent - Related
Person's own gross negligence or willful misconduct; provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or out - of
- pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Credit Agreement, any other Credit Document, or any
document contemplated by or referred to herein, to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Borrower. The undertaking in this Section shall survive termination of the
Commitments, the payment of all Credit Party Obligations and the resignation of
the Administrative Agent.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Credit Parties and their respective
Affiliates as though Bank of America were not the Administrative Agent or the
L/C Issuer hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding any Credit Party or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of such Credit Party or such Affiliate) and acknowledge that the
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, Bank of America shall have the same rights and
powers under this Credit Agreement as any other Lender and may exercise such
rights and powers as though it were not the Administrative Agent or the L/C
Issuer, and the terms "Lender" and "Lenders" include Bank of America in its
individual capacity.
103
10.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon thirty
(30) days' notice to the Lenders; provided that any such resignation by Bank of
America shall also constitute its resignation as L/C Issuer. If the
Administrative Agent resigns under this Credit Agreement, the Required Lenders
shall appoint from among the Lenders a successor administrative agent for the
Lenders, which successor administrative agent shall be consented to by the
Borrower at all times other than during the existence of an Event of Default
(which consent of the Borrower shall not be unreasonably withheld or delayed).
If no successor administrative agent is appointed prior to the effective date of
the resignation of the Administrative Agent, the Administrative Agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent from among the Lenders. Upon the acceptance of its
appointment as successor administrative agent hereunder, the Person acting as
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and, unless the Borrower and the
Lenders choose to appoint an L/C Issuer that is different than the
Administrative Agent, L/C Issuer and the respective terms "Administrative Agent"
and "L/C Issuer" shall mean such successor administrative agent and Letter of
Credit issuer, and the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated and the retiring L/C Issuer's
rights, powers and duties as such shall be terminated, without any other or
further act or deed on the part of such retiring L/C Issuer or any other Lender,
other than the obligation of the successor L/C Issuer to issue letters of credit
in substitution for the Letters of Credit, if any, outstanding at the time of
such succession or to make other arrangements satisfactory to the retiring L/C
Issuer to effectively assume the obligations of the retiring L/C Issuer with
respect to such Letters of Credit. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this Section 10
and Sections 11.4 and 11.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this Credit
Agreement. If no successor administrative agent has accepted appointment as
Administrative Agent by the date which is thirty (30) 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 perform all of the duties of the Administrative Agent hereunder
until such time, if any, as the Required Lenders appoint a successor
administrative agent as provided for above.
10.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Credit Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Credit Party Obligations that are owing and
unpaid and to file such other documents as may be
104
necessary or advisable in order to have the claims of the Lenders and
the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and
the Administrative Agent and their respective agents and counsel and
all other amounts due the Lenders and the Administrative Agent under
Sections 2.3(i) and (j), 2.8 and 11.4) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.8 and 11.4.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Credit Party Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
10.11 COLLATERAL AND GUARANTY MATTERS.
The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion,
(a) to release any Lien on any property granted to or
held by the Administrative Agent under any Credit Document (i) upon
termination of the Commitments and payment in full of all Credit Party
Obligations (other than contingent indemnification obligations) and the
expiration or termination of all Letters of Credit, (ii) that is
transferred or to be transferred as part of or in connection with any
disposition of Property that is permitted hereunder or under any other
Credit Document, or (iii) subject to Section 11.1, if approved,
authorized or ratified in writing by the Required Lenders;
(b) to subordinate any Lien on any Property granted to or
held by the Administrative Agent under any Credit Document to the
holder of any Lien on such Property that is permitted by clause (i) of
the definition of Permitted Liens; and
(c) to release any Guarantor from its obligations under
the Guaranty if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in
105
particular types or items of Property, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 10.11.
10.12 OTHER AGENTS; ARRANGERS AND MANAGERS.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Credit Agreement as a "syndication agent,"
"documentation agent," "co - agent," "book manager," "book runner," "lead
manager," "arranger," "lead arranger" or "co - arranger" shall have any right,
power, obligation, liability, responsibility or duty under this Credit Agreement
other than, in the case of such Lenders, those applicable to all Lenders as
such. Without limiting the foregoing, none of the Lenders or other Persons so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders or other Persons so identified in deciding to enter into this
Credit Agreement or in taking or not taking action hereunder.
SECTION 11
MISCELLANEOUS
11.1 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Credit Agreement or any
other Credit Document, and no consent to any departure by the Borrower or any
other Credit Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Credit Party, as the case
may be, and each such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such amendment, waiver or consent shall:
(a) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 9.2) without
the written consent of such Lender (it being understood and agreed that
a waiver of any condition precedent set forth in Section 5.2 or of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender);
(b) (i) postpone any date fixed by this Credit Agreement
or any other Credit Document for any payment (excluding mandatory
prepayments) of principal, interest or fees due to the Lenders (or any
of them) hereunder or under any other Credit Document without the
written consent of each Lender directly affected thereby or (ii)
postpone any date fixed by this Credit Agreement or any other Credit
Document for any payment of any reimbursement or indemnification
obligation hereunder or under any other Credit Document without the
written consent of each Lender possessing a reimbursement right or
indemnification right that has accrued or is due and payable at such
time;
(c) (i) reduce the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing, or any fees payable
hereunder or under any other Credit
106
Document without the written consent of each Lender directly affected
thereby; provided, however, that only the consent of the Required
Lenders shall be necessary to amend the definition of "Default Rate" or
to waive any obligation of the Borrower to pay interest at the Default
Rate, or (ii) reduce the amount of any reimbursement or indemnification
obligation hereunder or under any other Credit Document without the
written consent of each Lender possessing a reimbursement right or
indemnification right that has accrued or is due and payable at such
time;
(d) change Section 2.12 or Section 9.3 in a manner that
would alter the pro rata sharing of payments among the Lenders required
thereby without the written consent of each Lender;
(e) change any provision of this Section 11.1 (provided
that class vote provisions in this Section may be amended with the
approval of a majority of each class (without the need for the approval
of each member of each class)) or the definition of "Required Lenders"
or any other provision hereof requiring the consent of each Lender to
amend, waive or otherwise modify such provision or any rights
thereunder, without the written consent of each Lender;
(f) except as the result of or in connection with an
Asset Disposition not prohibited by Section 8.5, release all or
substantially all of the Collateral;
(g) except as the result of or in connection with a
dissolution, merger or disposition of a Credit Party not prohibited by
Section 8.4 or Section 8.5, release the Borrower or all or
substantially all of the other Credit Parties from its or their
obligations under the Credit Documents without the written consent of
each Lender;
(h) without the consent of the Required Revolving Lenders
(other than Defaulting Lenders), waive any Default or Event of Default
(or amend any provision of any Credit Document that results in any
outstanding Default or Event of Default being cured or terminated)
solely for purposes of Section 5.2(c); provided, however, that only the
consent of the Required Revolving Lenders shall be necessary to waive
any such outstanding Default or Event of Default solely for purposes of
Section 5.2(c);
(i) without the consent of Lenders (other than Defaulting
Lenders) holding in the aggregate at least a majority of the
outstanding Tranche A Term Loan (and participations therein) and a
majority of the outstanding Tranche B Term Loan (and participations
therein), (i) amend, change, waive, discharge or terminate Section 9.3
so as to alter the manner of application of any payment in respect of
the Credit Party Obligations or proceeds of Collateral or (ii) amend,
change, waive, discharge or terminate Section 2.4(c) so as to alter the
manner of application of proceeds of any mandatory prepayment required
by Section 2.4(b)(ii), (iii), (iv) or (v) hereof, in each case only to
the extent such amendment, change, waiver, discharge or termination
directly affects such Lenders;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of
107
the L/C Issuer under this Credit Agreement or any Letter of Credit Application
relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Credit Agreement or any
other Credit Document; (iii) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto;
(iv) a Letter of Credit may be amended in accordance with the terms of Section
2.3(b)(i) and (ii); and (v) the execution of any Joinder Agreement by the
Administrative Agent, the Borrower and the new Subsidiary or Subsidiaries party
thereto, and any update to the Schedules hereto and to the Collateral Documents
made in accordance with the terms of such Joinder Agreement, shall not require
the approval of any Lender.
For the avoidance of doubt and notwithstanding any provision to the
contrary contained in this Section 11.1, this Credit Agreement may be amended
(or amended and restated) with the written consent of the Credit Parties and the
Required Lenders (x) to increase the aggregate Commitments of the Lenders (by
the addition of new Lenders or increasing the individual Commitments of existing
Lenders that consent thereto), (y) to add one or more additional tranches of
Loans to the Credit Agreement and to permit the extensions of credit from time
to time outstanding thereunder and the accrued interest and fees in respect
thereof (collectively, the "Additional Extensions of Credit") to share ratably
in the benefits of this Credit Agreement and other Credit Documents with the
other then outstanding Credit Party Obligations and (z) to include appropriately
the Lenders holding such credit facilities in any determination of the Required
Lenders; provided, however, that no such amendment shall permit the Additional
Extensions of Credit to share ratably with or with preference to the Term Loans
in the application of mandatory prepayments without the consent of Lenders
(other than Defaulting Lenders) holding in the aggregate at least a majority of
the outstanding Tranche A Term Loan (and participations therein) and a majority
of the outstanding Tranche B Term Loan (and participations therein), or
otherwise to share ratably with or with preference to the Revolving Loans
without the consent of the Lenders holding a majority of the outstanding
Revolving Loans.
Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder, except that the Commitment of such Lender may not be increased or
extended without the consent of such Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders shall determine whether
or not to allow a Credit Party to use cash collateral in the context of a
bankruptcy or insolvency proceeding and such determination shall be binding on
all of the Lenders.
108
11.2 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) General. Unless otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in
writing (including by facsimile transmission). All such written notices
shall be mailed (by certified or registered mail, postage prepaid),
faxed or delivered to the applicable address, facsimile number or
(subject to subsection (c) below) electronic mail address, and all
notices and other communications expressly permitted hereunder to be
given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, the Administrative Agent
or the L/C Issuer, to the address, facsimile number,
electronic mail address or telephone number specified for such
Person on Schedule 11.2 or to such other address, facsimile
number, electronic mail address or telephone number as shall
be designated by such party in a notice to the other parties;
and
(ii) if to any other Lender, to the address,
facsimile number, electronic mail address or telephone number
specified in its Administrative Questionnaire or to such other
address, facsimile number, electronic mail address or
telephone number as shall be designated by such party in a
notice to the Borrower, the Administrative Agent and the L/C
Issuer.
All such notices and other communications shall be deemed to
be given or made upon the earlier to occur of (A) actual receipt by the
relevant party hereto and (B) (1) if delivered by hand or by courier,
when signed for by or on behalf of the relevant party hereto; (2) if
delivered by mail (by certified or registered mail, postage prepaid),
four (4) Business Days after deposit in the mails; (3) if delivered by
facsimile, when sent and receipt has been confirmed by telephone; and
(4) if delivered by electronic mail (which form of delivery is subject
to the provisions of subsection (c) below), when delivered; provided,
however, that notices and other communications to the Administrative
Agent and the L/C Issuer pursuant to Section 2 shall not be effective
until actually received by such Person. In no event shall a voicemail
message be effective as a notice, communication or confirmation
hereunder.
(b) Effectiveness of Facsimile Documents and Signatures.
Credit Documents may be transmitted and/or signed by facsimile. The
effectiveness of any such documents and signatures shall, subject to
applicable Law, have the same force and effect as manually - signed
originals and shall be binding on all Credit Parties, the
Administrative Agent and the Lenders. The Administrative Agent may also
require that any such documents and signatures be confirmed by a
manually - signed original thereof; provided, however, that the failure
to request or deliver the same shall not limit the effectiveness of any
facsimile document or signature.
(c) Limited Use of Electronic Mail. Electronic mail and
Internet and intranet websites may be used only to distribute routine
communications, such as financial statements and other information as
provided in Section 7.1, and to distribute Credit
109
Documents for execution by the parties thereto, and may not be used for
any other purpose except as deemed reasonable and appropriate by the
Administrative Agent after consultation with the Borrower.
(d) Reliance by Administrative Agent and Lenders. The
Administrative Agent and the Lenders shall be entitled to rely and act
upon any notices (including telephonic Loan Notices) reasonably
believed by the Administrative Agent and any such Lenders to have been
given by or on behalf of the Borrower even if (i) such notices were not
made in a manner specified herein, were incomplete or were not preceded
or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify each Agent - Related
Person and each Lender from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice reasonably
believed to have been given by or on behalf of the Borrower. All
telephonic notices to and other communications with (i) the credit
services group of the Administrative Agent and (ii) any other division
or group within the Administrative Agent (which notifies the Borrower
in writing after the Closing Date of such fact), may be recorded by
such group or division of the Administrative Agent, and each of the
parties hereto hereby consents to such recording.
11.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure by any Lender or the Administrative Agent to exercise, and
no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder 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.
11.4 ATTORNEY COSTS, EXPENSES AND TAXES.
The Credit Parties jointly and severally agree (a) to pay or reimburse
the Administrative Agent for all reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of this
Credit Agreement and the other Credit Documents and any amendment, waiver,
consent or other modification of the provisions hereof and thereof (whether or
not the transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, (b) to pay or reimburse the
Administrative Agent for all costs and expenses incurred in connection with the
enforcement, attempted enforcement, or preservation of any rights or remedies
under this Credit Agreement or the other Credit Documents (including all such
costs and expenses incurred during any "workout" or restructuring in respect of
the Credit Party Obligations and during any legal proceeding, including any
proceeding under any Debtor Relief Law), including all Attorney Costs and (c) to
pay or reimburse each Lender for all costs and expenses incurred during the
existence of an Event of Default in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Credit
Agreement or the other Credit Documents (including all such costs and expenses
incurred during
110
any "workout" or restructuring in respect of the Credit Party Obligations and
during any legal proceeding, including any proceeding under any Debtor Relief
Law), including all Attorney Costs. The foregoing costs and expenses shall
include all reasonable search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and other out - of - pocket expenses
incurred by the Administrative Agent and the cost of independent public
accountants and other outside experts retained by the Administrative Agent. All
amounts due under this Section 11.4 shall be payable within ten (10) Business
Days after demand therefor. The agreements in this Section shall survive the
termination of the Commitments and repayment of all other Credit Party
Obligations.
11.5 INDEMNIFICATION BY THE BORROWER.
Whether or not the transactions contemplated hereby are consummated,
the Credit Parties jointly and severally shall indemnify and hold harmless each
Agent - Related Person, each Lender and their respective Affiliates, directors,
officers, employees, counsel, agents and attorneys - in - fact (collectively the
"Indemnitees") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, demands, actions, judgments, suits, costs, expenses
and disbursements (including Attorney Costs) of any kind or nature whatsoever
which may at any time be imposed on, incurred by or asserted against any such
Indemnitee in any way relating to or arising out of or in connection with (a)
the execution, delivery, enforcement, performance or administration of any
Credit Document or the consummation of the transactions contemplated thereby,
(b) any Commitment, Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (c) any actual or alleged presence or release of Hazardous Materials on
or from any property currently or formerly owned or operated by any Credit Party
or any Subsidiary thereof, or any Environmental Liability related in any way to
any Credit Party or any Subsidiary thereof, or (d) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of, preparation for, or defense of any pending or threatened claim,
investigation, litigation or proceeding) and regardless of whether any
Indemnitee is a party thereto (all the foregoing, collectively, the "Indemnified
Liabilities"), in all cases, whether or not caused by or arising, in whole or in
part, out of the negligence of the Indemnitee; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
liabilities, obligations, losses, damages, penalties, claims, demands, actions,
judgments, suits, costs, expenses or disbursements are determined by a court of
competent jurisdiction by final and nonappealable judgment to have resulted from
the gross negligence or willful misconduct of such Indemnitee. No Indemnitee
shall be liable for any damages arising from the use by others of any
information or other materials obtained through IntraLinks or other similar
information transmission systems in connection with this Credit Agreement,
except to the extent such damages are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee, nor shall any Indemnitee
have any liability for any indirect, consequential or punitive damages relating
to this Credit Agreement or any other Credit Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date). All amounts due under this Section 11.5 shall be payable within
ten (10) Business Days after
111
written demand therefor. The agreements in this Section shall survive the
resignation of the Administrative Agent, the replacement of any Lender, the
termination of the Commitments and the repayment, satisfaction or discharge of
all the other Credit Party Obligations.
11.6 PAYMENTS SET ASIDE.
To the extent that any payment by or on behalf of any Credit Party is
made to the Administrative Agent or any Lender, or the Administrative Agent or
any Lender exercises its right of set - off, and such payment or the proceeds of
such set - off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set - off had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
11.7 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Credit Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender
and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of
this Section, or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of subsection (f) or (g) of this
Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Credit Agreement,
expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the
Indemnitees) any legal or equitable right, remedy or claim under or by
reason of this Credit Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this
Credit Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b), participations in
L/C Obligations) at the time owing to it); provided that (i) except in
the case of an assignment of the entire remaining amount of the
assigning Lender's Commitment and the Loans at the time owing to it,
the aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) subject to each such assignment,
determined as of the date the Assignment and Assumption with
112
respect to such assignment is delivered to the Administrative Agent or,
if "Trade Date" is specified in the Assignment and Assumption, as of
the Trade Date, (A) if such Commitment assigned is a Revolving
Commitment, shall not be less than $2,500,000 and (B) if such
Commitment assigned is a Tranche A Term Loan Commitment or a Tranche B
Term Loan Commitment, shall not be less than $1,000,000, in each case
unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed); (ii)
any assignment of a Revolving Commitment must be approved by the
Administrative Agent and the L/C Issuer unless the Person that is the
proposed assignee is itself a Revolving Lender (whether or not the
proposed assignee would otherwise qualify as an Eligible Assignee); and
(iii) 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, with only one such fee
payable in the case of substantially contemporaneous assignments to
Approved Funds or Affiliates of a single Lender; provided that such
processing and recordation fee shall not be required for any assignment
from a Lender to an Affiliate of such Lender and shall not be
reimbursed by any Credit Party. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to subsection (c) of this
Section, from and after the effective date specified in each Assignment
and Assumption, the Eligible Assignee thereunder shall be a party to
this Credit Agreement and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a
Lender under this Credit 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 Credit
Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender's rights and obligations under this Credit
Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 3.1, 3.4, 3.5, 11.4
and 11.5 with respect to facts and circumstances occurring prior to the
effective date of such assignment). Upon request, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this
Credit Agreement that does not comply with this subsection shall be
treated for purposes of this Credit Agreement as a sale by such Lender
of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at the
Administrative Agent's Office 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 the Commitments of, and principal amounts
of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive absent manifest error, 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 Credit 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.
113
(d) Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the
Borrower or any of the Borrower's Affiliates (other than accounts
managed by Oak Hill Advisors, Inc. or its Affiliates) or Subsidiaries)
(each, a "Participant") in all or a portion of such Lender's rights
and/or obligations under this Credit Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations) owing to it); provided that (i) such
Lender's obligations under this Credit Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii)
the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Credit Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole
right to enforce this Credit Agreement and to approve any amendment,
modification or waiver of any provision of this Credit Agreement;
provided that such agreement or instrument may provide that such Lender
will not, without the consent of the Participant, agree to any
amendment, waiver or other modification described in clauses (a), (b)
and (c) of the first proviso to Section 11.1 that directly affects such
Participant. Subject to subsection (e) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of
Sections 3.1, 3.4 and 3.5 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by Law, each Participant also
shall be entitled to the benefits of Section 11.9 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.12
as though it were a Lender.
(e) A Participant shall not be entitled to receive any
greater payment under Section 3.1, 3.4 of 3.5 than the applicable
Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the Borrower consents
otherwise. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.1 unless the
Borrower is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Borrower, to comply
with Section 11.15 as though it were a Lender.
(f) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Credit
Agreement (including under its Note, if any) to secure obligations of
such Lender, including any pledge or assignment to secure obligations,
to a Federal Reserve Bank; provided that no such pledge or assignment
shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party
hereto.
(g) Notwithstanding anything to the contrary contained
herein, any Lender that is a Fund may create a security interest in all
or any portion of the Loans owing to it and the Note, if any, held by
it to the trustee for holders of obligations owed, or securities
issued, by such Fund as security for such obligations or securities;
provided that unless and until such trustee actually becomes a Lender
in compliance with the other provisions of this Section 11.7, (i) no
such pledge shall release the pledging Lender from any of its
114
obligations under the Credit Documents and (ii) such trustee shall not
be entitled to exercise any of the rights of a Lender under the Credit
Documents even though such trustee may have acquired ownership rights
with respect to the pledged interest through foreclosure or otherwise.
(h) Notwithstanding anything to the contrary contained
herein, if at any time Bank of America assigns all of its Commitment
and Loans pursuant to subsection (b) above, Bank of America may, upon
thirty (30) days' notice to the Borrower and the Lenders, resign as L/C
Issuer. In the event of any such resignation as L/C Issuer, the
Borrower shall be entitled to appoint from among the Lenders a
successor L/C Issuer hereunder; provided, however, that no failure by
the Borrower to appoint any such successor shall affect the resignation
of Bank of America as L/C Issuer. If Bank of America resigns as L/C
Issuer, it shall retain all the rights and obligations of the L/C
Issuer hereunder with respect to all Letters of Credit outstanding as
of the effective date of its resignation as L/C Issuer and all L/C
Obligations with respect thereto (including the right to require the
Lenders to make Revolving Loans or fund risk participations in
Unreimbursed Amounts pursuant to Section 2.3(c)).
11.8 CONFIDENTIALITY.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential); (b) to the extent requested by any regulatory
authority; (c) to the extent required by applicable Laws or by any subpoena or
similar legal process; (d) to any other party to this Credit Agreement; (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Credit Agreement or the enforcement of rights
hereunder; (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any Eligible Assignee of or Participant
in, or any prospective Eligible Assignee of or Participant in, any of its rights
or obligations under this Credit Agreement or (ii) any direct or indirect
contractual counterparty or prospective counterparty (or such contractual
counterparty's or prospective counterparty's professional advisor) to any credit
derivative transaction relating to obligations of the Credit Parties; (g) with
the consent of the Borrower; (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent or any Lender on a nonconfidential
basis from a source other than a Credit Party and such information from such
source is not, to such Lender's or the Administrative Agent's actual knowledge,
subject to an obligation of confidentiality; or (i) to the National Association
of Insurance Commissioners or any other similar organization. In addition, the
Administrative Agent and the Lenders may disclose the existence of this Credit
Agreement and information about this Credit Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Administrative Agent and the Lenders in connection with the administration and
management of this Credit Agreement, the other Credit Documents, the
Commitments, and the Credit Extensions; provided, however, the Administrative
Agent and the Lenders may not disclose non-
115
public financial information regarding any Credit Party to such market data
collectors and other service providers. For the purposes of this Section,
"Information" means all information received from any Credit Party relating to
any Credit Party or its business, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by any Credit Party. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information. Notwithstanding
anything herein to the contrary, "Information" shall not include, and the
Administrative Agent and each Lender may disclose without limitation of any
kind, any information with respect to the "tax treatment" and "tax structure"
(in each case, within the meaning of Treasury Regulation Section 1.6011 - 4) of
the transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Administrative Agent or
such Lender relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transaction as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby.
11.9 SET-OFF.
In addition to any rights and remedies of the Lenders provided by Law,
upon the occurrence and during the continuance of any Event of Default, each
Lender is authorized, subject to the terms of Section 2.12, at any time and from
time to time, without prior notice to the Borrower or any other Credit Party,
any such notice being waived by each Credit Party to the fullest extent
permitted by Law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender (or any Lender Affiliate, branch
or agent of such Lender) to or for the credit or the account of the respective
Credit Parties against any and all Credit Party Obligations owing to such Lender
hereunder or under any other Credit Document, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Credit Agreement or any other Credit Document and
although such Credit Party Obligations may be contingent or unmatured or
denominated in a currency different from that of the applicable deposit or
indebtedness. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set - off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect
the validity of such set - off and application. Notwithstanding the foregoing
the parties hereto agree that the Lenders' rights of set off with respect to
Cash Collateral are subject to the rights of the Administrative Agent (on behalf
of the Lenders) with respect to such Cash Collateral pursuant to the terms of
the control or similar agreement related to such account and the other
Collateral Documents.
11.10 INTEREST RATE LIMITATION.
Notwithstanding anything to the contrary contained in any Credit
Document, the interest paid or agreed to be paid under the Credit Documents
shall not exceed the maximum rate of non - usurious interest permitted by
applicable Law (the "Maximum Rate"). If the Administrative
116
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Credit Party Obligations hereunder.
11.11 COUNTERPARTS.
This Credit Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
11.12 INTEGRATION; EFFECTIVENESS; CONTINUING AGREEMENT.
(a) This Credit Agreement, together with the other Credit
Documents, comprises the complete and integrated agreement of the
parties on the subject matter hereof and thereof and supersedes all
prior agreements, written or oral, on such subject matter. In the event
of any conflict between the provisions of this Credit Agreement and
those of any other Credit Document, the provisions of this Credit
Agreement shall control; provided that the inclusion of supplemental
rights or remedies in favor of the Administrative Agent or the Lenders
in any other Credit Document shall not be deemed a conflict with this
Credit Agreement. Each Credit Document was drafted with the joint
participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
(b) This Credit Agreement shall become effective at such
time when all of the conditions set forth in Section 5.1 have been
satisfied or waived by the Lenders and it shall have been executed by
the Borrower, the Guarantors and the Administrative Agent, and the
Administrative Agent shall have received copies hereof (telefaxed or
otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of the Borrower, the Guarantors, the
Administrative Agent and each Lender and their respective successors
and permitted assigns. At such time as this Credit Agreement becomes
effective pursuant to the terms of the immediately preceding sentence,
the Existing Credit Agreement automatically shall be deemed amended and
restated in its entirety by this Credit Agreement and the related
refinancing, and the Credit Parties and the Lenders party to the
Existing Credit Agreement shall no longer have any obligations
thereunder (other than those obligations in the Existing Credit
Agreement that expressly survive the termination thereof).
(c) This Credit Agreement shall be a continuing agreement
and shall remain in full force and effect until all Loans, L/C
Obligations, interest, fees and other Credit Party Obligations (other
than those obligations that expressly survive the termination of this
Credit Agreement) have been paid in full and all Commitments and
Letters of Credit have been terminated. Upon termination, the Credit
Parties shall have no further obligations (other
117
than those obligations that expressly survive the termination of this
Credit Agreement) under the Credit Documents and the Administrative
Agent shall, at the request and expense of the Borrower, deliver all
the Collateral in its possession to the Borrower and release all Liens
on the Collateral; provided that should any payment, in whole or in
part, of the Credit Party Obligations be rescinded or otherwise
required to be restored or returned by the Administrative Agent or any
Lender, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, then the Credit Documents shall
automatically be reinstated and all Liens of the Administrative Agent
shall reattach to the Collateral and all amounts required to be
restored or returned and all costs and expenses incurred by the
Administrative Agent or any Lender in connection therewith shall be
deemed included as part of the Credit Party Obligations.
11.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any other
Credit Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof
and thereof. Such representations and warranties have been or will be relied
upon by the Administrative Agent and each Lender, regardless of any
investigation made by the Administrative Agent or any Lender or on their behalf
and notwithstanding that the Administrative Agent or any Lender may have had
notice or knowledge of any Default at the time of any Credit Extension, and
shall continue in full force and effect as long as any Commitment remains
outstanding, any Loan or any other Credit Party Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
11.14 SEVERABILITY.
If any provision of this Credit Agreement or the other Credit Documents
is held to be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Credit Agreement and the
other Credit Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
11.15 TAX FORMS.
(a) (i) Each Foreign Lender shall deliver to the
Borrower and the Administrative Agent, prior to receipt of any
payment under any Credit Document (or upon accepting an
assignment of an interest herein), two duly signed completed
copies of either IRS Form W - 8BEN or any successor thereto
(relating to such Foreign Lender and entitling it to a
complete exemption from U.S. withholding tax on all payments
to be made to such Foreign Lender by the Borrower pursuant to
this Credit Agreement) or IRS Form W - 8ECI or any successor
thereto (relating to all payments to be made to such Foreign
Lender by the Borrower pursuant to this Credit Agreement) or
such other evidence
118
satisfactory to the Borrower and the Administrative Agent that
such Foreign Lender is entitled to a complete exemption from
U.S. withholding tax, including any exemption pursuant to
Section 881(c) of the Code. Thereafter and from time to time,
each such Foreign Lender shall (A) promptly submit to the
Administrative Agent such additional duly completed and signed
copies of one of such forms (or such successor forms as shall
be adopted from time to time by the relevant United States
taxing authorities) as may then be available under then
current United States Laws and regulations to avoid, or such
evidence as is satisfactory to the Borrower and the
Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of
all payments to be made to such Foreign Lender by the Borrower
pursuant to this Credit Agreement, (B) promptly notify the
Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or
reduction, and (C) take such steps as shall not be materially
disadvantageous to it, in the reasonable judgment of such
Lender, and as may be reasonably necessary (including the re -
designation of its Lending Office) to avoid any requirement of
applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign
Lender.
(ii) Each Foreign Lender, to the extent it does
not act or ceases to act for its own account with respect to
any portion of any sums paid or payable to such Lender under
any of the Credit Documents (for example, in the case of a
typical participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender
ceases to act for its own account with respect to any portion
of any such sums paid or payable, and at such other times as
may be necessary in the determination of the Administrative
Agent (in the reasonable exercise of its discretion), (A) two
duly signed completed copies of the forms or statements
required to be provided by such Lender as set forth above, to
establish the portion of any such sums paid or payable with
respect to which such Lender acts for its own account that is
not subject to U.S. withholding tax, and (B) two duly signed
completed copies of IRS Form W - 8IMY (or any successor
thereto), together with any information such Lender chooses to
transmit with such form, and any other certificate or
statement of exemption required under the Code, to establish
that such Lender is not acting for its own account with
respect to a portion of any such sums payable to such Lender.
(iii) The Borrower shall not be required to pay
any additional amount to any Foreign Lender under Section 3.1
(A) with respect to any Taxes required to be deducted or
withheld on the basis of the information, certificates or
statements of exemption such Lender transmits with an IRS Form
W - 8IMY pursuant to this Section 11.15(a) or (B) if such
Lender shall have failed to satisfy the foregoing provisions
of this Section 11.15(a); provided that if such Lender shall
have satisfied the requirement of this Section 11.15(a) on the
date such Lender became a Lender or ceased to act for its own
account with respect to any payment under any of the Credit
Documents, nothing in this Section 11.15(a) shall relieve the
Borrower of its obligation to pay any amounts pursuant to
Section 3.1 in the event
119
that, as a result of any change in any applicable Law, treaty
or governmental rule, regulation or order, or any change in
the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date
establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under
any of the Credit Documents is not subject to withholding or
is subject to withholding at a reduced rate.
(iv) The Administrative Agent may, without
reduction, withhold any Taxes required to be deducted and
withheld from any payment under any of the Credit Documents
with respect to which the Borrower is not required to pay
additional amounts under this Section 11.15(a).
(b) Each Lender that is a "United States person" within
the meaning of Section 7701(a)(30) of the Code shall deliver to the
Administrative Agent two duly signed completed copies of IRS Form W -
9. If such Lender fails to deliver such forms, then the Administrative
Agent may withhold from any interest payment to such Lender an amount
equivalent to the applicable back - up withholding tax imposed by the
Code, without reduction.
(c) If any Governmental Authority asserts that the
Administrative Agent did not properly withhold or backup withhold, as
the case may be, any tax or other amount from payments made to or for
the account of any Lender, such Lender shall indemnify the
Administrative Agent therefor, including all penalties and interest,
any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses
(including Attorney Costs) of the Administrative Agent. The obligation
of the Lenders under this Section shall survive the termination of the
Commitments, repayment of all other Credit Party Obligations hereunder
and the resignation of the Administrative Agent.
11.16 REPLACEMENT OF LENDERS.
Under any circumstances set forth herein providing that the Borrower
shall have the right to replace a Lender as a party to this Credit Agreement,
the Borrower may, upon notice to such Lender and the Administrative Agent,
replace such Lender by causing such Lender to assign, and such Lender shall
assign, its Commitment and outstanding Loans (with the assignment fee to be paid
by the Eligible Assignee in such instance) at par (unless otherwise consented to
by such Lender) pursuant to Section 11.7(b) to one or more other Lenders or
Eligible Assignees procured by the Borrower. The Borrower shall (x) pay in full
all principal, interest, fees and other amounts owing to such Lender through the
date of replacement (including any amounts payable pursuant to Section 3.5) and
(y) release such Lender from its obligations under the Credit Documents. Any
Lender being replaced shall execute and deliver an Assignment and Assumption
with respect to such Lender's Commitment and outstanding Loans and
participations in L/C Obligations.
120
11.17 GOVERNING LAW.
(a) THIS CREDIT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, the LAW OF THE STATE OF NEW YORK;
PROVIDED THAT THE ADMINISTRATIVE Agent AND EACH LENDER SHALL RETAIN ALL
RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING IN NEW YORK CITY OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION
AND DELIVERY OF THIS CREDIT AGREEMENT, EACH OF THE CREDIT PARTIES, THE
Administrative Agent AND EACH LENDER CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON - EXCLUSIVE JURISDICTION OF THOSE
COURTS. EACH OF THE CREDIT PARTIES, THE ADMINISTRATIVE Agent AND EACH
LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY CREDIT DOCUMENT OR
OTHER DOCUMENT RELATED THERETO. EACH OF THE CREDIT PARTIES, THE
Administrative Agent AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER
MEANS PERMITTED BY THE LAW OF SUCH STATE.
11.18 WAIVER OF RIGHT TO TRIAL BY JURY.
EACH PARTY TO THIS CREDIT AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER
ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
121
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: PACKAGING DYNAMICS OPERATING COMPANY,
a Delaware corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
GUARANTORS: PACKAGING DYNAMICS CORPORATION,
a Delaware corporation
BAGCRAFT PACKAGING, L.L.C.
(f/k/a BAGCRAFT ACQUISITION, L.L.C.),
a Delaware limited liability company
INTERNATIONAL CONVERTER, INC.,
a Delaware corporation
IPMC ACQUISITION, L.L.C.,
a Delaware limited liability company
WOLF PACKAGING INC.,
an Iowa corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
ADMINISTRATIVE AGENT
AND LENDERS:
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Assistant Vice President
(Signatures Continued)
Packaging Dynamics Operating Company
Credit Agreement - September 2003
Signature Page
BANK OF AMERICA, N.A.,
as a Lender and as L/C Issuer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
(Signatures Continued)
Packaging Dynamics Operating Company
Credit Agreement - September 2003
Signature Page
NATIONAL CITY BANK
By: /s/ ▇▇▇▇▇▇▇▇▇ Pass
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇ Pass
Title: Vice President
Packaging Dynamics Operating Company
Credit Agreement - September 2003
Signature Page
THE NORTHERN TRUST COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Second Vice President
Packaging Dynamics Operating Company
Credit Agreement - September 2003
Signature Page
FIFTH THIRD BANK (CHICAGO)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Title: AVP
Signature Page
BANK OF SCOTLAND
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: First Vice President
Signature Page
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Commercial Banking Officer
Signature Page