Exhibit 10.28
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CREDIT AGREEMENT
dated as of November 24, 1997
by and among
KOPPERS INDUSTRIES, INC., as Borrower
THE PARTIES LISTED IN SCHEDULE 4.34 HERETO, as Guarantors
THE BANKS PARTIES HERETO FROM TIME TO TIME,
THE ISSUING BANK REFERRED TO HEREIN,
THE SWINGLINE BANK REFERRED TO HEREIN,
and
SBC WARBURG DILLON READ INC., as Arranger and Syndication Agent
and
SWISS BANK CORPORATION, STAMFORD BRANCH, as Documentation Agent
and
MELLON BANK, N.A., as Administrative Agent and Collateral Agent
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TABLE OF CONTENTS
Section Title Page
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ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. Certain Definitions........................................... 2
1.02. Construction.................................................. 29
1.03. Accounting Principles......................................... 30
1.04. Currency Equivalents Generally................................ 32
ARTICLE II
THE FACILITY
2.01. The Commitments; Obligations Several.......................... 33
(a) The Commitments........................................ 33
(b) Obligations Several.................................... 33
2.02. Loans......................................................... 33
(a) (i) The Revolving Credit Commitments................. 33
(ii) Term Loan Commitments............................ 34
(b) Revolving Credit....................................... 35
2.03. Notes......................................................... 35
2.04. Making of Loans............................................... 35
2.05. Commitment Fees; Reduction of the Commitments; Mandatory
Prepayments of Loans.......................................... 36
(a) Commitment Fees 36
(b) Reduction of the Term Loan A Commitments and the
Revolving Credit Commitments.................................. 38
(c) Mandatory Prepayments.................................. 38
(i) Term Loan Facilities............................. 38
(ii) Revolving Facility............................... 40
2.06. Interest Rates................................................ 41
(a) Optional Bases of Borrowing............................ 41
(i) Base Rate Option................................. 41
(ii) Euro-Rate Option................................. 42
(iii) As-Offered Rate Option........................... 43
(b) Pricing Levels................................... 44
(c) Funding Periods.................................. 45
(d) Transactional Amounts............................ 45
(e) Interest After Maturity.......................... 45
(f) Euro-Rate Unascertainable; Impracticability...... 46
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Section Title Page
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2.07. Conversion or Renewal of Interest Rate Options............. 47
(a) Conversion or Renewal............................ 47
(b) Failure to Convert or Renew...................... 48
2.08. Payments and Prepayments................................... 48
2.09. Interest Payment Dates..................................... 50
2.10. Pro Rata Treatment and Payments............................ 50
2.11. Additional Compensation in Certain Circumstances........... 51
(a) Increased Costs or Reduced Return Resulting from
Taxes, Reserves, Capital Adequacy Requirements,
Expenses, Etc................................... 51
(b) Indemnity........................................ 53
2.12. Taxes...................................................... 53
(a) Payments Net of Taxes............................ 53
(b) Indemnity........................................ 54
2.13. Funding by Branch, Subsidiary or Affiliate................. 55
(a) Notional Funding................................. 55
(b) Actual Funding................................... 55
2.14. Currency Exchange Fluctuations............................. 56
ARTICLE III
THE SUBFACILITIES
3.01. Letters of Credit.......................................... 56
(a) Generally........................................ 56
(b) Australian Letters of Credit..................... 57
3.02. Letter of Credit Fees...................................... 58
(a) Commissions...................................... 58
(b) Facing Fee; Administration Fees.................. 59
3.03. Procedure for Issuance and Amendment of Letters of Credit.. 60
(a) Procedure for Issuance........................... 60
(b) Extension and Increase........................... 60
(c) Limitations on Issuance and Extension............ 61
(d) Amendments....................................... 62
3.04. Letter of Credit Participating Interests................... 62
3.05. Payments................................................... 63
(a) Reimbursement of Issuing Banks................... 63
(b) Agreement of Banks............................... 64
(c) Receipt of Payment............................... 64
(d) Rescission....................................... 64
(e) Equalization..................................... 65
3.06. Further Assurances......................................... 65
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Section Title Page
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3.07. Obligations Absolute....................................... 65
3.08. Certain Provisions Relating to the Issuing Banks; Additional
Provisions Regarding Letters of Credit.................... 66
(a) General.......................................... 66
(b) Administration................................... 66
(c) Indemnification of Issuing Bank.................. 67
3.09. Cash Collateral for Letters of Credit...................... 67
(a) Letter of Credit Collateral Account.............. 67
(b) Cash Collateral for Letter of Credit Exposure in
Certain Circumstances........................... 68
(c) Application of Funds............................. 68
(d) Survival of Provisions........................... 68
3.10. Certain Letters of Credit Outstanding as of Closing Date... 69
3.11. The Swingline Subfacility.................................. 69
(a) General.......................................... 69
(b) Nature of Credit................................. 69
(c) Swingline Note................................... 69
(d) Maturity......................................... 70
(e) Making of Swingline Loans, etc................... 70
(f) Repayment of Swingline Loans, etc................ 70
3.12. Limitations on the Making of Swingline Loans............... 70
(a) Swingline Current Availability................... 70
(b) Rights of the Parties............................ 71
3.13. Swingline Loan Participating Interests..................... 71
(a) Generally........................................ 71
(b) Obligations Absolute............................. 71
(c) Payment by Banks on Account of Swingline Loans... 72
(d) Distributions to Participants.................... 72
(e) Rescission....................................... 72
(f) Equalization..................................... 73
3.14. Certain Provisions Relating to the Swingline Bank.......... 73
(a) General.......................................... 73
(b) Administration................................... 73
(c) Indemnification of Swingline Bank................ 74
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Organization and Qualification............................. 74
4.02. Authority and Authorization................................ 75
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Section Title Page
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4.03. Execution and Binding Effect............................... 75
4.04. Authorizations and Filings................................. 75
4.05. Absence of Conflicts....................................... 76
4.06. Financial Statements....................................... 76
4.07. No Event of Default; Compliance with Instruments........... 77
4.08. Litigation................................................. 78
4.09. Subsidiaries............................................... 78
4.10. Pension-Related Matters.................................... 78
4.11. Title to Property.......................................... 79
4.12. Contracts.................................................. 80
4.13. Taxes...................................................... 80
4.14. Financial Accounting Practices............................. 80
4.15. No Material Adverse Change................................. 81
4.16. Regulation U............................................... 81
4.17. Compliance with Laws....................................... 81
4.18. Patents, Licenses, Franchises.............................. 82
4.19. Accurate and Complete Disclosure........................... 82
4.20. Investment Company......................................... 83
4.21. Public Utility Holding Company............................. 83
4.22. Proceeds................................................... 83
4.23. Affiliated Entities........................................ 84
4.24. Regulation O............................................... 84
4.25. Burdensome Obligations..................................... 84
4.26. Insurance.................................................. 84
4.27. Delivery of the Senior Note Documents and Senior
Subordinated Note Documents............................... 85
4.28. Security Documents......................................... 85
4.29. Solvency................................................... 86
4.30. Hazardous Materials........................................ 86
4.31. Acquisition Agreement and Acquisition Agreement Guarantee.. 87
4.32. Existing Indebtedness...................................... 87
4.33. Employment Agreements...................................... 87
4.34. Guarantors................................................. 87
4.35. Transaction Documents...................................... 87
4.36. Senior Subordinated Notes.................................. 88
ARTICLE V
CONDITIONS PRECEDENT
5.01. Conditions to Initial Extensions of Credit................. 89
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Section Title Page
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5.02. Conditions to All Extensions of Credit..................... 96
(a) Notice........................................... 96
(b) Representations and Warranties................... 96
(c) No Default....................................... 96
(d) No Violations of Law............................. 96
5.03. Additional Conditions to Issuances of Letters of Credit.... 97
ARTICLE VI
AFFIRMATIVE COVENANTS
6.01. Reporting and Information Requirements..................... 97
(a) Annual Audit Reports............................. 97
(b) Quarterly Reports................................ 98
(c) Management Reports............................... 98
(d) Compliance Certificates.......................... 99
(e) Accountants' Certificate......................... 99
(f) Forecast and Analysis............................ 99
(g) Other Reports and Information.................... 100
(h) Further Information.............................. 100
(i) Notice of Event of Default....................... 100
(j) Notice of Material Adverse Change................ 100
(k) Notice of Material Proceedings................... 101
(l) Notice of Pension-Related Events................. 101
(m) Notice of Other Material Defaults................ 102
(n) Notice of Other Amendments....................... 102
(o) Visitation....................................... 103
(p) Environmental Matters............................ 103
6.02. Preservation of Existence and Franchises................... 104
6.03. Insurance.................................................. 104
6.04. Maintenance of Properties.................................. 105
6.05. Payment of Taxes and Other Potential Charges and
Priority Claims; Payment of Other Current
Liabilities............................................... 105
6.06. Financial Accounting Practices............................. 106
6.07. Compliance with Laws....................................... 106
6.08. Use of Credits............................................. 107
6.09. Official Authorizations, etc............................... 107
6.10. Contracts.................................................. 107
6.11. Maintenance of Liens of the Security Documents............. 107
6.12. Environmental Matters...................................... 107
(a) Hazardous Substances............................. 107
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Section Title Page
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(b) Financial Assurance.............................. 108
(c) Indemnification.................................. 108
6.13. Annual Bank Meeting........................................ 109
6.14. Additional Credit Parties.................................. 109
6.15. Certain Post-Closing Deliveries............................ 104
ARTICLE VII
NEGATIVE COVENANTS
7.01. Financial Maintenance Covenants............................ 110
(a) Net Worth........................................ 110
(b) Debt/Consolidated EBITDA......................... 110
(c) Interest Coverage Ratio.......................... 110
(d) Consolidated Debt Service Coverage Ratio......... 110
(e) Current Ratio.................................... 111
7.02. Liens...................................................... 111
7.03. Indebtedness............................................... 113
7.04. Guaranty Equivalents....................................... 114
7.05. Loans and Investments...................................... 115
7.06. Dividends and Related Distributions........................ 116
7.07. Limitation on Optional Payments and Modification of
Certain Debt Instruments................................... 118
7.08. Leases..................................................... 118
7.09. Fundamental Changes........................................ 119
7.10. Dispositions of Assets..................................... 119
7.11. Disposition of Stock in and Indebtedness of Subsidiaries... 121
7.12. Transactions with Affiliates............................... 121
7.13. Continuation of or Change in Business...................... 122
7.14. Capital Expenditures....................................... 122
7.15. Consolidated Tax Returns................................... 123
7.16. Regulation U............................................... 123
7.17. Certain Documents.......................................... 123
7.18. Compliance with ERISA...................................... 123
7.19. Limitation of Other Restrictions on Liens, Dividend
Restrictions on Subsidiaries, etc.......................... 124
7.20. Limitation on Other Restrictions on Amendment of
This Agreement, etc........................................ 124
7.21. Limitation on Creation of Subsidiaries..................... 125
7.22. Borrowings Under the Australian Revolving Loan Facility.... ▇▇▇
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▇▇▇▇▇▇▇ Title Page
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ARTICLE VIII
DEFAULTS
8.01. Events of Default.......................................... 126
8.02. Consequences of an Event of Default........................ 131
8.03. Set-Off.................................................... 132
8.04. Application of Proceeds.................................... 133
8.05. Equalization Among Bank Parties and Participants........... 134
ARTICLE IX
THE AGENTS
9.01. Appointment................................................ 135
9.02. Delegation of Duties....................................... 135
9.03. Nature of Duties; Independent Credit Investigation......... 135
9.04. Actions in Discretion of Agents; Instructions from Banks... 136
9.05. Exculpatory Provisions..................................... 137
9.06. Reimbursement and Indemnification.......................... 138
9.07. Administration by the Agents............................... 139
9.08. The Agents in Their Respective Individual Capacities....... 139
9.09. Holders of Notes........................................... 139
9.10. Successor Agents........................................... 140
9.11. Additional Agents.......................................... 141
9.12. Calculations............................................... 141
9.13. Administrative Agent's Fee................................. 136
9.14. Funding by Administrative Agent............................ 142
ARTICLE X
MISCELLANEOUS
10.01. Holidays................................................... 142
10.02. Records.................................................... 142
10.03. Amendments or Waivers...................................... 143
10.04. No Implied Waiver; Cumulative Remedies..................... 145
10.05. Notices.................................................... 145
10.06. Expenses; Taxes; Attorneys' Fees........................... 146
10.07. Limitation on Payments; Severability....................... 147
(a) Limitation on Payments........................... 147
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Section Title Page
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(b) Severability..................................... 147
10.08. Government Law; Submission to Jurisdiction; Waiver of
Jury Trial; Limitation of Liability....................... 148
(a) Governing Law.................................... 148
(b) Certain Waivers.................................. 148
(c) LIMITATION OF LIABILITY.......................... 149
10.09. Prior Understanding........................................ 149
10.10. Duration; Survival......................................... 149
10.11. Counterparts............................................... 150
10.12. Successors and Assigns; Participations; Assignments........ 150
(a) Successors and Assigns........................... 150
(b) Participations................................... 151
(c) Sales to Purchasing Banks........................ 151
(d) The Register..................................... 153
(e) Agreements of Transferor Bank and Purchasing
Bank............................................ 153
(f) Financial and Other Information.................. 154
(g) Taxes............................................ 154
(h) Assignments to Federal Reserve Bank.............. 155
10.13. Replacement of Bank........................................ 155
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Annex A Committed Amounts
Exhibit A-1 Form of Revolving Credit Note..................... ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ Form of Term Loan A Note.......................... ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ Form of Term Loan B Note.......................... A-3-1
Exhibit B Form of Swingline Note............................ B-1
Exhibit C-1 Form of Subsidiary Guarantee...................... C-1-1
Exhibit C-2 Form of Australian Subsidiary Guarantee........... ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ Form of Security Agreement........................ ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ Form of Australian Security Trust Deed............ ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ Form of Securities Pledge Agreement............... ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ Form of Australian Fixed and Floating Charge...... D-4-1
Exhibit E-1 Form of Mortgage.................................. E-1-1
Exhibit E-2 Form of Australian Mortgage....................... E-2-1
Exhibit F Form of Commitment and Loan Transfer Supplement... F-1
Exhibit G-1 Form of Opinion of U.S. Counsel................... G-1-1
Exhibit G-2 Form of Opinion of Australian Counsel............. G-2-1
Exhibit G-3 Form of Opinion of Local Counsel.................. G-3-1
Exhibit G-4 Form of Opinion of Australian Local Counsel....... G-4-1
Exhibit H-1 Form of Australian Revolving Loan Facility........ ▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ Term Loan Facility............. H-2-1
Exhibit I-1 Form of Australian Term Loan Letter of Credit..... I-1-1
Exhibit I-2 Form of Australian Revolving Loan Letter of Credit I-2-1
Schedule P1 Ownership
Schedule 1.01A Government Loans
Schedule 3.10 Certain Letters of Credit Outstanding as of Closing Date
Schedule 4.01 Organization and Qualification
Schedule 4.04 Authorizations and Filings
Schedule 4.05 Absence of Conflicts
Schedule 4.06 Financial Statements
Schedule 4.07 No Event of Default; Compliance with Instruments
Schedule 4.08 Litigation
Schedule 4.09 Subsidiaries
Schedule 4.10 Pension-Related Matters
Schedule 4.11 Title to Property
Schedule 4.12 Contracts
Schedule 4.13 Taxes
Schedule 4.17 Compliance with Laws
Schedule 4.18 Patents, Licenses, Franchises
Schedule 4.22 Sources and Uses of Funds Necessary to Consummate
the Transaction
Schedule 4.23 Affiliated Entities
Schedule 4.25 Burdensome Obligations
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Schedule 4.26 Insurance
Schedule 4.28 Security Documents
Schedule 4.30 Hazardous Materials
Schedule 4.32 Existing Indebtedness
Schedule 4.33 Employment Agreements
Schedule 4.34 Guarantors
Schedule 5.01 (xvi) Legal Opinions of Local Counsel
Schedule 5.01 (xxxiv) Certain Documents to Be Delivered in Form and
Substance Satisfactory to the Agents
Schedule 7.01 Potential Write-Offs
Schedule 7.02 Liens
Schedule 7.03 Indebtedness
Schedule 7.04 Guaranty Equivalents
Schedule 7.05 Loans and Investments
Schedule 7.08 Leases
Schedule 7.12 Transactions with Affiliates
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT, dated as of November 24, 1997, by and among
KOPPERS INDUSTRIES, INC., a Pennsylvania corporation (the "Borrower"), as
Borrower, THE PARTIES LISTED IN SCHEDULE 4.34 HERETO (each a "Guarantor" and
collectively, the "Guarantors"), as Guarantors, THE BANKS PARTIES HERETO FROM
TIME TO TIME (as hereinafter further defined, individually a "Bank" and
collectively, the "Banks"), THE ISSUING BANKS REFERRED TO HEREIN (as hereinafter
further defined, individually an "Issuing Bank" and collectively, the "Issuing
Banks"), THE SWINGLINE BANK REFERRED TO HEREIN (as hereinafter further defined,
the "Swingline Bank"), SBC WARBURG DILLON READ INC., as arranger and syndication
agent for the Banks (in such capacities, the "Arranger" and the "Syndication
Agent"), SWISS BANK CORPORATION, STAMFORD BRANCH, as documentation agent for the
Banks (the "Documentation Agent"), and MELLON BANK, N.A., as administrative
agent and collateral agent for the Banks, the Issuing Banks and the Swingline
Bank (in such capacities, the "Administrative Agent" and "Collateral Agent" and
together with the Arranger, Syndication Agent and the Documentation Agent, the
"Agents").
W I T N E S S E T H :
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WHEREAS, the Borrower, Saratoga Partners III, L.P. and Saratoga
Koppers Funding, Inc. (collectively, "Saratoga") have acquired all of the voting
and non-voting shares of common stock of the Borrower formerly owned by
Cornerstone Spectrum, Inc. for approximately $52.5 million in the aggregate (the
"Cornerstone Repurchase"); and
WHEREAS, the Borrower intends to enter into a transaction pursuant to
which (a) the Borrower will acquire from The Broken Hill Proprietary Company
Limited ("BHP") all of the shares of capital stock of Koppers Australia Pty.
Ltd. ("KAP") owned by BHP for approximately $65 million, (b) the Borrower will
repurchase from APT Holdings Corporation ("APT"), a wholly owned subsidiary of
Mellon Bank Corporation, all of the non-voting shares of common stock of the
Borrower owned by APT for approximately $23 million, of which the Borrower will
repurchase the portion of such shares having a purchase price of approximately
$11.5 million on the Closing Date (as hereinafter defined) (the "APT Transaction
Repurchase") and the Borrower will repurchase the remaining portion of such
shares on or prior to the date which is 364 days from the date hereof (the "APT
Post-Transaction Repurchase" and, together with the APT Transaction Repurchase,
the "APT Repurchase"), and (c) the Borrower will refinance certain of its
existing indebtedness, including all indebtedness under its senior credit
facilities and indebtedness represented by 8 1/2% Senior Notes due 2004 which
are tendered pursuant to a tender offer made by the Borrower. The transactions
described in clauses (a)-(c) above, excluding the APT Post-Transaction
Repurchase, together with the Cornerstone Repurchase, and the financings
therefor discussed below, are collectively referred to herein as the
"Transaction"; and
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WHEREAS, Saratoga has provided approximately $35.5 million in cash as
financing for the Cornerstone Repurchase (the "Equity Investments"); and
WHEREAS, not more than $5.5 million of proceeds from the various
financing components of the Transaction will be applied by the Borrower to
repurchase the shares of non-voting common stock acquired by Saratoga in the
Cornerstone Repurchase; and
WHEREAS, other than capital and credit which shall become available to
the Borrower upon satisfaction of the various conditions contained in this
Agreement, approximately $175 million in cash will be provided as financing for
the Transaction from the proceeds of the issuance of Senior Subordinated Notes
(as hereinafter defined); and
WHEREAS, upon consummation of the Transaction, ownership of the
capital stock of the Borrower shall be as set forth on Schedule P1 hereto; and
WHEREAS, subject to the terms and conditions of this Agreement, to
provide the remaining financing for the Transaction, to repay certain existing
Indebtedness of the Borrower and KAP, to pay fees and expenses in connection
with the Transaction and, after the Closing Date, to provide working capital to,
and for general corporate purposes of, the Borrower and KAP, the Banks have
agreed to make available on the Closing Date approximately $275 million from the
secured bank facilities provided for herein.
NOW THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I.
DEFINITIONS; CONSTRUCTION
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1.01 Certain Definitions.
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In addition to other words and terms defined elsewhere in this
Agreement, as used herein the following words and terms shall have the following
meanings, respectively, unless the context otherwise clearly requires:
"Acquisition Agreement" shall mean the Asset Purchase Agreement dated
as of December 28, 1988 by and between the Borrower and Beazer East.
"Acquisition Agreement Guarantee" shall mean the Guarantee by Beazer
Limited of all Beazer East's liabilities and obligations under Article VII of
the Acquisition Agreement.
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"Additional Credit Party" and "Additional Credit Parties" shall have
the meanings assigned to those terms in Section 6.14.
"Administrative Agent" shall have the meaning assigned to that term
in the introductory paragraph hereto.
"Advisory Services Agreement" shall mean the Advisory Services
Agreement made as of the Closing Date by and between the Borrower and Saratoga
Partners III, L.P.
"Affected Party" shall have the meaning assigned to that term in
Section 2.06(f).
"Affiliate" of a person shall mean (a) any person which directly or
indirectly controls, or is controlled by, or is under common control with, such
person, any person which owns beneficially or of record 5% or more of any class
of capital stock of such person or a Subsidiary of such person or of which 5% or
more of any class of capital stock (or, in the case of a person that is not a
corporation, 5% or more of the equity interest) is owned beneficially or of
record by such person or a Subsidiary of such person, and (b) any director or
officer (or, in the case of a person which is not a corporation, any individual
having powers analogous to those of a corporate director or officer) of such
person or of a person who is an Affiliate of such person within the meaning of
the preceding clause (a), and (c) for each individual who is an Affiliate within
the meaning of the foregoing, any other individual related to such Affiliate by
consanguinity within the third degree or in a step or adoptive relationship
within such third degree or related by affinity with such Affiliate or any such
individual, and any person directly or indirectly controlled by any of the
foregoing. The term "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting securities, by
contract or otherwise.
"Affiliated Entity" shall mean any person as to which the Borrower or
any of its Subsidiaries (i) is or has agreed or otherwise has a duty to become a
general partner of such person or otherwise generally liable for or on account
of the liabilities, acts or omissions of such person, (ii) has agreed or
otherwise has a duty to acquire securities or other interests in or make capital
contributions, loans or other investments to or on account of such person, or
(iii) has an interest in such person or has or may have a liability to or on
account of such person which would reasonably be expected to be material to the
business, operations, condition, financial or otherwise, or prospects of the
Borrower or the enterprise comprised of the Borrower and its Subsidiaries taken
as a whole, or an Affiliated Entity of any such person.
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"Agents" shall have the meaning assigned to that term in the
introductory paragraph hereto and "Agent" shall mean any of the individual
parties who are collectively referred to as Agents.
"Agreement" shall mean this Credit Agreement as amended, modified or
supplemented from time to time hereafter.
"Applicable Margin" shall have the meaning assigned to that term in
Section 2.06(a).
"APT" shall have the meaning assigned to that term in the recitals
hereto.
"APT Post-Transaction Repurchase" shall have the meaning assigned to
that term in the recitals hereto.
"APT Repurchase" shall have the meaning assigned to that term in the
recitals hereto.
"APT Transaction Repurchase" shall have the meaning assigned to that
term in the recitals hereto.
"Arranger" shall have the meaning assigned to that term in the
introductory paragraph hereto.
"As-Offered Rate" and "As-Offered Rate Option" shall have the meanings
assigned to those terms in Section 2.06(a) hereof.
"As-Offered Rate Portion" of any Loan or Loans shall mean at any time
the portion, including the whole, of such Loan or Loans bearing interest at such
time under the As-Offered Rate Option. If no Loan or Loans are specified, "As-
Offered Rate Portion" shall refer to the As-Offered Rate Portion of all Loans
outstanding at such time.
"As-Offered Rate Funding Period" shall have the meaning assigned to
that term in Section 2.06(c) hereof.
"Asset Disposition" shall have the meaning assigned to that term in
Section 7.10 hereof.
"Australian Credit Facilities" shall mean the Australian Revolving
Loan Facility and the Australian Term Loan Facility.
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"Australian Dollar," "Australian Dollars" and the symbol "A$" shall
mean lawful money of Australia.
"Australian Dollar Equivalent" shall have the meaning assigned to
that term in Section 1.04.
"Australian Fixed and Floating Charge" shall mean the executed
Australian Fixed and Floating Charge substantially in the form of Exhibit D-4,
as the same may be amended, modified or supplemented from time to time.
"Australian LC Issuing Bank" shall mean Swiss Bank Corporation, in its
capacity as issuer of the Australian Term Loan Letter of Credit and the
Australian Revolving Loan Letter of Credit.
"Australian Mortgage" or "Australian Mortgages" shall mean any or all,
as the case may be, of the mortgages or deeds of trust from each Australian
Subsidiary Guarantor to the Administrative Agent in substantially the form
attached as Exhibit E-2, with respect to the Australian Mortgaged Property, as
the same may be amended, modified or supplemented from time to time.
"Australian Mortgaged Property" shall mean and include any and all
property covered by or subject to or intended or purported to be subject to the
Liens of any of the Australian Mortgages.
"Australian Revolving Loan Facility" shall mean the revolving loan
facility between KAP and the Australian Revolving Loan Facing Bank substantially
in the form of Exhibit H-1 hereto.
"Australian Revolving Loan Facing Bank" shall mean Commonwealth Bank
of Australia in its capacity as the bank party to the Australian Revolving Loan
Facility, or any successor bank party thereto as may be appointed in accordance
with the terms thereof and hereof.
"Australian Revolving Loan Interest Reserve" shall mean at any time
2.5% of the aggregate Accommodations (as defined in the Australian Revolving
Loan Facility) provided to the Borrower under the Australian Revolving Loan
Facility.
"Australian Revolving Loan Letter of Credit" shall have the meaning
assigned to such term in Section 3.01(b)(ii).
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"Australian Security Trust Deed" shall mean the executed Australian
Security Trust Deed substantially in the form of Exhibit D-2, as the same may be
amended, modified or supplemented from time to time.
"Australian Subsidiary Guarantee" shall mean the executed Australian
Subsidiary Guarantee substantially in the form of Exhibit C-2, as the same may
be amended, modified or supplemented from time to time.
"Australian Subsidiary Guarantor" shall mean each person who executes
and delivers an Australian Subsidiary Guarantee.
"Australian Term Loan Facility" shall mean the term loan facility
between KAP and the Australian Term Loan Facing Bank substantially in the form
of Exhibit H-2 hereto.
"Australian Term Loan Facing Bank" shall mean National Australia Bank
Limited in its capacity as the bank party to the Australian Term Loan Facility,
or any successor bank party thereto as may be appointed in accordance with the
terms thereof and hereof.
"Australian Term Loan Interest Reserve" shall mean the difference
between the stated amount of the Australian Term Loan Letter of Credit and the
maximum Limit (as specified in the Australian Term Loan Facility) available to
KAP under the Australian Term Loan Facility.
"Australian Term Loan Letter of Credit" shall have the meaning
assigned to such term in Section 3.01(b)(i).
"Bank" shall mean any of the banks, institutional investors, insurance
companies and other lending institutions which shall be parties hereto from time
to time, and "Banks" shall mean all of the banks, institutional investors,
insurance companies and other lending institutions which shall be parties hereto
from time to time. "Bank" shall in any event include the Issuing Banks and the
Swingline Bank.
"Bank Parties" shall mean the Banks, the Issuing Banks, the
Swingline Bank and the Agents.
"Base Rate" and "Base Rate Option" shall have the meanings assigned
to those terms in Section 2.06(a).
-7-
"Base Rate Portion" of any Loan or Loans shall mean at any time the
portion, including the whole, of such Loan or Loans bearing interest at such
time (i) under the Base Rate Option or (ii) in accordance with the first
sentence of Section 2.06(e). If no Loan or Loans are specified, "Base Rate
Portion" shall refer to the Base Rate Portion of all Loans outstanding at such
time.
"Beazer East" shall mean Beazer East, Inc., a Delaware corporation.
"Beazer Limited" shall mean Beazer Limited, an English corporation.
"BHP" shall have the meaning assigned to that term in the recitals
hereto.
"BHP Agreement" shall mean the Agreement for Sale of Shares by and
among BHP Nominees No. 3 Pty. Ltd., BHP, the Borrower, KAP, Continental Carbon
Australia Pty. Limited, and KAP Investments, Inc. dated as of October 8, 1997.
"Borrower" shall have the meaning assigned to that term in the
introductory paragraph hereto.
"Business Day" shall mean any day other than a Saturday, Sunday,
public holiday under the laws of the Commonwealth of Pennsylvania or the State
of New York or other day on which banking institutions are authorized or
obligated to close in Pittsburgh, Pennsylvania or New York, New York.
"Capitalized Lease" shall mean at any time any lease which is, or is
required to be, capitalized on the balance sheet of the lessee at such time, and
"Capitalized Lease Obligation" of any person at any time shall mean the
aggregate amount which is, or is required to be, reported as a liability on the
balance sheet of such person at such time as lessee under a Capitalized Lease.
"Closing Date" shall mean the date upon which Loans are initially made
hereunder, but in no event later than December 31, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
any successor statute of similar import, and regulations thereunder, in each
case as in effect from time to time. References to sections of the Code shall
be construed to also refer to any successor sections.
"Collateral" shall mean any property or assets at any time covered by
or subject to or intended or purported to be covered by or subject to the Lien
of any of the Security Documents.
-8-
"Collateral Agent" shall have the meaning assigned to that term in
the recitals hereto.
"Commitment" shall mean, with respect to any Bank, the aggregate of
such Bank's Revolving Credit Commitment, Term Loan A Commitment and Term Loan B
Commitment.
"Commitment and Loan Transfer Supplement" shall mean a Commitment and
Loan Transfer Supplement substantially in the form of Exhibit F, executed and
delivered as provided in Section 10.12(c).
"Commitment Letter" shall mean the commitment letter dated October 31,
1997 from SBC Warburg Dillon Read Inc., Swiss Bank Corporation and Mellon Bank,
N.A. to the Borrower and the Fee Letters referred to therein.
"Committed Amount" and "Committed Amounts" shall have the meanings
assigned to those terms in Section 2.01(a).
"Computation Date" shall mean each March 31, June 30, September 30 and
December 31, the date upon which the Borrower shall request the making of any
Loan or the issuance of any Letter of Credit, and any other date upon which a
determination shall be made by the Administrative Agent to compute the U.S.
Dollar Equivalent of the aggregate Revolving Credit Exposure of the Banks for
the purposes of Section 2.14(b).
"Consolidated Current Assets" at any time shall mean the current
assets of the Borrower and its Consolidated Subsidiaries at such time, before
taking into account any LIFO Reserves.
"Consolidated Current Liabilities" at any time shall mean the current
liabilities of the Borrower and its Consolidated Subsidiaries at such time.
"Consolidated Current Ratio" at any time shall mean Consolidated
Current Assets at such time divided by the sum of (i) Consolidated Current
Liabilities at such time and (ii) the amount of all Revolving Credit Loans,
Letter of Credit Reimbursement Obligations and Swingline Loans outstanding at
such time to the extent that such amounts are not otherwise included within the
definition of Consolidated Current Liabilities at such time.
"Consolidated Debt Service Coverage Ratio" at the end of any fiscal
quarter shall mean Consolidated EBITDA for the four most recent consecutive full
fiscal quarters divided by the sum of (i) the amount of Consolidated Interest
Expense (which, through September 30, 1998, shall be calculated on a pro forma
---------
basis for the Transaction) during
-9-
such fiscal quarters and (ii) the amount of scheduled retirements of long-term
Indebtedness due and paid in cash during such fiscal quarters. In making any
pro forma adjustment required pursuant to this definition, Indebtedness or other
obligations incurred in connection with the Transaction shall be deemed to bear
interest at a rate per annum not less than the one-month Euro-Rate as of the
last day of such period plus the Level V Applicable Margin specified in Section
2.06(a) in respect of all periods through the period ending March 31, 1998.
"Consolidated EBITDA" for any period shall mean the sum of (a)
Consolidated Net Income for such period, (b) Consolidated Interest Expense for
such period, (c) Consolidated Income Tax Expense for such period, (d)
consolidated depreciation expense of the Borrower and its Consolidated
Subsidiaries for such period, and (e) consolidated amortization expense of the
Borrower and its Consolidated Subsidiaries for such period, minus the sum of (x)
noncash gains to the extent included in determining such Consolidated Net Income
for such period and (y) equity earnings of Affiliates (other than Consolidated
Subsidiaries) to the extent included in determining Consolidated Net Income for
such period, plus the sum of (ww) cash dividends received from Affiliates by the
Borrower to the extent not included in determining Consolidated Net Income for
such period, (xx) noncash charges to the extent included in determining such
Consolidated Net Income for such period and in respect of which no future cash
expenditure is reasonably anticipated and (yy) equity losses of Affiliates
(other than Consolidated Subsidiaries) to the extent included in determining
Consolidated Net Income for such period; provided that through September 30,
1998, Consolidated EBITDA will be calculated on a pro forma basis for the
---------
Transaction; provided, further, that through September 30, 1998, Consolidated
EBITDA will be increased by the amount of cash write offs identified on Schedule
7.01, to the extent actually taken in the fiscal quarter ending December 31,
1997. In making any pro forma adjustment required pursuant to this definition,
Indebtedness or other obligations incurred in connection with the Transaction
shall be deemed to bear interest at a rate per annum not less than the one-month
Euro-Rate as of the last day of such period plus the Level V Applicable Margin
specified in Section 2.06(a) in respect of all periods through the period ending
March 31, 1998.
"Consolidated Income Tax Expense" for any period shall mean the
consolidated charges against income of the Borrower and its Consolidated
Subsidiaries for foreign, federal, state and local income taxes for such period.
"Consolidated Indebtedness" at any time shall mean the consolidated
Indebtedness of the Borrower and its Consolidated Subsidiaries at such time.
"Consolidated Interest Expense" for any period shall mean the
consolidated interest expense of the Borrower and its Consolidated Subsidiaries
for such period.
-10-
"Consolidated Net Income" for any period shall mean the consolidated
net earnings (or loss) after taxes of the Borrower and its Consolidated
Subsidiaries for such period.
"Consolidated Net Worth" at any time shall mean the consolidated
stockholders' equity of the Borrower and its Consolidated Subsidiaries at such
time, except that there shall be deducted any amount of treasury stock reflected
as an asset at such time.
"Consolidated Subsidiaries" of a person at any time shall mean those
Subsidiaries whose accounts are or should be consolidated with those of such
person at such time, but excluding Unrestricted Subsidiaries.
"Controlled Group Member" shall mean each trade or business (whether
or not incorporated) which together with the Borrower or any of its Subsidiaries
is treated as a controlled group or single employer under Section 4001(a)(14) or
400(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code.
"Cornerstone Repurchase" shall have the meaning assigned to that
term in the recitals hereto.
"Corresponding Source of Funds" shall mean, in the case of any Funding
Segment of the Euro-Rate Portion, the proceeds of hypothetical receipts by a
Notional Euro-Rate Funding Office or by a Bank through a Notional Euro-Rate
Funding Office of one or more Dollar deposits in the interbank Eurodollar market
at the beginning of the Euro-Rate Funding Period corresponding to such Funding
Segment, having maturities approximately equal to such Euro-Rate Funding Period
and in an aggregate amount approximately equal to such Funding Segment.
"Credit Party" shall mean any of the Borrower or the Guarantors, and
"Credit Parties" shall mean all such persons, collectively.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement, among the Borrower or
any of its Subsidiaries, on the one hand, and one or more of the Agents, on the
other hand, designed to protect the Borrower or any of its Subsidiaries against
fluctuations in currency values.
"Documentation Agent" shall have the meaning assigned to that term
in the introductory paragraph hereto.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money of
the United States of America.
-11-
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed to also refer to any successor sections.
"Euro-Rate" and "Euro-Rate Option" shall have the meanings
assigned to those terms in Section 2.06(a).
"Euro-Rate Funding Period" shall have the meaning assigned to that
term in Section 2.06(c).
"Euro-Rate Portion" of any Loan or Loans shall mean at any time the
portion, including the whole, of such Loan or Loans bearing interest at any time
under the Euro-Rate Option or at a rate calculated by reference to the Euro-Rate
under Section 2.06(e)(i). If no Loan or Loans are specified, "Euro-Rate
Portion" shall refer to the Euro-Rate Portion of all Loans outstanding at such
time.
"Euro-Rate Reserve Percentage" shall have the meaning assigned to
that term in Section 2.06(a).
"Event of Default" shall mean any of the Events of Default
described in Section 8.01.
"Exchange Agreement" shall mean the Exchange Agreement, dated as of
December 1, 1997 between the Borrower and Saratoga Partners III, L.P.
"Existing Indebtedness" shall have the meaning assigned to that
term in Section 4.32.
"Federal Funds Effective Rate" shall have the meaning assigned to
that term in Section 2.06(a).
"Financing Proceeds" shall mean the cash (other than Net Cash
Proceeds) received by the Borrower and/or any of its Subsidiaries, directly or
indirectly, from any debt financing transaction of whatever kind or nature,
including without limitation from any incurrence of Indebtedness (other than the
sale of equity), any mortgage or pledge of an asset or interest therein
(including a transaction which is the substantial equivalent of a mortgage or
pledge), from a lease to a third party and a pledge of the lease payments due
thereunder to secure Indebtedness, from the refund of a cash deposit held by a
vendor of an asset other than in the ordinary course of business consistent with
past practice, or any other similar arrangement or technique whereby the
Borrower or any of its Subsidiaries obtains cash in
-12-
respect of an asset, net of direct costs associated therewith. Financing
Proceeds shall not include any amounts with respect to the incurrence of
Indebtedness permitted by Section 7.03 hereof.
"Funding Segment," as applied to the Euro-Rate Portion or the As-
Offered Rate Portion at any time, shall mean the entire principal amount of such
Portion to which at the time in question there is applicable a particular Euro-
Rate Funding Period or As-Offered Rate Funding Period, as the case may be,
beginning on a particular day and ending on a particular day. (By definition,
each such Portion is at all times composed of an integral number of discrete
Funding Segments, and the sum of the principal amounts of all Funding Segments
of any such Portion at any time equals the principal amount of such Portion at
such time.)
"GAAP" shall mean, with respect to the Borrower and its Consolidated
Subsidiaries (including the Unrestricted Subsidiaries whose accounts are also
consolidated with the Borrower), generally accepted accounting principles in the
United States and, with respect to KAP and its consolidated Subsidiaries alone
(including Unrestricted Subsidiaries whose accounts are also consolidated with
KAP), generally accepted accounting principles in Australia, in any such case,
as such principles shall be in effect at the Relevant Date, subject to Section
1.03.
"Government Loan Liens" shall mean Liens securing Indebtedness
outstanding pursuant to the Government Loans existing on the Closing Date.
"Government Loans" shall mean the loans listed on Schedule 1.01A as
in effect on the date hereof.
"Guarantee" shall mean any Australian Subsidiary Guarantee or
Subsidiary Guarantee.
"Guarantor" and "Guarantors" shall have the meanings assigned to those
terms in the introductory paragraph hereto, and shall also include each person
who executes and delivers a Guarantee.
"Guaranty Equivalent": A person (the "Deemed Guarantor") shall be
deemed to be subject to a Guaranty Equivalent in respect of any obligation (the
"Assured Obligation") of another person (the "Deemed Obligor") if the Deemed
Guarantor directly or indirectly guarantees, becomes surety for, endorses,
assumes, indemnifies or agrees to indemnify the Deemed Obligor against, or
otherwise agrees, becomes or remains liable (contingently or otherwise) for,
such Assured Obligation, in whole or in part. Without limitation, a Guaranty
Equivalent shall be deemed to exist if a Deemed Guarantor agrees, becomes or
remains liable
-13-
(contingently or otherwise), directly or indirectly: (i) to purchase or assume,
or to supply funds for the payment, purchase or satisfaction of, an Assured
Obligation, (ii) to make any loan, advance, capital contribution or other
investment in, or to purchase or lease any property or services from, a Deemed
Obligor (A) to maintain the solvency of the Deemed Obligor, (B) to enable the
Deemed Obligor to meet any other financial condition, (C) to enable the Deemed
Obligor to satisfy any Assured Obligation or to make any Stock Payment or any
other payment, or (D) to assure the holder of such Assured Obligation against
loss, (iii) to purchase or lease property or services from the Deemed Obligor
regardless of the non-delivery of or failure to furnish such property or
services, (iv) in a transaction having the characteristics of a take-or-pay or
throughput contract or as described in paragraph 6 of FASB Statement of
Financial Accounting Standards No. 47, or (v) in respect of any other
transaction the effect of which is to assure the payment or performance (or
payment of damages or other remedy in the event of nonpayment or nonperformance)
in whole or in part of any Assured Obligation.
"Hazardous Substances" shall mean hazardous wastes, hazardous
substances, hazardous materials, toxic substances, hazardous air pollutants or
toxic pollutants, as those terms are used in the Resource Conservation and
Recovery Act, 42 USC (S) 6901 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act, 42 USC (S) 9601 et seq., the Hazardous Materials
Transportation Act, 49 USC (S) 5101 et seq., the Toxic Substances Control Act,
15 USC (S) 2601 et seq., the Clean Air Act, 42 USC (S) 7401 et seq., and the
-- ---
Clean Water Act, 33 USC (S) 1251 et seq., or in any regulations promulgated
pursuant thereto, or in any other applicable state, federal or local Law.
"▇▇▇▇▇▇▇ Credit Facility" shall mean the credit facilities provided by
Westpac Banking Corporation to Koppers ▇▇▇▇▇▇▇ and its Subsidiaries pursuant to
a letter agreement dated September 8, 1997, and any refinancings thereof on
terms substantially consistent with the terms thereof.
"▇▇▇▇▇▇▇ Liens" shall mean Liens securing Indebtedness outstanding
from time to time pursuant to the ▇▇▇▇▇▇▇ Credit Facility existing on the
Closing Date.
"Indebtedness" of a person shall mean, without duplication:
(i) all indebtedness or liability for or on account of money
borrowed by, or credit extended to or on behalf of, or for or on account of
deposits with or advances to, such person; and all obligations of such
person evidenced by bonds, debentures, notes or similar instruments;
(ii) all indebtedness or liability for or on account of property
or services purchased or acquired by such person; and all amounts secured
by a Lien on property
-14-
owned by such person (whether or not assumed) and Capitalized Lease
Obligations of such person (without regard to any limitation of the rights
and remedies of the holder of such Lien or the lessor under such
Capitalized Lease to repossession or sale of such property);
(iii) the face amount of all letters of credit (other than the
Australian Term Loan Letter of Credit and the Australian Revolving Loan
Letter of Credit) issued for the account of such person and, without
duplication, the unreimbursed amount of all drafts drawn thereunder, and
all other obligations of such person associated with such letters of credit
or draws thereunder; and obligations (in the nature of principal or
interest) of such person in respect of acceptances or similar obligations
issued or created for the account of such person;
(iv) the aggregate amount which is required to be reported as a
liability on the balance sheet of such person under a product financing or
similar arrangement pursuant to paragraph 8 of FASB Statement of Financial
Accounting Standards No. 49 or any similar requirement of GAAP; and
(v) all obligations of such person under any interest rate or
currency swap, cap, floor, collar, future, forward or option agreement, or
other interest rate or currency protection agreement (the "principal
amount" of which at any time shall be the amount then payable by such
person upon payment thereof due to default by such person);
provided that Indebtedness of a person shall exclude all obligations of such
person in respect of payment or performance bonds.
"Indebtedness for Borrowed Money" at any time shall mean, without
duplication:
(i) all indebtedness or liability for or on account of money
borrowed by, or credit extended to or on behalf of, or for or on account of
deposits with or advances to, such person; and all obligations of such
person evidenced by bonds, debentures, notes or similar instruments;
(ii) all amounts secured by a Lien on property owned by such
person (whether or not assumed) and Capitalized Lease Obligations of such
person (without regard to any limitation of the rights and remedies of the
holder of such Lien or the lessor under such Capitalized Lease to
repossession or sale of such property); and
-15-
(iii) the unreimbursed amount of all drafts drawn under the letters
of credit issued for the account of such person and all other obligations
of such person associated with such letters of credit or draws thereunder;
and obligations (in the nature of principal or interest) of such person in
respect of acceptances or similar obligations issued or created for the
account of such person.
"Independent Financial Advisor" means a nationally recognized
investment banking, accounting or appraisal firm (i) which does not (and whose
directors, officers, employees and Affiliates do not) have a direct or indirect
material financial interest in the Borrower or any of its Subsidiaries and (ii)
which, in the sole judgment of the board of directors of the Borrower, is
otherwise independent and qualified to perform the task for which such firm is
being engaged.
"Interest Coverage Ratio" at the end of any fiscal quarter shall mean
Consolidated EBITDA during the four most recent consecutive full fiscal quarters
divided by the amount of Consolidated Interest Expense (which through September
30, 1998 shall be calculated on a pro forma basis for the Transaction) paid on
Indebtedness during such fiscal quarters.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge arrangement, among the Borrower
or any of its Subsidiaries, on the one hand, and one or more of the Agents, on
the other hand, to or under which the Borrower or any of its Subsidiaries is a
party or a beneficiary on the Closing Date or becomes a party or a beneficiary
thereafter.
"Investors" shall mean Saratoga and the Management Investors.
"Issuing Banks" shall mean the Australian LC Issuing Bank and the
Standby and Trade LC Issuing Bank, in their capacities as issuers of Letters of
Credit.
"KAP" shall have the meaning assigned to that term in the recitals
hereto.
"Koppers ▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Investments Pty.
Limited.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"Letter of Credit" shall have the meaning assigned to that term in
Section 3.01, and "Letters of Credit" shall mean all such letters of credit
collectively.
-16-
"Letter of Credit Application" shall have the meaning assigned to
that term in Section 3.03(a).
"Letter of Credit Collateral Account" shall have the meaning
assigned to that term in Section 3.09(a).
"Letter of Credit Exposure" at any time shall mean the sum of (i) the
aggregate Letter of Credit Unreimbursed Draws at such time and (ii) the
aggregate Letter of Credit Undrawn Availability at such time.
"Letter of Credit Participating Interest" shall have the meaning
assigned to that term in Section 3.04.
"Letter of Credit Reimbursement Obligation" shall mean the obligation
of the Borrower to reimburse an Issuing Bank the U.S. Dollar Equivalent amount
of each drawing under a Letter of Credit issued by such Issuing Bank, together
with interest thereon as provided herein.
"Letter of Credit Undrawn Availability" with respect to any Letter of
Credit at any time shall mean the maximum U.S. Dollar Equivalent amount
available to be drawn under such Letter of Credit at such time and thereafter,
regardless of the existence or satisfaction of any condition or any limitation
on drawing.
"Letter of Credit Unreimbursed Draw" with respect to any Letter of
Credit at any time shall mean the aggregate U.S. Dollar Equivalent amount of all
payments made by the Issuing Bank issuing such Letter of Credit under such
Letter of Credit, to the extent not repaid by the Borrower at such time.
"Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, including any conditional sale or title retention arrangements, and
any assignment, deposit arrangement or lease intended as, or having the effect
of, security.
"LIFO Reserve" shall mean any reserve required under the last-in-
first-out method of accounting.
"Loan" shall mean any loan made by a Bank to the Borrower under this
Agreement, and "Loans" shall mean all loans made by the Banks under this
Agreement, including Term Loans, Revolving Credit Loans and Swingline Loans.
-17-
"London Business Day" shall mean a day for dealing in deposits in
Dollars by and among banks in the London interbank market and which is a
Business Day.
"Management Investors" shall mean those persons who are or who
hereafter may become Management Investors as provided in the Stockholder's
Agreement.
"Management Stock Repurchase" shall have the meaning assigned to
that term in Section 4.22.
"Managing Directors' Reports" shall mean reports containing unaudited
consolidated and consolidating statements of income prepared by KAP on a basis
consistent with past practices for presentation to the Managing Directors of
KAP.
"Material Adverse Effect" shall mean: (i) a material adverse effect
on the business, operations, condition (financial or otherwise) or prospects of
the Borrower or the enterprise comprised of the Borrower and its Subsidiaries
taken as a whole, (ii) a material adverse effect on the ability of the Borrower
or any Guarantor to perform or comply with any of the terms and conditions of
the Senior Note Documents, the Senior Subordinated Note Documents, this
Agreement or any Related Document to which it is a party, or (iii) an adverse
effect on the legality, validity, binding effect, enforceability or
admissibility into evidence of this Agreement or any Related Document, or the
ability of the Administrative Agent, Collateral Agent or any Bank Party to
enforce any rights or remedies under or in connection with this Agreement or any
Related Document.
"Monessen Facility" shall mean the Company's coke facility located
in Monessen, Pennsylvania.
"Monessen Section 29 Tax Credits" means the tax credits available
under Section 29 of the U.S. Internal Revenue Code associated with the
operations of the Monessen Facility.
"month," with respect to a Euro-Rate Funding Period, shall mean the
interval between the Euro-Convention Dates in consecutive calendar months as to
such Euro-Rate Funding Period. The "Euro-Convention Date" in a calendar month
at the end of any Euro-Rate Funding Period shall mean the day in such calendar
month numerically corresponding to the first day of such Euro-Rate Funding
Period, except (i) if there is no such numerically corresponding day in a
calendar month, the "Euro-Convention Date" for such calendar month shall mean
the last London Business Day of such calendar month, (ii) if the first day of
such Euro-Rate Funding Period is the last day of a calendar month, the "Euro-
Convention Date" for any later calendar month shall mean the last London
Business Day of such calendar month and (iii) otherwise, if a numerically
corresponding day in a given calendar month is
-18-
not a London Business Day, the "Euro-Convention Date" for such calendar month
shall mean the next following day that is a London Business Day of such calendar
month.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" or "Mortgages" shall mean any or all, as the case may be,
of the mortgages or deeds of trust from the Borrower to the Administrative Agent
in substantially the form attached as Exhibit E-1, with respect to the Mortgaged
Property, as the same may be amended, modified or supplemented from time to
time.
"Mortgaged Property" shall mean and include any and all property
covered by or subject to or intended or purported to be subject to the Liens of
any of the Mortgages.
"Multiemployer Plan" shall mean any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower, any of its Subsidiaries or any other Controlled Group Member
has or had an obligation to contribute.
"Net Cash Proceeds" from any asset disposition shall mean the gross
cash proceeds (including casualty insurance proceeds) of such disposition, net
of all reasonable legal, accounting and financial advisory fees and expenses,
brokerage commissions and other similar fees and expenses incurred in connection
with, and provision for all taxes resulting from, such disposition and any
reasonable reserve established in accordance with GAAP against any liabilities
associated with the assets disposed of and retained by the seller provided that
the amount of any subsequent reduction of such reserve (other than in connection
with a payment in respect of such liability) shall be deemed to be Net Cash
Proceeds on the date of such reduction.
"Net Financing Proceeds" shall mean Financing Proceeds, net of all
reasonable legal, accounting and financial advisory fees and expenses, brokerage
commissions and other similar fees and expenses incurred in connection with, and
provision for all taxes resulting from, such financing.
"New Stockholders' Agreement" shall mean the New Stockholders'
Agreement, to be entered into upon consummation of the APT Post-Transaction
Repurchase, by and among the Borrower and the Investors, in form and substance
satisfactory to the Agents.
"Note" or "Notes" shall mean the Term Loan A Note(s), the Term Loan B
Note(s), Revolving Credit Note(s) or Swingline Note(s), as the case may be, of
the Borrower, executed and delivered under this Agreement, together with all
extensions, renewals, refinancings or refundings thereof in whole or in part.
-19-
"Notional Euro-Rate Funding Office" shall have the meaning assigned
to that term in Section 2.13(a).
"Obligations" shall mean all obligations from time to time of the
Borrower to any Bank Party arising under or in connection with or related to or
evidenced by or secured by this Agreement or any Related Document, and all
extensions, renewals or refinancings thereof, whether such obligations are
direct or indirect, otherwise secured or unsecured, joint or several, absolute
or contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising (and specifically including obligations arising or
accruing after the commencement of any bankruptcy, insolvency or similar
proceedings with respect to the Borrower or which would have arisen or accrued
but for the commencement of such proceeding, even if the claim for such
obligation is not allowed in such proceeding under applicable Law). Without
limitation of the foregoing, such obligations include the principal amount of
all Loans, interest and Letter of Credit Reimbursement Obligations and fees,
indemnities or expenses under or in connection with this Agreement or any
Related Document, and all extensions, renewals and refinancings thereof, whether
or not such Loans were made or Letters of Credit were issued in compliance with
the terms and conditions of this Agreement or in excess of the obligation of the
Banks to lend or the authority of the Issuing Banks to issue Letters of Credit.
Obligations shall remain notwithstanding any assignment or transfer or any
subsequent assignment or transfer of any of the Obligations or any interest
therein.
"Office," when used in connection with the Administrative Agent or
Collateral Agent, shall mean its office located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, when used in connection with the Arranger
and Syndication Agent, shall mean its office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and when used in connection with the
Documentation Agent, shall mean its office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or in each case such other office or offices of
such Agents, or any branches, subsidiaries or affiliates thereof, as may be
designated from time to time by any respective Agent.
"Official Authorizations" shall have the meaning assigned to that
term in Section 4.04.
"Official Body" shall mean any government or political subdivision, or
any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Option" shall mean the Base Rate Option, the Euro-Rate Option or
the As-Offered Rate Option, as the case may be.
-20-
"Participants" shall have the meaning assigned to that term in
Section 10.12(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under Title IV of ERISA, or any other governmental agency, department or
instrumentality succeeding to the functions of said corporation.
"Performance Ratio" at any time shall mean (x) the sum of Consolidated
Indebtedness at such time plus, through September 30, 1998, the amount of cash
write offs identified on Schedule 7.01, to the extent actually taken in the
fiscal quarter ending December 31, 1997, but only until such time as and to the
extent that such write offs are actually paid, divided by (y) Consolidated
EBITDA for the four most recent consecutive full fiscal quarters at such time.
"Permitted Asset Disposition Proceeds Reinvestments" shall mean
capital assets useful in the business of the Borrower; provided that in no event
shall the fair market value of the aggregate amount of Permitted Asset
Disposition Proceeds Reinvestments exceed $10,000,000.
"Permitted Indebtedness" shall have the meaning assigned to that
term in Section 7.03.
"Permitted Liens" shall have the meaning assigned to that term in
Section 7.02.
"person" shall mean any individual, corporation, partnership, trust,
unincorporated association, joint venture, joint-stock company, government
(including political subdivisions), governmental authority or agency, or any
other entity.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) to which Section 4021 of ERISA applies and (i) which is
maintained for employees of the Borrower or any Controlled Group Member, or (ii)
to which the Borrower or any Controlled Group Member made, or was required to
make, contributions at any time within the preceding five (5) years.
"Portion" shall mean the Base Rate Portion, the Euro-Rate Portion or
As-Offered Rate Portion.
"Potential Default" shall mean any event or condition which with
notice, passage of time or a determination by the Administrative Agent or the
Banks, as the case may be, or any combination of the foregoing, would constitute
an Event of Default.
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"Pricing Level" shall have the meaning assigned to that term in
Section 2.06(b).
"Prime Rate" shall have the meaning assigned to that term in Section
2.06(a).
"Pro Rata" shall mean from or to each Bank in proportion to such
Bank's applicable Proportion.
"Proportion" shall mean the Term Loan A Proportion, Term Loan B
Proportion or Revolving Credit Proportion, as the case may be.
"Purchasing Banks" shall have the meaning assigned to that term in
Section 10.12(c).
"Register" shall have the meaning assigned to that term in Section
10.12(d).
"Related Documents" shall mean the Commitment Letter (to the extent
that the obligations thereunder survive the execution and delivery of this
Agreement), the Notes, the Security Documents, the Letter of Credit
Applications, the Letters of Credit, the Commitment and Loan Transfer
Supplements, the Australian Credit Facilities and any and all other instruments
or documents delivered by or on behalf of the Borrower in connection with any
thereof, as the same may be amended, modified or supplemented from time to time.
"Relevant Date" shall mean the time a relevant computation or
determination is to be made or the date of relevant financial statements.
"Reportable Event" shall mean (i) a reportable event described in
Section 4043 of ERISA and regulations thereunder, (ii) a withdrawal by a
substantial employer from a Plan to which more than one employer contributes, as
referred to in Section 4063(b) of ERISA, (iii) a cessation of operations at a
facility causing more than twenty percent (20%) of Plan participants to be
separated from employment, as referred to in Section 4062(e) of ERISA, or (iv) a
failure to make a required installment or other payment with respect to a Plan
when due in accordance with Section 412 of the Code or Section 302 of ERISA
which causes the total unpaid balance of missed installments and payments
(including unpaid interest) to exceed $750,000.
"Required Banks" shall mean, as of any date, Banks which have made
Loans or have Letter of Credit Exposure constituting, in the aggregate, at least
65% in principal amount of all Loans and Letter of Credit Exposure outstanding
on such date, or, if no Loans or Letter of Credit Exposure is outstanding on
such date, Banks which have Commitments constituting, in the aggregate, at least
65% of all Commitments outstanding on such date.
-22-
"Retiring Employee Stock Repurchases" shall mean the repurchase of
shares of common stock of the Borrower and/or options to purchase shares of
common stock of the Borrower from an employee of the Borrower upon the
retirement of such employee in accordance with the terms of the Stockholders'
Agreement or the New Stockholders' Agreement.
"Revolving Credit Commitment" shall have the meaning assigned to
that term in Section 2.02(a).
"Revolving Credit Committed Amount" shall have the meaning assigned
to that term in Section 2.01(a).
"Revolving Credit Expiration Date" shall mean the sixth anniversary
of the Closing Date.
"Revolving Credit Exposure" of any Bank at any time shall mean the sum
of such Bank's Pro Rata share of the aggregate principal amount of Revolving
Credit Loans, the aggregate Letter of Credit Exposure and the aggregate
principal amount of Swingline Loans outstanding at such time.
"Revolving Credit Facility" shall mean the credit facility evidenced
by the Revolving Credit Committed Amount.
"Revolving Credit Loans" shall have the meaning assigned to that
term in Section 2.02(a).
"Revolving Credit Notes" shall mean the promissory notes of the
Borrower executed and delivered under Section 2.03, any promissory note issued
in substitution therefor pursuant to Section 2.13(b) or 10.12(c), together with
all extensions, renewals, refinancings or refundings thereof in whole or part.
"Revolving Credit Proportion" shall have the meaning assigned to
that term in Section 2.01(a).
"S&P" shall mean Standard & Poor's Corporation.
"Saratoga" shall have the meaning assigned to that term in the
recitals hereto.
"Scheduled Amortization Payment" shall mean principal payments applied
to the Term Loan A Facility, the Australian Term Loan Facility and the Term Loan
B Facility on the last Business Day of the month set forth in the column under
the heading "Date"
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below, and in the amounts set forth in the appropriate subcolumn under the
heading "Scheduled Amortization Payment" below:
Scheduled Amortization Payment
======================================================================
Date Australian Term
Term Loan A Loan Term Loan B
Facility Facility Facility
May 31, 1998 $4,000,000 $1,000,000 $ 500,000
November 30, 1998 4,000,000 1,000,000 500,000
May 31, 1999 5,500,000 2,000,000 500,000
November 30, 1999 5,500,000 2,000,000 500,000
May 31, 2000 7,000,000 3,000,000 500,000
November 30, 2000 7,000,000 3,000,000 500,000
May 31, 2001 6,000,000 4,000,000 500,000
November 30, 2001 6,000,000 4,000,000 500,000
May 31, 2002 5,000,000 5,000,000 500,000
November 30, 2002 5,000,000 5,000,000 500,000
May 31, 2003 7,500,000 5,000,000 10,000,000
November 30, 2003 7,500,000 5,000,000 10,000,000
May 31, 2004 20,000,000
November 30, 2004 20,000,000
=====================================================================
provided that each Scheduled Amortization Payment in respect of the Term Loan A
Facility commencing on and after May 31, 1999 shall be reduced by one tenth of
the amount of the aggregate undrawn Term Loan A Committed Amounts of the Banks
at the time of the Term Loan A Commitment Expiration Date, provided, further,
that each Scheduled Amortization Payment in respect of the Australian Term Loan
Facility shall be net of any reduction in the Australian Term Loan Interest
Reserve attributable to such Scheduled Amortization Payment as provided in
Section 2.05(c)(i)(E).
"Securities Pledge Agreement" shall mean the executed Securities
Pledge Agreement substantially in the form of Exhibit D-3, as the same may be
amended, modified or supplemented from time to time.
"Security Agreement" shall mean the executed Security Agreement
substantially in the form of Exhibit D-1, as the same may be amended, modified
or supplemented from time to time.
-24-
"Security Documents" shall mean collectively the Subsidiary
Guarantees, the Australian Subsidiary Guarantee, the Mortgages, the Australian
Mortgages, the Securities Pledge Agreement, the Australian Fixed and Floating
Charge, the Security Agreement and the Australian Security Trust Deed and any
other agreement or instrument from time to time granting or purporting to grant
the Collateral Agent a Lien on any property for the benefit of the Bank Parties
to secure the Obligations, or constituting a Guaranty Equivalent for the
Obligations, or subordinating obligations to the Obligations, and any and all
instruments and documents relating to any or all thereof; provided that the
Senior Subordinated Note Documents shall not be deemed to be Security Documents.
"Senior Note Documents" shall mean the Senior Notes, the Senior Note
Indenture, the Senior Note Underwriting Agreement and the Senior Note
Prospectus, and all other agreements, documents and instruments relating
thereto, each as constituted on the date hereof and as the same may be amended,
modified or supplemented in accordance with this Agreement.
"Senior Note Indenture" shall mean the Indenture, dated as of February
10, 1994, between the Borrower and PNC Bank, National Association (as successor
to Integra Trust Company), trustee, relating to the Senior Notes, as amended by
the First Amendment to Indenture, dated as of September 1, 1996, between the
Borrower and PNC Bank, National Association and as further amended by the Second
Amendment to Indenture, dated as of November 19, 1997, between the Borrower and
PNC Bank, National Association, as the same may be further amended, modified or
supplemented in accordance with this Agreement.
"Senior Note Prospectus" shall mean the Prospectus, dated February
3, 1994, relating to the Senior Notes.
"Senior Note Underwriting Agreement" shall mean the Underwriting
Agreement, dated February 3, 1994, between the Borrower and ▇▇▇▇▇ ▇▇▇▇▇▇
Shearson Inc.
"Senior Notes" shall mean the Borrower's 8-1/2% Senior Notes Due 2004,
issued pursuant to the Senior Note Indenture, as the same may be amended,
modified or supplemented in accordance with this Agreement to the extent such
Senior Notes remain outstanding upon consummation of the Transaction.
"Senior Subordinated Note Documents" shall mean the Senior
Subordinated Notes, the Senior Subordinated Note Indenture, the Senior
Subordinated Note Purchase Agreement, the Senior Subordinated Note Registration
Rights Agreement and the Senior Subordinated Note Offering Memorandum, and all
other agreements, documents and instruments relating thereto, each as
constituted on the date hereof and as the same may be amended, modified or
supplemented in accordance with this Agreement.
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"Senior Subordinated Note Indenture" shall mean the Indenture, dated
as of December 1, 1997, between the Borrower and PNC Bank, National Association,
as trustee, relating to the Senior Subordinated Notes, as the same may be
amended, modified or supplemented in accordance with this Agreement.
"Senior Subordinated Note Offering Memorandum" shall mean the Offering
Memorandum, dated November 20, 1997, relating to the Senior Subordinated Notes.
"Senior Subordinated Note Purchase Agreement" shall mean the Purchase
Agreement, dated December 1, 1997, between the Borrower and SBC Warburg Dillon
Read Inc.
"Senior Subordinated Note Registration Rights Agreement" shall mean
the Registration Rights Agreement, dated December 1, 1997, between the Borrower
and SBC Warburg Dillon Read Inc.
"Senior Subordinated Notes" shall mean the Borrower's 9-7/8% Senior
Subordinated Notes Due 2007, issued pursuant to the Senior Subordinated Note
Indenture, as the same may be amended, modified or supplemented in accordance
with this Agreement.
"Significant Subsidiary" shall have the meaning assigned to the term
"significant subsidiary" pursuant to Section 1-02 of Regulation S-X promulgated
under the United States Securities Act of 1933, as amended.
"Site Reviewers" shall mean such persons as the Collateral Agent may
designate pursuant to Section 6.01(p).
"Spot Rate" shall mean with respect to any applicable currency, at any
date of determination thereof, the spot rate of exchange for such date in London
that appears on the display page applicable to such currency on the Telerate
System Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the spot rate of exchange in London);
provided that if there shall at any time no longer exist such a page or a
relevant spot rate is not shown on such service, the spot rate of exchange shall
be determined by reference to another similar rate publishing service selected
by the Administrative Agent and if no such similar rate publishing service is
available by reference to the published rate of the Administrative Agent in
effect at such date for similar commercial transactions.
"Standard Notice" shall mean an irrevocable notice provided to the
Administrative Agent:
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(i) no later than 11:00 a.m., Pittsburgh time, on any Business Day
in the case of selection of, conversion to, or renewal of, the Base Rate
Option or prepayment of any Base Rate Portion;
(ii) no later than 11:00 a.m., Pittsburgh time, on any Business
Day which is at least three (3) London Business Days in advance in the case
of selection of, conversion to, or renewal of, the Euro-Rate Option or
prepayment of any Euro-Rate Portion; and
(iii) no later than 1:00 p.m., Pittsburgh time, the same
Business Day in the case of selection of, or conversion to, or renewal of,
the As-Offered Rate Option or prepayment of any As-Offered Rate Portion.
"Standby and Trade LC Issuing Bank" shall mean Mellon Bank, N.A., or
any other successor Bank which may be designated as the successor Standby and
Trade LC Issuing Bank by the Standby and Trade LC Issuing Bank from time to time
which following any such designation shall mean such successor, in any such case
in such Standby and Trade LC Issuing Bank's capacity as issuer of Standby or
Trade Letters of Credit.
"Standby or Trade Letters of Credit" shall have the meaning assigned
to that term in Section 3.01(a).
"Stock Payment" by any person shall mean any dividend, distribution or
payment of any nature (whether in cash, securities, or other property) on
account of or in respect of any shares of the capital stock (or warrants,
options or rights therefor) of such person, including any payment on account of
the purchase, redemption, retirement, defeasance or acquisition of any shares of
the capital stock (or warrants, options or rights therefor) of such person, in
each case regardless of whether required by the terms of such capital stock (or
warrants, options or rights) or any other agreement or instrument.
"Stockholders' Agreement" shall mean the Stockholders' Agreement,
dated as of December 28, 1988, by and among the Borrower and the Stockholders
referred to therein, as amended.
"Subsidiary" of a person at any time shall mean any corporation of
which a majority (by number of shares or number of votes) of any class of
outstanding capital stock normally entitled to vote for the election of one or
more directors (regardless of any contingency which does or may suspend or
dilute the voting rights of such class) is at such time owned directly or
indirectly, beneficially or of record, by such person or one more Subsidiaries
of such person, and any trust or other person of which a majority of any class
of
-27-
outstanding equity interests is at such time owned directly or indirectly,
beneficially or of record, by such person or one or more Subsidiaries of such
person.
"Subsidiary Guarantee" shall mean any executed Subsidiary Guarantee
substantially in the form of Exhibit C-1, as the same may be amended, modified
or supplemented from time to time.
"Subsidiary Guarantor" shall mean each person who executes and
delivers a Subsidiary Guarantee.
"Swingline Bank" shall mean Mellon Bank, N.A., or any other successor
Bank which may be designated as the successor Swingline Bank by the Swingline
Bank from time to time which following any such designation shall mean such
successor, in any such case in such Swingline Bank's capacity as the Swingline
Bank.
"Swingline Current Availability" shall have the meaning assigned to
that term in Section 3.12(a) hereof.
"Swingline Loan Participating Interest" shall have the meaning
assigned to that term in Section 3.13(a) hereof.
"Swingline Loans" shall have the meaning assigned to that term in
Section 3.11(a) hereof.
"Swingline Note" shall mean the promissory note of the Borrower
executed and delivered under Section 3.11(c) hereof, together with all
extensions, renewals, refinancings or refundings thereof in whole or in part.
"Swingline Subfacility Amount" shall have the meaning assigned to
that term in Section 3.11(a) hereof.
"Syndication Agent" shall have the meaning assigned to that term in
the introductory paragraph hereto.
"Term Loan" shall mean any Term Loan A Facility Term Loan or any
Term Loan B Facility Term Loan, as the case may be.
"Term Loan A Commitment" shall have the meaning assigned to that
term in Section 2.02(a)(ii)(A).
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"Term Loan A Commitment Expiration Date" shall mean November 22, 1998,
or such earlier date as the Term Loan Commitments shall terminate pursuant to
this Agreement.
"Term Loan A Committed Amount" shall have the meaning assigned to
that term in Section 2.01(a)(ii).
"Term Loan A Expiration Date" shall mean the sixth anniversary of
the Closing Date.
"Term Loan A Facility" shall mean the credit facility evidenced by
the Term Loan A Committed Amount of each Bank.
"Term Loan A Facility Term Loan" shall have the meaning assigned to
that term in Section 2.02(a)(ii)(A).
"Term Loan A Notes" shall mean the promissory notes of the Borrower
executed and delivered under Section 2.03, or any promissory note issued in
substitution therefor pursuant to Section 10.12(c), together with all
extensions, renewals, refinancings or refundings thereof in whole or in part.
"Term Loan A Proportion" shall have the meaning assigned to that
term in Section 2.01(a).
"Term Loan B Commitment" shall have the meaning assigned to that
term in Section 2.02(a)(ii)(B).
"Term Loan B Committed Amount" shall have the meaning assigned to
that term in Section 2.01(a).
"Term Loan B Expiration Date" shall mean the seventh anniversary of
the Closing Date.
"Term Loan B Facility" shall mean the credit facility evidenced by
the Term Loan B Committed Amount of each Bank.
"Term Loan B Facility Term Loan" shall have the meaning assigned to
that term in Section 2.02(a)(ii)(B).
"Term Loan B Notes" shall mean the promissory notes of the Borrower
executed and delivered under Section 2.03, or any promissory note issued in
substitution
-29-
therefor pursuant to Section 10.12(c), together with all extensions, renewals,
refinancings or refundings thereof in whole or in part.
"Term Loan B Proportion" shall have the meaning assigned to that
term in Section 2.01(a).
"Transaction" shall have the meaning assigned to that term in the
recitals hereto.
"Transaction Documents" shall mean the Securities Purchase Agreement,
dated as of October 15, 1997 among Koppers Industries, Inc., Saratoga Partners
III, L.P., Saratoga Koppers Funding, Inc., Pittsburgh Acquisition Corporation
and the Borrower, the BHP Agreement, the Share Purchase Agreement by and among
the Borrower and APT Holdings Corporation dated as of December 1, 1997, the
Exchange Agreement and the Senior Subordinated Note Documents.
"Transfer Effective Date" shall have the meaning assigned to that term
in any Commitment and Loan Transfer Supplement.
"Transferee" shall have the meaning assigned to that term in Section
10.12(f).
"Unrestricted Subsidiaries" shall mean Koppers ▇▇▇▇▇▇▇, Subsidiaries
of Koppers ▇▇▇▇▇▇▇, Koppers Power Poles Pty. Ltd., Koppers Investments (Aust.)
Pty. Limited, Koppers Seut Pty. Limited and, subject to the provisions of
Section 6.14, KAP Investments Inc.
"U.S. Dollar Equivalent" shall have the meaning assigned to that
term in Section 1.04.
1.02. Construction.
------------
In this Agreement and each Related Document, unless the context
otherwise clearly requires, references to the plural include the singular, the
singular the plural, and the part the whole; "or" has the inclusive meaning
represented by the phrase "and/or"; and the terms "property" or "properties" and
"assets" each includes all properties and assets of any kind or nature tangible
or intangible, real, personal or mixed, now existing or hereafter acquired.
References in this Agreement and the Related Documents to "determinations" by an
Agent or any Bank Party shall mean good faith determinations or good faith
estimates by such Agent or such Bank Party (in the case of quantitative
determinations) and good faith determinations or good faith beliefs by such
Agent or such Bank Party (in the case of qualitative determinations). The words
"hereof," "herein," "hereunder" and similar terms in
-30-
this Agreement and the Related Documents refer to this Agreement or such Related
Document, as the case may be, as a whole and not to any particular provision of
this Agreement or such Related Document. The words "includes" and "including"
(and similar terms) in this Agreement or any Related Document means "includes
without limitation" and "including without limitation," respectively (and
similarly for similar terms). The section and other headings contained in this
Agreement and in each Related Document and the tables of contents preceding this
Agreement or such Related Document, as the case may be, are for reference
purposes only and shall not control or affect the construction of this Agreement
or such Related Document or the interpretation hereof or thereof in any respect.
Section, subsection, annex, exhibit and schedule references in this Agreement
and in each Related Document are to this Agreement or such Related Document, as
the case may be, unless otherwise specified. Each annex, exhibit and schedule
to this Agreement or any Related Document constitutes part of this Agreement or
such Related Document, as the case may be. Each of the covenants, terms and
provisions of this Agreement and the Related Documents is intended to have, and
shall have, independent effect, and compliance with any particular covenant,
term or provision shall not constitute compliance with any other covenants, term
or provision.
1.03. Accounting Principles.
---------------------
(a) Except as otherwise provided in this Agreement, all computations
and determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
assigned to such terms by GAAP.
(b) If any change in GAAP after the date of this Agreement is or
shall be required to be applied to transactions then or thereafter in existence,
and a violation of one or more provisions of this Agreement shall have occurred
or in the opinion of the Borrower would likely occur which would not have
occurred or be likely to occur if no change in accounting principles had taken
place,
(i) The parties agree that such violation shall not be considered to
constitute an Event of Default or a Potential Default for a period of
ninety (90) days from the date the Borrower notifies the Administrative
Agent of the application of this Section 1.03(b);
(ii) The parties agree in such event to negotiate in good faith
an amendment of this Agreement which shall approximate to the extent
possible the economic effect of the original financial covenants after
taking into account such change in GAAP; and
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(iii) If the parties are unable to negotiate such an amendment
within such ninety (90) day period, the Borrower shall have the option of
(A) prepaying the Loans and cash collateralizing the Letters of Credit
(pursuant to applicable provisions hereof) or (B) submitting the drafting
of such an amendment to a firm of independent certified public accountants
of nationally recognized standing acceptable to the parties, which shall
complete its draft of such amendment within ninety (90) days of submission;
if the Borrower and the Agents cannot agree, the firm shall be selected by
binding arbitration in the City of Pittsburgh, Pennsylvania in accordance
with the rules then and there obtaining of the American Arbitration
Association. If the Borrower does not exercise either such option within
said period, then as used in this Agreement "GAAP" shall mean generally
accepted accounting principles in effect at the Relevant Date. The parties
agree that if the Borrower elects the option in clause (B) above, until
such firm has been selected and completes drafting such amendment, no such
violation shall constitute an Event of Default or a Potential Default.
(c) If any change in GAAP after the date of this Agreement is
required to be applied to transactions or conditions then or thereafter in
existence, and the Agents shall assert that the effect of such change is or
shall likely be to distort materially the effect of any of the definitions of
financial terms in Article I or any of the covenants of the Borrower in Section
7.01 (the "Financial Maintenance Covenants"), so that the intended economic
effect of any of the Financial Maintenance Covenants will not in fact be
accomplished,
(i) The Administrative Agent shall notify the Borrower of such
assertion, specifying the change in GAAP which is objected to, and, until
otherwise determined as provided below, the specified change in GAAP shall
not be made by the Borrower in its financial statements for the purpose of
applying the Financial Maintenance Covenants;
(ii) The parties shall follow the procedures set forth in
paragraph (ii) and the first sentence of paragraph (iii) of subsection (b)
of this Section. If the parties are unable to agree on an amendment as
provided in said paragraph (ii) and if the Borrower does not exercise
either option set forth in the first sentence of said paragraph (iii)
within the specified period, then as used in this Agreement "GAAP" shall
mean generally accepted accounting principles in effect at the Relevant
Date, except that the specified change in GAAP which is objected to by the
Agents shall not be made in applying the Financial Maintenance Covenants.
The parties agree that if the Borrower elects the option in clause (B) of
the first sentence of said paragraph (iii), until such independent firm has
been selected and completes drafting such amendment, the specified change
in GAAP shall not be made in applying the Financial Maintenance Covenants;
and
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(d) All expenses of compliance with this Section 1.03 shall be paid
by the Borrower.
1.04. Currency Equivalents Generally.
------------------------------
For all purposes of any Loan or Letter of Credit (or the making or
issuance thereof) pursuant to this Agreement (but not for purposes of the
preparation of any financial statements delivered pursuant hereto), the
equivalent in Australian Dollars (the "Australian Dollar Equivalent") of an
amount in U.S. Dollars, and the equivalent in U.S. Dollars (the "U.S. Dollar
Equivalent") of an amount in Australian Dollars or other currency, shall be
determined at the Spot Rate; provided that the U.S. Dollar Equivalent of an
amount denominated in U.S. Dollars shall be such amount. For purposes of
determining compliance with any restriction determined by reference to a U.S.
Dollar amount in this Agreement (other than to the extent relating to any Loan
or Letter of Credit (or the making or issuance thereof) under this Agreement),
the U.S. Dollar Equivalent amount of transactions occurring prior to the date of
determination shall be calculated based on the Spot Rate on the date of
determination; provided that such restriction shall nonetheless be deemed not
violated if the U.S. Dollar Equivalent amount of such transactions based on the
Spot Rate in effect on the respective dates of such transactions would have been
in compliance with the applicable restriction.
ARTICLE II.
THE FACILITY
------------
2.01. The Commitments; Obligations Several.
------------------------------------
(a) The Commitments. Each Bank's "Committed Amount" with respect to
---------------
each of the Term Loan A Facility, the Term Loan B Facility and the Revolving
Credit Facility at any given time shall be equal to the amount set forth in
Annex A (or in any Commitment and Loan Transfer Supplement) as its "Term Loan A
Committed Amount," "Term Loan B Committed Amount" or "Revolving Credit Committed
Amount," as the case may be, as any such amounts may have been reduced pursuant
to Section 2.05(b) at such time, and subject to transfer as provided in Section
10.12. The Committed Amount of each Bank with respect to the Loans shall at all
times be in the Proportion set forth opposite the name of each such Bank in
Annex A (or in any Commitment and Loan Transfer Supplement) as its "Term Loan A
Proportion," "Term Loan B Proportion" or "Revolving Credit Proportion," as the
case may be.
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(b) Obligations Several. The failure of any Bank to make any Loan
-------------------
shall not relieve any other Bank of its obligation to lend hereunder, but none
of the Agents nor any Bank shall be responsible for the failure of any other
Bank to make any Loan hereunder.
2.02. Loans.
-----
(a) (i) The Revolving Credit Commitments. Subject to the terms and
--------------------------------
conditions and relying upon the representations and warranties herein set forth,
each Bank with a Revolving Credit Committed Amount, severally and not jointly,
agrees (each such agreement being herein called a "Revolving Credit Commitment")
to make loans to the Borrower (the "Revolving Credit Loans") and to otherwise
extend credit to the Borrower in the form of deemed participations in the
Australian Term Loan Letter of Credit, Australian Revolving Loan Letter of
Credit, Standby or Trade Letters of Credit, or as otherwise contemplated by
Article III hereof, at any time or from time to time on or after the Closing
Date and to but not including the Revolving Credit Expiration Date. A Bank
shall have no obligation to make any Revolving Credit Loan to the extent that
(A) the aggregate of all Revolving Credit Loans of such Bank which are
outstanding plus the aggregate of all Letter of Credit Participating Interests
of such Bank in outstanding Standby or Trade Letters of Credit exceed such
Bank's Pro Rata Share (based on such Bank's Revolving Credit Proportion) of
$80,000,000 plus the amount of any Letter of Credit Participating Interests in
any Letter of Credit Unreimbursed Draw in respect of the Australian Term Loan
Letter of Credit and the Australian Revolving Loan Letter of Credit; or (B) such
Bank's Revolving Credit Exposure at any time would exceed such Bank's Revolving
Credit Committed Amount at such time. Further, the Banks shall have no
obligation to make any Revolving Credit Loans on or after the Revolving Credit
Expiration Date. To the extent not due and payable earlier as provided herein,
Revolving Credit Loans shall be due and payable on the Revolving Credit
Expiration Date.
(ii) The Term Loan Commitments.
-------------------------
(A) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank with a Term Loan
A Committed Amount, severally and not jointly, agrees (each such agreement
being herein called a "Term Loan A Commitment") to make loans to the
Borrower (the "Term Loan A Facility Term Loans") at any time or from time
to time on or after the Closing Date and to but not including the Term Loan
A Commitment Expiration Date. A Bank shall have no obligation to make any
Term Loan A Facility Term Loan to the extent that the sum of such Bank's
Pro Rata share of the aggregate principal amount of Term Loan A Facility
Term Loans would at any time exceed such Bank's Term Loan A Committed
Amount less such Bank's Pro Rata share of all repayments, prepayments and
Scheduled Amortization Payments applied to the Term Loan A Facility. Each
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Bank's agreement shall terminate on the Term Loan A Commitment Expiration
Date to the extent that the Term Loan A Facility Term Loans have not been
made. To the extent not due and payable earlier as provided herein, Term
Loan A Facility Term Loans shall be due and payable on the Term Loan A
Expiration Date. The Borrower may not reborrow Term Loan A Facility Term
Loans following any repayment, prepayment or Scheduled Amortization Payment
with respect thereto.
(B) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank with a Term Loan
B Committed Amount, severally and not jointly, agrees (each such agreement
being herein called a "Term Loan B Commitment") to make a loan to the
Borrower (the "Term Loan B Facility Term Loans") on the Closing Date in an
aggregate principal amount equal to such Bank's Pro Rata share of the
aggregate principal amount of the Term Loan B Facility. Such agreement
shall terminate on the Closing Date to the extent that the Term Loan B
Facility Term Loans have not been made. To the extent not due and payable
earlier as provided herein, Term Loan B Facility Term Loans shall be due
and payable on the Term Loan B Expiration Date. The Borrower may not
reborrow Term Loan B Facility Term Loans following any repayment,
prepayment or Scheduled Amortization Payment with respect thereto.
(b) Revolving Credit. Within the limits of time and amount set forth
----------------
in Section 2.02(a)(i), and subject to the provisions of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Credit Loans.
2.03. Notes.
-----
The obligation of the Borrower to repay the unpaid principal amount of
Revolving Credit Loans, Term Loan A Facility Term Loans and Term Loan B Facility
Term Loans made to it by each Bank and to pay interest thereon shall be
evidenced in part by promissory notes of the Borrower (respectively, the
"Revolving Credit Notes," the "Term Loan A Notes" and the "Term Loan B Notes"),
one of each, as applicable, for each Bank, in each case in substantially the
form of Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇ or Exhibit A-3, as the case may be, each dated
the Closing Date and otherwise with the blanks therein appropriately filled,
each such note to be in a face amount equal to the applicable Bank's initial
Revolving Credit Committed Amount, Term Loan A Committed Amount or Term Loan B
Committed Amount, as the case may be, and payable to the order of the applicable
Bank. The executed Revolving Credit Notes, Term Loan A Notes and Term Loan B
Notes shall be delivered by the Borrower to the Administrative Agent on the
Closing Date, and the Administrative Agent shall promptly deliver each such note
to the applicable Bank.
-35-
2.04. Making of Loans.
---------------
Subject to Section 3.11 hereof as to Swingline Loans, whenever the
Borrower desires that the Banks make Loans, the Borrower shall provide Standard
Notice to the Administrative Agent setting forth the following information:
(a) The date, which shall be a Business Day, on which such proposed
Loans are to made;
(b) The interest rate Option or Options selected in accordance with
Section 2.06(a) and the principal amounts selected in accordance with
Section 2.06(d) of the Base Rate Portion, each Funding Segment of the Euro-
Rate Portion and each Funding Segment of the As-Offered Portion of such
proposed Loans;
(c) The Euro-Rate Funding Period for each Funding Segment of the
Euro-Rate Portion of such proposed Loans, selected in accordance with
Section 2.06(c);
(d) The As-Offered Funding Period for each Funding Segment of the As-
Offered Portion of such proposed Loans, selected in accordance with Section
2.06(c);
(e) The aggregate principal amount of such proposed Loans, selected
in accordance with Section 2.06(d), which shall be the sum of the principal
amounts selected pursuant to clause (b) of this Section 2.04; and
(f) whether such Loan is to be made from the Term Loan A Facility,
Term Loan B Facility or Revolving Credit Facility in accordance with
Section 2.02.
The Administrative Agent shall promptly give notice to each Bank of the
information contained in each Standard Notice received by it as aforesaid and of
the proposed amount of such Bank's Loan. Standard Notice having been so
provided to the Administrative Agent, unless any applicable condition specified
in Article V has not been satisfied, on the date specified in such Standard
Notice each Bank shall make the proceeds of its Loan available to the
Administrative Agent at the Administrative Agent's Office no later than 2:00
o'clock p.m., Pittsburgh time, in funds immediately available at such Office,
and the Administrative Agent will make the funds so received immediately
available to the Borrower at such Office.
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2.05. Commitment Fees; Reduction of the Commitments;
Mandatory Prepayments of Loans.
----------------------------------------------------
(a) Commitment Fees. The Borrower agrees to pay to the
---------------
Administrative Agent for the account of each Bank, as consideration for such
Bank's Commitment hereunder, a commitment fee, for each day from and including
the date of this Agreement (in the case of Banks which shall be parties hereto
on such date) or the date of the relevant Commitment and Loan Transfer
Supplement (in the case of Purchasing Banks),
(i) in the case of such Bank's Revolving Credit Commitment, to but not
including the Revolving Credit Expiration Date on the amount of such Bank's
Revolving Credit Committed Amount on such day less such Bank's Pro Rata
share of the Revolving Credit Loans and Letter of Credit Exposure
outstanding on such day plus such Bank's Pro Rata share of the U.S. Dollar
Equivalent amount available to be borrowed under the Australian Revolving
Loan Facility, notwithstanding any restriction on such borrowing imposed by
Section 7.22, at the rate of 37.5 basis points per annum through the first
day of the calendar month following the first determination of the
Performance Ratio, and thereafter at the rate determined by reference to
the applicable Pricing Level, as determined pursuant to Section 2.06(b), as
follows:
Pricing Commitment Fee
Level I 20 basis points
Level II 20 basis points
Level III 25 basis points
Level IV 30 basis points
Level V 37.5 basis points
Level VI 50 basis points
(ii) in the case of such Bank's Term Loan A Commitment, to but not
including the Term Loan A Commitment Expiration Date on the amount of such
Bank's Term Loan A Committed Amount on such day less such Bank's Pro Rata
share of the Term Loan A Facility Term Loans outstanding on such day less
any repayments, prepayments and Scheduled Amortization Payments applied to
the Term Loan A Facility, at the rate of 37.5 basis points per annum,
through the first day of the calendar month following the first
determination of the Performance Ratio, and thereafter at the rate
determined by reference to the applicable Pricing Level, as determined
pursuant to Section 2.06(b), as follows:
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Commitment Fee
Pricing Level (per annum)
------------- -----------------
Level I 20 basis points
Level II 20 basis points
Level III 25 basis points
Level IV 30 basis points
Level V 37.5 basis points
Level VI 50 basis points
(iii) in the case of such Bank's Term Loan B Commitment, to but
not including the Closing Date on the amount of such Bank's Term Loan B
Committed Amount, at the rate of 37.5 basis points per annum,
in each case, based on a year of 365 or 366 days, as the case may be, and actual
days elapsed. The commitment fee shall be due and payable for the preceding
period for which such fee has not been paid (i) on the last day of each March,
June, September, and December , (ii) on the date of each reduction of the Term
Loan A Commitments or the Revolving Credit Commitments on the amount so reduced,
and (iii) on the date of termination of the Term Loan A Commitments or the
Revolving Credit Commitments or on the Term Loan A Commitment Expiration Date or
the Revolving Credit Expiration Date.
(b) Reduction of the Term Loan A Commitments
and the Revolving Credit Commitments.
----------------------------------------
(i) The Borrower may at any time or from time to time reduce ratably
the Revolving Credit Commitments to an amount (which may be zero) not less than
the sum of the Revolving Credit Loans and Letter of Credit Exposure then
outstanding plus the principal amount of all Revolving Credit Loans not yet made
and Letters of Credit not yet issued as to which notice has been given by the
Borrower pursuant to Section 2.04 or 3.03. Every partial reduction of the
Revolving Credit Commitments shall be in a minimum principal amount of
$5,000,000 and shall also be in an integral multiple of $1,000,000; provided
that the minimum Revolving Credit Commitment, following any partial reduction,
shall not be less than $25,000,000. Reduction of the Revolving Credit
Commitments shall be made by providing not less than three (3) Business Days'
notice (which notice shall be irrevocable) to such effect to the Administrative
Agent. After the date specified in such notice, the Revolving Credit Commitment
fee shall be calculated upon the Revolving Credit Commitments as so reduced.
(ii) The Borrower may at any time or from time to time reduce ratably
the Term Loan A Commitments to an amount (which may be zero) not less than the
sum of the Term Loan A Facility Term Loans plus the principal amount of all Term
Loan A Facility
-38-
Term Loans not yet made as to which notice has been given by the Borrower
pursuant to Section 2.04. Every partial reduction of the Term Loan A
Commitments shall be in a principal amount which is an integral multiple of
$1,000,000. Reduction of the Term Loan A Commitments shall be made by providing
not less than three (3) Business Days' notice (which notice shall be
irrevocable) to such effect to the Administrative Agent. After the date
specified in such notice, the Term Loan A Commitment fee shall be calculated
upon the Term Loan A Commitments as so reduced.
(c) Mandatory Prepayments.
---------------------
(i) Term Loan Facilities.
--------------------
(A) Within five Business Days of the date of funds being made
available to the Borrower or any of its Subsidiaries consisting of Net Cash
Proceeds required under Section 7.10(c), (d) or (e) to be applied as
provided in this Section, such Net Cash Proceeds shall be applied as
provided in Section 2.05(c)(i)(D).
(B) Within five Business Days of the date of funds being made
available to the Borrower or any of its Subsidiaries consisting of Net
Financing Proceeds other than Net Financing Proceeds which constitute
Permitted Indebtedness pursuant to Section 7.03, such Net Financing
Proceeds shall be applied as provided in Section 2.05(c)(i)(D).
(C) The Borrower shall cause to be paid on the date of receipt thereof
by the Borrower or any of its Subsidiaries, an amount equal to 50% of the
proceeds (net of underwriting discounts and commissions and other costs and
expenses directly associated therewith) from the sale by the Borrower after
the Closing Date of equity securities of the Borrower in any public
offering or private placement (other than proceeds received in connection
with the exercise of employee stock options, the sale of shares pursuant to
the Koppers Industries, Inc. Employee Stock Purchase Plan and the Koppers
Industries, Inc. Stock Redemption and Purchase Plan, or the resale of
shares to Management Investors) or from a capital contribution from any
person in the manner provided in Section 2.05(c)(i)(D) hereof.
(D) Prepayments to be applied pursuant to this Section 2.05(c)(i)(D)
shall be applied Pro Rata (treating the Australian Term Loan Facing Bank as
a Bank having a Proportion equal to the amount outstanding under the
Australian Term Loan Facility) towards amounts outstanding under the Term
Loan A Facility, the Term Loan B Facility and the Australian Term Loan
Facility based on the aggregate principal amounts outstanding thereunder
and towards the Revolving Credit Facility in respect of, and only to the
extent of, amounts outstanding thereunder due to any Letter of
Credit Participating Interests in any Letter of
-39-
Credit Unreimbursed Draw under the Australian Term Loan Letter of Credit,
provided that a Bank entitled to receive a prepayment in respect of a Term
Loan B Facility Term Loan may decline such prepayment, in which case such
declining Bank's prepayment share shall be applied Pro Rata (as provided
above) to the Term Loan A Facility and the Australian Term Loan Facility,
up to the full amount outstanding thereunder and to the Revolving Credit
Facility up to, and only to the extent of, amounts outstanding thereunder
due to any Letter of Credit Participating Interests in any Letter of Credit
Unreimbursed Draw under the Australian Term Loan Letter of Credit. Any
application under this Section 2.05(c)(i)(D) shall be applied pro rata
towards the remaining Scheduled Amortization Payments under the Term Loan A
Facility, the Term Loan B Facility and/or the Australian Term Loan
Facility, as the case may be. The Committed Amount of each Bank with
respect to the Term Loan A Facility, the Term Loan B Facility or the
Revolving Credit Facility, as the case may be, shall be Pro Rata
automatically and permanently reduced to the extent of any payment applied
to such facility under this Section and the Revolving Credit Committed
Amount of each Bank shall also be Pro Rata automatically and permanently
reduced as provided in Section 3.01(b)(i).
(E) The Borrower shall pay in respect of the Term Loan A Facility, the
Term Loan B Facility and, to the extent provided in the next succeeding
sentence, the Revolving Credit Facility, and shall cause KAP to pay,
subject to the next succeeding sentence, in respect of the Australian Term
Loan Facility, each Scheduled Amortization Payment until all Term Loans,
borrowings under the Australian Term Loan Facility and Letter of Credit
Unreimbursed Draws in respect of the Australian Term Loan Letter of Credit
are paid in full, in the amounts and at the times specified in the
definition of Scheduled Amortization Payment to the extent that prepayments
have not previously been applied to such Scheduled Amortization Payments
pursuant to the terms hereof; provided that any Scheduled Amortization
Payment in respect of the Australian Term Loan Facility shall be net of the
amount of any reduction in the Letter of Credit Undrawn Availability of the
Australian Term Loan Letter of Credit attributable to a reduction in the
Australian Term Loan Interest Reserve related to a Scheduled Amortization
Payment under the Australian Term Loan Facility. Any Scheduled
Amortization Payment in respect of the Australian Term Loan Facility shall
be applied Pro Rata (treating the Australian Term Loan Facing Bank as a
Bank having a Proportion equal to the amount outstanding under the
Australian Term Loan Facility) towards amounts outstanding under the
Australian Term Loan Facility and amounts outstanding under the Revolving
Credit Facility in respect of, and only to the extent of, Letter of Credit
Participating Interests in any Letter of Credit Unreimbursed Draw under the
Australian Term Loan Letter of Credit. The Committed Amount of each Bank
with respect to the Term Loan A Facility, the Term Loan B Facility or the
-40-
Revolving Credit Facility, as the case may be, shall be Pro Rata
automatically and permanently reduced to the extent of any payment applied
to such facility under this Section and the Revolving Credit Committed
Amount of each Bank shall also be Pro Rata automatically and permanently
reduced as provided in Section 3.01(b)(i).
(ii) Revolving Facility. (A) As provided in the next succeeding
------------------
sentence, the Borrower shall prepay Swingline Loans and Revolving Credit
Loans and shall provide cash collateral with respect to outstanding Letter
of Credit Exposure to the extent that the aggregate Revolving Credit
Exposure exceeds the aggregate Revolving Credit Committed Amounts.
Such excess amount shall be applied first to the principal of Swingline
Loans, then to the principal of the Revolving Credit Loans, then to
outstanding Letter of Credit Unreimbursed Draws, and the balance shall be
deposited into the Letter of Credit Collateral Account.
The Borrower shall cause KAP to pay all amounts owing in respect of
KAP's obligations under the Australian Revolving Loan Facility, including
repayment of all outstanding borrowings thereunder, on or prior to the
Revolving Credit Expiration date.
(B) The Borrower shall prepay or repay any Letter of Credit
Participating Interests in any Letter of Credit Unreimbursed Draw under the
Australian Term Loan Letter of Credit in accordance with Sections
2.05(c)(i)(D), 2.05(c)(i)(E) and 2.08(c) of this Agreement.
2.06. Interest Rates.
--------------
(a) Optional Bases of Borrowing. The unpaid principal amount of the
---------------------------
Loans shall bear interest for each day until due on one or more bases selected
by the Borrower from among the interest rate Options set forth below, it being
understood that, subject to the provisions of this Agreement, including but not
limited to Section 3.11 hereof as to Swingline Loans, and so long as the
aggregate number of Funding Segments of the Euro-Rate Portion of the Loans at
any time shall not exceed twelve, the Borrower may select different Options to
apply simultaneously to different Portions of the Loans and may select different
Funding Segments to apply simultaneously to different parts of the Euro-Rate
Portion of the Loans:
(i) Base Rate Option: A rate per annum (computed on the basis of a
----------------
year of 365 or 366 days, as the case may be, and actual days elapsed) for
each day equal to the Base Rate for such day plus the Applicable Margin for
such day, such interest
-41-
rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate. "Base Rate," as used
herein, shall mean, for any day, the greater of (A) the Prime Rate for such
day and (B) 1/2% over the Federal Funds Effective Rate for such day, such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Prime Rate or Federal Funds Effective
Rate. "Prime Rate," as used herein, shall mean the interest rate per annum
announced from time to time by the Administrative Agent as its prime rate,
such rate to change automatically effective as of the effectiveness of each
announced change in such prime rate. The Prime Rate may be greater or less
than the interest rates charged by the Administrative Agent (in its
capacity as a lender) to other borrowers and is not solely based or
dependent upon the interest rate which the Administrative Agent (in such
capacity) may charge any particular borrower or class of borrowers.
"Federal Funds Effective Rate," as used herein, shall mean, for any day,
the rate per annum (rounded upward to the nearest 1/100 of 1%) announced by
the Federal Reserve Bank of New York (or any successor) as being the
weighted average of the rates on overnight Federal funds transactions
arranged by Federal funds brokers on the previous trading day, as computed
and announced by such Federal Reserve Bank (or any successor) in
substantially the same manner as such Federal Reserve Bank computes and
announces the weighted average it refers to as the "Federal Funds Effective
Rate" as of the date of this Agreement; provided that if such Federal
Reserve Bank (or its successor) does not announce such rate for any day,
the "Federal Funds Effective Rate" for such day shall be the average rate
determined in good faith by the Administrative Agent (which determination
shall be conclusive absent manifest error) that it was charged for its
Federal funds transactions on such previous trading day.
(ii) Euro-Rate Option: A rate per annum (based on a year of 360
----------------
days and actual days elapsed) for each day equal to the Euro-Rate for such
day plus the Applicable Margin. "Euro-Rate," as used herein, shall mean,
for any day, for each Funding Segment of the Euro-Rate Portion
corresponding to a proposed or existing Euro-Rate Funding Period, the rate
per annum determined by the Administrative Agent by dividing (the resulting
quotient to be rounded upward to the nearest 1/100 of 1%) (A) the rate of
interest (which shall be the same for each day in such Euro-Rate Funding
Period) determined in good faith by the Administrative Agent (which
determination shall be conclusive absent manifest error) to be the average
of the rates per annum for deposits in Dollars offered to major money
center banks in the London interbank market at approximately 11:00 a.m.,
London time, two (2) London Business Days prior to the first day of such
Euro-Rate Funding Period for delivery on the first day of such Euro-Rate
Funding Period in amounts comparable to such Funding Segment and having
maturities comparable to such Euro-Rate Funding Period by (B) a number
equal to 1.00 minus the Euro-Rate Reserve Percentage.
-42-
The "Euro-Rate" may also be expressed by the following formula:
[average of the rates offered to major money
center banks in the London interbank market]
Euro-Rate = determined by the Administrative Agent per subsection (A) ]
----------------------------------------------------------
[1.00 - Euro-Rate Reserve Percentage ]
The "Euro-Rate Reserve Percentage" for any day shall mean the maximum
effective percentage (expressed as a decimal fraction, rounded upward to
the nearest 1/100 of 1%), as determined in good faith by the Administrative
Agent (which determination shall be conclusive absent manifest error),
which is in effect on such day as prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for determining the reserve
requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to
as "Eurocurrency liabilities") of a member bank in such System. The Euro-
Rate shall be adjusted automatically as of the effective date of each
change in the Euro-Rate Reserve Percentage. The Euro-Rate shall be
calculated in accordance with the foregoing whether or not any Bank is
actually required to hold reserves in connection with its eurocurrency
funding or, if it is required to hold reserves, is required to hold
reserves at the "Euro-Rate Reserve Percentage" as herein defined. The
Administrative Agent shall give promptly notice to the Borrower and to the
Banks of the Euro-Rate so determined or adjusted, which determination or
adjustment, if made in good faith, shall be conclusive absent manifest
error.
(iii) As-Offered Rate Option: A rate per annum (computed on the
----------------------
basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the As-Offered Rate for such day plus the Applicable
Margin. "As-Offered Rate," as used herein, shall mean, for any day, for
each Funding Segment of the As-Offered Rate Portion corresponding to a
proposed or existing As-Offered Rate Funding Period, a rate per annum
offered by the Swingline Bank in its sole discretion to Borrower from time
to time.
Notwithstanding the foregoing, Term Loan A Facility Term Loans and Revolving
Credit Loans may be made only at the Base Rate Option and the Euro-Rate Option,
Term Loan B Facility Term Loans may be made only at the Euro-Rate Option and
Swingline Loans may be made only at the Base Rate Option and the As-Offered Rate
Option.
"Applicable Margin" is based on the applicable Pricing Level and shall
mean for each Option the rate per annum set forth below:
-43-
Applicable Margin
Term Loan A Facility
Term Loans and
Revolving Credit Loans Term Loan B
(including Swingline Loans) Facility Term Loans
--------------------------- -------------------
Euro-Rate and
As-Offered
Pricing Level Base Rate Rate Euro-Rate
------------- --------- ---- ---------
Level I 0 basis points 75 basis points 175 basis points
Level II 0 basis points 100 basis 175 basis points
points
Level III 25 basis points 125 basis 175 basis points
points
Level IV 50 basis points 150 basis ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇ ▇ ▇▇ basis points 175 basis 225 basis points
points
Level VI 100 basis points 200 basis 250 basis points
points
(b) Pricing Levels. For the purposes of Sections 2.06(a) and
--------------
2.05(a), the applicable level of pricing (the "Pricing Level") shall be
determined as follows:
Pricing Level Performance Ratio
------------- -----------------
Level I Less than 2.25x
Level II 2.25x - 2.49x
Level III 2.50x - 2.99x
Level IV 3.00x - 3.49x
Level V 3.50x - 3.99x
Level VI Greater than or equal to 4.00x
provided, that through the first day of the calendar month following the first
determination of the Performance Ratio, the Applicable Margin shall equal (i)
175 basis points in respect of Euro-Rate based and As-Offered Rate based Loans
which are Term Loan A Facility Term Loans and Revolving Credit Loans (including
Swingline Loans), (ii) 225 basis points in respect of Euro-Rate based Loans
which are Term Loan B Facility Term Loans and (iii) 75 basis points in respect
of Base Rate based Loans. Together with each delivery of financial statements
pursuant to Section 6.01(a) or 6.01(b), the Borrower shall deliver a
certificate, duly completed and signed by the Treasurer, Controller or Chief
Financial Officer of Borrower, setting forth the calculation of the Performance
Ratio, as supported by the
-44-
accompanying financial statements, stating the Pricing Level applicable to such
Performance Ratio and calculating the U.S. Dollar Equivalent of the Revolving
Credit Exposure. Except as expressly set forth herein, any change in the
applicable Pricing Level shall be effective as of the first day of the calendar
month following the month in which the applicable financial statements and
certificate are received by the Administrative Agent.
(c) Funding Periods. Any time the Borrower shall select, convert to
---------------
or renew the Euro-Rate Option or the As-Offered Rate Option to apply to any part
of the Loans, the Borrower shall specify, with respect to the Euro-Rate Option,
one or more periods of one, two, three or six months (the "Euro-Rate Funding
Periods"), and, with respect to the As-Offered Rate Option, one or more periods
of days (the "As-Offered Rate Funding Period") during which such Option shall
apply; provided, that:
(i) Each Euro-Rate Funding Period shall begin on a London Business
Day, and the duration of each Euro-Rate Funding Period shall be determined
in accordance with the definition of the term "month" herein;
(ii) The Borrower may not select a Euro-Rate Funding Period or an
As-Offered Rate Funding Period that would end after the Revolving Credit
Expiration Date, the Term Loan A Expiration Date or the Term Loan B
Expiration Date, as the case may be;
(iii) The Borrower shall, in selecting any Euro-Rate Funding Period
or any As-Offered Rate Funding Period, allow for foreseeable mandatory
prepayment of the Loans; and
(iv) The Borrower may not select an As-Offered Rate Funding Period
longer than 30 days.
(d) Transactional Amounts. Subject to Section 3.11 hereto as to
---------------------
Swingline Loans, every selection of, conversion from, conversion to, or renewal
of, an interest rate Option, and every payment or prepayment of any Loans
(except pursuant to Section 2.05(c)) shall be in a principal amount such that,
after giving effect thereto, the aggregate principal amount of each Portion
shall be equal to $1,000,000 or an integral multiple thereof.
(e) Interest After Maturity. After the principal amount of the Base
-----------------------
Rate Portion of any Loan shall have become due (by acceleration or otherwise),
such Portion shall bear interest for each day until paid (before and after
judgment) at a rate per annum (based on a year of 365 or 366 days, as the case
may be) which shall be 2% above the then current Base Rate Option, such interest
rate to change automatically from time to time effective as of the effective
date of each change in the Base Rate. After the principal amount of any Euro-
-45-
Rate Portion or any As-Offered Rate Portion of any Loan shall have become due
(by acceleration or otherwise), such Portion shall bear interest for each day
until paid (before and after judgment) (i) until the end of the then current
Euro-Rate Funding Period or As-Offered Rate Funding Period, as the case may be,
at a rate per annum 2% above the rate otherwise applicable to such Loan and (ii)
thereafter in accordance with the previous sentence.
(f) Euro-Rate Unascertainable; Impracticability. If
-------------------------------------------
(i) on any date on which a Euro-Rate would otherwise be set the
Administrative Agent (in the case of (A) or (B) below) or any Bank (in the
case of (C) below) shall have in good faith determined (which determination
shall be conclusive) that:
(A) adequate and reasonable means do not exist for ascertaining
such Euro-Rate, or
(B) a contingency has occurred which materially and adversely
affects the interbank Eurodollar market, or
(C) the effective cost to such Bank of funding a proposed
Funding Segment of the Euro-Rate Portion from a Corresponding Source
of Funds shall exceed the Euro-Rate applicable to such Funding
Segment, or
(ii) at any time any Bank shall have determined in good faith (which
determination shall be conclusive) that the making, maintenance or funding
of any part of the Euro-Rate Portion has been made impracticable or
unlawful by compliance by such Bank or a Notional Euro-Rate Funding Office
in good faith with any Law or guideline or interpretation or administration
thereof by any Official Body charged with the interpretation or
administration thereof or with any request or directive of any such
Official Body (whether or not having the force of law);
then, and in any such event, the Administrative Agent or such Bank (the
"Affected Party"), as the case may be, may notify the Borrower of such
determination (and any Bank giving such notice shall so notify the
Administrative Agent). Upon such date as shall be specified in such notice
(which shall not be earlier than one (1) Business Day following the date such
notice is given), the obligation of the Banks or the Affected Party to allow the
Borrower to select, convert to or renew the Euro-Rate Option shall be suspended
until the Administrative Agent or such Affected Party, as the case may be, shall
have later notified the Borrower (and any Affected Party giving such notice
shall so notify the Administrative Agent) of the Administrative Agent's or such
Affected Party's determination in good faith (which determination shall be
conclusive) that the circumstance giving rise to such previous
-46-
determination no longer exists. If any Affected Party notifies the Borrower of
a determination under subsection (ii) of this Section 2.06(f), the Euro-Rate
Portion of the Loans of such Affected Party shall automatically be converted to
the Base Rate Option as of the date specified in such notice (and accrued
interest thereon shall be due and payable on such date).
If at the time the Administrative Agent or any Bank makes a
determination under subsection (i) or (ii) of this Section 2.06(f) the Borrower
has previously notified the Administrative Agent that it wishes to select,
convert to or renew the Euro-Rate Option with respect to any proposed Loan, but
such Loan has not yet been made, such notification shall be deemed to provide
for selection of, conversion to or renewal of the Base Rate Option instead of
the Euro-Rate Option with respect to such Loan or, in the case of a
determination by a Bank, the Loan of such Bank.
2.07. Conversion or Renewal of Interest
Rate Options.
---------------------------------
(a) Conversion or Renewal. Subject to Section 3.11 hereof as to
---------------------
Swingline Loans, and subject to the provisions of Section 2.11(b), the Borrower
may convert any part of its Loans from any interest rate Option or Options to
any other interest rate Option or Options and may renew the Euro-Rate Option as
to any Funding Segment of the Euro-Rate Portion:
(i) At any time with respect to conversion from the Base Rate
Option; or
(ii) At the expiration of any Euro-Rate Funding Period with respect
to conversions from or renewals of the Euro-Rate Option, as to the Funding
Segment corresponding to such expiring Euro-Rate Funding Period.
Whenever the Borrower desires to convert or renew any interest rate
Option or Options, the Borrower shall provide to the Administrative Agent
Standard Notice setting forth the following information:
(w) The date, which shall be a Business Day, on which the proposed
conversion or renewal is to be made;
(x) The principal amounts selected in accordance with Section 2.06(d)
of the Base Rate Portion and each Funding Segment of the Euro-Rate Portion
to be converted from or renewed;
-47-
(y) The interest rate Option or Options selected in accordance with
Section 2.06(a) and the principal amounts selected in accordance with
Section 2.06(d) of the Base Rate Portion and each Funding Segment of the
Euro-Rate Portion to be converted to; and
(z) With respect to each Funding Segment to be converted to or
renewed, the Euro-Rate Funding Period selected in accordance with Section
2.06(d) to apply to such Funding Segment.
Standard Notice having been so provided, after the date specified in such
Standard Notice, interest shall be calculated upon the principal amount of the
Loans as so converted or renewed. Interest on the principal amount of any part
of Loans converted or renewed shall be due and payable on the conversion or
renewal date.
(b) Failure to Convert or Renew. Absent due notice from the Borrower
---------------------------
of conversion or renewal in the circumstance described in Section 2.07(a)(ii),
any part of the Euro-Rate Portion for which such notice is not received shall be
converted automatically to the Base Rate Option on the last day of the expiring
Euro-Rate Funding Period.
2.08. Payments and Prepayments.
------------------------
(a) The Borrower shall have the right at its option to prepay the
Loans in whole or part without premium or penalty (but subject to the provisions
of Section 2.11(b)):
(i) At any time with respect to any part of the Base Rate Portion; or
(ii) At the expiration of any Euro-Rate Funding Period or any As-
Offered Rate Funding Period with respect to prepayment of the Euro-Rate
Portion or the As-Offered Rate Portion, as the case may be, with respect to
any part of the Funding Segment corresponding to such expiring Euro-Rate
Funding Period or As-Offered Rate Funding Period, as the case may be.
If at any time the aggregate Revolving Credit Exposure shall exceed
the aggregate Revolving Credit Committed Amounts, the Borrower shall immediately
prepay a principal amount of Revolving Credit Loans as provided in Section
2.05(c)(ii).
(b) Subject to Section 3.11 hereto as to Swingline Loans, whenever
the Borrower desires or is required to prepay any part of the Loans, it shall
provide Standard Notice to the Administrative Agent setting forth the following
information:
-48-
(i) The date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(ii) The principal amounts selected in accordance with Section
2.06(d) of the Base Rate Portion and each part of each Funding Segment of
the Euro-Rate Portion to be prepaid;
(iii) The total principal amount of such prepayment, selected in
accordance with Section 2.06(d), which shall be the sum of the principal
amounts of the Loans to be prepaid; and
(iv) The amount of such prepayment to be applied to the Term Loans
(including amounts outstanding under the Australian Term Loan Facility) and
the amount of such prepayment to be applied to Revolving Credit Loans.
Standard Notice having been so provided, on the date specified in such Standard
Notice the principal amounts of the Base Rate Portion and each part of the Euro-
Rate Portion specified in such notice, together with interest on such principal
amounts to such date, shall be due and payable.
(c) Prepayments to be applied to Term Loans pursuant to this Section
2.08 shall be applied Pro Rata (treating the Australian Term Loan Facing Bank as
a Bank having a Proportion equal to the amount outstanding under the Australian
Term Loan Facility) towards amounts outstanding under the Term Loan A Facility,
the Term Loan B Facility and the Australian Term Loan Facility based on the
aggregate principal amount outstanding thereunder and towards the Revolving
Credit Facility in respect of, and only to the extent of, amounts outstanding
thereunder due to any Letter of Credit Participating Interests in any Letter of
Credit Unreimbursed Draw under the Australian Term Loan Letter of Credit,
provided that a Bank entitled to receive a prepayment in respect of a Term Loan
B Facility Term Loan may decline such prepayment, in which case such declining
Bank's prepayment share shall be applied Pro Rata (as provided above) to the
Term Loan A Facility and the Australian Term Loan Facility, up to the full
amount outstanding thereunder and to the Revolving Credit Facility up to, and
only to the extent of, amounts outstanding thereunder due to any Letter of
Credit Participating Interests in any Letter of Credit Unreimbursed Draw under
the Australian Term Loan Letter of Credit. Any application under this Section
2.08(c) shall be applied pro rata towards the remaining Scheduled Amortization
Payments under the Term Loan A Facility, the Term Loan B Facility and/or the
Australian Term Loan Facility, as the case may be. The Committed Amount of each
Bank with respect to the Term Loan A Facility, the Term Loan B Facility or the
Revolving Credit Facility, as the case may be, shall be Pro Rata automatically
and permanently reduced to the extent of any payment applied to such facility
under this Section and the Revolving Credit Committed Amount of each Bank
-49-
shall also be Pro Rata automatically and permanently reduced as provided in
Section 3.01(b)(i).
2.09. Interest Payment Dates.
----------------------
Interest on the Base Rate Portion shall be due and payable on each
March 31, June 30, September 30 and December 31. Interest on each Funding
Segment of the As-Offered Rate Portion shall be due and payable on the last day
of the corresponding As-Offered Rate Funding Period. Interest on any Funding
Segment of the Euro-Rate Portion shall be due and payable on the last day of the
corresponding Euro-Rate Funding Period and, if such Euro-Rate Funding Period is
longer than three months, also every third month during such Euro-Rate Funding
Period. After maturity of any part of the Loans (by acceleration or otherwise),
interest on such part shall be due and payable on demand.
2.10. Pro Rata Treatment and Payments.
-------------------------------
Each borrowing from the Banks, each conversion or renewal of any
interest rate Option and each payment or prepayment to the Banks (except as
otherwise specifically provided herein, including with respect to borrowings in
respect of the Swingline Loans) shall be made Pro Rata (which, in the case of
prepayments of Term Loans, shall treat the Australian Term Loan Facing Bank as a
Bank having a Proportion equal to the amount outstanding under the Australian
Term Loan Facility) and from and to each Bank on the same date. All payments and
prepayments to be made in respect of principal, interest, fees or other amounts
due from the Borrower hereunder or under any Related Document (other than the
Australian Credit Facilities) shall be payable at 12:00 Noon, Pittsburgh time,
on the day when due without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived, and a cause of action therefor shall
immediately accrue. Except for payments under Section 2.11, 2.12 or 10.06 or in
respect of the Australian Credit Facilities, such payments shall be made to the
Administrative Agent at its Office in Dollars in funds immediately available at
such Office without setoff, counterclaim or other deduction of any nature, and
payments under Section 2.11, 2.12 or 10.06 shall be made to the applicable Bank,
Issuing Bank or the Swingline Bank at such domestic account as it may specify to
the Borrower from time to time in funds immediately available at such account.
Any payment received by the Administrative Agent or any Bank, any Issuing Bank
or the Swingline Bank after 12:00 noon, Pittsburgh time, on any day shall be
deemed to have been received on the next succeeding Business Day. The
Administrative Agent shall distribute to the Banks, the Issuing Banks or the
Swingline Bank, as the case may be, all such payments received by the
Administrative Agent for their respective accounts as promptly as practicable
after receipt by the Administrative Agent. To the extent permitted by law, after
there shall have become due (by acceleration or otherwise) interest, fees or any
other amounts due from
-50-
the Borrower hereunder or under any of the Related Documents (other than the
Australian Credit Facilities) (excluding overdue principal, which shall bear
interest as described in Section 2.06(e), but including interest payable under
this Section 2.10), such amounts shall bear interest for each day until paid
(before and after judgment), payable on demand, at a rate per annum (based on a
year of 365 or 366 days, as the case may be, and actual days elapsed) 2% above
the then current Base Rate Option, such interest rate to change automatically
from time to time effective as of the effective date of each change in the Base
Rate. To the extent permitted by law, interest accrued on any amount which has
become due hereunder or under any Related Document (other than the Australian
Credit Facilities) shall compound on a day-by-day basis, and hence shall be
added daily to the overdue amount to which such interest relates.
All payments and prepayments, including Scheduled Amortization
Payments, required to be made hereunder in respect of borrowings under the
Australian Credit Facilities shall be payable as provided in the Australian
Credit Facilities, on the day when due without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived. Such payments, to
the extent not determined in Australian Dollars, shall be in the amount of the
Australian Dollar Equivalent, and shall be made by KAP to both the Australian
Term Loan Facing Bank or the Australian Revolving Loan Facing Bank, as the case
may be, as provided in the Australian Credit Facilities in immediately available
Australian Dollar funds without setoff, counterclaim or other deduction of any
nature.
2.11. Additional Compensation in Certain Circumstances.
------------------------------------------------
(a) Increased Costs or Reduced Return Resulting from Taxes, Reserves,
-----------------------------------------------------------------
Capital Adequacy Requirements, Expenses, Etc. If any Law or guideline or
--------------------------------------------
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive of any Official Body (whether or not having the force of law) now
existing or hereafter adopted:
(i) subjects any Bank Party or any Notional Euro-Rate Funding Office
to any tax or changes the basis of taxation with respect to this Agreement,
the Notes, the Loans, the Letters of Credit, the Letter of Credit
Participating Interests or the Swingline Loan Participating Interests, or
payments by the Borrower of principal, interest, fees or other amounts due
from the Borrower hereunder or under the Related Documents (except for
taxes on the overall net income of such Bank Party or such Notional Euro-
Rate Funding Office imposed by the jurisdiction in which such Bank Party's
principal office or Notional Euro-Rate Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve, special
deposit, insurance assessment or similar requirement against credits or
commitments to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account
-51-
of, or other acquisitions of funds by, such Bank Party or any Notional
Euro-Rate Funding Office (other than requirements expressly included herein
in the determination of the Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or
credits or commitments to extend credit extended by, any Bank Party or any
Notional Euro-Rate Funding Office, or (B) otherwise applicable to the
obligations of any Bank Party or any Notional Euro-Rate Funding Office
under this Agreement, or
(iv) imposes upon any Bank Party or any Notional Euro-Rate Office
any other condition or expense with respect to this Agreement or the
Related Documents or its making, maintenance or funding of any Loan, Letter
of Credit, Letter of Credit Participating Interest or Swingline Loan
Participating Interest, or any security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank Party or any Notional Euro-Rate Funding Office or, in the case of clause
(iii), any person controlling a Bank Party, with respect to this Agreement, the
Related Documents or the making, maintenance or funding of any Loan, Letter of
Credit or Letter of Credit Participating Interest or Swingline Loan
Participating Interest (or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of return on such Bank
Party's or controlling person's capital, taking into consideration such Bank
Party's or controlling person's policies with respect to capital adequacy) by an
amount which such Bank Party deems to be material (such Bank Party being deemed
for this purpose to have made, maintained or funded each Funding Segment of the
Euro-Rate Portion from a Corresponding Source of Funds), such Bank Party may
from time to time notify the Borrower of the occurrence of any such event and
the amount determined in good faith (using any averaging and attribution method)
by such Bank Party (which determination shall be conclusive) to be necessary to
compensate such Bank Party or such Notional Euro-Rate Funding Office for such
increase, reduction or imposition. Such amount shall be due and payable by the
Borrower to such Bank Party ten (10) Business Days after such notice is given by
such Bank Party to the Borrower. If requested by the Borrower, such Bank Party
shall deliver to the Borrower a certificate, which certificate shall be
conclusive absent manifest error, as to the amount due and payable under this
Section 2.11(a) from time to time and the method of calculating such amount.
(b) Indemnity. In addition to the compensation required by
---------
subsection (a) of this Section 2.11, the Borrower shall indemnify each Bank
against any loss or expense
-52-
(including loss of margin) which such Bank has sustained or incurred as a
consequence of any:
(i) payment or prepayment or conversion of any Funding Segment of
any Euro-Rate Portion or any As-Offered Rate Portion on a day other than
the last day of the corresponding Euro-Rate Funding Period or As-Offered
Rate Funding Period, as the case may be (whether or not such payment,
prepayment or conversion is mandatory or automatic and whether or not such
payment, prepayment or conversion is then due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or in part any notice stated
herein to be irrevocable (a Bank having in its sole discretion the options
(A) to give effect to such attempted revocation and obtain indemnity under
this Section 2.11(b) or (B) to treat such attempted revocation as having no
force or effect, as if never made), or
(iii) default by the Borrower in the performance or observance of
any covenant or condition contained in this Agreement or any Related
Document, including any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal, interest, fee or any other amount
due hereunder or under any Related Document.
If the Bank sustains or incurs any such loss or expense, it may from time to
time notify the Borrower of the amount determined in good faith by such Bank
(which determination shall be conclusive) to be necessary to indemnify such Bank
for such loss or expense (each Bank being deemed for this purpose to have made,
maintained or funded each Euro-Rate Portion from a Corresponding Source of
Funds). Such amount shall be due and payable by the Borrower to such Bank ten
(10) Business Days after such notice is given (and any Bank giving any such
notice shall notify the Administrative Agent of the amount so demanded). If
requested by the Borrower, such Bank shall deliver to the Borrower a
certificate, which certificate shall be conclusive absent manifest error, as to
the amount due and payable under this Section 2.11(b) from time to time and the
method of calculating such amount.
2.12. Taxes.
-----
(a) Payments Net of Taxes. All payments made by the Borrower under
---------------------
this Agreement or any Related Document shall be made free and clear of, and
without reduction or withholding for or on account of, any present or future
income, stamp, documentary, excise or other taxes, levies, imposts, duties,
charges, fee, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Official Body, and all liabilities with
respect thereto, excluding;
-53-
(i) in the case of each Bank Party, income or franchise taxes
imposed on such Bank Party by the jurisdiction under the laws of which such
Bank Party is organized or any political subdivision or taxing authority
thereof or therein or as a result of a connection between such Bank Party
and any jurisdiction other than a connection resulting solely from this
Agreement and the transactions contemplated hereby,
(ii) in the case of each Bank Party, income or franchise taxes
imposed by any jurisdiction in which such Bank Party's lending offices
which make or book Loans or issue Letters of Credit are located or any
political subdivision or taxing authority thereof or therein, and
(iii) any taxes payable solely as a result of the failure of a Bank
described in Section 10.12(g) to timely deliver the forms described therein
to the extent required thereby, other than if such failure is due to a
change in law occurring after the date on which a form originally was
required to be provided or if no such form is required
(all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld or deducted from any amounts payable to any Bank Party under this
Agreement or any Related Document, the Borrower shall pay the relevant amount of
such Taxes and the amounts so payable to such Bank Party shall be increased to
the extent necessary to yield to such Bank Party (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Related Documents. Whenever any
Taxes are paid by the Borrower with respect to payments made in connection with
this Agreement or any Related Document, as promptly as possible thereafter, the
Borrower shall send to the Administrative Agent for its own account or for the
account of such other Bank Party, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof.
(b) Indemnity. The Borrower hereby indemnifies each Bank Party for
---------
the full amount of all Taxes attributable to or arising from payments by or on
behalf of the Borrower to such Bank Party hereunder or under any of the Related
Documents, any Taxes paid by such Bank Party, and any present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any Taxes (including any incremental Taxes, interest or
penalties which may become payable by such Bank Party as a result of any failure
to pay such Taxes). Such indemnification shall be made within five (5) Business
Days from the date such Bank Party makes written demand therefor.
2.13. Funding by Branch, Subsidiary or Affiliate.
------------------------------------------
-54-
(a) Notional Funding. Each Bank shall have the right from time to
----------------
time, prospectively or retrospectively, without notice to the Borrower, to deem
any branch, subsidiary or affiliate of such Bank to have made, maintained or
funded any part of the Euro-Rate Portion at any time; provided, however, that
such Bank shall not have such right if such transfer would cause an event or
condition described in Section 2.06(f)(ii) or increase compensation payable by
the Borrower under Section 2.11(a). Any branch, subsidiary or affiliate so
deemed shall be known as a "Notional Euro-Rate Funding Office." Such Bank shall
deem any part of the Euro-Rate Portion or the funding therefor to have been
transferred to a different Notional Euro-Rate Funding Office if such transfer
would avoid or cure an event or condition described in Section 2.06(f)(ii) or
would lessen compensation payable by the Borrower under Section 2.11(a), and if
such Bank determines in its sole discretion that such transfer would be
practicable and would not have a material adverse effect on the affected part of
the Euro-Rate Portion, such Bank or any Notional Euro-Rate Funding Office (it
being assumed for purposes of such determination that each part of the Euro-Rate
Portion is actually made or maintained by or funded through the corresponding
Notional Euro-Rate Funding Office). Notional Euro-Rate Funding Offices may be
selected by such Bank without regard to such Bank's actual methods of making,
maintaining or funding the Euro-Rate Portion or any sources of funding actually
used by or available to such Bank.
(b) Actual Funding. Each Bank shall have the right from time to time
--------------
to make or maintain any part of the Euro-Rate Portion by arranging for a branch,
subsidiary or affiliate of such Bank to make or maintain such part of the Euro-
Rate Portion; provided, however, that such Bank shall not have such right if
such transfer would cause an event or condition described in Section 2.06(f)(ii)
or increase compensation payable by the Borrower under Section 2.11(a). Such
Bank shall have the right to (i) hold any applicable Note payable to its order
for the benefit and account of such branch, subsidiary or affiliate or (ii)
request the Borrower to issue one or more promissory notes in the principal
amount of such part of the Euro-Rate Portion in substantially the form of
Exhibit ▇-▇, ▇▇▇▇▇▇▇ ▇-▇, Exhibit A-3 or Exhibit B, as the case may be, with the
blanks appropriately filled, payable to such branch, subsidiary or affiliate and
with appropriate changes reflecting that the holder thereof is not obligated to
make any additional Loans to the Borrower. The Borrower agrees to comply
promptly with any request under subsection (ii) of this Section 2.13(b). If any
Bank causes a branch, subsidiary or affiliate to make or maintain any part of
the Euro-Rate Portion hereunder, all terms and conditions of this Agreement
shall, except where the context clearly requires otherwise, be applicable to
such part of the Euro-Rate Portion and to any Note payable to the order of such
branch, subsidiary or affiliate to the same extent as if such part of the Euro-
Rate Portion were made or maintained and such note were a Note payable to such
Bank's order.
2.14. Currency Exchange Fluctuations.
------------------------------
-55-
(a) The Borrower will implement and maintain internal controls, and
shall cause KAP to implement and maintain internal controls, to monitor the
borrowings and repayments of Loans by the Borrower and borrowings and interest
reserves under the Australian Credit Facilities by KAP and the issuance of and
drawings under Letters of Credit, with the object of preventing any request for
the making of a Loan or the issuance of a Letter of Credit that would result in
the aggregate Revolving Credit Exposure of the Banks being in excess of the
aggregate Revolving Credit Commitments then in effect and of promptly
identifying and remedying any circumstance where, by reason of changes in
exchange rates, the aggregate Revolving Credit Exposure of the Banks exceeds the
aggregate Revolving Credit Commitments then in effect.
(b) If on any Computation Date the Administrative Agent shall have
determined that the U.S. Dollar Equivalent of the aggregate Revolving Credit
Exposure of the Banks exceeds the aggregate Revolving Credit Commitments due to
a change in currency exchange rates between the U.S. Dollar and the Australian
Dollar, then the Administrative Agent shall give notice to the Borrower that a
prepayment in the amount of such excess (or, if no Revolving Credit Loans are
outstanding, that the provision of cash collateral for outstanding Letters of
Credit in the amount of such excess) is required under Section 2.05(c)(ii)
within 5 Business Days unless, during such period, whether by currency
fluctuation or otherwise, such excess shall have been eliminated in its
entirety.
ARTICLE III.
THE SUBFACILITIES
-----------------
3.01. Letters of Credit.
-----------------
(a) Generally. Subject to the terms and conditions of this Agreement,
---------
and relying upon the representations and warranties herein set forth and upon
the agreements of the Banks set forth in Sections 3.04 and 3.05, the Standby and
Trade LC Issuing Bank agrees to issue for the account of the Borrower standby
letters of credit and documentary or import (trade) letters of credit as
provided in this Article III (each such letter of credit, as amended, modified
or supplemented from time to time, a "Standby or Trade Letter of Credit" and
collectively the "Standby or Trade Letters of Credit"); provided that, on the
date of the issuance of any Standby or Trade Letter of Credit, and after giving
effect to such issuance, the aggregate Revolving Credit Exposure shall not
exceed the aggregate Revolving Credit Commitments at such time; and provided,
further, that the aggregate Letter of Credit Exposure at any time outstanding
shall not exceed $20,000,000 plus the U.S. Dollar Equivalent of the Letter of
Credit Exposure of the Australian Term Loan Letter of Credit and the Australian
Revolving Loan Letter of Credit. Each Standby or Trade Letter of Credit
-56-
shall (a) be for a purpose which is in the ordinary course of the Borrower's
business; (b) be in favor of such beneficiary or beneficiaries as the Borrower
shall specify and as shall be approved by the Standby or Trade LC Issuing Bank
in its reasonable discretion; (c) be denominated in Dollars; and (d) have an
expiration date no later than, (x) in the case of standby letters of credit, two
years after its date of issuance, and (y) in the case of documentary or import
(trade) letters of credit, 180 days after its date of issuance, provided that no
Standby or Trade Letter of Credit shall have an expiration date which is later
than five days prior to the Revolving Credit Expiration Date; provided, further,
that, on the fifth day prior to the Revolving Credit Expiration Date, the
Borrower shall provide for the termination and cancellation, in a manner
satisfactory to the Banks, of each then outstanding Standby or Trade Letter of
Credit.
(b) Australian Letters of Credit.
----------------------------
(i) Australian Term Loan Letter of Credit. On the Closing Date the
-------------------------------------
Australian LC Issuing Bank will issue to the Australian Term Loan Facing
Bank for the account of the Borrower an A$ denominated letter of credit
with an initial Letter of Credit Undrawn Availability equal to the
Australian Dollar Equivalent of $40,000,000, substantially in the Form of
Exhibit I-1 hereto (the "Australian Term Loan Letter of Credit"). The
Australian Term Loan Letter of Credit shall expressly provide that such
Letter of Credit may only be drawn upon (x) in the event of a default in
the payment of principal or interest under the Australian Term Loan
Facility or (y) upon the occurrence of an event described in Section
8.01(p) or (q) with respect to KAP in the lesser of the amount of principal
and interest then due to the Australian Term Loan Facing Bank or the Letter
of Credit Undrawn Availability of the Australian Term Loan Letter of
Credit. The stated amount with respect to, and the Letter of Credit
Undrawn Availability of, the Australian Term Loan Letter of Credit shall be
automatically and permanently reduced, and the Revolving Credit Committed
Amount of each Bank shall be Pro Rata automatically and permanently
reduced, by the U.S. Dollar Equivalent of each A$ denominated amount
received by the Australian Term Loan Facing Bank in respect of any
repayment, prepayment or Scheduled Amortization Payment applied to
borrowings under the Australian Term Loan Facility. The Australian Term
Loan Letter of Credit shall (a) be for the purpose of providing credit
support for the Australian Term Loan Facility, (b) be in favor of the
Australian Term Loan Facing Bank, (c) be denominated in Australian Dollars;
and (d) have an expiration date no later than six years after its date of
issuance.
(ii) Australian Revolving Loan Letter of Credit. On the Closing
------------------------------------------
Date the Australian LC Issuing Bank will issue to the Australian Revolving
Loan Facing Bank for the account of the Borrower an A$ denominated Letter
of Credit with an initial
-57-
Letter of Credit Undrawn Availability equal to the Australian Dollar
Equivalent of $10,000,000 substantially in the Form of Exhibit I-2 hereto
(the "Australian Revolving Loan Letter of Credit"). The Australian
Revolving Loan Letter of Credit shall expressly provide that such Letter of
Credit may only be drawn upon (x) in the event of a default in the payment
of principal or interest under the Australian Revolving Loan Facility or
(y) upon the occurrence of an event described in Section 8.01(p) or (q)
with respect to KAP in the lesser of the amount of principal and interest
then due to the Australian Revolving Loan Facing Bank or the Letter of
Credit Undrawn Availability of the Australian Revolving Loan Letter of
Credit. The stated amount with respect to, and the Letter of Credit Undrawn
Availability of, the Australian Revolving Loan Letter of Credit may be
permanently reduced by the Borrower as provided in the Australian Revolving
Loan Facility, in which case the Revolving Credit Committed Amount of each
Bank shall be Pro Rata automatically and permanently reduced by the U.S.
Dollar Equivalent of the A$ denominated amount of such reduction. The
Australian Revolving Loan Letter of Credit shall (a) be for the purpose of
providing credit support for the Australian Revolving Loan Facility, (b) be
in favor of the Australian Revolving Loan Facing Bank, (c) be denominated
in Australian Dollars; and (d) have an expiration date no later than six
years after its date of issuance.
3.02. Letter of Credit Fees.
---------------------
(a) Commissions. (i) The Borrower shall pay to the Administrative
-----------
Agent with respect to each trade Letter of Credit, for the accounts of the
several Banks in proportion to their respective Revolving Credit Proportions, a
Letter of Credit commission on the stated amount of each such Letter of Credit
in an amount equal to 50 basis points of such stated amount. The commission
applicable to each such Letter of Credit shall be payable on the date of
issuance of each such Letter of Credit.
(ii) The Borrower shall pay to the Administrative Agent with respect to
each standby Letter of Credit and the Australian Term Loan Letter of Credit, for
the accounts of the several Banks in proportion to their respective Revolving
Credit proportions, a Letter of Credit commission on the average daily Letter of
Credit Undrawn Availability equal to the Applicable Margin then applicable (or
which then would be applicable) to Revolving Credit Loans outstanding and
bearing interest at the Euro-Rate Option (whether or not any such Loans shall
then be outstanding or bearing interest by reference to such Option). The
commission applicable to each such Letter of Credit shall be payable quarterly
in arrears on the last day of each March 31, June 30, September 30 and December
31 while each such Letter of Credit is outstanding, on the date of any drawing
thereunder and on the date of the expiration and termination thereof, in each
case for the preceding period for which such commission has not been paid.
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(iii) The Borrower shall pay to the Administrative Agent with respect
to the Australian Revolving Loan Letter of Credit, for the accounts of the
several Banks in proportion to their respective Revolving Credit Proportions, an
Australian Revolving Loan Letter of Credit commission, on the average daily U.S.
Dollar Equivalent amount of borrowings under the Australian Revolving Loan
Facility plus the U.S. Dollar Equivalent amount of the Australian Revolving Loan
Interest Reserve, equal to the Applicable Margin then applicable (or which then
would be applicable) to Revolving Credit Loans outstanding and bearing interest
at the Euro-Rate Option (whether or not any such Loans shall then be outstanding
or bearing interest by reference to such Option). The commission applicable to
the Australian Revolving Loan Letter of Credit shall be payable quarterly in
arrears on the last day of each March 31, June 30, September 30 and December 31
while the Australian Revolving Loan Letter of Credit is outstanding, on the date
of any drawing thereunder and on the date of the expiration and termination
thereof, in each case for the preceding period for which such commission has not
been paid.
(b) Facing Fee; Administration Fees. The Borrower shall pay directly
-------------------------------
to each respective Issuing Bank (A) with respect to each outstanding Standby or
Trade Letter of Credit, to and for the sole account of the Standby and Trade LC
Issuing Bank, and (B) with respect to the Australian Term Loan Letter of Credit
and the Australian Revolving Loan Letter of Credit, to and for sole account of
the Australian LC Issuing Bank, a Letter of Credit facing fee calculated at the
rate of 25 basis points per annum on the aggregate Letter of Credit Undrawn
Availability of such of the foregoing Letters of Credit issued by the respective
Issuing Bank, in the case of standby Letters of Credit, the Australian Term Loan
Letter of Credit and the Australian Revolving Loan Letter of Credit, or
aggregate stated amount, if applicable, in the case of trade Letters of Credit;
in each case payable quarterly in arrears on the last day of each March 31, June
30, September 30 and December 31 while each Letter of Credit is outstanding, on
the date of any drawing thereunder and on the date of the expiration or
termination thereof, in each case for the preceding period for which such facing
fee has not been paid. In addition, the Borrower shall pay directly to each
respective Issuing Bank, for the sole account of such Issuing Bank, such other
issuance, administration, maintenance, amendment, drawing and negotiation fees
as may be customarily charged by such Issuing Bank from time to time in
connection with letters of credit issued by it.
3.03. Procedure for Issuance and Amendment of
Letters of Credit.
------------------------------------------
(a) Procedure for Issuance. The Borrower may from time to time
----------------------
request the Standby and Trade LC Issuing Bank to issue a Standby or Trade Letter
of Credit by delivering to the Standby and Trade LC Issuing Bank at such
location as the Standby and Trade LC Issuing Bank may from time to time
designate, with a copy to the Administrative Agent, at least three (3) Business
Days prior to the proposed Standby or Trade Letter of
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Credit issuance date (or on such shorter notice as the Standby and Trade LC
Issuing Bank may approve in its discretion), an application, in such form as may
from time to time be approved by the Standby and Trade LC Issuing Bank (the
"Letter of Credit Application"), completed to the satisfaction of the Standby
and Trade LC Issuing Bank, together with such other certificates, documents and
other papers and information as the Standby and Trade LC Issuing Bank may
reasonably request. Upon receipt of any Letter of Credit Application, the
Standby and Trade LC Issuing Bank will process such Letter of Credit
Application, and the other certificates, documents and other papers and
information delivered to it in connection therewith, in accordance with its
customary procedures and, unless it has been notified by the Administrative
Agent by the Standby and Trade LC Issuing Bank's close of business on the
Business Day preceding the proposed Standby or Trade Letter of Credit issuance
date that any condition thereto has not been satisfied, issue such Standby or
Trade Letter of Credit by delivering the original thereof to the beneficiary and
furnishing a copy thereof to the Borrower and the Administrative Agent (and the
Administrative Agent shall upon request promptly furnish copies thereof to the
Banks).
(b) Extension and Increase. (i) The Borrower may from time to time
----------------------
request the Standby and Trade LC Issuing Bank to extend the expiration date of
an outstanding Standby or Trade Letter of Credit or increase the Letter of
Credit Undrawn Availability thereunder. Such extension or increase shall for
all purposes hereof (including Section 5.02) be treated as though the Borrower
had requested issuance of a new Standby or Trade Letter of Credit pursuant to
Section 3.03(a); provided that the Standby or Trade LC Issuing Bank may, if it
so elects, issue an amendment to the particular Standby or Trade Letter of
Credit in question providing for such extension or increase in lieu of issuing a
new Standby or Trade Letter of Credit in substitution for the outstanding
Standby or Trade Letter of Credit.
(ii) The Borrower may request the Australian LC Issuing Bank to
increase the Letter of Credit Undrawn Availability of the Australian Revolving
Loan Letter of Credit by the Australian Dollar Equivalent of $10,000,000 on the
date of any such increase. Such increase shall for all purposes hereof
(including Section 5.02) be treated as though the Borrower had requested the
issuance of a new Letter of Credit. The Australian LC Issuing Bank may, if it so
elects, issue an amendment to the Australian Revolving Loan Letter of Credit
providing for such increase in lieu of issuing a new Australian Revolving Loan
Letter of Credit in substitution for the outstanding Australian Revolving Loan
Letter of Credit.
At least three (3) Business Days prior to the date upon which the
Borrower shall desire to increase the Letter of Credit Undrawn Availability of
the Australian Revolving Loan Letter of Credit, the Borrower shall deliver to
the Australian LC Issuing Bank at such location as the Australian LC Issuing
Bank may from time to time designate, with a copy to the Administrative Agent,
an application, in such form as may from time to time be approved by the
Australian LC Issuing Bank, completed to the satisfaction of the Australian
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LC Issuing Bank, together with such other certificates, documents and other
papers and information as the Australian LC Issuing Bank may reasonably request.
Upon receipt of the aforementioned application, the Australian LC Issuing Bank
will process such application, and the other certificates, documents and other
papers and information delivered to it in connection therewith, in accordance
with its customary procedures and, unless it has been notified by the
Administrative Agent by the Australian LC Issuing Bank's close of business on
the Business Day preceding the proposed increase in the Letter of Credit Undrawn
Availability of the Australian Revolving Loan Letter of Credit that any
condition thereto has not been satisfied, increase the Letter of Credit Undrawn
Availability of the Australian Revolving Loan Letter of Credit consistent with
the Borrower's request by either issuing an amendment to the Australian
Revolving Loan Letter of Credit providing for such increase or by issuing a new
Australian Revolving Loan Letter of Credit in substitution for the outstanding
Australian Revolving Loan Letter of Credit, delivering the original amendment or
new Australian Revolving Loan Letter of Credit, as the case may be, to the
beneficiary and furnishing a copy thereof to the Borrower and the Administrative
Agent (and the Administrative Agent shall upon request promptly furnish copies
thereof to the Banks).
(c) Limitations on Issuance and Extension. (i) As between the
-------------------------------------
Borrower and the Standby and Trade LC Issuing Bank, the issuance or extension of
any Standby or Trade Letter of Credit (including any deemed issuance pursuant to
Section 3.10 or arising from any increase or extension of any outstanding
Standby or Trade Letter of Credit pursuant to Section 3.03(b)) is within the
reasonable discretion of the Standby and Trade LC Issuing Bank.
(ii) As between the Standby and Trade LC Issuing Bank and the other
Bank Parties, the Standby and Trade LC Issuing Bank shall be justified and fully
protected in issuing any Standby or Trade Letter of Credit (including any deemed
issuance pursuant to Section 3.10 or arising from any increase or extension of
any outstanding Standby or Trade Letter of Credit pursuant to Section 3.03(b))
absent notice from the Administrative Agent as provided in Section 3.03(a), in
each case notwithstanding any subsequent notices to the Standby and Trade LC
Issuing Bank, any knowledge of an Event of Default or Potential Default, any
knowledge of failure of any condition specified in Section 5.02 to be satisfied,
any other knowledge of the Standby and Trade LC Issuing Bank, or any other
event, condition or circumstance whatsoever.
(iii) As between the Administrative Agent and the Banks, the
Administrative Agent shall have no obligation to direct the Standby and Trade LC
Issuing Bank pursuant to Section 3.03(a) not to issue any Standby or Trade
Letter of Credit unless the Administrative Agent shall have received from the
Required Banks, at least two (2) Business Days before the date of such proposed
issuance, an unrevoked written notice that any condition precedent set forth in
Section 5.02 will not be satisfied on such date and expressly requesting that
the
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Administrative Agent direct the Standby and Trade LC Issuing Bank not to issue
such Standby or Trade Letter of Credit. Unless the Administrative Agent has
received such notice, the Administrative Agent shall be justified and fully
protected, as against the Banks, in failing to direct the Standby and Trade LC
Issuing Bank not to issue such Standby or Trade Letter of Credit,
notwithstanding any subsequent notices to the Administrative Agent, any
knowledge of an Event of Default or Potential Default, any knowledge of failure
of any condition specified in Section 5.02 to be satisfied, any other knowledge
of the Administrative Agent, or any other event, condition or circumstance
whatsoever.
(d) Amendments. At the request of the Borrower from time to time, and
----------
subject to satisfaction of such conditions as an Issuing Bank may require, such
Issuing Bank may amend, modify or supplement Letters of Credit, or waive
compliance with any condition of issuance or payment, without the consent of,
and without liability to, the Administrative Agent or any Bank; provided that,
notwithstanding the foregoing, an Issuing Bank shall not issue any Letter of
Credit as to which it has received a notice from the Administrative Agent as
contemplated by Section 3.03(a); and provided, further, that any amendment,
modification or supplement that extends the expiration date or increases the
amount available to be drawn under any outstanding Standby or Trade Letter of
Credit shall be subject to Section 3.03(b).
3.04. Letter of Credit Participating Interests.
----------------------------------------
In the case of each Letter of Credit, effective as of the date of the
issuance thereof (including any deemed issuance pursuant to Section 3.10 or
arising from any increase or extension of any outstanding Letter of Credit
pursuant to Section 3.03(b)), each Issuing Bank automatically shall be deemed,
irrevocably and unconditionally, to have sold, assigned, transferred and
conveyed to each Bank, and each Bank automatically shall be deemed, irrevocably
and unconditionally, to have purchased, acquired, accepted and assumed from each
Issuing Bank, without recourse to, or representation or warranty by, any such
Issuing Bank, an undivided interest in a proportion equal to such Bank's
Revolving Credit Proportion, in all of such Issuing Bank's rights and
obligations in, to or under such Letter of Credit, the related Letter of Credit
Reimbursement Obligations and all collateral, guarantees and other rights from
time to time directly or indirectly securing the foregoing (such interest of
each Bank being referred to herein as a "Letter of Credit Participating
Interest"). Other than Letter of Credit Reimbursement Obligations and Letter of
Credit commissions, amounts payable pursuant to Section 3.02(a) from time to
time under or in connection with a Letter of Credit shall be for the sole
account of the Issuing Bank issuing such Letter of Credit. On the date that any
Purchasing Bank becomes a party to this Agreement in accordance with Section
10.12, Letter of Credit Participating Interests in any outstanding Letters of
Credit held by the Bank from which such Purchasing Bank acquired its interest
hereunder shall be proportionately reallotted between such Purchasing Bank and
such transferor Bank (and, to the extent such transferor Bank is the Issuing
Bank, the Purchasing Bank shall be deemed to
-62-
have acquired a Letter of Credit Participating Interest from such transferor
Bank to such extent). Except as contemplated by the immediately preceding
sentence, neither the Letter of Credit Participating Interest of any Bank
hereunder nor its obligations under this Article III may be assigned or
transferred without the written consent of the Issuing Bank of the underlying
Letter or Letters of Credit. Each Bank hereby expressly and unconditionally
agrees that its obligation to participate in each Letter of Credit issued
hereunder and its obligation to make the payments specified in Section 3.05
shall be absolute, irrevocable and unconditional, and shall not be affected by
any event, condition or circumstance whatsoever. The failure of any Bank to make
any such payment shall not relieve any Bank of its funding obligation hereunder
on the date due, but no Bank shall be responsible for the failure of any other
Bank to meet its funding obligations hereunder.
3.05. Payments.
--------
(a) Reimbursement of Issuing Banks. The Borrower agrees (i) to
------------------------------
reimburse each Issuing Bank, forthwith upon its demand, by making payment to the
Administrative Agent for the account of such Issuing Bank in accordance with
Section 2.10, on the date and in the amount of each payment made by such Issuing
Bank under any Letter of Credit, without notice, protest or demand, all of which
are expressly waived, and a cause of action therefor shall immediately accrue,
and (ii) to pay to the Administrative Agent for the account of such Issuing Bank
interest on any Letter of Credit Unreimbursed Draw for each day from the date of
such payment until demand at a fluctuating rate per annum equal to the then
current Base Rate Option applicable to Revolving Credit Loans and from the date
of demand until reimbursement in full thereof (before and after judgment) at a
fluctuating rate per annum equal to 2% above the then current Base Rate Option
applicable to Revolving Credit Loans, in each case such interest to change
automatically from time to time effective as of the effective date of each
change in the Base Rate.
(b) Agreement of Banks. In the event that an Issuing Bank makes a
------------------
payment under any Letter of Credit and is not reimbursed in full therefor
forthwith upon demand of such Issuing Bank (or if any reimbursed amount is
required to be returned by such Issuing Bank), such Issuing Bank shall promptly
notify the Administrative Agent thereof (which notice may be by telephone), and
the Administrative Agent shall forthwith notify each Bank (which notice may be
by telephone promptly confirmed in writing) thereof. No later than the
Administrative Agent's close of business at its Office on the date such notice
is given, each such Bank will pay to the Administrative Agent, for the account
of such Issuing Bank, in immediately available funds, an amount equal to such
Bank's Pro Rata share of the respective Letter of Credit Unreimbursed Draw. If
and to the extent that any Bank fails to make such payment to the Administrative
Agent for the account of such Issuing Bank on such date, such Bank shall pay
such amount, on demand, together with interest, for such Issuing Bank's account,
for each day from and including the date of such Issuing Bank's payment to
-63-
and including the date of payment to such Issuing Bank (before and after
judgment) at the following rates per annum: (i) for each day from and including
the date of such payment by such Issuing Bank to and including the second
Business Day thereafter, at the Federal Funds Effective Rate for such day, and
(ii) for each day thereafter, at the rate applicable to Letter of Credit
Unreimbursed Draws under Section 3.05(a) for such day.
(c) Receipt of Payment. Whenever, at any time, after an Issuing Bank
------------------
has made payment under a Letter of Credit and has received from any Bank such
Bank's Pro Rata share of the Letter of Credit Unreimbursed Draw with respect
thereto, such Issuing Bank receives any payment or makes any application of
funds on account of such Letter of Credit Unreimbursed Draw, such Issuing Bank
will pay to the Administrative Agent, for the account of such Bank, such Bank's
Pro Rata share of such payment or application.
(d) Rescission. If any amount received by an Issuing Bank on account
----------
of any Letter of Credit Reimbursement Obligation shall be avoided, rescinded or
otherwise returned or paid over by such Issuing Bank for any reason at any time,
whether before or after the termination of this Agreement (or such Issuing Bank
believes in good faith that such avoidance, rescission, return or payment is
required, whether or not such matter has been adjudicated), each Bank will,
promptly upon notice from the Administrative Agent or such Issuing Bank, pay
over to the Administrative Agent, for the account of such Issuing Bank, such
Bank's Pro Rata share of such amount (to the extent such amount was therefore
paid to such Bank hereunder), together with its Pro Rata share of any interest
or penalties payable with respect thereto.
(e) Equalization. If any Bank receives any payment or makes any
------------
application on account of its Letter of Credit Participating Interest in a
Letter of Credit, such Bank shall forthwith pay over to the Issuing Bank of such
Letter of Credit in Dollars and in like kind of funds received or applied by it
the amount in excess of such Bank's ratable share of the amount so received or
applied.
3.06. Further Assurances.
------------------
The Borrower hereby agrees from time to time to do and perform any and
all acts and to execute any and all other or further instruments reasonably
requested by each Issuing Bank more fully to effect the purposes of this
Agreement and the issuance of the Letters of Credit hereunder.
3.07. Obligations Absolute.
--------------------
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The payment obligations of the Borrower under Section 3.05 shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including the following
circumstances:
(a) any lack of validity or enforceability of this Agreement, any
Letter of Credit, any other Related Document or any other documents,
instruments or agreements evidencing or otherwise relating to any
obligation of the Borrower secured or supported by any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which
the Borrower or any other person may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons for
whom any such beneficiary or any such transferee may be acting), the
Issuing Bank of such Letter of Credit or any other Bank Party, or any other
person, whether in connection with this Agreement, the transactions
contemplated hereby or any unrelated transaction;
(c) any draft, certificate, statement or other document presented
under any 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;
(d) payment by an Issuing Bank under any Letter of Credit issued by
such Issuing Bank against presentation of a draft or certificate which does
not comply with the terms of such Letter of Credit, or payment by an
Issuing Bank under any Letter of Credit issued by such Issuing Bank in any
other circumstances in which any condition to payment is not met, except
payment resulting solely from the gross negligence or willful misconduct of
any such Issuing Bank, as finally determined by a court of competent
jurisdiction; or
(e) any other event, condition, circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
3.08. Certain Provisions Relating to the Issuing Banks;
Additional Provisions Regarding Letters of Credit.
-------------------------------------------------
(a) General. The Issuing Banks shall have no duties or
-------
responsibilities except those expressly set forth in this Agreement and the
Related Documents, and no implied duties or responsibilities on the part of any
Issuing Bank shall be read into this Agreement or any Related Document or shall
otherwise exist. The duties and responsibilities of the Issuing Banks to the
other Bank Parties under this Agreement and the Related Documents shall be
mechanical and administrative in nature, and the Issuing Banks shall not have a
fiduciary relationship in respect of any Bank Party or any other person. No
Issuing Bank shall be
-65-
liable for any action taken or omitted to be taken by it under or in connection
with this Agreement or any Related Document, unless caused by its own gross
negligence or willful misconduct, as finally determined by a court of competent
jurisdiction. No Issuing Bank shall be under any obligation to ascertain,
inquire or give any notice relating to (i) the performance or observance of any
of the terms or conditions of this Agreement or any Related Document, (ii) the
business, operations, condition (financial or otherwise) or prospects of the
Borrower or any other person, or (iii) the existence of any Event of Default or
Potential Default. No Issuing Bank shall be under any obligation, either
initially or on a continuing basis, to provide any person with any notices,
reports or information of any nature, whether in its possession presently or
hereafter, except for such notices, reports and other information as expressly
required by this Agreement to be so furnished.
(b) Administration. The Issuing Banks may rely upon any notice or
--------------
other communication of any nature (written or oral, whether or not such notice
or other communication is made in a manner permitted or required by this
Agreement or any Related Document) purportedly made by or on behalf of the
proper party or parties, and no Issuing Bank shall have any duty to verify the
identity or authority of any person giving such notice or other communication.
An Issuing Bank may consult with legal counsel (including in-house counsel for
any such Issuing Bank or in-house or other counsel for the Borrower),
independent public accountants and any other experts selected by it from time to
time, and any such Issuing Bank shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts. Whenever an Issuing Bank shall deem it
necessary or desirable that a matter be proved or established with respect to
the Borrower or any other Bank Party, such matter may be established by a
certificate of the Borrower or such other Bank Party, as the case may be, and
such Issuing Bank may be conclusively rely upon such certificate.
(c) Indemnification of Issuing Bank. The Borrower hereby indemnifies
-------------------------------
and holds each Issuing Bank harmless from and against any and all claims,
damages, losses, liabilities, costs, expenses, actions, judgments and suits of
any kind or nature whatsoever (including reasonable attorneys' fees and
expenses) (collectively "Claims") that may at any time be imposed on, incurred
by or asserted against such Issuing Bank in its capacity as such as a result of,
or arising out of, or in any way relating to or by reason of or in connection
with this Agreement or any Related Document, any transaction contemplated hereby
or thereby, or any transaction secured or financed, in whole or in part,
directly or indirectly, with any Letter of Credit or the proceeds thereof,
except to the extent, but only to the extent, any such Claims are caused by such
Issuing Bank's gross negligence or willful misconduct, as finally determined by
a court of competent jurisdiction. Each Bank agrees to reimburse and indemnify
each Issuing Bank for and against any and all Claims required to be reimbursed
by the Borrower pursuant to the immediately preceding sentence but not so
reimbursed.
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3.09. Cash Collateral for Letters of Credit.
-------------------------------------
(a) Letter of Credit Collateral Account. If required, the Collateral
-----------------------------------
Agent shall maintain in its own name at its Office a deposit account (the
"Letter of Credit Collateral Account"), which shall bear interest (added to the
deposit balance) in accordance with the Collateral Agent's ordinary practices
for deposit accounts of like size and nature, over which the Collateral Agent
shall have sole dominion and control, and the Borrower shall have no right to
withdraw any funds deposited therein. The Collateral Agent shall deposit into
the Letter of Credit Collateral Account such funds as this Agreement or any
Related Document requires to be paid therein. As security for the payment of
all Obligations, the Borrower hereby grants, conveys, assigns, pledges,
transfers to the Collateral Agent, and creates in the Collateral Agent's favor,
a continuing Lien on and security interest in, the Letter of Credit Collateral
Account, all amounts from time to time on deposit therein, all proceeds of the
conversion, voluntary or involuntary, thereof into cash, instruments, securities
or other property, and all other proceeds thereof. The Borrower hereby
represents, warrants, covenants and agrees that such Lien shall at all times be
valid and perfected, prior to all other Liens, and the Borrower shall take or
cause to be taken all such actions and execute and deliver all such instruments
and documents as may be necessary or, in the Collateral Agent's reasonable
judgment, desirable to perfect or protect such Lien. The Borrower shall not
create or suffer to exist any Lien on any amount or investment held in the
Letter of Credit Collateral Account other than the Lien in favor of the
Collateral Agent granted under this Section.
(b) Cash Collateral for Letter of Credit Exposure in Certain
--------------------------------------------------------
Circumstances. To the extent that this Agreement or any Related Document
-------------
requires a payment, prepayment or other application of funds to be made with
respect to the Revolving Credit Loans or Swingline Loans, such provision shall
be construed as follows: after payment in full by the Borrower of the
outstanding Swingline Loans, the outstanding Revolving Credit Loans, and the
outstanding Letter of Credit Unreimbursed Draws, then, to the extent of the
excess, if any, of the aggregate Letter of Credit Exposure at such time over the
balance in the Letter of Credit Collateral Account, an amount equal to
the remainder of the amount so required to be paid by the Borrower shall
immediately be paid by the Borrower to the Collateral Agent for deposit in the
Letter of Credit Collateral Account. In addition, the Borrower agrees that,
without limitation of the foregoing or of any other provisions of this Agreement
or the Related Documents requiring collateral for the Letters of Credit or other
Obligations in whole or in part, and without limitation of other rights or
remedies under this Agreement or the Related Documents or at law or in equity,
if all the Revolving Credit Loans become due and payable pursuant to Section
8.02 hereof, the Borrower shall immediately pay to the Collateral Agent, for
deposit in the Letter of Credit Collateral Account, an amount equal to
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the excess, if any, of the aggregate Letter of Credit Exposure at such time over
the balance in the Letter of Credit Collateral Account.
(c) Application of Funds. The Collateral Agent shall apply funds in
--------------------
the Letter of Credit Collateral Account: (i) on account of Letter of Credit
Reimbursement Obligations as and when the same become due and payable if and to
the extent that the Borrower fails directly to pay the same, and (ii) if no
Letter of Credit Reimbursement Obligations are due and payable, no Letters of
Credit are outstanding and the balance of the Letter of Credit Collateral
Account exceeds the aggregate Letter of Credit Exposure, the excess shall be
applied on account of the other Obligations. If all Obligations (other than
Obligations constituting contingent obligations under indemnification provisions
which survive indefinitely, so long as no unsatisfied claim has been made under
any such indemnification provision) have been indefeasibly paid in full in cash,
all Commitments have terminated and all Letters of Credit have expired, promptly
following demand by the Borrower, the Collateral Agent shall release to the
Borrower all remaining funds in the Letter of Credit Collateral Account.
(d) Survival of Provisions. The provisions of this Section 3.09 shall
----------------------
continue in full force and effect from and after the date hereof until the
obligation of each Issuing Bank to issue Letters of Credit has expired or has
been terminated, all Letters of Credit have expired or have been terminated and
all Letter of Credit Reimbursement Obligations have been indefeasibly paid in
full in cash.
3.10. Certain Letters of Credit Outstanding as of Closing Date.
--------------------------------------------------------
Notwithstanding anything to the contrary set forth herein, the Borrower
shall be deemed to have requested the Standby and Trade LC Issuing Bank to issue
on the Closing Date, and the Standby and Trade LC Issuing Bank shall be deemed
to have issued on such date, the letters of credit set forth on Schedule 3.10,
without further action on the part of the Borrower or the Standby and Trade LC
Issuing Bank (and, without limitation of the foregoing, the Borrower shall not
be required to pay any commission pursuant to Section 3.02(a) or any issuance
fee pursuant to Section 3.02(b) in connection with any such deemed issuance).
From and after such deemed issuance, all such letters of credit shall be deemed
to be Standby or Trade Letters of Credit issued and outstanding hereunder for
all purposes hereof.
3.11. The Swingline Subfacility.
-------------------------
(a) General. Subject to the terms and conditions of this Agreement,
-------
and relying upon the representations and warranties herein set forth and the
upon the agreements
-68-
of the Banks set forth in Section 3.13 hereof, the Swingline Bank may in its
discretion make loans (the "Swingline Loans") to the Borrower at any time or
from time to time on or after the date hereof and to but not including the
Revolving Credit Expiration Date. The Swingline Bank shall not make any
Swingline Loan to the extent that the aggregate amount of Swingline Loans
outstanding would exceed $10,000,000 (the "Swingline Subfacility Amount"). The
Swingline Bank shall not make any Swingline Loan to the extent that the
aggregate amount of Swingline Loans outstanding would exceed the Swingline
Current Availability most recently notified to it, as more fully provided in
Section 3.12(a) hereof.
(b) Nature of Credit. Within the limits of time and amount set forth
----------------
in this Section 3.11, and subject to the provisions of this Agreement, and so
long as the Swingline Bank is willing in its discretion to make Swingline Loans,
the Borrower may borrow, repay and reborrow Swingline Loans hereunder.
(c) Swingline Note. The obligation of the Borrower to repay the
--------------
unpaid, principal amount of the Swingline Loans made to it by the Swingline Bank
and to pay interest thereon shall be evidenced in part by a promissory note of
the Borrower to the Swingline Bank, dated the Closing Date (the "Swingline
Note") in substantially the form attached hereto as Exhibit B, with the blanks
appropriately filled, payable to the order of the Swingline Bank in a face
amount equal to the Swingline Subfacility Amount.
(d) Maturity. To the extent not due and payable earlier, the
--------
Swingline Loans shall be due and payable on the Revolving Credit Expiration
Date.
(e) Making of Swingline Loans, etc. The Borrower may request
------------------------------
Swingline Loans to be made in accordance with the provisions of Section 2.04
hereof, except that (x) the Administrative Agent need not notify other Banks of
such request, and (y) Swingline Loans may be requested and made in any amount of
not less than $250,000 (subject to the overall limits of amount set forth in
this Section 3.11).
(f) Repayment of Swingline Loans, etc. Without limitation of any
---------------------------------
other provision hereof, the Swingline Bank may in its discretion and with prior
notice to the Borrower elect to apply to repayment of Swingline Loans any
amounts on deposit from time to time in accounts maintained with it by or for
the benefit of the Borrower. The Borrower may, in the alternative, prepay
Swingline Loans in accordance with the provisions of Section 2.08 hereof, except
that the Borrower need give notice only to the Administrative Agent and the
Swingline Bank and the Administrative Agent need not notify other Banks of such
request.
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3.12. Limitations on the Making of Swingline Loans.
--------------------------------------------
(a) Swingline Current Availability. The Administrative Agent shall
------------------------------
calculate the Swingline Current Availability each time there is a change in the
aggregate outstanding principal amount of the Revolving Credit Loans, the
aggregate Letter of Credit Exposure or the Revolving Credit Committed Amounts.
The "Swingline Current Availability" at any time shall be equal to the lesser of
(i) the Swingline Subfacility Amount, or
(ii) the amount equal to (A) the sum of the Revolving Credit
Committed Amounts of the Banks at such time, minus (B) the sum of the
aggregate principal amount of Revolving Credit Loans and the aggregate
Letter of Credit Exposure at such time.
Each time the Swingline Current Availability changes, the Administrative Agent
shall promptly notify the Swingline Bank (by telephone promptly confirmed in
writing) of such fact, stating the new Swingline Current Availability. From and
after the second Business Day after receiving such notice from the
Administrative Agent, the Swingline Bank shall not make any Swingline Loan to
the extent that the aggregate principal amount of Swingline Loans would exceed
the Swingline Current Availability so notified to the Swingline Bank.
(b) Rights of the Parties. As between the Borrower, on the one hand,
---------------------
and the Swingline Bank and the other Bank Parties, on the other hand, the making
of any Swingline Loan is within the discretion of the Swingline Bank. As
between the Swingline Bank, on the one hand, and the other Bank Parties, on the
other hand, the Swingline Bank shall not make any Swingline Loan outside the
limitations of time and amount set forth in Section 3.11 hereof, and shall not
make any Swingline Loan if the Swingline Bank shall have received, at least two
Business Days before making such Swingline Loan, from the Required Banks an
unrevoked written notice that any condition precedent set forth in Section 5.02
will not be satisfied and expressly requesting that the Swingline Bank cease to
make Swingline Loans. Absent such notice, the Swingline Bank shall be justified
and fully protected, as against the Administrative Agent and the Banks, in
making Swingline Loans, notwithstanding any knowledge of an Event of Default or
Potential Default, any knowledge of failure of any condition specified in
Section 5.02 hereof to be satisfied, any other knowledge of the Swingline Bank,
or any other event, condition or circumstance whatever.
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3.13. Swingline Loan Participating Interests.
--------------------------------------
(a) Generally. At the discretion of the Swingline Bank at any time,
---------
on one Business Day's notice to each Bank, the Swingline Bank may require each
other Bank to purchase, acquire, accept and assume from the Swingline Bank,
without recourse to, or representation or warranty by, the Swingline Bank, an
undivided interest, in a proportion equal to such Bank's Pro Rata share, in all
of the Swingline Bank's rights and obligations in, to or under the outstanding
Swingline Loans, together with accrued and unpaid interest thereon, and all
collateral, guarantees and other rights from time to time directly or indirectly
securing the foregoing (such interest of each Bank being referred to herein as a
"Swingline Loan Participating Interest"). On the date that any Purchasing Bank
becomes a party to this Agreement in accordance with Section 10.12 hereof,
Swingline Loan Participating Interests in any outstanding Swingline Loans held
by the Bank from which such Purchasing Bank acquired its interest hereunder
shall be proportionately reallotted between such Purchasing Bank and such
transferor Bank.
(b) Obligations Absolute. Notwithstanding any other provision hereof,
--------------------
each Bank hereby agrees that its obligation to participate in each Swingline
Loan issued in accordance herewith, and its obligation to make the payments
specified in Section 3.05 hereof, are each absolute, irrevocable and
unconditional and shall not be affected by any event, condition or circumstance
whatever. The failure of any Bank to make any such payment shall not relieve
any other Bank of its funding obligation hereunder on the date due, but no Bank
shall be responsible for the failure of any other Bank to meet its funding
obligations hereunder.
(c) Payment by Banks on Account of Swingline Loans. If the Swingline
----------------------------------------------
Bank desires to sell Swingline Loan Participants Interests to the Banks, the
Swingline Bank will promptly notify the Administrative Agent thereof (which
notice may be by telephone), and the Administrative Agent shall forthwith notify
each Bank (which notice may be by telephone promptly confirmed in writing)
thereof. No later than the Administrative Agent's close of business on the date
such notice is given by the Administrative Agent, each such Bank will pay to the
Administrative Agent, for the account of the Swingline Bank, in immediately
available funds, an amount equal to such Bank's Pro Rata share of the
outstanding principal amount of the Swingline Loans and accrued and unpaid
interest thereon. If and to the extent that any Bank fails to make such payment
to the Swingline Bank on such date, such Bank shall pay such amount on demand,
together with interest, for the Swingline Bank's own account, for each day from
and including the date of the Swingline Bank's payment to and including the date
of repayment to the Swingline Bank (before and after judgment) at the following
rates per annum: (x) for each day from and including the date of such payment
by the Swingline Bank to and including the second Business Day thereafter, at
the Federal
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Funds Effective Rate for such day, and (y) for each day thereafter, at the rate
applicable to the Swingline Loans for such day.
(d) Distributions to Participants. If, at any time, after the
-----------------------------
Swingline Bank has made a Swingline Loan and has received from any Bank such
Bank's share of such Swingline Loan, and the Swingline Bank receives any payment
or makes any application of funds on account of such Swingline Loan, the
Swingline Bank will pay to the Administrative Agent, for the account of such
Bank, such Bank's Pro Rata share of such payment.
(e) Rescission. If any amount received by the Swingline Bank on
----------
account of any Swingline Loan or interest thereon shall be avoided, rescinded or
otherwise returned or paid over by the Swingline Bank for any reason at any
time, whether before or after the termination of this Agreement (or the
Swingline Bank believes in good faith that such avoidance, rescission, return or
payment is required, whether or not such matter has been adjudicated), each such
Bank will, promptly upon notice from the Administrative Agent or the Swingline
Bank, pay over to the Administrative Agent for the account of the Swingline Bank
its Pro Rata share of such amount, together with its Pro Rata share of any
interest or penalties payable with respect thereto.
(f) Equalization. If any Bank receives any payment or makes any
------------
application on account of its Swingline Loan Participating Interest, such Bank
shall forthwith pay over to the Swingline Bank in Dollars and in like kind of
funds received or applied by it the amount in excess of such Bank's ratable
share of the amount so received or applied.
3.14. Certain Provisions Relating to the Swingline Bank.
-------------------------------------------------
(a) General. The Swingline Bank shall have no duties or
-------
responsibilities except those expressly set forth in this Agreement and the
Related Documents, and no implied duties or responsibilities on the part of the
Swingline Bank shall be read into this Agreement or any Related Document or
shall otherwise exist. The duties and responsibilities of the Swingline Bank to
the other Bank Parties under this Agreement and the Related Documents shall be
mechanical and administrative in nature, and the Swingline Bank shall not have a
fiduciary relationship in respect of any Bank Party or any other person. The
Swingline Bank shall not be liable for any action taken or omitted to be taken
by it under or in connection with this Agreement or any Related Document, unless
caused by its own gross negligence or willful misconduct, as finally determined
by a court of competent jurisdiction. The Swingline Bank shall not be under any
obligation to ascertain, inquire or give any notice relating to (i) the
performance or observance of any of the terms or conditions of this Agreement or
any Related Document, (ii) the business, operations, condition (financial or
otherwise) or prospects of the Borrower or any other person, or (iii) the
existence of any Event of Default or Potential Default. The Swingline Bank
shall not be under any
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obligation, either initially or on a continuing basis, to provide any person
with any notices, reports or information of any nature, whether in its
possession presently or hereafter, except for such notices, reports and other
information expressly required by this Agreement to be so furnished.
(b) Administration. The Swingline Bank may rely upon any notice or
--------------
other communication of any nature (written or oral, whether or not such notice
or other communication is made in a manner permitted or required by this
Agreement or any Related Document) purportedly made by or on behalf of the
proper party or parties, and the Swingline Bank shall not have any duty to
verify the identity or authority of any person giving such notice or other
communication. The Swingline Bank may consult with legal counsel (including
in-house counsel for the Swingline Bank or in-house or other counsel, for the
Borrower), independent public accountants and any other experts selected by it
from time to time, and the Swingline Bank shall not be liable for any action
taken or omitted to be taken in good faith in accordance with the advice of such
counsel, accountants or experts. Whenever the Swingline Bank shall deem it
necessary or desirable that a matter be proved or established with respect to
the Borrower or any Bank Party, such matter may be established by a certificate
of the Borrower or such other Bank Party, as the case may be, and the Swingline
Bank may conclusively rely upon such certificate.
(c) Indemnification of Swingline Bank. The Borrower hereby
---------------------------------
indemnifies and holds the Swingline Bank harmless from and against any and all
claims, damages, losses, liabilities, expenses, actions, judgments and suits of
any kind or nature whatsoever (including reasonable attorneys' fees and
expenses) ("Swingline Bank Claims") that may at any time be imposed on, incurred
by or asserted against the Swingline Bank in its capacity as such as a result
of, or arising out of, or in any way relating to or by reason of, this
Agreement, any Related Document, any transaction contemplated hereby or thereby,
or any transaction financed, in whole or in part, directly or indirectly, with
the proceeds of any Swingline Loan, except to the extent, but only to the
extent, any such Swingline Bank Claims are caused by the Swingline Bank's gross
negligence or willful misconduct, as finally determined by a court of competent
jurisdiction. Each Bank agrees to reimburse and indemnify the Swingline Bank
for and against any and all Swingline Bank Claims required to be reimbursed by
the Borrower pursuant to the immediately preceding sentence but not so
reimbursed.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower hereby represents and warrants to the Bank Parties that:
-73-
4.01. Organization and Qualification.
------------------------------
The Borrower, the Borrower's Subsidiaries, KAP and KAP's Subsidiaries
(other than the Unrestricted Subsidiaries) are each corporations duly organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation. The Borrower, the Borrower's Subsidiaries, KAP
and KAP's Subsidiaries (other than the Unrestricted Subsidiaries) each has
corporate power and authority to own or lease its property and to transact the
business in which it is engaged or presently proposes to engage. Except as set
forth on Schedule 4.01, the Borrower, the Borrower's Subsidiaries, KAP and KAP's
Subsidiaries (other than the Unrestricted Subsidiaries) are each duly qualified
to do business as a foreign corporation and in good standing in all
jurisdictions in which the ownership of their respective properties or the
nature of their respective activities or both makes such qualification
necessary, except to the extent that any failure to be so qualified does not
have or would not reasonably be expected to have, a Material Adverse Effect.
Schedule 4.01 states as of the date hereof the jurisdictions of incorporation of
the Borrower, each of the Borrower's Subsidiaries, KAP and each of KAP's
Subsidiaries (other than the Unrestricted Subsidiaries) and the jurisdictions in
which the Borrower, each of the Borrower's Subsidiaries, KAP and each of KAP's
Subsidiaries (other than the Unrestricted Subsidiaries) are each qualified to do
business as a foreign corporation.
4.02. Authority and Authorization.
---------------------------
The Borrower has full corporate power and authority to execute and
deliver this Agreement and the Related Documents to which it is a party, to make
the borrowings provided for herein and to perform its obligations hereunder and
thereunder, and all such action has been duly and validly authorized by all
necessary corporate proceedings on its part. Each Guarantor has full corporate
power and authority to execute and deliver the Related Documents to which it is
a party and to perform its obligations hereunder and thereunder, and all such
action has been duly and validly authorized by all necessary corporate
proceedings on its part.
4.03. Execution and Binding Effect.
----------------------------
This Agreement and the Related Documents to which the Borrower is a
party have been duly and validly executed and delivered by the Borrower and
constitute, and each other Related Document to which the Borrower hereafter may
be a party, when executed and delivered by the Borrower, will constitute, legal,
valid and binding obligations of the Borrower enforceable in accordance with the
terms hereof and thereof, except, in each case, as may be limited by bankruptcy,
insolvency or other similar laws of general application
-74-
affecting the enforcement of creditors' rights or by general principles of
equity limiting the availability of equitable remedies. The Related Documents to
which each Guarantor is a party have been duly and validly executed and
delivered by such Guarantor and constitute, and each other Related Document to
which any Guarantor hereafter may be a party, when executed and delivered by
such Guarantor, will constitute, legal, valid and binding obligations of such
Guarantor enforceable in accordance with the terms hereof and thereof, except,
in each case, as may be limited by bankruptcy, insolvency or other similar laws
of general application affecting the enforcement of creditors' rights or by
general principles of equity limiting the availability of equitable remedies.
4.04. Authorizations and Filings.
--------------------------
Except as set forth on Schedule 4.04, as of the date hereof, no
authorization, consent, approval, license, exemption, authorization or
validation or other action by, and no registration, qualification, designation,
declaration, recording or filing with, any Official Body by the Borrower, the
Borrower's Subsidiaries, KAP or KAP's Subsidiaries (other than the Unrestricted
Subsidiaries) (collectively, "Official Authorizations") is or will be necessary
or advisable in connection with execution and delivery of this Agreement, the
Related Documents, consummation of the Transaction or the transactions herein or
therein contemplated, performance of or compliance with the terms and conditions
hereof or thereof or to ensure the legality, validity, enforceability or
admissibility in evidence hereof or thereof. Each Official Authorization
referred to on Schedule 4.04 has been duly obtained or made, as the case may be,
and is in full force and effect or, if so specified on Schedule 4.04, will be
either (a) obtained or made prior to, and will be in full force and effect on,
the Closing Date or (b) obtained or made as promptly as practicable following
the Closing Date. There is no action, suit, proceeding or investigation pending
or (to the Borrower's knowledge after due inquiry) threatened which seeks or may
result in the reversal, rescission, termination, modification or suspension of
any such Official Authorization.
4.05. Absence of Conflicts.
--------------------
Except as set forth on Schedule 4.05, neither the execution and
delivery of this Agreement or the Related Documents nor consummation of the
transactions herein or therein contemplated nor performance of or compliance
with the terms and conditions hereof or thereof will (a) violate or conflict
with any Law, (b) violate or conflict with or result in a breach of or a default
under (i) the articles of incorporation or bylaws (or other comparable
organizational documents) of the Borrower, any of the Borrower's Subsidiaries,
KAP or any of KAP's Subsidiaries (other than the Unrestricted Subsidiaries) or
(ii) any agreement or instrument to which the Borrower, any of the Borrower's
Subsidiaries, KAP or any of KAP's Subsidiaries (other than the Unrestricted
Subsidiaries) is a party or by which any of them or any of their respective
properties may be subject or bound, the consequences of which has,
-75-
or would reasonably be expected to have, a Material Adverse Effect, or to result
in any liability of any Bank Party, or (c) result in the creation or imposition
of any Lien upon any property of the Borrower, any of the Borrower's
Subsidiaries, KAP or any of KAP's Subsidiaries (other than the Unrestricted
Subsidiaries), except for any Lien created by or pursuant to the Security
Documents.
4.06. Financial Statements.
--------------------
(a) The Borrower has heretofore furnished or caused to be furnished to
the Banks audited financial statements of the Borrower and its Consolidated
Subsidiaries and of KAP and its Consolidated Subsidiaries (including the
Unrestricted Subsidiaries) for each of the three years in the period ended
December 31, 1996, and unaudited financial statements of the Borrower and its
Consolidated Subsidiaries and of KAP and its Consolidated Subsidiaries
(including the Unrestricted Subsidiaries) for the fiscal quarters ending March
31, 1997, June 30, 1997 and September 30, 1997, in each case including balance
sheets and the related statements of income. The Borrower has also heretofore
furnished or caused to be furnished to the Banks unaudited interim combined
(where available, and where not, uncombined) consolidated and consolidating
financial statements of the Borrower and KAP for each fiscal month and quarterly
period ended subsequent to June 30, 1997 as to which such financial statements
are available. Such financial statements present fairly the financial condition
of Borrower and its Consolidated Subsidiaries and KAP and its Consolidated
Subsidiaries (including the Unrestricted Subsidiaries) as of the end of such
periods and the results of its operations for such periods, all in conformity
with GAAP (or in the case of KAP and its Consolidated Subsidiaries (including
the Unrestricted Subsidiaries), in conformity with Australian generally accepted
accounting principals in effect at the date of this Agreement consistently
applied). Except as disclosed in the financial statements referred to herein or
on Schedule 4.06, as of the date hereof, both before and after giving effect to
the Transaction, none of the Borrower, its Subsidiaries, KAP or its Subsidiaries
has any contingent liabilities (including liabilities for taxes), unusual
forward or long-term commitments or unrealized or anticipated losses from
unfavorable commitments which have, or would reasonably be expected to have, a
Material Adverse Effect.
(b) The Borrower has also furnished to the Banks a pro forma
consolidated balance sheet as of September 30, 1997 of the Borrower and its
Consolidated Subsidiaries (including KAP and its Consolidated Subsidiaries)
giving effect to the Transaction. Such pro forma balance sheet presents fairly
the financial condition of the Borrower and its Consolidated Subsidiaries
(including KAP and its Consolidated Subsidiaries) on a pro forma basis and were
prepared in accordance with GAAP to the extent such principles can be applied on
a pro forma basis.
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(c) The Borrower has also furnished to the Banks projected financial
statements for the Borrower and its Consolidated Subsidiaries (including KAP and
its Consolidated Subsidiaries) for each of the seven fiscal years following the
Closing Date, demonstrating the projected consolidated financial condition,
results of operations and cash flows of the Borrower and its Consolidated
Subsidiaries (including KAP and its Consolidated Subsidiaries) for such periods,
after giving effect to the Transaction. Such projections are accompanied by a
written statement of the assumptions and estimates underlying such projections.
Such projections, assumptions and estimates were made on a reasonable basis and
in good faith, and nothing has come to the attention of the Borrower which would
lead either to believe that such projections will not be attained or exceeded.
4.07. No Event of Default; Compliance with Instruments.
------------------------------------------------
No event has occurred and is continuing and no condition exists which
constitutes an Event of Default or Potential Default. Except as set forth on
Schedule 4.07, none of the Borrower, any of the Borrower's Subsidiaries, KAP or
any of KAP's Subsidiaries is in violation of (a) its articles of incorporation
or bylaws (or other comparable constituent documents) or (b) any agreement or
instrument to which it is a party or by which it or any of its respective
properties may be subject or bound, the consequences of which has, or would
reasonably be expected to have, a Material Adverse Effect.
4.08. Litigation.
----------
Except as set forth in the financial statements referred to in Section
4.06 or as set forth on Schedule 4.08, there is no pending or (to the Borrower's
knowledge after due inquiry) threatened proceeding by or before any Official
Body against or affecting the Borrower, any of the Borrower's Subsidiaries, KAP
or any of KAP's Subsidiaries (a) seeking to challenge, prevent or declare
illegal any of the transactions contemplated by the Transaction, this Agreement
or the Related Documents, or (b) as to which there is a reasonable probability
of it being adversely decided and, if adversely decided, which would reasonably
be expected to have a Material Adverse Effect.
4.09. Subsidiaries.
------------
Schedule 4.09 sets forth, upon the consummation of the Transaction, the
authorized capitalization of the Borrower and each of its Subsidiaries, the
number of shares of each class of capital stock of each thereof issued and
outstanding and the number and percentage of outstanding shares of each such
class of capital stock owned by the Borrower or any of its Subsidiaries. Upon
consummation of the Transaction the outstanding shares of the Borrower and each
of its Subsidiaries (other than the Unrestricted Subsidiaries) will have been
duly authorized and validly issued and are fully paid and nonassessable. Upon
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consummation of the Transaction, the Borrower and its Subsidiaries (other than
the Unrestricted Subsidiaries) each will own beneficially and of record and have
good title to all the shares each is listed as owning on Schedule 4.09, free and
clear of any Lien. Except as set forth on Schedule 4.09, upon consummation of
the Transaction, there will be no options, warrants, calls, subscriptions,
conversion rights, exchange rights, preemptive rights or other rights,
agreements or arrangements (contingent or other) which may in any circumstances
now or hereafter obligate the Borrower or any of its Subsidiaries (other than
the Unrestricted Subsidiaries) to issue any shares of its capital stock or any
other securities. Upon consummation of the Transaction, the Borrower will have
no Significant Subsidiaries other than KAP and none of the Unrestricted
Subsidiaries (other than Koppers ▇▇▇▇▇▇▇ and its Subsidiaries, collectively)
will be Significant Subsidiaries with respect to KAP.
4.10. Pension-Related Matters.
-----------------------
A copy of the most recent Annual Report (5500 Series Form) including
all attachments thereto filed with the Internal Revenue Service has been made
available to the Banks for each Plan and fairly presents the funding status of
each Plan. There has been no material deterioration in any Plan's funding
status since the date of such Annual Report. Schedule 4.10 sets forth as of the
date hereof a list of (a) all Australian superannuation plans to which KAP or
any of its Consolidated Subsidiaries is a party and (b) all Plans and
Multiemployer Plans and all available information with respect to the Borrower's
or any Controlled Group Member's direct, indirect or potential withdrawal
liability to any Multiemployer Plan. Except as set forth on Schedule 4.10, the
Borrower has no liability in excess of $750,000 (contingent or otherwise) for,
and none of Borrower's property or assets are encumbered in connection with, (a)
failure to meet the minimum funding requirements under ERISA or the Code with
respect to a Plan (including joint and several liability with Controlled Group
Member for the minimum funding requirement and the excise tax for failure to
meet such requirement, any lien for contributions with respect to a Plan which
are due and unpaid by the Borrower or a Controlled Group Member, and any
security posted by the Borrower to obtain a waiver of the minimum funding
requirement), (b) any amendment to a Plan described in Code Section 401(a)(29)
or ERISA Section 307, (c) any PBGC premiums in excess of $250,000 with respect
to a Plan which are due and unpaid by the Borrower or a Controlled Group Member,
(d) the termination of a Plan or withdrawal by the Borrower or a Controlled
Group Member from any Multiemployer Plan or (e) any underfunding of any
Australian employee benefit plan.
4.11. Title to Property.
-----------------
Schedule 4.11 sets forth a description of all real property owned by or
leased to the Borrower, the Borrower's Subsidiaries, KAP and KAP's Subsidiaries
(other than the
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Unrestricted Subsidiaries). The Borrower, the Borrower's Subsidiaries, KAP and
KAP's Subsidiaries (other than the Unrestricted Subsidiaries) each has good and
marketable title to all real property purported to be owned by it and good and
marketable title to all other property purported to be owned by it, subject only
to Permitted Liens. Except as set forth on Schedule 4.11, all such property is
in good operating condition and repair, except to the extent that any failure to
be in such condition and repair does not have, or would not reasonably be
expected to have, a Material Adverse Effect, and the Borrower's, the Borrower's
Subsidiaries', KAP's and KAP's Subsidiaries' (other than the Unrestricted
Subsidiaries) use thereof conforms in all material respects to all Laws
applicable thereto. Except as set forth on Schedule 4.11, the Borrower, the
Borrower's Subsidiaries, KAP and KAP's Subsidiaries (other than the Unrestricted
Subsidiaries) each has full and complete right to use and possession of all
properties purported to be leased by it. Except as set forth on Schedule 4.11,
the Borrower, the Borrower's Subsidiaries, KAP and KAP's Subsidiaries (other
than the Unrestricted Subsidiaries) are each in compliance in all material
respects with all leases applicable to it.
4.12. Contracts.
---------
Except as stated on Schedule 4.12, none of the Borrower, any of the
Borrower's Subsidiaries, KAP or any of KAP's Subsidiaries (other than the
Unrestricted Subsidiaries) is a party to or is subject to any agreement or
instrument of any kind (including agreements to repay borrowed money,
guarantees, leases of real or personal property as lessor or lessee, contracts
for future purchase or delivery of goods or rendering of services, powers of
attorney, distribution arrangements, patent license agreements, collective
bargaining agreements, employment agreements, bonus, pension or retirement
plans, or vacation pay, insurance or welfare agreements) other than agreements
or instruments which are terminable at will by such person without penalty or
which do not have, or would not reasonably be expected to have, if lost, a
Material Adverse Effect. The Borrower, the Borrower's Subsidiaries, KAP and
KAP's Subsidiaries (other than the Unrestricted Subsidiaries) are each and, to
the Borrower's knowledge, all other parties to all agreements and instruments to
which any thereof is a party are, in substantial compliance with the terms
thereof, and none of the Borrower, any of the Borrower's Subsidiaries, KAP or
any of KAP's Subsidiaries (other than the Unrestricted Subsidiaries) or, to the
Borrower's knowledge, any other party, is in default thereunder (and no event
has occurred which, but for the giving of notice or the passage of time or both,
would constitute such a default) which default has, or would reasonably be
expected to have, a Material Adverse Effect.
4.13. Taxes.
-----
All tax returns required to be filed by the Borrower, the Borrower's
Subsidiaries, KAP and KAP's Subsidiaries (other than the Unrestricted
Subsidiaries) have
-79-
been properly prepared, executed and filed. All taxes, assessments, fees and
other governmental charges upon the Borrower, its Subsidiaries, KAP and KAP's
Subsidiaries (other than the Unrestricted Subsidiaries) or upon any of their
respective properties, incomes, sales or franchises which are due and payable
have been paid, except for any nonpayment permitted by Section 6.05. The
reserves and provisions for taxes on the books of the Borrower, each of the
Borrower's Subsidiaries, KAP and each of KAP's Subsidiaries for all open years
and for its current fiscal period are adequate in accordance with GAAP. None of
the Borrower, any of the Borrower's Subsidiaries, KAP or any of KAP's
Subsidiaries (other than the Unrestricted Subsidiaries) knows of any proposed
additional assessment or basis for any material assessment for additional taxes
(whether or not reserved against), except as set forth on Schedule 4.13.
4.14. Financial Accounting Practices.
------------------------------
The Borrower, the Borrower's Subsidiaries, KAP and each of KAP's
Subsidiaries each makes and keeps books, records and accounts which, in
reasonable detail, accurately and fairly reflect their respective transactions
and dispositions of their respective assets, and each maintains a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals, and appropriate action is taken with respect to any differences.
4.15. No Material Adverse Change.
--------------------------
Since September 30, 1997 there has been no material adverse change in
the business, operations, condition, financial or otherwise, or prospects of the
Borrower or the enterprise comprised of the Borrower, the Borrower's
Subsidiaries, KAP and KAP's Subsidiaries taken as a whole or the ability of any
of the foregoing to consummate the Transaction or to perform any of their
respective obligations under this Agreement or the Related Documents.
4.16. Regulation U.
------------
The Borrower shall make no use of any of the credits hereunder for the
purpose of buying or carrying any "margin stock," as such term is used in
Regulation U of the Board of Governors of the Federal Reserve System, as amended
from time to time. None of the Borrower, any of the Borrower's Subsidiaries,
KAP or any of KAP's
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Subsidiaries owns any "margin stock" or is engaged in the business of extending
credit to others for the purpose of buying or carrying any "margin stock," and
no Loan or Letter of Credit nor any proceeds of any thereof will be used for any
such purpose. Neither the making of any Loan or the issuance of any Letter of
Credit nor any use thereof or of any of the proceeds of any thereof will violate
or conflict with any of the provisions of Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System, as amended from time to time.
4.17. Compliance with Laws.
--------------------
Except as set forth on Schedule 4.17, none of the Borrower, any of the
Borrower's Subsidiaries, KAP or any of KAP's Subsidiaries (other than the
Unrestricted Subsidiaries) is in violation of, or subject to any contingent
liability on account of, any Law (including ERISA, the Code, any applicable
occupational and health, safety or welfare Law, environmental protection Law or
hazardous waste or toxic substances management, handling or disposal Law, and
including (a) any restrictions, specifications or requirements pertaining to
products that the Borrower, any of the Borrower's Subsidiaries, KAP or any of
KAP's Subsidiaries (other than the Unrestricted Subsidiaries) manufactures,
processes or sells or pertaining to the services any thereof performs, (b) the
conduct of their respective businesses, and (c) the use, maintenance or
operation of the real and personal properties owned or possessed by them),
except for violations which, in the aggregate, do not have, and would not
reasonably be expected to have, a Material Adverse Effect.
4.18. Patents, Licenses, Franchises.
-----------------------------
The Borrower, the Borrower's Subsidiaries, KAP and KAP's Subsidiaries
(other than the Unrestricted Subsidiaries) each owns or possesses or otherwise
has the right to use all the patents, inventions, technology, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and rights
with respect to the foregoing necessary to own or operate its properties or
carry on its business as presently conducted or presently planned to be
conducted without conflict with the rights of others. Schedule 4.18 sets forth
as of the date hereof all material patents, patent applications, trademarks,
service marks and applications therefor and inventions and copyrights of the
Borrower, the Borrower's Subsidiaries, KAP and KAP's Subsidiaries (other than
the Unrestricted Subsidiaries). Except as set forth on Schedule 4.18, as of the
date hereof, there are no claims of infringement or misappropriation of
proprietary rights of others pending or threatened by or against the Borrower,
any of the Borrower's Subsidiaries, KAP or any of KAP's Subsidiaries (other than
the Unrestricted Subsidiaries).
4.19. Accurate and Complete Disclosure.
--------------------------------
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No representation or warranty made by the Borrower or any Guarantor
under (or, in the case of any such representation or warranty made prior to the
date hereof, in connection with) this Agreement or the Related Documents, and no
statement made by the Borrower or any Guarantor in any financial statement
(furnished pursuant to Section 4.06 or otherwise), certificate, report, exhibit
or document furnished by or on behalf of the Borrower or any Guarantor to the
Bank Parties pursuant to (or, in the case of any statement, certificate, report,
exhibit or document furnished prior to the date hereof, in connection with) this
Agreement or the Related Documents is false or misleading in any material
respect, including by omission of material information necessary to make such
representation, warranty or statement, in light of the circumstances under which
they were made, not misleading (as of the date hereof, in the case of any
representation or warranty, statement, certificate, report, exhibit or document
made or given on or prior to the date hereof, and as of the date when made, in
the case of any representation or warranty, statement, certificate, report,
exhibit or document made or given after the date hereof). The Borrower has
disclosed to the Banks in writing every fact (other than those relating to
political, social or economic events, changes or effects of general national or
global scope) which has, or which so far as the Borrower can now foresee is
reasonably possible in the future and which will have, or would reasonably be
expected to have, a Material Adverse Effect.
4.20. Investment Company.
------------------
None of the Borrower, the Borrower's Subsidiaries, KAP or any of KAP's
Subsidiaries is an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act of 1940, as
amended.
4.21. Public Utility Holding Company.
------------------------------
None of the Borrower, the Borrower's Subsidiaries, KAP or KAP's
Subsidiaries is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of either a "holding company" or a "subsidiary
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
4.22. Proceeds.
--------
Schedule 4.22 sets forth the sources and uses of funds necessary to
consummate the Transaction. Other than the uses of funds specified on Schedule
4.22, the Borrower will use the Loans and Letters of Credit (or the proceeds of
any thereof) only as follows:
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(a) On the Closing Date, the Australian Term Loan Letter of Credit and
the Australian Revolving Loan Letter of Credit will be issued to provide
credit support for the Australian Credit Facilities;
(b) To the extent not used on the Closing Date as set forth on
Schedule 4.22, the Term Loan A Facility Term Loans may be used for a period
of up to 364 days from the date of this Agreement to repurchase Senior
Notes remaining outstanding after the Closing Date, to repurchase, at a
price of $17.00 per share, shares of common stock of the Borrower held by
certain Management Investors for an aggregate purchase price not to exceed
$15,000,000 (the "Management Stock Repurchase") and to consummate the APT
Post-Transaction Repurchase; and
(c) The Revolving Credit Loans, the Standby or Trade Letters of Credit
and the Swingline Loans (and the proceeds of any thereof) as may from time
to time be available shall be used only for the Borrower's working capital
or general corporate purposes.
4.23. Affiliated Entities.
-------------------
Schedule 4.23 sets forth as of the date hereof the name of,
jurisdiction of organization of, nature of, and the nature of the Borrower's,
each of its Subsidiaries, KAP, each of KAP's Subsidiaries and each Affiliated
Entity's interest in and liabilities to, for the acts of, or with respect to,
each Affiliated Entity.
4.24. Regulation O.
------------
No director, executive officer or principal shareholder of the Borrower
is a "director," "executive officer" or "principal shareholder," as such terms
are used in Regulation O of the Board of Governors of the Federal Reserve
System, as amended from time to time, of any Bank.
4.25. Burdensome Obligations.
----------------------
Except as set forth on Schedule 4.25, none of the Borrower, any of the
Borrower's Subsidiaries, KAP or any of KAP's Subsidiaries (other than the
Unrestricted Subsidiaries) nor any of their respective properties is subject to
or bound by any Law or, to the Borrower's knowledge after due inquiry, any
pending or threatened change of Law, or subject to any restriction under its
respective articles of incorporation or bylaws (or other comparable constituent
documents) or under any agreement or instrument to which it is a party or by
which it or any of its respective properties may be subject or bound, which is
so
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unusual and burdensome as to have, or to be reasonably likely in the
foreseeable future to have, a Material Adverse Effect.
4.26. Insurance.
---------
The Borrower, the Borrower's Subsidiaries, KAP and KAP's Subsidiaries
(other than the Unrestricted Subsidiaries) each maintains with financially sound
and reputable insurers insurance with respect to its respective properties and
businesses and against at least such liabilities, casualties and contingencies
and in at least such types and amounts as is customary in the case of
corporations engaged in the same or a similar business or having similar
properties similarly situated and otherwise in accordance with the terms of the
Security Documents. Schedule 4.26 sets forth a list of all insurance currently
maintained by the Borrower, the Borrower's Subsidiaries, KAP and KAP's
Subsidiaries (other than the Unrestricted Subsidiaries).
4.27. Delivery of the Senior Note Documents and Senior
Subordinated Note Documents.
----------------------------
The Borrower has provided or caused to be provided, in each case, to
the Banks true, correct and complete copies of the Senior Note Documents and the
Senior Subordinated Note Documents in the form executed or contemplated for
execution, as the case may be (including all exhibits, schedules and disclosure
letters, if any, delivered pursuant thereto), and all amendments thereto,
waivers relating thereto and other side letters or agreements affecting the
terms thereof. The Senior Subordinated Note Purchase Agreement has been duly
executed and delivered by the Borrower and is in full force and effect. The
representations and warranties of the Borrower contained in the Senior
Subordinated Note Purchase Agreement are true and correct in all material
respects on the date hereof as if made on and as of the date hereof, and each
Bank shall be entitled to rely on such representations and warranties with the
same force and effect as if they were set forth in this Agreement in full and
made to each Bank directly.
4.28. Security Documents.
------------------
(a) The Security Documents are effective to create in favor of the
Collateral Agent, for the benefit of the Bank Parties, a legal, valid and
enforceable security interest in all right, title and interest of the Borrower
and the Guarantors in and to the Collateral described therein. The Security
Documents constitute a fully perfected first Lien on, and security interest in,
all right, title and interest of the Borrower and the Guarantors in and to such
Collateral, subject only to Permitted Liens.
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(b) Each Mortgage and each Australian Mortgage is effective to grant
to the Collateral Agent, for the benefit of the Bank Parties, a legal, valid and
enforceable mortgage lien on and security interest in all right, title and
interest of the mortgagor thereunder in and to the Mortgaged Property or the
Australian Mortgaged Property, as the case may be, described therein. When each
Mortgage and each Australian Mortgage is duly recorded in the offices in the
jurisdictions listed on Schedule 4.28, and the recording fees and taxes
(including any necessary stamp duty) in respect thereof are paid and compliance
is otherwise had with the formal requirements of local law generally applicable
to the recording of real estate mortgages, each Mortgage and each Australian
Mortgage will constitute a fully perfected Lien on such Mortgaged Property or
Australian Mortgaged Property, as the case may be, subject only to Permitted
Liens; and each Mortgage and each Australian Mortgage also creates a legal,
valid, enforceable and perfected first Lien on all right, title and interest of
the Borrower or the Guarantors, as the case may be, in and to all personal
property which is the subject of such Mortgage or Australian Mortgage subject
only to Permitted Liens.
4.29. Solvency.
--------
On the Closing Date, both before and after giving effect to the
incurrence of all Indebtedness incurred by the Borrower and each Guarantor on
such date, (a) the sum of the respective debts and liabilities (including
contingent liabilities) of the Borrower and each Guarantor will not be greater
than all the respective assets of the Borrower and each such Guarantor at a fair
valuation, (b) the then present fair salable value of the respective assets of
the Borrower and each Guarantor will not be less than the amount required to pay
the respective probable liabilities of the Borrower and each such Guarantor on
their debts as they become absolute and matured, (c) the Borrower and each
Guarantor will not have incurred, and do not believe that they will incur, debts
or liabilities (including contingent liabilities) beyond the Borrower's or each
such Guarantor's ability to pay as such debts and liabilities mature, (d) the
Borrower and each Guarantor will not have been engaged in a business or a
transaction for which the Borrower's or each such Guarantor's property
constitutes or would constitute unreasonably small capital (as such term is used
in any Law referred to in the following clause (e)), and (e) the Borrower and
each Guarantor were not and are not otherwise insolvent as defined in, or
otherwise in a condition which could in any circumstances render any transfer,
conveyance, obligation or act made, incurred or performed by them avoidable or
fraudulent pursuant to, any Law that may be applicable to any such person
pertaining to bankruptcy, insolvency or creditors' rights (including Title 11
(Bankruptcy) of the United States Code, as amended, the Uniform Fraudulent
Conveyance Act or Uniform Fraudulent Transfer Act or other applicable Law
pertaining to fraudulent conveyances or fraudulent transfers or preferences).
4.30. Hazardous Materials.
-------------------
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The Borrower and KAP, to the Borrower's knowledge, and except as
otherwise disclosed on Schedule 4.30, have substantially complied with, are
currently in substantial compliance with, have not been charged with, have not
received any notice of, and are not under investigation for, the failure to
substantially comply with any and all Laws relating to human health, safety or
welfare or environmental protection matters and, specifically, those relating to
Hazardous Substances. Except as otherwise disclosed on Schedule 4.30, none of
the Mortgaged Property, or any portion thereof, is presently listed or proposed
for listing on the National Priorities List, on the Comprehensive Environmental
Response, Compensation and Liability Information System List, or on any similar
state list of sites requiring investigation or cleanup.
4.31. Acquisition Agreement and Acquisition
Agreement Guarantee.
--------------------
The environmental indemnification provisions of the Acquisition
Agreement (including Article IX thereof) and the Acquisition Agreement Guarantee
are legal, valid and binding obligations of Beazer East and Beazer Limited,
respectively, enforceable in accordance with the terms thereof, except, in each
case, as such enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting creditors' rights generally.
4.32. Existing Indebtedness.
---------------------
Except as set forth on Schedule 4.32, none of the Borrower, any
Subsidiary of the Borrower, KAP or any Subsidiary of KAP have any outstanding
Indebtedness for Borrowed Money (each such item specified on Schedule 4.32 being
referred to as "Existing Indebtedness"). Upon consummation of the Transaction,
neither the Borrower nor any Subsidiary of the Borrower (other than the
Unrestricted Subsidiaries) will have any outstanding Indebtedness which is not
Permitted Indebtedness.
4.33. Employment Agreements.
---------------------
Except as set forth on Schedule 4.33, upon consummation of the
Transaction, neither the Borrower nor KAP will be a party to any employment
agreement with any officer, in the case of the Borrower, or director, in the
case of KAP thereof.
4.34. Guarantors.
----------
Except as set forth on Schedule 4.34, upon consummation of the
Transaction, no Subsidiary of the Borrower (x) will be a Significant Subsidiary
or (y) other than KHC Assurance, Inc. will have any liability pursuant to any
Guaranty Equivalent (other than the Guarantees). The Borrower will cause each
Subsidiary of the Borrower listed on Schedule
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4.34 (other than an Unrestricted Subsidiary and KHC Assurance, Inc.) to execute
and deliver on the Closing Date a Subsidiary Guarantee, in the case of
Subsidiaries of the Borrower incorporated in a State of the United States of
America, or an Australian Subsidiary Guarantee, in the case of Subsidiaries of
the Borrower incorporated in a State of Australia.
4.35. Transaction Documents.
---------------------
The Borrower has provided or caused to be provided, or by the Closing
Date shall have been provided or caused to be provided, to the Banks true,
correct and complete copies of the Transaction Documents (in each case including
all exhibits, schedules and disclosure letters, if any, delivered pursuant
thereto), and all amendments thereto, waivers relating thereto and other side
letters or agreements affecting the terms thereof. The Transaction Documents
have not been, and by the Closing Date shall not have been, amended, modified or
supplemented, nor have, nor shall have, any of the provisions thereof been
waived, except in accordance with this Agreement. Each Transaction Document has
been duly executed and delivered by the Borrower or KAP, to the extent it is a
party thereto, and is in full force and effect. The representations and
warranties of the Borrower, KAP, any of their respective Subsidiaries and, to
the knowledge of the Borrower, each other party thereto contained in each of the
Transaction Documents are true and correct in all material respects on and as of
the date hereof as if made on and as of the date hereof, and shall be true and
correct in all material respects on and as of the Closing Date as if made on and
as of the Closing Date, and, to the extent made by the Borrower, KAP, or any of
their respective Subsidiaries, each Bank shall be entitled to rely on such
representations and warranties with the same force and effect as if they were
set forth in this Agreement in full and made to each Bank directly. The
provisions of each of the Transaction Documents, including, without limitation,
all representations, warranties and covenants of the parties thereto other than
the Borrower and KAP, are and shall be legal, valid and binding obligations of
such other parties, enforceable in accordance with the terms thereof.
4.36. Senior Subordinated Notes.
-------------------------
(a) The offering and sale of the Senior Subordinated Notes has and
will be made in accordance with the applicable terms of the Securities Act of
1933, applicable state securities laws and other applicable Laws. Each offering
memorandum used in connection with the offering and sale of the Senior
Subordinated Notes does not and will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
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(b) All of the Obligations constitute and will constitute "Senior
Debt" and "Designated Senior Debt" within the meaning of such term in the Senior
Subordinated Note Indenture. The subordination provisions of the Senior
Subordinated Note Indenture are enforceable against the Borrower, each Guarantor
and the holders from time to time of the Senior Subordinated Notes.
ARTICLE V.
CONDITIONS PRECEDENT
--------------------
5.01. Conditions to Initial Extensions of Credit.
------------------------------------------
The effectiveness of this Agreement and the agreement of each Bank to
make its initial Loan or Loans, and of each Issuing Bank to issue any Letter of
Credit, on the Closing Date is subject to the satisfaction, on and as of the
Closing Date, of the following conditions precedent:
(i) The Administrative Agent shall have received for each Bank a
counterpart of this Agreement, a Term Loan A Note, Term Loan B Note and
Revolving Credit Note for each Bank (unless such Bank shall not have a
Committed Amount with respect the Obligations evidenced by any such Note),
and the Swingline Note for the Swingline Bank, in each case, duly executed
by the Borrower and conforming to the requirements hereof.
(ii) The Administrative Agent shall have received, in form and
substance satisfactory to the Agents, with a counterpart or copy for each
Bank Party, (y) each of the Security Documents, duly executed by each
respective Credit Party which is a party thereto, and (z) such other
documents and instruments as may be necessary or appropriate to perfect the
Lien thereof in the Collateral covered thereby, duly executed, to the
extent necessary, by the appropriate Credit Party.
(iii) All fees and other compensation required to be paid on or
prior to the Closing Date to any of the Bank Parties pursuant hereto or to
the Commitment Letters shall have been paid or received.
(iv) The Administrative Agent shall have received, with a
counterpart for each Bank, a certificate or certificates of the Secretary
or an Assistant Secretary of the Borrower, dated the Closing Date, as to
(w) true copies of the Stockholders' Agreement as in effect on such date,
(x) true copies of the articles of incorporation and bylaws (or other
comparable constituent documents) of the Borrower and each
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Guarantor as in effect on such date (which, in the case of the articles of
incorporation (or other comparable constituent document), shall be
certified to be true, correct and complete by the appropriate Official
Body, where available, not more than thirty (30) days before the Closing
Date), (y) true copies of all corporate action taken by the Borrower and
each Guarantor relative to this Agreement and the Related Documents
including certified copies of extract minutes of the board of directors of
each Australian Subsidiary Guarantor authorizing the signing and delivery
of and observance of obligations under the Security Documents to which it
is a party, appointing authorized officers, in the case of the Borrower, or
directors, in the case of KAP, and which acknowledge that those documents
will benefit that Australian Subsidiary Guarantor, and (z) the incumbency
and signatures of the respective officers of the Borrower and each
Guarantor executing this Agreement and/or any Related Documents to which
the Borrower or any such Guarantor is a party, together with satisfactory
evidence of the incumbency of such Secretary or Assistant Secretary. The
Administrative Agent shall have received, with a copy for each Bank,
certificates from the appropriate Official Bodies, dated not more than
thirty (30) days before the Closing Date, showing the authority and good
standing of the Borrower and each Guarantor in each jurisdiction where the
conduct of their respective businesses requires such qualification.
(v) The Administrative Agent shall have received, with copies or
executed counterparts for each Bank, true and correct copies (in each case
certified as to authenticity on the Closing Date) of all Official
Authorizations, if any, referred to on Schedule 4.04 and not previously
delivered to the Administrative Agent, and all such Official Authorizations
shall be satisfactory in form and substance to the Administrative Agent and
shall be in full force and effect.
(vi) The Administrative Agent shall have received, with copies or
executed counterparts for each Bank, true and correct copies of each
consent, waiver, amendment or agreement, if any, which has been obtained by
or on behalf of the Borrower or any of its Subsidiaries in respect of any
matter which, absent such consent, waiver, amendment or agreement, would be
within the scope of clause (b)(ii) of Section 4.05, and such items shall be
satisfactory in form and substance to the Administrative Agent and shall be
in full force and effect.
(vii) The Administrative Agent shall have received, with a copy for
each Bank, copies of the pro forma balance sheets and projections referred
to in Sections 4.06(b) and (c), each certified by the Chief Financial
Officer of the Borrower, and all of which shall be satisfactory in form and
substance to the Administrative Agent.
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(viii) No suit, action, investigation, inquiry or other proceeding
(including the enactment or promulgation of any statute or rule) by or
before any arbitrator or any Official Body shall be pending, and no
preliminary or permanent injunction or order by any state or federal court
shall have been entered, (i) in connection with the Transaction, this
Agreement or the Related Documents, or any of the transactions contemplated
hereby or thereby, or (ii) which, in any such case, has, or would
reasonably be expected to have, a Material Adverse Effect.
(ix) No event shall have occurred which, in the judgment of the
Required Banks, constitutes a material adverse change in the business,
operations, condition, financial or otherwise, or prospects of the
Borrower, KAP or the enterprise comprised of the Borrower, the Borrower's
Subsidiaries, KAP and KAP's Subsidiaries taken as a whole since September
30, 1997. No facts or circumstances shall have been discovered by the Banks
which would be materially inconsistent with the assumptions underlying the
projections or with the other information furnished to the Administrative
Agent by the Borrower. No transaction (other than the Transaction) entered
into by the Borrower, any of the Borrower's Subsidiaries, KAP or any of
KAP's Subsidiaries, whether or not in the ordinary course of business,
shall, in the reasonable judgment of the Administrative Agent, be
materially adverse to the Borrower, the Borrower's Subsidiaries, KAP and
KAP's Subsidiaries, taken as a whole.
(x) The Administrative Agent shall have received a certificate from
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Intermediaries, Inc., with a copy for each Bank, dated as
of a recent date, and other evidence satisfactory to it, that the insurance
policies required by this Agreement and the Security Documents have been
obtained.
(xi) Any documents or instruments (including financing statements)
required to be filed under or in connection with any of the Security
Documents in order to create, in favor of the Collateral Agent, a perfected
first Lien on the Collateral described therein with respect to which a
mortgage, charge or security interest may be perfected by recording or
filing shall have been executed and delivered to the Collateral Agent or
its legal advisors (including, without limitation, in respect of the
charges comprised in the Australian Mortgages, duly signed and completed
ASC Forms 309, signed but undated ASC Forms 350 and signed authorities to
complete ASC Forms 350) and, if requested by the Collateral Agent, properly
recorded or filed in each office in each jurisdiction listed on Schedule
4.28; and such recordings or filings shall be the only ones required in
order to create in favor of the Collateral Agent, for the benefit of the
Bank Parties, a perfected first Lien on the Collateral described therein in
each of the jurisdictions listed on Schedule 4.28. The Collateral Agent
shall have received (or promptly after the Closing Date shall receive)
evidence
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satisfactory to it in its reasonable discretion of each such filing,
registration or recording and satisfactory evidence of the payment of any
necessary fee, tax or expense relating thereto. There shall have been
delivered to the Collateral Agent all such other documents and instruments
(including certificates of title) necessary or appropriate to create in
favor of the Collateral Agent, for the benefit of the Bank Parties, a
perfected first Lien on the Collateral.
(xii) To the extent requested by the Collateral Agent, the
Collateral Agent shall have received in respect of each parcel covered by
each Mortgage a title insurance policy (or policies) dated the Closing
Date. Each such policy shall (i) be in an amount satisfactory to the
Collateral Agent; (ii) be issued at ordinary rates; (iii) ensure that the
Mortgage insured thereby creates a valid first Lien on such parcel or
estate of the Borrower or applicable Guarantor, as the case may be, therein
free and clear of all defects and encumbrances, except such as may be
approved by the Collateral Agent; (iv) name the Collateral Agent for the
benefit of the Bank Parties as the insured thereunder; (v) be in the form
of ALTA Loan Policy - 1970 (or other form acceptable to the Collateral
Agent); (vi) contain such endorsements and affirmative coverage as the
Collateral Agent may reasonably request; and (vii) be issued by a title
insurance company satisfactory to the Collateral Agent.
(xiii) The Collateral Agent shall have received a copy of such of
the recorded documents referred to, or listed as exceptions to title in,
the title policy or policies referred to in subsection 5.01(xii) as the
Collateral Agent may request and a copy of all other documents requested by
the Collateral Agent affecting any part of the Mortgaged Property (and not
previously delivered to the Collateral Agent).
(xiv) The Collateral Agent shall have received the results
satisfactory to the Agents of a recent search by a person satisfactory to
it of the Uniform Commercial Code, Australian Securities Commission or
other filing with Official Bodies, if any, which may have been filed with
respect to personal property of the Borrower and each Guarantor in each of
the locations set forth on Schedule 4.28.
(xv) The Administrative Agent shall have received, with an
executed counterpart for each Bank, opinions, dated the Closing Date, of
counsel to the Borrower and KAP, substantially in the form of Exhibits G-1
and G-2.
(xvi) The Administrative Agent shall have received, with an
executed counterpart for each Bank, an opinion of each local counsel listed
on Schedule 5.01(xvi), in the form of Exhibit G-3 or Exhibit G-4, as
appropriate, to reflect the laws of the respective jurisdictions as to
validity, binding effect and enforceability of the Related Documents,
creation and perfection of Liens and other
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matters, and such other matters incident to the transactions contemplated
hereby or by the Related Documents as the Administrative Agent may
reasonably request.
(xvii) There shall be no substantial impairment of the financial
markets generally, or any change in national or international financial,
political or economic conditions which, in the opinion of the Agents, would
reasonably be expected to materially and adversely affect the transactions
contemplated by this Agreement or the Related Documents.
(xviii) The conditions set forth in subsections (a) through (d),
inclusive, of Section 5.02 shall have been satisfied.
(xix) The Agents shall have received, with copies or executed
counterparts for each Bank, a certificate from the Chief Financial Officer
of the Borrower and an opinion of Houlihan, Lokey, ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial
Advisors, Inc. in form and substance reasonably satisfactory to the Agents
with respect to the solvency of each of the Borrower and KAP immediately
after the consummation of the Transaction.
(xx) The terms, conditions and structure of the Transaction (and
the documentation therefor) shall be in form and substance satisfactory to
the Agents.
(xxi) The Borrower shall have received aggregate gross proceeds
(i.e., before payment of expenses, underwriting fees, discounts and the
----
like) of at least $175 million from the sale of Senior Subordinated Notes
pursuant to agreements, including interest rate, tenor, terms and
conditions thereunder, in form and substance reasonably satisfactory to the
Agents.
(xxii) Each transaction which is a component of the Transaction
(other than the making of the initial Loans and the issuance of the
Australian Term Loan Letter of Credit and the Australian Revolving Loan
Letter of Credit) shall have been consummated in all material respects in
accordance with the terms hereof and the terms of documentation therefor
(without the waiver of any material condition unless consented to by the
Agents) in form and substance reasonably satisfactory to the Agents.
(xxiii) All obligations of the Borrower and its Subsidiaries (other
than Unrestricted Subsidiaries) with respect to Existing Indebtedness
(other than Permitted Indebtedness described in clauses (c), (d), (g) and
(h) of Section 7.03) shall be repaid in full (or provisions made therefor
satisfactory to the Agents) and all lending commitments thereunder
terminated to the reasonable satisfaction of the Agents with all security
interests in favor of existing lenders being unconditionally released, and
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evidence of the foregoing reasonably satisfactory to the Agents shall have
been provided in writing. The Agents may, in their sole and exclusive
discretion, accept from the lenders of Existing Indebtedness written
confirmation that all obligations of the Borrower and its Subsidiaries
under any such Existing Indebtedness have been satisfied and that all
lending commitments thereunder have been terminated and that all security
interests in favor of existing lenders will be promptly and unconditionally
released.
(xxiv) The Borrower shall have received the required consents from
the holders of the Senior Notes necessary to cause the trustee under the
Senior Note Indenture to enter into an amendment to the Senior Note
Indenture in form and substance reasonably satisfactory to the Agents, and
the Borrower shall have accepted for payment all Senior Notes tendered by
the holders thereof in the tender offer related to the aforementioned
consents.
(xxv) The Agents shall have been provided with copies of, and
shall be reasonably satisfied with, the employment agreements of officers
of the Borrower and KAP set forth on Schedule 4.33.
(xxvi) The Agents shall be satisfied with the proposed and actual
capitalization and corporate and organizational structure of the Borrower
and its Subsidiaries (after giving effect to the Transaction), including as
to direct and indirect ownership and as to the terms of the indebtedness
and capital stock of the Borrower and its Subsidiaries. Immediately after
giving effect to the Transaction, the Borrower and its Subsidiaries (other
than the Unrestricted Subsidiaries) shall have no outstanding Indebtedness
other than Permitted Indebtedness.
(xxvii) All material documentation and agreements related to the
Transaction or which, in the judgment of the Agents, affect the extension
of credit under this Agreement in any material respect shall be in form and
substance reasonably satisfactory to the Agents; and all material
conditions precedent under all documentation relating to the consummation
of the Transaction shall have been satisfied.
(xxviii) The Agents shall be reasonably satisfied as to the amount
and nature of all tax, ERISA, employee retirement benefit and other
contingent liabilities to which the Borrower, its Subsidiaries, KAP and
KAP's Subsidiaries (other than the Unrestricted Subsidiaries) may be
subject, and the plans of the Borrower, its Subsidiaries, KAP and KAP's
Subsidiaries (other than the Unrestricted Subsidiaries) with respect
thereto.
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(xxix) The Banks shall have received reasonably satisfactory pro
forma balance sheets of the Borrower and its Subsidiaries after giving
effect to the Transaction and the financings contemplated hereby. The
Banks shall have received projected cash flows and income statements for
the period of seven years following the Closing Date, which projections
shall be based upon reasonable assumptions made in good faith and
reasonably satisfactory to the Banks. The Banks shall have received
unaudited interim combined (where available, and where not, uncombined)
consolidated and consolidating financial statements of the Borrower and its
Subsidiaries and KAP and its Subsidiaries for each fiscal month and
quarterly period ended subsequent to June 30, 1997 as to which such
financial statements are available. If as of the Closing Date any such
financial statements or projections are required to be updated in order to
remain accurate, such updated financial statements or projections shall
not, in the reasonable judgment of the Banks, reflect any material adverse
change as compared with the financial statements or projections previously
furnished to the Banks.
(xxx) The Agents shall be satisfied that Beazer East and Beazer
Limited are continuing to satisfy their respective obligations under the
Acquisition Agreement and the Acquisition Agreement Guarantee.
(xxxi) The Collateral Agent or its legal advisors have received
the original power of attorney for each Australian Subsidiary Guarantor
under which a person signs and delivers the Security Documents to which it
is a party and, if required by the Collateral Agent, evidence of its
stamping and registration.
(xxxii) The Collateral Agent or its legal advisors have received
(in form and substance satisfactory to the Collateral Agent and its legal
advisors) a duly signed certificate under section 2.06(b) of the Australian
Corporations Law issued by each Australian Subsidiary Guarantor in relation
to financial assistance given in relation to the acquisition of shares in
KAP.
(xxxiii) The Collateral Agent or its legal advisors shall have
received (in form and substance satisfactory to the Collateral Agent and
its legal advisors) (i) a statutory declaration from a director of each
Australian Subsidiary Guarantor stating that the entering into of the
Related Documents to which it is a party (and the performance of
obligations under them) does not contravene Part 3.2A of the Corporations
Law and the Australian Subsidiary Guarantor is not insolvent and will not
become insolvent as a result of the entering into of those documents; (ii)
share certificates for all the issued share capital of each Australian
Subsidiary Guarantor together with undated share transfer forms relating to
those shares duly executed by the relevant shareholder in each of those
companies as transferor; (iii) certified copies of extract minutes
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of an extraordinary general meeting of shareholders of each Australian
Subsidiary Guarantor which evidence the unanimous resolutions of those
shareholders authorizing the signing and delivery of and observance of
obligations under the Related Documents to which it is a party; and (iv)
either evidence that the Security Documents have been stamped or the amount
of money which, in the reasonable opinion of the Collateral Agent, is
required for payment of stamp duty on each of the Security Documents.
(xxxiv) All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the Related Documents shall be
satisfactory in form and substance to each Agent in its sole discretion
including, but not limited to, the documents listed in Schedule
5.01(xxxiv).
5.02. Conditions to All Extensions of Credit.
--------------------------------------
The agreement of each Bank Party to make any Loan or issue any Letter
of Credit on any date (including the Closing Date) is subject to the
satisfaction of the following conditions precedent as of the date such Loan is
made or Letter of Credit is issued (or deemed to be issued):
(a) Notice. In the case of any Loan, appropriate Standard Notice
------
shall have been given by the Borrower before such date as provided in Section
2.04.
(b) Representations and Warranties. Each of the representations and
------------------------------
warranties made by the Borrower and each Guarantor in or pursuant to this
Agreement or the Related Documents shall be true and correct in all material
respects on and as of such date as if made on and as of such date (in the case
of the Loans to be made or Letters of Credit to be issued on the Closing Date,
after giving effect to the Transaction).
(c) No Default. No Event of Default or Potential Default shall have
----------
occurred and be continuing on such date or after giving effect to the Loan to be
made or Letter of Credit to be issued on such date (in the case of the Loans to
be made or Letters of Credit to be issued on the Closing Date, after giving
effect to the Transaction).
(d) No Violations of Law. Neither the making nor use of any Loan or
--------------------
Letter of Credit (or the proceeds of any thereof) shall cause any Bank Party to
be in violation of any Law.
Each Request by the Borrower that a Loan be made or Letter of Credit
be issued shall constitute a representation and warranty by the Borrower as of
the date of such
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request that the conditions contained in this subsection 5.02 have been
satisfied. Failure of the Administrative Agent, an Issuing Bank or the Swingline
Bank, as the case may be, to receive notice from the Borrower to the contrary
before such Loan is made or Letter of Credit is issued shall constitute a
further representation and warranty by the Borrower that the conditions referred
to in this Section 5.02 have been satisfied as of the date such Loan is made or
such Letter of Credit is issued.
5.03. Additional Conditions to Issuances of Letters of Credit.
-------------------------------------------------------
The agreement of the Standby and Trade LC Issuing Bank to issue any
Letter of Credit is also subject to satisfaction of the conditions precedent set
forth in Sections 3.01 and 3.03.
ARTICLE VI.
AFFIRMATIVE COVENANTS
---------------------
The Borrower covenants to the Banks as follows:
6.01. Reporting and Information Requirements.
--------------------------------------
(a) Annual Audit Reports. As soon as practicable, and in any event
--------------------
within 90 days after the close of each fiscal year, the Borrower shall furnish
to the Administrative Agent, with a copy for each Bank, consolidated and
consolidating statements of income, retained earnings and changes in financial
position and cash flow statements of the Borrower and its Consolidated
Subsidiaries (including Unrestricted Subsidiaries) for such fiscal year and a
consolidated and consolidating balance sheet of the Borrower and its
Consolidated Subsidiaries (including Unrestricted Subsidiaries) as of the close
of such fiscal year, and notes to each, all in reasonable detail, setting forth
in comparative form the corresponding figures for the preceding fiscal year,
with such consolidated statements and balance sheet to be certified by
independent certified public accountants of recognized national standing
selected by the Borrower and satisfactory to the Banks. The certificate or
report of such accountants shall be free of exceptions or qualifications not
acceptable to the Banks (and in any event shall be free of any exception,
qualification or explanation relating to ability to continue as a going concern,
limited scope of examination or independence), a copy of such certificate or
report shall be addressed to the Banks and signed by such independent public
accountants, and such certificate or report shall in any event contain a written
statement of such accountants substantially to the effect that (i) such
accountants examined such consolidated statements and balance sheet in
accordance with generally accepted auditing standards and accordingly made such
tests of accounting records and such other auditing procedures as such
accountants considered necessary in the circumstances, and (ii) in the
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opinion of such accountants such consolidated statements and balance sheet
present fairly the financial position of the Borrower and its Consolidated
Subsidiaries (including Unrestricted Subsidiaries) as of the end of such fiscal
year and the results of their operations and the changes in their financial
position for such fiscal year, in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal year (except for changes in
application in which such accountants concur). Simultaneously, with the delivery
to the Administrative Agent of the financial statements required by this Section
6.01(a), the Borrower shall also furnish to the Administrative Agent, with a
copy for each Bank, the certificate required pursuant to Section 2.06(b).
(b) Quarterly Reports. As soon as practicable, and in any event
-----------------
within forty-five (45) days after the close of each fiscal quarter of each
fiscal year, the Borrower shall furnish to the Administrative Agent, with a copy
for each Bank, unaudited consolidated and consolidating statements of income (or
Managing Directors' Reports), retained earnings and changes in financial
position and cash flow statements for the Borrower and its Consolidated
Subsidiaries (including Unrestricted Subsidiaries) for such fiscal quarter and
for the period from the beginning of such fiscal year to the end of such fiscal
quarter and an unaudited consolidated and consolidating balance sheet of the
Borrower and its Consolidated Subsidiaries (including Unrestricted Subsidiaries)
as of the close of such fiscal quarter, and notes to each, all in reasonable
detail, setting forth in comparative form the corresponding figures for the same
period or as of the same date during the preceding fiscal year (except for the
consolidated balance sheet, which shall set forth in comparative form the
corresponding balance sheet as of the prior fiscal year end), and certified by
the President, Treasurer or Chief Financial Officer of the Borrower as
presenting fairly the financial position of the Borrower and its Consolidated
Subsidiaries (including Unrestricted Subsidiaries) as of the end of such fiscal
quarter and the results of their operations and the changes in their financial
position for such fiscal quarter, in conformity with GAAP (other than with
respect to any Managing Directors' Reports) applied in a manner consistent with
that of the most recent audited financial statements furnished to the Banks,
subject to normal and recurring year-end audit adjustments. Simultaneously with
the delivery to the Administrative Agent of the financial statements required by
this Section 6.01(b), the Borrower shall also furnish to the Administrative
Agent, with a copy for each Bank, (i) such information concerning environmental
matters as the Administrative Agent or the Banks may reasonably request, such
information to be in form and scope satisfactory to the Administrative Agent or
the Banks, as the case may be, and (ii) the certificate required pursuant to
Section 2.06(b).
(c) Management Reports. Commencing January 1998, promptly after the
------------------
close of each month, each fiscal quarter and each fiscal year, and in any event
within thirty (30) days after the close of any such month, forty-five (45) days
after the close of any such fiscal quarter and 90 days after the close of any
such fiscal year, the Borrower shall deliver
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to the Administrative Agent, with a copy for each Bank, a management report, in
form and scope satisfactory to the Banks, which report shall contain, with
respect to monthly reports, without limitation, a consolidated statement of
revenues and earnings of the Borrower and its Consolidated Subsidiaries for such
month and, in each case, comparison of such amounts to projections for such
period and, if deviations from such projections are material, an explanation
therefor.
(d) Compliance Certificates. Concurrently with the delivery of each
-----------------------
set of financial statements referred to in Sections 6.01(a) and (b), the
Borrower shall deliver to the Administrative Agent, with a copy for each Bank, a
certificate, dated as of the end of the applicable fiscal year or quarter, as
the case may be, signed by the President, Treasurer or Chief Financial Officer
of the Borrower, (i) stating that as of the date thereof no Event of Default or
Potential Default has occurred and is continuing or exists, or, if an Event of
Default or Potential Default has occurred and is continuing or exists,
specifying in detail the nature and period of existence thereof and any action
with respect thereto taken or contemplated to be taken by the Borrower, (ii)
stating in reasonable detail the information and calculations necessary to
establish compliance with the provisions of Sections 7.01, 7.05(f), 7.05(g),
7.06(d), 7.10(c), 7.10(d), 7.10(e) and 7.14, and (iii) stating that the signer
has personally reviewed this Agreement and that such certificate is based on an
examination made by or under the supervision of the signer sufficient to assure
that such certificate is accurate.
(e) Accountants' Certificate. Each set of consolidated statements
------------------------
and balance sheet delivered pursuant to Section 6.01(a) shall be accompanied by
(i) a certificate or report, dated the date of such statements and balance
sheet, by the accountants who certified such statements and balance sheet,
stating in substance that they have reviewed this Agreement and that in making
the examination necessary for their certification of such statements and balance
sheet they did not become aware of any Event of Default or Potential Default,
or, if they did become so aware, such certificate or report shall state the
nature and period of existence thereof, and (ii) a certificate or report, dated
as of the date of such financial statements, by such accountants, stating in
reasonable detail the information and calculations necessary to establish
compliance with Sections 7.01, 7.05(f), 7.05(g), 7.06(d), 7.10(c), 7.10(d),
7.10(e) and 7.14 as of the end of such fiscal year.
(f) Forecast and Analysis. As soon as practicable, and in any event
---------------------
within thirty (30) days after the close of each fiscal year of the Borrower, the
Borrower shall furnish to the Administrative Agent, with a copy for each Bank, a
business plan for the Borrower and its Subsidiaries for the following year,
which business plan shall be in form and scope satisfactory to the Banks and
(without limitation) shall include projections of revenues and expenses (capital
or otherwise) of the Borrower and its Subsidiaries for such following year
(including for potential environmental obligations or liabilities (remedial,
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compliance or other)). Such plan shall also include information (in form and
detail satisfactory to the Banks) concerning the anticipated scope of the
Borrower's and its Subsidiaries' potential environmental obligations or
liabilities for such year, the risks associated therewith, the Borrower's and
its Subsidiaries' potential indemnification claims with respect thereto and
similar matters.
(g) Other Reports and Information. Promptly upon their becoming
-----------------------------
available, the Borrower shall deliver to the Administrative Agent, with a copy
for each Bank, a copy of (i) all regular or special reports or effective
registration statements which the Borrower or any of its Subsidiaries shall file
with the Securities and Exchange Commission (or any successor thereto) or any
securities exchange, (ii) all reports, proxy statements, financial statements
and other information distributed by the Borrower or any of its Subsidiaries to
its stockholders, bondholders or the financial community in general, and (iii)
any reports submitted to the Borrower or any of its Subsidiaries by independent
accountants in connection with any annual, interim or special audit of the
Borrower or any of its Subsidiaries.
(h) Further Information. The Borrower shall promptly furnish to the
-------------------
Administrative Agent, with a copy for each Bank, such other information and in
such form as the Administrative Agent or any Bank may reasonably request.
(i) Notice of Event of Default. Promptly upon becoming aware of any
--------------------------
Event of Default or Potential Default, and, in any event, within five (5)
Business Days of so becoming aware, the Borrower shall give the Administrative
Agent notice thereof, together with a written statement of the President,
Treasurer or Chief Financial Officer of the Borrower setting forth the details
thereof and within ten (10) Business Days thereafter, notice of any action with
respect thereto taken or contemplated to be taken by the Borrower. The Borrower
shall be deemed to have become aware of an event described in this Section
6.01(i) at such time as its President, Treasurer or Chief Financial Officer
shall, or, in the exercise of reasonable diligence, should, have become aware
thereof.
(j) Notice of Material Adverse Change. Promptly upon becoming aware
---------------------------------
thereof, and in any event within five (5) Business Days of so becoming aware,
the Borrower shall give the Administrative Agent notice of any event or
circumstance which has, or would reasonably be expected to have, a Material
Adverse Effect. The Borrower shall be deemed to have become aware of an event
or circumstance of the type described in this Section 6.01(j) at such time as
its President, Treasurer or Chief Financial Officer shall, or, in the exercise
of reasonable diligence, should, have become aware thereof.
(k) Notice of Material Proceedings. Promptly upon becoming aware
------------------------------
thereof and, in any event, within five (5) Business Days of so becoming aware,
the Borrower shall
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give the Administrative Agent notice of the commencement, existence or threat of
any proceeding by or before any Official Body against or affecting the Borrower
or any of its Subsidiaries which is reasonably possible to be adversely decided,
and which, if adversely decided, would have, or would reasonably be expected to
have, a Material Adverse Effect. Promptly upon commencing, or becoming aware of
the commencement of, any arbitration proceeding under Article XI of the
Acquisition Agreement, the Borrower shall give the Administrative Agent notice
thereof if the amount in controversy therein, singly or in the aggregate with
all other amounts then in controversy in all similar proceedings, shall exceed
$1,000,000.
(l) Notice of Pension-Related Events. In the event that the
--------------------------------
Borrower, any Controlled Group Member or any administrator of a Plan:
(i) receives the notification referred to in subsection (i), (iv) or
(vii) of Section 8.01(g);
(ii) has knowledge of (A) the occurrence of a Reportable Event with
respect to a Plan; (B) any event which has occurred or any action which has
been taken to amend or terminate a Plan as referred to in subsection (ii)
or (vi) of Section 8.01g); (C) any event which has occurred or any action
which has been taken which could result in complete withdrawal, partial
withdrawal or secondary liability for withdrawal liability payments with
respect to a Multiemployer Plan as referred to in subsection (vii) of
Section 8.01(g); (D) any action which has been taken in furtherance of, any
agreement which has been entered into for, or any petition which has been
filed with a United States District Court for, the appointment of a trustee
for a Plan as referred to in subsection (iii) of Section 8.01(g); (E) any
action to amend a Plan which requires security to be provided to the Plan
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (F) the
occurrence of any event, or existence of any condition, requiring the
provision of any notice or information to the PBGC or participants with
respect to any Plan under Section 4010 or Section 4011 of ERISA or (G) any
failure to pay the PBGC premium with respect to a Plan when due; or
(iii) files a notice of intent to terminate a Plan with the
Internal Revenue Service or the PBGC; or files with the Internal Revenue
Service a request pursuant to Section 412(d) or 412(e) of the Code for a
variance from the minimum funding standard or an extension of the period
for amortizing unfunded liabilities, respectively, for a Plan; or files a
return with the Internal Revenue Service with respect to the tax imposed
under Section 4971(a) of the Code for failure to meet the minimum funding
standards established under Section 412 of the Code for a Plan;
the Borrower shall promptly (and in any event within seven (7) days in the case
of a Reportable Event which is a failure to meet the minimum funding requirement
with respect
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to a Plan, including failure to pay any contribution when due, and the total
unpaid balance of contributions due to such Plan exceeds $1,000,000) furnish to
the Administrative Agent (A) a copy of any notice received, request or petition
filed or agreement entered into; (B) the most recent Annual Report (Form 5500
Series) and attachments thereto for the Plan; (C) the most recent actuarial
report for the Plan; (D) any notice, return or materials required to be filed
with the Internal Revenue Service, the PBGC or Plan participants or
beneficiaries in connection with the event, action or filing; and (E) a written
statement of the President, Treasurer or Chief Financial Officer of the Borrower
describing the event or the action taken and the reasons therefor.
(m) Notice of Other Material Defaults. Promptly upon becoming aware
---------------------------------
of any default by the Borrower or any of its Subsidiaries under any agreement or
instrument to which the Borrower or any of its Subsidiaries is a party or by
which the Borrower or any of its Subsidiaries or any of their respective
properties may be subject or bound, the Borrower shall give the Administrative
Agent notice thereof, together with a written statement of the President,
Treasurer or Chief Financial Officer of the Borrower setting forth the details
thereof, if the consequence of such default has, or would reasonably be expected
to have, a Material Adverse Effect.
(n) Notice of Other Amendments. The Borrower shall promptly notify
--------------------------
the Administrative Agent of any amendment or supplement to, or extension or
renewal of, or waiver by any other party thereto of any right under or condition
of, Article VII of the Acquisition Agreement, the Acquisition Agreement
Guarantee, any of the Senior Note Documents or any of the Senior Subordinated
Note Documents. The Borrower shall provide the Administrative Agent with copies
of any reports, certificates or notices furnished to any other party to the
Acquisition Agreement, the Acquisition Agreement Guarantee, the Senior Note
Documents or the Senior Subordinated Note Documents pursuant to their terms or
to the terms of any such amendment or supplement, concurrently with the
Borrower's delivery of such report, certificate or notice to such other party.
(o) Visitation. The Borrower shall permit such persons as any Agent
----------
or any Bank may designate to visit and inspect, during normal business hours,
any of the properties of the Borrower or any of its Subsidiaries, to examine
their respective books and records and take copies and extracts therefrom, and
to discuss their respective affairs with their respective officers and employees
and independent accountants, engineers, consultants and contractors (each of
whom is hereby authorized to discuss with any Agent or any Bank the affairs of
the Borrower or its Subsidiaries) at such times and as often as any such Agent
or any Bank may reasonably request.
(p) Environmental Matters. (i) If an Event of Default shall occur,
---------------------
the Borrower shall permit such visitation by such persons ("Site Reviewers") as
the Collateral
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Agent may select in connection with the Collateral Agent's or the Banks'
consideration of enforcement or preservation of rights under this Agreement or
any of the Related Documents, to visit its properties and, in the case of the
Mortgaged Property, to perform such reasonable environmental site investigations
and assessments ("Site Assessments") thereon for the purpose of determining
whether there exists thereon any environmental condition which could result in
any liability, cost or expense to the owner or occupier thereof relating to
Hazardous Substances. Such Site Assessments may include both above and below the
ground testing for environmental damage or the presence of Hazardous Substances
and such other tests as, in the opinion of the Site Reviewers, are necessary to
conduct the Site Assessments. The Borrower shall supply to the Site Reviewers
such historical and operational information, including the results of all
samples sent for analysis, correspondence with Official Bodies and previous
environmental audits or environmental reviews as are within its possession,
custody or control or which are reasonably available to it and which may be
reasonably requested by the Site Reviewers to facilitate the Site Assessments,
and will make available for meetings with the Site Reviewers appropriate
personnel employed by the Borrower who have knowledge of such matters. The cost
of performing all Site Assessments shall be paid by the Borrower within five (5)
days after demand by the Collateral Agent, together, if such amount shall not
have been paid within such five (5) days, with interest thereon at the rate
specified in Section 2.06(e) from and after such fifth day until paid.
(ii) At such other times and places and as often as the Collateral
Agent may reasonably request, the Borrower shall make available to the
Collateral Agent or its representatives such historical and operational
information, including the results of all samples sent for analysis,
correspondence with Official Bodies, all environmental reviews conducted prior
to December 28, 1988 and all non-privileged environmental reviews conducted
after December 28, 1988 regarding its properties, as are within its possession,
custody or control or which are reasonably available to it and which may be
reasonably requested by the Collateral Agent or its representatives, and will
make available for meetings with the Collateral Agent or its representatives
appropriate personnel employed by the Borrower who have knowledge of such
matters.
6.02. Preservation of Existence and Franchises.
----------------------------------------
Subject to Section 7.09, the Borrower shall, and shall cause each of
its Subsidiaries to, maintain its corporate existence, rights and franchises in
full force and effect in its respective jurisdiction of incorporation. The
Borrower shall, and shall cause each of its Subsidiaries to, qualify and remain
qualified as a foreign corporation in each jurisdiction in which failure to
receive or retain such qualification would have, or would reasonably be expected
to have, a Material Adverse Effect.
-102-
6.03. Insurance.
---------
The Borrower shall, and shall cause each of its Subsidiaries to,
maintain with financial sound and reputable insurers insurance with respect to
its properties and business and against such liabilities, casualties and
contingencies of such types and in such amounts as is satisfactory to the Banks
in their reasonable judgment and as is customary in the case of corporations
engaged in the same or a similar business or having similar properties similarly
situated, and in any event shall
(a) maintain in effect all such insurance with respect to the
Collateral as is required by the Security Documents;
(b) keep all its insurable properties insured against loss or damage
by fire, lightning, earthquake, flood, collapse, wind and hail, explosion,
smoke, riot, vandalism, civil commotion, aircraft and vehicles in amounts
sufficient to prevent the Borrower or such Subsidiary from becoming a
coinsurer within the terms of the policies in questions; and
(c) maintain in effect all such workers' compensation, disability
benefits and similar insurance as may be required under the laws of any
State or jurisdiction in which it may be engaged in business (provided that
such insurance may be effected through an insurance fund operated by such
State or other jurisdiction or by causing to be maintained a system or
systems of self-insurance which is in accord with applicable Laws).
The Borrower shall, if so requested by the Administrative Agent,
deliver to the Administrative Agent original or duplicate policies or
certificates of such insurance and, as often as the Administrative Agent may
reasonably request, a report of a reputable insurance broker, or an insurance
company representative if an insurance broker is not involved, with respect to
such insurance.
6.04. Maintenance of Properties.
-------------------------
(a) The Borrower shall, and shall cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition
such properties now or hereafter owned, leased or otherwise possessed by it,
failure to maintain which would have, or would reasonably be expected to have a
Material Adverse Effect, and shall make or cause to be made all needful and
proper repairs, renewals, replacements and improvements thereto so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
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(b) The Borrower shall, and shall cause each of its Subsidiaries to,
maintain or cause to be maintained in full force and effect all patents, patent
applications, trademarks, service marks and applications therefor, trade names,
copyrights and all other intellectual property rights now or hereafter owned, or
otherwise possessed by it, failure to maintain which would have, or would
reasonably be expected to have, a Material Adverse Effect.
6.05. Payment of Taxes and Other Potential Charges and
Priority Claims; Payment of Other Current Liabilities.
-----------------------------------------------------
The Borrower shall, and shall cause each its Subsidiaries to, pay or
discharge
(a) on or prior to the date on which penalties attach thereto, all
taxes, assessments and other governmental charges or levies imposed upon it
or any of its properties or income (including such as may arise under
Section 4062, Section 4063 or Section 4064 of ERISA, or any similar
provision of Law);
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like
persons which, if unpaid, might result in the creation of a Lien upon any
such property; and
(c) on or prior to the date when due, all other lawful claims which,
if unpaid, might result in the creation of a Lien upon any such property
(other than Permitted Liens) or which, if unpaid, might give rise to a
claim entitled to priority over general creditors of the Borrower or such
Subsidiary in a case under Title 11 (Bankruptcy) of the United States Code,
as amended, or in any insolvency proceeding or dissolution or winding-up
involving the Borrower or such Subsidiary;
provided that, unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, the Borrower or such Subsidiary need not
pay or discharge any such tax, assessment, charge, levy, claim or current
liability so long as the validity thereof is contested in good faith and by
appropriate proceedings diligently conducted, and so long as such reserves or
other appropriate provisions as may be required by GAAP shall have been made
therefor, and so long as such failure to pay or discharge does not have, and
would not reasonably be expected to have, a Material Adverse Effect. The
Borrower shall promptly notify the Administrative Agent in writing if it or any
of its Subsidiaries learns of any material proposed additional assessment or
basis for any material assessment for additional taxes (whether or not reserved
against).
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6.06. Financial Accounting Practices.
------------------------------
The Borrower shall, and shall cause each of its Subsidiaries to, make
and keep books, records and accounts which, in reasonable detail, accurately and
fairly reflect its transactions and dispositions of its assets, and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with management's
general or specific authorization, (b) transactions are recorded as necessary
(i) to permit preparation of financial statements in conformity with GAAP and
(ii) to maintain accountability for assets, (c) access to assets is permitted
only in accordance with management's general or specific authorization, and (d)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
6.07. Compliance with Laws.
--------------------
The Borrower shall, and shall cause each of its Subsidiaries to,
comply with all applicable Laws (including ERISA, the Code and any applicable
tax Law, product safety Law, occupational safety or human health, safety or
welfare Law, environmental protection or pollution control Law and hazardous
waste or toxic substances management, handling or disposal Law) in all respects
(including compliance in respect of products that it manufactures, processes or
sells or services it performs, conduct of its business or use, maintenance or
operation of real and personal properties owned or possessed by it); provided
that the Borrower shall not be deemed to be in violation of this Section 6.07 as
a result of any failures to comply which do not result in fines, penalties,
injunctive relief or other civil or criminal liabilities which, in the
aggregate, would have, or would reasonably be expected to have, a Material
Adverse Effect.
6.08. Use of Credits.
--------------
The Borrower shall use or apply the proceeds of all Loans and all
Letters of Credit and the proceeds thereof only as provided in (and not in any
manner inconsistent with) this Agreement).
6.09. Official Authorizations, etc.
----------------------------
The Borrower shall, and shall cause each of its Subsidiaries to, at
all times obtain and maintain in full force and effect all Official
Authorizations required by this Agreement or the Related Documents or otherwise
necessary or advisable in connection with execution and delivery of this
Agreement or the Related Documents, consummation of the transactions herein or
therein contemplated, performance of or compliance with the terms and
-105-
conditions hereof or thereof or to ensure the legality, validity, enforceability
and admissibility in evidence hereof or thereof.
6.10. Contracts.
---------
The Borrower shall, and shall cause each of its Subsidiaries to,
comply with all agreements or instruments to which it is a party or by which it
or any of its respective properties may be subject or bound; provided that the
Borrower shall not be deemed to be in violation of this Section 6.10 as a result
of any failure to comply which does not have, and would not reasonably be
expected to have, a Material Adverse Effect.
6.11. Maintenance of Liens of the Security Documents.
----------------------------------------------
The Borrower shall, at its expense, promptly, execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record, or cause to be registered, filed or recorded, in any
appropriate governmental office, any document or instrument supplemental to or
confirmatory of the Security Documents which may be necessary or desirable for
the continued validity, perfection or priority of the Liens on the Collateral
covered thereby.
6.12. Environmental Matters.
---------------------
(a) Hazardous Substances. Except with respect to those acts,
--------------------
omissions, conditions or circumstances which result or may result in "Pre-
Closing Environmental Claims" or "Pre-Closing Environmental Cleanup Liability"
as defined in the Acquisition Agreement, the Borrower shall use all reasonable
efforts to prevent the deposit, emission, discharge or release by Borrower of
any Hazardous Substances on its properties, unless such deposit, emission,
discharge or release is authorized by, and in full compliance with (including by
the giving of all necessary financial assurances) a duly issued permit, license,
authorization or other approval of an Official Body or is otherwise done in
compliance with Environmental Laws. In addition to the reporting requirements
in Section 6.01, the Borrower shall notify the Administrative Agent promptly
upon becoming aware, and in any event within five (5) Business Days thereafter,
of any spill, discharge or release of a Hazardous Substance in excess of any
reportable quantity or of any other significant or material environmental event,
circumstance or condition relating to its properties. The Borrower shall use
its best efforts to handle, store, transport and dispose of all Hazardous
Substances generated by it on its properties in compliance with all applicable
Law now or hereafter enacted, and the Borrower shall use its best efforts to
promptly clean up any accidental deposit, emission, discharge or release of
Hazardous Substances, pollutants or contaminants from or on any of its
properties in accordance with applicable Law. The
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Borrower shall pay, collect or remit, as appropriate, in a timely manner, all
fees imposed by any Official Body which may be incurred by it as a result of the
handling, storage, collection, treatment or disposal of solid wastes or
Hazardous Substances.
(b) Financial Assurance. Except as otherwise provided in Section
-------------------
7.02(a)(ii) or (b) of the Acquisition Agreement, the Borrower shall at all times
maintain and keep in effect appropriate financial assurances, bonds or other
financial security or liability insurance required by any Official Body to be
kept as conditions of any permits, licenses, authorization or other approvals
necessary (i) to permit the Borrower to operate pollution control equipment;
(ii) to close facilities which handled, stored, treated or disposed of Hazardous
Substances and to provide for post-closure care of the same; (iii) to undertake
any cleanup or remediation of areas on any of its properties in or on which
Hazardous Substances were or are generated, handled, stored, treated or disposed
of; or (iv) otherwise required by any Official Body as a condition of the
Borrower's operation of all or any part of its properties.
(c) Indemnification. The Borrower hereby indemnifies and agrees to
---------------
defend the Bank Parties from and against, and hold the Bank Parties harmless
from, any and all liability, obligation, loss or damage which such Bank Party
may or might incur by reason of the Liens granted pursuant to the Security
Documents or arising from or relating to the existence of Hazardous Substances
on any of the Borrower's properties (including the Mortgaged Property) or
arising from or relating to acts, omissions, conditions or circumstances covered
under Article VII of the Acquisition Agreement; provided that the Borrower shall
not be liable for any such liability, obligation, loss or damage to the extent
that the same shall result from the gross negligence or willful misconduct, as
finally determined by a court of competent jurisdiction, of the person seeking
to be indemnified.
6.13. Annual Bank Meeting.
-------------------
The Borrower shall hold an annual bank meeting at the request of the
Agents or the Required Banks.
6.14. Additional Credit Parties.
-------------------------
In the event that any person becomes a Significant Subsidiary,
directly or indirectly, of the Borrower after the Closing Date (each such
Significant Subsidiary referred to herein as an "Additional Credit Party" and
collectively as the "Additional Credit Parties"), then, promptly after such
person becomes a Significant Subsidiary of the Borrower, the Borrower shall
notify the Administrative Agent and the Collateral Agent and shall cause such
Significant Subsidiary to execute and deliver all such agreements, guarantees,
pledges, assignments, documents and certificates (including any amendments to
the Related Documents) as the Administrative Agent or the Collateral Agent may
request and do such
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other acts and things as the Administrative Agent or the Collateral Agent may
request in order to have such Significant Subsidiary guarantee the Obligations
and grant to the Collateral Agent ratably on behalf of the Banks, a duly
perfected Lien (subject to no Liens other than Permitted Liens and Liens
expressly permitted by the applicable Security Documents) on all real property
and personal property of such Significant Subsidiary and effect fully the
purposes of this Agreement and the other Related Documents and to provide for
payment of the Obligations in accordance with the terms of this Agreement and
the other Related Documents. Without limiting the generality of the foregoing,
in such event, such Additional Credit Party shall execute and deliver to the
Administrative Agent or the Collateral Agent, as appropriate, all Security
Documents as the Administrative Agent or the Collateral Agent may deem necessary
or appropriate to grant the Collateral Agent a security interest in all property
of such Additional Credit Party that would have constituted Collateral if such
Significant Subsidiary were a Credit Party on the Closing Date. For the purposes
of this Section 6.14, KAP Investments Inc. will be deemed to become a
Significant Subsidiary (and shall no longer be an Unrestricted Subsidiary) on
May 31, 1998 unless the Borrower shall have acquired and retired to treasury all
capital stock of the Borrower owned by KAP Investments Inc. prior to such date.
6.15. Certain Post-Closing Deliveries.
-------------------------------
Notwithstanding the provisions of subsections 5.01(xi) and 5.01 (xii),
the Borrower shall (i) use best efforts to cause the landlords of the leased
real properties of the Borrower listed on Schedule 4.11 that are not subject to
a Mortgage to deliver lien waiver and collateral access agreements, in form and
substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent, and (ii) deliver or cause to be delivered to the Collateral Agent within
30 days following the Closing Date effective title insurance policies with
respect to Mortgages for which the Borrower has provided written evidence to the
Collateral Agent that Borrower has requested a title insurance commitment prior
to the date of this Agreement but for which the title company has not produced a
title insurance commitment as of the Closing Date.
ARTICLE VII.
NEGATIVE COVENANTS
------------------
The Borrower covenants to the Banks as follows:
7.01. Financial Maintenance Covenants.
-------------------------------
-108-
(a) Net Worth. Consolidated Net Worth shall not, at any time on or
---------
after December 31, 1997, be less than the sum of ($40,000,000), plus the amount
of write offs identified on Schedule 7.01, to the extent not actually taken in
the fiscal quarter ending December 31, 1997, plus 50% of cumulative Consolidated
Net Income from January 1, 1998 plus 100% of the proceeds (net of underwriting
discounts and commissions and other costs and expenses directly associated
therewith) from the sale after the Closing Date of equity securities of the
Borrower in any public offering or private placement or from a capital
contribution from any person; provided that no adjustment shall be made for any
period in which the Borrower has negative Consolidated Net Income.
(b) Debt/Consolidated EBITDA. The Performance Ratio shall at no time
------------------------
exceed the ratio specified below for periods through September 30 of the years
indicated below.
1998 1999 2000 2001 2002 2003 2004 and thereafter
----- ---- ---- ---- ---- ---- -------------------
4.80x 4.50x 4.50x 4.00x 3.75x 3.75x 3.50x
(c) Interest Coverage Ratio. The Interest Coverage Ratio at the end
-----------------------
of any fiscal quarter for periods through September 30 of the years set forth
below shall not be less than the amounts set forth below.
1998 1999 2000 2001 2002 2003 2004 and thereafter
----- ---- ---- ---- ---- ---- -------------------
2.25x 2.50x 2.75x 3.00x 3.00x 3.00x 3.00x
(d) Consolidated Debt Service Coverage Ratio. The Consolidated Debt
----------------------------------------
Service Coverage Ratio at the end of any fiscal quarter for periods through
September 30 of the years set forth below shall not be less than the amounts set
forth below.
1998 1999 2000 2001 2002 2003 2004 and thereafter
----- ---- ---- ---- ---- ---- -------------------
1.75x 1.75x 1.75x 1.75x 1.75x 1.75x 1.25x
(e) Current Ratio. The Consolidated Current Ratio at the end of any
-------------
fiscal quarter shall not be less than 1.10x.
7.02. Liens.
-----
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, at any time create, incur, assume or suffer to exist any Lien
on any of its property or assets, or agree, become or remain liable
(contingently or otherwise) to do any of the foregoing, except for the following
("Permitted Liens"):
(a) Liens existing on the date hereof and listed on Schedule 7.02
(and extension, renewal and replacement Liens upon the same property
theretofore subject to a listed Lien in an aggregate amount not exceeding
$500,000; provided that the
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amount secured by each Lien constituting such an extension, renewal or
replacement Lien shall not exceed the amount secured by the Lien
theretofore existing);
(b) Liens arising from taxes, assessments, charges, levies or claims
described in Section 6.05(a) or (b) that are not yet due or that remain
payable without penalty or are otherwise permitted to remain unpaid under
the proviso to such Section 6.05;
(c) Deposits or pledges to secure workers' compensation, unemployment
insurance or other social security obligations, or in connection with or to
secure the performance of bids, tenders, trade contracts or leases, or to
secure statutory obligations, or stay, surety or appeal bonds, or other
pledges or deposits of like nature, all in the ordinary course of business;
(d) Zoning restrictions, easements, minor restrictions on the use of
real property, minor irregularities in title thereto and other minor Liens
that do not secure the payment of money or the performance of an obligation
and that do not in the aggregate materially detract from the value of a
property or asset to, or materially impair its use in the business of, the
Borrower or such Subsidiary;
(e) Liens of the Security Documents and Liens on properties subject
to the Security Documents to the extent permitted by the Security
Documents;
(f) Liens on property securing all or part of the purchase price
thereof and Liens (whether or not assumed) existing on property at the time
of purchase thereof'
provided that:
(i) such Lien is created before or substantially simultaneously
with the purchase of such property in the ordinary course of business of
the Borrower or such Subsidiary (or is a Lien securing successor
obligations incurred to extend or refinance predecessor obligations allowed
under this Section 7.02(f); provided that in each case the successor
obligation is an obligation of the same person subject to the predecessor
obligation, is not greater than (and is not otherwise on terms less
advantageous than) the predecessor obligation, and the Lien securing the
successor obligation does not extend to any property other than that
subject to the Lien securing the predecessor obligation);
(ii) such Lien is confined solely to the property so purchased,
improvements thereto and proceeds thereof;
-110-
(iii) the aggregate amount secured by all such Liens on any
particular property at the time purchased by the Borrower or such
Subsidiary, as the case may be, does not exceed the lesser of the purchase
price of such property or the fair market value of such property at the
time of purchase thereof ("purchase price" for this purpose including the
amount secured by each such Lien thereon whether or not assumed); and
(iv) the obligation secured by such Lien is Indebtedness permitted
under Section 7.03(h) or Indebtedness incurred by KAP or any of its
Consolidated Subsidiaries in connection with the purchase of goods in the
ordinary course of business;
(g) Government Loan Liens;
(h) judgment Liens in existence for less than sixty (60) days after
the entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to customary deductibles) by
insurance; and
(i) Liens securing obligations under Interest Rate Agreements and
Currency Agreements.
Notwithstanding the foregoing, "Permitted Lien" shall in no event
include any Lien imposed by, or required to be granted pursuant to, ERISA, the
Code or any human health, safety or welfare Law or environmental Law.
7.03. Indebtedness.
------------
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, at any time, create, incur, assume or suffer to exist any
Indebtedness, or agree, become or remain liable (contingently or otherwise) to
do any of the foregoing, except for the following ("Permitted Indebtedness"):
(a) Indebtedness under this Agreement and the Related Documents;
(b) Indebtedness existing on the Closing Date and listed on Schedule
7.03 (and extensions, renewals and replacements thereof on terms no less
advantageous than the Indebtedness extended, renewed or replaced);
(c) current accounts payable to trade creditors on ordinary and
customary trade terms and arising out of transactions (other than
borrowings) in the ordinary course of business;
-111-
(d) Indebtedness of the Borrower under the Senior Notes in an
aggregate principal amount not to exceed $15,000,000;
(e) Indebtedness of the Borrower and the Guarantors under the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$175,000,000;
(f) Permitted Liens;
(g) Government Loans;
(h) other Indebtedness (including Indebtedness secured by purchase
money Liens described in Section 7.02(f) on property used in the ordinary
course of business of the Borrower or such Subsidiary) in an aggregate
amount not exceeding $10,000,000 at any time outstanding;
(i) Indebtedness of a Credit Party owing to any other Credit Party;
provided that each such Credit Party is either the Borrower or a
Significant Subsidiary of the Borrower and has delivered such Security
Documents and other agreements, guarantees, pledges, assignments, documents
and certificates and performed such other acts contemplated by Section
6.14; and
(j) Indebtedness under Interest Rate Agreements and Currency
Agreements.
7.04. Guaranty Equivalents.
--------------------
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, at any time directly or indirectly be or become subject to or
bound by any Guaranty Equivalent, except for the following:
(a) obligations under or in respect of this Agreement and the Related
Documents;
(b) contingent liabilities arising from the endorsement of negotiable
or other instruments for deposit or collection or similar transactions in
the ordinary course of business;
(c) indemnifications by the Borrower or any of its Consolidated
Subsidiaries of the liabilities of its directors or officers pursuant to
provisions contained in its respective articles of incorporation or bylaws
as in effect on the date hereof or as otherwise permitted by applicable
Law;
-112-
(d) indemnifications in favor of the initial purchasers of the Senior
Subordinated Notes as set forth in the Senior Subordinated Note Purchase
Agreement, indemnifications in favor of the holders of Senior Subordinated
Notes as set forth in the Senior Subordinated Note Registration Rights
Agreement and other ordinary and customary indemnifications of underwriters
in connection with other permitted public offerings of the Borrower's
securities;
(e) indemnifications with respect to surety bonds and other similar
obligations in connection with contracts for the sale of goods or
performance of services in the ordinary course of business;
(f) guarantees and contingent liabilities existing on the date hereof
and listed on Schedule 7.04 (and extensions, renewals and replacements
thereof on terms no more burdensome than the guarantee or contingent
liability extended, renewed or replaced);
(g) other Guaranty Equivalents; provided that the aggregate principal
amount of all such other Guaranty Equivalents pursuant to this Section
7.04(g) shall not exceed $10,000,000 at any time outstanding;
(h) to the extent not covered in (d) above, indemnifications provided
by the Borrower and its Consolidated Subsidiaries to those other persons
who are parties to the Transaction Documents; and
(i) reasonable indemnifications in connection with the sale of the
Monessen Section 29 Tax Credits.
7.05. Loans and Investments.
---------------------
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, at any time make or suffer to exist or remain outstanding any
loan, advance or other extension of credit to, or purchase, acquire or own
(beneficially or of record) any stocks, bonds, notes or securities of, or any
partnership interests (whether general or limited) in, or any other debt or
equity interest in, or make any capital contribution to or other investment in,
any other person, or agree, become or remain liable to do any of the foregoing,
except for the following:
(a) loans and investments existing on the date hereof and listed on
Schedule 7.05 (including any extensions or renewals thereof);
-113-
(b) trade credit extended, and loans and advances extended to
subcontractors or suppliers, under usual and customary terms in the
ordinary course of business;
(c) advances to employees to allow such employees to meet expenses
incurred in the ordinary course of business;
(d) (i) demand deposits, time deposits, certificates of deposit in or
loans to or secured or guaranteed by United States commercial banks or the
Commonwealth of Australia or an Australian bank authorized under the
Banking Act of 1959 or a bank constituted under the legislation of any
State of the Commonwealth of Australia, in the case of any bank having
shareholders' equity of at least $100,000,000, and in any case, maturing
not in excess of one year from the date of acquisition, (ii) obligations
backed by the full faith and credit of the United States of America or the
Commonwealth of Australia maturing not in excess of one year from the date
of acquisition, and (iii) commercial paper maturing not in excess of 180
days from the date of acquisition and rated P-1 by ▇▇▇▇▇'▇ or A-1 by S&P or
their respective Australian affiliates on the date of acquisition; provided
that the aggregate amount invested pursuant to this subsection (d) shall
not exceed $20,000,000 at any one time;
(e) an investment consisting of the contribution of the Monessen
Facility to a partnership or other entity created for the purpose of
effecting the sale of the Monessen Section 29 Tax Credits; provided that
the Borrower shall be the general partner (or equivalent) of such entity,
an Affiliate of the Borrower shall continue to operate the Monessen
Facility, such contribution shall be credited to the Borrower's capital
account (or equivalent) of such entity at the fair market value of the
Monessen Facility and the other investor's interest in such entity shall be
redeemable by the Borrower following expiration of the Monessen Section 29
Tax Credits;
(f) investments in joint ventures in which no other person has a
beneficial ownership interest greater than the beneficial ownership
interest of the Borrower in an aggregate amount not exceeding $2,500,000 at
any time outstanding; provided that the person in which such investment is
made is engaged primarily in a business which is the same as, or
substantially similar or incidental to, a business in which the Borrower is
substantially engaged on and as of the date hereof; and provided, further,
that, at the time of such investment, both immediately before and
immediately after giving effect thereto, no Event of Default or Potential
Default shall have occurred and be continuing or shall exist; and
(g) investments in capital assets or wholly-owned Subsidiaries (or
persons who become wholly-owned Subsidiaries as a result of such
investment) in a cumulative aggregate amount not to exceed $15,000,000
through the termination of this
-114-
Agreement; provided that the person in which such investment is made is
engaged primarily in a business which is the same as, or substantially
similar or incidental to, a business in which the Borrower is substantially
engaged on and as of the date hereof; and provided, further, that, at the
time of such investment, both immediately before and immediately after
giving effect thereto, no Event of Default or Potential Default shall have
occurred and be continuing or shall exist.
7.06. Dividends and Related Distributions.
-----------------------------------
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, declare, make or pay any Stock Payment, or agree, become or
remain liable (contingently or otherwise) to do any of the foregoing, except for
the following:
(a) A wholly-owned Consolidated Subsidiary of the Borrower may
declare and make Stock Payments if the capital stock of such wholly-owned
Consolidated Subsidiary is owned by the Borrower or by a direct or indirect
wholly-owned Consolidated Subsidiary of the Borrower;
(b) The Borrower may from time to time declare and make Stock
Payments if such Stock Payment is payable solely in shares of capital stock
(or options, warrants or other rights therefor) of the Borrower, and a
Consolidated Subsidiary of the Borrower may declare and make Stock Payments
if such Stock Payment is payable solely in shares of capital stock (or
warrants, options or other rights therefor) of such Subsidiary; provided,
however, that no shares of capital stock (or options, warrants or other
rights therefor) may be issued pursuant to this Section 7.06(b) if such
capital stock is subject, in whole or in part, to mandatory redemption or
redemption at the option of the holder thereof, or convertible into or
exchangeable for any capital stock subject to such redemption;
(c) (i) The APT Post-Transaction Repurchase and the Management Stock
Repurchase provided that, on the date of such repurchase, or immediately
thereafter and after giving effect thereto, no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; and
(ii) Retiring Employee Stock Repurchases; provided that, on the date
of such repurchase, or immediately thereafter and after giving effect
thereto, no Event of Default or Potential Default shall have occurred and
be continuing or shall exist; and
(d) Other Stock Payments not more than one time in any fiscal year
and in no event prior to 30 days following the receipt by the
Administrative Agent of the reports specified in Section 6.01(a), (x) up to
an amount equal to the lesser of (p) $5,000,000
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or (q) 50% of Consolidated Net Income for the prior fiscal year (which, for
the fiscal year ending December 31, 1997, shall not give effect to write
offs identified on Schedule 7.01 to the extent actually taken in the fiscal
quarter ending December 31, 1997), or (y) if the Performance Ratio shall be
less than 2.5x for two consecutive fiscal quarters, up to an amount equal
to 50% of Consolidated Net Income for the prior fiscal year; provided, that
on the date of declaration, payment or repurchase thereof, or immediately
thereafter and after giving effect thereto, no Event of Default or
Potential Default shall have occurred and be continuing or shall exist;
provided, further, that Stock Payments permitted pursuant to this
subsection 7.06(d) but not made during any fiscal year may be carried
forward and applied in any future fiscal year subject to compliance with
the other provisions of this subsection 7.06(d); provided, further, that
promptly following any such Stock Payment permitted pursuant to this
subsection 7.06(d), the Borrower shall provide written notice of such Stock
Payment, including reasonable detail as to nature and amount, to the
Administrative Agent.
7.07. Limitation on Optional Payments and
Modification of Certain Debt Instruments.
----------------------------------------
So long as any Commitment remains outstanding, or any portion of any
Revolving Credit Loan or any Swingline Loan remains unpaid, or any Letter of
Credit remains outstanding, or any other Obligation remains unpaid or
undischarged, the Borrower shall not, and shall not permit any of its
Consolidated Subsidiaries to, (a) pay, prepay, purchase, redeem, retire, defease
or otherwise acquire, or otherwise make any payment (on account of principal,
interest, premium or otherwise) of, any obligation under or evidenced by the
Senior Subordinated Notes or the Senior Subordinated Note Indenture, except that
the Borrower may make regularly scheduled payments of interest on the Senior
Subordinated Notes as contemplated by the Senior Subordinated Notes and the
Senior Subordinated Note Indenture; or (b) modify or change, or consent or agree
to any amendment or modification or change to, any of the terms of the Senior
Subordinated Notes or the Senior Subordinated Note Indenture (other than any
such amendment, modification or change which would only extend the maturity or
reduce the amount of any payment of principal of the Senior Subordinated Notes
or which would only reduce the rate or extend the date for payment of interest
thereon).
7.08. Leases.
------
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, at any time enter into or suffer to remain in effect any
agreement to lease, any real or personal property, except for the following:
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(a) leases existing on the date hereof and listed on Schedule 7.08
(and any extensions, replacements or renewals thereof);
(b) operating leases of computer equipment, data processing
equipment, office equipment, transportation equipment or other movable
equipment or office space, in each case used by the lessee in the ordinary
course of business; provided that no such lease shall have a term longer
than the greater of seven years or 75% of the useful economic life of the
property or asset subject to such lease;
(c) leases by the Borrower as lessor to a Consolidated Subsidiary as
lessee or by a Consolidated Subsidiary as lessor to the Borrower as lessee;
and
(d) other leases to the extent that the aggregate rental obligations
of the Borrower and its Consolidated Subsidiaries with respect to such
other leases does not exceed $3,000,000 in any fiscal year.
7.09. Fundamental Changes.
-------------------
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, enter into any transaction of acquisition (including, but not
limited to, the acquisition of equity interests in any person and the
acquisition of capital assets other than to the extent permitted by Section
7.14) or merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
business, property or assets, or make any material change in the present method
of conducting business, or agree to do any of the foregoing, except that, if no
Event of Default or Potential Default shall occur and be continuing or shall
exist or immediately thereafter and after giving effect thereto will exist, so
long as none of the Obligations or Liens created by or under this Agreement or
any of the Related Documents is impaired thereby:
(a) any Consolidated Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided, that the Borrower shall
be the continuing or surviving corporation) or with or into any one or more
wholly-owned Consolidated Subsidiaries of the Borrower (provided that a
wholly-owned Consolidated Subsidiary of the Borrower shall be the
continuing or surviving corporation);
(b) any wholly-owned Consolidated Subsidiary of the Borrower may
sell, lease, transfer or otherwise dispose of any or all of its property or
assets (upon voluntary liquidation or otherwise) to the Borrower or another
wholly-owned Consolidated Subsidiary of the Borrower; and
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(c) investments permitted by Section 7.05(f) or (g).
7.10. Dispositions of Assets.
----------------------
The Borrower shall not, and shall not permit any of its Consolidated
Subsidiaries to, directly or indirectly, voluntarily or involuntarily, sell
convey, assign, lease, abandon or otherwise transfer or dispose of (any of the
foregoing being referred to in this Section 7.10 as an "Asset Disposition" and
any series of related Asset Dispositions constituting but a single Asset
Disposition), any of its property or assets (including sale, assignment,
discount or other disposition of accounts, contract rights, chattel paper or
general intangibles, with or without recourse), or agree, become or remain
liable (contingently or otherwise) to do any of the foregoing, except for the
following:
(a) Asset Dispositions (including transfers of obsolete or worn out
property and the sale of inventory) in the ordinary course of business and
Asset Dispositions consisting of casualty losses to the extent the
insurance proceeds resulting therefrom are applied to repair or replace the
affected assets and condemnations to the extent the proceeds resulting
therefrom are applied to acquire equivalent assets;
(b) Asset Dispositions between Guarantors;
(c) Asset Dispositions not described in Section 7.10(a), (b), (d) or
(e), up to a maximum aggregate book value of $20,000,000, at the fair
market value thereof; provided (i) 80% of the consideration received is in
immediate exchange for cash (with any note or other obligation that is
immediately converted into cash being deemed to be cash in the amount so
converted); (ii) if at any time the aggregate fair market value of all
assets disposed of pursuant to this Section 7.10(c), the proceeds of which
have not been applied in accordance with Section 2.05(c)(i)(A) or
reinvested as provided below, shall exceed $5,000,000, on the date of the
closing thereof, the Borrower shall apply the Net Cash Proceeds of such
asset disposition to make a prepayment in accordance with Section
2.05(c)(i)(A) unless (A) to the extent that the Borrower shall intend to
(and, within sixty (60) days after the closing of such transaction, shall)
reinvest such proceeds in Permitted Asset Disposition Proceeds
Reinvestments, the Borrower shall not be required to make such prepayment
(and the Borrower hereby further agrees that, in the event that it shall
make any disposition of assets in accordance with the foregoing, which
assets constitute Collateral, and it shall be required to make any
reinvestment of the proceeds thereof as aforesaid, it shall make such
reinvestment only in assets which would also constitute Collateral, and it
shall also execute such documents and instruments and take such other or
further actions as the Collateral Agent may reasonably request in order to
create or perfect a
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Lien thereon in favor of the Collateral Agent for the benefit of the Bank
Parties); and (B) to the extent that a reinvestment of the type
contemplated by the preceding clause (A) shall not have occurred within
sixty (60) days after the closing of such transaction, then the Borrower
shall make such prepayment within five Business Days thereafter and
otherwise in accordance with Section 2.05(c)(i)(A); and (iii) on the date
of the consummation of each Asset Disposition of the type contemplated by
this Section 7.10(c), the Borrower shall provide the Administrative Agent
with written notice thereof;
(d) An Asset Disposition consisting of the sale, transfer, carryover,
lease or other disposition of the Monessen Facility; provided, that the Net
Cash Proceeds of any transaction pursuant to this Section 7.10(d) shall be
applied in accordance with Section 2.05(c)(i)(A); and
(e) upon request and with the consent of the Required Banks (such
consent not to be unreasonably withheld), other sales, conveyances,
assignments or other transfers or dispositions of property or assets at
fair market value; provided, that the Net Cash Proceeds of all transactions
pursuant to this Section 7.10(e) shall be applied in accordance with
Section 2.05(c)(i)(A).
Upon request of the Borrower, the Collateral Agent (acting on behalf
of all the Bank Parties) shall execute and deliver such instruments and
documents (including releases of Liens) as the Borrower may reasonably request
in order to permit the Borrower to consummate any of the transactions
contemplated by subsections (a) through (d) of this Section 7.10.
7.11. Disposition of Stock in and Indebtedness of Subsidiaries.
--------------------------------------------------------
The Borrower shall not directly or indirectly sell or otherwise
dispose of, or part with control of, any shares of the capital stock of any of
its Subsidiaries or any Indebtedness of any of its Consolidated Subsidiaries,
and shall not permit any of its Subsidiaries directly or indirectly to issue,
sell or otherwise dispose of, or part with control of, any shares of the capital
stock of itself or any of its Subsidiaries or permit any of its Consolidated
Subsidiaries directly or indirectly to issue, sell or otherwise dispose of, or
part with control of, any Indebtedness of itself or any of its Consolidated
Subsidiaries ("indirect" disposition or issuance of shares of capital stock
including disposition or issuance of options, warrants, calls, subscriptions,
conversion rights, exchange rights, preemptive rights or other rights,
agreements or arrangements (contingent or other) with respect to such shares),
except
(a) the Borrower and its Consolidated Subsidiaries may incur or
suffer to remain outstanding Indebtedness to the extent not prohibited by
Section 7.03; and
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(b) the Borrower and its Subsidiaries may issue and dispose of shares
of its own capital stock pursuant to a transaction not prohibited by
Section 7.06.
7.12. Transactions with Affiliates.
----------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or carry out any transaction with
(including purchase property or services from or sell property or services, to,
make any loan or advance to, or enter into, permit to remain in existence or
amend, any contract, agreement or arrangement with) any Affiliate of the
Borrower, or agree, become or remain liable (contingently or otherwise) to do
any of the foregoing, except for those set forth on Schedule 7.12 and the
following:
(a) directors, officers and employees of the Borrower and its
Subsidiaries may render services to the Borrower or such Subsidiary for
compensation at the same rates generally paid by corporations engaged in
the same or similar businesses for the same or similar services;
(b) the Borrower and its Subsidiaries may enter into and carry out
other transactions with its Affiliates in the ordinary course of business
consistent with the past practices of the Borrower, pursuant to the
reasonable requirements of the Borrower's, or such Subsidiary's, business,
upon terms reasonably found by a majority of the disinterested members of
the board of directors of the Borrower and such Subsidiary, after due
inquiry, to be fair and reasonable and no less favorable to the Borrower or
such Subsidiary than would obtain in a comparable arm's-length transaction;
provided that with respect to any transaction or series of related
transactions the aggregate amount of which is in excess of $10,000,000,
other than a transaction of the type contemplated by Section 7.03(i), in
addition to approval of its board of directors, the Borrower will obtain a
written opinion of an Independent Financial Advisor stating that the terms
of such transaction are fair to the Borrower or its Subsidiary, as the case
may be, from a financial point of view; and
(c) the Borrower may enter into the Advisory Services Agreement and
may continue to perform its obligations pursuant to Sections 3(b), 4 and 5
thereunder to the extent that such advisory fees payable by the Borrower
thereunder are treated by the Borrower as an operating expense for purposes
of the calculation of Consolidated EBITDA for the purposes of this
Agreement.
7.13. Continuation of or Change in Business.
-------------------------------------
The Borrower shall, and shall cause each of its Subsidiaries to,
engage in the business they have engaged in and substantially as engaged in
during the present and
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preceding fiscal years, and the Borrower shall not, and shall not permit any of
its Subsidiaries to, engage in any unrelated line of business.
7.14. Capital Expenditures.
--------------------
The Borrower and its Consolidated Subsidiaries shall not make any
capital expenditures, directly or indirectly, for cash or other consideration,
in any fiscal year which, in the aggregate, exceed $35,000,000; provided that
the amount of capital expenditures permitted in any calendar year may be
increased by an amount not to exceed 50% of the previous year's permitted
capital expenditures to the extent such amounts were not expended in such
previous year; provided, further, that all capital expenditures made pursuant to
this Section 7.14 shall be in the ordinary course of business.
7.15. Consolidated Tax Returns.
------------------------
The Borrower shall not file, or consent to the filing of, any
consolidated income tax return with any person other than its Subsidiaries.
7.16. Regulation U.
------------
The Borrower shall not use any Letter of Credit or any Loan or the
proceeds of any thereof directly or indirectly to purchase or carry any "margin
stock" (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve system) or to extend credit to others for the purpose of
purchasing or carrying, directly or indirectly, any such margin stock.
7.17. Certain Documents.
-----------------
The Borrower shall not (a) amend its articles of incorporation or
bylaws, each as in effect on the date hereof, in any way adverse to the
interests of the Bank Parties, or (b) amend, waive or release, or agree to the
amendment, waiver or release, of Article VII of the Acquisition Agreement or of
any term or provision of the Acquisition Agreement Guarantee, (c) amend any
provision of the Australian Credit Facilities, (d) amend Section 3(b) of the
Advisory Services Agreement or (e) amend, waive or release, or agree to the
amendment, waiver or release of the Stockholders' Agreement provided that the
Borrower may be released from the Stockholders' Agreement concurrently with
entering into the New Stockholders' Agreement, following which the Borrower
shall not amend, waive or release, or agree to the amendment, waiver or release
of the New Stockholders' Agreement.
7.18. Compliance with ERISA.
---------------------
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The Borrower shall not (a) terminate any Plan so as to result in any
material liability to the PBGC, (b) engage in any "prohibited transaction" (as
defined in Section 4975 of the Code) involving any Plan which would result in a
material liability for an excise tax or civil penalty in connection therewith,
(c) incur or suffer to exist any material "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, involving any Plan, or
(d) allow or suffer to exist any event or condition which would reasonably be
expected to present a material risk of incurring a material liability to the
PBGC by reason of termination of any such Plan.
7.19. Limitation of Other Restrictions on Liens,
Dividend Restrictions on Subsidiaries, etc.
------------------------------------------
Except for the restrictions imposed by this Agreement and the Related
Documents and the Senior Subordinated Note Indenture, the Borrower shall not,
and shall not permit any of its Consolidated Subsidiaries to:
(a) enter into or become or remain subject to any agreement or
instrument to which the Borrower or such Consolidated Subsidiary is a party
or by which any of them or any of their respective properties may be
subject or bound which would (i) prohibit the grant of any Lien upon any of
its properties in favor of the Bank Parties or any successors thereto
pursuant to any extension, renewal or replacement of Indebtedness
constituting Obligations, or (ii) restrict or prohibit the transfer or
disposition of any of its properties, or require the disposition of or
application of the proceeds of any such disposition in a specified manner,
except a restriction on Liens on or transfers or other dispositions of
property subject to a Permitted Lien for the benefit of the holder of such
Permitted Lien; or
(b) be or become subject to any restriction of any nature (whether
arising by agreement or otherwise) on the right of the Borrower or such
Consolidated Subsidiary from time to time (i) in the case of a Consolidated
Subsidiary, to declare and pay dividends or make other distributions with
respect to the shares of its capital stock owned by the Borrower or any of
its Consolidated Subsidiaries, (ii) in the case of the Borrower or any of
its Consolidated Subsidiaries, to pay any obligations from time to time
owed to the Borrower or any of its Consolidated Subsidiaries, or (iii) in
the case of the Borrower or any of its Consolidated Subsidiaries, make
loans or advances to the Borrower of any of its Consolidated Subsidiaries,
except a restriction of general applicability under applicable Law.
7.20. Limitation on Other Restrictions on Amendment
of This Agreement, etc.
-----------------------
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The Borrower shall not, and shall not permit any of its Subsidiaries
to, enter into, become or remain subject to any agreement or instrument to which
the Borrower or such Subsidiary is a party or by which it or any of its
respective properties may be subject or bound, which would prohibit or require
the consent of any person to any amendment, modification or supplement to this
Agreement or any of the Related Documents, except for this Agreement and the
Related Documents.
7.21. Limitation on Creation of Subsidiaries.
--------------------------------------
The Borrower shall not, and shall not cause or permit any of its
Subsidiaries to, establish, create or acquire after the Closing Date any
Subsidiary; provided that the Borrower and its Subsidiaries may establish or
create Subsidiaries so long as (i) at least 30 days' written notice is provided
to the Administrative Agent, (ii) all of the capital stock of such new
Subsidiary is pledged pursuant to a Securities Pledge Agreement or other similar
securities pledge agreement, as applicable, and the certificates representing
such stock, together with stock powers duly executed in blank, are delivered to
the Collateral Agent, and (iii) any such new Subsidiary shall have executed and
delivered a Subsidiary Guarantee or other similar guarantee and any other
Security Document or similar document requested by the Collateral Agent or the
Required Banks. In addition, each new Subsidiary shall execute and deliver or
shall cause to be executed and delivered all relevant documentation of the type
described in Article V as such Subsidiary would have delivered if such
Subsidiary were a Subsidiary on the Closing Date.
7.22. Borrowings Under the Australian Revolving Loan
Facility.
---------
The Borrower shall not permit KAP to incur additional Indebtedness for
Borrowed Money under the Australian Revolving Loan Facility unless (i) the
Borrower shall provide to the Administrative Agent notice within one week
following such incurrence of the amount and date of such incurrence and (ii) at
the time of the incurrence of such Indebtedness for Borrowed Money, the
conditions specified in Sections 5.02(b), 5.02(c) and 5.02(d) shall be
satisfied.
Each notice by the Borrower of an incurrence by KAP of Indebtedness
for Borrowed Money under the Australian Revolving Loan Facility shall constitute
a representation and warranty by the Borrower as of the date of such notice of
compliance with this Section 7.22. Failure of the Administrative Agent to
receive notice from the Borrower to the contrary before such incurrence shall
constitute a further representation and warranty by the Borrower of compliance
with this Section 7.22.
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ARTICLE VIII.
DEFAULTS
--------
8.01. Events of Default.
-----------------
An Event of Default shall mean the occurrence or existence of one or
more of the following events or conditions (whatever the reason for such Event
of Default and whether voluntary, involuntary or effected by operation of Law):
(a) The Borrower shall fail to pay when due any principal (whether by
mandatory prepayment, Scheduled Amortization Payment, at maturity or
otherwise) of any Loan or any Letter of Credit Reimbursement Obligation or
to make any required cash collateralization of any outstanding Letter of
Credit; or
(b) The Borrower shall fail to pay when due interest on any Loan, any
fee, indemnity or expense (including any amount payable pursuant to Section
2.11) or any other amount due hereunder or under any of the Related
Documents, and such failure shall have continued for a period of five (5)
Business Days; or
(c) Any material representation or warranty made or deemed to have
been made by the Borrower or any Guarantor under this Agreement or any of
the Related Documents or any material statement made by the Borrower in any
financial statement, certificate, report, exhibit or document furnished by
the Borrower to any Agent or any Bank Party pursuant to this Agreement or
any of the Related Documents shall proved to have been false or misleading
in any material respect as of the time when made (including by omission of
material information necessary to make such representation, warranty or
statement, in light of the circumstances under which it was made, not
misleading); or
(d) The Borrower shall default in the performance or observance of
any covenant contained in Article VII or Section 6.01(i); or
(e) The Borrower or any Guarantor shall default in the performance or
observance of any other covenant, agreement or duty under this Agreement or
any Related Document and (i) in the case of a default under Section 6.01
(other than under subsection (j) of such Section 6.01), such default shall
have continued for a period of ten (10) days after notice from the
Administrative Agent to the Borrower, (ii) in the case of any other
default, such default shall have continued for a period of thirty (30)
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days after notice from the Administrative Agent to the Borrower, and (iii)
in the case of any default under any Security Document, the Required Banks
shall have determined in good faith that such default has had, is having or
would reasonably be likely to have a material adverse effect on its rights
and remedies thereunder or such default shall have continued beyond any
period of grace with respect thereto as provided in such Security Document,
but in any event for a period of not less than thirty (30) days; or
(f) The Borrower or any of its Subsidiaries (i) shall default (as
principal or as guarantor or other surety) in any payment of any obligation
(or set of related obligations) in respect of Indebtedness in excess of
$5,000,000 in aggregate amount beyond any period of grace with respect
thereto or, if such obligation or obligations is or are payable or
repayable on demand, shall fail to pay or repay such obligation or
obligations when demanded, or (ii) shall default in the observance of any
covenant, term or condition contained in any agreement or instrument by
which such obligation or obligations is or are created, secured or
evidenced if the effect of such default is to cause, or to permit the
holder or holders of such obligation or obligations (or a trustee or agent
on behalf of such holder or holders) to cause, all or part of such
obligation or obligations to become due before its or their otherwise
stated maturity; or
(g) The occurrence of any event described in subsections (i) through
(viii) below, other than a Reportable Event described in clause (iv) of
such defined term, if the aggregate of the amount of the unfunded benefit
liabilities (as defined in Section 4001(a)(16) of ERISA) for each Plan to
which such event relates, plus the aggregate withdrawal liability due for
each Multiemployer Plan to which such event relates, is greater than
$750,000; the occurrence of an event described in subsection (ix) below and
the PBGC premiums due and unpaid exceed $250,000; or the occurrence of a
Reportable Event as described in clause (iv) of such defined term:
(i) The PBGC notifies a Plan pursuant to Section 4042 of ERISA
by service of a complaint, written threat of filing a law suit or
otherwise of its determination that an event described in Section
4042(a) of ERISA has occurred, a Plan should be terminated, or a
trustee should be appointed for a Plan; or
(ii) Any action is taken to terminate a Plan pursuant to its
provisions or the plan administrator files with the PBGC a notice of
intent to terminate a Plan in accordance with Section 4041 of ERISA;
or
(iii) Any action is taken by a plan administrator to have a
trustee appointed for a Plan pursuant to Section 4042 of ERISA; or
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(iv) A return is filed with the Internal Revenue Service, or
a Plan is notified by the Secretary of the Treasury that a notice of
deficiency under Section 6212 of the Code has been mailed, with
respect to the tax imposed under Section 4971(a) of the Code for
failure to meet the minimum funding standards established under
Section 412 of the Code; or
(v) A Reportable Event occurred with respect to a Plan; or
(vi) Any action is taken to amend a Plan to become an employee
benefit plan described in Section 4021(b)(1) of ERISA, causing a Plan
termination under Section 4041(e) of ERISA; or
(vii) The Borrower or any Controlled Group Member receives a
notice of liability or demand for payment on account of complete
withdrawal under Section 4203 of ERISA, partial withdrawal under
Section 4205 of ERISA or on account of becoming secondarily liable for
withdrawal liability payments under Section 4204 of ERISA (sale of
assets); or
(viii) The property or assets of the Borrower or any Controlled
Group Member are encumbered as a result of security provided to a Plan
pursuant to Section 412 of the Code or Section 306 of ERISA in
connection with a request for a minimum funding waiver or extension of
the amortization period, or pursuant to Section 401(a)(29) of the Code
or Section 307 of ERISA as a result of a Plan amendment; or
(ix) The Borrower or a Controlled Group Member fails to pay the
PBGC premium with respect to a Plan when due and it remains unpaid for
more than thirty (30) days thereafter.
For purposes of subsection (g)(i) above, the amount of the unfunded
benefit liabilities shall be determined and certified to by an actuary
selected or approved by the Administrative Agent or in any other manner
chosen by the Administrative Agent, and the annual withdrawal liability
payment due for the Multiemployer Plan(s) shall be determined from the
notice of withdrawal liability or demand for payment issued by the
Multiemployer Plan(s); or
(h) One or more judgments for the payment of money shall have been
entered against the Borrower or any of its Subsidiaries, which judgment or
judgments exceed $5,000,000 in the aggregate, are not fully covered by
insurance and such judgment or judgments shall have become final and
nonappealable or shall have remained undischarged and unstayed for a period
of sixty (60) consecutive days; or
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(i) A writ or warrant of attachment, garnishment, execution,
distraint or similar process shall have been issued against the Borrower or
any of its Subsidiaries or any of their respective properties in an amount
exceeding $5,000,000 in aggregate, which shall have become final and
nonappealable or remained undischarged and unstayed for a period of sixty
(60) consecutive days; or
(j) Any Official Authorization now or hereafter made by or with any
Official Body in connection with this Agreement or any Related Document is
not obtained or shall have ceased to be in full force and effect or shall
have been modified or amended or shall have been held to be illegal or
invalid, and such event or condition has, or would reasonably be expected
to have, a Material Adverse Effect; or
(k) Any Security Document shall cease to be in full force and effect;
or any Lien created or purported to be created in any Collateral shall fail
to be a valid, enforceable and perfected Lien in favor of the
Administrative Agent for the benefit of the Bank Parties securing the
Obligations, prior to all other Liens except Permitted Liens, except as the
result of any action or failure to act on the part of any of the Bank
Parties; or
(l) This Agreement or any Related Document or any term or provision
hereof or thereof shall cease to be in full force and effect (except in
accordance with the express terms of this Agreement or such Related
Document), or the Borrower or any Guarantor shall, or shall purport to,
terminate (except in accordance with the terms of this Agreement or such
Related Document), repudiate, declare voidable or void or otherwise
contest, this Agreement or such Related Document or term or provision
hereof or thereof or any obligation or liability of the Borrower hereunder
or thereunder; or
(m) Any Official Body shall have held or ruled that Article VII of
the Acquisition Agreement is not valid and binding on Beazer East or the
Acquisition Agreement Guarantee is not valid and binding on Beazer Limited,
or the Borrower shall have agreed to the withdrawal, revocation or
modification of the Acquisition Agreement or the Acquisition Agreement
Guarantee without the prior written consent of the Required Banks; or
(n) (i) (A) a failure by Beazer East to pay any obligation or set of
obligations under Article VII of the Acquisition Agreement in excess of
$5,000,000 in aggregate, which failure shall have continued for a period of
thirty (30) days or more, or (B) any other failure by Beazer East to
perform any obligation or set of obligations under Article VII of the
Acquisition Agreement which the Required Banks shall determined in good
faith has had, is having or would be reasonably likely to have a Material
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Adverse Effect; and (ii) a failure to perform by Beazer Limited under the
Acquisition Agreement Guarantee with respect to such obligation or set of
obligations; provided, however, that, if an arbitration proceeding or
arbitration proceedings shall have been instituted under Article XI of the
Acquisition Agreement with respect to any such obligation or set of
obligations, such failure by Beazer East to pay or perform such obligation
or obligations shall not constitute an Event of Default hereunder unless or
until (w) a final decision shall have been rendered against Beazer East in
such arbitration proceeding and Beazer East shall have failed to perform
such obligation for a period of thirty (30) days after such final decision
has been rendered, (x) the Required Banks shall have determined in good
faith that such arbitration proceeding is not being diligently prosecuted,
(y) a period of one year shall have passed since the commencement of such
arbitration proceeding, or (z) the Borrower shall have expended more than
$10,000,000 in the aggregate in unreimbursed expenditures as a result of
such failure to perform by Beazer East and Beazer Limited; or
(o) (i) Any person other than the Investors and their controlled (but
not controlling or commonly controlled) Affiliates shall become the
beneficial owner of more than 50% of the voting stock of the Borrower or
shall obtain the power to nominate or elect, by agreement or otherwise, at
least a majority of the board of directors of the Borrower, or the
Management Investors shall cease to be the beneficial owners of at least
10% of the voting stock of the Borrower; or (ii) a "Change of Control"
under and as defined in the Senior Subordinated Note Indenture shall occur;
or
(p) A proceeding shall have been instituted in respect of the
Borrower or any of its Significant Subsidiaries:
(i) seeking to have an order for relief entered in respect of
the Borrower or such Subsidiary, or seeking a declaration or entailing
a finding that the Borrower or such Subsidiary is insolvent or a
similar declaration or finding, or seeking dissolution, winding-up,
charter revocation or forfeiture, liquidation, reorganization,
arrangement, adjustment, composition or other similar relief with
respect to the Borrower or such Subsidiary, its assets or its debts
under any law relating to bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal entitles or any other
similar law now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee, custodian,
liquidator, assignee, sequestrator or other similar official for the
Borrower or such Subsidiary or for all or any substantial part of its
property,
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and such proceeding shall result in the entry, making or grant of any such
order for relief, declaration, finding, relief or appointment, or such
proceeding shall remain undismissed and unstayed for a period of sixty (60)
consecutive days; or
(q) the Borrower or any of its Significant Subsidiaries, shall become
insolvent, shall fail to pay, become unable to pay, or state that it is or
will be unable to pay, its debts as they become due, shall voluntarily
suspend transaction of its business, is taken to fail to comply with a
statutory demand in accordance with section 459F of the Corporations Law
(in the case of Australian Subsidiary Guarantors) shall make a general
assignment for the benefit of creditors, shall institute (or fail to
controvert in a timely and appropriate manner) a proceeding described in
Section 8.01(p)(i) or (whether or not any such proceeding has been
instituted) shall consent to or acquiesce in any such order for relief,
declaration, finding or relief described therein, shall institute (or fail
to controvert in a timely and appropriate manner) a proceeding described in
Section 8.01(p)(ii) or (whether or not any such proceeding has been
instituted) shall consent to or acquiesce in any such appointment or to the
taking of possession by any such official of all or any substantial part of
its property, whether or not any such proceeding is instituted, shall
revoke or forfeit its articles of incorporation (or other constituent
documents), dissolve, wind up or liquidate itself or any substantial part
of its property (except as provided in Section 7.10) or resolve to do so,
appoints or any other person appoints an administrator to an Australian
Subsidiary Guarantor or takes any step to do so, or shall take any action
in furtherance of any of the foregoing.
8.02. Consequences of an Event of Default.
-----------------------------------
(a) If an Event of Default specified in subsections (a) through (o)
of Section 8.01 shall occur and be continuing or shall exist, then, in addition
to all other rights and remedies which any Bank Party may have hereunder or
under any Related Document, at law, in equity or otherwise, the Banks shall be
under no further obligation to make Loans, the Issuing Banks shall be under no
further obligation to issue any Letters of Credit and the Administrative Agent
may, and (subject to Section 9.05) upon the written request of the Required
Banks, shall, by notice to the Borrower, from time to time, do any or all of the
following:
(i) Declare the Commitments terminated, whereupon the Commitments
shall be terminated and any fees hereunder shall be immediately due and
payable without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived, and a cause of action therefor
shall immediately accrue; and
(ii) Declare the unpaid principal amount of the Loans, interest
accrued thereon and all other Obligations (including the obligation to cash
collateralize
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outstanding Letters of Credit) to be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived, and a cause of action therefor shall
immediately accrue.
(b) If an Event of Default specified in subsection (p) or (q) of
Section 8.01 shall occur or exist, then, in addition to all other rights and
remedies which the Administrative Agent or any Bank Party may have hereunder or
under any Related Document, at law, in equity or otherwise, the Commitments
shall automatically terminate and the Banks shall be under no further obligation
to make Loans, the Issuing Banks shall be under no further obligation to issue
any Letters of Credit, and the unpaid principal amount of the Loans, all
interest accrued thereon and all other Obligations (including the obligation to
cash collateralize outstanding Letters of Credit) shall become immediately due
and payable without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, and an action therefor shall immediately
accrue.
8.03. Set-Off.
-------
If the unpaid principal amount of any Obligation shall have become due
and payable (by acceleration or otherwise), each Bank Party, each branch,
subsidiary or affiliate of each Bank Party anywhere in the world and each
Participant, shall have the right, in addition to all other rights and remedies
available to it, without notice to the Borrower, to set off against and
appropriate and apply against such Obligation any debt owing to, and any other
funds held in any manner for the account of, the Borrower by such Bank party or
such branch, subsidiary or affiliate or such Participant, including all funds in
all deposit accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or hereafter maintained by the
Borrower with such Bank Party or such branch, subsidiary or affiliate or such
Participant. Such right shall be absolute and unconditional and, without
limitation, shall exist whether or not such Bank Party or such branch,
subsidiary or affiliate or such Participant shall have given notice or made any
demand hereunder or under any Related Document or under any participation,
whether or not such debt owing to or funds held for the account of the Borrower
is or are contingent or absolute or matured or unmatured, whether or not any
amounts owing to any Participant with respect to any participation are matured
or unmatured, whether or not any such branch, subsidiary or affiliate or
Participant is in privity with or is a creditor of the Borrower, and regardless
of the existence or adequacy of any collateral, guaranty or any other security,
right or remedy available to any Bank Party or Participant. Such right shall
exist regardless of the currency in which is expressed such debt owing to or
such funds held for the account of the Borrower, and if such debt is or such
funds are expressed in a currency (the "Set-off Currency") other than the
currency payable hereunder (the "Contractual Currency"), for purposes of
effecting set-off the rate of exchange used shall be that at which in accordance
with normal banking procedures such Bank Party or such branch, subsidiary or
affiliate or such Participant could
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purchase the Contractual Currency with the Set-off Currency on the Business Day
following such set-off. The Borrower hereby consents to and confirms the
foregoing arrangements and confirms each Bank Party's rights, and each branch's
subsidiary's and affiliate's rights, and each Participant's rights, of banker's
lien and set-off. The rights provided by this Section are in addition to all
other rights of set-off and banker's lien and all other rights and remedies
which any Bank Party (or any branch, subsidiary or affiliate or any Participant)
may otherwise have under this Agreement, any Related Document, at law, in equity
or otherwise, and nothing in this Agreement or in any of the Related Documents
shall be deemed to be a waiver or prohibition of or restriction on any Bank
Party's rights, or any branch's, subsidiary's or affiliate's rights, or any
Participant's rights, of banker's lien or set-off.
8.04. Application of Proceeds.
-----------------------
Any amount received by any Bank Party, whether as the result of any
voluntary payment or prepayment, upon the exercise of any right of set-off or
banker's lien, by counterclaim, or by any other source, shall be applied against
the Obligations as follows:
(a) first, to payment in full of all fees, indemnities and other
amounts due to the Agents in their respective capacities as such;
(b) second, to payment in full of all fees, indemnities and other
amounts due to the Issuing Banks and the Swingline Bank in their capacities
as such, other than principal of or interest on Swingline Loans and Letter
of Credit Reimbursement Obligations, ratably amongst the Issuing Banks and
the Swingline Bank in proportion to the respective amounts described in
this clause "second" due to them;
(c) third, to payment in full of all fees (other than fees in respect
of Letters of Credit pursuant to Section 3.02(a)) and expenses due
hereunder or under any of the Related Documents and not paid pursuant to
clause (a) or (b) above;
(d) fourth, to payment in full of all interest then due on
outstanding Loans and Letter of Credit Unreimbursed Draws and Swingline
Loans and to payment in full of all fees in respect of Letters of Credit
pursuant to Section 3.02(a);
(e) fifth, to payment in full of all principal of outstanding Loans,
Letter of Credit Unreimbursed Draws and Swingline Loans, ratably among the
Banks, the Issuing Banks and the Swingline Bank in proportion to the
respective amounts described in this clause "fifth" due to them;
(f) sixth, to funding of the Letter of Credit Collateral Account in
accordance with the provisions hereof;
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(g) seventh, to payment in full of any and all other amounts due
hereunder or under any of the Related Documents in respect of the
Commitments, the Loans, the Letters of Credit or otherwise; and
(h) thereafter, to the Borrower or as otherwise required by Law.
8.05. Equalization Among Bank Parties and Participants.
------------------------------------------------
The Bank Parties and the Participants hereby agree among themselves
that, if any Bank Party or Participant shall receive (whether by voluntary
payment, realization upon security, set-off or from any other source) any amount
on account of any part of the Obligations which is in excess of the share
thereof to which such Bank Party or Participant is entitled pursuant to the
terms of this Agreement, then the Bank Party or Participant receiving such
excess amount shall notify the other Bank Parties and Participants which may be
entitled to a share thereof and the Administrative Agent of such receipt, and
equitable adjustment will be made in the manner stated in this Section so that,
in effect, all such excess amounts are shared Pro Rata among the Bank Parties
and Participants. The Bank Party or Participant receiving any such excess
amount shall purchase (which it shall be deemed to have done simultaneously with
the receipt of such excess amount) for cash from the other Bank Parties and
Participants, as the case may be, an interest in the Obligations owing to each
other Bank Party or Participant in such amount as shall result in a Pro Rata
participation by all Bank Parties and Participants in such excess amount (and to
the extent of any such sharing, the Bank Party or Participant receiving such
interest shall be deemed to be a Participant); provided, however, that if all or
any portion of such excess amount shall thereafter be recovered from the Bank
Party or Participant making such purchase, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by Law (including court order) to be
paid by such Bank Party or Participant, as the case may be.
ARTICLE IX.
THE AGENTS
----------
9.01. Appointment.
-----------
The Bank Parties hereby irrevocably appoint SBC Warburg Dillon Read
Inc. to act as their Arranger and Syndication Agent, Mellon Bank, N.A. to act as
their Administrative Agent and Collateral Agent and Swiss Bank Corporation to
act as their Documentation Agent hereunder and under the Related Documents as
herein specified. Each Bank Party hereby irrevocably authorizes the Agents to
take such action on its behalf under the provisions of this Agreement and the
Related Documents, and to exercise such powers and to perform such
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duties hereunder and thereunder, as are specifically delegated to or required of
the Agents by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto. Each of the Agents hereby agrees to act in its
respective capacities on behalf of the Bank Parties on the terms and conditions
set forth in this Agreement and the Related Documents. Each Bank Party hereby
irrevocably authorizes the Agents to execute and deliver each of the Related
Documents as an Agent and to accept delivery of such of the other Related
Documents as may not require execution by the Agents. Each Bank Party hereby
agrees that the rights and remedies granted to the Agents hereunder and under
the Related Documents shall be exercised exclusively by the Agents, and that no
Bank Party shall have any right individually to exercise any such right or
remedy, except to the extent, if any, expressly provided herein or therein.
9.02. Delegation of Duties.
--------------------
Each of the Agents may perform any of its duties hereunder or under
the Related Documents by or through agents or employees. None of the Agents
shall be responsible for the negligence or misconduct of any agents selected by
it with reasonable care. Each of the Agents may consult with legal counsel
(including counsel for such Agent or in-house or other counsel for the
Borrower), independent public accountants and any other experts selected by it
from time to time, and any such Agent shall not be liable to the Bank Parties
for any action taken or omitted to be taken in good faith by it in accordance
with the advice of such counsel, accountants or experts.
9.03. Nature of Duties; Independent Credit Investigation.
--------------------------------------------------
(a) The Agents shall have no duties or responsibilities except those
expressly set forth in this Agreement or the Related Documents, and no implied
duties or responsibilities on the part of the Agents shall be read into this
Agreement or any Related Document or shall otherwise exist. The duties and
responsibilities of each of the Agents under this Agreement and the Related
Documents shall be mechanical and administrative in nature; the Agents shall not
by reason of this Agreement or any of the Related Documents have a fiduciary
relationship in respect of any Bank Party; and nothing in this Agreement or any
Related Document, expressed or implied, is intended to or shall be so construed
as to impose upon any of the Agents any obligations in respect of this Agreement
or any Related Document except as expressly set forth herein or therein.
(b) The Agents are and shall be solely the agents of the Bank
Parties. The Agents do not assume, and shall not at any time be deemed to have,
any relationship of agency or trust with or for, or any other duty or
responsibility to, the Borrower or any person other than the Bank Parties. The
provisions of this Article IX are for the benefit of the Bank
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Parties (and the other persons named in Section 9.06), and the Borrower shall
not have any rights under any of the provisions of this Article IX.
(c) Each Bank Party expressly acknowledges (i) that the Agents have
not made any representation or warranty to it, and that no act by the Agents
heretofore or hereafter taken, including any review of the affairs of the Credit
Parties, shall be deemed to constitute any representation or warranty by the
Agents to any Bank Party; (ii) that, independently and without reliance upon the
Agents, and based upon such documents and information as it has deemed
appropriate, it has made its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the
Credit Parties, and its own credit and legal analysis and decision to enter into
this Agreement and the Related Documents; (iii) that, independently and without
reliance upon the Agents, and based upon such documents and information as it
shall deem appropriate at the time, it will continue to make its own decisions
to take or not take action under or in connection with this Agreement or the
Related Documents; and (iv) that the Agents have and shall have no duty or
responsibility, either initially or on a continuing basis, to provide it with
any credit or other information, except as otherwise expressly provided herein,
whether coming into their possession before the making of any Loans or issuance
of any Letters of Credit hereunder or at any time or times hereafter.
9.04. Actions in Discretion of Agents; Instructions
from Banks.
---------------------------------------------
Each of the Agents agrees, upon the written request of the Required
Banks, to take any action of the type specified as being within such Agent's
rights, powers or discretion herein or in the Related Documents; provided,
however, that such Agent shall be under no obligation to take any action
hereunder or under any Related Document if such Agent believes in good faith
that taking such action may conflict with any Law or any provision of this
Agreement or any Related Document or may require such Agent to qualify to do
business in any jurisdiction where it is not then so qualified. In the absence
of a request by the Required Banks, each of the Agents shall have authority (but
under no circumstances shall be obligated), in its sole discretion, to take or
not to take any such action, unless this Agreement or the Related Documents
specifically require the consent of the Required Banks, in which case such Agent
shall not take such action absent such direction or consent. Any action taken
or failure to act pursuant to such instructions or discretion shall be binding
on all the Bank Parties. No Bank Party shall have any right of action against
any of the Agents, and none of the Agents shall have any liability to any person
as a result of (a) acting or refraining from acting in accordance with the
directions of the Required Banks, (b) refraining from acting in the absence of
instructions to act from the Required Banks, whether or not such Agent has
discretionary power to take such action, or (c) taking discretionary action it
is authorized to take under this Section 9.04, subject to the provisions of
Section 9.05.
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9.05. Exculpatory Provisions.
----------------------
(a) None of the Agents nor any of their respective directors,
officers, employees or agents shall be liable to any of the Agents or any Bank
Party for any action taken or omitted to be taken by it hereunder or under any
of the Related Documents or in connection herewith or therewith, unless caused
by its own gross negligence or willful misconduct, as finally determined by a
court of competent jurisdiction.
(b) In performing its functions and duties hereunder or under the
Related Documents on behalf of the Bank Parties, each Agent shall exercise the
same care which it would exercise in dealing with loans for its own account, but
it shall not be responsible in any manner to any of the Bank Parties for (i) the
execution, delivery, effectiveness, enforceability, genuineness, validity or
adequacy of this Agreement or any of the Related Documents, (ii) any recital,
representation, warranty, document, certificate, report or statement herein or
therein or made or furnished under or in connection with this Agreement or any
Related Document, (iii) any failure of the Borrower or any other person to
perform any of their respective obligations under this Agreement or any of the
Related Documents, (iv) the existence, validity, enforceability, perfection,
recordation, priority, adequacy or value, now or hereafter, of any Lien or other
direct or indirect security afforded or purported to be afforded by any of the
Security Documents or otherwise from time to time, or (v) caring for,
protecting, insuring, or paying any taxes, charges or assessments with respect
to, any Collateral.
(c) None of the Agents shall be under any obligation to ascertain,
inquire or give any notice relating to (i) the performance or observance of any
of the terms or conditions of this Agreement or any of the Related Documents on
the part of the Borrower or any other person, (ii) the business, operations,
condition (financial or otherwise) or prospects of the Borrower or any other
person, or (ii) except to the extent set forth in Section 9.05(e), the existence
of any Event of Default or Potential Default.
(d) None of the Agents shall be under any obligation to any of the
Bank Parties, either initially or on a continuing basis, to provide any Bank
Party with any notices, reports or information of any nature, whether in its
possession presently or hereafter, except for such notices, reports and other
information expressly required by this Agreement or any of the Related Documents
to be furnished by such Agent to such Bank Party.
(e) None of the Agents shall be under any obligation to any of the
Bank Parties, either initially or on a continuous basis, to ascertain the
existence or possible existence of any Event of Default or Potential Default and
none of the Agents shall be deemed to have knowledge of the occurrence of an
Event of Default or Potential Default unless a required payment by the Borrower
to such Agent has not been made or such Agent
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has received notice from another Bank Party or the Borrower specifying such
Event of Default or Potential Default and stating that such notice is a "Notice
of Default." In the event that the Administrative Agent fails to so receive any
such payment or receives any such notice, the Administrative Agent shall give
prompt notice thereof to the other Bank Parties.
9.06. Reimbursement and Indemnification.
---------------------------------
Each Bank severally agrees to reimburse and indemnify each of the
Agents in their respective capacities as such and each of their respective
directors, officers, employees and agents (to the extent not reimbursed by the
Borrower), Pro Rata for all Proportions, for and against any and all
liabilities, obligations, losses (other than any losses resulting from a failure
by the Administrative Agent to receive from the Borrower any amount owing
pursuant to Section 9.13), damages, penalties, actions, judgment, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including the fees
and disbursements of counsel for each of the Agents or such other person in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Agent or such other person shall be
designated a party thereto) which may at any time be imposed on, incurred by or
asserted against each Agent, in its capacity as such, or such other person as a
result of, or arising out of, or in any way related to or by reason of, this
Agreement or the Related Documents, any transaction from time to time
contemplated hereby or thereby, or any transaction financed in whole or in part
or directly or indirectly with any Loans or Letters of Credit (or the proceeds
of any thereof); provided, that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent that they result from an Agent's
or such other person's gross negligence or willful misconduct, as finally
determined by a court of competent jurisdiction.
9.07. Administration by the Agents.
----------------------------
(a) Each of the Agents shall be entitled to rely upon any writing,
facsimile transmission, telegram, telex or teletype message, resolution, notice,
consent, certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise (whether or not such communication is
made in a manner permitted or required by this Agreement or any Related
Document) believed by it to be genuine and correct and to have been signed, sent
or made by the proper party or parties, and each of the Agents shall have no
duty to verify the identify or authority of any person giving any such
communication. Each of the Agents may conclusively rely upon the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to such Agent in accordance with the requirements of this
Agreement or any of the Related Documents. Whenever an Agent shall deem it
necessary or desirable that a matter be proved or established with respect to
the Borrower, any of its Subsidiaries or any other Bank Party, such matter may
be
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established by a certificate of the Borrower or such other Bank Party, as the
case may be, and such Agent may conclusively rely upon such certificate (unless
other evidence with respect to such matter is specifically prescribed in this
Agreement or any of the Related Documents). Each of the Agents may fail or
refuse to take any action unless it shall be indemnified to its satisfaction
from time to time against any and all amounts, liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature which may be imposed on, incurred by or asserted against
such Agent by reason of taking or continuing to take any such action.
9.08. The Agents in Their Respective Individual Capacities.
----------------------------------------------------
Each of the Agents shall have the same rights and powers hereunder and
under the Related Documents as any other Bank Party and may exercise the same as
though it were not an Agent, and the terms "Banks," "Bank Parties" or "holders
of Notes" shall, unless the context hereof otherwise indicates, include any of
the Agents in their individual capacities. Except as otherwise provided herein,
each of the Agents and its affiliates may, without liability to account, make
loans to, accept deposits from, acquire debt or equity interests in, act as
trustee under indentures of, and generally engage in any other kind of business
with, the Borrower and its Subsidiaries and their respective stockholders and
affiliates as though it were not acting as an Agent.
9.09. Holders of Notes.
----------------
Each of the Agents may deem and treat any Bank payee of any Note as
the owner of such Note for all purposes hereof, unless and until a Transfer
Supplement with respect to the assignment or transfer thereof shall have been
filed with the Agents in accordance with Section 10.12. Any request, authority,
direction or consent of any person who at the time of making such request or
giving such authority, direction or consent was a Bank shall be conclusive and
binding on any present or subsequent holder, transferee or assignee of such Note
or of any Note or Notes issued in exchange therefor.
9.10. Successor Agents.
----------------
(a) Any of the Agents may resign at any time by giving ten (10) days'
prior written notice thereof to the other Bank Parties and the Borrower, such
resignation to be effective on the date specified in such notice, and on such
date, the resigning Agent shall be automatically discharged from its duties
under this Agreement and the Related Documents without requirement of any
further action by such resigning Agent. Any of the Agents may be removed at any
time by the Required Banks, giving ten (10) days' prior written notice thereof
to the Agent, the other Bank Parties and the Borrower, such removal to be
effective
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on the date specified in such notice and, on such date, the removed Agent shall
be automatically discharged from its duties under this Agreement and the Related
Documents without requirement of any further action by such removed Agent, the
other Bank Parties or the Borrower. Upon any such resignation or removal of an
Agent, the Required Banks shall have the right to appoint a successor Agent;
provided, however, that, so long as no Event of Default or Potential Default
hereunder shall have occurred and be continuing, any such appointment of a
successor Agent shall be subject to the prior written consent of the Borrower
not to be unreasonably withheld. If no successor Agent shall have been appointed
and accepted such appointment within ten (10) days after the resigning Agent's
notice of resignation or removed Agent's notice of removal, then the resigning
or removed Agent, on behalf of the other Bank Parties may, but shall not be
obligated to, appoint a successor Agent, which shall be either a Bank or a
commercial bank organized under the laws of the United States of America or any
state thereof and have a combined capital and surplus of at least
$1,000,000,000; provided, however, that so long as no Event of Default or
Potential Default shall have occurred and be continuing or shall exist, any such
appointment of a successor Agent shall be subject to the prior consent of the
Borrower not to be unreasonably withheld. Upon the appointment of a successor
Agent and acceptance by such successor Agent of its appointment, such successor
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the former Agent in its capacity as such, without
further act, deed or conveyance. Upon the effective date of resignation or
removal of an Agent, such Agent shall be discharged from its duties as such
under this Agreement and the Related Documents, but the provisions of this
Agreement and the Related Documents shall inure to its benefit as to any actions
taken or omitted by it while it was Agent. If and for so long as no successor
Agent shall have been appointed, then any notice or other communication required
or permitted to be given by such Agent shall be sufficiently given if given by
the Required Banks, all notices or other communications required or permitted to
be given to such Agent shall be given to each other Bank Party, all payments to
be made to such Agent shall be made directly to the Bank Party for whose account
such payment is required to be made, and any and all interests granted to such
Agent for the benefit of the Bank Parties under any of the Security Documents
shall be deemed to have been granted to the other Bank Parties.
(b) Notwithstanding any other provision of this Agreement or the
Related Documents to the contrary, none of the Agents nor any of their
respective directors, officers, employees or agents shall be liable to any other
Bank Party for any action taken or omitted to be taken by it under or in
connection with this Section 9.10.
9.11. Additional Agents.
-----------------
If any of the Agents shall from time to time deem it necessary or
advisable, for its own protection in the performance of its duties hereunder or
in the interest of the other
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Bank Parties, such Agent and the Borrower shall execute and deliver a
supplemental agreement and all other instruments and agreements necessary or
advisable, in the opinion of such Agent, to constitute another commercial bank
or trust company, or one or more other persons approved by such Agent, to act as
co-Agent or agent with respect to any part of the Collateral, with such powers
of such Agent as may be provided in such supplemental agreement, and to vest in
such bank, trust company or persons as such co-Agent or separate agent, as the
case may be, any properties, rights, powers, privileges or duties of such Agent
under this Agreement or the Related Documents.
9.12. Calculations.
------------
In the absence of gross negligence or willful misconduct, none of the
Agents shall be liable for any error in computing the amount payable to any Bank
Party, whether in respect of the Loans, Letters of Credit, fees or any other
amounts due to the Bank Parties under this Agreement or the Related Documents.
In the event an error in computing any amount payable to any Bank Party is made,
such Agent, the Borrower and each affected Bank Party shall, forthwith upon
discovery of such error, make such adjustments as shall be required to correct
such error, and interest on such adjusted amount will accrue as set forth in
Section 9.14.
9.13. Administrative Agent's Fee.
--------------------------
The Borrower agrees to pay to the Administrative Agent as
consideration for its services as Administrative Agent hereunder such fees as
are set forth in a separate letter agreement between the Administrative Agent
and the Borrower.
9.14. Funding by Administrative Agent.
-------------------------------
Unless the Administrative Agent shall have been notified in writing by
any Bank not later than the close of business on the day before the day on which
any Loan is requested by the Borrower to be made that such Bank will not make
its Pro Rata share of such Loan available, the Administrative Agent may assume
that such Bank will make its Pro Rata share of such Loan available, and in
reliance upon such assumption the Administrative Agent may (but in no
circumstances shall be required to) make available to the Borrower a
corresponding amount. If and to the extent that any Bank fails to make such
amount available to the Administrative Agent on such date, such Bank shall pay
such amount on demand (or, if such Bank fails to pay such amount on demand, the
Borrower shall pay such amount on demand), together with interest, for the
Administrative Agent's own account, for each day from and including the date of
the Administrative Agent's payment to and including the date of repayment to the
Administrative Agent (before and after judgment) at the following rates per
annum: (x) for each day from and including the date of such payment by
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the Administrative Agent to and including the second Business Day thereafter, at
the Federal Funds Effective Rate of such day, and (y) for each day thereafter,
at the rate applicable to such Loans for such day. All payments to the agent
under this Section shall be made to the Administrative Agent at its Office in
Dollars in funds immediately available at such Office, without set-off,
withholding, counterclaim or other deduction of any nature.
ARTICLE X.
MISCELLANEOUS
-------------
10.01. Holidays.
--------
Except as otherwise provided herein, whenever any payment or action to
be made or taken hereunder or under the Related Documents shall be stated to be
due on a day which is not a Business Day, such payment or action shall be made
or taken on the next following Business Day, and such extension of time shall be
included in computing interest or fees, if any, in connection with such payment
or action.
10.02. Records.
-------
The unpaid principal amount of the Loans owing to each Bank, the
unpaid interest accrued thereon, the interest rate or rates applicable to such
unpaid principal amount, the duration of such applicability, each Bank's
Commitment and the accrued and unpaid fees owing to each Bank Party shall at all
times be ascertained from the records of the Administrative Agent, which shall
be conclusive absent manifest error. The Letter of Credit Exposure, the Letter
of Credit Participating Interests, the unpaid Letter of Credit Reimbursement
Obligations, the unpaid interest accrued thereon, the interest rate or rates
applicable thereto and the accrued and unpaid Letter of Credit commissions and
fees shall at all times be ascertained from the records of the Issuing Bank of
such Letter of Credit, which shall be conclusive absent manifest error. The
Swingline Participating Interests, the unpaid principal amount of the Swingline
Loans, the unpaid interest accrued thereon and the interest rate or rates
applicable thereto shall at all times be ascertained from the records of the
Swingline Bank, which shall be conclusive absent manifest error.
10.03. Amendments or Waivers.
---------------------
(a) Agreements amending or changing any provisions of or adding to
this Agreement or the Related Documents or the rights of the Bank Parties or the
Borrower hereunder or thereunder may be entered into, and waivers or consents to
departure from the
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due performance of the obligations of the Borrower hereunder or thereunder may
be given, with the consent of all or certain of the Bank Parties as follows:
(i) Any amendment, waiver or consent which would
(A) increase the Committed Amount of any Bank over the amount
thereof then in effect, or extend the Revolving Credit Expiration Date
or change any Scheduled Amortization Payment; or
(B) reduce the principal amount of or extend the time for any
scheduled payment of principal of any Loan, Letter of Credit
Reimbursement Obligation or Swingline Loan, or reduce the rate of
interest or extend the time for payment of any interest borne by any
Loan, Letter of Credit Reimbursement Obligation or Swingline loan,
shall require the written consent of such Banks as hold 100% of the
aggregate outstanding principal amount of the Loans, or, if no Loans are at
the time outstanding, Banks whose Commitments constitute 100% of the
Revolving Credit Commitments then outstanding; and
(ii) Any amendment, waiver or consent which would extend the time
for payment of or reduce the amount of any fee due and owing to any Bank
party shall require the written consent of each Bank Party affected
thereby; and
(iii) Any other amendment or waiver of or consent to departure from
the due performance by the Borrower of any covenant, representation,
warranty or other term or provision hereof or of any of the Related
Documents shall require the written consent of the Required Banks, except
that no amendment to Article III may be made (and the rights, interests or
obligations of the Issuing Banks and the Swingline Bank may not otherwise
be changed), in the case of Sections 3.01 through 3.10, without the consent
of the Issuing Banks and, in the case of Sections 3.11 through 3.14,
without the consent of the Swingline Bank, and no amendment to Article IX
may be made (and the rights, interests or obligations of any Agent may not
otherwise be changed) without the consent of the Agent affected;
provided, however, that no agreement, waiver or consent may be made which would
(w) release any Guarantor from its obligations pursuant to its Guarantee;
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(x) except as expressly authorized by Section 7.10, release any Collateral
under any of the Security Documents having a fair market value (as determined in
good faith by the Board of Directors of the Borrower) in excess of $5,000,000
for any one release; or
(y) amend this Section 10.03 or change the definition of "Required Banks";
or
(z) foreclose on any of the Mortgaged Property or Australian Mortgaged
Property,
without the written consent of 100% of the Banks; and provided, further, that
Commitment and Loan Transfer Supplements may be entered into in the manner
provided in Section 10.12.
(b) With the written consent of sufficient Bank Parties as specified
in Section 10.03(a), the Administrative Agent or the Collateral Agent, as the
case may be, acting on behalf of all Bank Parties, and the Borrower may execute
amendments to this Agreement or the Related Documents, and such Agent (so
acting) may execute waivers or consents, each of which shall be effective to
bind all the Bank Parties.
(c) In the case of any waiver or consent relating to any provision
hereof or of the Related Documents, the parties shall be restored to their
positions authorized by such waiver or consent and their rights thereunder, and
any Potential Default or Event of Default so waived or consented to shall be
deemed to be cured and not continuing; but no such waiver or consent shall
extend to any other obligation or any subsequent or other Potential Default or
Event of Default or impair any right consequent thereon.
(d) Any such agreement, waiver or consent must be in writing and
shall be effective only to the extent specifically set forth in such writing.
10.04. No Implied Waiver; Cumulative Remedies.
--------------------------------------
No course of dealing and no delay or failure of any of the Agents or
any other Bank Party in exercising any right, power or privilege under this
Agreement or any of the Related Documents shall affect any other or future
exercise thereof or the exercise of any other right, power or privilege; nor
shall any single or partial exercise of any such right, power or privilege or
any abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or
privilege. The rights and remedies of each of the Agents and the other Bank
Parties under the Agreement and the Related Documents are cumulative and are not
exclusive of any rights or remedies which the Agents or any other Bank Party
would otherwise have.
10.05. Notices.
-------
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(a) All notices under Section 2.04 or 2.08(b) shall be sent to the
Administrative Agent by facsimile transmission (which shall be effective when
received) or by telephone confirmed by facsimile transmission or first-class
mail (which shall be effective when telephoned), in all cases with charges
prepaid. All notices under Sections 2.06(f), 2.11(b) or 8.02(a) shall be sent
to the Borrower by facsimile transmission (which shall be effective when
received), by telephone confirmed by facsimile transmission or first-class mail
(which shall be effective when telephoned) or by first-class or first-class
express mail (which shall be effective when received), in all cases with charges
prepaid. All other notices, requests, demands, directions and other
communications (collectively "notices") under the provisions of this Agreement
or any Related Document shall be in writing (including facsimile transmission)
unless otherwise expressly permitted hereunder and shall be sent by hand
delivery or first-class or first-class express mail or by recognized overnight
courier, or by facsimile transmission with confirmation in writing mailed first-
class or first class express or by recognized overnight courier, in all cases
with charges prepaid, and any such properly given notice shall be effective when
received. All notices shall be sent to the applicable party at the address
stated on the signature page hereof or in accordance with the last unrevoked
written direction from such party to the other parties hereto.
(b) Any Bank giving any notice to the Borrower or any other party to
this Agreement or any Related Document shall simultaneously send a copy thereof
to the Administrative Agent, and the Administrative Agent shall promptly notify
the other Bank Parties of the receipt by it of any such notice.
(c) Each Bank Party may rely on any notice (whether or not such
notice is made in a manner permitted or required by this Agreement or any
Related Document) purportedly made by or on behalf of the Borrower, and no Bank
Party shall have any duty to verify the identity or authority of any person
giving any such notice.
10.06. Expenses; Taxes; Attorneys' Fees.
--------------------------------
(a) The Borrower agrees to pay or cause to be paid and to save each
Bank Party harmless from and against liability for the payment of all reasonable
out-of-pocket costs and expenses, including fees and expenses of counsel,
including local counsel, auditors, and all other professional, accounting,
evaluation and consulting costs, incurred by any Bank Party from time to time
and arising from or relating to (i) in the case of any of the Agents, the
negotiation, preparation, execution, delivery and performance of this Agreement
and the Related Documents (including the Commitment Letter) and the initial
syndication thereof (other than the fees of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ LLP incurred
by Mellon Bank, N.A. in connection with the initial negotiation, preparation,
execution and delivery of this Agreement), (ii) in the case of the
Administrative Agent or Collateral Agent, any requested amendments,
modifications, supplements, waivers or consents (whether or not ultimately
entered into or
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granted) to or with respect to this Agreement or any of the Related Documents,
(iii) in the case of each Bank Party, the enforcement or preservation of rights
under this Agreement or any of the Related Documents, including (A) the
creation, perfection or protection of any Lien on any Collateral, (B) the
protection, collection, lease, sale, taking possession of, preservation of, or
realization on, any Collateral, including advances for taxes, filing fees and
the like, (C) collection or enforcement of any outstanding Loan or Letter of
Credit Reimbursement Obligation or any other Obligation owing to any Bank Party,
(D) any litigation, proceeding, dispute, work-out, restructuring or rescheduling
related in any way to this Agreement or the Related Documents, and (E) in the
case of SBC Warburg Dillon Read Inc., any syndication with respect to this
Agreement and the Related Documents.
(b) The Borrower hereby indemnifies the Bank Parties, their
respective affiliates, and the directors, officers, employees and agents of each
thereof, and the other banks and financial institutions which may be offered the
opportunity to participate in the financing contemplated by this Agreement, and
their respective affiliates, directors, officers, employees and agents, and each
of them (collectively, the "Indemnified Parties"), and agrees to hold each of
them harmless from and against any and all losses, claims, damages, expenses or
liabilities incurred by any of them or to which any of them may become subject,
insofar as such losses, claims, damages, expenses or liabilities (or actions,
suits or proceedings, including any inquiry or investigation or claims in
respect thereof) arise out of, result from, or in any way relate to, this
Agreement, any of the Related Documents, any transactions from time to time
contemplated hereby or thereby, or any transaction financed or secured in whole
or in part, directly or indirectly, with the proceeds of any Loan or any Letter
of Credit or the proceeds of any thereof (whether or not any Indemnified Party
is a party to any action or proceeding out of which any such losses, claims,
damages, expenses or liabilities arise), and to reimburse the Indemnified
Parties, upon demand, for any legal or other expenses incurred by any thereof in
or in connection with investigating, preparing to defend, defending or otherwise
participating in any such claim, action or proceeding relating to any such loss,
claim, damage or liability, except any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the person seeking such indemnification, as finally determined by a court of
competent jurisdiction. If and to the extent that the foregoing obligations of
the Borrower under this Section 10.06(b), or any other indemnification
obligation of the Borrower hereunder or under any Related Document, shall be
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable Law.
(c) The Borrower agrees to pay all stamp, document, transfer,
recording, filing, registration, search, sales and excise taxes or fees and all
other similar impositions now or hereafter determined by any Bank Party to be
payable in connection with this Agreement or any of the Related Documents or any
other documents, instruments or transactions pursuant to
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or in connection herewith or therewith and the Borrower agrees to save each Bank
Party harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions.
10.07. Limitation on Payments; Severability.
------------------------------------
(a) Limitation on Payments. The parties hereto intend to conform to
----------------------
all applicable laws in effect from time to time limiting the maximum rate of
interest that may be charged or collected. Accordingly, notwithstanding any
other provision hereto or of any Related Document, the Borrower shall not be
required to make any payment to or for the account of any Bank Party, and each
Bank Party shall refund any payment made by the Borrower, to the extent that
such requirement or such failure to refund would violate or conflict with the
nonwaivable provisions of any applicable Law limiting the maximum amount of
interest which may be charged or collected by such Bank Party.
(b) Severability. The provisions of this Agreement are intended to
------------
be severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
10.08. Government Law; Submission to Jurisdiction; Waiver
of Jury Trial; Limitation of Liability.
--------------------------------------------------
(a) GOVERNING LAW. THIS AGREEMENT AND ALL RELATED DOCUMENTS (EXCEPT
-------------
TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH RELATED DOCUMENTS)
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF
THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
(b) CERTAIN WAIVERS. THE BORROWER HEREBY IRREVOCABLY AND
---------------
UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING
FROM OR RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT OR ANY
STATEMENT, COURSE OF CONDUCT, ACT, OMISSION OR EVENT OCCURRING IN
CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY "RELATED LITIGATION") MAY BE
BROUGHT
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IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN
ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION OF SUCH COURTS,
AND, TO THE FULLEST EXTENT PERMITTED BY LAW, AGREES THAT IT WILL NOT BRING
ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT
THE RIGHT OF ANY BANK PARTY TO BRING ANY PERMITTED ACTION, SUIT OR
PROCEEDING IN ANY OTHER FORUM);
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES
ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY
RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER THE BORROWER;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR
OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED
U.S. MAIL, POSTAGE PREPAID, TO THE BORROWER AT THE ADDRESS FOR NOTICES
DESCRIBED IN SECTION 10.05, AND CONSENTS AND AGREES THAT SUCH SERVICE SHALL
CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE SERVICE (BUT NOTHING HEREIN
SHALL AFFECT THE VALIDITY OR EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER
MANNER PERMITTED BY LAW); AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
(c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED BY LAW,
-----------------------
NO CLAIM MAY BE MADE BY THE BORROWER AGAINST ANY BANK PARTY, OR ANY AFFILIATE,
DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF ANY OF THEM, FOR ANY SPECIAL,
INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT OR ANY
STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION
HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ON ANY OTHER
THEORY OF LIABILITY). THE BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO
▇▇▇ UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY EXISTS OR
ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED TO EXIST IN
ITS FAVOR.
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10.09. Prior Understanding.
-------------------
This Agreement and the Related Documents supersede all prior and
contemporaneous understandings and agreements, whether written or oral, among
the parties hereto relating to the transactions provided for herein and therein,
including the Commitment Letter, except for (a) the obligation of the Borrower
to pay the underwriting fee as set forth in the Underwriting Fee Letter
constituting part of the Commitment Letter, and (b) the obligation of the
Borrower to pay the arrangement fee as set forth in the Arrangement Fee Letter
which is a part of the Commitment Letter.
10.10. Duration; Survival.
------------------
All representations and warranties of the Borrower contained herein
and in the Related Documents or made in connection herewith or therewith shall
survive the making of and shall not be waived by the execution and delivery of
this Agreement or any of the Related Documents, any investigation by or
knowledge of any Bank Party, the making of any Loan, the issuance (including any
deemed issuance pursuant to Section 3.10 or arising from any increase or
extension of any outstanding Letter of Credit pursuant to Section 3.03(b)) of
any Letter of Credit or any other event or condition whatsoever. All covenants
and agreements of the Borrower contained herein or in any Related Document shall
continue in full force and effect from and after the date hereof until all
Commitments have terminated, all Letters of Credit have expired or have been
terminated and all other Obligations have been indefeasibly paid in full in
cash. Without limitation, it is understood that all obligations of the Borrower
to make payments to or indemnify the Bank Parties (including obligations arising
under Sections 2.11, 2.12 and 10.06) shall survive the payment in full of all
other Obligations, termination of the Borrower's right to borrow hereunder and
all other events and conditions whatsoever. In addition, all obligations of
each Bank to make payments to or indemnify the Agents, the Issuing Banks or the
Swingline Bank and persons related to the Agents, the Issuing Banks or the
Swingline Bank (including but not limited to obligations arising under Sections
2.11, 2.12, 3.08(c), 3.14(c) and 10.06) shall survive the payment in full by the
Borrower of all other Obligations, termination of the Borrower's right to borrow
hereunder and all other events and conditions whatsoever.
10.11. Counterparts.
------------
This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
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10.12. Successors and Assigns; Participations; Assignments.
---------------------------------------------------
(a) Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the Borrower, the Bank Parties and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights hereunder without the prior written consent of all the Bank
Parties, and any purported assignment without such consent shall be void, and
except that, to the fullest extent permitted by Law, a Bank Party may not
voluntarily assign or transfer any of its rights hereunder except in accordance
with the other provisions of this Section 10.12, and any other purported
voluntary assignment or transfer shall be void; provided that this Agreement
shall inure to the benefit of successors to the Bank parties by operation of Law
or resulting from an involuntary assignment or transfer (including the
appointment of a receiver, conservator, trustee or like person) and any
successor by merger or consolidation. Except to the extent otherwise required by
the context of this Agreement, the word "Bank" or "Bank Party" where used in
this Agreement shall mean and include any holder of any Note originally issued
to any Bank hereunder, and each such holder of a Note shall be bound by and have
the benefits of this Agreement the same as if such holder had been a signatory
hereto.
(b) Participations. Any Bank may, in the ordinary course of its
--------------
business and in accordance with applicable Law, at any time sell to one or more
additional banks or financial institutions ("Participants") participating
interests in all or a portion of any Loan or Letter of Credit Reimbursement
Obligation owing to such Bank, any Note, Letter of Credit Participating Interest
or Swingline Participating Interest held by such Bank, any Commitment of such
Bank or any other interest of such Bank hereunder. In the event of any such
sale by a Bank of participating interests to a Participant, such Bank's
obligations under this Agreement to the other parties to this Agreement and the
Related Documents shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, such Bank shall remain the holder of
any such Note for all purposes of this Agreement and the Related Documents, and
the other parties hereto shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations under this Agreement
and the Related Documents. The Borrower hereby consents to and confirms the
foregoing arrangements and hereby confirms each Bank's right without notice to
or consent of the Borrower to create or dispose of participations in the
Obligations as contemplated by this Section 10.12(b) (whether such
participations are in the form of partial or complete assignments of such Bank
Party's rights hereunder or under the Related Documents, creation of a debtor-
creditor or trustee-beneficiary relationship between such Bank Party and such
Participants or otherwise). The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.06(f), 2.11, 2.12, 2.13 and 9.06
with respect to its participation in the Commitments and the Loans and Letter of
Credit Reimbursement Obligations outstanding from time to time; provided that no
Participant shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Bank would have been entitled to receive in
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respect of the amount of the participation transferred by such transferor Bank
to such Participant had no such transfer occurred. A Bank may agree with any
Participant not to consent to any amendment to or waiver under this Agreement
which would require the written consent of 100% of the Banks without the consent
of such Participant, but a Bank may not agree with a Participant not to consent
to any other amendment or waiver under this Agreement.
(c) Sales to Purchasing Banks. Any Bank may, in the ordinary course
-------------------------
of its commercial banking business and in accordance with applicable Law, at any
time assign to any other Bank, any affiliate of itself or of any Bank which is
wholly owned by a common parent corporation or, subject to the limitations set
forth in the proviso to this sentence, to one or more additional banks or
financial institutions (collectively "Purchasing Banks") all or any portion of
its rights and obligations under this Agreement and the Related Documents
pursuant to a Commitment and Loan Transfer Supplement, executed by such
Purchasing Bank, such transferor Bank (and, in the case of a Purchasing Bank
that is not then a Bank, by the Borrower, the Issuing Banks and the Agents), and
delivered to the Administrative Agent for its acceptance and recording in the
Register hereinafter referred to as hereinafter provided); provided, however,
that (i) the Commitment purchased by any such Purchasing Bank which is not then
a Bank shall be equal to or greater than $5,000,000 unless such Purchasing Bank
is acquiring 100% of the Commitment of such transferor Bank, (ii) the transferor
Bank which has transferred part of its Commitment constituting less than such
Bank's full Commitment to any such Purchasing Bank which is not then a Bank
shall retain a Commitment, after giving effect to such sale, equal to or greater
than $5,000,000, and (iii) a transfer to any Purchasing Bank which is not then a
Bank shall be made only with the consent of the Borrower and the Agents and, in
the case of the transfer of a Bank's rights under this Agreement appurtenant to
the Revolving Credit Facility, the Issuing Banks and the Swingline Bank (which
in each case shall not be unreasonably withheld). Upon such execution,
delivery, acceptance and recording, from and after the Transfer Effective Date
(determined pursuant to such Commitment and Loan Transfer Supplement), (x) the
Purchasing Bank thereunder shall be a party hereto and, to the extent provided
in such Commitment and Loan Transfer Supplement, have the rights and obligations
of a Bank hereunder with Commitments as set forth therein, and (y) the
transferor Bank thereunder shall, to the extent provided in such Commitment and
Loan Transfer Supplement, be released from its obligations under this Agreement
(and, in the case of a Commitment and Loan Transfer Supplement covering all or
the remaining portion of a transferor Bank's rights and obligations under this
Agreement, such transferor Bank shall cease to be a party hereto; provided,
however, that the provisions of this Agreement and the Related Documents shall
continue to inure to its benefit as to any actions taken or omitted by it while
it was a Bank). Such Commitment and Loan Transfer Supplement shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect
the addition of such Purchasing Bank and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Bank of all or a
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portion of the rights and obligations of such transferor Bank under this
Agreement and the Related Documents. On or prior to the Transfer Effective
Date, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes of a
transferor Bank a new Note or Notes to the order of such Purchasing Bank in
amounts equal to the Commitment assumed by it pursuant to such Commitment and
Loan Transfer Supplement and, if the transferor Bank has retained a Commitment
hereunder, a new Note or Notes to the order of the transferor Bank in amounts
equal to the Commitment retained by it hereunder. Such new Note or Notes shall
be dated the same dates as the Note or Notes surrendered and shall otherwise be
in the form of the Notes replaced thereby. The Notes surrendered by the
transferor Bank shall be returned by the Administrative Agent to the Borrower
marked "exchanged".
(d) The Register. The Administrative Agent shall maintain at its
------------
office a copy of each Commitment and Loan Transfer Supplement delivered to it
and a register (the "Register") for the recordation of the names and addresses
of the Banks and the Commitment of, and principal amount of the Obligations
owing to, each Bank from time to time. The entries in the Register shall be
conclusive and binding for all purposes, in the absence of manifest error, and
the Borrower and the Bank Parties may treat each person whose name is recorded
in the Register as a Bank for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Bank at any reasonable
time and from time to time upon reasonable prior notice. Upon its receipt of a
Commitment and Loan Transfer Supplement executed by a transferor Bank and a
Purchasing Bank (and, in the case of a Purchasing Bank that is not then a Bank
or an affiliate thereof, by the Borrower and the Agents) together with the Note
or Notes subject to such transfer and payment by the Purchasing Bank to the
Administrative Agent of a registration and processing fee of $3,500 (which shall
be solely for the account of the Administrative Agent), and the Administrative
Agent shall (i) promptly accept such Commitment Transfer Supplement and (ii) on
the Transfer Effective Date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance and
recordation to the other Bank Parties and the Borrower.
(e) Agreements of Transferor Bank and Purchasing Bank. By executing
-------------------------------------------------
and delivering a Commitment and Loan Transfer Supplement, the transferor Bank
and the Purchasing Bank confirm to and agree with each other and the other
parties hereto as follows: (i) other than as expressly provided in such
Commitment and Loan Transfer Supplement, the transferor Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or with respect to the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the Related
Documents or any other instrument or document furnished pursuant hereto and
thereto; (ii) the transferor Banks makes no representation or warranty and
assumes no responsibility with respect to the financial
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condition of the Credit Parties or the performance or observance by the Credit
Parties of any of its obligations under this Agreement or any of the Related
Documents or other instruments or documents furnished pursuant hereto or
thereto; (iii) the Purchasing Bank confirms that it has received a copy of this
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Commitment and
Loan Transfer Supplement; (iv) the Purchasing Bank will, independently and
without reliance upon the Administrative Agent, the transferor Bank or any other
Bank Party, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own decisions in taking or not
taking action under this Agreement and the Related Documents; (v) the Purchasing
Bank agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the Related Documents are
required to be performed by it as a Bank; (vi) the Purchasing Bank agrees that
such Commitment and Loan Transfer Supplement is taken by it without recourse to
the transferor Bank.
(f) Financial and Other Information. The Borrower hereby authorizes
-------------------------------
each Bank to disclose to any prospective Participant or Purchasing Bank (each a
"Transferee") or any potential Transferee any and all financial and other
information in such Bank's possession concerning the Borrower and its
Subsidiaries and Affiliates which has been or may be delivered to such Bank by
or on behalf of the Borrower pursuant to this Agreement or any of the Related
Documents or which has been or may be delivered to such Bank by or on behalf of
the Borrower in connection with such Bank's credit evaluation of the Borrower
and its Subsidiaries and Affiliates prior to becoming a party to this Agreement.
At the request of any Bank, the Borrower, at the Borrower's expense, shall
provide to each prospective Transferee the conformed copies of documents
referred to in Section 6(c) of the form of Transfer Supplement.
(g) Taxes. Each Bank which is incorporated or organized under the
-----
laws of any jurisdiction other than the United States or any state thereof
agrees that, on or prior to the date any payment is due to be made to it
hereunder or under any Related Document, it will furnish to the Borrower and the
Administrative Agent two valid, duly completed copies of (i) United States
Internal Revenue Service Form 4224 or 1001, or (ii) in the case of a Bank that
is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and
cannot deliver IRS Form 4224 or 1001, IRS Form W-8 and a certificate confirming
that such Bank is not a "Bank" for purposes of Section 881(c)(3)(A), or any
successor applicable form, as the case may be, certifying that such Bank is
entitled to a complete exemption from U.S. withholding tax with respect to (x)
in the case of clause (i) above, all payments, and (y) in the case of clause
(ii) above, payments of interest, to be made under this Agreement and the
Related Documents. Each Bank which so delivers to the Borrower and the
Administrative Agent an Internal Revenue Service Form 1001, 4224 or W-8, or a
successor applicable form, agrees to deliver to the Borrower and the
Administrative Agent two further copies of the said
-151-
Internal Revenue Service Form 1001, 4224 or W-8 or a successor applicable form,
or other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or otherwise is required to be
resubmitted as a condition to obtaining an exemption from withholding tax, or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it, and such extensions or renewals thereof as may
reasonably be requested by the Borrower or the Administrative Agent, certifying
that such Bank is entitled to a complete exemption from or reduction in United
States withholding tax with respect to payments under this Agreement or any
Related Document, unless in any such cases an event (including any change in
law) has occurred prior to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable or which would prevent
such Bank from duly completing and delivering any such form with respect to it
and such Bank advises the Borrower and the Administrative Agent that it is not
capable of delivering any such form or certificate, in which case such Bank
shall not be required or have any obligation to deliver any such form or
certificate. In addition, if at any time the Borrower believes that payments to
any Bank (foreign or domestic) may be subject to U.S. backup withholding tax,
such Bank shall, at the Borrower's reasonable request from time to time, if such
Bank is legally able to do so, provide the Borrower with evidence establishing
an exemption from U.S. backup withholding tax.
(h) Assignments to Federal Reserve Bank. Any Bank may at any time
-----------------------------------
assign all or any portion of its rights under this Agreement, including any
Obligation owing to it and any Note held by it, to a Federal Reserve Bank. No
such assignment shall relieve the transferor Bank from any of its obligations
hereunder.
10.13. Replacement of Bank.
-------------------
If at any time the all-in interest cost to the Borrower including any
increased costs imposed on the Borrower pursuant to Section 2.11(a) being paid
to any Bank becomes greater than 125% of the amount determined by multiplying
(a) the aggregate all-in interest cost to the Borrower (including such increased
costs) being paid to all of the Banks times (b) the Commitment Proportion of
such Bank, the Borrower may at its option replace such Bank with another
commercial lending institution by giving notice to the Bank Parties stating that
the Borrower wishes to replace such Bank and giving the name of the replacement
commercial lending institution, which replacement institution shall be
satisfactory to the remaining Bank Parties in their reasonable discretion. Any
such replacement shall not be deemed to be a prepayment for any purpose hereof,
except that the Borrower shall pay to the Bank being replaced any payment
required to be made pursuant to Section 2.11(b) as if such replacement
constituted a prepayment.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed and delivered this Agreement as of the date first
above written.
Attest: KOPPERS INDUSTRIES, INC.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By /s/ M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------ -------------------------
Title VP and Secretary Title Treasurer
--------------------- ----------------------
[CORPORATE SEAL]
Address for notices:
Koppers Building
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
SBC WARBURG DILLON READ INC., as
Arranger and Syndication Agent
By /s/ ▇▇▇▇▇ ▇. Field
---------------------------
Title Executive Diretor
Loan Syndications
------------------------
By /s/ ▇▇▇▇ ▇▇▇▇▇
---------------------------
Title Director
Banking Finance
------------------------
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (203) 719-8610
SWISS BANK CORPORATION,
STAMFORD BRANCH,
individually and as Documentation Agent
By /s/ ▇▇▇▇▇ ▇. Field
---------------------------
Title Executive Director
Loan Syndications
------------------------
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Title Associate Director
------------------------
Banking Finance
Support, N.A.
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
MELLON BANK, N.A.,
individually and as
Administrative and Collateral Agent
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title Vice President
--------------------------
Address for Notices:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Three Mellon ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Loan Administration
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Schedule 5.01(xxxiv)
Certain documents to be delivered in form and substance satisfactory to the
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Agents
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Stockholder's Agreement
Senior Subordinated Note Documents
Australian Credit Facilities and the ancillary documents thereto
Exchange Agreement
Waiver BHP to Section 8.10(d) of the BHP Agreement
Advisory Services Agreement
Koppers Industries, Inc. Employee Stock Purchase Plan
Koppers Industries, Inc. Stock Redemption and Purchase Plan
