1
EXHIBIT 4.6
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
Among
STERLING CHEMICALS, INC.
as the Company
and
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
Individually, as an Issuing Bank and as Administrative Agent,
CREDIT SUISSE FIRST BOSTON
Individually, as an Issuing Bank, and as Documentation Agent
and
FINANCIAL INSTITUTIONS
NOW OR HEREAFTER PARTIES HERETO
$125,000,000 Revolving Credit Facility
$76,500,000 Tranche A Term Loans
$199,166,667 Tranche B Term Loans
$5,281,250 ESOP Term Loans
July 10, 1997
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.02 Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . 39
Section 1.03 Other Definitional Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 1.04 Definition Cross References in Financing Documents . . . . . . . . . . . . . . . 40
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01 Loans and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 2.02 Borrowing Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.03 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2.05 Notes and Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 2.06 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 2.07 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 2.08 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 2.09 Termination or Reduction of Revolving Credit Commitments . . . . . . . . . . . . 52
Section 2.10 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 2.11 Continuation and Conversion Options . . . . . . . . . . . . . . . . . . . . . . . 56
Section 2.12 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 2.13 Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 2.14 Interest Rate Not Ascertainable, etc. . . . . . . . . . . . . . . . . . . . . . . 59
Section 2.15 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 2.16 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 2.17 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 2.18 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 2.19 Sharing of Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 2.20 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 2.21 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 2.22 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE III
CONDITIONS TO BORROWINGS AND TO
PURCHASE, RENEWAL AND REARRANGEMENT
Section 3.01 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
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Section 3.02 Conditions Precedent to Initial STX Loan . . . . . . . . . . . . . . . . . . . . 70
Section 3.03 Conditions Precedent to AFB Loans . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 3.04 Conditions Precedent to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 4.02 Corporate Power and Authorization . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 4.03 Binding Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 4.04 No Legal Bar or Resultant Lien . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 4.05 No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 4.06 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
Section 4.07 Investments and Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 4.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 4.09 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
Section 4.10 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 4.11 Taxes; Governmental Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 4.12 Titles, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 4.13 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 4.14 Casualties; Taking of Properties . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 4.15 Compliance with the Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 4.16 No Material Misstatements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 4.17 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 4.18 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . 87
Section 4.19 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 4.20 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 4.21 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 4.22 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 4.23 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 4.24 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 4.25 Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
Section 4.26 Unrestricted Subsidiary Qualification . . . . . . . . . . . . . . . . . . . . . . 89
ARTICLE V
COVENANTS
Section 5.01 Certain Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . 89
(a) Maintenance and Compliance, etc. . . . . . . . . . . . . . . . . . . . . . . . . 90
(b) Payment of Taxes and Claims, etc. . . . . . . . . . . . . . . . . . . . . . . . . 90
(c) Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
(d) Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
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(e) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
(f) Accounts and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
(g) Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
(h) Operation and Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . 91
(i) Additional Subsidiaries; Permitted Acquisitions; Additional Liens . . . . . . . . 91
(j) Non-Consolidation of Unrestricted Subsidiaries . . . . . . . . . . . . . . . . . 92
Section 5.02 Reporting Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
(a) Annual Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
(b) Quarterly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 94
(c) Monthly Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 94
(d) No Default/Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . 95
(e) Management Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
(f) Title Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
(g) Events or Circumstances with respect to Collateral . . . . . . . . . . . . . . . 95
(h) Borrowing Base Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
(i) Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
(j) Shareholder Communications, Filings . . . . . . . . . . . . . . . . . . . . . . . 96
(k) Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
(l) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
(m) Borrowing Base Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
(n) Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
(o) Annual Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
(p) Excess Cash Flow Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 97
(q) Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 5.03 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
(a) Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
(b) Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
(c) Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
(d) Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
(e) Senior Debt Leverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
Section 5.04 Certain Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
(a) Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
(b) Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c) Mergers, Sales, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
(d) Dividends, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
(e) Investments, Loans, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
(f) Lease Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
(g) Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
(h) Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
(i) ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
(j) Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . 109
(k) Negative Pledge Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
(l) Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 110
(m) Unconditional Purchase Obligations . . . . . . . . . . . . . . . . . . . . . . . 111
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(n) Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
(o) Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
(p) Modifications to Senior Subordinated Notes; No Voluntary Prepayments . . . . . 112
(q) Intercompany Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
(r) Modification or Amendment of the AFB Earnout Agreement . . . . . . . . . . . . 112
(s) Reverse Designation of Unrestricted Subsidiaries . . . . . . . . . . . . . . . 112
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Section 6.02 Covenants Without Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Section 6.03 Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Section 6.04 Other Financing Document Obligations . . . . . . . . . . . . . . . . . . . . . 113
Section 6.05 Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Section 6.06 Non-Payments of Other Indebtedness . . . . . . . . . . . . . . . . . . . . . . 114
Section 6.07 Defaults Under Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . 114
Section 6.08 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
Section 6.09 Money Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Section 6.10 Discontinuance of Business . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Section 6.11 Financing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Section 6.12 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Section 6.13 Merger Agreement Representations and Warranties . . . . . . . . . . . . . . . . 115
Section 6.14 ▇▇▇▇▇▇▇▇ Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 6.15 Default Under Senior Secured Discount Notes . . . . . . . . . . . . . . . . . . 116
Section 6.16 Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 6.17 Equity Notes Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
Section 6.18 Cytec Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
ARTICLE VII
THE AGENTS
Section 7.01 Appointment of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . 117
Section 7.02 Limitation of Duties of Administrative Agent . . . . . . . . . . . . . . . . . 117
Section 7.03 Lack of Reliance on the Administrative Agent and the Documentation Agent . . . 117
Section 7.04 Certain Rights of the Administrative Agent . . . . . . . . . . . . . . . . . . 118
Section 7.05 Reliance by Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . 118
Section 7.06 INDEMNIFICATION OF ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT . . . . . . . . 118
Section 7.07 The Administrative Agent and Documentation Agent in their Individual Capacity . 119
Section 7.08 May Treat Lender as Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
Section 7.09 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . . . . 119
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Section 7.10 Documentation Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 7.11 Assumption of Administrative Agent . . . . . . . . . . . . . . . . . . . . . . 120
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 8.02 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Section 8.03 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 121
Section 8.04 Payment of Expenses, Indemnities, etc. . . . . . . . . . . . . . . . . . . . . 122
Section 8.05 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Section 8.06 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
Section 8.07 Successors and Assigns; Participations and Assignments . . . . . . . . . . . . 124
Section 8.08 Governing Law; Submission to Jurisdiction; Etc. . . . . . . . . . . . . . . . . 127
Section 8.09 Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . . . . 129
Section 8.10 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Section 8.11 Renewal, Extension or Rearrangement . . . . . . . . . . . . . . . . . . . . . . 129
Section 8.12 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Section 8.13 Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
Section 8.14 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 8.15 Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 8.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 8.17 Survival of Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 8.18 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 8.19 Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 8.20 EXCULPATION PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131
Section 8.21 Secured Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Section 8.22 Ratification of Security Instruments . . . . . . . . . . . . . . . . . . . . . 132
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ANNEXES
Annex I - Loans and Commitments
SCHEDULES
Schedule 1.01-A - Outstanding Letters of Credit
Schedule 1.01-B - Principal Account Obligors
Schedule 4.07 - Investments and Guaranties
Schedule 4.08 - Litigation
Schedule 4.12 - Titles
Schedule 4.13 - Defaults
Schedule 4.19 - Subsidiaries/Guarantors
Schedule 4.19-A - Subsidiaries/Guarantors
Schedule 4.19-B - Subsidiaries/Guarantors
Schedule 4.23 - Material Contracts
Schedule 4.24 - Employment Contracts
Schedule 5.04(a) - Existing Indebtedness
Schedule 5.04(b) - Liens
EXHIBITS
Exhibit A - Form of Revolving Note
Exhibit B-1 - Form of Tranche A Term Note
Exhibit B-2 - Form of Tranche B Term Note
Exhibit B-3 - Form of ESOP Term Note
Exhibit C - Form of Tax Sharing Agreement
Exhibit D - Form of Borrowing Request
Exhibit E-1 - Form of Opinion of ▇▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P. dated as of the
Restated Closing Date
Exhibit E-2 - Form of Opinion of Canadian counsel to the Company dated as of
the Restated Closing Date
Exhibit E-3 - Form of Opinion of Georgia counsel to the Company dated as of
the Restated Closing Date
Exhibit E-4 - Form of Opinion of Florida Counsel to the Company dated as of
the Restated Closing Date
Exhibit F-1-A - Form of Ratification of Guaranty Agreement and Security
Instruments
Exhibit F-1-B - Form of Ratification of Limited Guaranty Agreement and
Security Instruments (Santa ▇▇▇▇)
Exhibit F-2 - Form of Amended and Restated Deed of Trust
Exhibit F-3 - Form of Security Agreement of the Company
Exhibit F-4 - Form of Security Agreement of Subsidiary Guarantors
Exhibit F-5 - Form of Holdco Security Agreement (Pledge)
Exhibit F-6 - Form of Company Security Agreement (Pledge)
Exhibit F-7 - Form of Subsidiary Security Agreement (Pledge)
Exhibit F-8 - Form of Deed of Trust
Exhibit F-9 - Form of Leasehold Deed of Trust
Exhibit F-10 - Form of Second Lien Deed of Trust
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Exhibit F-11 - Form of Collateral Assignment (Intercompany Loans and Accounts)
the Company
Exhibit F-12 - Form of Collateral Assignments (Intercompany Loans and
Accounts) Subsidiary Guarantors
Exhibit F-13 - Form of Cash Collateral Account Agreement
Exhibit F-14 - Form of Security Agreement of Sterling Fibers
Exhibit F-15 - Form of Santa ▇▇▇▇ Deed of Trust
Exhibit F-16 - Form of Limited Guaranty Agreement (Santa ▇▇▇▇)
Exhibit F-17 - Form of Collateral Assignment (Intercompany Loans and Accounts
by Sterling Fibers)
Exhibit F-18 - Form of Third Amendment and Supplement to Security Agreement
(Pledge) of the Company
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Borrowing Base Report
Exhibit I - Form of U.S. Tax Compliance Certificate
Exhibit J - Form of Notice of Designated Retained Cash Flow Usage
Exhibit K-1 - Form of Guaranty Agreement dated as of the AFB Effective Date
Exhibit K-2 - Form of Subrogation and Contribution Agreement dated as of AFB
Effective Date
Exhibit L-1 - Description of Terms, Limitations, Rights and Preferences of
Preferred Stock
Exhibit L-2 - Description of Terms, Limitations, Rights and Preferences of
Series B Preferred Stock
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") is made
and entered into as of this 10th day of July, 1997, among STERLING CHEMICALS,
INC., a Delaware corporation (the "Company"), TEXAS COMMERCE BANK NATIONAL
ASSOCIATION, individually, as a Lender, as an Issuing Bank and as
Administrative Agent, CREDIT SUISSE FIRST BOSTON, individually, as a Lender, as
an Issuing Bank and as Documentation Agent, each additional Issuing Bank
hereunder from time to time, and each of the lenders that is a signatory hereto
or which becomes a party hereto as provided in Section 8.07 (individually, a
"Lender" and, collectively, the "Lenders").
INTRODUCTORY STATEMENT
STX Acquisition Corp., a Delaware corporation, acquired Sterling
Chemicals, Inc. ("SCI"), a Delaware corporation (the "SCI Acquisition")
pursuant to the Merger Agreement (defined below) between STX Acquisition Corp.
and SCI. Upon the terms and subject to the conditions set forth in the Merger
Agreement, STX Acquisition Corp. merged with and into SCI (the "Merger"). From
and after the time that the Merger occurred, the separate corporate existence
of STX Acquisition Corp. ceased and SCI continued as the surviving corporation
and succeeded to and assumed all the rights and obligations of STX Acquisition
Corp. in accordance with the General Corporation Law of the State of Delaware.
STX Acquisition Corp. formed STX Chemicals Corp. for purposes of
acquiring all of the assets and liabilities of SCI (the "SCI Asset Conveyance")
simultaneously with the time that the Merger occurred. Substantially
contemporaneously with the SCI Asset Conveyance and Merger, STX Chemicals Corp.
was renamed "Sterling Chemicals, Inc." and SCI was renamed Sterling Chemicals
Holdings, Inc. ("Holdco").
STX Chemicals Corp. entered into that certain Credit Agreement dated
as of the STX Closing Date (defined below) (as amended, the "Original Credit
Agreement"), by and among STX Chemicals Corp., as borrower, Texas Commerce Bank
National Association, individually, as a lender, as an issuing bank, and as
administrative agent, Credit Suisse, individually, as a lender, as an issuing
bank and as documentation agent, each additional issuing bank under such credit
agreement and each of the lenders that were or became a signatory thereto
(individually, an "Original Lender" and, collectively, the "Original Lenders"),
pursuant to which the Original Lenders agreed to provide credit facilities to
the Company in the amount of up to $456,500,000 (the "STX Facilities"),
consisting of $100,000,000 of Revolving Credit Loans, $200,000,000 of Tranche A
Term Loans (the "Original Tranche A Term Loans"), $150,000,000 of Tranche B
Term Loans (the "Original Tranche B Term Loans") and $6,500,000 of ESOP Term
Loans. Proceeds of the Original Tranche A Term Loans and Original Tranche B
Term Loans were used solely (i) to finance a portion of the SCI Acquisition,
(ii) to refinance existing indebtedness and to assume the obligations under the
Outstanding Letters of Credit of SCI, and (iii) to finance fees and expenses
relating to the financing of the SCI Acquisition. Proceeds of the Revolving
Credit Loans have been and will be used solely to finance ongoing working
capital requirements and for general corporate purposes of the Company and were
used to finance a portion of the SCI Acquisition. Proceeds of the ESOP Term
Loans were used solely to fund the Secondary ESOP Loan (as defined herein), and
will be used by the ESOP solely for the purchase of Holdco Common Stock.
10
On January 31, 1997, the Company entered into an additional Credit
Agreement dated as of January 31, 1997 (as amended, the "AFB Acquisition Credit
Agreement"), by and among the Company, Texas Commerce Bank National
Association, individually, as a lender, and as administrative agent under the
AFB Acquisition Credit Agreement, Credit Suisse First Boston, individually, as
a lender, and as documentation agent under the AFB Acquisition Credit
Agreement, and each of the lenders that were or became a signatory thereto
(individually, an "AFB Lender" and, collectively, the "AFB Lenders"), pursuant
to which the AFB Lenders agreed to provide credit facilities to the Company in
the amount of up to $81,000,000 (the "AFB Facilities"), consisting of
$31,000,000 of Tranche A Term Loans (the "AFB Tranche A Term Loans") and
$50,000,000 of Tranche B Term Loans (the "AFB Tranche B Term Loans"). Proceeds
of the AFB Tranche A Term Loans and AFB Tranche B Term Loans were used solely
(i) to finance a portion of the AFB Acquisition (as defined below), (ii) to
finance fees and expenses relating to the financing of the AFB Acquisition and
(iii) fund up to $1,000,000 of the Secondary ESOP Loan.
The Company entered into that certain First Amendment to Credit
Agreement ("STX First Amendment") dated as of January 31, 1997, by and among
the Company, Texas Commerce Bank National Association, individually, as an
issuing bank and as administrative agent under the Original Credit Agreement
and Credit Suisse First Boston (formerly known as Credit Suisse), individually,
as an issuing bank and as documentation agent under the Original Credit
Agreement and the Original Lenders, amending the Original Credit Agreement to
permit the AFB Acquisition and to permit the Company to enter into the AFB
Acquisition Credit Agreement.
In connection with the AFB Acquisition Credit Agreement and the STX
First Amendment, the Original Lenders and the AFB Lenders agreed pursuant to an
Intercreditor Agreement dated as of January 31, 1997 (the "Intercreditor
Agreement"), by and among the Original Lenders, Texas Commerce Bank National
Association, as administrative agent under the Original Credit Agreement (the
"Original Administrative Agent"), the AFB Lenders, Texas Commerce Bank National
Association, as administrative agent under the AFB Acquisition Credit Agreement
(the "AFB Administrative Agent") and the Company, that they would rank pari
passu with one another in respect of certain payments, recoveries, collateral
or security under the Original Credit Agreement and the AFB Acquisition Credit
Agreement and that such payments, recoveries, collateral and security would be
made on a pro rata basis.
In connection with SCI Acquisition, Holdco funded a portion of the SCI
Acquisition price through the issuance of its $191,751,000 Senior Secured
Discount Notes (the "Senior Secured Discount Notes") under the terms of that
certain $191,751,000 13 1/2% Senior Secured Discount Notes due 2008 Indenture
dated as of August 15, 1996, with Fleet National Bank, as trustee (the "Senior
Secured Discount Notes Indenture"), and the Company funded a portion of the SCI
Acquisition price through the issuance of its $275,000,000 Senior Subordinated
Notes (the "Senior Subordinated Notes") under the terms of that certain
$275,000,000 11 3/4% Senior Subordinated Notes due 2006 Indenture dated as of
August 15, 1996, with Fleet National Bank, as trustee (the "Senior Subordinated
Notes Indenture").
On April 7, 1997, the Company issued its Senior Subordinated Notes in
an aggregate principal amount of $150,000,000 (the "Additional Senior
Subordinated Notes") under the terms of that certain $150,000,000 Senior
Subordinated Notes Due 2007 Indenture dated as of April 7, 1997, with Fleet
National Bank, as trustee (the "Additional Senior Subordinated Notes
Indenture") and used a portion of the proceeds thereof to
2
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voluntarily prepay a portion of the Original Tranche A Term Loans, the Original
Tranche B Term Loans, the AFB Tranche A Term Loans and the AFB Tranche B Term
Loans pursuant to the terms of the Original Credit Agreement, the AFB
Acquisition Credit Agreement and the Intercreditor Agreement.
In connection with the issuance of the Additional Senior Subordinated
Notes, the Company entered into that certain First Amendment to Credit
Agreement ("AFB First Amendment") dated as of March 31, 1997, by and among the
Company, Texas Commerce Bank National Association, individually and as
administrative agent under the AFB Acquisition Credit Agreement, Credit Suisse
First Boston, individually, and as documentation agent under the AFB
Acquisition Credit Agreement and the AFB Lenders and that certain Second
Amendment to Credit Agreement (the "STX Second Amendment") dated as of March
31, 1997, by and among the Company, Texas Commerce Bank National Association,
individually, as an issuing bank, and as administrative agent under the
Original Credit Agreement, Credit Suisse First Boston (formerly known as Credit
Suisse), individually, as an issuing bank and as documentation agent under the
Original Credit Agreement and the Original Lenders, pursuant to which the
Original Lenders and the AFB Lenders consented to the issuance by the Company
of its Additional Senior Subordinated Notes, the modification of the order of
application of proceeds of such notes upon voluntary prepayment by the Company
of the Original Tranche A Term Loans, the Original Tranche B Term Loans, the
AFB Tranche A Term Loans and the AFB Tranche B Term Loans, and consented to an
increase of $25,000,000 in the Revolving Credit Commitments relating to the
Revolving Credit Loans under the STX Facilities.
The amendments contained in Section 2 of each of the STX Second
Amendment and the AFB First Amendment became effective upon receipt by the
Original Administrative Agent of the voluntary prepayment by the Company
comprising the proceeds of the Additional Senior Subordinated Notes. The
Company made such voluntary prepayment in an aggregate amount of $150,000,000
on April 7, 1997. In connection with such voluntary prepayment, applied
pursuant to the provisions of the Original Credit Agreement as amended by the
STX Second Amendment and the AFB Acquisition Credit Agreement as amended by the
AFB First Amendment, the Original Tranche B Term Loan Lenders and the AFB
Tranche B Term Loan Lenders declined to receive such voluntary prepayment and
consequently, no Tranche B Term Loans were prepaid. The application of such
voluntary prepayment also resulted in the modification of the amortization
schedule for the Original Tranche A Term Loans and the AFB Tranche A Term
Loans.
Concurrently with the STX Second Amendment and the AFB First
Amendment, the Company entered into that certain First Amendment to
Intercreditor Agreement dated as of March 31, 1997, by and among the Original
Lenders, the Original Administrative Agent, the AFB Lenders, the AFB
Administrative Agent and the Company, whereby the parties to the Intercreditor
Agreement acknowledged the changes permitted under the STX Second Amendment and
the AFB First Amendment and reaffirmed the intent of the parties that the
Original Lenders and the AFB Lenders would rank pari passu with one another in
respect of certain payments, recoveries, collateral or security under the
Original Credit Agreement and the AFB Acquisition Credit Agreement and that
such payments, recoveries, collateral and security would be made on a pro rata
basis.
The Company desired that the permitted aggregate amount of the
Secondary ESOP Loan be reduced by $2,500,000 and a new investment basket be
created to permit the Company to purchase up to $2,500,000 in the aggregate of
Holdco Common Stock from certain employees of the Company that elected to take
cash instead of stock in connection with the termination of the employee stock
ownership plan of SCI existing prior to the SCI Acquisition (the "Old ESOP").
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In connection with the reduction in the Secondary ESOP Loan amount,
the Company entered into that certain Second Amendment to Credit Agreement
("AFB Second Amendment") dated as of July 3, 1997, by and among the Company,
Texas Commerce Bank National Association, individually and as administrative
agent under the AFB Acquisition Credit Agreement, Credit Suisse First Boston,
individually, and as documentation agent under the AFB Acquisition Credit
Agreement and the AFB Lenders and that certain Third Amendment to Credit
Agreement (the "STX Third Amendment") dated as of July 3, 1997, by and among
the Company, Texas Commerce Bank National Association, individually, as an
issuing bank, and as administrative agent under the Original Credit Agreement,
Credit Suisse First Boston (formerly known as Credit Suisse), individually, as
an issuing bank and as documentation agent under the Original Credit Agreement
and the Original Lenders, pursuant to which the Original Lenders and the AFB
Lenders consented to the reduction of the Secondary ESOP Loan by an amount
equal to $2,500,000 and created a corresponding permitted investment in Holdco
Common Stock purchased from certain employees of the Company electing to take
cash instead of stock in connection with the termination of the Old ESOP.
The Company has requested, and the Original Lenders, the
administrative agent, documentation agent and issuing banks under the Original
Credit Agreement have agreed, that the Original Credit Agreement, as amended by
the STX First Amendment, the STX Second Amendment and the STX Third Amendment,
be amended and restated and the STX Facilities be evidenced, contained and
governed by the terms of such amended and restated Original Credit Agreement.
The Company has requested, and the AFB Lenders, the administrative agent and
documentation agent under the AFB Acquisition Credit Agreement have agreed,
that the AFB Acquisition Credit Agreement, as amended by the AFB First
Amendment and the AFB Second Amendment be amended and restated and the AFB
Facilities be evidenced, contained and governed by the terms of such amended
and restated AFB Acquisition Credit Agreement. The Company desires and has
requested that such amended and restated Original Credit Agreement, such
amended and restated AFB Acquisition Credit Agreement and such amended
Intercreditor Agreement be combined and set forth in this Agreement.
The Company desires and has requested that the Original Tranche A Term
Loans and the AFB Tranche A Term Loans be consolidated, combined and continued
pursuant to the terms of this Agreement and that the Original Tranche B Term
Loans and the AFB Tranche B Term Loans be consolidated, combined and continued
pursuant to the terms of this Agreement and that all other Obligations owing or
to be owing under the Original Credit Agreement and the AFB Acquisition Credit
Agreement, respectively, be consolidated, combined and continued pursuant to
the terms and conditions of this Agreement.
The Company, the Original Lenders and the AFB Lenders desire and have
agreed that the collateral and security under each of the Original Credit
Agreement and the AFB Acquisition Credit Agreement will continue to secure the
STX Facilities, the AFB Facilities, all Obligations under the Original Credit
Agreement and all Obligations under the AFB Acquisition Credit Agreement, all
as consolidated, combined, continued, amended and restated in this Agreement,
and as intended by the Intercreditor Agreement. The Company, the Original
Lenders and the AFB Lenders have agreed that the terms of the Intercreditor
Agreement, as amended by the First Amendment to Intercreditor Agreement, be
consolidated, combined and continued in this Agreement.
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It is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities existing under the
Original Credit Agreement and the AFB Acquisition Credit Agreement or evidence
the repayment of any of such obligations and liabilities and that this
Agreement amend and restate in its entirety the Original Credit Agreement and
the AFB Acquisition Credit Agreement and re-evidence the obligations of the
Company outstanding thereunder.
The Company desires, through Sterling Pulp Chemicals (Sask) Ltd., an
Ontario corporation and an indirect wholly owned Subsidiary of the Company
("Sterling Sask"), to acquire substantially all of the assets of Saskatoon
Chemicals, Limited, a subsidiary of Weyerhaeuser Canada, Ltd. (the "Saskatoon
Acquisition"), pursuant to a Purchase Agreement dated as of May 21, 1997, as
amended, by and among the Company and Weyerhaeuser Canada, Ltd. (the "Saskatoon
Purchase Agreement"). In connection with the Saskatoon Acquisition, the
Company will create (i) Sterling Chemicals Acquisitions, Inc., a Delaware
corporation ("▇▇▇▇▇▇▇▇ ▇▇▇"), which will be a wholly owned Subsidiary of the
Company, (ii) Sterling (Sask) Holdings Ltd., an Ontario corporation ("Sask
Holdings"), which will be a wholly owned Subsidiary of ▇▇▇▇▇▇▇▇ ▇▇▇, and (iii)
Sterling Sask, which will be a wholly owned Subsidiary of Sask Holdings.
To accomplish the Saskatoon Acquisition, the Company has requested
that it be permitted to initially create Sterling Sask as an Unrestricted
Subsidiary (as defined herein) under this Agreement and to provide for the
creation of additional Unrestricted Subsidiaries pursuant to certain terms,
conditions and restrictions and that this Agreement provide for additional
modifications to covenants and provisions to permit the Company to effect the
Saskatoon Acquisition.
AGREEMENT
In consideration of the mutual covenants and agreements herein
contained, the Company, the Agents (as defined below), the Issuing Banks (as
defined below) and the Lenders agree that the Original Credit Agreement, the
AFB Acquisition Credit Agreement and the Intercreditor Agreement shall be
amended and restated in their entirety as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
Section 1.01 Definitions. As used herein, the following terms
shall have the meanings herein specified (to be equally applicable to both the
singular and plural forms of the terms defined). Reference to any party to a
Financing Document means that party and its successors and assigns.
"Additional Senior Subordinated Notes" shall mean the
additional senior subordinated notes issued pursuant to the Additional
Senior Subordinated Notes Indenture, as amended, in an amount of at
least $150,000,000 issued by the Company.
"Additional Senior Subordinated Notes Indenture" shall mean
that certain Sterling Chemicals,
5
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Inc. $150,000,000 Senior Subordinated Notes Due 2007 Indenture with
Fleet National Bank, as Trustee, as amended, modified or supplemented
from time to time.
"Administrative Agent" shall mean Texas Commerce Bank National
Association, acting in the manner and to the extent described in
Article VII.
"Advance Notice" shall mean written or telecopy notice (with
telephonic confirmation in the case of telecopy notice), which in each
case shall be irrevocable, from the Company to be received by the
Administrative Agent before 11:00 a.m. (Houston time), by the number
of Business Days in advance of any Borrowing, conversion, continuation
or prepayment of any Loan or Loans pursuant to this Agreement as
respectively indicated below:
(a) Eurodollar Loans - 3 Business Days; and
(b) Base Rate Loans - Same Business Day.
For the purpose of determining the respectively applicable Loans in
the case of the conversion from one Type of Loan into another, the
Loans into which there is to be a conversion shall control. The
Administrative Agent, each Issuing Bank and each Lender are entitled
to rely upon and act upon telecopy notice made or purportedly made by
the Company, and the Company hereby waives the right to dispute the
authenticity and validity of any such transaction once the
Administrative Agent or any Lender has advanced funds or any Issuing
Bank has issued Letters of Credit, absent manifest error.
"AFB Acquisition" shall mean the purchase by Sterling Fibers
of the acrylic fibers business of the Cytec Parties pursuant to the
Purchase Agreement.
"AFB Acquisition Credit Agreement" shall mean the $81,000,000
credit agreement dated as of January 31, 1997, among the Company, TCB,
individually and as administrative agent, Credit Suisse First Boston,
individually and as documentation agent, and the financial
institutions parties thereto in connection with the financing of the
AFB Acquisition, as amended by the AFB First Amendment and the AFB
Second Amendment.
"AFB Adjusted Historical EBITDA" shall mean (i) for the
Rolling Period ending March 31, 1997, $15,000,000, (ii) for the
Rolling Period ending June 30, 1997, $10,200,000, (iii) for the
Rolling Period ending September 30, 1997, $3,900,000, and (iv) for the
Rolling Period ending December 31, 1997, $1,000,000.
"AFB Earnout Agreement" shall mean the earnout agreement dated
as of December 23, 1996 among Sterling Fibers, Holdco, and Cytec
Industries in the form attached as Exhibit C to the Purchase
Agreement.
"AFB Effective Date" shall mean January 31, 1997.
"AFB Facilities" shall have the meaning provided in the
Introductory Statement.
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"AFB Fee Letter" shall mean the letter agreement dated
December 23, 1996, regarding fees, executed by TCB, and Chase
Securities Inc. and accepted and agreed to by the Company as of
December 23, 1996.
"AFB First Amendment" shall have the meaning provided in the
Introductory Statement.
"AFB Lenders" shall have the meaning provided in the
Introductory Statement.
"AFB Loans" shall mean the AFB Tranche A Term Loans and the
AFB Tranche B Term Loans.
"AFB Pilko Report" shall mean the Environmental, Health &
Safety Review dated November 13, 1996 relating to Cytec Industries,
Inc., Santa ▇▇▇▇ Plant--Pace, Florida, prepared by Pilko & Associates,
Inc., and the Investigation of Environmental Impacts dated January 17,
1997, relating to Cytec Industries's Acrylic Fiber Manufacturing
Facility, Santa ▇▇▇▇ County, Florida, prepared by Pilko & Associates,
Inc., each of which has been delivered to the Lenders.
"AFB Second Amendment" shall have the meaning provided in the
Introductory Statement.
"AFB Tranche A Term Loans" shall have the meaning provided in
the Introductory Statement.
"AFB Tranche B Term Loans" shall have the meaning provided in
the Introductory Statement.
"Affiliate" shall mean any Person controlling, controlled by
or under common control with any other Person. For purposes of this
definition, "control" (including "controlled by" and "under common
control with") means the possession, directly or indirectly, of the
power to either (a) vote 10% or more of the securities having ordinary
voting power for election of directors of such Person or (b) direct or
cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or otherwise.
Notwithstanding the foregoing, no individual shall be deemed to be an
Affiliate of a corporation solely by reason of his or her being an
officer or director of such corporation.
"Agents" shall mean, collectively, the Administrative Agent
and the Documentation Agent.
"Aggregate Revolving Credit Exposure" shall mean the sum of
all of the Revolving Credit Lenders' Revolving Credit Exposures.
"Agreement" shall mean this Amended and Restated Credit
Agreement, as further amended, modified or supplemented from time to
time.
"▇▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ U.K., Ltd., a
corporation incorporated under the laws of England and Wales.
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"▇▇▇▇▇▇▇▇ Indemnity" shall mean the indemnification
obligations of ▇▇▇▇▇▇▇▇ in favor of Sterling Canada and Sterling Pulp
as set forth in the Purchase Agreement dated as of August 20, 1992,
between Sterling Canada, Sterling Pulp, and Tenneco Canada, Inc., as
amended pursuant to an Amending Agreement dated January 24, 1996,
which obligations were assigned by Tenneco Canada, Inc. to, and
assumed by, ▇▇▇▇▇▇▇▇ pursuant to an Assignment and Consent Agreement
dated as of May 30, 1996.
"Amended and Restated Deed of Trust" shall mean the Amended,
Restated and Consolidated Mortgage, Deed of Trust, Assignment,
Security Agreement and Financing Statement dated as of the Restated
Closing Date, executed by the Company in favor of the Agents, the
Issuing Banks and the Lenders consolidating, combining, amending and
restating the Deed of Trust and the Second Lien Deed of Trust as
security for the payment of Lender Indebtedness.
"Applicable Commitment Fee Percentage" shall mean, on any day,
the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Leverage Ratio for
the Rolling Period ending on the most recent Quarterly Date with
respect to which the Company is required to deliver the Current
Information (said calculation to be made by the Administrative Agent
as soon as practicable after receipt by the Administrative Agent of
all required Current Information for the applicable period); provided
that, for purposes of this definition, "Rolling Period" shall mean (a)
for the second full Fiscal Quarter after the STX Effective Date, such
quarter and the preceding Fiscal Quarter, (b) for the third full
Fiscal Quarter after the STX Effective Date, such quarter and the two
preceding Fiscal Quarters (in the case of each of clauses (a) and (b)
determined on an annualized basis) and (c) for each Fiscal Quarter
thereafter, such quarter and the three preceding Fiscal Quarters:
================================================================================
LEVERAGE RATIO COMMITMENT FEE PERCENTAGE
--------------------------------------------------------------------------------
Greater than or equal to 3.00 .50%
--------------------------------------------------------------------------------
Less than 3.00 .375%
================================================================================
Each change in the Applicable Commitment Fee Percentage based on a
change in the Current Information (or the Company's failure to deliver
the Current Information) shall be effective as of the first day of the
third month of each applicable Fiscal Quarter (but based upon Current
Information for the immediately preceding Rolling Period), or if such
day is not a Business Day, then the first Business Day thereafter.
Notwithstanding the foregoing, (a) the initial Applicable Commitment
Fee Percentage will be (i) subject to the provisions of Section
2.12(a), .375% for the period from the STX Closing Date through the
STX Effective Date and (ii) .50% from the STX Effective Date through
the first day of the third month of the third full Fiscal Quarter
after the STX Effective Date (but based upon Current Information for
the immediately preceding Rolling Period) and (b) if at any time the
Company fails to deliver Current Information on or before the date
required pursuant to Section 5.02 (without regard to grace periods),
the Applicable Commitment Fee Percentage will be .50% from the date
such Current Information is due pursuant to Section 5.02 (without
regard to grace periods) through the date the Administrative Agent
receives all Current Information then due pursuant to Section 5.02.
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"Applicable Lender" shall mean, with respect to any Borrowing
of Revolving Credit Loans, each Revolving Credit Lender, with respect
to any Borrowing of Tranche A Term Loans, each Tranche A Term Loan
Lender, with respect to any Borrowing of Tranche B Term Loans, each
Tranche B Term Loan Lender, and with respect to any Borrowing of ESOP
Term Loans, each ESOP Term Loan Lender.
"Applicable Margin" shall mean, on any day and with respect to
any (a) Tranche B Term Loan, for Base Rate Loans, 2.00% per annum and
for Eurodollar Loans, 3.00% per annum, and (b) Revolving Credit Loan,
Tranche A Term Loan or ESOP Term Loan, the applicable per annum
percentage set forth at the appropriate intersection in the table
shown below, based on the Leverage Ratio for the Rolling Period ending
on the most recent Quarterly Date with respect to which the Company is
required to deliver the Current Information (said calculation to be
made by the Administrative Agent as soon as practicable after receipt
by the Administrative Agent of all required Current Information for
the applicable period); provided that, for purposes of this
definition, "Rolling Period" shall mean (a) for the second full Fiscal
Quarter after the STX Effective Date, such quarter and the preceding
Fiscal Quarter, (b) for the third full Fiscal Quarter after the STX
Effective Date, such quarter and the two preceding Fiscal Quarters (in
the case of each of clauses (a) and (b) determined on an annualized
basis) and (c) for each Fiscal Quarter thereafter, such quarter and
the three preceding Fiscal Quarters:
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================================================================================
LEVERAGE RATIO EURODOLLAR LOAN APPLICABLE BASE RATE LOAN APPLICABLE
MARGIN PERCENTAGE MARGIN PERCENTAGE
--------------------------------------------------------------------------------
Greater than or equal to 2.50% 1.50%
4.00
--------------------------------------------------------------------------------
Greater than or equal to 2.25% 1.25%
3.75 but less than 4.00
--------------------------------------------------------------------------------
Greater than or equal to 2.00% 1.00%
3.50 but less than 3.75
--------------------------------------------------------------------------------
Greater than or equal to 1.75% .75%
3.25 but less than 3.50
--------------------------------------------------------------------------------
Greater than or equal to 1.50% .50%
3.00 but less than 3.25
--------------------------------------------------------------------------------
Greater than or equal to 1.25% .25%
2.75 but less than 3.00
--------------------------------------------------------------------------------
Less than 2.75 1.00% 0%
================================================================================
Each change in the Applicable Margin based on a change in the Current
Information (or the Company's failure to deliver the Current
Information) shall be effective as of the first day of the third month
of each applicable Fiscal Quarter (but based upon Current Information
for the immediately preceding Rolling Period), or if such day is not a
Business Day, then the first Business Day thereafter. Notwithstanding
the foregoing, (a) for the period from the STX Effective Date through
the first day of the third month of the third full Fiscal Quarter
after the STX Effective Date, the initial Eurodollar Loan Applicable
Margin for the Revolving Credit Loans, Tranche A Term Loans and ESOP
Term Loans will be 2.50% and the initial Base Rate Loan Applicable
Margin for the Revolving Credit Loans, Tranche A Term Loans and ESOP
Term Loans will be 1.50% and (b) if at any time the Company fails to
deliver Current Information on or before the date required pursuant to
Section 5.02 (without regard to grace periods), the Eurodollar Loan
Applicable Margin for the Revolving Credit Loans, the Tranche A Term
Loans and the ESOP Term Loans will be 2.50% and the Base Rate Loan
Applicable Margin for the Revolving Credit Loans, the Tranche A Term
Loans, and the ESOP Term Loans will be 1.50% from the date such
Current Information is due pursuant to Section 5.02 (without regard to
grace periods) through the date the Administrative Agent receives all
Current Information then due pursuant to Section 5.02.
"Applicable Percentage" shall mean, with respect to any
Revolving Credit Lender, such Lender's Revolving Credit Percentage,
with respect to any Tranche A Term Loan Lender, such Lender's Tranche
A Term Loan Percentage, with respect to any Tranche B Term Loan
Lender, such Lender's Tranche B Term Loan Percentage, and with respect
to any ESOP Term Loan Lender, such Lender's ESOP Term Loan Percentage.
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"Application" shall mean an "Application and Agreement for
Letters of Credit," or similar instruments or agreements, entered into
between the Company and an Issuing Bank in connection with any Letter
of Credit.
"Assignment and Acceptance" shall have the meaning provided in
Section 8.07(c).
"Bankruptcy Code" shall have the meaning provided in Section
6.08.
"Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, whose numerator
is one and whose denominator is one minus the C\D Reserve Percentage
and (b) the C\D Assessment Rate.
"Base Rate" shall have the meaning provided in Section
2.06(a).
"Base Rate Loan" shall mean a Revolving Credit Loan, a Tranche
A Term Loan, a Tranche B Term Loan or an ESOP Term Loan bearing
interest at the rate provided in Section 2.06(a).
"Borrowing" shall mean a borrowing pursuant to a Borrowing
Request or a continuation or a conversion pursuant to Section 2.11
consisting, in each case, of the same Type of Loans having, in the
case of Eurodollar Loans, the same Interest Period (except as
otherwise provided in Sections 2.14 and 2.15) and made previously or
being made concurrently, with respect to Revolving Credit Loans, by
all of the Revolving Credit Lenders, with respect to Tranche A Term
Loans, by all of the Tranche A Term Loan Lenders, with respect to
Tranche B Term Loans, by all of the Tranche B Term Loan Lenders, and
with respect to ESOP Term Loans, by all of the ESOP Term Loan Lenders.
"Borrowing Base" shall mean at any time the amount equal to
the sum of (i) 85% of Eligible Accounts plus(ii) 65% of Eligible
Inventory; provided, however, if 65% of Eligible Inventory shall at
any time exceed 85% of Eligible Accounts, then the Borrowing Base
shall be reduced by such excess amount.
"Borrowing Base Report" shall mean the report of the Company
concerning the amount of the Borrowing Base, to be delivered pursuant
to Section 5.02(h), substantially in the form attached as Exhibit H.
"Borrowing Request" shall mean a request for a Borrowing
pursuant to Section 2.02, substantially in the form attached as
Exhibit D.
"BP Facility Fee" shall mean the periodic fee payable to the
Company by BP Chemicals, Inc., an Ohio Corporation, pursuant to
Section 3.1(c) of that certain Lease and Production Agreement between
BP Chemicals Inc., and the Company dated August 8, 1994.
"Business Day" shall mean any day excluding Saturday, Sunday
and any other day on which banks are required or authorized to close
in New York, New York or Houston, Texas and, if the
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20
applicable Business Day relates to Eurodollar Loans, on which trading
is carried on by and between banks in Dollar deposits in the
applicable interbank Eurodollar market.
"Canadian Facility" shall mean a revolving loan and letter of
credit facility for loans and letters of credit in Canadian or U.S.
dollars to or for the account of Sterling Pulp.
"Canadian Facility Administrative Agent" shall mean the
"Administrative Agent," or the Person performing such functions if
called by a different title, under the Canadian Facility.
"Canadian Subsidiary" shall mean any Subsidiary of the Company
that is organized under the laws of Canada or any province thereof,
and that is not an Unrestricted Subsidiary.
"Capital Expenditures" shall mean, for any period, all
expenditures (whether paid in cash or accrued as a liability,
including the portion of Capital Lease Obligations originally incurred
during such period that are capitalized for the consolidated balance
sheet of the Company) by the Company and its Subsidiaries (excluding
Unrestricted Subsidiaries) during such period, that, in conformity
with GAAP, are included in "capital expenditures," "additions to
property, plant or equipment" or comparable items in the consolidated
financial statements of the Company, but excluding (a) increases in
the consolidated fixed or capital assets of the Company and its
Subsidiaries (excluding Unrestricted Subsidiaries) resulting solely
from Permitted Acquisitions (other than expenditures made after the
date of any such Permitted Acquisition), (b) expenditures for the
restoration, repair or replacement of any fixed or capital asset that
was destroyed or damaged, in whole or in part, in an amount equal to
any insurance proceeds received in connection with such destruction or
damage, (c) increases in the capital assets of the Company or its
Subsidiaries (excluding Unrestricted Subsidiaries) resulting from
expenditures in respect of fixed or capital assets made by a Person
other than the Company or its Subsidiaries (excluding Unrestricted
Subsidiaries) so long as they have no obligation to reimburse such
other Person for such expenditures, and (d) expenditures made to
acquire the Properties in connection with the AFB Acquisition.
"Capital Expenditures from Retained Cash Flow" shall mean
Capital Expenditures permitted for any Fiscal Year pursuant to Section
5.04(o)(iii).
"Capital Lease Obligations" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease
of (or other agreement conveying the right to use) real and/or
personal property (excluding the Valdosta Lease but only to the extent
that the Company or any Subsidiary owns Valdosta Bonds) which
obligations are required to be classified and accounted for as a
liability for a capital lease on a balance sheet of such Person and,
for purposes of this Agreement, the amount of such obligations shall
be the capitalized amount thereof.
"Carry-Forward Capital Expenditures" shall mean Capital
Expenditures permitted for any Fiscal Year pursuant to Section
5.04(o)(ii).
"C\D Assessment Rate" shall mean for any day as applied to any
Base Rate Loan, the annual assessment rate determined by the
Administrative Agent to be payable on such day to the Federal
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21
Deposit Insurance Corporation (the "FDIC") for the FDIC (or any
successor thereto) to insure time deposits at offices of the
Administrative Agent in the United States.
"C\D Reserve Percentage" shall mean for any day as applied to
any Base Rate Loan, that percentage (expressed as a decimal) that is
in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the then
current reserve requirement for the Administrative Agent in respect of
new non-personal time deposits in Dollars having a maturity of 30 days
or more.
"Change of Control" shall mean either a "Change in Control",
as defined in the Senior Subordinated Notes Indenture or the
Additional Senior Subordinated Notes Indenture or a change resulting
when any Unrelated Person or any Unrelated Persons, other than the
Designated Shareholders, acting together, which would constitute a
Group together with any Affiliates or Related Persons thereof (in each
case also constituting Unrelated Persons) shall at any time either (i)
Beneficially Own more than 30% of the aggregate voting power of all
classes of Voting Stock of Holdco or (ii) succeed in having sufficient
of its or their nominees elected to the Board of Directors of Holdco
such that such nominees, when added to any existing director remaining
on the Board of Directors of Holdco after such election who is an
Affiliate or Related Person of such Person or Group, shall constitute
a majority of the Board of Directors of Holdco; provided, however, no
Change of Control shall have occurred so long as the Designated
Shareholders (or any combination thereof) shall retain more than 50%
of the aggregate voting power of all classes of Voting Stock of
Holdco. As used herein (a) "Beneficially Own" shall mean
"beneficially own" as defined in Rule 13d3 of the Securities Exchange
Act of 1934, as amended, or any successor provision thereto; provided,
however, that, for purposes of this definition, a Person shall not be
deemed to Beneficially Own securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates until such tendered securities are accepted for
purchase or exchange; (b) "Group" shall mean a "group" for purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended; (c)
"Unrelated Person" shall mean at any time any Person other than Holdco
or any of its Subsidiaries and other than any trust for any employee
benefit plan of Holdco or any of its Subsidiaries; (d) "Related
Person" of any Person shall mean any other Person owning (1) 5% or
more of the outstanding common stock of such Person or (2) 5% or more
of the Voting Stock of such Person; and (e) "Designated Shareholders"
shall mean the Persons who are, as of the Restated Closing Date,
parties to the shareholder agreement among certain shareholders of
Holdco, delivered to the Administrative Agent on the Restated Closing
Date.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and any successor statute.
"Collateral" shall mean the Company's, Holdco's and the
Subsidiary Guarantors' Properties described in and subject to the
Liens, privileges, priorities and security interests purported to be
created by any Security Instrument.
"Commitments" shall mean, for any Lender, such Lender's
Revolving Credit Commitment.
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"Commodity Swap Agreement" shall mean any contract for sale
for future delivery of commodities (whether or not the subject
commodities are to be delivered), hedging contract, forward contract,
swap agreement, futures contract or other commodity pricing protection
agreement or option with respect to any such transaction, designed to
hedge against fluctuations in prices of the subject commodities.
"Company" shall mean Sterling Chemicals, Inc., a Delaware
corporation, formerly known as STX Chemicals Corp.
"Cover", when required by this Agreement for Letter of Credit
Liabilities, shall be effected by paying to the Administrative Agent
in immediately available funds, to be held by the Administrative Agent
in a collateral account maintained by the Administrative Agent at its
Payment Office and collaterally assigned as security pursuant to the
Cash Collateral Account Agreement substantially in the form of Exhibit
F-13 dated as of the STX Effective Date between the Company and the
Administrative Agent, an amount equal to the maximum amount of each
applicable Letter of Credit available for drawing at any time. Such
amount shall be retained by the Administrative Agent in such
collateral account until such time as the applicable Letter of Credit
shall have expired and Reimbursement Obligations, if any, with respect
thereto shall have been fully satisfied.
"Credit Suisse First Boston" shall mean Credit Suisse First
Boston (formerly known as Credit Suisse), in its individual capacity
or as an Issuing Bank, as the case may be, and not as Documentation
Agent.
"Cumulative Retained Cash Flow" shall mean an amount equal to
the difference of (a) Retained Cash Flow for all then previous Fiscal
Years, on a cumulative basis, minus (b) Designated Retained Cash Flow
Usage, on a cumulative basis, in each case from April 1, 2000. For
the period beginning on August 22, 1996 and ending on April 1, 2000,
the Cumulative Retained Cash Flow shall equal zero.
"Current Assets" shall mean all assets of a Person which under
GAAP would be classified as current assets (excluding any cash or cash
equivalents).
"Current Information" shall mean, as of any day, the financial
statements and other related information for any applicable period
most recently required to be delivered to the Administrative Agent
pursuant to Sections 5.02(a), (b), and (d).
"Current Liabilities" shall mean all liabilities of a Person
which under GAAP would be classified as current liabilities, other
than current maturities of long term debt and the obligation to repay
the Revolving Credit Loans.
"Current Ratio" shall mean, on any day, the ratio of Current
Assets to Current Liabilities.
"Cytec Indemnity" shall mean the indemnification obligations
of the Cytec Parties in favor of the Company, Sterling Fibers and
Holdco as set forth in the Purchase Agreement.
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"Cytec Industries" shall mean Cytec Industries Inc., a
Delaware corporation.
"Cytec Parties" shall mean collectively Cytec Industries,
Cytec Acrylic Fibers Inc., a Delaware corporation, and Cytec
Technology Corp., a Delaware corporation.
"Deed of Trust" shall mean the Mortgage, Deed of Trust,
Assignment, Security Agreement and Financing Statement dated as of the
STX Effective Date, and delivered by the Company pursuant to Section
3.02(d)(viii) originally as security for the payment and performance
of the Lender Indebtedness under the Original Credit Agreement and now
as security for all Lender Indebtedness.
"Default" shall mean an Event of Default or any condition or
event which, with notice or lapse of time or both, would constitute an
Event of Default.
"Designated Retained Cash Flow Usage" shall be an amount
designated in writing by a Responsible Officer of the Company to the
Administrative Agent, which designation shall be in the form of
Exhibit J, to be a usage of Retained Cash Flow for either a Permitted
Acquisition or a Capital Expenditure.
"Documentary Letter of Credit" shall mean a letter of credit
issued pursuant to this Credit Agreement that supports payment or
performance for a single identified purchase or exchange of products
in the ordinary course of business of the Company or its Subsidiaries.
"Documentation Agent" shall mean Credit Suisse First Boston,
acting in the manner and to the extent described in Article VII.
"Dollar" and the sign "$" shall mean lawful money of the
United States of America.
"EBITDA" shall mean, as to the Company and its Subsidiaries
(excluding Unrestricted Subsidiaries) on a consolidated basis and for
any period, without duplication, the amount equal to net income less
any noncash income included in net income, plus (a) to the extent
deducted from net income, interest expense, depreciation, depletion
and impairment, amortization of leasehold and intangibles, expenses
incurred on or prior to the STX Effective Date relating to SAR's,
non-capitalized expenses incurred on or prior to the STX Effective
Date relating to the Merger not to exceed $3,633,000, other noncash
expenses, and income tax expenses, (b) prepaid royalty income
(including the BP Facility Fee) to the extent actually received in
cash; provided, that, extraordinary gains or losses, including but not
limited to gains or losses on the disposition of assets, shall not be
included in EBITDA, in each case for such period, and (c) for the
Rolling Periods ending on March 31, 1997, June 30, 1997, September 30,
1997, and December 31, 1997, the AFB Adjusted Historical EBITDA for
such Rolling Period.
"Eligible Account" shall mean at any time the invoice or
ledger amount owing on each account (which shall mean (i) any
"account" as such term is defined in Section 9106 of the UCC, (ii)
any receivable arising out of the licensing of chlorine dioxide
generator technology or other technology relating thereto, (iii)
receivables arising out of the profit sharing component of conversion
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contracts to the extent the parties thereto have agreed in writing as
to the amount thereof that is subject to no further adjustment and
payable within 90 days, and (iv) any "chattel paper" as such term is
defined in Section 9105(1)(b) of the UCC) of the Company or any of
its Subsidiaries (excluding Unrestricted Subsidiaries) (net of any
credit balance, returns, trade discounts, or unbilled amounts or
retention) for which each of the following statements is accurate and
complete (and the Company by including such account in any computation
of the Borrowing Base shall be deemed to represent and warrant to the
Administrative Agent, the Issuing Banks and the Lenders the accuracy
and completeness of such statements):
(a) Said account is a binding and valid
obligation of the obligor thereon in full force and effect;
(b) Said account is genuine as appearing on its
face or as represented in the books and records of Company or
any of its Subsidiaries, as applicable;
(c) Said account is free from plausibly valid
claims regarding rescission, cancellation or avoidance,
whether by operation of law or otherwise;
(d) Payment of said account is less than 90 days
past due as determined by the due date stated on the invoice
therefor (or if said account is not paid by reference to an
invoice in the ordinary course of business but instead by
reference to the terms of the agreements creating said
account, said account has not remained unpaid beyond 90 days
after the due date therefor);
(e) Said account is net of concessions, offset
(excluding any accounts payable offset supported by a Letter
of Credit) or understandings with the obligor thereon that in
any way could reasonably be expected to adversely affect the
payment of said account;
(f) In the case of an account owing to the
Company or any U.S. Subsidiary, the Administrative Agent, on
behalf of the Lenders, has a first-priority perfected Lien
covering said account, and, in the case of an account owing to
any Canadian Subsidiary, the Administrative Agent, on behalf
of the Lenders, has a first-priority perfected Lien in and to
65% of the issued and outstanding equity interests of Sterling
Pulp and Sterling NRO and any other direct Canadian Subsidiary
of the Company or any U.S. Subsidiary, in each case to the
extent required by and in accordance with the applicable
Security Instrument. Other than the Liens described in the
preceding sentence of this Subsection (f), said account is,
and at all times will be, free and clear of all Liens, except
that accounts owing to the Canadian Subsidiaries may be
pledged to secure the Canadian Facility.
(g) Said account arose in the ordinary course of
business of the Company or any of its Subsidiaries, as
applicable;
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(h) Said account is not payable by an obligor who
is more than 90 days past due with regard to 20% or more of
the total accounts owed to the Company or its Subsidiaries by
such obligor or any of its Affiliates;
(i) All consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
Governmental Authority required to be obtained, effected or
given in connection with the execution, delivery and
performance of said account by each party obligated thereunder
have been duly obtained, effected or given and are in full
force and effect;
(j) The obligor on said account is not the
subject of any bankruptcy or insolvency proceeding, has not
had a trustee or receiver appointed for all or a substantial
part of its property, has not made an assignment for the
benefit of creditors, admitted its inability to pay its debts
as they mature or suspended its business;
(k) The obligor of said account is subject to the
jurisdiction of federal, state or provincial courts in the
United States of America or Canada, unless (i) said account is
backed by a letter of credit in form acceptable to the
Administrative Agent and that is issued or confirmed by an
issuer, having ratings of at least A2 or P2 by Standard &
Poor's Ratings Group and ▇▇▇▇▇'▇ Investors Service, Inc.,
respectively or a rating of at least A2 by International Bank
Credit Analysis, Ltd. or at least LC1 by Thomson Bank Watch;
provided that if such issuer is rated by more than one such
Person, no such ratings shall be lower than the applicable
level set forth in this Subsection (k), or (ii) the obligor on
said account has longterm debt ratings, or is a wholly-owned
Subsidiary of a Person having longterm debt ratings of at
least A and A3 or shortterm debt ratings of at least A2 and
P2, in each case by Standard & Poor's Ratings Group and
▇▇▇▇▇'▇ Investors Service, Inc., respectively;
(l) In the case of the sale of goods, the subject
goods have been sold to an obligor on a true sale basis on
open account, or subject to contract, and not on consignment,
on approval or on a "sale or return" basis or subject to any
other repurchase or return agreement, no material part of the
subject goods has been returned, rejected, lost or damaged,
and said account is not, evidenced by chattel paper or an
instrument of any kind; and
(m) Each of the representations and warranties
set forth in the Security Instruments with respect to said
account is true and correct in all material respects on such
date;
provided that, (1) if any Eligible Account, when added to all other
accounts that are obligations of the same obligor and its Affiliates,
results in a total sum that exceeds 15% (or 25% in the case of any
obligor listed on Schedule 1.01B) of the total balance then due on all
Eligible Accounts (without giving effect to any reduction in Eligible
Accounts pursuant to this clause (1)), the amount of said account in
excess of 15% (or 25% in the case of any obligor listed on Schedule
1.01B) of such total balance then due shall be excluded from Eligible
Accounts, (2) if any account which is either a Canadian Account or an
Other Foreign Account, when added to the total of all other Canadian
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26
Accounts and Other Foreign Accounts included in Eligible Accounts,
results in a sum that exceeds 70% of the total balance then due on all
Domestic Accounts, the amount of said account in excess of such total
shall be excluded from Eligible Accounts, (3) if any account which is
an Other Foreign Account, when added to the total of all Other Foreign
Accounts included in Eligible Accounts, results in a sum that exceeds
40% of the total balance then due on all Domestic Accounts, the amount
of said account in excess of such total shall be excluded from
Eligible Accounts, and (4) any Other Foreign Account that would, but
for the effect of Subsection (k) of this definition be included in
Eligible Accounts, shall be included in Eligible Accounts up to an
aggregate amount not to exceed, at any one time, 10% of the total
balance then due on all Domestic Accounts. As used herein, the term
"Canadian Account" shall mean any account owing to a Canadian
Subsidiary and that otherwise meets the requirements to be an Eligible
Account. As used herein, the term "Domestic Account" shall mean any
Eligible Account other than a Canadian Account or an Other Foreign
Account. As used herein, the term "Other Foreign Account" shall mean
any account the obligor of which is not subject to the jurisdiction of
federal, state or provincial courts in the United States of America or
Canada, whether or not the Administrative Agent, on behalf of the
Lenders, has a first-priority, perfected Lien covering said account,
but which account otherwise meets the requirements to be an Eligible
Account.
"Eligible Inventory"" shall mean, at any time, all inventory
(as such term is defined in Section 9109(4) of the UCC) of the
Company and its Subsidiaries (excluding Unrestricted Subsidiaries) for
which each of the following statements is accurate and complete (and
the Company by including such inventory in any computation of the
Borrowing Base shall be deemed to represent and warrant to the
Administrative Agent, each Issuing Bank and each Lender the accuracy
and completeness of such statements):
(a) Said inventory shall be valued in accordance
with GAAP and (i) shall include raw materials and finished
goods but (ii) shall not include goods that are classified as
"work-in-progress";
(b) Said inventory is in good condition, meets
all standards imposed by any Governmental Authority having
regulatory authority over it, its use and/or sale and is
either currently usable or currently salable in the normal
course of business of the Company and its Subsidiaries;
(c) Said inventory is in possession of the
Company or its Subsidiaries, or is in transit in the ordinary
course of business but in respect of which title remains in
the Company or its applicable Subsidiary and which is fully
insured (subject to deductibles consistent with prudent
industry standards for similarly situated companies) and is
not (i) located outside the United States of America or Canada
or (ii) in the possession or control of any warehouseman,
bailee, or any agent or processor for or customer of the
Company or its Subsidiaries or, if it is in any such Person's
possession, the Company or its applicable Subsidiaries shall
have notified (in a manner that effectively under applicable
law creates a valid and first-priority perfected Lien in favor
of the Administrative Agent, on behalf of the Lenders, in such
inventory) such warehouseman, bailee, agent, processor or
customer of the Administrative Agent's Lien and such
warehouseman, bailee, agent, processor or customer has
subordinated
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or waived any Lien it may claim therein and agreed to hold all
such inventory for the Administrative Agent's account subject
to the Administrative Agent's instructions;
(d) Each of the representations and warranties
set forth in the Security Instruments with respect to said
inventory is true and correct in all material respects on such
date;
(e) In the case of inventory of any U.S.
Subsidiaries, the Administrative Agent, on behalf of the
Lenders, has a first-priority perfected Lien covering said
inventory and, in the case of the inventory of any of the
Canadian Subsidiaries, the Administrative Agent, on behalf of
the Lenders, has a first-priority perfected Lien in and to 65%
of the issued and outstanding equity interests of Sterling
Pulp and Sterling NRO and any other direct Canadian Subsidiary
of the Company or any U.S. Subsidiary, in each case to the
extent required by and in accordance with the applicable
Security Instrument. Other than the Liens described in the
preceding sentence of this Subsection (e), said inventory is,
and at all time will be, free and clear of all Liens (or with
respect to which all rights of the holder of such Liens have
been waived or subordinated to the satisfaction of the
Administrative Agent), except that inventory owned by the
Canadian Subsidiaries may be pledged to secure the Canadian
Facility; and
(f) Said inventory does not include goods that
are not owned by the Company or its Subsidiaries or that are
held by the Company or its Subsidiaries pursuant to a
consignment agreement.
"Environmental Laws" shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any
Governmental Authority pertaining to health or the environment in
effect in any and all jurisdictions in which the Company or its
Subsidiaries are conducting or at any time have conducted business, or
where any Property of the Company or its Subsidiaries is located, or
where any hazardous substances generated by or disposed of by the
Company or its Subsidiaries are located, including but not limited to
the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as amended,
the Comprehensive Environmental, Response, Compensation, and Liability
Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of
1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the
Toxic Substances Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, and other environmental
conservation or protection laws. The term "oil" shall have the
meaning specified in OPA; the terms "hazardous substance," "release"
and "threatened release" have the meanings specified in CERCLA, and
the terms "solid waste" and "disposal" (or "disposed") have the
meanings specified in RCRA; provided, however, in the event either
CERCLA or RCRA is amended so as to change the meaning of any term
defined thereby, such changed meaning shall apply subsequent to the
effective date of such amendment, and provided, further, that, to the
extent the laws of the state in which any Property of the Company or
its Subsidiaries is located establish a meaning for "oil," "hazardous
substance," "release," "solid waste" or "disposal" which is broader
than that specified in either OPA, CERCLA or RCRA, such broader
meaning shall apply.
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"Equity Notes" shall mean the notes (constituting a portion of
up to $300,000 of the new common equity of Holdco issued at the time
of the AFB Acquisition) from former employees of the Cytec Parties.
"Equity Plans" shall mean the Omnibus Stock Plan and all other
contracts, commitments, plans, programs or arrangements providing for
the issuance or grant of any Stock Acquisition Rights or any capital
stock (restricted or otherwise), stock appreciation rights, phantom
stock or other equity interests (i) prior to the Merger and SCI Asset
Conveyance, in SCI or any of its Subsidiaries, and (ii) after the
Merger and Asset Conveyance, in Holdco, including stock purchase
plans. As used herein, "Omnibus Stock Plan" shall mean (i) prior to
the Merger and SCI Asset Conveyance, the Omnibus Stock and Incentive
Plan of SCI or any of its Subsidiaries, and (ii) after the Merger and
SCI Asset Conveyance, the Omnibus Stock and Incentive Plan of Holdco,
and "Stock Acquisition Rights" shall mean (i) all options, warrants,
calls, subscriptions or other rights of any nature to acquire any
shares of capital stock of, or any other equity interests in, Holdco
and (ii) all securities convertible into or exchangeable for such
shares or equity interests or obligating Holdco to grant, extend or
enter into any such option, warrant, call, subscription or other
right, agreement or commitment; provided, however, that the term
"Stock Acquisition Rights" shall not include SARs, phantom stock or
restricted stock grants.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which together with the Company or a Subsidiary
of the Company would be deemed to be a "single employer" within the
meaning of Section 4001(b)(1) of ERISA or Subsections 414(b), (c), (m)
or (o) of the Code.
"ERISA Termination Event" shall mean (i) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued
thereunder (other than a "Reportable Event" not subject to the
provision for 30day notice to the PBGC under Subsections .14, .18,
.19 or .20 of Part 2615 of the PBGC regulations), (ii) the withdrawal
of the Company, a Subsidiary of the Company or any ERISA Affiliate
from a Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, (iii) the filing
of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041(c) of ERISA, (iv) the
institution of proceedings to terminate a Plan by the PBGC, or (v) any
other event or condition which could reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Plan.
"ESOP" shall mean the new employee stock ownership plan of the
Company and its related trust, as in effect on the STX Effective Date.
"ESOP Security Agreement" shall mean that certain Security
Agreement dated as of the STX Effective Date, executed by the ESOP in
favor of the Company, and any and all amendments, modifications,
supplements, renewals and restatements thereof.
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"ESOP Term Loan" shall have the meaning provided in Section
2.01(a)(iii).
"ESOP Term Loan Lender" shall mean any Lender having an ESOP
Term Loan outstanding hereunder.
"ESOP Term Loan Maturity Date" shall mean September 30, 2000.
"ESOP Term Loan Percentage" shall mean as to any ESOP Term
Loan Lender, the percentage which such Lender's ESOP Term Loans then
outstanding constitutes of the aggregate ESOP Term Loans then
outstanding.
"ESOP Term Note" shall mean a promissory note of the Company
described in Section 2.05(d) payable to an ESOP Term Loan Lender and
being substantially in the form of Exhibit B-3 evidencing the
aggregate indebtedness of the Company to such Lender for ESOP Term
Loans.
"Eurodollar Loan" shall mean a Revolving Credit Loan, a
Tranche A Term Loan, a Tranche B Term Loan or an ESOP Term Loan
bearing interest at the rate provided in Subsection 2.06(b).
"Eurodollar Rate" shall mean, with respect to any Borrowing of
Eurodollar Loans for any Interest Period, the product of (a) (i) the
interest rate per annum shown on page 3750 of the Dow ▇▇▇▇▇ & Company
Telerate screen or any successor page as the composite offered rate
for London interbank deposits with a period comparable to the Interest
Period for such Eurodollar Loan, as shown under the heading "USD" at
11:00 A.M. (London time) two Business Days prior to the first day of
such Interest Period or (ii) if the rate in clause (i) of this
definition is not shown for any particular day, the average interest
rate per annum (rounded upwards, if necessary, to the next 1/16th of
1%) offered to the Reference Banks in the interbank Eurodollar market
for Dollar deposits of amounts in funds comparable to the principal
amount of the Eurodollar Loan to which such Eurodollar Rate is to be
applicable with maturities comparable to the Interest Period for which
such Eurodollar Rate will apply as of approximately 10:00 a.m.
(Houston time) two Business Days prior to the commencement of such
Interest Period, times (b) Statutory Reserves.
"Event of Default" shall have the meaning provided in Article
VI.
"Excess Cash Flow" shall mean (a) EBITDA for any Fiscal Year,
minus (b) for each such Fiscal Year and for the Company and its
Subsidiaries (excluding Unrestricted Subsidiaries) on a consolidated
basis, the sum of (i) scheduled payments of principal pursuant to
Sections 2.05(b) and (c), (ii) the principal portion of scheduled
payments under Capital Lease Obligations, (iii) cash interest, (iv)
cash taxes applicable to such Fiscal Year and paid prior to the date
of determination, by or on behalf of the Company and its Subsidiaries
(excluding Unrestricted Subsidiaries), (v) any Permitted Holdco
Dividends actually paid, (vi) the amount paid to Cytec Industries
pursuant to Section 2.03 of the AFB Earnout Agreement attributable to
such Fiscal Year, (vii) for the Fiscal Year ending September 30, 1997,
the AFB Adjusted Historical EBITDA for the Rolling Period ending on
September 30, 1997, and (viii) the amount equal to (A) actual Capital
Expenditures (exclusive of Capital Lease Obligations incurred during
such Fiscal Year and Capital Expenditures for such Fiscal
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Year that were designated as Capital Expenditures from Retained Cash
Flow), plus (B) the amount of Carry Forward Capital Expenditures
permitted to be made in the next succeeding Fiscal Year, minus (C) the
amount of Carry-Forward Capital Expenditures permitted to be made in
the current Fiscal Year.
"Exchange Rate Swap Agreement" shall mean any contract for
sale, purchase, or exchange or for future delivery of foreign currency
(whether or not the subject currency is to be delivered or
exchanged), hedging contract, forward contract, swap agreement,
futures contract, or other foreign exchange protection agreement or
option with respect to any such transaction, designed to hedge against
fluctuations in foreign exchange rates.
"Federal Funds Effective Rate" shall mean, for any day, the
per annum rate equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"Fee Letter" shall mean the letter agreement dated April 24,
1996, regarding fees, executed by TCB, Credit Suisse and Chase
Securities Inc. and accepted and agreed to by TSG as of April 24,
1996.
"Financial Statements" shall mean the audited consolidated
financial statements of SCI for the Fiscal Year ended September 30,
1995, the unaudited consolidated financial statements of SCI for the
Fiscal Quarter ended March 31, 1996 and the audited consolidated
financial statements of the Company for the Fiscal Year ended
September 30, 1996.
"Financing Documents" shall mean this Agreement, the Notes,
the Guaranty Agreements, the Security Instruments, the Stock
Intercreditor Agreement, the Applications, Borrowing Requests,
Borrowing Base Reports, the Fee Letter, the AFB Fee Letter, and the
other documents, instruments or agreements described in Subsections
3.02(d) and 3.03(d), together with any other document, instrument or
agreement (other than participation, agency or similar agreements
among the Lenders or between any Lender and any other bank or creditor
with respect to any indebtedness or obligations of Holdco or the
Company or its Subsidiaries hereunder or thereunder) now or hereafter
entered into in connection with the Loans, the Lender Indebtedness or
the Collateral, as such documents, instruments or agreements may be
amended, modified or supplemented from time to time.
"Fiscal Quarter" shall mean the fiscal quarter of the Company,
ending on the last day of each December, March, June and September in
each year.
"Fiscal Year" shall mean the fiscal year of the Company,
ending on September 30th of each year.
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"Fixed Charge Coverage Ratio" shall mean, for any day:
(a) from January 1, 1997, through March 31, 1997,
the ratio of (i) EBITDA for the Rolling Period ending on
December 31, 1996 less cash income taxes actually paid during
the Fiscal Quarter ending on December 31, 1996, times four,
plus cash income tax refunds actually received by the Company
and its Subsidiaries (excluding Unrestricted Subsidiaries) on
a consolidated basis for the Rolling Period ending on December
31, 1996, to (ii) the sum of (A) Scheduled Principal Payments
made during the Fiscal Quarter ending on December 31, 1996,
times four, plus (B) the amount of cash interest paid during
the Fiscal Quarter ending on December 31, 1996 (including the
interest component of Capital Lease Obligations), times four,
plus (C) actual Capital Expenditures (excluding Project
Capital Expenditures and Capital Lease Obligations incurred
during such period) made during the Rolling Period ending on
December 31, 1996, plus (D) all Permitted Holdco Dividends
paid during the Rolling Period ending on December 31, 1996;
(b) from April 1, 1997, through June 30, 1997,
the ratio of (i) EBITDA for the Rolling Period ending on
March 31, 1997, less cash income taxes actually paid during
the two Fiscal Quarters ending on December 31, 1996 and March
31, 1997, respectively, times two, plus cash income tax
refunds actually received by the Company and its Subsidiaries
(excluding Unrestricted Subsidiaries) on a consolidated basis
for the Rolling Period ending on March 31, 1997, to (ii) the
sum of (A) Scheduled Principal Payments made during the two
Fiscal Quarters ending on December 31, 1996, and March 31,
1997, times two, plus (B) the amount of cash interest paid
during the two Fiscal Quarters ending on December 31, 1996,
and March 31, 1997 (including the interest component of
Capital Lease Obligations), respectively, times two, plus (C)
actual Capital Expenditures (excluding Project Capital
Expenditures and Capital Lease Obligations incurred during
such period) made during the Rolling Period ending on March
31, 1997, plus (D) all Permitted Holdco Dividends paid during
the Rolling Period ending on March 31, 1997;
(c) from July 1, 1997, through September 30,
1997, the ratio of (i) EBITDA for the Rolling Period ending
on June 30, 1997, less cash income taxes actually paid for the
three Fiscal Quarters ending on December 31, 1996, March 31,
1997 and June 30, 1997, respectively, times 1.33, plus cash
income tax refunds actually received by the Company and its
Subsidiaries (excluding Unrestricted Subsidiaries) on a
consolidated basis for the Rolling Period ending on June 30,
1997, to (ii) the sum of (A) Scheduled Principal Payments made
during the three Fiscal Quarters ending on December 31, 1996,
March 31, 1997, June 30, 1997, respectively, times 1.33, plus
(B) the amount of cash interest paid during the three Fiscal
Quarters ending on December 31, 1996, March 31, 1997, and June
30, 1997 (including the interest component of Capital Lease
Obligations), respectively, times 1.33, plus (C) actual
Capital Expenditures (excluding Project Capital Expenditures
and Capital Lease Obligations incurred during such period)
made during the Rolling Period ending on June 30, 1997, plus
(D) all Permitted Holdco Dividends paid during the Rolling
Period ending on June 30, 1997; and
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(d) from October 1, 1997, through December 31,
1997, the ratio of (i) EBITDA less cash income taxes actually
paid plus cash income tax refunds actually received by the
Company and its Subsidiaries (excluding Unrestricted
Subsidiaries) on a consolidated basis in each case for the
Rolling Period ending on September 30, 1997, to (ii) the sum
of (A) Scheduled Principal Payments made during such period,
plus (B) the amount of cash interest paid during such period
(including the interest component of Capital Lease
Obligations), plus (C) the greater of (1) actual Capital
Expenditures (exclusive of Capital Lease Obligations incurred
during such period, Capital Expenditures made during such
period that were designated by the Company to be Capital
Expenditures from Retained Cash Flow, and Project Capital
Expenditures made during such period) and (2) $15,000,000,
plus (D) all Permitted Holdco Dividends paid during such
period, all without duplication and as to the Company and its
Subsidiaries on a consolidated basis.
(e) after December 31, 1997, the ratio of (i)
EBITDA less cash income taxes actually paid plus cash income
tax refunds actually received by the Company and its
Subsidiaries (excluding Unrestricted Subsidiaries) on a
consolidated basis to (ii) the Fixed Charges, in each case for
the Rolling Period ending on the most recent Quarterly Date.
"Fixed Charges" shall mean without duplication, as to the
Company and its Subsidiaries (excluding Unrestricted Subsidiaries) on
a consolidated basis and for each Rolling Period, (a) Scheduled
Principal Payments made during such period, plus (b) the amount of
cash interest paid during such period (including the interest
component of Capital Lease Obligations), plus (c) the greater of (i)
actual Capital Expenditures (exclusive of Capital Lease Obligations
incurred during such period and Capital Expenditures made during such
period that were designated by the Company to be Capital Expenditures
from Retained Cash Flow) and (ii) $15,000,000, plus (d) all Permitted
Holdco Dividends paid during such period.
"Form 1001 Certification" shall have the meaning provided in
Section 2.20(f).
"Form 4224 Certification" shall have the meaning provided in
Section 2.20(f).
"Funded Indebtedness" shall mean, as to any Person, without
duplication, all Indebtedness for borrowed money, all obligations
evidenced by bonds, debentures, notes, or other similar instruments,
all Capital Lease Obligations, and all guaranties of Funded
Indebtedness of other Persons.
"GAAP" shall mean generally accepted accounting principles as
applied in accordance with Section 1.02.
"Governmental Authority" shall mean any (domestic or foreign)
federal, state, province, county, city, municipal or other political
subdivision or government, department, commission, board, bureau,
court, agency or any other instrumentality of any of them, which
exercises jurisdiction over the Company or any of its Property, or any
Subsidiary of the Company or any of such Subsidiary's Property or any
Plan.
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"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other
direction or requirement (including but not limited to any of the
foregoing which relate to Environmental Laws, energy regulations and
occupational, safety and health standards or controls) of any
Governmental Authority.
"Guaranty Agreements" shall mean, collectively the Subsidiary
Guaranty and the Limited Guaranty.
"Hedge Agreement" shall mean (i) any Commodity Swap Agreement,
(ii) any Interest Rate Swap Agreement, or (iii) any Exchange Rate Swap
Agreement.
"Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or
from time to time may be contracted for, taken, reserved, charged or
received on the Notes or on other Lender Indebtedness, as the case may
be, owed to it under the law of any jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding other provisions
of this Agreement, or law of the United States of America applicable
to such Lender and the Transactions, which would permit such Lender to
contract for, charge, take, reserve or receive a greater amount of
interest than under such jurisdiction's law.
"Holdco" shall have the meaning provided in the Introductory
Statement.
"Holdco Common Stock" shall mean the common stock of Holdco,
par value $0.01 per share.
"Indebtedness" of any Person shall mean:
(i) all obligations of such Person for borrowed
money and obligations evidenced by bonds, debentures, notes or
other similar instruments;
(ii) all obligations of such Person (whether
contingent or otherwise) in respect of bankers' acceptances,
letters of credit, surety or other bonds and similar
instruments;
(iii) all obligations of such Person to pay the
deferred purchase price of Property or services (other than
for borrowed money);
(iv) all Capital Lease Obligations in respect of
which such Person is liable, contingently or otherwise, as
obligor, guarantor or otherwise, or in respect of which
obligations such Person otherwise assures a creditor against
loss;
(v) all guaranties (direct or indirect), and
other contingent obligations of such Person in respect of, or
obligations to purchase or otherwise acquire or to assure
payment of, Indebtedness of other Persons;
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(vi) Indebtedness of others secured by any Lien
upon Property owned by such Person, whether or not assumed;
(vii) all obligations or undertakings of such
Person to maintain or cause to be maintained the financial
position or financial covenants of other Persons;
(viii) obligations to deliver goods or services in
consideration of advance payments, excluding such obligations
incurred in the ordinary course of business as conducted by
the Company and its Subsidiaries as of the Restated Closing
Date; and
(ix) the net amount of obligations of such Person
under agreements of the types described in the definitions of
Commodity Swap Agreements, Exchange Rate Swap Agreements and
Interest Rate Swap Agreements;
provided, that the term "Indebtedness" shall not mean or include any
indebtedness of the type described in clause (i) of this definition in
respect of which monies sufficient to pay and discharge the same in
full (either on the expressed date of maturity thereof or on such
earlier date as such indebtedness may be duly called for redemption
and payment) shall be deposited (in accordance with the terms of such
indebtedness) with a depository, agency or trustee, acceptable to the
Administrative Agent, in trust for the payment of such indebtedness
with the effect that the obligor of such indebtedness has no further
obligation to comply with the covenants and other applicable terms of
the documentation existing in connection therewith.
"Intercreditor Agreement" shall have the meaning provided in
the Introductory Statement.
"Interest Coverage Ratio" shall mean, on any day, the ratio of
(a) EBITDA for the Rolling Period ending on the then most recent
Quarterly Date to (b) cash interest payments made by the Company and
its Subsidiaries (excluding Unrestricted Subsidiaries) on a
consolidated basis during such Rolling Period.
"Interest Period" shall mean, with respect to each Borrowing
of Eurodollar Loans, an interest period complying with the terms and
provisions of Section 2.07.
"Interest Rate Swap Agreement" shall mean any rate swap, rate
cap, rate floor, rate collar, forward rate agreement, futures or other
rate protection agreement or option with respect to any such
transaction, designed to hedge against fluctuations in interest rates.
"Issuing Bank" shall mean, for each Letter of Credit, TCB,
Credit Suisse First Boston (or any other Lender designated by the
Company and approved in writing by the Administrative Agent such
approval not to be unreasonably withheld), as the issuing bank for
such Letter of Credit, at the option of the Company.
"Leasehold Deed of Trust" shall mean the Leasehold Deed to
Secure Debt and Security Agreement dated as of the STX Effective Date,
as amended by the First Amendment and Supplement
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35
to Leasehold Deed of Trust to Secure Debt and Security Agreement dated
as of the AFB Effective Date, and delivered by the Company pursuant to
Section 3.02(d)(ix) and Section 3.03(d)(xiv), respectively, as
security for the Lender Indebtedness.
"Lender" shall have the meaning assigned such term in the
opening paragraph of this Agreement and shall include any and all of
the Original Lenders and the AFB Lenders.
"Lender Indebtedness" shall mean any and all amounts owing or
to be owing by the Company to the Agents, the Issuing Banks or the
Lenders with respect to or in connection with the Loans, any Letter of
Credit Liabilities, the Notes, any Hedge Agreement, this Agreement, or
any other Financing Document and, as to Hedge Agreements, any and all
amounts owing or to be owing by the Company thereunder to any Secured
Affiliate and comprising all of the Lender Indebtedness under the
Original Credit Agreement and the Lender Indebtedness under the AFB
Acquisition Credit Agreement.
"Lending Office" shall mean for each Lender the office
specified opposite such Lender's name on the signature pages hereof,
or in the Assignment and Acceptance pursuant to which it became a
Lender, with respect to each Type of Loan, or such other office as
such Lender may designate in writing from time to time to the Company
and the Administrative Agent with respect to such Type of Loan.
"Letters of Credit" shall have the meaning assigned such term
in Section 2.03(a) and shall include the Outstanding Letters of
Credit, which are hereby deemed to be issued under this Agreement.
"Letter of Credit Liabilities" shall mean, at any time and in
respect of any Letter of Credit, the sum of (i) the amount available
for drawings under such Letter of Credit as of the date of
determination plus (ii) the aggregate unpaid amount of all
Reimbursement Obligations due and payable as of the date of
determination in respect of previous drawings made under such Letter
of Credit.
"Leverage Ratio" shall mean, on any day, the ratio of (a)
Funded Indebtedness of the Company and its Subsidiaries (excluding
Unrestricted Subsidiaries) on a consolidated basis as of the date of
determination to (b) EBITDA for the Rolling Period ending on the most
recent Quarterly Date as of the date of determination.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner of
the Property, whether such interest is based on contract or
constitutional common law, or statutory law, and including but not
limited to the lien or security interest arising from a mortgage,
encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes.
The term "Lien" shall include reservations, exceptions, encroachments,
easements, rights of way, covenants, conditions, restrictions, liens
and other statutory, constitutional, or common law rights of
landlords, leases and other title exceptions and encumbrances
affecting Property. For the purposes of this Agreement, the Company
or any Subsidiary of the Company shall be deemed to be the owner of
any Property which it has
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acquired or holds subject to a conditional sale agreement, financing
lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.
"Limited Guaranty" shall mean the Limited Guaranty Agreement
(Santa ▇▇▇▇) dated as of the AFB Effective Date, executed by Sterling
Fibers in favor of the Agents, the Issuing Banks and the Lenders.
"Limited Liability Interests" shall mean any ownership
interest in capital stock of a corporation, any equity interest in
another entity, or any indebtedness of a corporation or other entity,
the ownership of which stock, other interest or indebtedness, as a
matter of applicable law, can impose no personal liability on the
owner thereof for any debts, obligations or liabilities whatsoever of
such corporation or entity.
"Loan" shall mean a Revolving Credit Loan or a Term Loan and
"Loans" shall mean collectively the Revolving Credit Loans or the Term
Loans or one or more of them as provided herein.
"Margin Stock" shall have the meaning provided in Regulations
G, U and X.
"Material Adverse Effect" shall mean any material and adverse
effect on (i) the business operations, assets, liabilities, condition
(financial or otherwise), or results of operations of the Company, on
an individual basis, or the Company and its Subsidiaries taken as a
whole, (ii) the ability of the Company on an individual basis to carry
out its business or of the Company and its Subsidiaries taken as a
whole to carry out their business, or (iii) the ability of the Company
and its Subsidiaries, taken as a whole, to perform the obligations
under the Notes, this Agreement or the other Financing Documents in
accordance with their respective terms.
"Material Contract" shall mean each contract, license, and
agreement listed on Schedule 4.23.
"Maximum Available Amount" shall mean, at any date, an amount
equal to the lesser of (a) the amount by which (i) the aggregate
Revolving Credit Commitments as of such date exceeds (ii) the
aggregate principal amount of Indebtedness outstanding under the
Canadian Facility as of such date, and (b) the amount by which (i) the
Borrowing Base as of such date exceeds (ii) the aggregate principal
amount of Indebtedness outstanding under the Canadian Facility as of
such date.
"Merger" shall have the meaning provided in Introductory
Statement.
"Merger Agreement" shall mean the Agreement and Plan of
Merger, between STX Acquisition Corp. and SCI, as amended by that
certain letter agreement dated as of June 11, 1996 and in effect on
the STX Closing Date.
"Net Proceeds" shall mean, with respect to any sale, transfer,
or disposition of Property permitted by Section 5.04(c) ("Permitted
Disposition"), the gross amount received by the Company or any of its
Subsidiaries (excluding Unrestricted Subsidiaries) from such Permitted
Disposition,
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minus the sum of (i) the amount, if any, of all taxes paid or payable
by the Company or any of its Subsidiaries (excluding Unrestricted
Subsidiaries) directly resulting from such Permitted Disposition
(including the amount, if any, estimated by the Company in good faith
at the time of such Permitted Disposition for taxes payable by the
Company or any of its Subsidiaries (excluding Unrestricted
Subsidiaries) on or measured by net income or gain resulting from such
Permitted Disposition), and (ii) the reasonable outofpocket costs
and expenses incurred by the Company or such Subsidiary in connection
with such Permitted Disposition (including reasonable brokerage fees
paid to a Person other than an Affiliate of the Company, but excluding
any fees or expenses paid to an Affiliate of the Company).
"NonRecourse Debt" shall mean Indebtedness or that portion of
Indebtedness as to which neither the Company nor any of its
Subsidiaries (other than an Unrestricted Subsidiary), (i) provides
credit support pursuant to any undertaking, agreement or instrument
that would constitute Indebtedness, (ii) is directly or indirectly
liable, or (iii) constitutes the lender.
"Notes" shall mean the Revolving Credit Notes and the Term
Notes.
"Notice of Designated Retained Cash Flow Usage" shall mean a
notice in the form attached as Exhibit J.
"Old ESOP " shall mean the employee stock ownership plan of
SCI in existence prior to the SCI Acquisition, and its related trust,
as in effect on the STX Closing Date.
"Original Credit Agreement" shall mean the $456,500,000
principal amount credit agreement dated as of the STX Closing Date
among STX Chemicals Corp., TCB, individually, as an issuing bank and
as administrative agent, Credit Suisse, individually, as an issuing
bank and as documentation agent, and the lenders party thereto, as
amended by the STX First Amendment, the STX Second Amendment and the
STX Third Amendment.
"Original Lenders" shall have the meaning provided in the
Introductory Statement.
"Original Loans" shall mean, collectively, the Revolving
Credit Loans, the Original Tranche A Term Loans, the Original Tranche
B Term Loans and the ESOP Term Loans.
"Original Tranche A Term Loans" shall have the meaning
provided in the Introductory Statement.
"Original Tranche B Term Loans" shall have the meaning
provided in the Introductory Statement.
"Other Taxes" shall have the meaning provided in Subsection
2.20(b).
"Outstanding Letter of Credit" shall mean any of the
outstanding letters of credit issued for the account of the Company or
Sterling Pulp, and identified on Scheduled 1.01A.
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"Payment Office" shall mean the Administrative Agent's office
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; Attention:
▇▇▇▇ ▇▇▇▇▇▇▇ (or such other office or individual as the Administrative
Agent may hereafter designate in writing to the other parties hereto).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permitted Acquisition" shall mean any non-hostile acquisition
by the Company or its Subsidiaries (excluding Unrestricted
Subsidiaries) of the voting securities (other than publicly traded
securities) or other equity interests, or all or substantially all of
the assets, of any Person other than Holdco or an Unrestricted
Subsidiary (or any division or product line of such Person), but only
so long as no Default shall have occurred and be continuing at the
time of (or would result from) such acquisition, and only to the
extent permitted pursuant to Section 5.04(e)(x).
"Permitted Holdco Dividend" shall mean any of the following,
to the extent permitted pursuant to Section 5.04(d)(iv):
(a) cash dividends to Holdco in any Fiscal Year
not to exceed (A) $500,000 for the period from the STX
Effective Date through September 30, 1996 and (B) $2,000,000
for Fiscal Year ended September 30, 1997, and for each
succeeding Fiscal Year; and
(b) cash dividends to Holdco so long as Holdco
promptly, and in any event within five Business Days, utilizes
the full amount of such cash dividends for the sole purpose of
paying interest as and when due with respect to the Senior
Secured Discount Notes then outstanding to the extent required
to be made in accordance with the terms of the Senior Secured
Discount Notes as in effect on the STX Effective Date and
without giving effect to any amendment or modification thereof
unless agreed to in writing by the Lenders; provided that (i)
the amount of such cash dividends paid pursuant to this clause
(b) shall not exceed the amount necessary to make such
required interest payment in accordance with the terms of the
Senior Secured Discount Notes, (ii) no such payment shall be
made at any time when the payment of cash interest on the
Senior Secured Discount Notes is not required to be made
pursuant to the provisions thereof, and (iii) no such payment
shall be made at any time prior to the fifth anniversary of
the STX Effective Date.
"Person" shall mean any individual, partnership, firm,
corporation (including, but not limited to the Company), association,
joint venture, trust or other entity, or any government or political
subdivision or agency, department or instrumentality thereof;
provided, however, for the purpose of the definition of "Change of
Control," "Person" shall mean a "person" or group of persons within
the meaning of Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended.
"Plan" shall mean any employee pension benefit plan, as
defined in Section 3(2) of ERISA (including, but not limited to, an
employee pension benefit plan, such as a foreign plan, which is not
subject to the provisions of ERISA), which (i) is currently or
hereafter sponsored, maintained or contributed to by the Company, a
Subsidiary of the Company or an ERISA Affiliate, or (ii) was at any
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time during the six preceding Fiscal Years sponsored, maintained or
contributed to by the Company, a Subsidiary of the Company or an ERISA
Affiliate.
"Preferred Stock" shall mean the redeemable Series A Preferred
Stock issued by Holdco with terms, limitations, rights and preferences
as set forth in Exhibit L-1.
"Prime Rate" shall mean the rate which the Administrative
Agent announces from time to time as its prime rate, effective as of
the date announced as the effective date of any change in such prime
rate. Without notice to the Company or any other Person, the Prime
Rate shall change automatically from time to time as and in the amount
by which such prime rate shall fluctuate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. The Administrative Agent may
make commercial loans or other loans at rates of interest at, above or
below the Prime Rate.
"Project Capital Expenditures" shall mean all Capital
Expenditures made by the Company and its Subsidiaries through December
31, 1996, for the construction of the Valdosta, Georgia facility and
the methanol facility located in Texas City, Texas.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" shall mean the Asset Purchase Agreement
dated as of December 23, 1996, among Sterling Fibers, the Company,
Holdco and the Cytec Parties.
"Quarterly Dates" shall mean the last day of each December,
March, June, and September, in each year.
"Reference Banks" shall mean the Agents.
"Register" shall have the meaning assigned in Section 8.07(d).
"Regulation D", "Regulations G, U and X" shall mean,
respectively, Regulation D under the Securities Act of 1933, as
amended or modified from time to time, and Regulation G, Regulation U
and Regulation X of the Board of Governors of the Federal Reserve
System, as such regulations are from time to time in effect and any
successor regulations thereto.
"Reimbursement Obligations" shall mean, at any date, the
obligations of the Company then outstanding in respect of the Letters
of Credit, to reimburse the Administrative Agent for the account of
the Issuing Bank for the amount paid by the Issuing Bank in respect of
any drawings under the Letters of Credit.
"Required Lenders" shall mean at any time, Lenders the Total
Credit Percentages of which aggregate at least 51%.
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"Responsible Officer" shall mean, with respect to any
corporation, the chairman of the board, the president, any vice
president, the chief executive officer or the chief operating officer,
or any equivalent officer (regardless of his or her title), and, in
respect of financial or accounting matters, the chief financial
officer, the vice president of finance, the treasurer, the controller,
or any equivalent officer (regardless of his or her title). Unless
otherwise specified, all references to a Responsible Officer herein
shall mean a Responsible Officer of the Company.
"Restated Closing Date" shall mean the "as of" date of this
Agreement set forth in the first paragraph hereof.
"Retained Cash Flow" shall mean, in any Fiscal Year, the
amount of Excess Cash Flow that exceeds the amount of the prepayment
of Term Loans required pursuant to Section 2.10(b)(i) for such Fiscal
Year.
"Revolving Credit Commitment" shall have the meaning assigned
such term in Subsection 2.01(c).
"Revolving Credit Exposure" shall mean, at any time and as to
each Lender, the sum of (a) the aggregate principal amount of the
Revolving Credit Loans made by such Lender outstanding as of such date
plus (b) such Lender's Revolving Credit Percentage of the aggregate
amount of all Letter of Credit Liabilities as of such date.
"Revolving Credit Lender" shall mean any Lender having a
Revolving Credit Commitment or Revolving Credit Exposure hereunder.
"Revolving Credit Loan" shall have the meaning provided in
Subsection 2.01(a)(iv); the Revolving Credit Loans shall not include
any Letter of Credit Liabilities.
"Revolving Credit Maturity Date" shall mean March 31, 2003.
"Revolving Credit Note" shall mean a promissory note of the
Company described in Section 2.05(a) payable to any Lender and being
substantially in the form of Exhibit A, evidencing the aggregate
Indebtedness of the Company to such Lender resulting from Revolving
Credit Loans made by such Lender.
"Revolving Credit Percentage" shall mean as to any Revolving
Credit Lender, the percentage of the aggregate Revolving Credit
Commitments constituted by its Revolving Credit Commitment (or, if the
Revolving Credit Commitments have terminated or expired, the
percentage which such Lender's Revolving Credit Exposure at such time
constitutes of the Aggregate Revolving Credit Exposure at such time).
"Rolling Period" shall mean for each Fiscal Quarter commencing
with the first full Fiscal Quarter after the STX Effective Date, such
quarter and the three preceding Fiscal Quarters.
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"Santa ▇▇▇▇ Deed of Trust" shall mean the Mortgage, Assignment
and Security Agreement dated as of the AFB Effective Date, delivered
by Sterling Fibers pursuant to Section 3.03(d)(ii) as security for the
payment and performance of Sterling Fibers' obligations under the
Limited Guaranty Agreement (Santa ▇▇▇▇) dated as of the AFB Effective
Date, delivered by Sterling Fibers pursuant to Section 3.03(d)(iii).
"SAR" shall mean each stock appreciation right outstanding
under any Equity Plan.
"Saskatoon Acquisition" shall have the meaning provided in the
Introductory Statement.
"Sask Holdings" shall mean Sterling (Sask) Holdings Ltd., an
Ontario (Canada) corporation and a wholly owned Subsidiary of
▇▇▇▇▇▇▇▇ ▇▇▇.
"Scheduled Capital Expenditures" shall mean Capital
Expenditures permitted for any Fiscal Year pursuant to Section
5.04(o)(i).
"Scheduled Principal Payments" shall mean, for any period, the
amounts of scheduled principal payments made during such period with
respect to Funded Indebtedness (including the principal portion of all
Capital Lease Obligations) not including any principal payments of (a)
the ESOP Term Loan, but only to the extent that net income for the
applicable period was reduced for the expense incurred by the Company
for contributions to the ESOP, and (b) Revolving Credit Loans.
"SCI" shall mean, prior to the SCI Acquisition, Sterling
Chemicals, Inc., a Delaware corporation, which merged with STX
Acquisition Corp. and pursuant to the terms of the Merger became the
surviving corporation, simultaneously changing its name to Sterling
Chemicals Holdings, Inc.
"SCI Acquisition" shall have the meaning provided in the
Introductory Statement.
"SCI Asset Conveyance" shall have the meaning provided in the
Introductory Statement.
"Second Lien Deed of Trust" shall mean the Second Lien
Mortgage, Deed of Trust, Assignment, Security Agreement and Financing
Statement dated as of the AFB Effective Date, delivered by the Company
pursuant to Section 3.03(d)(v) as security for the payment and
performance of the Lender Indebtedness.
"Secondary ESOP Loan" shall mean the loan or loans made by the
Company to the ESOP to allow the ESOP to purchase Holdco Common Stock.
"Secondary ESOP Loan Documents" shall mean the Secondary ESOP
Note, the ESOP Security Agreement, and all documents, instruments and
agreements now or hereafter executed by the ESOP and delivered to the
Company as the lender under the Secondary ESOP Loan, and any and all
amendments, modifications, supplements, renewals or restatements
thereof.
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"Secondary ESOP Note" shall mean the promissory note or notes
from the ESOP to the Company evidencing the Secondary ESOP Loan, and
any and all amendments, modifications, supplements, renewals and
restatements thereof.
"Secured Affiliate" shall mean any Affiliate of any Lender
that has entered into a Hedge Agreement with the Company or any of its
Subsidiaries with the obligations of the Company or such Subsidiary
thereunder being secured by one or more Security Instruments.
"Security Instruments" shall mean the agreements or
instruments described or referred to in Subsections 3.02(d)(iii)
through (xii), (xv) and (xvi) and in Subsections 3.03(d)(i) through
(xviii), including, to the extent such Subsections describe an
amendment, the agreement or instrument amended thereby, and any and
all other agreements or instruments now or hereafter executed and
delivered by the Company, any Subsidiary of the Company or any other
Person as security for the payment or performance of the Lender
Indebtedness, as any of the foregoing may have been, or may hereafter
be, amended, modified or supplemented.
"Senior Debt" shall mean, as to any Person, all Funded
Indebtedness of such Person, less any subordinated Indebtedness with
terms of subordination substantially similar to the terms of
subordination of the Senior Subordinated Notes and the Additional
Senior Subordinated Notes.
"Senior Debt Leverage Ratio" shall mean, on any day, the ratio
of (a) Senior Debt of the Company and its Subsidiaries (excluding
Unrestricted Subsidiaries) on a consolidated basis as of the date of
determination to (b) EBITDA for the Rolling Period ending on the most
recent Quarterly Date as of the date of determination.
"Senior Secured Discount Notes" shall mean the senior secured
discount notes issued pursuant to the Senior Secured Discount Notes
Indenture with initial proceeds in an amount of up to $100,000,000
issued by Holdco in connection with the debt financing for the SCI
Acquisition.
"Senior Secured Discount Notes Indenture" shall mean the
Sterling Chemicals Holdings, Inc. $191,751,000 13 1/2% Senior Secured
Discount Notes due 2008 Indenture dated as of August 15, 1996, with
Fleet National Bank, as Trustee.
"Senior Subordinated Notes" shall mean the senior subordinated
notes issued pursuant to the Senior Subordinated Notes Indenture in an
amount of up to $275,000,000 issued by the Company in connection with
the debt financing for the SCI Acquisition.
"Senior Subordinated Notes Indenture" shall mean the Sterling
Chemicals, Inc. $275,000,000 11 3/4% Senior Subordinated Notes Due
2006 Indenture dated as of August 15, 1996, with Fleet National Bank,
as Trustee.
"Series B Preferred Stock" shall mean the redeemable Series B
Preferred Stock issued by Holdco with terms, limitations, rights and
preferences as set forth in Exhibit L-2.
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"Solvent" shall mean with respect to any Person on a
particular date, the condition that, on such date, (a) the fair value
of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature, and (d) such Person is
not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would
constitute an unreasonably small amount of capital.
"Standby Letter of Credit" shall mean a letter of credit that
(i) is used in lieu or in support of performance guarantees or
performance, surety or other similar bonds (but expressly excluding
stay and appeal bonds) arising in the ordinary course of business,
(ii) is used in lieu or in support of stay or appeal bonds, (iii)
supports the payment of insurance premiums for reasonably necessary
casualty insurance carried by the Company or any of its consolidated
Subsidiaries, or (iv) supports payment or performance for identified
purchases or exchanges of products in the ordinary course of business.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator
of which is the number one minus the aggregate of the maximum
applicable reserve percentages, including any marginal, special,
emergency or supplemental reserves (expressed as a decimal)
established by the Board of Governors of the Federal Reserve System
and any other banking authority to which the Lenders are subject for
Eurocurrency Liabilities (as defined in Regulation D) or any other
category of deposits or liabilities by reference to which the
Eurodollar Rate is determined. Such reserve percentages shall include
those imposed pursuant to Regulation D. Eurodollar Loans shall be
deemed to constitute Eurocurrency Liabilities and to be subject to
such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any
reserve percentage.
"▇▇▇▇▇▇▇▇ ▇▇▇" shall mean Sterling Chemicals Acquisitions,
Inc., a Delaware corporation and a wholly-owned Subsidiary of the
Company.
"Sterling Canada" shall mean Sterling Canada, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Company.
"Sterling Fibers" shall mean Sterling Fibers, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Company.
"Sterling NRO" shall mean Sterling NRO, Ltd., an Ontario
(Canada) corporation.
"Sterling Pulp" shall mean Sterling Pulp Chemicals, Ltd., an
Ontario (Canada) corporation and a wholly-owned subsidiary of
Sterling Canada.
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"Sterling (Sask)" shall mean Sterling Pulp Chemicals (Sask)
Ltd., an Ontario (Canada) corporation and a wholly-owned Subsidiary of
Sask Holdings.
"Stock Intercreditor Agreement" shall mean the intercreditor
agreement between the Administrative Agent, on behalf of the Lenders,
and Fleet National Bank of Connecticut, as Trustee on behalf of the
holders of the Senior Secured Discount Notes, and dated as of the STX
Effective Date.
"STX Closing Date" shall mean June 21, 1996.
"STX Effective Date" shall mean August 21, 1996.
"STX Facilities" shall have the meaning provided in the
Introductory Statement.
"STX First Amendment" shall have the meaning provided in the
Introductory Statement.
"STX Pilko Report" shall mean the environmental assessment
letter of Pilko & Associates, Inc. dated April 18, 1996, and the
accompanying Environmental Assessment of Sterling Chemicals, Inc. each
of which has been delivered to the Lenders.
"STX Second Amendment" shall have the meaning provided in the
Introductory Statement.
"STX Third Amendment" shall have the meaning provided in the
Introductory Statement.
"Subsidiary" of any Person shall mean a corporation, limited
liability company, partnership or other entity of which a majority of
the outstanding shares of stock of each class having ordinary voting
power or other equity interests is owned by such Person, by one or
more Subsidiaries of such Person, or by such Person and one or more of
its Subsidiaries.
"Subsidiary Guaranty" shall mean the Guaranty Agreement dated
as of the AFB Effective Date executed by the then existing Subsidiary
Guarantors.
"Subsidiary Guarantors" shall mean those Subsidiaries
designated as Subsidiary Guarantors on Schedule 4.19 as of the STX
Effective Date, on Schedule 4.19-A as of the AFB Effective Date and on
Schedule 4.19-B as of the Restated Closing Date, and any other
Subsidiaries that become Subsidiary Guarantors pursuant to Section
5.01(i).
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement
substantially in the form of Exhibit C, dated as of the STX Effective
Date, executed between the Company and Holdco.
"Taxes" shall have the meaning provided in Subsection 2.20(a).
"TCB" shall mean Texas Commerce Bank National Association, in
its individual capacity or as an Issuing Bank, as the case may be, and
not as Administrative Agent.
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"Term Loan" shall mean a Tranche A Term Loan, a Tranche B Term
Loan or an ESOP Term Loan, as the context shall require; collectively,
the "Term Loans".
"Term Loan Lender" shall mean any Tranche A Term Loan Lender,
Tranche B Term Loan Lender or ESOP Term Loan Lender.
"Term Note" shall mean a Tranche A Term Note, a Tranche B Term
Note or an ESOP Term Note, as the context shall require; collectively
the "Term Notes".
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary rate (adjusted to the basis of a year of 365 or 366 days, as
the case may be) for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a Business
Day, the next preceding Business Day) by the Board of Governors of the
Federal Reserve System (the "Board") through the public information
telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in the
Federal Reserve Statistical Release H.15(519) during the week
following such day), or if such rate shall not be so reported on such
day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major
money center banks in New York City received at approximately 10:00
A.M., New York City time on such day (or, if such day shall not be a
Business Day, on the next preceding Day) by the Administrative Agent
from three New York City negotiable certificate of deposit dealers of
recognized standing selected by the Administrative Agent.
"Total Credit Percentage" shall mean as to any Lender at any
time, (i) the percentage of the aggregate Revolving Credit
Commitments, then constituted by such Lender's Revolving Credit
Commitment; (ii) in the case of the termination or expiration of the
Revolving Credit Commitments, by reference to the Aggregate Revolving
Credit Exposure of the Revolving Credit Lenders and such Lender's
Revolving Credit Exposure; and (iii) as to the Tranche A Term Loans,
the Tranche B Term Loans or the ESOP Term Loans, by reference to the
aggregate principal amount of the Tranche A Term Loans, the Tranche B
Term Loans or the ESOP Term Loans of the Lenders, as the case may be,
and the aggregate principal amount of such Lender's Tranche A Term
Loans, Tranche B Term Loans or ESOP Term Loans, as the case may be.
"Tranche A Term Loan" shall have the meaning provided in
Subsection 2.01(a)(i) and includes the Original Tranche A Term Loans
and the AFB Tranche A Term Loans.
"Tranche A Term Loan Lender" shall mean any Lender having a
Tranche A Term Loan outstanding hereunder.
"Tranche A Term Loan Maturity Date" shall mean March 31, 2003.
"Tranche A Term Loan Percentage" shall mean as to any Tranche
A Term Loan Lender, at any time after the Restated Closing Date, the
percentage which such Lender's Tranche A Term Loans then outstanding
constitutes of the aggregate Tranche A Term Loans then outstanding.
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"Tranche A Term Note" shall mean a promissory note of the
Company described in Section 2.05(b) payable to a Tranche A Term Loan
Lender and being substantially in the form of Exhibit B-1, evidencing
the aggregate indebtedness of the Company to such Lender for Tranche A
Term Loans.
"Tranche B Term Loan" shall have the meaning provided in
Subsection 2.01(a)(ii) and includes the Original Tranche B Term Loans
and the AFB Tranche B Term Loans.
"Tranche B Term Loan Lender" shall mean any Lender having a
Tranche B Term Loan outstanding hereunder.
"Tranche B Term Loan Maturity Date" shall mean
September 30, 2004.
"Tranche B Term Loan Percentage" shall mean as to any Tranche
B Term Loan Lender, at any time after the Restated Closing Date, the
percentage which such Lender's Tranche B Term Loans then outstanding
constitutes of the aggregate Tranche B Term Loans then outstanding.
"Tranche B Term Note" shall mean a promissory note of the
Company described in Section 2.05(c) payable to a Tranche B Term Loan
Lender and being substantially in the form of Exhibit B-2, evidencing
the aggregate indebtedness of the Company to such Lender for Tranche B
Term Loans.
"Transactions" shall mean the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
"TSG" shall mean The Sterling Group, Inc., a Texas corporation.
"Type" of Loan shall mean a Base Rate Loan or Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the State of New York or, where applicable as to
specific Collateral, any other relevant state.
"Unrestricted Subsidiary" shall mean (a) Sterling Sask, Sask
Holdings and ▇▇▇▇▇▇▇▇ ▇▇▇ and (b) (i) any other wholly-owned
Subsidiary of the Company that at the time of creation is designated
as an Unrestricted Subsidiary by the Company (which designation is
approved by its Board of Directors) and (ii) any Subsidiary created or
acquired by another Unrestricted Subsidiary, provided that, in each
case, such Unrestricted Subsidiary (x) has not acquired any Property
from the Company or any of its Subsidiaries, except as specifically
permitted by this Agreement, (y) has no Indebtedness other than
Non-Recourse Debt and (z) does not own any capital stock, or any
warrants, options or other rights to acquire capital stock, of the
Company or any Subsidiary (other than an Unrestricted Subsidiary) and
at the time of such designation, (A) the Company is unable to meet the
incurrence test for debt set forth in the Senior Subordinated Notes
Indenture or the Additional Senior Subordinated Notes Indenture or (B)
Holdco is unable to meet the incurrence test for debt set forth in the
Senior Secured Discount Notes Indenture. Notice of any such
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designation by the Company shall be delivered by the Company to the
Administrative Agent by promptly filing with the Administrative Agent
a copy of the resolutions of the Board of Directors of the Company
approving such designation and a certificate of a Responsible Officer
certifying that such designation complies with the requirements of
this definition. Such designation shall become effective upon receipt
by the Administrative Agent of the foregoing. Each Unrestricted
Subsidiary designated hereunder shall continue to be treated as an
Unrestricted Subsidiary for purposes of this Agreement until the
Company shall deliver notice to the Administrative Agent pursuant to
and in compliance with Section 5.04(s).
"U.S. Subsidiary" shall mean all Subsidiaries of the Company
organized under the laws of any state, territory or subdivision of the
United States.
"U.S. Tax Compliance Certificate" shall have the meaning
provided in Section 2.20(f)(y).
"Valdosta Bonds" shall mean any of the Valdosta-Lowndes County
Industrial Authority Industrial Development Revenue Bonds (Sterling
Pulp Chemicals US, Inc. Project) Series 1995, issued and outstanding
under that certain Indenture of Trust dated as of October 1, 1995
between Valdosta-Lowndes County Industrial Authority and Synovus Trust
Company, as amended as of the STX Closing Date, and thereafter, as
amended from time to time to the extent permitted by the Financing
Documents.
"Valdosta Lease" shall mean that certain Indenture of Lease
dated as of October 1, 1995 by and between the Valdosta-Lowndes County
Industrial Authority and Sterling Pulp Chemicals US, Inc., a Delaware
corporation.
"Voting Stock" of any Person shall mean capital stock of such
Person which ordinarily has voting power for the election of directors
(or persons performing similar functions) of such Person, whether at
all times or only so long as no senior class of securities has such
voting power by reason of any contingency.
Section 1.02 Accounting Terms and Determinations. Unless
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be prepared in accordance
with GAAP applied on a basis consistent with the Financial Statements, except
for changes concurred with by the Company's independent public accountants;
provided that, if such changes affect the results of the calculations of the
financial ratios required under Section 5.03 (as compared to the results
obtained by applying GAAP in effect on the Restated Closing Date), the Company
and the Administrative Agent (acting on behalf and at the direction of the
Required Lenders) agree to negotiate in good faith to adjust such financial
ratios in order to make them comparable after giving effect to such change in
GAAP.
Section 1.03 Other Definitional Terms. The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, schedule, exhibit and like
references are to this Agreement unless otherwise specified.
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Section 1.04 Definition Cross References in Financing Documents.
To the extent any Financing Document, including without limitation, the
Security Documents, makes reference to, or incorporates by reference the
defined terms of, either of the Original Credit Agreement or the AFB
Acquisition Credit Agreement, such reference or incorporation by reference
shall be deemed to refer to this Agreement, and, as applicable, to incorporate
the definitions amended and restated herein.
ARTICLE II
AMOUNT AND TERMS OF LOANS
Section 2.01 Loans and Commitments.
(a) Loans. Subject to the terms and conditions and
relying on the representations and warranties contained herein, (i)
each Tranche A Term Loan Lender severally agrees to maintain
outstanding, on the Restated Closing Date, term loans (each a "Tranche
A Term Loan") to the Company; (ii) each Tranche B Term Loan Lender
severally agrees to maintain outstanding, on the Restated Closing
Date, term loans (each a "Tranche B Term Loan") to the Company; (iii)
each ESOP Term Loan Lender severally agrees to maintain outstanding,
on the Restated Closing Date, term loans (each an "ESOP Term Loan") to
the Company; and (iv) on any Business Day from and after the Restated
Closing Date, but prior to the Revolving Credit Maturity Date, each
Revolving Credit Lender severally agrees to make revolving credit
loans (each a "Revolving Credit Loan") to the Company. Any Term Loan
that is repaid or prepaid may not be reborrowed.
(b) Types of Loans. The Revolving Credit Loans and the
Term Loans made pursuant hereto by each Lender shall, at the option of
the Company, be either Base Rate Loans or Eurodollar Loans and may be
continued or converted pursuant to Section 2.11, provided that, except
as otherwise specifically provided herein, all Loans made pursuant to
the same Borrowing shall be of the same Type.
(c) Revolving Credit Commitments. Each Revolving Credit
Lender's Revolving Credit Exposure shall not exceed at any one time
the amount set forth opposite such Lender's name on Annex I under the
caption "Revolving Credit Commitment" (as the same may be reduced
pursuant to Section 2.09 or otherwise from time to time modified
pursuant to Section 8.07(b), its "Revolving Credit Commitment," and
collectively for all Revolving Credit Lenders, the "Revolving Credit
Commitments"); provided, however, that the Aggregate Revolving Credit
Exposure at any one time outstanding shall not exceed the Maximum
Available Amount in effect at such time; and, provided, further, the
aggregate principal amount of all Revolving Credit Loans at any one
time outstanding shall not exceed the difference between (i) the
Maximum Available Amount in effect at such time and (ii) the aggregate
amount of all Letter of Credit Liabilities at such time. There may be
more than one Borrowing with respect to Revolving Credit Loans on any
day. Within the foregoing limits and subject to the conditions set
out in Article III, the Company
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may obtain Borrowings of Revolving Credit Loans, repay or prepay such
Revolving Credit Loans, and reborrow such Revolving Credit Loans.
(d) Amounts of Borrowings, etc. The aggregate principal
amount of each Borrowing (i) of Eurodollar Loans shall be not less
than $3,000,000 and shall be in an integral multiple of $100,000, and
(ii) of Base Rate Loans hereunder shall be not less than $1,000,000
and shall be in an integral multiple of $100,000, except that any
Borrowing of Revolving Credit Loans that are Base Rate Loans may be in
the aggregate amount of the unused Maximum Revolving Credit Loan
Amount in effect at such time. Borrowings of more than one Type may
be outstanding at the same time; provided, however, that the Company
shall not be entitled to request any Borrowing that, if made, would
result in an aggregate of more than fourteen separate Borrowings of
Eurodollar Loans being outstanding at any one time. For purposes of
the foregoing, Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be
considered separate Borrowings.
Section 2.02 Borrowing Requests.
(a) Borrowing Requests. Whenever the Company desires to
make a Borrowing hereunder, it shall give Advance Notice in the form
of a Borrowing Request, specifying, subject to the provisions hereof,
(i) the aggregate principal amount of the Revolving Credit Loans to
be made pursuant to such Borrowing, (ii) the date of Borrowing (which
shall be a Business Day), (iii) whether the Revolving Credit Loans
being made pursuant to such Borrowing are to be Base Rate Loans or
Eurodollar Loans, and (vi) in the case of Eurodollar Loans, the
Interest Period to be applicable thereto.
(b) Notice by Administrative Agent. The Administrative
Agent shall promptly give each Applicable Lender telecopy or
telephonic notice (and, in the case of telephonic notices, confirmed
by telecopy or otherwise in writing) of the proposed Borrowing, of
such Lender's Applicable Percentage thereof and of the other matters
covered by the Advance Notice. The Company hereby waives the right to
dispute the Administrative Agent's record of the terms of such
telephonic notice, absent manifest error.
Section 2.03 Letters of Credit.
(a) Issuance of Letters of Credit. Subject to the terms
and conditions hereof, the Company shall have the right, in addition
to Revolving Credit Loans provided for in Section 2.01, to utilize the
Revolving Credit Commitments from time to time prior to the Revolving
Credit Maturity Date by obtaining the issuance of either Documentary
Letters of Credit or Standby Letters of Credit for the account of the
Company by an Issuing Bank if the Company shall so request in the
notice referred to in Subsection 2.03(b)(i) (such letters of credit
being collectively referred to as the "Letters of Credit"); provided,
however, that the Aggregate Revolving Credit Exposure at any one time
outstanding shall not exceed the Maximum Available Amount in effect at
such time and the aggregate of all Letter of Credit Liabilities at any
one time outstanding shall not exceed $25,000,000. The Letters of
Credit shall be denominated in Dollars and may be issued
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to support the obligations of the Company or any of its Subsidiaries.
Upon the date of the issuance of a Letter of Credit, the applicable
Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each Revolving Credit Lender, and each
Revolving Credit Lender shall be deemed, without further action by any
party hereto, to have purchased from such Issuing Bank, a
participation, to the extent of such Lender's Revolving Credit
Percentage, in such Letter of Credit and the related Letter of Credit
Liabilities. No Letter of Credit issued pursuant to this Agreement
shall have an expiry date that exceeds the Revolving Credit Maturity
Date. Any Letter of Credit may give the beneficiary thereof either
the right to draw upon the Letter of Credit upon its expiry date or
the right to automatically extend the expiry date thereof for periods
of up to one year per extension; provided that no such extension shall
extend the expiry date beyond the Revolving Credit Maturity Date. The
Company and the Lenders agree that, as of the STX Effective Date, the
Outstanding Letters of Credit shall for all purposes of this Agreement
be deemed to be Letters of Credit issued under and pursuant to the
terms of this Agreement.
(b) Additional Letter of Credit Provisions. The
following additional provisions shall apply to each Letter of Credit:
(i) The Company shall give the Administrative
Agent and the Issuing Bank at least three Business Days' prior
notice (effective upon receipt), or in each case, such shorter
period as may be agreed to by the Administrative Agent and
such Issuing Bank, specifying the date such Letter of Credit
is to be issued (which shall be a Business Day) and the
Issuing Bank and describing: (A) the face amount of the Letter
of Credit, (B) the expiration date of the Letter of Credit,
(C) the name and address of the beneficiary, (D) information
concerning the transaction proposed to be supported by such
Letter of Credit as the Administrative Agent or such Issuing
Bank may reasonably request, (E) such other information and
documents relating to the Letter of Credit as the
Administrative Agent or such Issuing Bank may reasonably
request, and (F) a precise description of documents and the
verbatim text of any certificate to be presented by the
beneficiary, which, if presented prior to the expiry date of
the Letter of Credit, would require such Issuing Bank to make
payment under the Letter of Credit; provided that such Issuing
Bank, in its reasonable judgment, may require changes in such
documents and certificates; and provided further that no
Issuing Bank shall be required to issue any Letter of Credit
that on its terms requires payment thereunder prior to the
next Business Day following receipt by such Issuing Bank of
such documents and certificates. Each such notice shall be
accompanied by the applicable Issuing Bank's Application and
by a certificate executed by a Responsible Officer setting
forth calculations evidencing availability for such Letter of
Credit pursuant to Subsection 2.03(b)(ii) and stating that all
conditions precedent to such issuance have been satisfied.
Each Letter of Credit shall, to the extent not inconsistent
with the express terms hereof or the applicable Application,
be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (together with any subsequent revisions
thereof approved by a Congress of the International Chamber of
Commerce, the "UCP"), and shall, as to matters not governed by
the UCP, be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
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(ii) No Letter of Credit may be issued if after
giving effect thereto the Aggregate Revolving Credit Exposure
would exceed the Maximum Available Amount. On each day during
the period commencing with the issuance of any Letter of
Credit and until such Letter of Credit shall have expired or
have been terminated, the Revolving Credit Commitment of each
Revolving Credit Lender shall be deemed to be utilized for all
purposes hereof in an amount equal to such Lender's Revolving
Credit Percentage of the amount of the Letter of Credit
Liabilities related to such Letter of Credit.
(iii) Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment thereunder, the
Issuing Bank shall promptly notify the Company and the
Administrative Agent of such demand (provided that the failure
of an Issuing Bank to give such notice shall not affect the
Reimbursement Obligations of the Company hereunder) and the
Company shall immediately, and in any event no later than
10:00 a.m. (Houston, Texas time) on the date of such drawing,
reimburse the Administrative Agent for the account of the
applicable Issuing Bank for any amount paid by the Issuing
Bank upon any drawing under any Letter of Credit, without
presentment, demand, protest or other formalities of any kind
in an amount, in same day funds, equal to the amount of such
drawing. Unless prior to 10:00 a.m. (Houston, Texas time) on
the date of such drawing, the Company shall have either
notified the Issuing Bank and the Administrative Agent that
the Company intends to reimburse the Administrative Agent for
the account of the applicable Issuing Bank for the amount of
such drawing with funds other than the proceeds of Revolving
Credit Loans or delivered to the Administrative Agent a
Borrowing Request for Revolving Credit Loans in an amount
equal to such drawing, the Company will be deemed to have
given a Borrowing Request to the Administrative Agent
requesting that the Revolving Credit Lenders make Revolving
Credit Loans which shall be Base Rate Loans on the date on
which such drawing is honored in an amount equal to the amount
of such drawing; provided that such Loans shall be subject to
(i) the satisfaction of the conditions in Article III and (ii)
the existence of Revolving Credit Loan availability pursuant
to Section 2.01(c) hereof (after giving effect to repayment of
the applicable Reimbursement Obligations with the proceeds of
the proposed Revolving Credit Loans). Subject to the
preceding sentence, if so requested by the Administrative
Agent, each of the Revolving Credit Lenders shall, on the date
of such drawing, make such Revolving Credit Loans in an amount
equal to such Lender's Revolving Credit Percentage of such
drawing or the full amount of the unused Revolving Credit Loan
available pursuant to Section 2.01(c), as applicable, the
proceeds of which shall be applied directly by the
Administrative Agent to reimburse the applicable Issuing Bank
to the extent of such proceeds.
(iv) If the Company fails to reimburse the
applicable Issuing Bank as provided in clause (iii) above for
any reason, including, but not limited to, failure to satisfy
the conditions in Article III or insufficient unused Revolving
Credit Loan availability pursuant to Section 2.01(c), such
Issuing Bank shall promptly notify the Administrative Agent
and the Administrative Agent shall notify each Revolving
Credit Lender of the unreimbursed amount of such drawing and
of such Lender's respective participation therein based on
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such Lender's Revolving Credit Percentage. Each Revolving
Credit Lender will pay to the Administrative Agent for the
account of the applicable Issuing Bank on the date of such
notice an amount equal to such Lender's Revolving Credit
Percentage of such unreimbursed drawing (or, if such notice is
made after 1:00 p.m. (Houston, Texas time) on such date, on
the next succeeding Business Day). If any Revolving Credit
Lender fails to make available to such Issuing Bank the amount
of such Lender's participation in such Letter of Credit as
provided in this clause (iv), such Issuing Bank shall be
entitled to recover such amount on demand from such Lender
together with interest at the Federal Funds Effective Rate for
one Business Day and thereafter at the Base Rate. Nothing in
this clause (iv) shall be deemed to prejudice the right of any
Revolving Credit Lender to recover from such Issuing Bank any
amounts made available by such Lender to such Issuing Bank
pursuant to this clause (iv) if it is determined by a court of
competent jurisdiction that the payment with respect to a
Letter of Credit by such Issuing Bank was wrongful and such
wrongful payment was the result of gross negligence or willful
misconduct on the part of such Issuing Bank. The applicable
Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent to each Revolving Credit Lender such
Lender's Revolving Credit Percentage of all amounts received
from the Company for payment, in whole or in part, of the
Reimbursement Obligation in respect of any Letter of Credit,
but only to the extent such Lender has made payment to such
Issuing Bank in respect of such Letter of Credit pursuant to
this clause (iv).
(v) The issuance by the applicable Issuing Bank
of each Letter of Credit shall, in addition to the conditions
precedent set forth in Article III, be subject to the
conditions precedent that such Letter of Credit shall be in
such form and contain such terms as shall be reasonably
satisfactory to such Issuing Bank, and that the Company shall
have executed and delivered such other instruments and
agreements relating to such Letter of Credit as such Issuing
Bank shall have reasonably requested and that are not
inconsistent with the terms of this Agreement including the
applicable Issuing Bank's Application therefor. In the event
of a conflict between the terms of this Agreement and the
terms of any Application, the terms of this Agreement shall
control.
(vi) AS BETWEEN THE COMPANY AND ANY ISSUING BANK,
THE COMPANY ASSUMES ALL RISKS OF THE ACTS AND OMISSIONS OF OR
MISUSE OF THE LETTERS OF CREDIT ISSUED BY SUCH ISSUING BANK BY
THE RESPECTIVE BENEFICIARIES OF SUCH LETTERS OF CREDIT. IN
FURTHERANCE AND NOT IN LIMITATION OF THE FOREGOING, SUCH
ISSUING BANK SHALL NOT BE RESPONSIBLE: (A) FOR THE FORM,
VALIDITY, SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL EFFECT
OF ANY DOCUMENT SUBMITTED BY ANY PERSON IN CONNECTION WITH THE
APPLICATION FOR OR ISSUANCE OF SUCH LETTERS OF CREDIT, EVEN IF
IT SHOULD IN FACT PROVE TO BE IN ANY OR ALL RESPECTS INVALID,
INSUFFICIENT, INACCURATE, FRAUDULENT OR FORGED; (B) FOR THE
VALIDITY OR SUFFICIENCY OF ANY INSTRUMENT TRANSFERRING OR
ASSIGNING OR PURPORTING TO TRANSFER OR ASSIGN ANY SUCH LETTER
OF CREDIT OR THE RIGHTS OR BENEFITS THEREUNDER OR PROCEEDS
THEREOF, IN WHOLE OR IN PART, WHICH MAY PROVE TO BE INVALID OR
INEFFECTIVE FOR ANY REASON; (C) FOR ERRORS, OMISSIONS,
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INTERRUPTIONS OR DELAYS IN TRANSMISSION OR DELIVERY OF ANY
MESSAGES, BY MAIL, CABLE, TELEGRAPH, TELEX OR OTHERWISE,
WHETHER OR NOT THEY ARE IN CIPHER; (D) FOR ERRORS IN
INTERPRETATION OF TECHNICAL TERMS; (E) FOR ANY LOSS OR DELAY
IN THE TRANSMISSION OR OTHERWISE OF ANY DOCUMENT REQUIRED IN
ORDER TO MAKE A DRAWING UNDER ANY SUCH LETTER OF CREDIT OR OF
THE PROCEEDS THEREOF; (F) FOR THE MISAPPLICATION BY THE
BENEFICIARY OF ANY SUCH LETTER OF CREDIT OF THE PROCEEDS OF
ANY DRAWING UNDER SUCH LETTER OF CREDIT; AND (G) FOR ANY
CONSEQUENCES ARISING FROM CAUSES BEYOND THE CONTROL OF SUCH
ISSUING BANK, INCLUDING, WITHOUT LIMITATION, THE ACTIONS OF
ANY GOVERNMENTAL AUTHORITY. NONE OF THE ABOVE SHALL AFFECT,
IMPAIR, OR PREVENT THE VESTING OF ANY OF SUCH ISSUING BANK'S
RIGHTS OR POWERS HEREUNDER. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS CLAUSE (VI), THE COMPANY SHALL NOT
ASSUME ANY RISK, AND SHALL HAVE NO OBLIGATION TO INDEMNIFY AN
ISSUING BANK, IN RESPECT OF ANY LIABILITY INCURRED BY SUCH
ISSUING BANK ARISING PRIMARILY OUT OF THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH ISSUING BANK, AS DETERMINED BY A
COURT OF COMPETENT JURISDICTION.
(vii) Each Issuing Bank will send to the Company
and the Administrative Agent immediately upon issuance of any
Letter of Credit, or an amendment thereto, a true and complete
copy of such Letter of Credit, or such amendment thereto.
Upon issuance of any Letter of Credit or an amendment thereto,
the Administrative Agent shall promptly notify each Revolving
Credit Lender of the terms of such Letter of Credit or
amendment thereto, the Issuing Bank for such Letter of Credit
or amendment thereto, and of such Lender's Revolving Credit
Percentage of the amount of such Letter of Credit or amendment
thereto, and the Administrative Agent shall provide to each
Revolving Credit Lender a copy of such Letter of Credit or
such amendment thereto. Upon cancellation or termination of
any Letter of Credit, the Issuing Bank shall promptly notify
the Administrative Agent and the Company, and the
Administrative Agent will then promptly notify each Revolving
Credit Lender, of such cancellation or termination.
(viii) The obligation of the Company to reimburse
each Issuing Bank for Reimbursement Obligations with regard to
the Letters of Credit issued by it and the obligations of the
Revolving Credit Lenders under clause (iv) shall be
unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement and under all
circumstances including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability
of any Letter of Credit;
(B) the existence of any claim, setoff,
defense or other right that the Company may have at
any time against a beneficiary or any transferee of
any Letter of Credit (or any Persons for whom any
such transferee may be acting), any Lender or any
other Person, whether in connection with this
Agreement, the transactions contemplated herein or
any unrelated transaction (including any
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underlying transaction between the Company or one of
its Subsidiaries and the beneficiary for which the
Letter of Credit was procured) other than a defense
based on the gross negligence(AS OPPOSED TO ORDINARY
NEGLIGENCE)or willful misconduct of such Issuing
Bank, as determined by a court of competent
jurisdiction;
(C) any draft, demand, certificate or
any other document presented under any Letter of
Credit is proved to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein
is untrue or inaccurate in any respect;
(D) any adverse change in the condition
(financial or otherwise) of the Company;
(E) any breach of this Agreement or any
other Financing Document by the Company,
Administrative Agent or any Lender (other than the
applicable Issuing Bank);
(F) any other circumstance or happening
whatsoever which is similar to any of the foregoing;
provided that such other occurrence or happening is
not the result of the gross negligence (AS OPPOSED TO
ORDINARY NEGLIGENCE) or willful misconduct of such
Issuing Bank, as determined by a court of competent
jurisdiction; or
(G) the fact that a Default shall have
occurred and be continuing.
(c) Upon the request of the Company, the Administrative
Agent, the Issuing Banks, the Lenders and the Company agree to
negotiate in good faith to allow or to provide for the issuance of
letters of credit denominated in Canadian dollars.
Section 2.04 Disbursement of Funds.
(a) Availability. No later than 11:00 a.m. (Houston
time) on the date of each Borrowing, each Lender will make available
to the Administrative Agent such Lender's Applicable Percentage of the
amount (if any) by which the principal amount of the Borrowing
requested to be made on such date by such Lender exceeds the principal
amount of Loans (if any) of such Lender maturing on such date, in
Dollars and in immediately available funds at the Payment Office. The
Administrative Agent will make available to the Company at the Payment
Office the aggregate of the amounts (if any) so made available by the
Lenders by depositing such amounts, in immediately available funds, to
an account of the Company at the Administrative Agent designated by
the Company for such purpose. To the extent that Revolving Credit
Loans mature or Reimbursement Obligations are due and owing on the
date of a requested Borrowing of Revolving Credit Loans, the Revolving
Credit Lenders shall apply the proceeds of the Revolving Credit Loans
then being made, to the extent thereof, to the repayment of such
maturing Revolving Credit Loans or Reimbursement Obligations, such
Revolving Credit Loans or
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Reimbursement Obligations and repayments intended to be a
contemporaneous exchange.
(b) Funds to the Administrative Agent. Unless the
Administrative Agent shall have been notified by any Applicable Lender
prior to the date of a Borrowing that such Lender does not intend to
make available to the Administrative Agent such Lender's Applicable
Percentage of the Borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date, and the
Administrative Agent may make available to the Company a corresponding
amount. If such corresponding amount is not in fact made available to
the Administrative Agent by such Lender on the date of a Borrowing,
the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest
at the Federal Funds Effective Rate. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Company,
and the Company shall immediately pay such corresponding amount to the
Administrative Agent together with interest at the rate specified for
the Borrowing which includes such amount paid. Nothing in this
Section shall be deemed to relieve any Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights which the
Company may have against any Lender as a result of any default by such
Lender hereunder.
(c) Lenders' Responsibilities. No Lender shall be
responsible for any default by any other Lender in its obligation to
make Loans hereunder, and each Lender shall be obligated to make only
such Loans provided to be made by it hereunder, regardless of the
failure of any other Lender to fulfill its Commitment hereunder.
Section 2.05 Notes and Amortization.
(a) Revolving Credit Notes. The Company's obligation to
pay the principal of, and interest on, the Revolving Credit Loans made
by each Revolving Credit Lender shall be further evidenced by the
Company's issuance, execution and delivery of a Revolving Credit Note
payable to the order of each such Lender in the amount of such
Lender's Revolving Credit Commitment and shall be dated as of the date
of issuance of such Revolving Credit Note. The principal amount of
each Revolving Credit Note shall be payable on or before the Revolving
Credit Maturity Date.
(b) Tranche A Term Notes and Amortization. The Company's
obligation to pay the principal of, and interest on, the Tranche A
Term Loans maintained outstanding by each Tranche A Term Loan Lender
shall be further evidenced by the Company's issuance, execution and
delivery of a Tranche A Term Note payable to the order of each such
Lender in the principal amount of such Lender's Tranche A Term Loans,
and dated as of the date of issuance of such Tranche A Term Note. The
aggregate principal amount of the Tranche A Term Notes applicable to
the aggregate Tranche A Term Loans of all Tranche A Term Loan Lenders
shall be payable in quarterly installments of the amounts set forth
below (in each case, as reduced by the application of any prepayments
pursuant to Section 2.10):
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QUARTERLY DATE AMOUNT
March 31, 2000 $1,204,306.93
June 30, 2000 $4,228,329.21
September 30, 2000 $4,228,329.21
December 31, 2000 $5,686,373.77
March 31, 2001 $5,686,373.77
June 30, 2001 $5,686,373.77
September 30, 2001 $5,686,373.77
December 31, 2001 $7,144,418.31
March 31, 2002 $7,144,418.31
June 30, 2002 $7,144,418.31
September 30, 2002 $7,144,418.31
December 31, 2002 $7,757,933.17
March 31, 2003 $7,757,933.17
The first such quarterly installment shall be payable on March 31,
2000, and the remaining quarterly installments shall be payable on
each Quarterly Date thereafter, with the final installment in the
amount of the aggregate unpaid principal balance then owing being
payable on or before the Tranche A Term Loan Maturity Date.
(c) Tranche B Term Notes and Amortization. The Company's
obligation to pay the principal of, and interest on, the Tranche B
Term Loans maintained outstanding by each Tranche B Term Loan Lender
shall be further evidenced by the Company's issuance, execution and
delivery of a Tranche B Term Note payable to the order of each such
Lender in the principal amount of such Lender's Tranche B Term Loans,
and dated as of the date of issuance of such Tranche B Term Note. The
aggregate principal amount of the Tranche B Term Notes applicable to
the aggregate Tranche B Term Loans of all Tranche B Term Loan Lenders
shall be payable in quarterly installments in the amounts set forth
below (in each case, as reduced by the application of any prepayments
pursuant to Section 2.10):
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QUARTERLY DATE AMOUNT QUARTERLY DATE AMOUNT
------------------ -------- ------------------- ------------
September 30, 1997 $333,333 March 31, 2001 $333,333
December 31, 1997 $333,333 June 30, 2001 $333,333
March 30, 1998 $333,333 September 30, 2001 $333,333
June 30, 1998 $333,333 December 31, 2001 $333,333
September 30, 1998 $333,333 March 31, 2002 $333,333
December 31, 1998 $333,333 June 30, 2002 $333,333
March 31, 1999 $333,333 September 30, 2002 $333,333
June 30, 1999 $333,333 December 31, 2002 $333,333
September 30, 1999 $333,333 March 31, 2003 $333,333
December 31, 1999 $333,333 June 30, 2003 $30,750,004
March 30, 2000 $333,333 September 30, 2003 $30,750,004
June 30, 2000 $333,333 December 31, 2003 $32,500,000
September 30, 2000 $333,333 March 30, 2004 $32,500,000
December 31, 2000 $333,333 June 30, 2004 $32,500,000
September 30, 2004 $32,500,000
The first such quarterly installment shall be payable on September 30,
1997, and the remaining quarterly installments shall be payable on
each Quarterly Date thereafter, with the final installment in the
amount of the aggregate unpaid principal balance then owing being
payable on or before the Tranche B Term Loan Maturity Date.
(d) ESOP Term Notes and Amortization. The Company's
obligation to pay the principal of, and interest on, the ESOP Term
Loans maintained outstanding by each ESOP Term Loan Lender is further
evidenced by the Company's issuance, execution and delivery of an ESOP
Term Note payable to the order of each such Lender in the principal
amount of such Lender's ESOP Term Loans and dated as of the date of
issuance of such ESOP Term Note. The principal amount of the
aggregate ESOP Term Notes shall be payable in 13 quarterly
installments (in each case as reduced by the application of any
prepayments pursuant to Section 2.10), the first 12 of which will be
equal installments of $406,250. The first such quarterly installment
shall be payable on September 30, 1997, and the remainder shall be
payable on each Quarterly Date thereafter, with the final installment
in the amount of the aggregate unpaid principal balance then owing
being payable on or before the ESOP Term Loan Maturity Date.
Section 2.06 Interest. In all cases subject to Section 8.12:
(a) Base Rate Loans. Subject to Section 2.06(c), the
Company agrees to pay interest in respect of the unpaid principal
amount of each Base Rate Loan from the date thereof until payment in
full thereof at a rate per annum which shall be, for any day, equal to
the sum of the Applicable Margin plus the Base Rate in effect on such
day, but in no event to exceed the Highest Lawful Rate. The term
"Base Rate" shall mean, for any day, the highest of (i) the Prime Rate
in effect on such day, (ii) one-half of one percent ( 1/2%) plus the
Federal Funds Effective Rate in effect for such day (rounded upwards,
if necessary, to the nearest 1/16th of 1%), and (iii) one
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percent (1%) plus the Base CD Rate in effect on such day, but in no
event to exceed the Highest Lawful Rate. For purposes of this
Agreement, any change in the Base Rate due to a change in the
Three-Month Secondary CD Rate, the Federal Funds Effective Rate, or
the Prime Rate shall be effective as of the opening of business on the
effective date of such change in the Three-Month Secondary CD Rate,
the Federal Funds Effective Rate, or the Prime Rate, as the case may
be. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive and binding, absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate
and the Three-Month Secondary CD Rate for any reason, including but
not limited to the inability of the Administrative Agent to obtain
sufficient bids or publications in accordance with the terms hereof,
the Base Rate shall be the Prime Rate until the circumstances giving
rise to such inability no longer exist.
(b) Eurodollar Loans. Subject to Section 2.06(c), the
Company agrees to pay interest in respect of the unpaid principal
amount of each Eurodollar Loan from the date thereof until payment in
full thereof at a rate per annum which shall be the sum of the
relevant Applicable Margin plus the Eurodollar Rate, but in no event
to exceed the Highest Lawful Rate.
(c) Default Interest. If the Company shall default in
the payment of the principal of or interest on any Loan or any other
amount becoming due hereunder or under any Financing Document, by
acceleration or otherwise, the Company shall on demand from time to
time pay interest, to the extent permitted by law, on such defaulted
amount to but excluding the date of actual payment (after as well as
before judgment) at a rate per annum equal to (a) in the case of any
Eurodollar Loan, the rate that would be applicable under Section
2.06(b) to such Eurodollar Loan, plus 2% per annum, and (b) in the
case of any other amount, the rate that would be applicable under
Section 2.06(a) to a Base Rate Loan, plus 2% per annum.
(d) Interest Payment Dates. Interest on each Loan shall
accrue from and including the date of such Loan to but excluding the
date of payment in full thereof. Interest on each Eurodollar Loan
shall be payable on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three
months, on each day which occurs every three months after the initial
date of such Interest Period, and on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise) and,
after maturity, on demand. Interest on each Base Rate Loan shall be
payable on each Quarterly Date, commencing on the first of such days
to occur after such Loan is made, at maturity (whether by acceleration
or otherwise) and, after maturity, on demand.
(e) Notice by the Administrative Agent. The
Administrative Agent, upon determining the Eurodollar Rate for any
Interest Period, shall promptly notify by telecopy or telephone (in
the case of telephonic notices, confirmed by telecopy or otherwise in
writing) or in writing the Company and the Applicable Lenders.
Section 2.07 Interest Periods. In connection with each Borrowing
of Eurodollar Loans, the Company shall elect an Interest Period to be
applicable to such Borrowing, which Interest Period shall begin on and include,
as the case may be, the date selected by the Company pursuant to Section
2.02(a),
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the conversion date or the date of expiration of the then current Interest
Period applicable thereto, and end on but exclude the date which is either one,
two, three, six or (subject to availability by each Applicable Lender) twelve
months thereafter, as selected by the Company; provided that:
(a) Business Days. If any Interest Period would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day, provided,
further, that if any Interest Period (other than in respect of a
Borrowing of Eurodollar Loans the Interest Period of which is expiring
pursuant to Section 2.15(b) hereof) would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(b) Month End. Any Interest Period which begins on the
last Business Day of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar month at the end of
such Interest Period) shall, subject to Subsection (c) below, end on
the last Business Day of a calendar month;
(c) Payment Limitations. No Interest Period shall extend
beyond any date that any principal payment or prepayment is scheduled
to be due unless the aggregate principal amount of Borrowings which
are Borrowings of Base Rate Loans or which have Interest Periods which
will expire on or before such date, less the aggregate amount of any
other principal payments or prepayments due during such Interest
Period, is equal to or in excess of the amount of such principal
payment or prepayment; and
(d) Maturity Dates. No Interest Period with regard to
Revolving Credit Loans shall extend beyond the Revolving Credit
Maturity Date, no Interest Period with regard to Tranche A Loans shall
extend beyond the Tranche A Term Loan Maturity Date, no Interest
Period with regard to Tranche B Term Loans shall extend beyond the
Tranche B Term Loan Maturity Date and no Interest Period with regard
to ESOP Term Loans shall extend beyond the ESOP Term Loan Maturity
Date.
Section 2.08 Repayment of Loans.
(a) The Company hereby unconditionally promises to pay to
the Administrative Agent for the account of (i) each Revolving Credit
Lender, the then unpaid principal amount of each Revolving Credit Loan
of such Lender on the Revolving Credit Maturity Date (or such earlier
date on which the Revolving Credit Loans become due and payable
which the Tranche B Term Loans become due and payable pursuant to
pursuant to Article VI); (ii) each Tranche A Term Loan Lender the
amounts specified in Section 2.05(b), on the dates specified in
Section 2.05(b) (or such earlier date on which the Tranche A Term
Loans become due and payable pursuant to Article VI); (iii) each
Tranche B Term Loan Lender, the amounts specified in Section 2.05(c),
on the dates specified in Section 2.05(c) (or such earlier date on
which the Tranche B Term Loans become due and payable
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pursuant to Article VI); and (iv) each ESOP Term Loan Lender, the
amounts specified in Section 2.05(d), on the dates specified in
Section 2.05(d) (or such earlier date on which the ESOP Term Loans
become due and payable pursuant to Article VI). The Company hereby
further agrees to pay interest on the unpaid principal amount of the
Loans from time to time outstanding from the date hereof until payment
in full thereof at the rates per annum, and on the dates, set forth in
Section 2.06.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the
Company to such Lender resulting from each Loan of such Lender from
time to time, including, without limitation, the amounts of principal
and interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to Section 8.07(d), and a subaccount therein for each Lender,
in which shall be recorded (i) the amount of each Loan made hereunder,
the Type thereof and each Interest Period, if any, applicable thereto,
(ii) the amount of any principal or interest due and payable or to
become due and payable from the Company to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent
hereunder from the Company and each Lender's Applicable Percentage
thereof.
(d) The entries made in the Register and the accounts of
each Lender maintained pursuant to Section 2.08(b) shall, to the
extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Company therein
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain the Register or any such account, or
any error therein, shall not in any manner affect the obligation of
the Company to repay (with applicable interest) the Loans made to the
Company by such Lender in accordance with the terms of this Agreement.
Section 2.09 Termination or Reduction of Revolving Credit
Commitments. The Company may, upon at least three Business Days' notice to the
Administrative Agent, terminate entirely at any time, or partially reduce from
time to time by an aggregate amount of $5,000,000 or any larger multiple of
$1,000,000, the unused portions of the Revolving Credit Commitments, provided
that any such reduction shall apply proportionately to the Revolving Credit
Commitment of each Revolving Credit Lender. If the Revolving Credit
Commitments are terminated in their entirety, all accrued commitment fees with
respect thereto shall be payable on the effective date of such termination.
Section 2.10 Prepayments.
(a) Mandatory Borrowing Base Prepayments. If at any time
the Aggregate Revolving Credit Exposure is in excess of the Maximum
Available Amount, the Company shall immediately pay to the
Administrative Agent, for the account of the Revolving Credit Lenders,
the amount of such excess to be applied (i) as a prepayment of the
Revolving Credit Loans and Reimbursement Obligations outstanding and
(ii) after payment in full of the Revolving Credit Loans and
Reimbursement Obligations outstanding, as Cover for the Letter of
Credit Liabilities in an amount of such remaining excess. Any such
prepayment or Cover shall be payable or provided in full on the date
on which the reduction or termination of the Commitments pursuant to
Section 2.09 becomes effective.
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(b) Mandatory Term Loan Prepayments.
(i) On or before the 105th day after each
September 30th, commencing on September 30, 1997, the Company
shall deliver to each Lender the Company's calculation of its
Excess Cash Flow for the Fiscal Year ended on such September
30th; provided that for purposes of this Section 2.10(b), the
period ending on September 30, 1997, shall begin on August 22,
1996 and end on September 30, 1997. On the third day after
delivery of the notice provided above, but in no event later
than the 108th day after each September 30th, commencing
September 30, 1997, the Company shall prepay (by payment to
the Administrative Agent for distribution to the Term Loan
Lenders as provided below) an aggregate principal amount of
Term Loans equal to (A) 75% of Excess Cash Flow for any Fiscal
Year (or other applicable period as provided above) if, as of
the last day of the applicable Fiscal Year, the aggregate
principal amount of the Tranche A Term Loans and the Tranche B
Term Loans is equal to or greater than $203,000,000, and (B)
50% of Excess Cash Flow for any Fiscal Year thereafter
(provided that, other Indebtedness of the Company and its
Subsidiaries has not been used to effect such repayment of
Term Loans); and, in the case of (A) and (B) above, less the
amount of any voluntary prepayments of Term Loans made by the
Company as permitted in Subsection 2.10(c) during such Fiscal
Year (or other applicable period).
(ii) At any time the Company becomes obligated to
prepay all or part of the Senior Subordinated Notes or the
Additional Senior Subordinated Notes, the Company shall, prior
to any prepayment of the Senior Subordinated Notes or the
Additional Senior Subordinated Notes, prepay the Term Loans in
full.
(iii) At any time that the Company and its
Subsidiaries sell, lease, or otherwise dispose of any of their
Property, the Company shall promptly prepay an aggregate
principal amount of Term Loans equal to the amount of Net
Proceeds in excess of $5,000,000 in the aggregate in any
Fiscal Year, received from such sale, lease or disposal of
Property, less the amount reinvested pursuant to Subsection
5.04(c)(i)(C)(2).
(iv) Prepayments of the Term Loans pursuant to
this Section 2.10(b) shall be applied (i), so long as no
Default has occurred and is continuing, to the Tranche A Term
Loans and the Tranche B Term Loans (A) pro rata based on
outstanding principal amount thereof at the time of such
prepayment and (B) pro rata to the respective installments of
principal thereof, and (ii), if a Default has occurred and is
continuing, (A) pro rata (based on outstanding principal
amount thereof at the time of such prepayment) to the Tranche
A Term Loans, the Tranche B Term Loans and the ESOP Term Loans
and (B) pro rata to the respective installments of principal
thereof. Notwithstanding the foregoing, in respect of any
partial prepayment of Term Loans (until such time as the
Tranche A Term Loans have been repaid in full) pursuant to
this Section 2.10(b), any Tranche B Term Loan Lender may, at
its option, irrevocably decline receipt of its Tranche B Term
Loan share of any such prepayment, and, if such lender so
declines, such share shall be applied as an additional
prepayment of the Tranche A Term Loans, the other Tranche B
Term Loans,
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and ESOP Term Loans in accordance with the immediately
preceding sentence, as further adjusted pursuant to the
balance of this Section 2.10(b). In the case of any
prepayment pursuant to clauses (i,) (ii), or (iii), the
Company shall provide to the Administrative Agent written
notice of such prepayment at least five Business Days prior to
the date such prepayment is to be made. Any Tranche B Term
Loan Lender may notify the Administrative Agent and the
Company of its election to decline its Tranche B Term Loan
share of all such prepayments, in which event such notice
shall be effective until such Lender notifies the
Administrative Agent and the Company to the contrary. Any
Tranche B Term Loan Lender that wishes to decline receipt of
its share of any given prepayment pursuant to this Section
2.10(b), shall promptly, and in any event no later than 10:00
a.m. (Houston, Texas time) on the date following its receipt
of the notice of such prepayment, notify the Company and the
Administrative Agent of such election. Any Tranche B Term
Loan Lender that has not provided notice pursuant to one of
the two preceding sentences prior to such 10:00 a.m. deadline
shall be deemed to have elected to accept such prepayment.
The Administrative Agent shall promptly provide, to all such
accepting Tranche B Term Loan Lenders, notice of the principal
amount of the Tranche B Term Loans that such lenders have
elected to decline. Any such accepting Lender may, at its
option, irrevocably decline receipt of its share of any such
declined shares of such prepayment (and shall indicate in such
notice whether it elects to accept or decline receipt of its
share of such prepayment declined by other Lenders pursuant to
this sentence), and, if such Lender so declines, such share
shall be applied as an additional prepayment of the Tranche A
Term Loans, the other Tranche B Term Loans and the ESOP Term
Loans in accordance with this Section 2.10(b). Any Tranche B
Term Loan Lender that wishes to decline receipt of its share
of such declined shares, shall promptly, and in any event no
later than 10:00 a.m. (Houston, Texas time) on the date
following receipt of the notice from the Administrative Agent
regarding such declined shares, notify the Company and the
Administrative Agent of such election. Any such accepting
Lender that has not provided such notice prior to such 10:00
a.m. deadline shall be deemed to have elected to accept the
full amount of its share of such prepayment.
(v) Prior to April 1, 2000, the Company shall use
its Retained Cash Flow to prepay or repay first the
outstanding Revolving Credit Loans and second to prepay the
Term Loans, such prepayments to be applied as provided in
Section 2.10(b)(iv).
(c) Voluntary Prepayments. The Company may, at its
option, at any time and from time to time, prepay the Loans and the
Reimbursement Obligations, in whole or in part, upon giving, in the
case of any Revolving Credit Loan that is a Eurodollar Loan, or any
Term Loan, three Business Days' prior written notice to the
Administrative Agent, and, in the case of any Revolving Credit Loan
that is a Base Rate Loan, prior written notice on the same Business
Day to the Administrative Agent. Such notice shall specify (i) in the
case of any prepayment of Loans, the date and amount of prepayment and
whether the prepayment is (A) of Term Loans or Revolving Credit Loans,
or a combination thereof and (B) of Eurodollar Loans, Base Rate Loans
or a combination thereof, and, in each case if a combination thereof,
the principal amount allocable to each; (ii) in the case of any
prepayment of Reimbursement Obligations, the date and amount of
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prepayment, the identity of the applicable Letter of Credit or Letters
of Credit and the amount allocable to each of such Reimbursement
Obligations; and (iii) in the case of the prepayment of Term Loans,
whether the Company shall approve the election, if any, of the Tranche
B Term Loan Lenders to decline their share of any such prepayment as
further provided in this Section 2.10(c). Upon receipt of such
notice, the Administrative Agent shall promptly notify each Applicable
Lender of the contents thereof and of such Lender's Applicable
Percentage of such prepayment and, in the case of any Tranche B Term
Loan Lender, whether or not the Company has elected to permit each
Tranche B Term Loan Lender to, at its option, decline its Tranche B
Term Loan share of such prepayment. If any such notice is given, the
amount specified in such notice shall be due and payable on the date
specified therein, together with (if a Eurodollar Loan is prepaid
other than at the end of the Interest Period applicable thereto) any
amounts payable pursuant to Section 2.18 and, in the case of
prepayments of the Term Loans only, accrued interest to such date on
the amount prepaid. Prepayments of (i) the Term Loans pursuant to
this Section 2.10(c) shall be applied (A) so long as no Default has
occurred and is continuing, first, to the Tranche A Term Loans and the
Tranche B Term Loans (x) pro rata based on outstanding principal
amount thereof at the time of such prepayment and (y) pro rata to the
respective installments of principal thereof, and (B) if a Default has
occurred and is continuing, (x) pro rata (based on outstanding
principal amount thereof at the time of such prepayment) to the
Tranche A Term Loans, the Tranche B Term Loans and the ESOP Term Loans
and (y) pro rata to the respective installments of principal thereof,
and (ii) the Revolving Credit Loans and the Reimbursement Obligations
pursuant this Section shall (unless the Company otherwise directs) be
applied, first, to payment of the Revolving Credit Loans then
outstanding, second, to payment of any Reimbursement Obligations then
outstanding and, last, to Cover any outstanding Letter of Credit
Liability. Notwithstanding the foregoing and subject to the Company's
approval described above, in respect of any partial prepayment of Term
Loans (until such time as the Tranche A Term Loans have been repaid in
full) pursuant to this Section 2.10(c), any Tranche B Term Loan Lender
may, at its option, irrevocably decline receipt of its Tranche B Term
Loan share of any such prepayment, and, if such lender so declines,
such share shall be applied as an additional prepayment of the Tranche
A Term Loans, the other Tranche B Term Loans, and the ESOP Term Loans
in accordance with the immediately preceding sentence, as further
adjusted pursuant to balance of this Section 2.10(c). Any Tranche B
Term Loan Lender may notify the Administrative Agent and the Company
of its election to decline its Tranche B Term Loan share of all such
prepayments, in which event such notice shall be effective until such
Lender notifies the Administrative Agent and the Company to the
contrary. Any Tranche B Term Loan Lender that wishes to decline
receipt of its share of any given prepayment pursuant to this Section
2.10(c), shall promptly, and in any event no later than 10:00 a.m.
(Houston, Texas time) on the date following receipt of its notice of
such prepayment, notify the Company and the Administrative Agent of
such election. Any Tranche B Term Loan Lender that has not provided
notice pursuant to one of the two preceding sentences prior to such
10:00 a.m. deadline shall be deemed to have elected to accept such
prepayment. The Administrative Agent shall promptly provide, to all
such accepting Tranche B Term Loan Lenders, notice of the principal
amount of the Tranche B Term Loans that such lenders have elected to
decline. Any such accepting Lender may, at its option, irrevocably
decline receipt of its share of any such declined shares of such
prepayment (and shall indicate in such notice whether it elects to
accept or decline receipt of its share of such prepayment declined by
such other lenders pursuant to
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this sentence), and, if such Lender so declines, such share shall be
applied as an additional prepayment of the Tranche A Term Loans, the
other Tranche B Term Loans and the ESOP Term Loans in accordance with
this Section 2.10(c). Any Tranche B Term Loan Lender that wishes to
decline receipt of its share of the reallocation of such declined
shares, shall promptly, and in any event no later than 10:00 a.m.
(Houston, Texas time) on the date following receipt of the notice from
the Administrative Agent regarding such declined shares, notify the
Company and the Administrative Agent of such election. Any such
accepting Lender that has not provided such notice prior to such 10:00
a.m. deadline shall be deemed to have elected to accept the full
amount of its share of such prepayment. Each prepayment of Base Rate
Loans shall be in the minimum principal amount of $1,000,000 and in
integral multiples of $100,000 and each prepayment of Eurodollar Loans
shall be in the minimum principal amount of $3,000,000 and in integral
multiples of $100,000 or, in the case of either Base Rate Loans or
Eurodollar Loans, the aggregate principal balance outstanding on the
Term Loans or on the Revolving Credit Loans and the Reimbursement
Obligations, as applicable.
(d) Notice by Administrative Agent. Upon receipt of a
notice of prepayment pursuant to this Section, the Administrative
Agent shall promptly notify each Applicable Lender of the contents
thereof and of such Lender's ratable share of such prepayment.
Section 2.11 Continuation and Conversion Options.
(a) Continuation. The Company may elect to continue all
or any part of any Borrowing of Eurodollar Loans beyond the expiration
of the then current Interest Period relating thereto by giving Advance
Notice (which shall be irrevocable) to the Administrative Agent of
such election, specifying the Eurodollar Loans or portion thereof to
be continued and the Interest Period therefor. In the absence of such
a timely and proper election with regard to Eurodollar Loans, the
Company shall be deemed to have elected to convert such Eurodollar
Loans to Base Rate Loans pursuant to Subsection 2.11(d).
(b) Amounts of Continuations. All or part of any
Eurodollar Loans may be continued as provided herein, provided that
any continuation of such Loans shall not be (as to each Borrowing of
such Loans as continued for an applicable Interest Period) less than
$3,000,000 and shall be in an integral multiple of $100,000.
(c) Continuation or Conversion Upon Default. If no
Default shall have occurred and be continuing, each Eurodollar Loan
may be continued or converted as provided in this Section. If a
Default shall have occurred and be continuing, the Company shall not
have the option to elect to continue any such Eurodollar Loan pursuant
to Subsection 2.11(a) or to convert Base Rate Loans to Eurodollar
Loans pursuant to Subsection 2.11(e).
(d) Conversion to Base Rate. The Company may elect to
convert any Eurodollar Loan on the last day of the then current
Interest Period relating thereto to a Base Rate Loan by giving Advance
Notice to the Administrative Agent of such election.
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(e) Conversion to Eurodollar Rate. The Company may elect
to convert any Base Rate Loan at any time or from time to time to a
Eurodollar Loan by giving Advance Notice (which shall be irrevocable)
to the Administrative Agent of such election, specifying each Interest
Period therefor.
(f) Amounts of Conversions. All or any part of the
outstanding Loans may be converted as provided herein, provided that
any conversion of such Loans shall not result in a Borrowing of
Eurodollar Loans in an amount less than $3,000,000 and in integral
multiples of $100,000.
Section 2.12 Fees.
(a) Revolving Credit Commitments. The Company shall pay
to the Administrative Agent for the account of and distribution to
each Revolving Credit Lender in accordance with its Revolving Credit
Percentage a commitment fee for the period commencing on the STX
Closing Date, to and including the Revolving Credit Maturity Date (or
such earlier date as the Revolving Credit Commitments shall have been
terminated entirely) computed at the rate per annum equal to the
Applicable Commitment Fee Percentage on the average daily excess
amount of the Revolving Credit Commitments over the Revolving Credit
Exposure. The commitment fees on the Revolving Credit Commitments
earned from and after the STX Effective Date shall be payable in
arrears on each Quarterly Date, commencing on the first Quarterly Date
to occur after the STX Closing Date.
(b) Letters of Credit.
(i) As consideration for acting as the Issuing
Bank with respect to any Letter of Credit, the Company will
pay to the applicable Issuing Bank a fee to be agreed upon
between the Company and the applicable Issuing Bank not to
exceed .25% per annum on the daily average amount available
for drawing on the applicable Letter of Credit, payable in
arrears on each Quarterly Date. The Company shall also pay to
the Issuing Bank, with respect to any issuance, amendment,
transfer, or cancellation prior to expiration of any Letter of
Credit and for each drawing made thereunder, documentary and
processing charges in accordance with the Issuing Bank's
standard schedule for such charges in effect at the time of,
and payable at the time of, such issuance, amendment,
transfer, cancellation or drawing, as the case may be. All
fees payable pursuant to this clause (i) shall be retained by
the applicable Issuing Bank.
(ii) The Company will pay to the Administrative
Agent for the account of and pro rata distribution to each
Revolving Credit Lender a fee on the daily average amount
available for drawings under each Letter of Credit, in each
case for the period from and including the date of issuance of
such Letter of Credit to and excluding the date of expiration
or termination thereof computed at a per annum rate for each
day equal to the Applicable Margin for Revolving Credit Loans
that are Eurodollar Loans in effect on such day, payable in
arrears on each Quarterly Date.
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(c) Administrative Agent and Documentation Agent Fees.
The Company shall pay to the Agents such fees as are set forth in the
Fee Letter and the AFB Fee Letter, as the same has been or may be
hereafter amended or supplemented, on the dates and in the manner
specified therein.
Section 2.13 Payments, etc.
(a) Without Setoff, etc. Except as otherwise
specifically provided herein, all payments under this Agreement shall
be made to the Administrative Agent on behalf of the Applicable
Lenders without defense, setoff or counterclaim to the Administrative
Agent not later than 11:00 a.m. Houston time on the date when due and
shall be made in Dollars in immediately available funds at the Payment
Office; provided, that, to the extent that the Company has provided
Advance Notice with respect to a Borrowing of Revolving Credit Loans
and has instructed that the proceeds of such Borrowing is to be used
to repay installments of Term Loans due on the date of such Borrowing,
then so long as all conditions for such Borrowing have been met, any
such installments shall, to the extent of such Borrowing, be
considered repaid by 11:00 a.m. on the date of such Borrowing
regardless of when the Administrative Agent actually receives such
funds from the Lenders; provided, further, that the foregoing proviso
shall not modify the obligations of the Company provided in Section
2.04(b). The Administrative Agent will promptly thereafter distribute
funds in the form received relating to the payment of principal or
interest or commitment fees ratably to the Applicable Lenders for the
account of their respective Lending Offices, and funds in the form
received relating to the payment of any other amount payable to any
Lender to such Lender for the account of its Lending Office.
(b) Non-Business Days. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which
is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day (except as otherwise provided in Section
2.07 hereof) and, with respect to payments of principal, interest
thereon shall be payable at the applicable rate during such extension.
(c) Computations. All computations of interest shall be
made on the basis of a year of 360 days (unless such calculation would
result in a usurious rate, in which case interest shall be calculated
on the basis of a year of 365 or 366 days, as the case may be) in the
case of Eurodollar Loans or Base Rate Loans that are based upon the
Federal Funds Effective Rate or the Base CD Rate, and 365 or 366 days
(as the case may be) in the case of Base Rate Loans that are based
upon the Prime Rate, and all computations of fees shall be made on the
basis of a year of 360 days (unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis
of a year of 365 or 366 days, as the case may be), in each case for
the actual number of days (including the first day but excluding the
last day) occurring in the period for which such interest or fees are
payable. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall, except for manifest error, be
final, conclusive and binding for all purposes, provided that such
determination shall be made in good faith in a manner generally
consistent with the Administrative Agent's standard practice. If the
Administrative Agent and the Company
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determine that manifest error exists, said parties shall correct such
error by way of an adjustment to the payment due on the next Quarterly
Date.
Section 2.14 Interest Rate Not Ascertainable, etc. In the event
that the Administrative Agent shall have determined (which determination shall
be reasonably exercised and shall, absent manifest error, be final, conclusive
and binding upon all parties) that on any date for determining the Eurodollar
Rate for any Interest Period, by reason of any changes arising after the date
of this Agreement affecting the interbank Eurodollar market, or any Lender's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate, then, and in any such event, the Administrative Agent shall
forthwith give notice (by telephone confirmed in writing) to the Company and to
the Lenders of such determination. Until the Administrative Agent notifies the
Company that the circumstances giving rise to the suspension described herein
no longer exist, the obligations of the Lenders to make Eurodollar Loans shall
be immediately suspended; any Borrowing of Eurodollar Loans that is requested
(by continuation, conversion or otherwise) shall instead be made as a Borrowing
of Base Rate Loans, and any outstanding Eurodollar Loan shall be converted, on
the last day of the then current Interest Period applicable thereto, to a Base
Rate Loan.
Section 2.15 Illegality.
(a) Determinations of Illegality. In the event that any
Lender shall have determined (which determination shall be reasonably
exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) at any time that the making or continuance
of any Eurodollar Loan has become unlawful as a result of compliance
by such Lender in good faith with any applicable law, governmental
rule, regulation, guideline or order (whether or not having the force
of law and whether or not failure to comply therewith would be
unlawful), then, in any such event, the Lender shall give prompt
notice (by telephone confirmed in writing) to the Company and to the
Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to the other Lenders).
(b) Eurodollar Loans Suspended. Upon the giving of the
notice to the Company referred to in Subsection (a) above, (i) the
Company's right to request (by continuation, conversion or otherwise)
and such Lender's obligation to make Eurodollar Loans shall be
immediately suspended, and thereafter, any requested Borrowing of
Eurodollar Loans shall, as to such Lender only, be deemed to be a
request for a Base Rate Loan, and (ii) if the affected Eurodollar Loan
or Loans are then outstanding, the Company shall immediately, or if
permitted by applicable law, no later than the date permitted thereby,
upon at least one Business Day's written notice to the Administrative
Agent and the affected Lender, convert each such Eurodollar Loan into
a Base Rate Loan, provided that if more than one Lender is affected at
any time, then all affected Lenders must be treated the same pursuant
to this Subsection.
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Section 2.16 Increased Costs.
(a) Eurodollar Regulations, etc. If, by reason of (x)
after the date hereof, the introduction of or any change (including,
but not limited to, any change by way of imposition or increase of
reserve requirements) in or in the interpretation of any law or
regulation, or (y) the compliance with any guideline or request issued
by any central bank or other governmental authority or
quasi-governmental authority exercising control over banks or
financial institutions generally that becomes effective after the STX
Closing Date (whether or not having the force of law):
(i) any Lender (or its applicable Lending Office)
shall be subject to any tax, duty or other charge with respect
to its Eurodollar Loans or its obligation to make Eurodollar
Loans, or shall change the basis of taxation of payments to
any Lender of the principal of or interest on its Eurodollar
Loans or its obligation to make Eurodollar Loans (except for
changes in the rate of tax on the overall net income or gross
receipts of such Lender or its applicable Lending Office
imposed by the jurisdiction in which such Lender's principal
executive office or applicable Lending Office is located); or
(ii) any reserve (including, but not limited to,
any imposed by the Board of Governors of the Federal Reserve
System, but excluding any such reserve requirement that is
reflected in the Eurodollar Rate), special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or its
applicable Lending Office shall be imposed or deemed
applicable or any other condition affecting its Eurodollar
Loans or its obligations to make Eurodollar Loans shall be
imposed on any Lender or its applicable Lending Office or the
interbank Eurodollar market or the secondary certificate of
deposit market;
and as a result thereof there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining
Eurodollar Loans (except to the extent already included in the
determination of the applicable Eurodollar Rate) or there shall be a
reduction in the amount received or receivable by such Lender or its
applicable Lending Office, then the Company shall from time to time,
upon written notice from and demand by such Lender (with a copy of
such notice and demand to the Administrative Agent), pay to such
Lender, within 30 days after the date specified in such notice and
demand, additional amounts determined by such Lender in a reasonable
manner to be sufficient to indemnify such Lender against such
increased cost. A certificate as to the amount of such increased cost
and the calculation thereof, submitted to the Company and the
Administrative Agent by such Lender, shall, except for manifest error,
be final, conclusive and binding for all purposes, provided that the
determination of such amount shall be made in good faith in a manner
generally consistent with such Lender's standard practice.
(b) Costs. If any Lender shall advise the Administrative
Agent that at any time, because of the circumstances described in
clauses (x) or (y) in Subsection 2.16(a) or any other circumstances
arising after the STX Effective Date affecting such Lender or the
interbank Eurodollar market or such Lender's position in such market,
the Eurodollar Rate, as determined in
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good faith by the Administrative Agent, will not adequately and fairly
reflect the cost to such Lender of funding its Eurodollar Loans, then,
and in any such event:
(i) the Administrative Agent shall forthwith give
notice (by telephone confirmed in writing) to the Company and
to the Lenders of such advice;
(ii) the Company's right to request a Borrowing of
Eurodollar Loans from such Lender and such Lender's obligation
to make Eurodollar Loans shall be immediately suspended, any
such Borrowing of Eurodollar Loans that is requested (by
continuation, conversion or otherwise) shall, as to such
Lender only, be deemed to be a request for a Base Rate Loan,
and any such outstanding Eurodollar Loan from such Lender
shall be converted, on the last day of the then current
Interest Period applicable thereto, to a Base Rate Loan.
(c) Capital Adequacy. If, by reason of (i) after the
date hereof, the introduction of or any change (including, but not
limited to, any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation, or
(ii) the compliance with any guideline or request issued by any
central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions
generally that becomes effective after the STX Closing Date (whether
or not having the force of law), affects or would affect the amount of
capital required to be maintained by any Lender or any corporation
controlling such Lender, and the amount of such capital is increased
by or based upon the existence of such Lender's Loans or such Lender's
Commitment to lend hereunder and other commitments of this type or of
the Letters of Credit (or similar contingent obligations), then,
within 30 days after written request therefor by such Lender (with a
copy of such request to the Administrative Agent), the Company shall
pay to such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender for the
increased cost of such additional capital in light of such
circumstances, to the extent that such Lender reasonably determines
such increase in capital to be allocable to the existence of such
Lender's Loans or such Lender's Commitment to lend hereunder or to the
issuance or maintenance of the Letters of Credit. A certificate as to
such amounts and the calculation thereof, submitted to the Company and
the Administrative Agent by such Lender, shall be conclusive and
binding for all purposes, absent manifest error, provided that the
determination of such amount shall be made in good faith in a manner
generally consistent with such Lender's standard practice.
(d) Issuing Bank. The rights and benefits of the Lenders
under this Section 2.16 shall also apply to any Issuing Bank in its
capacity as such.
(e) Notice. The Company shall not be obligated to
compensate any Lender pursuant to this Section 2.16 for any amounts
attributable to a period more than one year prior to the giving of
notice by such Lender to the Company of its intention to seek
compensation under this Section 2.16.
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Section 2.17 Change of Lending Office. Each Lender agrees that it
will use reasonable efforts to designate an alternate Lending Office with
respect to any of its Eurodollar Loans affected by the matters or circumstances
described in Sections 2.14, 2.15 or 2.16 to reduce the liability of the Company
or avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as determined by such Lender in its sole
discretion; provided that such Lender shall have no obligation to so designate
an alternate Lending Office located in the United States.
Section 2.18 Funding Losses. The Company shall compensate each
Lender, upon its written request (which request shall set forth the basis for
requesting such amounts and shall, absent manifest error, be final, conclusive
and binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, but not limited to, any interest paid by such Lender to
lenders of funds borrowed by it to make or carry its Eurodollar Loans to the
extent not recovered by the Lender in connection with the re-employment of such
funds and excluding loss of anticipated profits), which the Lender may sustain:
(i) if for any reason (other than a default by such Lender) a Borrowing of
Eurodollar Loans does not occur on the date specified therefor in a Borrowing
Request (whether or not withdrawn), including, but not limited to a failure by
the Company to fulfill on the date of any Borrowing of Eurodollar Loans the
conditions set forth in Article III, or to convert or continue any Eurodollar
Loan hereunder after irrevocable notice of such conversion or continuation has
been given pursuant to Section 2.11 (ii), if any payment, prepayment or
conversion of any of its Eurodollar Loans required or permitted by any other
provision of this Agreement or otherwise, or any assignment of a Eurodollar
Loan pursuant to Section 2.22, in each case is made or deemed made on a date
which is not the last day of the Interest Period applicable thereto, or (iii)
if, for any reason, the Company defaults in its obligation to repay its
Eurodollar Loans or interest accrued thereon as and when due and payable (at
the due date thereof, whether at scheduled maturity, by acceleration,
irrevocable notice of prepayment or otherwise).
Section 2.19 Sharing of Payments, etc. If any Lender shall obtain
any payment or reduction (including, but not limited to, any amounts received
as adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code) of any obligation of the Company hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share of payments or reductions on account of such
obligations obtained by all the Lenders, such Lender shall forthwith (i) notify
each of the other Lenders and the Administrative Agent of such receipt, and
(ii) purchase from the other Lenders such participations in the affected
obligations as shall be necessary to cause such purchasing Lender to share the
excess payment or reduction, net of costs incurred in connection therewith,
ratably with each of them, provided that if all or any portion of such excess
payment or reduction is thereafter recovered from such purchasing Lender or
additional costs are incurred, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery or such additional costs, but
without interest. The Company agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section may, to the fullest
extent permitted by law, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Company in the amount of such participation.
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Section 2.20 Taxes.
(a) Payments Free and Clear. Any and all payments by the
Company under this Agreement or any other Financing Document shall be
made, in accordance with Section 2.13, free and clear of and without
deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender, the Administrative
Agent and each Issuing Bank, taxes imposed on its income, and
franchise or similar taxes imposed on it, by (i) any jurisdiction (or
political subdivision thereof) of which the Administrative Agent, such
Issuing Bank or such Lender, as the case may be, is a citizen or
resident or in which such Lender has a permanent establishment (or is
otherwise engaged in the active conduct of its banking business
through an office or a branch) which is such Lender's applicable
Lending Office, (ii) the jurisdiction (or any political subdivision
thereof) in which the Administrative Agent, such Issuing Bank or such
Lender is organized, or (iii) any jurisdiction (or political
subdivision thereof) in which such Lender, such Issuing Bank or the
Administrative Agent is presently doing business which taxes are
imposed solely as a result of doing business in such jurisdiction (all
such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities so arising out of payments by the Company
being hereinafter referred to as "Taxes"). If the Company shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Lenders, the Issuing Banks or the
Administrative Agent (i) the sum payable shall be increased by the
amount necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.20) such Lender, such Issuing Bank or the Administrative
Agent (as the case may be) shall receive an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company
shall make such deductions and (iii) the Company shall pay the full
amount deducted to the relevant taxing authority or other Governmental
Authority in accordance with applicable law.
(b) Other Taxes. In addition, the Company agrees to pay
any present or future stamp or documentary taxes or any other excise
or property taxes, charges or similar levies that arise from any
payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement, any Assignment and
Acceptance or any other Financing Document (hereinafter referred to as
"Other Taxes").
(c) Indemnification. The Company will indemnify each
Lender, each Issuing Bank and the Administrative Agent for the full
amount of Taxes and Other Taxes (including, but not limited to, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.20) paid by such Lender or such Issuing Bank or
the Administrative Agent (on their behalf or on behalf of any Lender),
as the case may be, and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or
not such Taxes or Other Taxes were correctly or legally asserted. Any
payment pursuant to such indemnification shall be made within 30 days
after the date any Lender, any Issuing Bank or the Administrative
Agent, as the case may be, makes written demand therefor. If a
Lender, an Issuing Bank or the Administrative Agent shall become aware
that it is entitled to claim a refund from a Governmental Authority in
respect of Taxes or Other Taxes as to which it has been indemnified by
the Company,
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or with respect to which the Company has paid additional amounts,
pursuant to this Section 2.20, it shall promptly notify the Company of
the availability of such claim and shall, within 30 days after receipt
of a request by the Company, make a claim to such Governmental
Authority for such refund at the Company's expense. If a Lender, an
Issuing Bank or the Administrative Agent receives a refund in respect
of any Taxes or Other Taxes with respect to which the Company has paid
additional amounts pursuant to this Section 2.20, it shall within 30
days from the date of such receipt pay over such refund to the Company
(but only to the extent of indemnity payments made, or additional
amounts paid, by the Company under this Section 2.20 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all
outofpocket expenses of such Lender, such Issuing Bank or the
Administrative Agent and without interest (other than interest paid by
the relevant Governmental Authority with respect to such refund);
provided, however, that the Company, upon the request of such Lender,
such Issuing Bank or the Administrative Agent, agrees to repay the
amount paid over to the Company (plus penalties, interest or other
charges payable to the relevant Governmental Authority) to such
Lender, such Issuing Bank or the Administrative Agent in the event
such Lender, such Issuing Bank or the Administrative Agent is required
to repay such refund to such Governmental Authority.
(d) Receipts. Within 30 days after the date of any
payment of Taxes or Other Taxes withheld by the Company in respect of
any payment to any Lender, any Issuing Bank or the Administrative
Agent, the Company will furnish to the Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof.
(e) Survival. Without prejudice to the survival of any
other agreement contained herein, the agreements and obligations
contained in this Section 2.20 shall survive the payment in full of
principal and interest hereunder.
(f) Lender Representations and Agreements. As of the
date on which any Lender becomes a party hereto, such Lender
represents that it is either (i) a corporation organized under the
laws of the United States of America or any state thereof (ii)
entitled to complete exemption from United States withholding tax
imposed on or with respect to any payments, including fees, to be made
to it pursuant to this Agreement or (iii) entitled to complete
exemption from United States withholding tax on interest imposed on or
with respect to any payments of interest to be made pursuant to this
Agreement (A) under an applicable provision of a tax convention to
which the United States of America is a party (B) because it is acting
through a branch, agency or office in the United States of America and
any payment to be received by it hereunder is effectively connected
with a trade or business in the United States of America or (C)
because it is a recipient of portfolio interest within the meaning of
Section 871(h) or 881(c) of the Code. Each Lender that is not a
corporation organized under the laws of the United States of America
or any state thereof shall:
(x) provide to the Company and the Administrative
Agent on or before the date of any payment by the Company
hereunder, or on the date of its delivery of the Assignment
and Acceptance pursuant to which it becomes a Lender, and at
such other times as required by United States law or as the
Company or the Administrative Agent shall
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reasonably request, two accurate and complete original signed
copies of either (A) Internal Revenue Service Form 4224 (or
successor form) certifying that all payments to be made to it
hereunder will be effectively connected to a United States
trade or business (the "Form 4224 Certification"), or (B)
Internal Revenue Service Form 1001 (or successor form)
certifying that it is entitled to the benefit of a provision
of a tax convention to which the United States of America is a
party which completely exempts from United States withholding
tax all payments to be made to it hereunder (the "Form 1001
Certification"). In addition, each Lender agrees that if it
previously filed a Form 4224 Certification it will deliver to
the Company and the Administrative Agent a new Form 4224
Certification prior to the first payment date occurring in
each of its subsequent taxable years (or such other date as
may be required in compliance with applicable law); and if it
previously filed a Form 1001 Certification, it will deliver to
the Company and the Administrative Agent a new certification
prior to the first payment date falling in the third year
following the previous filing of such certification (or such
other date as may be required in compliance with applicable
law); or
(y) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code,
(i) furnish to the Company on or before the date of any
payment by the Company, with a copy to the Administrative
Agent, (A) a certificate substantially in the form of Exhibit
I (any such certificate a "U.S. Tax Compliance Certificate")
and (B) two accurate and complete original signed copies of
Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the date
of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Code with
respect to payments of interest to be made under this
Agreement, any Notes or other Financing Documents (and to
deliver to the Company and the Administrative Agent two
further copies of such form on or before the date it expires
or becomes obsolete and after the occurrence of any event
requiring a change in the most recently provided form and, if
necessary, obtain any extensions of time reasonably requested
by the Company or the Administrative Agent for filing and
completing such forms) and (ii) agree, to the extent legally
entitled to do so, upon reasonable request by the Company, to
provide to the Company (for the benefit of the Company and the
Administrative Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such
Lender to an exemption from withholding with respect to
payments of interest under this Agreement, any Notes or other
Financing Documents, provided that in determining the
reasonableness of a request under this clause (iii) such
Lender shall be entitled to consider the cost (to the extent
unreimbursed by the Company) which would be imposed on such
Lender of complying with such request.
Each Lender also agrees to deliver to the Company and the
Administrative Agent such other or supplemental forms as may at any
time be required as a result of changes in applicable law or
regulation in order to confirm or maintain in effect its entitlement
to exemption from United States withholding tax on any payments
hereunder, provided that the circumstances of the Lender at the
relevant time and applicable laws permit it to do so. Except as
provided immediately below, if a
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Lender is organized under the laws of a jurisdiction outside the
United States of America, unless the Company and the Administrative
Agent have received a Form 1001 Certification, Form 4224
Certification, or an Internal Revenue Service Form W-8 and a U.S. Tax
Compliance Certificate, as applicable, satisfactory to them indicating
that all payments, or in the case of a Lender providing such forms as
are required under Section 2.20(f)(y) hereof, all payments of
interest, to be made to such Lender hereunder are not subject to
United States withholding tax, the Company shall be entitled to
withhold taxes from such payments at the applicable statutory rate,
provided that such withholding shall not increase the amount of
payments for the account of such Lender to be made by the Company
pursuant to Subsection 2.20(a). If a Lender determines, as a result
of any change in either (i) applicable law, regulation or treaty, or
in any official application thereof or (ii) its circumstances, that it
is unable to submit any form or certificate that it is obligated to
submit pursuant to this Section, or that it is required to withdraw or
cancel any such form or certificate previously submitted, it shall
promptly notify the Company and the Administrative Agent of such fact
and the Company shall be entitled to withhold taxes from such payments
at the applicable statutory rate, it being understood that such
withholding shall increase the amount of payments for the account of
such Lender to be made by the Company pursuant to Section 2.20(a).
Each Lender agrees to indemnify and hold the Administrative Agent
harmless from any United States taxes, penalties, interest and other
expenses, costs and losses incurred or payable by the Administrative
Agent (i) as a result of such Lender's failure to submit any form or
certificate that it is required to provide pursuant to this Section or
(ii) as a result of the Administrative Agent's reliance on any such
form or certificate which such Lender has provided to it pursuant to
this Section. Each Person that shall become a Lender or a Participant
pursuant to Section 8.07 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms, certifications and
statements required pursuant to this Section, provided that in the
case of a Participant the obligations of such Participant were it a
Lender except that such Participant shall furnish all such required
forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
(g) Efforts to Avoid or Reduce. Any Lender claiming any
additional amounts payable pursuant to this Section 2.20 shall use
reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document requested by the Company or the
Administrative Agent or to change the jurisdiction of its applicable
Lending Office or to contest any tax imposed if the making of such a
filing or change or contesting such tax would avoid the need for or
reduce the amount of any such additional amounts that may thereafter
accrue and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
Section 2.21 Pro Rata Treatment. Subject to Section 2.04(b),
each Borrowing of Revolving Credit Loans shall be made, each payment on account
of any commitment fee in respect of the Revolving Credit Commitments hereunder
shall be allocated by the Administrative Agent, and any reduction of the
Revolving Credit Commitments of the Lenders shall be allocated by the
Administrative Agent, pro rata according to the relevant Revolving Credit
Percentages of the Lenders. Subject to Section 2.04(b), each payment
(including each prepayment) on account of principal of and interest on any
Revolving Credit Loans shall be allocated by the Administrative Agent pro rata
according to the respective outstanding principal amounts of such Revolving
Credit Loans then held by the Revolving Credit Lenders. Except as
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otherwise provided in Sections 2.10(b) and (c), each payment on account of
principal of and interest on any Term Loans shall be allocated by the
Administrative Agent pro rata according to the respective outstanding principal
amounts of such Term Loans then held by the Term Loan Lenders. All proceeds
(including proceeds from the realization upon the Collateral) received after
acceleration of the maturity of the Loans, shall be applied first to
reimbursement of expenses and indemnities provided for in this Agreement and
the Financing Documents; second, to other Lender Indebtedness (including,
without limitation, Letter of Credit Liabilities) until repaid in full pro rata
to each Lender in accordance with its Total Credit Percentage; and, third, to
any other Person entitled to receive such proceeds in accordance with
applicable law.
Section 2.22 Replacement of Lenders. If any Lender does not make
a Eurodollar Loan pursuant to Section 2.15, is subject to increased costs
pursuant to Section 2.16, fails to designate an alternate Lending Office
pursuant to Section 2.17, or is owed or reasonably anticipates being owed
additional amounts pursuant to Section 2.20 and fails to take action required
under Subsection 2.20(g) to avoid or reduce any such additional amounts, the
Company shall have the right, if no Default then exists, to replace such Lender
with another bank or financial institution with the consent of the
Administrative Agent, which consent shall not be unreasonably withheld,
provided that (i) the obligations of the Company owing to the Lender being
replaced (including such increased costs) that are not being assigned to the
replacement lender shall be paid in full to the Lender being replaced
concurrently with such replacement lender, (ii) the replacement lender shall
execute an Assignment and Acceptance pursuant to which it shall become a party
hereto as provided in Section 8.07(c), and (iii) upon compliance with the
provisions for assignment provided in Section 8.07(c) and the payment of
amounts referred to in clause (i), the replacement lender shall constitute a
"Lender" hereunder and the Lender being so replaced shall no longer constitute
a "Lender" hereunder.
ARTICLE III
CONDITIONS TO BORROWINGS AND TO
PURCHASE, RENEWAL AND REARRANGEMENT
The obligation of each Applicable Lender to make a Revolving Credit
Loan, each Applicable Lender to maintain its Term Loans or an Issuing Bank to
issue a Letter of Credit hereunder is subject to the satisfaction of the
following conditions:
Section 3.01 Closing. (a) With respect to the prior closings of
the Original Credit Agreement and the AFB Acquisition Credit Agreement, the
Company delivered to the Administrative Agent (unless waived by the
Administrative Agent) all instruments, certificates and opinions referred to in
Section 3.02 not theretofore delivered and the Company delivered to the
Administrative Agent (unless waived by the Administrative Agent) on the same
day as the closing of the AFB Acquisition Credit Agreement, all instruments,
certificates and opinions referred to in Section 3.03 not theretofore
delivered; and
(b) With respect to the closing of this Agreement, the Company shall
have delivered to the Administrative Agent (unless waived by the Administrative
Agent) on the Restated Closing Date, which
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shall be a Business Day, all instruments, certificates and opinions referred to
in this Section 3.01(b) not theretofore delivered:
(i) Term Notes- A duly completed and executed Term Note
for each Applicable Lender and in each case dated as of the Restated
Closing Date, and payable to the order of such Applicable Lender;
(ii) Resolutions and Incumbency Certificates-
(A) certified copies of the resolutions of the
Boards of Directors of the Company dated as of the Restated
Closing Date and approving, as appropriate, the Loans, the
Notes, this Agreement and the other Financing Documents, and
all other documents, if any, to which the Company is a party
and evidencing corporate authorization with respect to such
documents; and
(B) a certificate of the Secretary or an
Assistant Secretary of the Company dated as of the Restated
Closing Date and certifying (1) the name, title and true
signature of each officer of such Person authorized to execute
the Notes, this Agreement, Applications and the other
Financing Documents to which it is a party, (2) the name,
title and true signature of each officer of such Person
authorized to provide the certifications required pursuant to
this Agreement including, but not limited to, certifications
required pursuant to Section 5.02, Borrowing Requests, and
Borrowing Base Reports, and (3) that attached thereto is a
true and complete copy of the articles of incorporation and
bylaws of the Company, as amended to date, and a recent good
standing certificate.
(iii) Opinions of Counsel- The following opinions of
counsel, in each case addressed to each of the Agents, the Issuing
Banks and the Lenders and covering such other matters as any
Administrative Agent, any Issuing Bank or the Lenders may reasonably
request:
(A) ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel to Holdco,
the Company and the Subsidiary Guarantors dated as of the
Restated Closing Date and substantially in the form of Exhibit
E-1 hereto; and
(B) Local counsel to the Company dated as of the
Restated Closing Date and substantially in the form of
Exhibits E-2 through E-4 as to the laws of Canada, the State
of Florida and the State of Georgia.
(iv) The Security Instruments and Guaranties
(A) Ratification of Guaranty Agreement and
Security Instruments, executed by each Subsidiary Guarantor,
substantially in the form of Exhibit F-1-A hereto, dated as of
the Restated Closing Date;
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(B) Ratification of Limited Guaranty Agreement
and Security Instruments (Santa ▇▇▇▇), executed by Sterling
Fibers, substantially in the form of Exhibit F-1-B hereto,
dated as of the Restated Closing Date;
(C) Amended and Restated Deed of Trust,
substantially in the form of Exhibit F-2 hereto, dated as of
the Restated Closing Date.
(D) Third Amendment and Supplement to Security
Agreement (Pledge), substantially in the form of Exhibit F-18,
dated as of the Restated Closing Date, and executed by the
Company granting to the Administrative Agent a first priority
security interest in 100% of the Capital Stock of the
Company's directly owned U.S. Subsidiaries, as security for
the Lender Indebtedness;
(E) Financing Statements or amendments to
Financing Statements previously filed, as appropriate, to
perfect the security interests created by the instruments
delivered under clauses (C) and (D) above;
(F) Stock certificates and corresponding stock
powers to perfect the Administrative Agent's security in the
stock pledged by the instrument delivered under clause (D)
above; and
(G) all Property in which the Administrative
Agent shall, at such time, be entitled to have a Lien pursuant
to this Agreement or any other Financing Document shall have
been physically delivered to the possession of the
Administrative Agent to the extent that such possession is
necessary for the purpose of perfecting the Administrative
Agent's Lien in such Collateral.
(v) The Consummation of the Saskatoon Acquisition. The
Saskatoon Acquisition shall have been consummated in accordance with
the terms thereof. The proceeds of the sale of new Holdco Common
Stock and the Series B Preferred Stock in an amount equal to
approximately Cdn $20,000,000 shall have been received by ▇▇▇▇▇▇▇▇
▇▇▇, Sask Holdings, or Sterling Sask in amounts and under terms
reasonably satisfactory to the Agents and the Lenders.
(vi) Insurance. A certificate of insurance coverage,
dated as of the Restated Closing Date evidencing that the Company and
its Subsidiaries are carrying insurance in accordance with Section
5.01(e) hereof.
(vii) Financial Statements and Projections. The financial
condition of the Company reflected in the financial information of the
Company that was delivered to the Lenders prior to the Restated
Closing Date by the Company has not changed in such a way as to
materially and adversely affect the prospects of the Company or
otherwise cause or result in a Material Adverse Effect.
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(viii) Title Insurance. Mortgagee's Policy of Title
Insurance, dated as of the Restated Closing Date, in form and
substance satisfactory to the Agents insuring the Lien on the
Company's chemical plant in Texas City, Texas granted pursuant to the
Amended and Restated Deed of Trust in the amount of $9,000,000.
Section 3.02 Conditions Precedent to Initial STX Loan. At the
time of the making by such Original Lender of its initial Original Loan under
the Original Credit Agreement or the issuance by such Issuing Bank of the
initial Letter of Credit (including, but not limited to, the assumption by the
Original Lenders of the Outstanding Letters of Credit), all obligations of the
Company under the Original Credit Agreement to the Original Administrative
Agent or any Original Lender incurred prior to such initial Loan or Letter of
Credit, shall have been paid in full, and the Original Administrative Agent
shall have received the following, each in form and substance reasonably
satisfactory to the Agents under the Original Credit Agreement and the Original
Lenders, with an original thereof for the Original Administrative Agent and
with sufficient copies thereof for each Original Lender (except that in the
case of the Notes, the originals thereof will be delivered to the respective
Original Lenders):
(a) Notes-A duly completed and executed Note for each
Original Lender and in each case dated as of the STX Closing Date, and
payable to the order of such Original Lender.
(b) Resolutions and Incumbency Certificates-
(i) certified copies of the resolutions of the
Boards of Directors of the Company, Holdco, and any of the
Company's Subsidiaries that are parties to any Financing
Document, dated, as to the Company, as of the STX Closing
Date, and as to Holdco and the Company's Subsidiaries, as of
the STX Effective Date, and approving, as appropriate, the
Original Loans, the Notes, the Original Credit Agreement and
the other Financing Documents, and all other documents, if
any, to which the Company, Holdco or such Subsidiary is a
party and evidencing corporate authorization with respect to
such documents;
(ii) a certificate of the Secretary or an
Assistant Secretary of the Company dated as of the STX Closing
Date, and certifying (A) the name, title and true signature of
each officer of such Person authorized to execute the Notes,
the Original Credit Agreement, Applications and the other
Financing Documents to which it is a party, (B) the name,
title and true signature of each officer of such Person
authorized to provide the certifications required pursuant to
this Agreement including, but not limited to, certifications
required pursuant to Section 5.02, Borrowing Requests, and
Borrowing Base Reports, and (C) that attached thereto is a
true and complete copy of the articles of incorporation and
bylaws of the Company, as amended to date, and a recent good
standing certificate; and
(iii) a certificate of the Secretary or an
Assistant Secretary of Holdco and of each Subsidiary that is a
party to any Financing Document, in each case, dated as of the
STX Effective Date and certifying (x) the name, title and true
signature of each officer of
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Holdco or such Subsidiary, as the case may be, authorized to
execute each such Financing Document to which it is a party,
and (y) that attached thereto is a true and complete copy of
the articles of incorporation and bylaws of Holdco or such
Subsidiary, as the case may be, as amended to date, and a
recent good standing certificate for Holdco or such
Subsidiary, as the case may be.
(c) Opinions of Counsel- The following opinions of
counsel, in each case addressed to each of the Agents under the
Original Credit Agreement, the Issuing Banks and the Original Lenders
and covering such other matters as any Original Administrative Agent,
any Issuing Bank or the Original Lenders may reasonably request:
(i) ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel to Holdco,
the Company and the Subsidiary Guarantors dated as of the STX
Closing Date and substantially in the form of Exhibit E-5
hereto; and
(ii) ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel to Holdco,
the Company and the Subsidiary Guarantors, dated as of the STX
Effective Date; and
(iii) Local counsel to the Company dated as of the
STX Closing Date, and substantially in the form of Exhibits
E-6 through E-7 as to the laws of Canada and the State of
Georgia.
(d) The Security Instruments and Guaranties-
(i) guaranty agreement dated as of the STX
Effective Date and executed by the then existing Subsidiary
Guarantors;
(ii) subrogation and contribution agreement dated
as of the STX Effective Date and executed by the then existing
Subsidiary Guarantors;
(iii) Security Agreement dated as of the STX
Effective Date executed by the Company, granting to the
Original Administrative Agent a first priority security
interest in all personal Property described therein, as
security for the indebtedness defined therein as the
"Obligations", substantially in the form of Exhibit F-3;
(iv) Security Agreements dated as of the STX
Effective Date executed by each of the then existing
Subsidiary Guarantors, granting to the Original Administrative
Agent a first priority security interest in all personal
Property described therein of each such Person, as security
for the indebtedness respectively defined therein as the
"Obligations", substantially in the form of Exhibit F-4;
(v) Security Agreement (Pledge) dated as of the
STX Effective Date executed by Holdco granting to the Original
Administrative Agent a first priority security interest in
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100% of the capital stock of the Company, as security for the
Lender Indebtedness under the Original Credit Agreement,
substantially in the form of Exhibit F-5;
(vi) Security Agreement (Pledge) dated as of the
STX Effective Date executed by the Company granting to the
Original Administrative Agent a first priority security
interest in 100% of the Capital Stock of the Company's
directly owned U.S. Subsidiaries, as security for the Lender
Indebtedness under the Original Credit Agreement,
substantially in the form of Exhibit F-6;
(vii) Security Agreements (Pledge) dated as of the
STX Effective Date executed by each of the Subsidiary
Guarantors granting to the Original Administrative Agent a
first priority security interest in 65% of the capital stock
of Sterling Pulp and Sterling NRO, as security for the Lender
Indebtedness under the Original Credit Agreement,
substantially in the form of Exhibit F-7;.
(viii) the Deed of Trust substantially in the form
of Exhibit F-8 hereto and dated as of the STX Effective Date;
(ix) The Leasehold Deed of Trust covering the
leasehold estate under the Valdosta Lease substantially in the
form of Exhibit F-9 and dated as of the STX Effective Date;
(x) Collateral Assignment (Intercompany Loans and
Accounts) dated as of the STX Effective Date executed by the
Company, assigning to the Original Administrative Agent the
Company's rights, titles and interests in and to all
intercompany loans and accounts owing to the Company by any of
its Subsidiaries, whether or not evidenced by promissory notes
or other instruments, as security for the Lender Indebtedness
under the Original Credit Agreement, substantially in the form
of Exhibit F-11;
(xi) Collateral Assignments (Intercompany Loans
and Accounts) dated as of the STX Effective Date executed by
each then existing Subsidiary Guarantor, assigning to the
Original Administrative Agent such Subsidiary Guarantor's
rights, titles and interests in and to all intercompany loans
and accounts owing to such Subsidiary Guarantor by the Company
or any of its other Subsidiaries, whether or not evidenced by
promissory notes or other instruments, as security for the
Lender Indebtedness under the Original Credit Agreement,
substantially in the form of Exhibit F-12;
(xii) Financing Statements, as appropriate, to
perfect the security interests created by the instruments
delivered under clauses (iii) through (xii) above;
(xiii) Stock certificates and corresponding stock
powers to perfect the Original Administrative Agent's security
in the stock pledged by the instruments delivered under
clauses (v) and (vii) above;
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(xiv) all Property in which the Original
Administrative Agent shall, at such time, be entitled to have
a Lien pursuant to the Original Credit Agreement or any other
Financing Document shall have been physically delivered to the
possession of the Original Administrative Agent to the extent
that such possession is necessary for the purpose of
perfecting the Original Administrative Agent's Lien in such
Collateral;
(xv) the Stock Intercreditor Agreement dated as of
the STX Effective Date; and
(xvi) the Cash Collateral Agreement substantially
in the form of Exhibit F-13 dated as of the STX Effective
Date.
(e) Insurance. A certificate of insurance coverage,
dated as of the STX Effective Date evidencing that the Company and its
Subsidiaries are carrying insurance in accordance with Section 5.01(e)
hereof. In addition, the Original Administrative Agent shall have
received evidence satisfactory to the Original Administrative Agent
that none of the improved real estate Collateral is situated in an
area that has been identified by the Director of the Federal Emergency
Management Agency (as to such Collateral located in the United States
of America) or any other Governmental Authority as an area having
special flood hazards. Should it be determined, however, that any of
the real estate Collateral is situated in an area identified as having
special flood hazards, the Original Administrative Agent shall have
received a copy of the applicable flood insurance policies (or policy
applications), in form and substance satisfactory to the Required
Original Lenders, indicating that the maximum limits of coverage have
been obtained and that the full premium therefor has been paid in
full.
(f) Title Insurance; Survey. Mortgagee's Policies of
Title Insurance, dated as of the STX Effective Date, in form and
substance satisfactory to the Agents under the Original Credit
Agreement insuring (i) the Lien on the Company's chemical plant in
Texas City, Texas granted pursuant to the Deed of Trust in the amount
of $9,000,000 (and a current survey covering such chemical plant) and
(ii) the Lien granted pursuant to the Leasehold Deed of Trust on the
leasehold estate under the Valdosta Lease, in the amount of $168,000.
(g) Consummation of SCI Acquisition, Merger and SCI Asset
Conveyance. The SCI Acquisition, the Merger and SCI Asset Conveyance
consummated in accordance with the terms of the Merger Agreement and
the Merger Agreement was not amended or modified other than with
express written consent of the Required Original Lenders (except for
amendments that did not materially change the structure of the Merger,
Acquisition or SCI Asset Conveyance as contemplated in the Merger
Agreement as of the STX Closing Date), subject only to the funding of
the Original Loans. The proceeds of the new common equity and
retained equity in Holdco equal to approximately $131,000,000
(assuming the retained equity is valued at $12.00 per share), the
Senior Subordinated Notes and the Senior Secured Discount Notes
necessary to consummate the SCI Acquisition and Merger were received
by the Company or Holdco in amounts and under terms reasonably
satisfactory to the Agents under the Original Credit Agreement and the
Original Lenders. All conditions precedent to the SCI Acquisition,
Merger and SCI Asset Conveyance set
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forth in the Merger Agreement were satisfied and were not amended,
modified or waived since the STX Closing Date, without the express
written consent of the Required Original Lenders. All representations
and warranties made by SCI in the Merger Agreement shall be true and
correct as of the STX Effective Date in all material respects (and SCI
so certified in writing, to the Original Administrative Agent, the
Issuing Banks and the Original Lenders) and were not amended, modified
or waived since the STX Closing Date, without the express written
consent of the Required Original Lenders. All documents, instruments,
agreements, transfers, conveyances and bills of sale necessary for the
SCI Asset Conveyance were in form reasonably satisfactory to the
Original Administrative Agent.
(h) Appraisals. Appraisals shall have been completed, at
the expense of the Company, determining the valueinuse of (i) the
Company's real and personal Property, located at the Texas City, Texas
facility, and (ii) designated personal Property of Sterling Pulp.
(i) Solvency Opinion. A solvency opinion by Houlihan,
Lokey, ▇▇▇▇▇▇ and ▇▇▇▇▇, Inc., dated as of the STX Effective Date,
addressed to the Original Administrative Agent, the Issuing Banks and
the Original Lenders, stating that the Company is Solvent, before and
after giving effect to the SCI Acquisition, Merger and SCI Asset
Conveyance.
(j) Lien Searches. Lien searches reflecting no prior
Liens on the Collateral other than Liens set forth on Schedule
5.04(b).
(k) Repayment of Debt and Release of Liens. Provision
satisfactory to the Agents under the Original Credit Agreement having
been made for the prepayment and refinancing of all Indebtedness of
the Company and its Subsidiaries and termination of commitments
described on Schedule 5.04(a), subject only to making available the
proceeds of the Loans for such prepayment and refinancing and all
Liens identified on Schedule 5.04(b) have been released or
documentation providing for the release of all such Liens shall have
been duly executed by all necessary Persons and provision satisfactory
to the Agents under the Original Credit Agreement shall have been made
for delivery thereof to the Original Administrative Agent upon
repayment of the Indebtedness of the Company and its Subsidiaries
described on Schedule 5.04(a);
(l) Secondary ESOP Loan Documents. Duly completed and
executed copies of the Secondary ESOP Note and the ESOP Security
Agreement.
(m) Financial Statements and Projections. The financial
condition of the Company and SCI reflected in the financial
information and projections of the Company and SCI that were delivered
to the Original Lenders as of the STX Closing Date by the Company,
have not changed as of the STX Effective Date in such a way as to
materially and adversely affect the prospects of the Company or
otherwise cause or result in a Material Adverse Effect (after giving
effect to the Merger and SCI Asset Conveyance).
(n) STX Pilko Report. A certificate of the Company,
dated as of the STX Effective Date, to the effect that to the
Company's best knowledge, no relevant facts, conditions or
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circumstances pertaining to environmental claims or liabilities shall
have arisen that would cause the STX Pilko Report, if deemed to have
been delivered on the STX Effective Date, to contain any material
misstatement of fact, or any omission of any material fact necessary
to make the STX Pilko Report accurate, complete and not misleading,
except to the extent that any such fact, condition, or circumstance
could not reasonably be expected to have a Material Adverse Effect.
(o) ▇▇▇▇▇▇▇▇ Indemnity. The ▇▇▇▇▇▇▇▇ Indemnity shall
remain legal, valid and binding in all respects as of the STX
Effective Date.
(p) Tax Sharing Agreement. The Tax Sharing Agreement
dated as of the STX Effective Date.
Section 3.03 Conditions Precedent to AFB Loans. At the time of
the making by such AFB Lender of its AFB Loans under the AFB Acquisition Credit
Agreement, all obligations of the Company hereunder to the AFB Administrative
Agent or any AFB Lender incurred prior to such AFB Loans, shall have been paid
in full, and the AFB Administrative Agent shall have received the following,
each in form and substance reasonably satisfactory to the Agents under the AFB
Acquisition Credit Agreement and the AFB Lenders, with an original thereof for
the AFB Administrative Agent and with sufficient copies thereof for each AFB
Lender (except that in the case of the Notes, the originals thereof will be
delivered to the respective AFB Lenders):
(a) Notes- A duly completed and executed Note for each
AFB Lender and in each case dated as of the AFB Effective Date, and
payable to the order of such AFB Lender.
(b) Resolutions and Incumbency Certificates-
(i) certified copies of the resolutions of the
Boards of Directors of the Company, Holdco, and any of the
Company's Subsidiaries that are parties to any Financing
Document, dated, as to the Company, as of the AFB Effective
Date, and as to Holdco and the Company's Subsidiaries, as of
the AFB Effective Date, and approving, as appropriate, the
AFB Loans, the Notes, the AFB Acquisition Credit Agreement and
the other Financing Documents, and all other documents, if
any, to which the Company, Holdco or such Subsidiary is a
party and evidencing corporate authorization with respect to
such documents;
(ii) a certificate of the Secretary or an
Assistant Secretary of the Company dated as of the AFB
Effective Date, and certifying (A) the name, title and true
signature of each officer of such Person authorized to execute
the Notes, the AFB Acquisition Credit Agreement, and the other
Financing Documents to which it is a party, (B) the name,
title and true signature of each officer of such Person
authorized to provide the certifications required pursuant to
the AFB Acquisition Credit Agreement including, but not
limited to, certifications required pursuant to Section 5.02,
the Borrowing Request and (C) that attached thereto is a true
and complete copy of the articles of incorporation and bylaws
of the Company, as amended to date, and a recent good standing
certificate; and
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(iii) a certificate of the Secretary or an
Assistant Secretary of Holdco and of each Subsidiary that is a
party to any Financing Document, in each case, dated as of the
AFB Effective Date and certifying (x) the name, title and true
signature of each officer of Holdco or such Subsidiary, as the
case may be, authorized to execute each such Financing
Document to which it is a party, and (y) that attached thereto
is a true and complete copy of the articles of incorporation
and bylaws of Holdco or such Subsidiary, as the case may be,
as amended to date, and a recent good standing certificate for
Holdco or such Subsidiary, as the case may be.
(c) Opinions of Counsel-The following opinions of
counsel, in each case addressed to each of the Agents under the AFB
Acquisition Credit Agreement and the AFB Lenders and covering such
other matters as any AFB Administrative Agent or the AFB Lenders may
reasonably request:
(i) ▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P., counsel to Holdco,
the Company and the Subsidiary Guarantors substantially in the
form of Exhibit E-9 hereto; and
(ii) Local counsel to the Company dated as of the
AFB Effective Date and substantially in the form of Exhibits
E-10 through E-12 as to the laws of Canada and the States of
Georgia and Florida.
(d) The Security Instruments and Guaranties-
(i) Security Agreement executed by Sterling
Fibers substantially in the Form of Exhibit F-14 and dated as
of the AFB Effective Date;
(ii) Santa ▇▇▇▇ Deed of Trust executed by Sterling
Fibers substantially in the form of Exhibit F-15 and dated as
of the AFB Effective Date;
(iii) Limited Guaranty Agreement (Santa ▇▇▇▇)
executed by Sterling Fibers substantially in the form of
Exhibit F-16 and dated as of the AFB Effective Date;
(iv) Collateral Assignment (Intercompany Loans and
Accounts) executed by Sterling Fibers substantially in the
form of Exhibit F-17 dated as of the AFB Effective Date;
(v) Second Lien Deed of Trust executed by the
Company substantially in the form of Exhibit F-10 dated as of
the AFB Effective Date;
(vi) Guaranty Agreement dated as of the AFB
Effective Date substantially in the form of Exhibit K-1
hereto, and executed by the then existing Subsidiary
Guarantors in favor of the Agents under the Original Credit
Agreement and the AFB Acquisition Credit Agreement, the
Issuing Banks, the Original Lenders and the AFB Lenders;
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(vii) Subrogation and Contribution Agreement
substantially in the form of Exhibit K-2 hereto, and dated as
of the AFB Effective Date executed by the Company and the then
existing Subsidiary Guarantors;
(viii) Second Amendment and Supplement to Security
Agreement dated as of the AFB Effective Date executed by the
Company, granting to the Original Administrative Agent a first
priority security interest in all personal Property described
therein, as security for the indebtedness defined therein as
the "Obligations";
(ix) First Amendment and Supplement to Security
Agreements dated as of the AFB Effective Date executed by each
of the then existing Subsidiary Guarantors, granting to the
Original Administrative Agent a first priority security
interest in all personal Property described therein of each
such Person, as security for the indebtedness respectively
defined therein as the "Obligations";
(x) Second Amendment and Supplement to Security
Agreement (Pledge) dated as of the AFB Effective Date executed
by Holdco granting to the Original Administrative Agent a
first priority security interest in 100% of the capital stock
of the Company, as security for the Lender Indebtedness under
the Original Credit Agreement and the AFB Acquisition Credit
Agreement;
(xi) Second Amendment and Supplement to Security
Agreement (Pledge) dated as of the AFB Effective Date executed
by the Company granting to the Original Administrative Agent a
first priority security interest in 100% of the Capital Stock
of the Company's directly owned U.S. Subsidiaries, as security
for the Lender Indebtedness under the Original Credit
Agreement and the AFB Acquisition Credit Agreement;
(xii) First Amendment and Supplement to Security
Agreement (Pledge) dated as of the AFB Effective Date executed
by Sterling Canada granting to the Original Administrative
Agent a first priority security interest in 65% of the capital
stock of Sterling Pulp and Sterling NRO and 100% of the
capital stock of Sterling Pulp Chemicals US, Inc., as security
for the Lender Indebtedness under the Original Credit
Agreement and the AFB Acquisition Credit Agreement;
(xiii) First Amendment and Supplement to Security
Agreement (Pledge) dated as of the AFB Effective Date executed
by Sterling Pulp Chemicals US, Inc. granting to the Original
Administrative Agent a first priority security interest in
100% of the capital stock of Sterling Pulp Chemicals, Inc., as
security for the Lender Indebtedness under the Original Credit
Agreement and the AFB Acquisition Credit Agreement;
(xiv) First Amendment and Supplement to the
Leasehold Deed to Secure Debt and Security Agreement covering
the leasehold estate under the Valdosta Lease and dated as of
the AFB Effective Date;
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(xv) Second Amendment and Supplement to Collateral
Assignment (Intercompany Loans and Accounts) dated as of the
AFB Effective Date executed by the Company, assigning to the
Original Administrative Agent the Company's rights, titles and
interests in and to all intercompany loans and accounts owing
to the Company by any of its Subsidiaries, whether or not
evidenced by promissory notes or other instruments, as
security for the Lender Indebtedness under the Original Credit
Agreement and the AFB Acquisition Credit Agreement;
(xvi) First Amendment and Supplement to Collateral
Assignments (Intercompany Loans and Accounts) dated as of the
AFB Effective Date executed by each Subsidiary Guarantor,
assigning to the Original Administrative Agent such Subsidiary
Guarantor's rights, titles and interests in and to all
intercompany loans and accounts owing to such Subsidiary
Guarantor by the Company or any of its other Subsidiaries,
whether or not evidenced by promissory notes or other
instruments, as security for the Lender Indebtedness under the
Original Credit Agreement and the AFB Acquisition Credit
Agreement;
(xvii) First Amendment and Supplement to Security
Agreement (Pledge-Bonds) dated as of the AFB Effective Date
executed by Sterling Canada granting to the Original
Administrative Agent a first priority security interest in the
Valdosta Bonds;
(xviii) Second Amendment and Supplement to Collateral
Assignment (ESOP) dated as of the AFB Effective Date executed
by the Company in favor of the Original Administrative Agent;
(xix) Security Agreement (ESOP) dated as of the
AFB Effective Date;
(xx) Financing Statements, as appropriate, or
other filings with Governmental Authorities to perfect the
security interests created by the instruments delivered under
clauses (i) through (xix) above;
(xxi) Stock certificates and corresponding stock
powers to perfect the Original Administrative Agent's security
in the capital stock pledged by the Company pursuant to the
instrument delivered under clauses (xi), (xii), (xiii) and
(xiv) above;
(xxii) all Property in which the Administrative
Agent shall, at such time, be entitled to have a Lien pursuant
to this Agreement or any other Financing Document shall have
been physically delivered to the possession of the
Administrative Agent to the extent that such possession is
necessary for the purpose of perfecting such Lien in such
Collateral; and
(xxiii) the Intercreditor Agreement dated as of the
AFB Effective Date.
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(e) Insurance. A certificate of insurance coverage,
dated as of the AFB Effective Date evidencing that the Company and its
Subsidiaries are carrying insurance in accordance with Section 5.01(e)
hereof. In addition, the AFB Administrative Agent shall have received
evidence satisfactory to the AFB Administrative Agent that none of the
improved real estate Collateral is situated in an area that has been
identified by the Director of the Federal Emergency Management Agency
(as to such Collateral located in the United States of America) or any
other Governmental Authority as an area having special flood hazards.
Should it be determined, however, that any of the real estate
Collateral is situated in an area identified as having special flood
hazards, the AFB Administrative Agent shall have received a copy of
the applicable flood insurance policies (or policy applications), in
form and substance satisfactory to the Required Lenders, indicating
that the maximum limits of coverage have been obtained and that the
full premium therefor has been paid in full.
(f) Title Insurance; Survey. Mortgagee's Policy of Title
Insurance in form and substance satisfactory to the Original
Administrative Agent insuring the Lien on the Santa ▇▇▇▇ Plant in
Santa ▇▇▇▇ County, Florida granted pursuant to the Santa ▇▇▇▇ Deed of
Trust in the amount of $14,500,000 and a current survey covering the
Santa ▇▇▇▇ Plant.
(g) Consummation of AFB Acquisition. The AFB Acquisition
shall have been consummated in accordance with the terms of the
Purchase Agreement and the Purchase Agreement shall not have been
amended or modified other than with express written consent of the
Required AFB Lenders (except for amendments that do not materially
change the terms of the AFB Acquisition as contemplated in the
Purchase Agreement as of December 23, 1996), subject only to the
funding of the AFB Loans. All conditions precedent to the AFB
Acquisition set forth in the Purchase Agreement shall have been
satisfied and shall not have been amended, modified or waived since
December 23, 1996 without the express written consent of the AFB
Lenders. All representations and warranties made by the Cytec Parties
in the Purchase Agreement shall be true and correct as of the AFB
Effective Date in all material respects and shall not have been
amended, modified or waived since the AFB Effective Date, without the
express written consent of the AFB Lenders. All documents,
instruments, agreements, transfers, conveyances and bills of sale
necessary for the AFB Acquisition shall be in form reasonably
satisfactory to the AFB Administrative Agent.
(h) Appraisals. Appraisals shall have been completed, at
the expense of the Company, determining the value-in-use of the real
and personal Property to be acquired in the AFB Acquisition.
(i) Lien Searches. Lien searches reflecting no prior
Liens on the Collateral other than Liens set forth on Schedule
5.04(b).
(j) Financial Statements and Projections. The financial
condition of the Company reflected in the financial information and
projections of the Company that were delivered to the Lenders on or
before January 6, 1997, by the Company have not changed in such a way
as to
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materially and adversely affect the prospects of the Company or
otherwise cause or result in a Material Adverse Effect (after giving
effect to the AFB Acquisition).
(k) AFB Pilko Report. A copy of the AFB Pilko Report and
a certificate of the Company, dated as of the AFB Effective Date, to
the effect that to the Company's best knowledge, no relevant facts,
conditions or circumstances pertaining to environmental claims or
liabilities shall have arisen that would cause the AFB Pilko Report,
if deemed to have been delivered on the AFB Effective Date, to contain
any material misstatement of fact, or any omission of any material
fact necessary to make the AFB Pilko Report accurate, complete and not
misleading, except to the extent that any such fact, condition, or
circumstance could not reasonably be expected to have a Material
Adverse Effect.
(l) ▇▇▇▇▇▇▇▇ Indemnity. The ▇▇▇▇▇▇▇▇ Indemnity shall
remain legal, valid and binding in all respects as of the AFB
Effective Date.
(m) Additional Equity. Evidence of the receipt by Holdco
of at least $10,000,000 of new common equity comprised of (i) at least
$9,700,000 of additional cash equity (and contributed by Holdco to the
Company and contributed or loaned by the Company to Sterling Fibers of
such cash equity) and (ii) up to $300,000 of Equity Notes, in each
case on terms and conditions satisfactory to the AFB Administrative
Agent.
(n) Issuance of Preferred Stock. Evidence satisfactory
to the AFB Administrative Agent of the issuance by Holdco of 100,000
shares of Preferred Stock to Cytec Industries on terms and conditions
as set forth in Exhibit L-1.
(o) STX First Amendment An executed copy of the STX
First Amendment in form and substance satisfactory to the AFB
Administrative Agent.
(p) Conditions to Funding Under the Original Credit
Agreement. A certificate from the Company certifying that the
conditions precedent set forth in Section 3.04(a), (b) and (c) of the
Original Credit Agreement are satisfied as of the AFB Effective Date.
(q) Annual Budget. A copy of the annual budget of the
Company and its Subsidiaries (consolidating on the basis of the
principal lines of business of the Company and its Subsidiaries)
setting forth in reasonable detail the projected revenues and expenses
of the Company for the Fiscal Year ending on September 30, 1997 (which
budget does not include provision for the AFB Acquisition).
(r) No Default. Both before and after giving effect to
the AFB Loans and the proposed use of proceeds thereof, there shall
exist no Default;
(s) Representations and Warranties. Both before and
after giving effect to the AFB Loans and the proposed use of proceeds
thereof, all representations and warranties contained herein and in
the other Financing Documents executed and delivered on or after the
date hereof
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shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on
and as of the date of such AFB Loan (unless such representation and
warranty is expressly limited to an earlier date or is no longer true
and correct solely as a result of transactions not prohibited by the
Financing Documents); and
(t) Documentation. The AFB Administrative Agent shall
have received such other documents as the AFB Administrative Agent (or
any AFB Lender acting through the AFB Administrative Agent) may
reasonably request, all in form and substance reasonably satisfactory
to the Administrative Agent.
Section 3.04 Conditions Precedent to Each Loan. At the time of
the making by such Lender of each Loan, including the initial Loan but not
including continuations or conversions pursuant to Section 2.11 (before as well
as after giving effect to such Loan and to the proposed use of the proceeds
thereof):
(a) No Default. There shall exist no Default;
(b) Representations and Warranties. All representations
and warranties contained herein and in the other Financing Documents
executed and delivered on or after the date hereof shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of
such Loan (unless such representation and warranty is expressly
limited to an earlier date or is no longer true and correct solely as
a result of transactions not prohibited by the Financing Documents);
and
(c) Documentation. The Administrative Agent shall have
received such other documents as the Administrative Agent (or any
Lender acting through the Administrative Agent) may reasonably
request, all in form and substance reasonably satisfactory to the
Administrative Agent.
Each Borrowing Request submitted by the Company, and the acceptance by
the Company of the proceeds of such Borrowing (but not including continuations
or conversions pursuant to Section 2.11), shall constitute a representation and
warranty by the Company, as of the date of such Borrowing, that the conditions
specified in Subsections 3.04(a) and (b) have been satisfied.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement, the
Company represents and warrants to the Lenders (which representations and
warranties (i) will survive the delivery of the Notes, (ii) made by the Company
as of the STX Closing Date, were made assuming that the SCI Acquisition,
Merger, and SCI Asset Conveyance had occurred on or before the STX Closing Date
and (iii) made by the Company as of
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the AFB Effective Date, were made assuming that the AFB Acquisition had
occurred on or before the AFB Effective Date) that:
Section 4.01 Corporate Existence. The Company and each of its
Subsidiaries are corporations duly organized, legally existing and in good
standing under the laws of the jurisdictions in which they are incorporated and
are duly qualified as foreign corporations in all jurisdictions wherein the
Property owned or the business transacted by them makes such qualification
necessary, except where the failure to be so qualified would not have a
Material Adverse Effect.
Section 4.02 Corporate Power and Authorization. The Company is
authorized and empowered to create and issue the Notes; the Company and each of
its Subsidiaries are duly authorized and empowered to execute, deliver and
perform the Financing Documents, including this Agreement, to which they
respectively are parties; and all corporate action on the Company's part
requisite for the due creation and issuance of the Notes on the Company's and
each of its Subsidiaries' respective part requisite for the due execution,
delivery and performance of the Financing Documents, including this Agreement,
to which the Company and each of its Subsidiaries respectively are parties has
been duly and effectively taken.
Section 4.03 Binding Obligations. This Agreement does, and the
Notes and other material Financing Documents to which the Company and each of
its Subsidiaries respectively are parties upon their creation, issuance,
execution and delivery will, when issued and delivered under this Agreement,
constitute legal, valid and binding obligations of the Company and each such
Subsidiary that is a party thereto, respectively, and will be enforceable in
accordance with their respective terms (except that enforcement may be subject
to any applicable bankruptcy, insolvency or similar laws generally affecting
the enforcement of creditors' rights and subject to the availability of
equitable remedies).
Section 4.04 No Legal Bar or Resultant Lien. The execution,
delivery and performance of the Notes and the other Financing Documents,
including this Agreement, to which the Company or any of its Subsidiaries is a
party do not and will not violate or create a default under any provisions of
the articles or certificate of incorporation or bylaws of the Company or any of
its Subsidiaries, or any contract, agreement, instrument or Governmental
Requirement to which the Company or any of its Subsidiaries is subject, or
result in the creation or imposition of any Lien upon any Properties of the
Company or any of its Subsidiaries, other than those violations and defaults
that would not have a Material Adverse Effect upon the Company's or such
Subsidiaries' use of such Properties or those permitted by this Agreement.
Section 4.05 No Consent. The Company's and each of its
Subsidiaries' respective execution, delivery and performance of the Notes and
the other Financing Documents, including this Agreement, to which the Company
and each such Subsidiary respectively are parties, and the consummation of the
Merger, the SCI Acquisition, the AFB Acquisition, and the Saskatoon Acquisition
do not require notice to or filing or registration with, or the authorization,
consent or approval of or other action by any other Person, including, but not
limited to, any Governmental Authority, except those obtained or made or where
the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
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Section 4.06 Financial Information.
(a) Financial Statements. The March 31, 1996 pro forma
consolidated financial statements of the Company heretofore delivered
to the Lenders were prepared consistent with GAAP and present the
estimated consolidated financial condition and operations of the
Company at such date and the results of its operations for the
six-month period then ended on a pro forma basis.
(b) Audited Financial Statements. The audited
consolidated balance sheets of the Company and its Subsidiaries as of
September 30, 1995 and 1996, and the related audited consolidated
statements of income, retained earnings and cash flows for the years
then ended, including in each case the related schedules and notes,
reported on by, in the case of the 1995 financial statements, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, and in the case of the 1996 financial statements,
Deloitte & Touche LLP, true copies of which have been previously
delivered to each of the Lenders, fairly present the consolidated
financial condition of the Company and its Subsidiaries as of the
dates thereof and the consolidated results of operations for such
periods, in accordance with GAAP applied on a consistent basis.
(c) No Material Adverse Effect. Since September 30,
1995, there has been no event or occurrence that could reasonably be
expected to have a Material Adverse Effect.
Section 4.07 Investments and Guaranties. Neither the Company nor
any of its Subsidiaries has made investments in or advances to any Person or
guaranties of the obligations of any Person that is not a Subsidiary of the
Company, except those permitted by Section 5.04, reflected in the Financial
Statements or described in Schedule 4.07.
Section 4.08 Litigation. Except as set forth in Schedule 4.08,
there is no material action, suit or proceeding, or any material governmental
investigation or any arbitration, in each case pending or, to the knowledge of
the Company, threatened against the Company or any of its Subsidiaries
(excluding Unrestricted Subsidiaries) or any material Property of any thereof
before any court or arbitrator or any Governmental Authority. There is no
material action, suit or proceeding, or any material governmental investigation
or any arbitration, in each case pending or, to the knowledge of the Company,
threatened against any Unrestricted Subsidiary or any material Property of any
Unrestricted Subsidiary before any court or arbitrator or any Governmental
Authority that could reasonably be expected to have a Material Adverse Effect.
There is no action, suit or proceeding, or any governmental investigation or
any arbitration, in each case pending or, to the knowledge of the Company,
threatened against the Company or any of its Subsidiaries or any material
Property of any thereof before any court or arbitrator or any Governmental
Authority which (i) challenges the validity of this Agreement, any Note, any
Application, the Subsidiary Guaranty or any of the other Financing Documents or
(ii) could reasonably be expected to have a Material Adverse Effect.
Section 4.09 Use of Proceeds. The Company will use the proceeds
of the Loans only for the purposes specified in the Introductory Statement to
this Agreement. The Letters of Credit will be used only for the purposes
provided in Section 2.03. Neither the Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock (within the
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meaning of Regulations, G, U or X) and no part of the proceeds of any Loan
hereunder will be used to buy or carry any Margin Stock in violation of
Regulation G, U, or X. Neither the Company nor any Person acting on behalf of
the Company has taken or will take any action which could reasonably be
expected to cause the Notes or any of the Financing Documents, including this
Agreement, to violate Regulations G, U or X or any other regulation of the
Board of Governors of the Federal Reserve System, in each case as now in effect
or as the same may hereinafter be in effect.
Section 4.10 Employee Benefits.
(a) Except as could not reasonably be expected to have a
Material Adverse Effect (i) the Company, its Subsidiaries and each
ERISA Affiliate have complied in all material respects with all
applicable laws regarding each Plan (including, where applicable,
ERISA, the Code, the Pension Benefits Act (Ontario), and the Income
Tax Act (Canada)); (ii) each Plan is, and has been, maintained and
administered in substantial compliance with its terms, applicable
collective bargaining agreements, and all applicable laws (including,
where applicable, ERISA, the Code, the Pension Benefits Act (Ontario),
and the Income Tax Act (Canada)); and (iii) no act, omission or
transaction has occurred which could result in imposition on the
Company, any Subsidiary of the Company or any ERISA Affiliate (whether
directly or indirectly) of (A) either a civil penalty assessed
pursuant to Subsections (c), (i) or (l) of Section 502 of ERISA or a
tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (B)
breach of fiduciary duty liability damages under Section 409 of ERISA.
(b) There exists no material outstanding liability of the
Company, any of its Subsidiaries or any ERISA Affiliate with respect
to any Plan that has been terminated. No material liability to the
PBGC (other than for the payment of current premiums which are not
past due) by the Company, any Subsidiary of the Company or any ERISA
Affiliate has been or is expected by the Company, any Subsidiary of
the Company or any ERISA Affiliate to be incurred with respect to any
Plan. No ERISA Termination Event with respect to any Plan has
occurred or is reasonably expected to occur (other than an event
described in clause (i) or (ii) of the definition of "ERISA
Termination Event" that could not reasonably be expected to have a
Material Adverse Effect).
(c) Full payment when due has been made of all amounts
which the Company, any of its Subsidiaries or any ERISA Affiliate is
required under the terms of each Plan or applicable law to have paid
as contributions to such Plan (excluding any nonpayment involving an
amount that is not material), and no accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists with respect to any Plan.
(d) With respect to any Plan that is a pension plan
subject to the Pension Benefits Act (Ontario), such Plan is fully
funded, on a going concern basis, in accordance with its terms and
regulatory requirements as outlined by the Pension Benefits Act
(Ontario), administrative requirements of the Pension Commission of
Ontario and the most recent actuarial report filed with the Pension
Commission of Ontario in respect of such Plan except to the extent any
failure to do so could not reasonably be expected to have a Material
Adverse Effect.
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(e) The actuarial present value of the benefit
liabilities (computed on an accumulated benefit obligation basis in
accordance with GAAP) under all Plans in the aggregate that are
subject to Title IV of ERISA does not, as of the end of the most
recently ended fiscal year of such Plans, exceed the current value of
the assets of all Plans in the aggregate that are allocable to such
benefit liabilities by (i) an amount that could reasonably be expected
to cause a Material Adverse Effect, if such excess is the result of a
change in market conditions, and (ii) more than $10,000,000 if such
excess is for any other reason. The term "actuarial present value of
the benefit liabilities" shall have the meaning specified in Section
4041 of ERISA.
(f) Except as expressly permitted pursuant to Sections
5.04(i)(v) and (vi), neither the Company, any Subsidiary of the
Company nor any ERISA Affiliate sponsors, maintains or contributes to,
or has at any time in the preceding six-year period sponsored,
maintained or contributed to, (i) any "multiemployer plan" (as defined
in Section 3(37) or 4001(a)(3) of ERISA) or (ii) any "multiemployer
pension plan" (as defined in the Pension Benefits Act (Ontario)).
(g) Neither the Company, any Subsidiary of the Company
nor any ERISA Affiliate is required to provide security to a Plan
pursuant to Section 401(a)(29) of the Code.
(h) The execution and delivery of the Financing Documents
and the Secondary ESOP Loan Documents, the consummation of the
Transactions and the transactions provided for in and contemplated by
the Secondary ESOP Loan Documents, and the lending of funds pursuant
to the provisions of the Financing Documents and the Secondary ESOP
Loan Documents will not involve or give rise to any nonexempt
prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code.
Section 4.11 Taxes; Governmental Charges. The Company and its
Subsidiaries have filed all tax returns and reports required to be filed and
have paid all taxes, assessments, fees and other governmental charges levied
upon any of them or upon any of their respective Properties or income which are
due and payable, including interest and penalties, except where failure to so
pay or file would not have a Material Adverse Effect, or have provided adequate
reserves for the payment thereof if required in accordance with GAAP for the
payment thereof, except such interest and penalties as are being contested in
good faith by appropriate actions or proceedings and for which adequate
reserves for the payment thereof as required by GAAP have been provided.
Section 4.12 Titles, etc. The Company and its Subsidiaries have
indefeasible title to their respective material (individually or in the
aggregate) Properties, and with respect to leased Properties, indefeasible
title to the leasehold estate with respect thereto, pursuant to valid and
enforceable leases, free and clear of all Liens except (i) Liens disclosed to
the Lenders in Schedule 4.12, (ii) in addition to the Liens disclosed in
Schedule 4.12, other Liens and minor irregularities in title which do not
materially interfere with the occupation, use and enjoyment by the Company or
any Subsidiary of the Company of any of their respective Properties in the
normal course of business as presently conducted or materially impair the value
thereof for such business, (iii) Liens otherwise permitted or contemplated by
this Agreement or the other Financing Documents and (iv) where the failure of
an Unrestricted Subsidiary to hold indefeasible title to its Properties would
not have a Material Adverse Effect.
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Section 4.13 Defaults. Neither the Company nor any of its
Subsidiaries is in default nor has any event or circumstance occurred which,
but for the passage of time or the giving of notice, or both, would constitute
a default (in any respect that would have a Material Adverse Effect) under any
loan or credit agreement, indenture, mortgage, deed of trust, security
agreement or other instrument or agreement evidencing or pertaining to any
Indebtedness of the Company or any of its Subsidiaries, or under any material
agreement or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound, except as
disclosed to the Lenders in Schedule 4.13. No Default hereunder has occurred
and is continuing.
Section 4.14 Casualties; Taking of Properties. Since September
30, 1995, neither the business nor the Properties of the Company or any of its
Subsidiaries have been affected in a manner that has had or would have a
Material Adverse Effect as a result of any fire, explosion, earthquake, flood,
drought, windstorm, accident, strike or other labor disturbance, embargo,
requisition or taking of Property or cancellation of contracts, permits or
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces or acts of God or of any public enemy.
Section 4.15 Compliance with the Law. Neither the Company nor any
of its Subsidiaries:
(a) is in violation of any Governmental Requirement; and
(b) has failed to obtain any license, permit,
right-of-way, franchise or other right or governmental authorization
necessary to the ownership of any of their respective Properties or
the conduct of their respective business;
which violation or failure would have (in the event that such a violation or
failure were asserted by any Person through appropriate action) a Material
Adverse Effect.
Section 4.16 No Material Misstatements. No written information,
exhibit, schedule or report prepared by or on behalf of the Company and
furnished to the Agent or the Lenders by or at the direction of the Company or
any of its Subsidiaries in connection with the negotiation of this Agreement
contained any material misstatement of fact or, when such statement is
considered with all other written statements furnished to the Lenders in that
connection, omitted to state a material fact or any fact necessary to make the
statement contained therein not misleading; provided, that, the financial
information with respect to the Company's projections, copies of which have
been furnished to each Lender prior to the Restated Closing Date, were prepared
in good faith on the basis of the assumptions stated therein, which assumptions
were believed by the Company to be reasonable in all material respects at the
time made.
Section 4.17 Investment Company Act. The Company is not an
"investment company" or a company "controlled" by an "investment company" that
is incorporated in or organized under the laws of the United States or any
"State," as those terms are defined in the Investment Company Act of 1940, as
amended. The execution and delivery by the Company and its Subsidiaries of
this Agreement and the other Financing Documents to which they respectively are
parties and their respective performance of the obligations provided for
therein, will not result in a violation of the Investment Company Act of 1940,
as amended.
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Section 4.18 Public Utility Holding Company Act. The Company is
not a "holding company," or a "subsidiary company" of a "holding company," or
an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 4.19 Subsidiaries. As of the STX Closing Date, the
Company has no Subsidiaries except those shown in Schedule 4.19 hereto, which
schedule was complete and accurate on such date. As of the AFB Effective Date,
the Company has no Subsidiaries except those shown in Schedule 4.19-A hereto,
which schedule was complete and accurate on such date. As of the Restated
Closing Date, the Company has no Subsidiaries except those shown in Schedule
4.19-B hereto, which schedule is complete and accurate. The Company owns,
either directly or indirectly, 100% of all stock of the Subsidiaries listed in
such Schedules.
Section 4.20 Insurance. All policies of fire, liability,
workmen's compensation, casualty, flood, business interruption and other forms
of insurance owned or held by the Company, and each of its Subsidiaries are
sufficient for compliance with all requirements of law and of all agreements to
which the Company or any of its Subsidiaries is a party; are valid, outstanding
and enforceable policies; provide adequate insurance coverage in at least such
amounts and against at least such risks (but including in any event public
liability) as are usually insured against in the same general area by companies
engaged in the same or a similar business for the assets and operations of the
Company and each of its Subsidiaries; and will not in any way be affected by,
or terminate or lapse by reason of, the transactions contemplated by this
Agreement. All such material policies are in full force and effect, all
premiums with respect thereto have been paid in accordance with their
respective terms, and no notice of cancellation or termination has been
received with respect to any such policy. Neither the Company nor any of its
Subsidiaries maintains any formalized self insurance program with respect to
its assets or operations or material risks with respect thereto in excess of
$5,000,000 in the aggregate. The certificate of insurance delivered to the
Lenders pursuant to Section 3.01(b)(vi) contains an accurate and complete
description of all material policies of insurance owned or held by the Company
and each of its Subsidiaries on the Restated Closing Date.
Section 4.21 Environmental Matters. Except as disclosed to the
Lenders in the STX Pilko Report or the AFB Pilko Report:
(a) Environmental Laws, etc. Neither any Property of the
Company or its Subsidiaries nor the operations conducted thereon
violate any applicable order of any court or Governmental Authority or
Environmental Laws, which violation could reasonably be expected to
have a Material Adverse Effect or which could reasonably be expected
to result in remedial obligations having a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all
relevant facts, conditions and circumstances, if any, pertaining to
the relevant Property.
(b) No Litigation. Without limitation of Subsection (a)
above, no Property of the Company or its Subsidiaries nor the
operations currently conducted thereon or by any prior owner or
operator of such Property or operation, are in violation of or subject
to any existing, pending or threatened action, suit, investigation,
inquiry or proceeding by or before any court or
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Governmental Authority or to any remedial obligations under
Environmental Laws, which violation, action, suit, investigation,
inquiry or proceeding could reasonably be expected to have a Material
Adverse Effect or which could reasonably be expected to result in
remedial obligations having a Material Adverse Effect assuming
disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to the
relevant Property.
(c) Notices, Permits, etc. All notices, permits,
licenses or similar authorizations, if any, required to be obtained or
filed by the Company or its Subsidiaries in connection with the
operation or use of any and all Property of the Company or its
Subsidiaries, including but not limited to past or present treatment,
storage, disposal or release of a hazardous substance or solid waste
into the environment, have been duly obtained or filed except to the
extent the failure to obtain or file such notices, permits, licenses
or similar authorizations could not reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to
result in remedial obligations having a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all
relevant facts, conditions and circumstances, if any, pertaining to
the relevant Property.
(d) Hazardous Substances Carriers. All hazardous
substances or solid waste generated at any and all Property of the
Company or its Subsidiaries have in the past been transported, treated
and disposed of only by carriers maintaining valid permits under RCRA
and any other Environmental Law, except to the extent the failure to
have such substances or waste transported, treated or disposed by such
carriers could not reasonably be expected to have a Material Adverse
Effect, and only at treatment, storage and disposal facilities
maintaining valid permits under RCRA and any other Environmental Law,
which carriers and facilities have been and are operating in
compliance with such permits, except to the extent the failure to have
such substances or waste treated, stored or disposed at such
facilities, or the failure of such carriers or facilities to so
operate, could not reasonably be expected to have a Material Adverse
Effect or which could reasonably be expected to result in remedial
obligations having a Material Adverse Effect assuming disclosure to
the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to the relevant
Property.
(e) Hazardous Substances Disposal. The Company and its
Subsidiaries have taken all reasonable steps necessary to determine
and have determined that no hazardous substances or solid waste have
been disposed of or otherwise released and there has been no
threatened release of any hazardous substances on or to any Property
of the Company or its Subsidiaries except in compliance with
Environmental Laws, except to the extent the failure to do so could
not reasonably be expected to have a Material Adverse Effect or which
could reasonably be expected to result in remedial obligations having
a Material Adverse Effect assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.
(f) No Contingent Liability. The Company and its
Subsidiaries have no material contingent liability in connection with
any release or threatened release of any hazardous substance or solid
waste into the environment other than such contingent liabilities at
any one time and from
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time to time which could reasonably be expected to exceed $10,000,000
in excess of applicable insurance coverage and for which adequate
reserves for the payment thereof as required by GAAP have not been
provided, or which could reasonably be expected to result in remedial
obligations having a Material Adverse Effect assuming disclosure to
the applicable Governmental Authority of all relevant facts,
conditions and circumstances, if any, pertaining to such release or
threatened release.
Section 4.22 Solvency. The Company and its Subsidiaries, taken as
a whole, and the Company and each of its material Subsidiaries (excluding
Unrestricted Subsidiaries) are Solvent, both before and after taking into
account the SCI Acquisition, the Merger, the AFB Acquisition and the Saskatoon
Acquisition.
Section 4.23 Material Contracts. As of the Restated Closing Date,
each of the Material Contracts is in full force and effect. Neither the
Company nor any of its Subsidiaries is in default under or in breach of any
term or condition of any Material Contract that would have a Material Adverse
Effect, nor is it aware of any default under or breach of any term or condition
of any Material Contract by any other party thereto that would have a Material
Adverse Effect.
Section 4.24 Employee Matters. Except as set forth on Schedule
4.24, as of the Restated Closing Date, none of the Company or its Subsidiaries
(excluding Unrestricted Subsidiaries), or any of their respective employees, is
subject to any collective bargaining agreement. There are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
the Company, threatened against the Company or its Subsidiaries, or their
respective employees, which could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. Except as set
forth in Schedule 4.24, none of the Company nor any of its Subsidiaries
(excluding Unrestricted Subsidiaries) is subject to an employment contract.
Section 4.25 Senior Indebtedness. The Lender Indebtedness
constitutes "Senior Debt" of the Company under and as defined in the Senior
Subordinated Notes Indenture and the Additional Senior Subordinated Notes
Indenture.
Section 4.26 Unrestricted Subsidiary Qualification. Each of
▇▇▇▇▇▇▇▇ ▇▇▇, Sask Holdings and Sterling Sask complies with the requirements of
a Subsidiary to be designated as an Unrestricted Subsidiary as set forth in
clause (b) of the definition of Unrestricted Subsidiary set forth in Section
1.01.
ARTICLE V
COVENANTS
Section 5.01 Certain Affirmative Covenants. So long as any Lender
has any Commitment hereunder or any Loan remains unpaid or any Revolving Credit
Exposure remains outstanding, the Company will at all times comply with the
following covenants:
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(a) Maintenance and Compliance, etc. The Company will
and will cause each of its Subsidiaries to (i) except as permitted by
Section 5.04(c) and except with respect to Unrestricted Subsidiaries,
preserve and maintain its corporate existence, and (ii) except where
failure to do so could not reasonably be expected to have a Material
Adverse Effect, observe and comply with all Governmental Requirements.
(b) Payment of Taxes and Claims, etc. The Company will
pay, and cause each of its Subsidiaries to pay, (i) all material
taxes, assessments and governmental charges imposed upon it or upon
its Property, and (ii) all material claims (including, but not limited
to, claims for labor, materials, supplies or services) which could
reasonably be expected, if unpaid, to become a Lien upon its Property,
unless, in each case, the validity or amount thereof is being
contested in good faith by appropriate action or proceedings and the
Company has established adequate reserves in accordance with GAAP with
respect thereto.
(c) Further Assurances. The Company will and will cause
each of its Subsidiaries to cure promptly any defects in the creation
and issuance of the Notes, and the execution and delivery of the
Financing Documents, including this Agreement. The Company at its
expense will, as promptly as practical, execute and deliver to the
Administrative Agent or the applicable Issuing Bank upon request all
such other and further documents, agreements and instruments (or cause
any of its Subsidiaries to take such action) in compliance with or
performance of the covenants and agreements of the Company or any of
its Subsidiaries in the Financing Documents, including this Agreement,
or to further evidence and more fully describe the Collateral, or to
correct any omissions in the Financing Documents, or more fully to
state the security obligations set out herein or in any of the
Financing Documents, or to perfect, protect or preserve any Liens
created pursuant to any of the Financing Documents, or to make any
recordings, to file any notices, or obtain any consents, all as may be
necessary or appropriate in connection therewith.
(d) Performance of Obligations. The Company will pay the
Notes according to the reading, tenor and effect thereof; and the
Company will do and perform every act and discharge all of the
obligations provided to be performed and discharged by the Company
under the Financing Documents, including this Agreement, at the time
or times and in the manner specified, and cause each of its
Subsidiaries to take such action with respect to their obligations to
be performed and discharged under the Financing Documents to which
they respectively are parties.
(e) Insurance. The Company will and will cause each of
its Subsidiaries to maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to
their respective Properties and business against such liabilities,
casualties, risks and contingencies and in such types (including
business interruption insurance and flood insurance) and amounts as is
customary in the case of Persons engaged in the same or similar
businesses and similarly situated and in accordance with any
Governmental Requirement. In the case of any fire, accident or other
casualty causing loss or damage to any Properties of the Company and
its Subsidiaries (excluding Unrestricted Subsidiaries) used in
generating cash flow or required by applicable law, the proceeds of
such policies in excess of $100,000 per occurrence shall be used to
promptly repair or replace any such damaged Properties as required by
applicable law, and otherwise shall be used
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in the Company's sole discretion, (i) to reasonably promptly repair or
replace the damaged Property, (ii) to prepay the Term Loans in
accordance with Section 2.10(c), or (iii) to reinvest in other
Properties that, in the good faith judgment of the Company, meet the
Company's capital investment criteria. The Company will obtain
endorsements to the policies pertaining to all physical Properties in
which the Administrative Agent or the Lenders shall have a Lien under
the Financing Documents, naming the Administrative Agent as a loss
payee and containing provisions that such policies will not be
cancelled without 30 days prior written notice having been given by
the insurance company to the Administrative Agent.
(f) Accounts and Records. The Company will keep and will
cause each of its Subsidiaries to keep proper books of record and
account in accordance with GAAP.
(g) Right of Inspection. The Company will permit and
will cause each of its Subsidiaries to permit any officer, employee or
agent of the Administrative Agent (and during the continuance of any
Default, any of the Lenders) to visit and inspect any of the
Properties of the Company or any of its Subsidiaries, examine the
Company's or any such Subsidiary's books of record and accounts, take
copies and extracts therefrom, and discuss the affairs, finances and
accounts of the Company or any of its Subsidiaries with the Company's
or such Subsidiary's officers, accountants and auditors, as often and
all at such reasonable times during normal business hours as may be
reasonably requested by the Administrative Agent or any of the
Lenders.
(h) Operation and Maintenance of Property. The Company
will, and will cause each of its Subsidiaries to, operate its
Properties or cause its Properties to be operated and maintained (i)
in accordance with prudent industry practice in all material respects
and in compliance in all material respects with the terms and
provisions of all applicable leases, contracts and agreements and (ii)
except where the noncompliance therewith could not reasonably be
expected to cause or result in a Material Adverse Effect, in
compliance with all applicable laws of the jurisdiction in which such
Properties may be situated, and all applicable laws, rules and
regulations of every other Governmental Authority from time to time
constituted to regulate the ownership and operation of such
Properties.
(i) Additional Subsidiaries; Permitted Acquisitions;
Additional Liens.
(i) If at any time after the Restated Closing Date the
Company or its Subsidiaries create or acquire any one or more
additional Subsidiaries (except for Unrestricted Subsidiaries):
(A) the Company shall, and shall cause its U.S.
Subsidiaries, to execute and deliver to the Administrative
Agent, at the time of such new Subsidiary's creation or
acquisition, additional pledge agreements granting a security
interest in, (1) if such new Subsidiary is a U.S. Subsidiary,
100% of the capital stock of, and other equity interest in,
such Subsidiary owned by the Company or any such U.S.
Subsidiary, respectively, or (2) if such new Subsidiary is not
a U.S. Subsidiary, 65% or the capital stock of, and other
equity interest in, such Subsidiary owned by the Company or
any such U.S. Subsidiary, respectively, in each case in
substantially the same form as the Pledge Agreement
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executed by the Company or its U.S. Subsidiaries, as
applicable, in connection with this Agreement; and
(B) if such new Subsidiary is a wholly-owned
(directly or indirectly) U.S. Subsidiary, the Company shall
cause such new Subsidiary to execute and deliver to the
Administrative Agent, at the time of such Subsidiary's
creation or acquisition, (1) a guaranty agreement in
substantially the same form as the Guaranty Agreement executed
by the Subsidiary Guarantors in connection with this
Agreement, and (2) appropriate mortgages and security
agreements and the like covering such Subsidiary's Property;
provided that, if such new Subsidiary does not have, but only for so
long as such new Subsidiary does not have, assets of more than
$50,000, the Company shall not be required to comply with this Section
5.01(i) with respect to such Subsidiary.
(ii) If at any time after the Restated Closing Date the
Company or any of its Subsidiaries (excluding Unrestricted
Subsidiaries) makes a Permitted Acquisition with respect to a Person
that is not a Subsidiary, the Company shall, and shall cause its U.S.
Subsidiaries, to execute and deliver to the Administrative Agent at
the time of such Permitted Acquisition, additional pledge agreements
granting a security interest in 100% of the capital stock of, or other
equity interest in, such Person owned by the Company or any such U.S.
Subsidiary, respectively, in each case in substantially the same form
as the Pledge Agreement executed by the Company or its U.S.
Subsidiaries, as applicable, in connection with this Agreement.
(iii) In connection with the execution and delivery of any
guaranty agreement, pledge agreement, mortgage, security agreement or
similar agreement pursuant to this Section 5.01(i), the Company shall,
or shall cause the relevant Subsidiary to, deliver to the Lenders such
corporate resolutions, certificates, legal opinions and such other
related documents as shall be reasonably requested by the Required
Lenders and consistent with the relevant forms and types thereof
delivered on the STX Effective Date or the AFB Effective Date or as
shall be otherwise reasonably acceptable to the Required Lenders.
Each guaranty agreement, pledge agreement, mortgage, security
agreement and the like delivered pursuant to this Section 5.01(i)
shall be deemed to be a Security Instrument from and after the date of
execution thereof.
(j) Non-Consolidation of Unrestricted Subsidiaries The
Company will, and shall cause each of its Subsidiaries (excluding
Unrestricted Subsidiaries) to, be operated at all times in such a
manner that its assets and liabilities may not be substantively
consolidated with those of any Unrestricted Subsidiary in the event of
the bankruptcy or insolvency of such Unrestricted Subsidiary. In this
regard, the Company shall, and shall cause that each of its
Subsidiaries (excluding Unrestricted Subsidiaries) shall:
(i) not (A) consolidate or merge with or into any
Unrestricted Subsidiary or (B) sell, lease or otherwise
transfer, directly or indirectly, all or substantially all of
its assets to any Unrestricted Subsidiary;
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(ii) subject to Section 5.04 (e), engage only in
investments in Limited Liability Interests and matters
necessarily incident thereto;
(iii) maintain corporate records and books of
account separate from each Unrestricted Subsidiary;
(iv) maintain its assets separately from the
assets of any Unrestricted Subsidiary (including through
maintenance of a separate bank account);
(v) not guarantee the obligations of any
Unrestricted Subsidiary, or advance funds (other than through
purchases of Limited Liability Interests as permitted by
Section 5.04(e)), for the payment of expenses or otherwise, to
any Unrestricted Subsidiary;
(vi) conduct all of its business correspondence
and other communications in its own name and on its own
stationery;
(vii) maintain separate financial statements;
(viii) maintain a board of directors that is
separate from the boards of directors of all Unrestricted
Subsidiaries;
(ix) maintain the requisite legal formalities in
order that the Company and its Subsidiaries (excluding
Unrestricted Subsidiaries) may each be treated as a legally
separate entity from any Unrestricted Subsidiary; and
(x) cause each Unrestricted Subsidiary, at the
time of its creation or acquisition, to be adequately
capitalized.
Section 5.02 Reporting Covenants. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit
Exposure remains outstanding, the Company will furnish the following to the
Administrative Agent (which shall provide copies to each Lender) and, in the
case of Sections 5.02(a), (b), (d), (e), (g), (i), (j), (k) and (l) to each of
the Lenders:
(a) Annual Financial Statements. As soon as available
and in any event within 90 days after the end of each Fiscal Year of
the Company, a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year and the related consolidated
statements of income, retained earnings and cash flows of the Company
and its Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and accompanied by a report thereon of independent
public accountants of recognized national standing, which such report
shall state that such consolidated financial statements present fairly
the consolidated financial condition as at the end of such Fiscal
Year, and the consolidated results of operations and cash flows for
such Fiscal Year, of the Company and its Subsidiaries in accordance
with GAAP, applied on a consistent basis. At the same time, a
consolidating balance sheet of the Company and its Subsidiaries as at
the end of such year and
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related consolidating statements of income and cash flows for such
Fiscal Year (in each case consolidating on the basis of principal
lines of business of the Company and its Subsidiaries), accompanied by
a certification thereon of a Responsible Officer, stating that such
consolidating financial statements form the basis of the Company's
consolidated financial statements and are fairly stated in all
material respects when considered in relation thereto.
(b) Quarterly Financial Statements. As soon as available
and in any event within 45 days after the end of each Fiscal Quarter
of the Company, a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter and the related
consolidated statements of income, retained earnings and cash flows of
the Company and its Subsidiaries for such Fiscal Quarter and for the
portion of the Company's Fiscal Year ended at the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Company's
previous Fiscal Year, all in reasonable detail and certified by a
Responsible Officer that such financial statements are complete and
correct and fairly present the consolidated financial condition as at
the end of such Fiscal Quarter, and the consolidated results of
operations and cash flows for such Fiscal Quarter and such portion of
the Company's Fiscal Year, of the Company and its Subsidiaries in
accordance with GAAP (subject to normal, year-end adjustments). At
the same time, a consolidating balance sheet of the Company and its
Subsidiaries at the end of such Fiscal Quarter and related
consolidating statements of income and cash flows, for the portion of
the Company's Fiscal Year ended at such quarter (in each case
consolidating on the basis of principal lines of business of the
Company and its Subsidiaries), accompanied by a certification from a
Responsible Officer that such consolidating financial statements form
the basis of the Company's consolidated financial statements and are
fairly stated in all material respects when considered in relation
thereto.
(c) Monthly Financial Statements. As soon as available
and in any event within 30 days after the end of each calendar month
of the Company, a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such month and the related consolidated
statements of income, retained earnings and cash flows of the Company
and its Subsidiaries for such calendar month and for the portion of
the Company's Fiscal Year ended at the end of such month, setting
forth in each case in comparative form the figures for the
corresponding month and the corresponding portion of the Company's
previous Fiscal Year, all in reasonable detail and certified by a
Responsible Officer that such financial statements are complete and
correct and fairly present the consolidated financial condition as at
the end of such calendar month, and the consolidated results of
operations and cash flows for such calendar month and such portion of
the Company's Fiscal Year, of the Company and its Subsidiaries in
accordance with GAAP (subject to normal, yearend adjustments). At
the same time, a consolidating balance sheet of the Company and its
Subsidiaries at the end of such calendar month and related
consolidating statements of income and cash flows, for the portion of
the Company's Fiscal Year ended at such month (in each case
consolidating on the basis of principal lines of business of the
Company and its Subsidiaries), accompanied by a certification from a
Responsible Officer that such consolidating financial statements form
the basis of the Company's consolidated financial statements and are
fairly stated in all material respects when considered in relation
thereto.
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(d) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a) and (b)
above, a certificate of the Company, signed by a Responsible Officer
(i) stating that a review of such financial statements during the
period covered thereby and of the activities of the Company and its
Subsidiaries has been made under such Responsible Officer's
supervision with a view to determining whether the Company and its
Subsidiaries have fulfilled all of their obligations under this
Agreement, the other Financing Documents, and the Notes; (ii) stating
that the Company and its Subsidiaries have fulfilled their obligations
under such instruments and that all representations made in this
Agreement continue to be true and correct (or specifying the nature of
any change), or if there shall be a Default or Event of Default,
specifying the nature and status thereof and the Company's proposed
response thereto; (iii) demonstrating in reasonable detail compliance
(including, but not limited to, showing all material calculations) as
at the end of such Fiscal Year or such Fiscal Quarter with Subsections
5.03(a), 5.03(b), 5.03(c), and 5.03(d); (iv) demonstrating in
reasonable detail compliance (including, but not limited to, showing
all material calculations) as at the end of the Fiscal Year with
Sections 5.04(o) and 5.04(e)(x), describing by category (utilizing the
same categories as are used by the Company in its internal financial
reports) any Permitted Acquisitions and any Capital Expenditures made
by the Company or any Subsidiary as of the end of such Fiscal Year and
attaching thereto a Notice of Designation of Retained Cash Flow Usage
dated as of the end of the preceding Fiscal Quarter; and (v)
containing or accompanied by such financial or other details,
information and material as the Administrative Agent may reasonably
request to evidence such compliance.
(e) Management Letters. Together with the financial
statements required pursuant to subsection (a) above, copies of each
management letter issued to the Company by such accountants promptly
following consideration or review by the Board of Directors of the
Company, or any committee thereof (together with any response thereto
prepared by the Company).
(f) Title Information. Within a reasonable time after a
request by the Administrative Agent, additional title information in
form and substance acceptable to the Required Lenders as is reasonably
necessary covering the Collateral so that the Lenders shall have
received, together with the title information previously received by
the Lenders, satisfactory title information covering all of the
Collateral .
(g) Events or Circumstances with respect to Collateral.
Promptly after the occurrence of any event or circumstance concerning
or changing any of the Collateral that would have a Material Adverse
Effect, notice of such event or circumstance in reasonable detail.
(h) Borrowing Base Reports. As soon as available and in
any event by the 20th day following the close of each calendar month,
a Borrowing Base Report dated and reflecting amounts as of the close
of business on the last day of the preceding calendar month.
(i) Notice of Certain Events. Promptly after the Company
learns of the receipt or occurrence of any of the following, a
certificate of the Company, signed by a Responsible Officer
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specifying (i) any official notice of any violation, possible
violation, non-compliance or possible non compliance, or claim made
by any Governmental Authority pertaining to all or any part of the
Properties of the Company or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect; (ii) any
event which constitutes a Default or Event of Default, together with a
detailed statement specifying the nature thereof and the steps being
taken to cure such Default or Event of Default; (iii) the receipt of
any notice from, or the taking of any other action by, the holder of
any promissory note, debenture or other evidence of indebtedness in
excess of $5,000,000 of the Company or any of its Subsidiaries with
respect to a claimed default, together with a detailed statement
specifying the notice given or other action taken by such holder and
the nature of the claimed default and what action the Company or its
Subsidiary is taking or proposes to take with respect thereto; (iv)
any default or noncompliance of any party to any of the Financing
Documents with any of the terms and conditions thereof or any notice
of termination or other proceedings or actions which could reasonably
be expected to adversely affect any of the Financing Documents; (v)
the creation, dissolution, merger or acquisition of any Subsidiary of
the Company with material operations; (vi) any event or condition not
previously disclosed to the Administrative Agent, which violates any
Environmental Law and which could potentially, in the Company's
reasonable judgment, have a Material Adverse Effect; (vii) any
material amendment to, termination of, or material default under a
Material Contract or any execution of, or material amendment to,
termination of, or material default under, any material collective
bargaining agreement, except collective bargaining agreements of
Unrestricted Subsidiaries; (viii) any event or condition which may
reasonably be expected to have a Material Adverse Effect; (ix) the
occurrence, with respect to ▇▇▇▇▇▇▇▇, of any of the events described
in Section 6.08 or the failure of the ▇▇▇▇▇▇▇▇ Indemnity to continue
to be in full force and effect; or (x) the occurrence, with respect to
any of the Cytec Parties, of any of the events described in Section
6.08 or the failure of the Cytec Indemnity to continue to be in full
force and effect.
(j) Shareholder Communications, Filings. Promptly upon
the mailing, filing, or making thereof, copies of all registration
statements, periodic reports and other documents (excluding the
related exhibits except to the extent expressly requested by the
Administrative Agent) filed by the Company with the Securities and
Exchange Commission (or any successor thereto) or any national
securities exchange.
(k) Litigation. Promptly after the occurrence thereof,
notice of the institution of or any material adverse development in
any action, suit or proceeding or any governmental investigation or
any arbitration, before any court or arbitrator or any governmental or
administrative body, agency or official, against the Company, Holdco,
or any Subsidiary Guarantor or any material Property of any thereof,
in which the amount involved is material and is not covered by
insurance or which could reasonably be expected to have a Material
Adverse Effect.
(l) ERISA. Promptly after (i) the Company's obtaining
knowledge of the occurrence thereof, notice that an ERISA Termination
Event or a "prohibited transaction," as such term is defined in
Section 406 of ERISA or Section 4975 of the Code, with respect to any
Plan has occurred, which such notice shall specify the nature thereof,
the Company's proposed response thereto (and, if applicable, the
proposed response thereto of any Subsidiary of the Company and of
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any ERISA Affiliate) and, where known, any action taken or proposed by
the Internal Revenue Service, the Department of Labor or the PBGC with
respect thereto, (ii) the Company's obtaining knowledge thereof,
copies of any notice of the PBGC's intention to terminate or to have a
trustee appointed to administer any Plan, and (iii) the filing thereof
with any Governmental Authority (if requested by the Administrative
Agent), copies of each annual and other report (including applicable
schedules) with respect to each Plan or any trust created thereunder.
(m) Borrowing Base Audit. At the cost of the Company, a
report or reports of an independent collateral field examiner approved
(i) by the Company, whose approval shall not be unreasonably withheld
and (ii) by the Administrative Agent (and which collateral field
examiner may be the Administrative Agent or an affiliate thereof) with
respect to the Eligible Accounts and Eligible Inventory components
included in the Borrowing Base. The Administrative Agent may (and, at
the direction of the Required Lenders, shall) request such reports or
additional reports as it (or the Required Lenders) shall reasonably
deem necessary; provided, however, that so long as no Default has
occurred and is continuing, the Company shall not be required to
reimburse the cost of more than one such report per Fiscal Year.
(n) Insurance Coverage.
(i) Upon request, a summary of the insurance
coverages of the Company and its Subsidiaries (excluding
Unrestricted Subsidiaries) in form and substance reasonably
satisfactory to the Administrative Agent; upon renewal of any
such insurance policy, a copy of an insurance certificate
summarizing the terms of such policy; and upon request of the
Administrative Agent, copies of the applicable policies; and
(ii) Upon request, a summary of the insurance
coverages of Unrestricted Subsidiaries in form and substance
reasonably satisfactory to the Administrative Agent, a copy of
an insurance certificate summarizing the terms of such
policies and copies of the applicable policies.
(o) Annual Budget. Not later than the 90th day after the
Fiscal Year ended September 30, 1996, and not later than the 60th day
after each Fiscal Year end thereafter, an annual budget of the Company
and it Subsidiaries (consolidating on the basis of principal lines of
business of the Company and its Subsidiaries), reviewed by the Board
of Directors of the Company, setting forth in reasonable detail, the
projected revenues and expenses of the Company for the following
Fiscal Year.
(p) Excess Cash Flow Certificate. On or before the 100th
day after each September 30th, commencing on September 30, 1997, the
Company's preliminary calculation of its Excess Cash Flow for the
Fiscal Year ended on such September 30th, in accordance with Section
2.10(b).
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(q) Other Information. With reasonable promptness, such
other information about the business and affairs and financial
condition of the Company or its Subsidiaries as the Administrative
Agent may reasonably request from time to time.
Section 5.03 Financial Covenants. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit
Exposure remains outstanding, the Company will, at all times on or after
December 31, 1996:
(a) Interest Coverage Ratio. Maintain an Interest
Coverage Ratio of not less than the ratio for each Rolling Period
indicated below:
Each Rolling Period ending Ratio
December 31, 1996 1.75
March 31, 1997 1.75
June 30, 1997 1.75
September 30, 1997 1.50
Each Rolling Period during
the Fiscal Year ending Ratio
September 30, 1998 1.35
Each Rolling Period ending Ratio
December 31, 1998 1.50
March 31, 1999 1.50
June 30, 1999 2.25
September 30, 1999 2.25
Each Rolling Period Ratio
thereafter 1.05
(b) Current Ratio. Maintain a Current Ratio of not less
than (i) 1.20 to 1.00, from January 1, 1997, through September 30,
1998, and (ii) 1.25 to 1.00 at all times after October 1, 1998.
(c) Fixed Charge Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio of not less than the ratio for each Rolling Period
indicated below:
Each Rolling Period during
the period beginning January 1, Ratio
1997 through September 30, 1997 1.05
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The Rolling Period ending Ratio
December 31, 1997 1.00
Each Rolling Period during
the period beginning January 1, Ratio
1998 through September 30, 1998 1.05
Each Rolling Period during
the period beginning October 1, Ratio
1998 through September 30, 1999 1.10
Each Rolling Period during
the Fiscal Years ending Ratio
September 30, 2000 1.15
September 30, 2001 1.20
Each Rolling Period Ratio
thereafter 1.20
(d) Leverage Ratio. Maintain a Leverage Ratio of not
greater than the ratio for each Rolling Period indicated below:
Each Rolling Period ending Ratio
December 31, 1996 5.25
March 31, 1997 6.35
June 30, 1997 7.00
September 30, 1997 7.00
December 31, 1997 7 00
March 31, 1998 7.00
June 30, 1998 7.00
September 30, 1998 7.00
December 31, 1998 6.50
March 31, 1999 6.00
June 30, 1999 4.50
September 30, 1999 4.50
Each Rolling Period during
the Fiscal Years ending Ratio
September 30, 2000 4.00
September 30, 2001 3.50
September 30, 2002 3.00
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(e) Senior Debt Leverage Ratio. Maintain a Senior Debt
Leverage Ratio of not greater than the ratio for each Rolling Period
indicated below:
Each Rolling Period ending Ratio
March 31, 1997 3.50
June 30, 1997 3.50
September 30, 1997 3.50
December 31, 1997 3.50
March 31, 1998 3.25
June 30, 1998 3.25
September 30, 1998 3.25
Each Rolling Period during
the Fiscal Years ending Ratio
September 30, 1999 3.00
September 30, 2000 3.00
September 30, 2001 3.00
September 30, 2002 3.00
Each Rolling Period Ratio
thereafter 3.00
The Company shall be deemed to be in compliance with the covenants contained
in this Section 5.03 at any time so long as the then most recent financial
statements prepared by the Company (for internal use or otherwise) and made
available to the Lenders show, or provide a basis for ascertaining, such
compliance and no Responsible Officer has obtained any information that causes
such Responsible Officer to reasonably conclude that the Company is not in
compliance with the covenants contained in this Section 5.03.
Section 5.04 Certain Negative Covenants. So long as any Lender
has any Commitment hereunder or any Loan remains unpaid or any Revolving Credit
Exposure remains outstanding, the Company will not:
(a) Indebtedness. Create, incur, assume or suffer to
exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Indebtedness, other than:
(i) the Lender Indebtedness in the principal
amount not to exceed the outstanding Term Loans and the
Revolving Credit Commitments less the aggregate
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amount of permanent reductions of the Revolving Credit
Commitments and payments or prepayments of the Term Loans;
(ii) Indebtedness outstanding on the date hereof
which is set forth on Schedule 5.04(a)-1, provided that any
Indebtedness indicated on Schedule 5.04(a) as "Indebtedness to
be Repaid" shall have been repaid on or before the STX
Effective Date or the AFB Effective Date, as applicable;
(iii) accounts payable (for the deferred purchase
price of Property or services) from time to time incurred in
the ordinary course of business and guaranties by the Company
or any Subsidiary in the ordinary course of business of any
such obligations incurred by any other Subsidiary;
(iv) Indebtedness owing by (A) the Company or a
Subsidiary Guarantor to Canadian Subsidiaries not to exceed
$5,000,000 in the aggregate, (B) Canadian Subsidiaries to the
Company or a Subsidiary Guarantor not to exceed (1)
$120,000,000 in the aggregate provided that such Indebtedness
may only arise from a transfer to one or more U.S.
Subsidiaries or the Company of existing Indebtedness owing as
of the AFB Effective Date to one or more Canadian Subsidiaries
and which does not under any circumstances involve
consideration for such transfer other than an exchange of such
Indebtedness for equity, plus (2) Indebtedness permitted
pursuant to Section 5.04(e)(vii); (C) any Subsidiary Guarantor
to the Company or any other Subsidiary Guarantor, (D) the
Company to any Subsidiary Guarantor; and (E) any Canadian
Subsidiary to any other Canadian Subsidiary;
(v) obligations for current taxes, assessments
and other governmental charges and taxes, assessments or other
governmental charges which are not yet due or are being
contested in good faith by appropriate action or proceeding
promptly initiated and diligently conducted, if such reserve
as shall be required by GAAP shall have been made therefor;
(vi) Capital Lease Obligations not to exceed
$1,000,000 at any one time;
(vii) Indebtedness not exceeding U.S. $15,000,000
under the Canadian Facility (and the "Bankers' Acceptances"
provided for therein) so long as the documentation with
respect thereto is reasonably satisfactory to the
Administrative Agent.
(viii) Indebtedness evidenced by the Senior
Subordinated Notes;
(ix) Indebtedness owing pursuant to Hedge
Agreements entered into in the ordinary course of business for
the purpose of hedging against fluctuations in interest rates
(on money borrowed by the Company), commodity prices and
foreign exchange rates;
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(x) Indebtedness (other than short-term
Indebtedness for borrowed money) created, incurred, assumed or
guaranteed after the date hereof not otherwise permitted
pursuant to this Subsection 5.04(a), provided that the
aggregate outstanding principal amount of such Indebtedness,
together with obligations (calculated based upon the net
present value of all future lease payments at an assumed
discount rate of 12%) in respect of the transactions described
in Section 5.04(g), shall not exceed $20,000,000 at any one
time outstanding;
(xi) Non-Recourse Debt of an Unrestricted
Subsidiary; and
(xii) Indebtedness evidenced by the Additional
Senior Subordinated Notes.
(b) Liens. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on any of its Property now owned or hereafter acquired
to secure any Indebtedness of the Company, any Subsidiary or any other
Person, other than:
(i) Liens existing on the date hereof and set
forth on Schedule 5.04(b)-1; provided that any Liens indicated
on Schedule 5.04(b) as "Liens to be Released" shall have been
released of record within 10 days after the STX Effective Date
or the AFB Effective Date, as applicable;
(ii) Liens securing the Lender Indebtedness and
Liens on Property of the Canadian Subsidiaries securing
Indebtedness under the Canadian Facility to the extent
permitted pursuant to Section 5.04(a);
(iii) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being
contested in good faith by appropriate action or proceedings
and with respect to which adequate reserves are being
maintained;
(iv) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen, repairmen,
workmen, and other Liens imposed by law created in the
ordinary course of business for amounts which are not past due
for more than 30 days or which are being contested in good
faith by appropriate action or proceedings and with respect to
which adequate reserves in accordance with GAAP are being
maintained;
(v) Liens incurred or deposits or pledges made in
the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, old age or other similar obligations, or to secure
the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, performance
and returnofmoney bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
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(vi) minor irregularities in title, easements,
rights-of-way, restrictions, servitudes, permits,
reservations, exceptions, conditions, covenants and other
similar charges or encumbrances not materially interfering
with the occupation, use and enjoyment by the Company or any
of its Subsidiaries of any of their respective Properties in
the normal course of business or materially impairing the
value thereof ;
(vii) any obligations or duties affecting any of
the Property of the Company or its Subsidiaries to any
municipality or public authority with respect to any
franchise, grant, license or permit which do not materially
impair the use of such Property for the purposes for which it
is held;
(viii) Liens upon Property acquired by the Company,
other than as a Permitted Acquisition, after the Restated
Closing Date with the proceeds of no greater than $10,000,000
of Indebtedness permitted pursuant to Section 5.04(a)(x);
provided that (A) such Lien was created solely for the purpose
of securing such Indebtedness, (B) and the principal amount
of such Indebtedness does not exceed the fair value of such
Property at the time of its acquisition;
(ix) Liens securing not more than $1,000,000 in
the aggregate existing on any real or personal property of any
Person at the time it becomes a Subsidiary after the Restated
Closing Date pursuant to a Permitted Acquisition;
(x) extensions, renewals or replacements of any
Lien referred to in Subsections 5.04(b)(i), (ii) and (ix),
provided that the principal amount of the Indebtedness or
obligation secured thereby is not increased and that any such
extension, renewal or replacement is limited to the Property
originally encumbered thereby;
(xi) with respect to Property located in Canada,
reservations, limitations, provisos and conditions in any
original grant from the Crown or any freehold lessor of any of
the properties of the Company or its Subsidiaries;
(xii) Liens resulting from operation of law with
respect to any judgments or orders not constituting a Default;
and
(xiii) Liens on Property of Unrestricted
Subsidiaries to secure Indebtedness of Unrestricted
Subsidiaries permitted under Section 5.04(a).
(c) Mergers, Sales, etc. Merge into or with or
consolidate with, or permit any of its Subsidiaries to merge into or
with or consolidate with, any other Person, or sell, lease or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease
or otherwise dispose of (whether in one transaction or in a series of
transactions) all or any part of its Property to any other Person.
Notwithstanding the foregoing limitations:
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(i) the Company and its Subsidiaries (excluding
Unrestricted Subsidiaries) may (A) sell inventory, and other
similar assets in the ordinary course of business, (B) sell,
transfer or otherwise dispose of personal property (including,
but not limited to, pipe, equipment, machinery and vehicles)
in the ordinary course of business or when, in the reasonable
judgment of the Company, such property is no longer used or
useful in the conduct of its business or the business of its
Subsidiaries, and (C) in addition to clauses (A) and (B),
sell, lease, or otherwise dispose of (1) up to $5,000,000 in
fair-market value of their Property in the aggregate during
any Fiscal Year, and (2) more than $5,000,000, but less than
$10,000,000 in fair-market value of their Property in the
aggregate during any Fiscal Year, provided that the Company
shall either prepay the Term Loans pursuant to Section
2.10(b)(iii) or promptly reinvest the Net Proceeds (in excess
of $5,000,000) from such sale in Properties that, in the
good-faith judgment of the Company, meet the Company's capital
investment criteria;
(ii) (A) any Subsidiary Guarantor may merge into
or with or consolidate with any other Subsidiary Guarantor or
the Company (and, in the case of the Company, so long as the
Company is the surviving entity), (B) any Canadian Subsidiary
may merge into or with or consolidate with any other Canadian
Subsidiary, (C) Sterling NRO may be liquidated into Sterling
Canada, (D) any Canadian Subsidiary may merge with or into or
consolidate with any Subsidiary Guarantor so long as (1) the
Subsidiary Guarantor is the surviving entity and (2) the
Canadian Subsidiary was Solvent immediately prior to the time
of such merger or consolidation, and (E) any Unrestricted
Subsidiary may merge into or with or consolidate with any
other Unrestricted Subsidiary;
(iii) any Subsidiary Guarantor may transfer
Property to any other Subsidiary Guarantor or to the Company,
and any Canadian Subsidiary may transfer Property to the
Company, any Subsidiary Guarantor, or any other Canadian
Subsidiary; and
(iv) any Unrestricted Subsidiary may sell, lease
or otherwise dispose of all or any of its Property to any
Person.
(d) Dividends, etc. Declare or pay any dividend on its
capital stock, make any payment to purchase, redeem, retire or
otherwise acquire any of its capital stock or any option, warrant, or
other right to acquire such capital stock, now or hereafter
outstanding, return any capital to its stockholders, make any
distribution of its assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders, or permit any of its
Subsidiaries to do so, except that:
(i) the Company may declare and deliver dividends
payable solely in shares of its capital stock or in options,
warrants or rights to purchase shares of capital stock;
(ii) the Company may make contributions to the
ESOP on behalf of the employees of the Company or its
Subsidiaries in the aggregate amount in any Fiscal Year
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not to exceed 8% of payroll expense during such Fiscal Year
attributable to employees of the Company and its Subsidiaries
who are eligible to participate in the ESOP;
(iii) any Subsidiary of the Company other than any
U.S. Subsidiary of a Canadian Subsidiary may declare and
deliver dividends to the Company or any wholly-owned
Subsidiary of the Company, and any Canadian Subsidiary or any
Unrestricted Subsidiary organized under the laws of Canada may
redeem shares of its own capital stock;
(iv) the Company may declare and deliver in any
Fiscal Year Permitted Holdco Dividends so long as, at the time
of payment of such dividend (both before and after giving
effect to the payment thereof), the Company satisfies the
conditions precedent to the making of Loans set forth in
Section 3.04; and
(v) the Company may declare and make a noncash
dividend or make a return of capital to Holdco in the form of
cancellation by the Company of the Indebtedness of Holdco
referred to in Section 5.04(e)(viii).
(e) Investments, Loans, etc. Make or permit any loans to
or investments in any Person, or permit any of its Subsidiaries
(excluding Unrestricted Subsidiaries) to make or permit any loans to
or investments in any Person, other than:
(i) investments, loans or advances, the material
details of which have been set forth in either the Financial
Statements or Schedule 4.07 hereto;
(ii) investments in direct obligations of the
United States of America or any agency thereof or, in the case
of Canadian Subsidiaries, investments in direct obligations of
Canada, in each case with maturities of one year or less from
the date of acquisition;
(iii) investments in certificates of deposit of
maturities less than one year, issued by commercial banks in
the United States having capital and surplus in excess of
$500,000,000 and having short-term credit ratings of at least
A1 and P1 by Standard & Poor's Ratings Group and ▇▇▇▇▇'▇
Investors Service, Inc., respectively;
(iv) investments in commercial paper of maturities
of not more than 270 days rated at least A1 and P1 by
Standard & Poor's Ratings Group and ▇▇▇▇▇'▇ Investors Service,
Inc., respectively; and
(v) investments in securities that are
obligations of the United States government purchased by the
Company or any Subsidiary of the Company under repurchase
agreements pursuant to which arrangements are made with
selling financial institutions (being a financial institution
having unimpaired capital and surplus of not less than
$500,000,000 and with short-term credit ratings of at least A1
and P1 by Standard & Poor's Ratings Group and ▇▇▇▇▇'▇
Investors Service, Inc., respectively) for such financial
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institutions to repurchase such securities within 30 days from
the date of purchase by the Company or such Subsidiary, and
other similar short-term investments made in connection with
the Company's or any of its Subsidiary's cash management
practices; provided that the Company shall take possession of
all securities purchased by the Company or any Subsidiary
under repurchase agreements and shall adhere to customary
margin and ▇▇▇▇-to-market procedures with respect to
fluctuations in value;
(vi) investments in any security issued by an
investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a-8) that is a
money market fund in compliance with all applicable
requirements of SEC Rule 2a-7 (17 CFR 270.2a-7);
(vii) (A) investments in or loans or advances to
Canadian Subsidiaries or Unrestricted Subsidiaries made after
the STX Effective Date not to exceed $10,000,000 in the
aggregate, and (B) loans or advances to, or investments in,
Guarantor Subsidiaries;
(viii) a loan by the Company to Holdco approximately
in the amount of $450,000,000 on the STX Effective Date to be
used by Holdco solely for consummation of the SCI Acquisition
and related transaction costs;
(ix) the Secondary ESOP Loan and any renewals or
replacements thereof or reborrowing thereunder in a total
principal amount not to exceed $6,000,000 at any time;
(x) Permitted Acquisitions in an amount not to
exceed (after giving effect thereto) Cumulative Retained Cash
Flow as of the date any such Permitted Acquisition is made;
(xi) routine loans or advances to employees in the
ordinary course of business not to exceed $25,000 at any time
outstanding to any one employee and $500,000 in the aggregate;
(xii) loans in an aggregate amount not to exceed
$500,000 to finance the purchase of homes by employees who
have been relocated by the Company or any Subsidiary; and
(xiii) investments, after the STX Effective Date, in
additional Valdosta Bonds issued to finance the completion of
the Company's plant in Valdosta, Georgia, so long as the
Administrative Agent (on behalf of the Lenders) has a first
priority, perfected Lien thereon to secure the Lender
Indebtedness;
(xiv) participations (for a tenor of not more than
90 days) in loans to Persons having short-term credit ratings
of at least A1 and P1 by Standard & Poor's Ratings Group and
▇▇▇▇▇'▇ Investors Service, Inc., respectively;
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(xv) the AFB Acquisition;
(xvi) other investments, loans, or advances in an
aggregate amount not to exceed $1,000,000 outstanding at any
one time.;
(xvii) investments, after July 3, 1997, in Holdco
Common Stock, purchased from certain employees of the Company
that have elected to take cash in lieu of stock in connection
with the termination of the Old ESOP, not to exceed in the
aggregate $2,500,000;
(xviii) investments in Limited Liability Interests in
▇▇▇▇▇▇▇▇ ▇▇▇, Sask Holdings and Sterling Sask to the extent
necessary to consummate the Saskatoon Acquisition, all such
investments in an aggregate amount not to exceed Cdn
$20,000,000 and provided that such investments are solely from
equity contributions of new Holdco Common Stock and the Series
B Preferred Stock from Holdco to ▇▇▇▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇
sells such new Holdco Common Stock and Series B Preferred
Stock and contributes the proceeds from such sale to Sask
Holdings and Sterling Sask; and
(xix) investments made after the Restated Closing
Date in Limited Liability Interests in Unrestricted
Subsidiaries; provided that such investments are solely from
equity contributions from Holdco comprising either (i) new
Holdco Common Stock or new preferred stock of Holdco or (ii)
the proceeds of an issuance of either new Holdco Common Stock
or new preferred stock of Holdco, that in each case such
Holdco Common Stock or preferred stock of Holdco does not
provide the holder thereof any right to cash payments (other
than, in the case of preferred stock, cash payments resulting
solely from a right to put such preferred stock to Holdco upon
the occurrence of a Change of Control as defined in the Senior
Secured Discount Notes Indenture) or cash dividends at any
time that any Lender Indebtedness is outstanding; and
provided, further, that the total consideration, including
transaction costs, paid by any Unrestricted Subsidiary for
Property or capital stock acquired by such Unrestricted
Subsidiaries after the Restated Closing Date shall not exceed
$100,000,000 in the aggregate.
(f) Lease Payments. Create, incur, assume or suffer to
exist, nor permit any of its Subsidiaries (excluding Unrestricted
Subsidiaries) to create, incur, assume or suffer to exist, any
obligation for the payment of rent or hire of Property of any kind
whatsoever (real or personal), whether directly or as a guarantor, if,
after giving effect thereto, the aggregate amount of all payments
required to be made by the Company and its Subsidiaries (excluding
Unrestricted Subsidiaries) on a consolidated basis pursuant to such
leases or lease agreements (excluding payments in respect of Capital
Lease Obligations and obligations described in Section 5.04(g) to the
extent permitted by this Agreement) would exceed $5,000,000 in any
Fiscal Year.
(g) Sales and Leasebacks. Except as permitted by Section
5.04(a)(x), enter into, or permit any of its Subsidiaries (excluding
Unrestricted Subsidiaries) to enter into, any arrangement,
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directly or indirectly, with any Person whereby the Company or any
such Subsidiary shall sell or transfer any Property, whether now owned
or hereafter acquired, and whereby the Company or any such Subsidiary
shall then or thereafter rent or lease as lessee such Property or any
part thereof or other Property which the Company or any such
Subsidiary intends to use for substantially the same purpose or
purposes as the Property sold or transferred.
(h) Nature of Business. Permit any material change to be
made in the character of its business or the business of any
Subsidiary as carried on at the date hereof, except as may be
permitted pursuant to this Agreement.
(i) ERISA Compliance.
(i) Engage in, or permit a Subsidiary of the
Company or any ERISA Affiliate to engage in, any transaction
in connection with which the Company, a Subsidiary of the
Company or any ERISA Affiliate could be subjected to either a
civil penalty assessed pursuant to Sections 502(c), (i) or (l)
of ERISA or a tax imposed by Chapter 43 of Subtitle D of the
Code, except where such assessment or imposition could not
reasonably be expected to have Material Adverse Effect;
(ii) Terminate, or permit a Subsidiary of the
Company or any ERISA Affiliate to terminate, any Plan in a
manner, or take any other action with respect to any Plan,
which could reasonably be expected to result in any material
liability of the Company, a Subsidiary of the Company or any
ERISA Affiliate to the PBGC or any other Governmental
Authority;
(iii) Fail to make, or permit a Subsidiary of the
Company or any ERISA Affiliate to fail to make, full payment
when due of all amounts which, under the provisions of any
Plan, agreement relating thereto or applicable law, the
Company, a Subsidiary of the Company or any ERISA Affiliate is
required to pay as contributions thereto, except where the
failure to make such payments could not reasonably be expected
to have Material Adverse Effect;
(iv) Permit to exist, or allow a Subsidiary of the
Company or any ERISA Affiliate to permit to exist, any
accumulated funding deficiency within the meaning of Section
302 of ERISA or Section 412 of the Code, whether or not
waived, with respect to any Plan;
(v) Contribute to or assume an obligation to
contribute to, or permit a Subsidiary of the Company (other
than a Subsidiary acquired as permitted pursuant to Section
5.04(i)(vi)) or any ERISA Affiliate to contribute to or assume
an obligation to contribute to, any "multiemployer plan" as
such term is defined in Section 3(37) or 4001(a)(3) of ERISA
or any "multi-employer pension plan" as such term is defined
in the Pension Benefits Act (Ontario);
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(vi) Acquire, or permit a Subsidiary of the
Company or any ERISA Affiliate to acquire, an interest in any
Person that causes such Person to become an ERISA Affiliate
with respect to the Company or a Subsidiary of the Company or
with respect to any ERISA Affiliate of the Company or a
Subsidiary of the Company if such Person sponsors, maintains
or contributes to, or at any time in the sixyear period
preceding such acquisition has sponsored, maintained, or
contributed to, (A) any "multiemployer plan" as such term is
defined in Section 3(37) or 4001(a)(3) of ERISA, or (B) any
"multi-employer pension plan" as such term is defined in the
Pension Benefits Act (Ontario); provided that, the Company may
acquire any such Person if (1) such Person is acquired as a
Permitted Acquisition, (2) such Person would not become an
ERISA Affiliate, and (3) neither the Company nor any of its
other Subsidiaries has any legal liability to perform such
Person's obligations or assume such Person's liabilities.
(vii) Fail to pay, or cause to be paid, to the PBGC
in a timely manner, and without incurring any late payment or
underpayment charge or penalty, all premiums required pursuant
to Sections 4006 and 4007 of ERISA, except where such failure
could not reasonably be expected to have a Material Adverse
Effect;
(viii) Amend, or permit a Subsidiary of the Company
or any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability such that the Company, a
Subsidiary of the Company or any ERISA Affiliate is required
to provide security to such Plan under Section 401(a)(29) of
the Code;
(ix) Incur, or permit a Subsidiary of the Company
or any ERISA Affiliate to incur, a material liability to or on
account of a Plan under Sections 515, 4062, 4063, 4064, 4201
or 4204 of ERISA; or
(x) Permit, or allow a Subsidiary of the Company
or any ERISA Affiliate to permit, the actuarial present value
of the benefit liabilities (computed on an accumulated benefit
obligation basis in accordance with GAAP) under all Plans in
the aggregate to exceed the current value of the assets of all
Plans in the aggregate that are allocable to such benefit
liabilities by (A) an amount that could reasonably be expected
to cause a Material Adverse Effect, if such excess is the
result of a change in market conditions, and (B) more than
$10,000,000 if such excess is for any other reason.
(j) Sale or Discount of Receivables. Discount or sell
(with or without recourse), or permit any of its Subsidiaries
(excluding Unrestricted Subsidiaries) to discount or sell (with or
without recourse), any of its or its Subsidiaries' (excluding
Unrestricted Subsidiaries) notes receivable or accounts receivable,
other than notes receivable and accounts receivable discounted or sold
without recourse and in the ordinary course of business of the Company
and its Subsidiaries (excluding Unrestricted Subsidiaries) (as
conducted as of the Restated Closing Date) in an aggregate amount not
to exceed $15,000,000 in any Fiscal Year.
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(k) Negative Pledge Agreements. Create, incur, assume or
suffer to exist, or permit any of its Subsidiaries (excluding
Unrestricted Subsidiaries) to create, incur, assume or suffer to
exist, any contract, agreement or understanding (other than this
Agreement, the other Financing Documents, or as set forth on Schedule
I to the respective Security Agreements delivered by the Company and
its Subsidiaries) which in any way prohibits or restricts the
granting, conveying, creation or imposition of any Lien on any
Property of the Company or its Subsidiaries (excluding Unrestricted
Subsidiaries), or which requires the consent of or notice to other
Persons in connection therewith, other than agreements (that do not
provide for borrowed money Indebtedness) entered into in the ordinary
course of business that restrict assignment by the Company of its
rights thereunder; provided that the Company shall use its best
efforts to negotiate such restrictions so as not to limit the right of
the Company to ▇▇▇▇▇ ▇ ▇▇▇▇ on the Company's rights thereunder in
favor of the Administrative Agent on behalf of the Lenders as security
for the Lender Indebtedness.
(l) Transactions with Affiliates. Enter into any
transaction or series of transactions, or permit any of its
Subsidiaries to enter into any transaction or series of transactions,
with Affiliates of the Company or its Subsidiaries which involve an
outflow of money or other Property from the Company or its
Subsidiaries to an Affiliate of the Company or its Subsidiaries,
including but not limited to repayment of Indebtedness, management
fees, compensation, salaries, asset purchase payments or any other
type of fees or payments similar in nature, other than on terms and
conditions substantially as favorable to the Company and its
Subsidiaries as would be obtainable by the Company and its
Subsidiaries in a reasonably comparable arm's-length transaction with
a Person other than an Affiliate of the Company or its Subsidiaries.
Notwithstanding the foregoing, the restrictions set forth in this
Section 5.04(l) shall not apply to: (i) the payment of reasonable and
customary fees to directors of the Company who are not employees of
the Company, (ii) any other transaction with any employee, officer or
director of the Company or any of its Subsidiaries pursuant to
employee benefit plans and compensation arrangements in amounts
customary for corporations similarly situated to the Company or any
such Subsidiary and entered into the ordinary course of business and
approved by the Board of Directors of the Company or any committee
thereof or the Board of Directors of such Subsidiary, (iii) the
payment of fees to TSG in connection with the SCI Acquisition which
have been disclosed prior to the STX Effective Date to the
Administrative Agent in writing, (iv) the SCI Asset Conveyance, (v)
the cancellation of Indebtedness described in Section 5.04(e)(viii),
(vi) the payment of fees to TSG in connection with the AFB Acquisition
which have been disclosed prior to the AFB Effective Date to the
Administrative Agent in writing, (vii) the payment of fees to TSG in
connection with the Saskatoon Acquisition which have been disclosed
prior to the Restated Closing Date to the Administrative Agent in
writing, (viii) any transaction or series of transactions with the
Company or the Subsidiary Guarantors which involve an outflow of money
or other Property from an Unrestricted Subsidiary to the Company or a
Subsidiary Guarantor, (ix) any transaction or series of transactions
which involve an outflow of money or other Property from an
Unrestricted Subsidiary to another Unrestricted Subsidiary, or (x)
any other transactions with Affiliates that do not in the aggregate
involve the payment of more than $1,000,000 during any twelve-month
period.
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(m) Unconditional Purchase Obligations. Enter into or be
a party to, or permit any of its Subsidiaries (excluding Unrestricted
Subsidiaries) to enter into or be a party to, any material contract
for the purchase of materials, supplies or other property or services,
if such contract requires that payment be made by it regardless of
whether or not delivery is ever made of such materials, supplies or
other property or services, except any such contract for the purchase
of power entered into by the Company or any Subsidiary in the ordinary
course of its business.
(n) Stock. Authorize or issue (i) any Voting Stock to
any Person other than Holdco or (ii) any preferred stock or other
equity securities having a mandatory redemption right existing with
regard thereto.
(o) Capital Expenditures. Make, or permit any of its
Subsidiaries (excluding Unrestricted Subsidiaries) to make, Capital
Expenditures in any Fiscal Year in excess of the sum of (i), (ii) and
(iii) below:
(i) Capital Expenditures in any Fiscal Year
pursuant to the following schedule:
Maximum Scheduled
Fiscal Year Ending Capital Expenditures
------------------ --------------------
September 30, 1997 $50,000,000
September 30, 1998 $45,000,000
September 30, 1999 and $35,000,000
each Fiscal Year thereafter
(ii) Up to 50% of the amount listed above for any
Fiscal Year but not expended in such Fiscal Year may be
carried forward and expended during the next Fiscal Year (but
not any other Fiscal Year).
(iii) In addition to Capital Expenditures permitted
by Sections 5.04(o)(i) and (ii), Capital Expenditures in an
amount (after giving effect thereto) not to exceed Cumulative
Retained Cash Flow, as of the date any such Capital
Expenditure is made.
(iv) In addition to Capital Expenditures permitted
by Sections 5.04(o)(i), (ii) and (iii), for the period from
the STX Effective Date through September 30, 1996, the Company
and its Subsidiaries may make Capital Expenditures in an
amount not to exceed $18,000,000.
Capital Expenditures that are not designated as Capital Expenditures
from Retained Cash Flow pursuant to a Notice of Designated Retained
Cash Flow Usage, are deemed to apply first to Carry-Forward Capital
Expenditures and last to Scheduled Capital Expenditures.
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(p) Modifications to Senior Subordinated Notes; No
Voluntary Prepayments.
(i) Amend, modify, or waive any covenant
contained in the Senior Subordinated Notes, the Additional
Senior Subordinated Notes, the Senior Subordinated Notes
Indenture or the Additional Senior Subordinated Notes
Indenture if the effect of such amendment, modification, or
waiver would be to make the terms of the Senior Subordinated
Notes, the Additional Senior Subordinated Notes, the Senior
Subordinated Notes Indenture or the Additional Senior
Subordinated Notes Indenture materially more onerous to the
Company;
(ii) Amend, modify, or waive any provision of the
Senior Subordinated Notes, the Additional Senior Subordinated
Notes, the Senior Subordinated Notes Indenture or the
Additional Senior Subordinated Notes Indenture which (A)
subjects the Company to any additional material obligation,
(B) increases the principal of or rate of interest on any
Senior Subordinated Note or any Additional Senior Subordinated
Note, (C) accelerates the date fixed for any payment of
principal or interest on any Senior Subordinated Note or any
Additional Senior Subordinated Note, (D) would change the
percentage of holders of such Senior Subordinated Notes or
such Additional Senior Subordinated Notes required for any
such amendment, modification, or waiver from the percentage
required on the Restated Closing Date, or (E) relates to the
subordination provisions thereof; or
(iii) Make any voluntary prepayment of, or
optionally redeem, or make any payment in defeasance of, any
part of the Senior Subordinated Notes or the Additional Senior
Subordinated Notes.
(q) Intercompany Transactions. Create and will not
permit any of its Subsidiaries (excluding Unrestricted Subsidiaries)
to, create or otherwise cause or permit to exist or become effective,
except as may be expressly permitted or required by the Financing
Documents, any consensual encumbrance or restriction of any kind on
the ability of any such Subsidiary to (i) pay dividends or make any
other distribution to the Company or any of its Subsidiaries in
respect of such Subsidiary's capital stock or with respect to any
other interest or participation in, or measured by, its profits, (ii)
pay any indebtedness owed to the Company or any of its Subsidiaries,
(iii) make any loan or advance to the Company or any of its
Subsidiaries, or (iv) sell, lease or transfer any of its Property to
the Company or any of its Subsidiaries.
(r) Modification or Amendment of the AFB Earnout
Agreement. Amend, modify or waive any provision of the AFB Earnout
Agreement if the effect of such amendment, modification or waiver
would be to increase any amount payable thereunder.
(s) Reverse Designation of Unrestricted Subsidiaries.
Designate (which designation is approved by the Board of Directors of
the Company) an Unrestricted Subsidiary as a Subsidiary that is no
longer an Unrestricted Subsidiary for purposes of this Agreement
unless both before and after giving effect to such reverse designation
(i) no Default or Event of Default shall exist,
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including, without limitation, a breach of Section 5.04(a) or Section
5.04(b), (ii) no default or event of default shall exist or be
continuing under any agreement, mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by such Unrestricted
Subsidiary, and (iii) no default or event of default shall exist or be
continuing under any of the Senior Secured Discount Notes Indenture,
the Senior Subordinated Notes Indenture and the Additional Senior
Subordinated Notes Indenture. Notice of any such reverse designation
by the Company shall be delivered by the Company to the Administrative
Agent together with a copy of the resolutions of the Board of
Directors of the Company approving such reverse designation and a
certificate of a Responsible Officer certifying that such reverse
designation complies with the requirements of this Section 5.04(s).
Such reverse designation shall become effective upon receipt by the
Administrative Agent of the foregoing. Any reverse designation that
fails to comply with the terms of this Section 5.04(s) shall be null
and void and of no effect whatsoever.
ARTICLE VI
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "Event of Default"):
Section 6.01 Payments. (a) The Company shall fail to pay when due
(including, but not limited to, by mandatory prepayment required pursuant to
Section 2.10) any principal of any Loan or any Note, or any Reimbursement
Obligation; or (b) the Company shall fail to pay when due any interest on any
Loan or Note or any fee or any other amount payable hereunder or under the Fee
Letter or the AFB Fee Letter or any other Financing Document, and such failure
to pay shall continue unremedied for a period of five days;
Section 6.02 Covenants Without Notice. The Company shall fail to
observe or perform any covenant or agreement contained in Subsections 5.01(e),
(g) and (i), Section 5.03 or Section 5.04 (other than Subsections
5.04(b)(iii)(v) hereof).
Section 6.03 Other Covenants. The Company shall fail to observe
or perform any covenant or agreement contained in (a) Subsections 5.02(a), (b),
(c), (d), (f), (g), (h), (j), (k) or (m) or Subsections 5.04(b)(iii)(v), and,
if capable of being remedied, such failure shall remain unremedied for 10 days
after the earlier of (i) the Company's obtaining knowledge thereof, or (ii)
written notice thereof shall have been given to the Company by any Lender, any
Issuing Bank or the Administrative Agent; and (b) this Agreement, other than
those referred to in Sections 6.01, 6.02, or clause (a) of this Section 6.03,
and, if capable of being remedied, such failure shall remain unremedied for 30
days after the earlier of (i) the Company's obtaining knowledge thereof, or
(ii) written notice thereof shall have been given to the Company by any Lender,
any Issuing Bank or the Administrative Agent;
Section 6.04 Other Financing Document Obligations. Default is
made in the due observance or performance by Holdco, the Company or any
Subsidiary of the Company of any of the covenants or agreements contained in
any Financing Document other than this Agreement, and such default continues
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unremedied beyond the expiration of any applicable grace period which may be
expressly allowed under such Financing Document;
Section 6.05 Representations. Any representation, warranty or
statement made or deemed to be made by Holdco, the Company or any Subsidiary of
the Company or any of Holdco's, such Company's, or Subsidiary's officers herein
or in any other Financing Document, or in any certificate, request or other
document furnished pursuant to or under this Agreement or any other Financing
Document, shall have been incorrect in any material respect as of the date when
made or deemed to be made;
Section 6.06 Non-Payments of Other Indebtedness. The Company or
any of its Subsidiaries shall fail to make any payment or payments of principal
of or interest on any Indebtedness of the Company or such Subsidiary (other
than (i) the Lender Indebtedness and (ii) any trade account subject to a bona
fide dispute and the trade creditor has neither filed a lawsuit nor caused a
Lien to be placed upon any Property of the Company or such Subsidiary) in
excess of $10,000,000 in the aggregate when due (whether at stated maturity, by
acceleration, on demand or otherwise) after giving effect to any applicable
grace period;
Section 6.07 Defaults Under Other Agreements. The Company or any
of its Subsidiaries shall fail to observe or perform any covenant or agreement
contained in any agreement(s) or instrument(s) relating to Indebtedness of the
Company or such Subsidiary of $10,000,000 or more in the aggregate within any
applicable grace period, or any other event shall occur, if the effect of such
failure or other event is to accelerate, or, with respect to the Company and
its Subsidiaries (excluding Unrestricted Subsidiaries), to permit the holder of
such Indebtedness or any other Person to accelerate, the maturity of
$10,000,000 or more in the aggregate of such Indebtedness; or $10,000,000 or
more in the aggregate of any such Indebtedness shall be, or if as a result of
such failure or other event may be, required to be prepaid (other than
prepayments resulting from excess cash flow or the sale of assets) in whole or
in part prior to its stated maturity;
Section 6.08 Bankruptcy. Holdco, the Company or any of its
Subsidiaries (excluding Unrestricted Subsidiaries) shall commence a voluntary
case concerning itself under Title 11 of the United States Code entitled
"Bankruptcy" as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against Holdco, the
Company or any of its Subsidiaries (excluding Unrestricted Subsidiaries) and
the petition is not controverted within 10 days, or is not stayed or dismissed
within 60 days, after commencement of the case; or a custodian (as defined in
the Bankruptcy Code) is appointed for, or takes charge of, all or any
substantial part of the property of Holdco, the Company or any of its
Subsidiaries (excluding Unrestricted Subsidiaries); or Holdco, the Company or
any of its Subsidiaries (excluding Unrestricted Subsidiaries) commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdco, the Company
or such Subsidiary or there is commenced against Holdco, the Company or any of
its Subsidiaries (excluding Unrestricted Subsidiaries) any such proceeding
which remains unstayed or undismissed for a period of 60 days; or Holdco, the
Company or any of its Subsidiaries (excluding Unrestricted Subsidiaries) is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or Holdco, the Company or
any of its Subsidiaries (excluding Unrestricted Subsidiaries) suffers any
appointment of any custodian or the like for it or any substantial part of its
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Property to continue undischarged or unstayed for a period of 60 days; or
Holdco, the Company or any of its Subsidiaries (excluding Unrestricted
Subsidiaries) makes a general assignment for the benefit of creditors; or
Holdco, the Company or any of its Subsidiaries (excluding Unrestricted
Subsidiaries) shall fail to pay, or shall state in writing that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or
Holdco, the Company or any of its Subsidiaries (excluding Unrestricted
Subsidiaries) shall by any act or failure to act indicate its consent to,
approval of or acquiescence in any of the foregoing; or any corporate action is
taken by Holdco, the Company or any of its Subsidiaries (excluding Unrestricted
Subsidiaries) for the purpose of effecting any of the foregoing;
Section 6.09 Money Judgment. Judgments or orders for the payment
of money involving in the aggregate at any time a liability (net of any
insurance proceeds or indemnity payments actually received in respect thereof
prior to or within 60 days from the entry thereof, or to be received in respect
thereof in the event any appeal thereof shall be unsuccessful) of more than
$10,000,000, or that would otherwise have a Material Adverse Effect shall be
rendered against the Company or any of it Subsidiaries (excluding Unrestricted
Subsidiaries) and such judgment or order shall continue unsatisfied in
accordance with the terms of such judgment or order (in the case of a money
judgment) and in effect for a period of 60 days during which execution shall
not be effectively stayed or deferred (whether by action of a court, by
agreement or otherwise);
Section 6.10 Discontinuance of Business. Except as a result of
any merger permitted by Section 5.04(c), the Company or any material Subsidiary
shall cease to be principally engaged in the businesses and operations in which
the Company and its then existing Subsidiaries were principally engaged on the
Restated Closing Date;
Section 6.11 Financing Documents. Any Material Provision of any
of the Financing Documents after delivery thereof shall for any reason, except
to the extent permitted by the terms thereof, cease to be in full force and
effect and valid, binding and enforceable (except as enforceability may be
limited as stated in Section 4.03) in accordance with its terms, or, in the
case of any of the Security Instruments, cease to create a valid and perfected
Lien of the priority contemplated thereby on any of the collateral purported to
be covered thereby, or the Company or any of its Subsidiaries (or any other
Person who may have granted or purported to grant such Lien) shall so state in
writing. As used in this Section 6.11, "Material Provision" shall mean (i)
with respect to this Agreement, the Notes, or any Subsidiary Guaranty, any
material term, covenant, or agreement set forth therein, and (ii) with respect
to any other Financing Document, any provision if the validity and
enforceability thereof is necessary for such Financing Document to accomplish
its stated, or clearly intended, purpose or otherwise necessary in order for
any Lender to enforce any material right or remedy under any Financing
Document;
Section 6.12 Change of Control. The occurrence of a Change of
Control;
Section 6.13 Merger Agreement Representations and Warranties. Any
representation or warranty made or deemed made by SCI in the Merger Agreement
shall be or have been incorrect in any material respect as of the STX Effective
Date;
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Section 6.14 ▇▇▇▇▇▇▇▇ Indemnity. (a) The occurrence, with respect
to ▇▇▇▇▇▇▇▇, of any of the events described in Section 6.08 or the failure of
the ▇▇▇▇▇▇▇▇ Indemnity to continue to be in full force and effect, (b) the
occurrence of any event or the existence of any condition that would have been
covered by the ▇▇▇▇▇▇▇▇ Indemnity, and (c) the existence of (a) and (b),
collectively, could reasonably be expected to have a Material Adverse Effect;
Section 6.15 Default Under Senior Secured Discount Notes. Holdco
shall fail to observe or perform any covenant or agreement contained in the
Senior Secured Discount Notes or the Senior Secured Discount Notes Indenture
within any applicable grace period, if the effect of such failure or other
event is to accelerate, or to permit the holders of the Senior Secured Discount
Notes or any other Person to accelerate, the maturity thereof;
Section 6.16 Senior Indebtedness. The Senior Subordinated Notes
or the Additional Senior Subordinated Notes shall cease, for any reason, to be
validly subordinated to the Lender Indebtedness, as provided in the Senior
Subordinated Notes Indenture and the Additional Senior Subordinated Indenture
or the Company, any Affiliate of the Company, the trustee in respect of the
Senior Subordinated Notes or the Additional Senior Subordinated Notes or the
holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes or the Additional Senior Subordinated Notes shall so assert
in writing;
Section 6.17 Equity Notes Contribution. Failure of Holdco to
contribute to the Company and the Company to contribute or loan to Sterling
Fibers at least $300,000 of additional cash equity within 90 days of the AFB
Effective Date, irrespective of the amount collected on the Equity Notes during
such period; or
Section 6.18 Cytec Indemnity. (a) The occurrence, with respect to
any of the Cytec Parties, of any of the events described in Section 6.08 or the
failure of the Cytec Indemnity to continue to be in full force and effect, (b)
the occurrence of any event or the existence of any condition that would have
been covered by the Cytec Indemnity, and (c) the existence of (a) and (b),
collectively, could reasonably be expected to have a Material Adverse Effect;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written or
telex request of the Required Lenders, shall, by written notice to the Company,
take any or all of the following actions, without prejudice to the rights of
the Administrative Agent, any Lender or the holder of any Note, to enforce its
claims against the Company: (i) declare the Revolving Credit Commitment and
other lending obligations, if any, terminated, whereupon the Revolving Credit
Commitment and other lending obligations, if any, of each Lender shall
terminate immediately; or (ii) declare the entire principal amount of and all
accrued interest on all Lender Indebtedness then outstanding to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
protest, notice of protest or dishonor, notice of acceleration, notice of
intent to accelerate or other notice of any kind, all of which are hereby
expressly waived by the Company, and thereupon take such action as it may deem
desirable under and pursuant to the Financing Documents; provided, that, if an
Event of Default specified in Section 6.08 shall occur, the result which would
occur upon the giving of written notice by the Administrative Agent to the
Company, as specified in clauses (i) and (ii) above, shall occur automatically
without the giving of any such notice.
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ARTICLE VII
THE AGENTS
Section 7.01 Appointment of Administrative Agent. Each Lender
(and each Secured Affiliate by and through its affiliated Lender), the
Documentation Agent and each Issuing Bank hereby designates Texas Commerce Bank
National Association, as Administrative Agent to act as herein specified and as
specified in the other Financing Documents. Each Lender (and each Secured
Affiliate by and through its affiliated Lender), the Documentation Agent and
each Issuing Bank hereby irrevocably authorizes the Administrative Agent to
take such action on its behalf under the provisions of this Agreement, the
Notes, and the other Financing Documents and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to
or required of the Administrative Agent by the terms hereof and thereof and
such other powers as are reasonably incidental thereto. The Administrative
Agent may perform any of its duties hereunder by or through its agents or
employees.
Section 7.02 Limitation of Duties of Administrative Agent. The
Administrative Agent shall have no duties or responsibilities except those
expressly set forth with respect to the Administrative Agent in this Agreement
and as specified in the other Financing Documents. Neither the Administrative
Agent nor any of its officers, directors, employees or agents shall be liable
for any action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Administrative Agent shall be mechanical and administrative
in nature; the Administrative Agent shall not have by reason of this Agreement
a fiduciary relationship in respect of any Lender; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Administrative Agent any obligations in respect of this
Agreement except as expressly set forth herein.
Section 7.03 Lack of Reliance on the Administrative Agent and the
Documentation Agent.
(a) Independent Investigation. Independently and without
reliance upon the Administrative Agent or the Documentation Agent,
each Lender, to the extent it deems appropriate, has made and shall
continue to make (i) its own independent investigation of the
financial condition and affairs of the Company in connection with the
taking or not taking of any action in connection herewith, and (ii)
its own appraisal of the creditworthiness of the Company, and, except
as expressly provided in this Agreement, and the other Financing
Documents the Administrative Agent and the Documentation Agent shall
have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the
consummation of the transactions contemplated herein or at any time or
times thereafter.
(b) Agents Not Responsible. The Administrative Agent and
the Documentation Agent shall not be responsible to any Lender or any
Issuing Bank for any recitals, statements, information,
representations or warranties herein or in any document, certificate
or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity,
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enforceability, collectibility, priority or sufficiency of this
Agreement, the Notes, the Letters of Credit or the other Financing
Documents or the financial condition of the Company or be required to
make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement, the
Notes or the other Financing Documents, or the financial condition of
the Company, or the existence or possible existence of any Default or
Event of Default.
Section 7.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including the failure to act) in connection with
this Agreement, the Notes and the other Financing Documents, the Administrative
Agent shall be entitled to refrain from such act or taking such action unless
and until the Administrative Agent shall have received instructions from the
Required Lenders; and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting under this
Agreement, the Notes and the other Financing Documents in accordance with the
instructions of the Required Lenders, or to the extent required by Section
8.02, all of the Lenders.
Section 7.05 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cablegram, radiogram, order or other documentary
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Administrative
Agent may consult with legal counsel (including counsel for the Company),
independent public accountants and other experts selected by it and 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.
Section 7.06 INDEMNIFICATION OF ADMINISTRATIVE AGENT AND
DOCUMENTATION AGENT. TO THE EXTENT THE ADMINISTRATIVE AGENT OR THE
DOCUMENTATION AGENT IS NOT REIMBURSED AND INDEMNIFIED BY THE COMPANY, EACH
LENDER WILL REIMBURSE AND INDEMNIFY THE ADMINISTRATIVE AGENT OR THE
DOCUMENTATION AGENT, AS APPLICABLE, IN PROPORTION TO ITS TOTAL CREDIT
PERCENTAGE, FOR AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING
REASONABLE COUNSEL FEES AND DISBURSEMENTS) OR DISBURSEMENTS OF ANY KIND OR
NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT OR THE DOCUMENTATION AGENT IN PERFORMING ITS DUTIES
HEREUNDER, IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT AND BY
REASON OF THE ORDINARY NEGLIGENCE OF THE ADMINISTRATIVE AGENT AND THE
DOCUMENTATION AGENT; PROVIDED THAT NO LENDER SHALL BE LIABLE TO THE
ADMINISTRATIVE AGENT OR THE DOCUMENTATION AGENT FOR ANY PORTION OF SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM, AS TO THE
ADMINISTRATIVE AGENT, THE ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OR, AS TO THE DOCUMENTATION AGENT, THE DOCUMENTATION AGENT'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
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Section 7.07 The Administrative Agent and Documentation Agent in
their Individual Capacity. With respect to their obligations under this
Agreement, the Loans made by it and the Notes issued to it, the Administrative
Agent and Documentation Agent shall have the same rights and powers hereunder
as any other Lender or holder of a Note and may exercise the same as though it
were not performing the duties, if any, specified herein; and the terms
"Lenders," "Required Lenders," "ESOP Term Loan Lenders," "Revolving Credit
Lenders," "Tranche A Term Loan Lenders," "Tranche B Term Loan Lenders,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include the Administrative Agent and Documentation Agent
in their individual capacity. The Administrative Agent and Documentation Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with the Company or any
affiliate of the Company as if it were not performing the duties, if any,
specified herein, and may accept fees and other consideration from the Company
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
Section 7.08 May Treat Lender as Owner. The Company, the
Administrative Agent and the Issuing Banks may deem and treat each Lender as
the owner of such Lender's Note for all purposes hereof unless and until a
written notice of the assignment or transfer thereof shall have been filed with
the Administrative Agent. Any request, authority or consent of any Person who
at the time of making such request or giving such authority or consent is the
owner of a Note shall be conclusive and binding on any subsequent owner,
transferee or assignee of such Note or any promissory note or notes issued in
exchange therefor.
Section 7.09 Successor Administrative Agent.
(a) Administrative Agent Resignation. The Administrative
Agent may resign at any time by giving written notice thereof to the
Lenders, the Issuing Banks and the Company and may be removed at any
time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right,
upon five days' notice to the Company, to appoint a successor
Administrative Agent, subject to the approval of the Company, such
approval not to be unreasonably withheld. If no successor
Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring
Administrative Agent, then, upon five days' notice to the Company, the
retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent (subject to approval of the Company,
such approval not to be unreasonably withheld), which shall be a bank
which maintains an office in the United States, or a commercial bank
organized under the laws of the United States of America or of any
State thereof, or any Affiliate of such bank, having a combined
capital and surplus of at least $250,000,000.
(b) Rights, Powers, etc. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Administrative
Agent's resignation
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or removal hereunder as Administrative Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
Section 7.10 Documentation Agent. The Documentation Agent has no
duties hereunder in its capacity as Documentation Agent.
Section 7.11 Assumption of Administrative Agent. The
Administrative Agent under this Agreement hereby agrees to and assumes the
rights, privileges and obligations of each of the Original Administrative Agent
and the AFB Administrative Agent and is hereby deemed for all purposes under
any Financing Document to be such Original Administrative Agent or AFB
Administrative Agent to the extent such Financing Document continues to make
reference to such agents.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including, telecopy
or similar teletransmission or writing) and shall be given to such party at its
address or telecopy number set forth on the signature pages hereof or such
other address or telecopy number as such party may hereafter specify by notice
to the Administrative Agent and the Company. Each such notice, request or
other communication shall be effective (i) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (ii) if given by any other means (including, but not
limited to, by air courier), when delivered at the address specified in this
Section; provided that notices to the Administrative Agent shall not be
effective until actually and physically received.
Section 8.02 Amendments and Waivers. Neither this Agreement nor
any other Financing Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section. The Required Lenders may, or, with the written consent of the
Required Lenders, the Administrative Agent shall, from time to time, (x) enter
into with the Company, written amendments, supplements or modifications hereto
and to the other Financing Documents for the purpose of adding any provisions
to this Agreement or to the other Financing Documents or changing in any manner
the rights or obligations of the Lenders or the Company hereunder or thereunder
or (y) waive at the Company's request, on such terms and conditions as the
Required Lenders or the Administrative Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other
Financing Documents or any Default and its consequences; provided, however,
that no such waiver and no such amendment, supplement or modification shall:
(a) reduce the amount or extend the scheduled date of
maturity of any Loan or any Reimbursement Obligation or of any
scheduled installment thereof or reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any
payment thereof or modify any provision that provides for the ratable
sharing by the Lenders of any payment or prepayment of
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Lender Indebtedness to provide for a non-ratable sharing thereof or
the right of the Term Lenders to decline acceptance of prepayment or
increase the amount or extend the expiration date of any Lender's
Revolving Credit Commitment or amend, modify or waive any provision of
Section 2.19, in each case without the prior written consent of each
Lender directly affected thereby;
(b) change the currency in which any Loan or
Reimbursement Obligation is payable or amend, modify or waive any
provision of this Section 8.02 or reduce the percentage specified in
the definition of Required Lenders, in each case without the written
consent of all of the Lenders;
(c) release (i) any Subsidiary Guarantor from its
obligations under the Subsidiary Guaranty or (ii) any of the
Collateral, without the written consent of all of the Lenders, except
as expressly permitted hereby, provided that the Administrative Agent
shall release (without consent from the Lenders) any Collateral sold,
transferred or otherwise disposed of as permitted by Section 5.04(c);
(d) amend, modify or waive any provision of Article VII
without the written consent of the Administrative Agent, and of the
Documentation Agent, if affected thereby; or
(e) amend, modify or waive (i) any Letter of Credit
Liability without the written consent of the Issuing Bank or (ii) any
Letter of Credit without the consent of each Revolving Credit Lender
if such Letter of Credit, after giving effect to such amendment,
modification or waiver, would no longer satisfy the requirements
hereof if such Letter of Credit was being issued ab initio at such
time, provided that in all cases other than clauses (i) or (ii), only
the consent of the Issuing Bank shall be required to amend, modify or
waive any Letter of Credit.
Any waiver and any amendment, supplement or modification pursuant to
this Section 8.02 shall apply to each of the Lenders and shall be
binding upon the Company, the Lenders, the Administrative Agent and
all future holders of the Loans. In the case of any waiver, the
Company, the Lenders and the Administrative Agent shall be restored to
their former position and rights hereunder and under the other
Financing Documents, and any Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any
subsequent or other Default, or impair any right consequent thereon.
Section 8.03 No Waiver; Remedies Cumulative. No failure or delay
on the part of the Company or the Administrative Agent or any Lender or any
holder of any Note in exercising any right or remedy under this Agreement or
any other Financing Document and no course of dealing between the Company and
the Administrative Agent or any Lender or any holder of any Note shall operate
as a waiver thereof, nor shall any single or partial exercise of any right or
remedy under the Notes, this Agreement or any other Financing Document preclude
any other or further exercise thereof or the exercise of any other right or
remedy under the Notes, this Agreement or any other Financing Document. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which the Company, the Administrative Agent or any
Lender would otherwise have. No notice to or demand on the Company not
required under the Notes, this Agreement or any other Financing Document in any
case shall entitle the Company to any other or further notice or demand in
similar or other circumstances or constitute
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a waiver of the rights of the Administrative Agent or the Lenders to any other
or further action in any circumstances without notice or demand.
Section 8.04 Payment of Expenses, Indemnities, etc. The Company
agrees to (and shall be liable for):
(a) Expenses. Whether or not the transactions hereby
contemplated are consummated, pay all reasonable out-of-pocket costs
and expenses of the Administrative Agent, the Documentation Agent and
each Issuing Bank in the administration (both before and after the
execution hereof and including advice of counsel for the
Administrative Agent as to the rights and duties of the Administrative
Agent and the Lenders with respect thereto) of, and in connection with
the preparation, execution and delivery of, recording or filing of,
preservation of rights under, enforcement of, and, after a Default,
refinancing, renegotiation or restructuring of, this Agreement, the
Notes, and the other Financing Documents and any amendment, waiver or
consent relating thereto (including, but not limited to, the
reasonable fees and disbursements of counsel for the Administrative
Agent and in the case of enforcement for any of the Lenders) and
promptly reimburse the Administrative Agent for all amounts expended,
advanced, or incurred by the Administrative Agent or the Lenders to
satisfy any obligation of the Company, Holdco, or the Subsidiary
Guarantors under this Agreement or any other Financing Document;
(b) INDEMNIFICATION. INDEMNIFY THE ADMINISTRATIVE AGENT,
THE DOCUMENTATION AGENT, THE ISSUING BANKS AND EACH LENDER, EACH OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES,
AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM HARMLESS AGAINST, AND
PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, ANY AND ALL
ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS, LITIGATION
OR INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR EXPENSES
OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED
AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS
DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY
WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY THE COMPANY OR ANY
SUBSIDIARY OF THE COMPANY OF THE PROCEEDS OF ANY OF THE LOANS; OR (II)
ANY OTHER ASPECT OF THIS AGREEMENT, THE NOTES, AND THE FINANCING
DOCUMENTS, INCLUDING BUT NOT LIMITED TO THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL (INCLUDING ALLOCATED COSTS OF INTERNAL
COUNSEL) AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH
INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT,
PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR
CLAIM, AND INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES,
LIABILITIES, DAMAGES OR EXPENSES ARISING BY REASON OF ORDINARY
NEGLIGENCE OF ANY OF THE ADMINISTRATIVE AGENT, THE DOCUMENTATION
AGENT, THE ISSUING BANKS AND EACH LENDER, EACH OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS AND
AFFILIATES; PROVIDED, HOWEVER, THE PROVISIONS OF THIS SECTION 8.04(B)
SHALL NOT APPLY TO ANY ACTION, SUITS, PROCEEDINGS, CLAIMS, COSTS,
LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE EXTENT, BUT ONLY TO
THE EXTENT, CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PARTY SEEKING INDEMNIFICATION;
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(c) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD
HARMLESS FROM TIME TO TIME THE ADMINISTRATIVE AGENT, THE DOCUMENTATION
AGENT, THE ISSUING BANKS AND THE LENDERS, EACH PERSON CLAIMING BY,
THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE FOREGOING AND THE RESPECTIVE
DIRECTORS, OFFICERS, COUNSEL, EMPLOYEE, AGENTS, AFFILIATES,
SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY
AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS
OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A
RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT)
TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT AND INCLUDING ANY AND ALL
LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR
PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A
RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT)
ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF THE ADMINISTRATIVE
AGENT, THE DOCUMENTATION AGENT, THE ISSUING BANKS AND THE LENDERS,
EACH PERSON CLAIMING BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE
FOREGOING AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES,
AGENTS, AFFILIATES, SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING
(1) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE PROPERTIES, INCLUDING
WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES
ON ANY OF THEIR RESPECTIVE PROPERTIES, (2) AS A RESULT OF THE BREACH
OR NON COMPLIANCE BY THE COMPANY OR ANY OF ITS SUBSIDIARIES WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (3) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES OF ANY OF THEIR RESPECTIVE PROPERTIES OR PAST ACTIVITY ON
ANY OF THEIR RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR
RESPECTIVE PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT
THE TIME, COULD RESULT IN PRESENT LIABILIT, (4) THE PRESENCE, USE,
RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR
AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE COMPANY OR ANY OF ITS
SUBSIDIARIES, OR (5) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OTHER
FINANCING DOCUMENT; PROVIDED, HOWEVER, NO INDEMNITY SHALL BE AFFORDED
UNDER THIS SECTION 8.04(C) IN RESPECT OF ANY PROPERTY FOR ANY
OCCURRENCE ARISING PRIMARILY FROM THE ACTS OR OMISSIONS OF THE
ADMINISTRATIVE AGENT OR ANY LENDER DURING THE PERIOD AFTER WHICH SUCH
PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED ACTUAL PHYSICAL
POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF
FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE); AND
(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING
PROVISIONS, THE COMPANY HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO
BRING AGAINST ANY OF THE PERSONS INDEMNIFIED IN THIS SECTION 8.04 ANY
DEMAND, CLAIM, COST RECOVERY ACTION OR LAWSUIT THEY MAY NOW OR
HEREAFTER HAVE OR ACCRUE (WHICH RELATE TO OR ARISE AS A RESULT OF THE
LOANS, THE LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) ARISING FROM
(1) ANY ENVIRONMENTAL LAW NOW OR HEREAFTER ENACTED (INCLUDING THOSE
APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES) UNLESS THE ACTS
OR
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OMISSIONS OF ANY SUCH PERSON OR THEIR RESPECTIVE SUCCESSORS AND ASSIGNS ARE
THE PRIMARY CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, COST
RECOVERY ACTION OR LAWSUIT, (2) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR
(3) THE BREACH OR NON-COMPLIANCE BY THE COMPANY WITH ANY ENVIRONMENTAL LAW
OR ENVIRONMENTAL COVENANT APPLICABLE TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, UNLESS THE ACTS OR OMISSIONS OF SUCH PERSON, ITS SUCCESSORS
AND ASSIGNS ARE THE PRIMARY CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH
DEMAND, CLAIM, COST RECOVERY ACTION OR LAWSUIT.
If and to the extent that the obligations of the Company under this Section are
unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law. The Company's obligations under this Section
shall survive any termination of this Agreement and the payment of the Notes.
Section 8.05 Right of Setoff. In addition to and not in limitation of all
rights of offset that any Lender or Issuing Bank may have under applicable law,
each Lender or other holder of a Note, or any other Lender Indebtedness shall,
upon the occurrence of any Event of Default and at any time during the
continuance thereof and whether or not such Lender, such Issuing Bank or such
holder has made any demand or the Company's obligations are matured, have the
right at any time and from time to time, without notice to the Company (any such
notice being expressly waived by the Company) to set-off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by any Lender or Issuing Bank to
or for the credit or the account of the Company against any and all of the
Lender Indebtedness owing to such Lender or Issuing Bank then outstanding,
subject to the provisions of Section 2.19.
Section 8.06 Benefit of Agreement. The Notes, this Agreement and the other
Financing Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
provided that the Company may not assign or transfer any of its interest
hereunder or thereunder without the prior written consent of the Lenders.
Section 8.07 Successors and Assigns; Participations and Assignments.
(a) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks,
financial institutions, or investment funds ("Participants") participating
interests in any Loan owing to such Lender, any Note held by such Lender,
any Revolving Credit Commitment of such Lender or any other interest of
such Lender hereunder and under the other Financing Documents. In the event
of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
holder of any such Loan (and any Note evidencing such Loan) for all
purposes under this Agreement and the other Financing Documents and the
Company and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this
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Agreement and the other Financing Documents. Any agreement pursuant to
which any Lender shall sell any such participating interest shall provide
that such Lender shall retain the sole right and responsibility to exercise
such Lender's rights and enforce the Company's obligations hereunder,
including the right to consent to any amendment, supplement, modification
or waiver of any provision of this Agreement or any of the other Financing
Documents, provided that such participation agreement may provide that such
Lender will not agree to any amendment, supplement, modification or waiver
described in clause (i) or (ii) of the proviso to the second sentence of
Section 8.02(a) without the consent of the Participant. The Company agrees
that each Lender shall be entitled to the benefits of Sections 2.15, 2.16,
2.18, 2.20 and 8.04 without regard to whether it has granted any
participating interests, and that all amounts payable to a Lender under
such Sections shall be determined as if such Lender had not granted any
such participating interests. Each Participant shall have the rights of
set-off against the Lender Indebtedness and similar rights or Liens to the
same extent as may be available to the Administrative Agent or the Lenders.
(b) Branch Offices, Affiliates, Any Lender may make, carry or transfer
Loans at, to or for the account of, any of its branch offices or the office
of an Affiliate of such Lender.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign to
any Lender or any Affiliate thereof, or, with the prior written consent of
the Company and the Administrative Agent (which in each case shall not be
unreasonably withheld), to an additional bank, financial institution or
investment fund (an "Assignee") all or any part of its rights and
obligations under this Agreement and any Notes, including, without
limitation, its Revolving Credit Commitment, Loans, and Letter of Credit
Liabilities pursuant to an Assignment and Acceptance, substantially in the
form of Exhibit G (each an "Assignment and Acceptance"), executed by such
Assignee, such assigning Lender (and, in the case of any Assignee that is
not then a Lender or an Affiliate thereof, by the Company and the
Administrative Agent) and delivered to the Administrative Agent for its
acceptance and recording in the Register; provided that (i) (unless the
Company and the Administrative Agent otherwise consent in writing) no such
transfer to an Assignee (other than a Lender or any Affiliate thereof)
shall be in a principal amount less than (A) $5,000,000 for a transfer by
any Tranche B Term Loan Lender, and (B) $10,000,000 in the aggregate for a
transfer by any other Lender (or, if less than the applicable amount
required by clause (A) or (B), the full amount of such assigning Lender's
Term Loans, Revolving Credit Loans, Letter of Credit Liabilities, and
Revolving Credit Commitment) and (ii) if any Lender assigns all or any part
of its rights and obligations under this Agreement to one of its Affiliates
in connection with or in contemplation of the sale or other disposition of
its interest in such Affiliate, the Company's and the Administrative
Agent's prior written consent shall be required for such assignment. Upon
such execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and Acceptance, (x)
the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a
Lender hereunder with a Revolving Credit Commitment, Revolving Credit
Exposure, and Term Loans, as set forth therein, and (y) the assigning
Lender thereunder shall be released from its obligations under this
Agreement to the extent that such obligations shall have been expressly
assumed by the Assignee
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pursuant to such Assignment and Acceptance (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto but shall nevertheless
continue to be entitled to the benefits of Sections 2.16, 2.18, 2.20 and
8.04). Notwithstanding the foregoing, no Assignee, which as of the date of
any assignment to it pursuant to this Section 8.07(c) would be entitled to
receive any greater payment under Section 2.16 or 2.20 than the assigning
Lender would have been entitled to receive as of such date under such
Sections with respect to the rights assigned, shall be entitled to receive
such payments unless the Company has expressly consented in writing to
waive the benefit of this provision at the time of the Assignment.
(d) The Administrative Agent, on behalf of the Company, shall maintain
at its address referred to in Section 8.01 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the Revolving
Credit Commitment and of, and the principal amount of the Loans and Letter
of Credit Liabilities owing to, and any Notes evidencing such Loans owned
by, each Lender from time to time. Notwithstanding anything in this
Agreement to the contrary, the Company, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as
the owner of any Loan, any Notes and the Revolving Credit Commitments and
recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Notwithstanding anything in this Agreement to the contrary, no
assignment under Section 8.07(c) of any rights or obligations under or in
respect of the Loans, Reimbursement Obligations or the Notes evidencing
such Loans shall be effective unless and until the Administrative Agent
shall have recorded the assignment in the Register pursuant to this Section
8.07(e). Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an Affiliate thereof, by the Company and the
Administrative Agent), together with payment to the Administrative Agent of
a registration and processing fee of $3,500 (which fee need not be paid in
the case of any assignment to an Affiliate of the assigning Lender and
which shall not be a cost subject to reimbursement under Section 8.04 or
otherwise hereunder), the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register
and give prompt notice of such acceptance and recordation to the Lenders
and the Company. On or prior to such effective date, the assigning Lender
shall surrender any outstanding Notes held by it, all or a portion of which
are being assigned, and the Company, shall, upon the request to the
Administrative Agent by the assigning Lender or the Assignee, as
applicable, execute and deliver to the Administrative Agent (in exchange
for the outstanding Notes of the assigning Lender) a new Revolving Credit
Note, Tranche A Term Note, Tranche B Term Note and/or ESOP Term Note, as
the case may be, to the order of such Assignee in an amount equal to (i) in
the case of a Revolving Credit Note, the greater of (A) the amount of such
Assignee's Revolving Credit Commitment and (B) the aggregate principal
amount of the Revolving Credit Exposure of such Assignee, (ii) in the case
of a Tranche A Term Note, the amount of such Assignee's Tranche A Term
Loans, (iii) in the case of a Tranche B Term Note, the amount of such
Assignee's Tranche B Term Loans, and (iv) in the case
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of an ESOP Term Note, the amount of such Assignee's ESOP Term Loans, in
each case with respect to the relevant Loan, Letter of Credit Liability or
Revolving Credit Commitment after giving effect to such Assignment and
Acceptance and, if the assigning Lender has retained a Revolving Credit
Commitment, Revolving Credit Exposure, or Term Loan hereunder, a new
Revolving Credit Note, Tranche A Term Note, Tranche B Term Note and/or ESOP
Term Note, as the case may be, to the order of the assigning Lender in an
amount equal to (i) in the case of a Revolving Credit Note, the greater of
(A) the amount of such Lender's Revolving Credit Commitment and (B) the
aggregate principal amount of all Revolving Credit Exposure of such Lender,
(ii) in the case of a Tranche A Term Note, the amount of such Lender's
Tranche A Term Loans, (iii) in the case of a Tranche B Term Note, the
amount of such Assignee's Tranche B Term Loans, and (iv) in the case of an
ESOP Term Note, the amount of such Assignee's ESOP Term Loans, in each case
with respect to the relevant Loan, Revolving Credit Exposure or Revolving
Credit Commitment after giving effect to such Assignment and Acceptance.
Any such new Notes shall be dated such effective date and shall otherwise
be in the form of the Note replaced thereby. Any Notes surrendered by the
assigning Lender shall be returned by the Administrative Agent to the
Company marked "canceled".
(f) The Company authorizes each Lender to disclose to any participant
or Assignee (each, a "Transferee") and any prospective Transferee,
provided, that, any such Transferee or potential Transferee has signed a
confidentiality agreement substantially similar to the provisions of
Section 8.13, any and all information in such Lender's possession
concerning the Company and its Affiliates which has been delivered to such
Lender by or on behalf of the Company pursuant to this Agreement or which
has been delivered to such Lender by or on behalf of the Company in
connection with such Lender's credit evaluation of the Company and its
Affiliates prior to becoming a party to this Agreement. No assignment or
participation made or purported to be made to any Transferee shall be
effective without the prior written consent of the Company if it would
require it to make any filing with any Governmental Authority or qualify
any Loan or Note under the laws of any jurisdiction, and the Company shall
be entitled to request and receive such information and assurances as it
may reasonably request from any Lender or any Transferee to determine
whether any such filing or qualification is required or whether any
assignment or participation is otherwise in accordance with applicable law.
(g) Any Lender may at any time grant, pledge or assign a security
interest in all or a portion of its rights under this Agreement to secure
obligations of such Lender, including any such grant, pledge or assignment
to a Federal Reserve Bank, and this Section 8.07 shall not apply to any
such grant, pledge or assignment of a security interest; provided that no
such grant, pledge or assignment of a security interest shall release a
Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.
Section 8.08 Governing Law; Submission to Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING
SECTION 5-1401 OF
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THE NEW YORK GENERAL OBLIGATIONS LAW, OR ANY SIMILAR SUCCESSOR PROVISION
THERETO, BUT EXCLUDING ALL OTHER CONFLICT-OF-LAWS RULES)AND TO THE EXTENT
CONTROLLING, LAWS OF THE UNITED STATES OF AMERICA.
(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER FINANCING DOCUMENTS MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF
THE AFORESAID COURTS. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, BUT NOT LIMITED TO, ANY OBJECTION TO THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
(c) WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE
LAW, EACH OF THE COMPANY, THE AGENTS, THE ISSUING BANKS AND THE LENDERS (I)
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO ANY FINANCING DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (II) IRREVOCABLY WAIVE ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III)
CERTIFY THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS; AND (IV) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE OTHER FINANCING DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION.
(d) Designation of Process Agent. The Company hereby irrevocably
designates CT Corporation System, with an office on the date hereof at ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, as the designee, appointee and process
agent of the Company to receive, for and on behalf of the Company, service
of process in such respective jurisdictions in any legal action or
proceeding with respect to this Agreement, the Notes, or the other
Financing Documents. It is understood that a copy of such process served on
such agent will be promptly forwarded by mail to the Company at its address
set forth opposite its signature below, but the failure of the Company to
receive such copy shall not affect in any way the service of such process.
The Company further irrevocably consents to the service of process of any
of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to the Company at its said address, such service to become effective 30
days after such mailing.
(e) Service of Process. Nothing herein shall affect the right of the
Administrative Agent or any Lender or any holder of a Note to serve process
in any other manner permitted by
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law or to commence legal proceedings or otherwise proceed against the
Company in any other jurisdiction.
Section 8.09 Independent Nature of Lenders' Rights. The amounts payable at
any time hereunder to each Lender shall be a separate and independent debt, and
each Lender shall be entitled to protect and enforce its rights arising out of
this Agreement, and it shall not be necessary for any other Lender to be joined
as an additional party in any proceeding for such purpose.
Section 8.10 Invalidity. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Financing
Document shall, for any reason, be held invalid, illegal or unenforceable in any
respect, (i) the Company agrees that such invalidity, illegality or
unenforceability shall not affect any other provision of the Notes, this
Agreement or any other Financing Document and (ii) the Company and the
Administrative Agent (acting on behalf and at the direction of the Lenders) will
negotiate in good faith to amend such provision so as to be legal, valid, and
enforceable.
Section 8.11 Renewal, Extension or Rearrangement. All provisions of this
Agreement and of any other Financing Documents relating to the Notes or other
Lender Indebtedness shall apply with equal force and effect to each and all
promissory notes hereafter executed which in whole or in part represent a
renewal, extension for any period, increase or rearrangement of any part of the
Lender Indebtedness originally represented by the Notes, or of any part of such
other Lender Indebtedness.
Section 8.12 Interest. It is the intention of the parties hereto to conform
strictly to usury laws applicable to the Administrative Agent, the Documentation
Agent, the Issuing Banks and the Lenders (collectively, the "Financing Parties")
and the Transactions. Accordingly, if the Transactions would be usurious as to
any Financing Party under laws applicable to it, then, notwithstanding anything
to the contrary in the Notes, this Agreement or in any other Financing Document
or agreement entered into in connection with the Transactions or as security for
the Notes, it is agreed as follows: (i) the aggregate of all consideration which
constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under the Notes, this Agreement or under any of such other Financing Documents
or agreements or otherwise in connection with the Transactions shall under no
circumstances exceed the maximum amount allowed by such applicable law, (ii) in
the event that the maturity of the Notes is accelerated for any reason, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (iii)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be cancelled automatically by such
Financing Party and, if theretofore paid, shall be credited by such Financing
Party on the principal amount of the Company's Indebtedness to such Financing
Party (or, to the extent that the principal amount of the Company's Indebtedness
to such Financing Party shall have been or would thereby be paid in full,
refunded by such Financing Party to the Company). The right to accelerate the
maturity of the Notes does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the
Financing Parties do not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to the Financing Parties for
the use, forbearance or detention of sums included in the Lender Indebtedness
shall, to the extent permitted by law applicable to such Financing Party, be
amortized, prorated, allocated and spread throughout the full term of
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the Notes until payment in full so that the rate or amount of interest on
account of the Lender Indebtedness does not exceed the applicable usury ceiling,
if any. As used in this Section, the terms "applicable law" or "laws applicable
to any Financing Party" shall mean the law of any jurisdiction whose laws may be
mandatorily applicable notwithstanding other provisions of this Agreement, or
law of the United States of America applicable to any Financing Party and the
Transactions which would permit such Financing Party to contract for, charge,
take, reserve or receive a greater amount of interest than under such
jurisdiction's law. To the extent that Article 5069-1.04 of the Texas Revised
Civil Statutes is relevant to any Financing Party for the purpose of determining
the Highest Lawful Rate, such Financing Party hereby elects to determine the
applicable rate ceiling under such Article by the indicated (weekly) rate
ceiling from time to time in effect, subject to such Financing Party's right
subsequently to change such method in accordance with applicable law.
Section 8.13 Confidential Information. The Administrative Agent and each
Lender agree that all documentation and other information made available by the
Company to the Administrative Agent or such Lender under the terms of this
Agreement shall (except to the extent such documentation or other information is
publicly available or hereafter becomes publicly available other than by action
of the Administrative Agent or such Lender, or was theretofore known or
hereinafter becomes known to the Administrative Agent or such Lender independent
of any disclosure thereto by the Company) be held in the strictest confidence by
the Administrative Agent or such Lender and used solely in the administration
and enforcement of the Loans from time to time outstanding from such Lender to
the Company and in the prosecution of defense of legal proceedings arising in
connection herewith; provided that (i) the Administrative Agent or such Lender
may disclose documentation and information to the Administrative Agent and/or to
any other Lender which is a party to this Agreement or any Affiliates thereof,
and (ii) the Administrative Agent or such Lender may disclose such documentation
or other information to any other bank or other Person to which such Lender
sells or proposes to make an assignment or sell a participation in its Loans
hereunder if such other bank or Person, prior to such disclosure, agrees in
writing to be bound by the terms of a confidentiality agreement substantially
similar to the provisions of this Section 8.13. Notwithstanding the foregoing,
nothing contained herein shall be construed to prevent the Administrative Agent
or a Lender from (a) making disclosure of any information (i) if required to do
so by applicable law or regulation, (ii) to any governmental agency or
regulatory body (including any self-regulatory agency or body) having or
claiming to have authority to regulate or oversee any aspect of such Lender's
business or that of such Lender's corporate parent or affiliates in connection
with the exercise of such authority or claimed authority, (iii) pursuant to any
subpoena or if otherwise compelled in connection with any litigation or
administrative proceeding, (iv) to correct any false or misleading information
which may become public concerning such Person's relationship to the Company, or
(v) to the extent the Administrative Agent or such Lender or its counsel deems
necessary or appropriate to effect or preserve its security for any Lender
Indebtedness or to enforce any remedy provided in the Financing Documents, the
Notes or this Agreement or otherwise available by law; or (b) making, on a
confidential basis, such disclosures as such Lender reasonably deems necessary
or appropriate to its legal counsel or accountants (including outside auditors).
If the Administrative Agent or such Lender is compelled to disclose such
confidential information in a proceeding requesting such disclosure, the
Administrative Agent or such Lender shall seek to obtain assurance that such
confidential treatment will be accorded such information; provided, however,
that the Lender shall have no liability for the failure to obtain such
treatment.
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Section 8.14 ENTIRE AGREEMENT. THE NOTES, THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
AGENTS, THE ISSUING BANKS OR THE LENDERS AND THE OTHER RESPECTIVE PARTIES HERETO
AND THERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 8.15 Attachments. The exhibits, schedules and annexes attached to
this Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.
Section 8.16 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 and delivered shall be an original but all of which
shall together constitute one and the same instrument.
Section 8.17 Survival of Indemnities. The Company's obligations under
Sections 2.16, 2.18, 2.20 and 8.04 shall survive the payment in full of the
Loans and the Letter of Credit Liabilities.
Section 8.18 Headings Descriptive. The headings of the several sections and
subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
Section 8.19 Satisfaction Requirement. If any agreement, certificate,
instrument or other writing, or any action taken or to be taken, is by the terms
of this Agreement required to be satisfactory to any party, the determination of
such satisfaction shall be made by such party in its sole and exclusive judgment
exercised reasonably and in good faith.
SECTION 8.20 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS; THAT IT HAS IN
FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE
OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN
REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS; AND HAS
RECEIVED THE ADVICE OF ITS ATTORNEYS IN ENTERING INTO THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF
THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS RESULT IN ONE PARTY ASSUMING
THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE
OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES
AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT "CONSPICUOUS."
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Section 8.21 Secured Affiliate. For purposes of this Agreement and all
other Financing Documents (other than applicable Hedge Agreements), if a Secured
Affiliate of a Lender has entered into one or more Hedge Agreements with the
Company or any its Subsidiaries, then to the extent that such Secured Affiliate
has rights or obligations (or if the affiliated Lender, rather than the Secured
Affiliate, were the counter-party to the applicable Hedge Agreement, such rights
or obligations that such Lender has) hereunder or under any other Financing
Document (other than applicable Hedge Agreements), such affiliated Lender shall
be the agent and attorney-in-fact for such Secured Affiliate with regard to any
such rights and obligations, or deemed rights and obligations, as if such Lender
were the counter-party to the applicable Hedge Agreement including, but not
limited to, the following: (a) all distributions or payments in respect of
Collateral owing to such Secured Affiliate shall be distributed or paid to such
Lender, (b) all representations, statements or disclaimers made herein or in any
Financing Document by or to such Lender shall be deemed to have been made by or
to such Secured Affiliate, (c) all obligations incurred by such Lender that
would have been incurred by the Secured Affiliate if it were a party hereto
(including, but not limited to, obligations under Section 7.06) shall be the
obligations of such Lender, and such Lender, as the agent and attorney-in-fact
of its Secured Affiliate, will make any and all payments owing to the
Administrative Agent with respect to such obligations or deemed obligations of
its Secured Affiliate. Each such Lender represents, warrants and covenants to
and with the Administrative Agent that such Lender has, or at all applicable
times will have, full power and authority to act as agent and attorney-in-fact
for its Secured Affiliates. Under no circumstance shall any Secured Affiliate
have any voting rights hereunder and the voting rights of any affiliated Lender
shall not be increased by virtue of the obligations owing to any such Secured
Affiliate.
Section 8.22 Ratification of Security Instruments. The Company hereby
expressly (i) acknowledges, ratifies and affirms all of its indebtedness,
obligations and liabilities under the Original Credit Agreement, the AFB
Acquisition Credit Agreement and the Intercreditor Agreement all as amended,
amended and consolidated by the terms of this Agreement, (ii) acknowledges and
agrees that (a) all liens and security interests created by and existing under
any and all instruments and documents executed by the Company, including,
without limitation, the Security Instruments, as security for its obligations
under the Original Credit Agreement, the AFB Acquisition Agreement and the
Intercreditor Agreement are and shall continue to be valid and subsisting liens
and security interests securing its obligations thereunder as amended, restated
and consolidated by this Agreement, (b) none of the rights, titles, interests,
liens and security interests created by and existing under any such instrument
or document shall be released or impaired hereby and shall be and remain in full
force and effect, and (c) all rights, titles, interests, liens and security
interests existing under such instruments and documents are renewed, extended,
carried forward and conveyed hereby to secure all of obligations the Company
under this Agreement, without the necessity to formally amend any such
instrument or document.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed as of the date first above written.
COMPANY: STERLING CHEMICALS, INC.
BY: /s/ ▇▇▇ ▇. ▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇
Vice President and Chief Financial Officer
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
ADMINISTRATIVE AGENT, TEXAS COMMERCE BANK
DOCUMENTATION AGENT, NATIONAL ASSOCIATION
ISSUING BANKS Individually, as an issuing bank and as
AND THE LENDERS: Administrative Agent
BY: /s/ ▇. ▇. ▇▇▇▇▇
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▇. ▇. ▇▇▇▇▇
Vice President
Address:
c/o Chase Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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CREDIT SUISSE FIRST BOSTON,
As Documentation Agent
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
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Director
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BY: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇
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Vice President
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Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 100103629
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
CREDIT SUISSE FIRST BOSTON,
Individually, As An Issuing Bank And As A Lender
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Director
-------------------------------------------
BY: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------------
Vice President
-------------------------------------------
Address:
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ 100103629
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 1]
143
ABN AMRO BANK N.V.
Houston Agency
BY: ABN AMRO NORTH AMERICA, INC.,
As Agent
BY: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
Vice President & Director
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President & Director
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 2]
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
BY: /s/ A.S. ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
A.S. ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
SR. TEAM LEADER-LOAN OPERATIONS
---------------------------------------
Address:
Atlanta Agency
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. F.C.H. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 3]
145
BANK OF SCOTLAND
BY: /s/ ▇▇▇▇▇ ▇▇▇▇ TAT
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇ TAT
-------------------------------------------
VICE PRESIDENT
-------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 4]
146
BHF - BANK AKTIENGESELLSCHAFT
BY: /s/ ▇▇▇▇▇ ▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇
----------------------------------------
Vice President
----------------------------------------
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Vice President
----------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ , ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 6]
147
CIBC INC.
BY: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Authorized Signatory
------------------------------------------
Address:
2 Houston Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
Two Paces West
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 7]
148
CREDIT LYONNAIS NEW YORK BRANCH
BY: /s/ ATHLA LOC
-----------------------------------------
Athla Loc
-----------------------------------------
1st Vice President
-----------------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. Page Dillehunt
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
Address:
Credit Lyonnais Chicago Branch
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 8]
149
FIRST SOURCE FINANCIAL LLP
BY: FIRST SOURCE FINANCIAL, INC.
AS ITS AGENT/MANAGER
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Vice President
---------------------------------------
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 9]
150
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Vice President
-----------------------------------------
Address:
One First National Plaza, MS 0634, 1-10
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 10]
151
THE CIT GROUP/BUSINESS CREDIT, INC.
BY: /s/ ▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Vice President
-----------------------------------------
Address:
Two Lincoln Center
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 11]
152
COMERICA BANK
BY: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
--------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
--------------------------------------------
Vice President
--------------------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 12]
153
CREDITANSTALT CORPORATE FINANCE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇▇▇▇
---------------------------------------------
Vice President
---------------------------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
Sr. Associate
---------------------------------------------
Address:
Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 13]
154
HIBERNIA NATIONAL BANK
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Vice President
-------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 14]
155
▇▇▇▇▇▇ BANK LTD
New York Branch
BY: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Vice President
--------------------------------------------
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Vice President
--------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 15]
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
BY: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Vice President
------------------------------------------
BY: /s/ ▇▇▇▇ ▇▇▇▇▇
------------------------------------------
▇▇▇▇ ▇▇▇▇▇
------------------------------------------
Vice President
------------------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 16]
157
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED NEW YORK BRANCH
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Joint General Manager
-------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention : ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ Commerce Tower, Suite 4700W
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 19]
158
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (a unit of The Chase Manhattan Bank),
(formerly known as CHL HIGH YIELD LOAN
PORTFOLIO (a unit of Chemical Bank))
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
MANAGING DIRECTOR
---------------------------------------------
Address:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 20]
159
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
--------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇.
--------------------------------------------
Vice President
--------------------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 21]
160
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE
FUND, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Authorized Signatory
----------------------------------
Address:
800 Scudders Mill Road - Area 2C
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
Custodian Bank:
Bank of New York
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/2936/2937
MLAM Accounting
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ - ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 22]
161
ML CBO IV (CAYMAN) LTD.
By: PROTECTIVE ASSET
MANAGNT L.L.C. AS
COLLATERAL MANAGER
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇, CPA, CPA
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President
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Protective Asset Management, L.L.C.
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Address:
Protective Asset Management Company
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Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 23]
162
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE INCOME TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Vice President
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Address:
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Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 24]
163
PARIBAS CAPITAL FUNDING LLC
By: /s/ [ILLEGIBLE]
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Address:
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Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 25]
164
RESTRUCTURED OBLIGATIONS BACKED BY
SENIOR ASSETS B.V.
By its Managing Director
ABN TRUSTCOMPANY (NEDERLAND) B.V.
By: /s/ [ILLELGIBLE]
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[ILLEGIBLE]
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By: /s/ [ILLELGIBLE]
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[ILLEGIBLE]
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Address:
Chancellor Capital Management, Inc.
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 27]
165
AERIES FINANCE LTD.
By: /s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
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Director
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Address:
c/▇ ▇▇▇▇▇ Management Services Limited
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▇▇▇▇▇▇ ▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ 2YQ
Attention: Director
Telephone: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇▇▇
Telecopy: 011-441-534-616900
With A Copy To:
Chancellor LGT Senior Secured Management
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Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 28]
166
CAPTIVA FINANCE LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Director
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Address:
c/o Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Cayman) Limited
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Attention: Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With A Copy To:
Chancellor LGT Senior Secured Management
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Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 29]
167
CAPTIVA II FINANCE LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Director
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Address:
c/o Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Cayman) Limited
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Attention: Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With A Copy To:
Chancellor LGT Senior Secured Management
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 30]
168
CERES FINANCE LTD.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Director
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Address:
c/o Deutsche ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Cayman) Limited
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Attention: Director
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With A Copy To:
Chancellor LGT Senior Secured Management
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 31]
169
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ASSET MANAGEMENT, L.P.
AS INVESTMENT ADVISOR
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Authorized Signatory
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Address:
800 Scudders Mill Road - Area 2C
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Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To:
Custodian Bank:
Bank Of New York
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Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇/2936/2937
MLAM Accounting
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Attention: Mr. ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 32]
170
SKANDINAVISKA ENSKILDA BANKEN
CORPORATION
By: /s/ SVERKER JOHANSSON
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Sverjer Johansson
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Vice President
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Address:
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Sverker Johansson
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
[Signature Page - 35]
▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BANK
By: /s/ R. ▇▇▇▇▇▇ ▇▇▇▇▇
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R. ▇▇▇▇▇▇ ▇▇▇▇▇
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Vice President
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Address:
Attention:
Telephone: ( ) -
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Telecopy: ( ) -
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