1
EXHIBIT 10.36
AMENDED AND RESTATED
CREDIT AGREEMENT
among
IPC, INC.,
as Borrower,
IVEX PACKAGING CORPORATION,
and the
DOMESTIC SUBSIDIARIES OF IPC, INC.,
as Guarantors,
THE LENDERS IDENTIFIED HEREIN,
AND
NATIONSBANK, N.A.
as Agent
DATED AS OF MARCH __, 1997
2
TABLE OF CONTENTS
-----------------
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Computation of Time Periods . . . . . . . . . . . . . . . . . 22
1.3 Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans. . . . . . . . . . . . . . . . . . . . . . . . 22
2.2 Revolving Letter of Credit Subfacility. . . . . . . . . . . . 25
2.3 Term Loans. . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.4 Stand Alone Letter of Credit Facility . . . . . . . . . . . . 29
2.5 Indemnification of Issuing Lenders . . . . . . . . . . . . . . 32
2.6 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3
PAYMENTS
3.1 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.2 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.3 Payment in full at Maturity . . . . . . . . . . . . . . . . . 35
3.4 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.5 Place and Manner of Payments . . . . . . . . . . . . . . . . . 37
3.6 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . . . . 37
3.7 Allocation of Payments After Event of Default . . . . . . . . 38
3.8 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . 39
3.9 Computations of Interest and Fees . . . . . . . . . . . . . . 40
SECTION 4
YIELD PROTECTION PROVISIONS
4.1 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . 40
4.2 Inability To Determine Interest Rate . . . . . . . . . . . . . 41
4.3 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.4 Requirements of Law . . . . . . . . . . . . . . . . . . . . . 41
4.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.6 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5
GUARANTY
5.1 Guaranty of Payment . . . . . . . . . . . . . . . . . . . . . 45
i
3
5.2 Obligations Unconditional . . . . . . . . . . . . . . . . . . 45
5.3 Modifications . . . . . . . . . . . . . . . . . . . . . . . . 46
5.4 Waiver of Rights . . . . . . . . . . . . . . . . . . . . . . . 46
5.5 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . 47
5.6 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.7 Limitation of Guaranty . . . . . . . . . . . . . . . . . . . . 47
SECTION 6
CONDITIONS PRECEDENT
6.1 Closing Conditions . . . . . . . . . . . . . . . . . . . . . . 48
6.2 Conditions to All Extensions of Credit . . . . . . . . . . . . 54
SECTION 7
REPRESENTATIONS AND WARRANTIES
7.1 Organization and Good Standing . . . . . . . . . . . . . . . . 54
7.2 Due Authorization . . . . . . . . . . . . . . . . . . . . . . 55
7.3 No Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.4 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.5 Enforceable Obligations . . . . . . . . . . . . . . . . . . . 55
7.6 Financial Condition . . . . . . . . . . . . . . . . . . . . . 55
7.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.8 Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.9 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.11 Material Agreements . . . . . . . . . . . . . . . . . . . . . 56
7.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.13 Compliance with Law . . . . . . . . . . . . . . . . . . . . . 56
7.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.16 Use of Proceeds; Margin Stock . . . . . . . . . . . . . . . . 57
7.17 Government Regulation . . . . . . . . . . . . . . . . . . . . 58
7.18 Environmental Matters . . . . . . . . . . . . . . . . . . . . 58
7.19 Intellectual Property . . . . . . . . . . . . . . . . . . . . 59
7.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.21 Investments . . . . . . . . . . . . . . . . . . . . . . . . . 59
7.22 No Financing of Corporate Takeovers . . . . . . . . . . . . . 60
7.23 Location of Collateral . . . . . . . . . . . . . . . . . . . . 60
SECTION 8
AFFIRMATIVE COVENANTS
8.1 Information Covenants. . . . . . . . . . . . . . . . . . . . . 60
8.2 Preservation of Existence and Franchises . . . . . . . . . . . 64
8.3 Books and Records . . . . . . . . . . . . . . . . . . . . . . 64
8.4 Compliance with Law . . . . . . . . . . . . . . . . . . . . . 64
8.5 Payment of Taxes and Other Indebtedness . . . . . . . . . . . 64
8.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 64
ii
4
8.7 Maintenance of Property . . . . . . . . . . . . . . . . . . . 65
8.8 Performance of Obligations . . . . . . . . . . . . . . . . . . 65
8.9 Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 65
8.11 Audits/Inspections . . . . . . . . . . . . . . . . . . . . . . 66
8.12 Financial Covenants . . . . . . . . . . . . . . . . . . . . . 66
8.13 Additional Credit Parties . . . . . . . . . . . . . . . . . . 67
8.14 Interest Rate Protection Agreements . . . . . . . . . . . . . 67
SECTION 9
NEGATIVE COVENANTS
9.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.3 Nature of Business . . . . . . . . . . . . . . . . . . . . . . 69
9.4 Consolidation and Merger . . . . . . . . . . . . . . . . . . . 69
9.5 Sale or Lease of Assets . . . . . . . . . . . . . . . . . . . 69
9.6 Advances, Investments and Loans . . . . . . . . . . . . . . . 70
9.7 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.8 Transactions with Affiliates . . . . . . . . . . . . . . . . . 70
9.9 Ownership of the Borrower . . . . . . . . . . . . . . . . . . 70
9.10 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.11 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . 70
9.12 Assets of Holdings . . . . . . . . . . . . . . . . . . . . . . 71
9.13 Sale Leasebacks . . . . . . . . . . . . . . . . . . . . . . . 71
9.14 Negative Pledges . . . . . . . . . . . . . . . . . . . . . . . 71
9.15 Limitation on Foreign Operations . . . . . . . . . . . . . . . 71
SECTION 10
EVENTS OF DEFAULT
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . 71
10.2 Acceleration; Remedies . . . . . . . . . . . . . . . . . . . . 74
iii
5
SECTION 11
AGENCY PROVISIONS
11.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . 75
11.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . 76
11.4 Reliance on Communications . . . . . . . . . . . . . . . . . . 76
11.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . 77
11.6 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . 77
11.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 77
11.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . 78
11.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 12
MISCELLANEOUS
12.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
12.2 Right of Set-Off . . . . . . . . . . . . . . . . . . . . . . . 79
12.3 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . 79
12.4 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . 81
12.5 Payment of Expenses; Indemnification . . . . . . . . . . . . . 81
12.6 Amendments, Waivers and Consents . . . . . . . . . . . . . . . 82
12.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.9 Defaulting Lender . . . . . . . . . . . . . . . . . . . . . . 82
12.10 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.11 Governing Law; Venue . . . . . . . . . . . . . . . . . . . . . 83
12.12 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . 83
12.13 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.15 Binding Effect; Termination of Original Credit Agreement;
Release of Foreign Subsidiary Guarantors and Collateral . . . 83
12.16 Entirety . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
iv
6
SCHEDULES
Schedule 1.1(a) Commitment Percentages
Schedule 2.2 Existing Revolving Letters of Credit
Schedule 2.4 Existing Stand Alone Letters of Credit
Schedule 7.9 Indebtedness
Schedule 7.10 Litigation
Schedule 7.15 Subsidiaries
Schedule 7.18 Environmental Matters
Schedule 7.19(a) Intellectual Property
Schedule 7.19(b) Intellectual Property Claims
Schedule 7.23(a) Real Property Collateral
Schedule 7.23(b) Personal Property Collateral
Schedule 7.23(c) Chief Executive Offices
Schedule 8.6 Insurance
Schedule 9.2 Liens
Schedule 9.6 Investments
Schedule 9.8 Affiliate Transactions
Schedule 12.1 Notices
EXHIBITS
Exhibit 2.1 Form of Notice of Borrowing/Continuation/Conversion
Exhibit 2.6(a) Form of Revolving Loan Note
Exhibit 2.6(b) Form of Tranche A Term Loan Note
Exhibit 8.1(d) Form of Officer's Certificate
Exhibit 8.13 Form of Joinder Agreement
Exhibit 12.3 Form of Assignment Agreement
v
7
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Credit Agreement"),
is entered into as of March __, 1997 among IPC, INC., a Delaware corporation
(the "Borrower"), IVEX PACKAGING CORPORATION, a Delaware corporation
("Holdings"), each of the Borrower's Domestic Subsidiaries (the Borrower's
Domestic Subsidiaries, together with Holdings, individually a "Guarantor" and
collectively the "Guarantors"), the Lenders (as defined herein) and NATIONSBANK,
N.A., as agent for the Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrower, Holdings, the Subsidiaries of the Borrower, the
Lenders party thereto and NationsBank, N.A., as Agent are currently parties to
that certain Credit Agreement, dated as of December 7, 1995 (the "Original
Credit Agreement");
WHEREAS, the Borrower and the Guarantors have requested that the
Lenders provide an amended and restated $205,000,000 credit facility to the
Borrower; and
WHEREAS, the Lenders have agreed to make the requested amended and
restated credit facility available to the Borrower on the terms and conditions
hereinafter set forth and securing such obligations as set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION I.
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms herein shall include in the singular number the plural and in the plural
the singular.
"Acadia" means Acadia Partners, L.P., a Delaware limited
partnership.
"Additional Credit Party" means each Person that becomes a
Guarantor after the Effective Date, as provided in Section 8.13
hereof.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Agent" means NationsBank, N.A. and any successors and
assigns in such
8
capacity.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited
to all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed to control a Person if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or
(ii) to direct or cause direction of the management and policies of
such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Applicable Percentage" means for Eurodollar Loans, Base Rate
Loans, and the Letter of Credit Fee, the appropriate applicable
percentages per annum corresponding to the Debt Coverage Ratio in
effect as of the most recent Calculation Date as shown below:
Applicable Applicable
Debt Percentage For Percentage For Letter Of
Pricing Coverage Eurodollar Base Rate Credit
Level Ratio Loans Loans Fee
------- -------- ---------- ---------- ---------
I > = 4.75 to 1.0 2.5% 1.50% 2.375%
II < 4.75 to 1.0 but 2.25% 1.25% 2.125%
> = 4.5 to 1.0
III < 4.5 to 1.0 but 2.00% 1.00% 1.875%
> = 4.0 to 1.0
IV < 4.0 to 1.0 but 1.75% 0.75% 1.625%
> = 3.5 to 1.0
V < 3.5 to 1.0 but 1.50% 0.50% 1.375%
> = 3.0 to 1.0
VI < 3.0 to 1.0 but 1.25% 0.25% 1.125%
> = 2.5 to 1.0
VII < 2.5 to 1.0 1.00% 0.00% 0.875%
The initial Applicable Percentage for Base Rate Loans,
Eurodollar Loans and the Letter of Credit Fee shall be based on
Pricing Level __ and shall remain at Pricing Level __ until the first
Calculation Date (as defined below) occurring after the Effective
Date. Thereafter, the Applicable Percentage for Revolving Loans,
Tranche A Term Loans and the Letter of Credit Fee shall, in each case,
be determined and adjusted quarterly on the date five Business Days
after the date by which the Borrower is required to provide the
officer's certificate in accordance with the provisions of Section
8.1(d) hereof (each a "Calculation Date"). Such Applicable
Percentage shall be effective from such Calculation Date until the next
such Calculation Date. Any adjustment in the Applicable Percentage
shall be applicable to all existing Loans and Letters of Credit as well
as any new Loans made or Letters of Credit issued.
"Asset Disposition" means the disposition of any or all of the
assets of the Borrower or any of its Subsidiaries whether by sale,
lease, transfer or otherwise, other than transfers of assets permitted
by Section 9.5 hereof.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of
the United States
2
9
Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate" means, for any day, a simple rate per annum equal
to the greater of (a) the Prime Rate for such day or (b) the sum of
1/2% plus the Federal Funds Rate for such day.
"Base Rate Loan" means a Loan which bears interest based on
the Adjusted Base Rate.
"Borrower" means IPC, Inc., a Delaware corporation.
"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized
or required by law or other governmental action to close in Charlotte,
North Carolina or New York, New York; provided that in the case of
Eurodollar Loans, such day is also a day on which dealings between
banks are carried on in U.S. dollar deposits in the London interbank
market.
"Capital Expenditures" means all expenditures of the Borrower
and its Subsidiaries which in accordance with GAAP would be classified
as capital expenditures, including, without limitation, capitalized
leases.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or
from ▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more
than 270 days from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements with a bank or trust company
(including any of the Lenders) or recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which
the Borrower shall have a perfected first priority security interest
(subject to no other Liens) and having, on the date of purchase
thereof, a fair market value of at least 100% of the amount of the
repurchase obligations, (e) Investments, classified in accordance with
GAAP as current assets, in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at
least $100,000,000 and the portfolios of which are limited to
Investments of the character described in the foregoing subdivisions
(a) through (d), and (f) demand deposit accounts and other deposits in
the ordinary course.
"Change of Control" means any Person, other than Acadia,
beneficially owning, directly or indirectly, stock of Holdings
controlling 20% or more of the voting power with respect to Holdings;
provided that a change of control shall not be deemed to occur upon
(a) the acquisition by the current partners of Acadia (or their
Affiliates) of shares of
3
10
Holding's voting stock pursuant to a distribution made in connection
with the winding-up of Acadia or (b) the acquisition of any voting
stock of Holdings by any Person, the majority of the equity of which
is owned by Persons (or their Affiliates) that in the aggregate
currently control, or own a majority of the equity of, Acadia.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means all collateral referred to in and covered
by the Collateral Documents.
"Collateral Assignment of Leasehold Interests" has the meaning
set forth in Section 6.1(d).
"Collateral Documents" means the Security Agreements, the
Pledge Agreements, the Mortgage Documents and such other documents
executed and delivered in connection with the attachment and
perfection of the Lenders' security interests in the assets of the
Credit Parties, including without limitation, UCC financing
statements, other applicable security registrations and patent and
trademark filings.
"Commitments" means the Revolving Committed Amount, the
Tranche A Term Loan Committed Amount and the Stand Alone LOC Committed
Amount.
"Controlled Group" means (i) the controlled group of
corporations as defined in Section 414(b) of the Code and the
applicable regulations thereunder or (ii) the group of trades or
businesses under common control as defined in Section 414(c) of the
Code and the applicable regulations thereunder, of which the Borrower
or any of its Subsidiaries is a member.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement, the Security Agreements, the Pledge Agreements, the
Collateral Documents and all other related agreements and documents
issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"Credit Parties" means the Borrower and the Guarantors and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, all of
the obligations of the Borrower and the other Credit Parties to the
Lenders and the Agent, whenever arising, under this Credit Agreement,
the Notes, the Collateral Documents or any of the other Credit
Documents to which the Borrower or any other Credit Party is a party.
"Debt Coverage Ratio" means, with respect to the Borrower and
its Subsidiaries on a consolidated basis, the ratio of (a) Funded Debt
to (b) EBITDA, as such ratio is calculated from time to time giving
effect to the Interim Adjustments.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
4
11
"Defaulting Lender" means, at any time, any Lender that, at
such time (a) has failed to make a Loan or purchase a Participation
Interest required pursuant to the term of this Credit Agreement, (b)
other than as set forth in (a) above, has failed to pay to the Agent
or any Lender an amount owed by such Lender pursuant to the terms of
this Credit Agreement unless such amount is subject to a good faith
dispute or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or
similar official.
"Domestic Subsidiaries" means all direct and indirect
Subsidiaries of the Parent or the Borrower that are domiciled,
incorporated or organized under the laws of any state of the United
States or the District of Columbia (or has any material assets located
in the United States). As of the Closing Date, the Domestic
Subsidiaries are as set forth on Schedule 7.15.
"EBITDA" means, for any period with respect to the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) Net
Income plus (b) an amount which, in the determination of Net Income
for such period has been deducted for (i) cash Interest Expense for
such period, (ii) total Federal, state or other income taxes for such
period (iii) all depreciation, amortization and other non-cash charges
for such period, (iv) all nonrecurring items (A) with respect to
noncash charges in connection with the Borrower's option plans dated
January 1, 1993, and (B) with respect to charges in connection with
the Borrower's special incentive agreement dated January 1, 1993, (v)
the net gain or loss on the sale or disposition of any real property,
and (vi) all extraordinary gains or losses, all as determined in
accordance with GAAP.
"Effective Date" means the date that all conditions precedent
under Section 6.1 hereunder have been satisfied (or waived by the
Lenders).
"Eligible Assignee" means any Lender or Affiliate or
subsidiary of a Lender, and any other commercial bank, financial
institution or "accredited investor" (as defined in Regulation D of
the Securities and Exchange Commission) reasonably acceptable to the
Agent and the Borrower.
"Environmental Claim" means any written notice of
investigation, violation, demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged damage, injury, threat, or
harm to natural resources, or the environment or to health or safety
from the Release of any Hazardous Materials.
"Environmental Laws" means any current or future legal
requirement pertaining to (a) the protection of health, safety, and
the indoor or outdoor environment, (b) the conservation, management,
or use of natural resources and wildlife, (c) the protection or use of
surface water and groundwater, (d) the management, manufacture,
possession, presence, use, generation, transportation, treatment,
storage, disposal, release, threatened release, abatement, removal,
remediation or handling of, or exposure to, any Hazardous Material or
(e) pollution (including any release to air, land, surface water, and
groundwater), and includes, without limitation, the Comprehensive
Environmental
5
12
Response, Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et
seq., Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976 and Hazardous and Solid Waste
Amendment of 1984, 42 USC 6901 et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 USC 1251 et
seq., Clean Air Act of 1966, as amended, 42 USC 7401 et seq., Toxic
Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous
Materials Transportation Act, 49 USC App. 1801 et seq., Occupational
Safety and Health Act of 1970, as amended, 29 USC 651 et seq., Oil
Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and
Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking
Water Act of 1974, as amended, 42 USC 300(f) et seq., any analogous
federal, state, provincial or local or any similar, implementing or
successor law, and any amendment, rule, regulation, order, or
directive issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity, whether or not
incorporated, which is under common control with any Credit Party or
any of its Subsidiaries within the meaning of Section 4001(a)(14) of
ERISA, or is a member of a group which includes any Credit Party or
any of its Subsidiaries and which is treated as a single employer
under Sections 414(b), (c), (m), or (o) of the Code.
"Eurodollar Loan" means a Loan which bears interest based on
the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not a Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available
from time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
6
13
"Event of Default" has the meaning specified in Section 10.1
hereof.
"Excess Cash Flow" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to (a) EBITDA
minus (b) Capital Expenditures and Investments minus (c) cash Interest
Expense minus (d) Federal, state and other income taxes actually paid
minus (e) Principal Amortization Payments and principal payments under
other Indebtedness minus (f) voluntary prepayments made with respect
to the Term Loans minus (g) dividends paid to Holdings to redeem
Holdings Debentures or as otherwise permitted by this Credit Agreement
in accordance with the terms of this Credit Agreement minus (h)
amounts paid to redeem Subordinated Notes in accordance with the terms
of this Credit Agreement minus (i) increases in Working Capital plus
(j) decreases in Working Capital.
"Existing Revolving Letters of Credit" means the Revolving
Letters of Credit set forth on Schedule 2.2 attached hereto.
"Existing Stand Alone Letters of Credit" means the Stand Alone
Letters of Credit set forth on Schedule 2.4 attached hereto.
"Extension of Credit" means, as to any Lender, the making of a
Loan by such Lender (or a participation therein by a Lender) or the
issuance of, or participation in, a Letter of Credit by such Lender.
"Federal Funds Rate" means for any day the rate per annum
(rounded upward to the nearest 1/100th of 1%) 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 on such day, as published by the Federal Reserve Bank of New
York on the New York business day next succeeding such day; provided
that (a) if such day is not a New York business day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next
preceding New York business day and (b) if no such rate is so
published on such next preceding New York business day, the Federal
Funds Rate for such day shall be the average rate quoted to the Agent
on such day on such transactions as determined by the Agent.
"Fee Letter" means that certain letter agreement, dated as of
the Closing Date, between the Agent and the Borrower, as amended,
modified, supplemented or replaced from time to time.
"Fixed Charge Coverage Ratio" means, with respect to the
Borrower and its Subsidiaries on a consolidated basis, the ratio of
(a) EBITDA minus Capital Expenditures to (b) the sum of, without
duplication, (i) cash Interest Expense plus (ii) Federal, state and
other income taxes paid in cash plus (iii) Scheduled Funded Debt
Payments plus (iv) cash interest due on Holdings Debentures plus (v)
dividends paid to Holdings (other than to redeem Holdings Debentures)
as permitted by Section 9.7 hereof, as such ratio shall be calculated
from time to time giving effect to the Interim Adjustments.
"Foreign Subsidiaries" means all Subsidiaries of the Borrower
that are not Domestic Subsidiaries.
"Funded Debt" means, without duplication, the sum of (i) all
Indebtedness of the
7
14
Borrower and its Subsidiaries for borrowed money, excluding
intercompany items, (ii) all purchase money Indebtedness of the
Borrower and its Subsidiaries, (iii) the principal portion of all
obligations of the Borrower and its Subsidiaries under capitalized
leases, (iv) unreimbursed portions of letters of credit drawn for the
account of the Borrower and its Subsidiaries, (v) all Guaranty
Obligations of the Borrower and its Subsidiaries with respect to
Funded Debt of another entity, (vi) all Funded Debt of another entity
secured by a Lien on any property of the Borrower and its Subsidiaries
but only to the extent of the value of such property, whether or not
such Funded Debt has been assumed by the Borrower or any of its
Subsidiaries, and (vii) all Funded Debt of any partnership or
unincorporated joint venture where the Borrower or one of its
Subsidiaries is a general partner therein but only to the extent such
Person is legally obligated or has a reasonable expectation of being
liable with respect thereto, net of any assets of such partnership or
joint venture.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section 1.3
hereof.
"Governmental Authority" means any Federal, state, provincial,
local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantor" means Holdings, each of the Domestic Subsidiaries
of the Borrower and each Additional Credit Party which has executed a
Joinder Agreement.
"Guaranty Obligations" means, without duplication, any
obligations (other than endorsements in the ordinary course of
business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations of any other Person in any manner,
whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such
Indebtedness or other obligation or any property constituting security
therefor, (b) to advance or provide funds or other support for the
payment or purchase of such indebtedness or obligation or to maintain
working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, maintenance agreements,
comfort letters or similar agreements or arrangements), (c) to lease
or purchase property, securities or services primarily for the purpose
of assuring the owner of such Indebtedness or obligation, or (d) to
otherwise assure or hold harmless the owner of such Indebtedness or
obligation against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set
forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Holdings" means Ivex Packaging Corporation, a Delaware
corporation.
"Holdings Debentures" means those certain 13 1/4% Senior
Discount Debentures due 2005 issued by Ivex Packaging Corporation
f/k/a Ivex Holdings Corporation as of March 8, 1993.
"Indebtedness" of any Person means, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds,
8
15
debentures, notes or similar instruments, or upon which interest
payments are customarily made, (iii) all obligations of such Person
under conditional sale or other title retention agreements relating to
property purchased by such Person to the extent of the value of such
property (other than customary reservations or retentions of title
under agreements with suppliers entered into in the ordinary course of
business), (iv) all obligations, including without limitation
intercompany items, of such Person issued or assumed as the deferred
purchase price of Property or services purchased by such Person which
would appear as liabilities on a balance sheet of such Person, (v) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of Property
owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (vi) all Guaranty Obligations of
such Person, (vii) the principal portion of all obligations of such
Person under (A) capital leases and (B) any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP, (viii) all
obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, or other interest or
exchange rate or commodity price hedging agreements, (ix) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(x) all preferred stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date and (xi) all other obligations which
would be shown as a liability on the balance sheet of such Person and
(xii) the aggregate purchase price paid by third parties for the
purchase of the accounts receivable of such Person subject at such
time to a sale of receivables (or similar transaction) regardless of
whether such transaction is effected without recourse to such Person
or in a manner that would not be reflected on the balance sheet of
such Person in accordance with GAAP. The Indebtedness of any Person
shall include the Indebtedness of any partnership or unincorporated
joint venture but only to the extent such Person is legally obligated
or has a reasonable expectation of being liable with respect thereto.
"Interbank Offered Rate" means, with respect to any Eurodollar
Loan for the Interest Period applicable thereto, the rate appearing on
Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If,
for any reason, such rate is not available, the term "Interbank
Offered Rate" shall mean, with respect to any Eurodollar Loan for the
Interest Period applicable thereto, the rate per annum appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two
Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if
more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"Interest Coverage Ratio" means, with respect to the Borrower
and its Subsidiaries on a consolidated basis, the ratio of (a) EBITDA
to (b) cash Interest Expense, as such ratio is calculated from time to
time giving effect to the Interim Adjustments.
"Interest Expense" means, with respect to the Borrower and its
Subsidiaries on a
9
16
consolidated basis, all interest expense, including the interest
component under capitalized leases and Receivables Transactions, as
determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Base Rate Loans, the
last day of each fiscal quarter of the Borrower and the Revolving Loan
Maturity Date or the Tranche A Term Loan Maturity Date as applicable,
and (b) as to Eurodollar Loans, the last day of each applicable
Interest Period and the Revolving Loan Maturity Date or the Tranche A
Term Loan Maturity Date, as applicable, and in addition where the
applicable Interest Period for a Eurodollar Loan is greater than three
months, then also the last day of each fiscal quarter of the Borrower
during such Interest Period. If an Interest Payment Date falls on a
date which is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day, except that in the case
of Eurodollar Loans where the next succeeding Business Day falls in
the next succeeding calendar month, then on the next preceding day.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Revolving Loan Maturity
Date or the Tranche A Term Loan Maturity Date, as applicable, and (c)
with regard to the Tranche A Term Loans, no Interest Period shall
extend beyond any Principal Amortization Payment Date unless the
portion of Tranche A Term Loans comprised of Base Rate Loans together
with the portion of Tranche A Term Loans comprised of Eurodollar Loans
with Interest Periods expiring prior to the date such Principal
Amortization Payment is due, is at least equal to the amount of such
Principal Amortization Payment due on such date and where an Interest
Period begins on a day for which there is no numerically corresponding
day in the calendar month in which the Interest Period is to end, such
Interest Period shall end on the last Business Day of such calendar
month.
"Intellectual Property" has the meaning set forth in Section
7.19 hereof.
"Interim Adjustments" means that, subsequent to the addition
of a New Company, the Interest Coverage Ratio, the Fixed Charge
Coverage Ratio and the Debt Coverage Ratio shall be calculated using
the adjustments and assumptions set forth below:
EBITDA, Capital Expenditures, Interest Expense and Scheduled
Funded Debt Payments for any New Company will be calculated commencing
after the acquisition of such New Company as follows:
(a) for any partial fiscal quarter that occurs
immediately subsequent to the addition of the New Company and for the
first three full fiscal quarters subsequent to the addition of the New
Company, EBITDA, Capital Expenditures Interest Expense and Scheduled
Funded Debt Payments for the New Company, for the quarter ending on
such date, shall be multiplied times a ratio equal to (i) 365 divided
by (ii) the number of days elapsed since the date of the addition of
the New Company until the last day of such quarter; and
(b) for the fourth full fiscal quarter subsequent to the
addition of the New
10
17
Company and each fiscal quarter end thereafter, EBITDA, Capital
Expenditures, Interest Expense and Scheduled Funded Debt Payments for
the New Company shall be the actual amounts for the four quarter
period ending on such date.
"Investment" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities
or otherwise) of assets, shares of capital stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests
or other securities of such other Person or (b) any deposit with, or
advance, loan or other extension of credit to, such Person (other than
deposits made in connection with the purchase of equipment or other
assets in the ordinary course of business) or (c) any other investment
in such Person, including, without limitation, any Guaranty Obligation
incurred for the benefit of such person.
"Issuing Lender" means (a) with respect to certain Existing
Stand Alone Letters of Credit under the Stand Alone Letter of Credit
Facility, Societe Generale, Southwest Agency and (b) with respect to
certain Existing Stand Alone Letters of Credit, any new Stand Alone
Letters of Credit, the Existing Revolving Letters of Credit, and any
new Revolving Letters of Credit, NationsBank, N.A.
"Issuing Lender Fees" has the meaning set forth in Section
3.4(b) hereof.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 8.13 attached hereto.
"Leasehold Properties" has the meaning set forth in Section
6.1(d) hereof.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender
by way of assignment in accordance with the terms hereof, together
with their successors and permitted assigns.
"Letter of Credit" means any standby or commercial letter of
credit issued by an Issuing Lender for the account of the Borrower in
accordance with the terms of Section 2.2 or 2.4 hereof and shall refer
to both Stand Alone Letters of Credit and Revolving Letters of Credit.
"Letter of Credit Fee" shall have the meaning assigned to such
term in the definition of Applicable Percentage in Section 1 hereof.
"Letter of Credit Lenders" shall have the meaning set forth in
Section 2.4 hereof.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any financing or similar statement or
notice filed under the Uniform Commercial Code as adopted and in
effect in the relevant jurisdiction or other similar recording or
notice statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans and/or the Tranche
A Term Loans (or a portion of any Revolving Loan or the Tranche A Term
Loans), individually or collectively, as appropriate.
11
18
"LOC Obligations" means Stand Alone LOC Obligations and
Revolving LOC Obligations.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"Material Adverse Effect" means a material adverse effect,
after taking into account applicable insurance, if any, on (i) the
operations, financial condition or business of the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower or a
Guarantor to perform its respective obligations under this Credit
Agreement or any of the other Credit Documents, or (iii) the validity
or enforceability of this Credit Agreement, any of the other Credit
Documents, or the rights and remedies of the Lenders hereunder or
thereunder taken as a whole.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Mortgage Documents" means the Mortgages, the Collateral
Assignments of Leasehold Interests, the Mortgage Policies and such
other documents and agreements executed or delivered in connection
with the Real Properties.
"Mortgage Policies" has the meaning set forth in Section
6.1(d) hereof.
"Mortgages" has the meaning set forth in Section 6.1(d)
hereof.
"Mortgaged Properties" has the meaning set forth in Section
6.1(d) hereof.
"Multiemployer Plan" means a Plan covered by Title IV of ERISA
which is a multiemployer plan as defined in Sections 3(37) or
4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of
ERISA, other than a Multiemployer Plan, which any Credit Party or any
of its Subsidiaries or any ERISA Affiliate and at least one employer
other than a Credit Party or any of its Subsidiaries or any ERISA
Affiliate are contributing sponsors.
"Net Cash Proceeds" means the gross cash proceeds (including
cash actually received by way of deferred payment pursuant to a
promissory note, receivable, or otherwise) received from the sale,
lease, conveyance, disposition or other transfer of assets, net of (i)
transaction costs payable to third parties, and (ii) a good faith
estimate of the taxes payable with respect to such proceeds
(including, without duplication, withholding taxes).
"Net Income" means, for any period, the net income after taxes
for such period of the Borrower and its Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
12
19
"Net Worth" means, as of any date, shareholders' equity or net
worth of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
"New Company" means a Person that is acquired by, and becomes
a Subsidiary of, a Credit Party (or a Subsidiary that is established
to purchase the assets of another Person) as long as, during the first
four full fiscal quarters subsequent to the acquisition, it remains a
separate Subsidiary of a Credit Party.
"▇▇▇▇▇▇ Property" means the property leased by the Borrower
located in Newton, Massachusetts.
"Non-Excluded Taxes" has the meaning set forth in Section 4.5
hereof.
"Note" or "Notes" means the Revolving Loan Notes and/or the
Tranche A Term Loan Notes, individually or collectively, as
appropriate.
"Notice of Borrowing/Continuation/Conversion" means a request
by the Borrower for a Revolving Loan (or any continuation or
conversion thereof) or for all or a portion of the Term Loans to
accrue interest at the Adjusted Base Rate or the Adjusted Eurodollar
Rate, in the form of Exhibit 2.1 attached hereto.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Participation Interest" means, the Extension of Credit by a
Lender by way of a purchase of a participation in Letters of Credit or
LOC Obligations as provided in Section 2.2 and 2.4 hereof or in any
Loans as provided in Section 3.8 hereof.
"Permitted Acquisition" means an acquisition of all or part of
the assets or stock of another Person by the Borrower; provided that
after giving effect to such acquisition (a) there is at least
$15,000,000 of availability under the Revolving Committed Amount, (b)
the ratio of (i) Senior Funded Debt to (ii) EBITDA, on a Pro Forma
Basis, is less than 3.0 to 1.0, (c) the Borrower and its Subsidiaries
are in compliance, on a Pro Forma Basis, with all of the covenants set
forth in Section 8.12 hereof and (d) no Default or Event of Default
exists and is continuing.
"Permitted Investments" means Investments which are (i) cash
or Cash Equivalents, (ii) accounts receivable created, acquired or
made in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms, (iii) Investments in a
Guarantor (other than Holdings), (iv) loans to directors, officers,
employees, agents, customers or suppliers in the ordinary course of
business for reasonable business expenses, (v) loans to directors,
officers and employees to finance purchases (or tax obligations
relating to such purchases) of Holding's capital stock not to exceed
$5,000,000, in the aggregate, at any one time, (vi) Permitted
Acquisitions, (vii) Investments in foreign joint ventures not to
exceed $5,000,000, in the aggregate, at any one time, (viii) the
purchase of restricted stock or options of Holdings or the Borrower
from employees who voluntarily or involuntarily terminate their
employment with the Borrower or any of its Subsidiaries, (ix) the
redemption of Subordinated Debt as permitted by this Credit Agreement
(x) the Investments set forth on Schedule 9.6 attached hereto and (xi)
Investments in Foreign Subsidiaries, subsequent to the Closing Date,
not
13
20
to exceed $20,000,000 PLUS THE AMOUNT OF DIVIDENDS PAID BY
FOREIGN SUBSIDIARIES TO A CREDIT PARTY, in the aggregate.
"Permitted Liens" means (i) Liens in favor of the Agent on
behalf of the Lenders, (ii) Liens for taxes not yet due or Liens for
taxes being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with GAAP have been
established (and as to which the property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof),
(iii) Liens in respect of property imposed by law arising in the
ordinary course of business such as materialmen's, mechanics',
warehousemen's carrier's, landlords' and other nonconsensual statutory
Liens and other like Liens which are not delinquent for a period of
more than sixty days or, if due and payable, are being contested in
good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to
which the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof), (iv) pledges or
deposits made to secure payment of worker's compensation insurance,
unemployment insurance, pensions or social security programs, (v)
Liens arising from good faith deposits in connection with or to secure
performance of tenders, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
incurred in the ordinary course of business (other than obligations in
respect of the payment of borrowed money), (vi) Liens arising from
good faith deposits in connection with or to secure performance of
statutory obligations and surety and appeal bonds, (vii) easements,
rights-of-way, restrictions (including zoning restrictions), minor
defects or irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use of the
encumbered property for its intended purposes, (viii) judgment Liens
that would not constitute an Event of Default, (ix) Liens on
receivables sold pursuant to a Receivables Transaction, (x) Liens in
connection with Indebtedness allowed under Sections 9.1(g) and 9.1(l)
hereof, (xi) Liens constituting intellectual property licenses entered
into in the ordinary course of business, (xii) Liens on the property
or assets of a corporation which becomes a Subsidiary of the Borrower
or is merged with or into a Credit Party after the date hereof that
secures Indebtedness permitted by Section 9.1(j) hereof; provided,
that (A) such Liens existed at the time such corporation became a
Subsidiary of the Borrower or was merged with or into a Credit Party
and were not created in anticipation thereof, (B) such Liens do not
extend to any property other than the actual property acquired in
connection with such acquisition and (C) at such time, no Default or
Event of Default exists or shall result from such transaction ; (xiii)
Liens arising by virtue of any statutory or common law provision
relating to banker's liens, rights of setoff or similar rights as to
deposit accounts or other funds maintained with a creditor depository
institution; and (xiv) Liens existing on the date hereof and identified
on Schedule 9.2 hereto and any Liens granted in connection with any
amendment, restatement, supplement, renewal, replacement, extension or
refunding (or successive amendments, restatements, supplements,
renewals, replacements, extensions or refundings) in whole or part of
any such Liens or the Indebtedness permitted by Section 9.1(b) hereof;
provided that the principal amount of Indebtedness secured by any such
Lien does not exceed the principal amount of such Indebtedness
outstanding immediately prior to such amendment, restatement,
supplement, renewal, replacement, extension or refunding.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
14
21
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Credit Party or any of its Subsidiaries or any ERISA Affiliate is (or,
if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" within the meaning of Section
3(5) of ERISA.
"Pledge Agreement" means the Amended and Restated Pledge
Agreement, executed and delivered by each of the applicable Credit
Parties in favor of the Agent, for the benefit of the Lenders, to
secure their obligations under the Credit Documents, as amended,
modified, extended, renewed or replaced from time to time.
"Prime Rate" means the per annum rate of interest established
from time to time by the Agent at its principal office in Charlotte,
North Carolina as its Prime Rate. Any change in the interest rate
resulting from a change in the Prime Rate shall become effective as of
12:01 a.m. of the Business Day on which each change in the Prime Rate
is announced by the Agent. The Prime Rate is a reference rate used by
the Agent in determining interest rates on certain loans and is not
intended to be the lowest rate of interest charged on any extension of
credit to any debtor.
"Principal Amortization Payment" means a principal payment on
the Tranche A Term Loans as set forth in Section 2.3(c) hereof.
"Principal Amortization Payment Date" means the date a
Principal Amortization Payment is due.
"Pro Forma Basis" means, with respect to a Permitted
Acquisition, that such Permitted Acquisition shall be deemed to have
occurred as of the first day of the four fiscal quarter period ending
as of the last day of the most recent fiscal quarter for which the
Lenders have received the financial information required by Section
8.1(b) hereof.
"Real Properties" means the Mortgaged Properties and the
Leasehold Properties.
"Receivables Transaction" means a transaction in which a
Credit Party sells or grants a security interest in its trade
receivables, as approved by the Required Lenders in their sole
discretion.
"Redemption Conditions" means, after giving effect to the
redemption or other acquisition of any Subordinated Debt (a) such
redemption or other acquisition is otherwise permitted under this
Credit Agreement, (b) there remains at least $15,000,000 of
availability under the Revolving Committed Amount, (c) the ratio of
(i) Senior Funded Debt to (ii) EBITDA, on a pro forma basis, is less
than 3.0 to 1.0, (d) the Borrower and its Subsidiaries, on a pro forma
basis, are in compliance with all of the covenants set forth in
Section 8.12 hereof, (e) no more than $25,000,000, in the aggregate,
shall be used to redeem or acquire Holdings Debentures from the
Closing Date to the date the Credit Party Obligations are satisfied in
full, (f) no Default or Event of Default exists and is continuing and
(g) the redemption price of Holdings Debentures and Subordinated Notes
shall not exceed the percentage of accreted value or par value, as
applicable, as set forth below:
15
22
Maximum Percentage of
Period Accreted Value/Par Value
------ ------------------------
From the Effective Date
to December 14, 1997 112.5%
From December 15, 1997
to December 14, 1998 109.25%
From December 15, 1998
to December 14, 1999 106.125%
From December 15, 1999
and thereafter 103.00%
"Regulation D, G, U, or X" means Regulation D, G, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Reportable Event" means a "reportable event" as defined in
Section 4043 of ERISA with respect to which the notice requirements to
the PBGC have not been waived.
"Required Lenders" means Lenders whose aggregate Credit
Exposure (as hereinafter defined) constitutes at least 51% of the
Credit Exposure of all Lenders at such time; provided, however, that
if any Lender shall be a Defaulting Lender at such time then there
shall be excluded from the determination of Required Lenders the
aggregate principal amount of Credit Exposure of such Lender at such
time. For purposes of the preceding sentence, the term "Credit
Exposure" as applied to each Lender shall mean (a) at any time prior
to the termination of the Commitments, the sum of (i) the Revolving
Commitment Percentage of such Lender multiplied times the Revolving
Committed Amount plus, (ii) the Tranche A Term Loan Commitment
Percentage of such Lender multiplied times the aggregate face amount
of Tranche A Term Loans outstanding at such time, plus (iii) the Stand
Alone LOC Commitment Percentage of such Lender multiplied times the
face amount of Stand Alone LOC Committed Amount and (b) at any time
after the termination of the Commitments, the sum of (i) the principal
balance of the outstanding Loans of such Lender, plus (ii) such
Lender's interest in the face amount of the outstanding Letters of
Credit.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or
a court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Revolving Committed Amount" means ONE HUNDRED FIVE MILLION
DOLLARS ($105,000,000), as such amount may be reduced from time to
time in accordance with the terms hereof.
"Revolving Letter of Credit" means the Existing Revolving
Letters of Credit and any Letter of Credit issued for the account of a
Credit Party by an Issuing Lender
16
23
pursuant to Section 2.2 hereof, as such Revolving Letters of Credit
may be amended, modified, extended, renewed or replaced.
"Revolving Letter of Credit Subfacility" shall have the
meaning set forth in Section 2.2 hereof.
"Revolving Loan Commitment Percentage" means, for each Lender,
the percentage identified as its Revolving Loan Commitment Percentage
on Schedule 1.1(a) attached hereto, as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 12.3 hereof.
"Revolving Loan Lenders" shall have the meaning set forth in
Section 2.1 hereof.
"Revolving Loan Maturity Date" means September 30, 2001.
"Revolving Loans" means the Revolving Loans made to the
Borrower pursuant to Section 2.1 hereof.
"Revolving Loan Unused Commitment" means, for any period, the
amount by which (i) the then applicable aggregate Revolving Committed
Amount exceeds (ii) the daily average sum for such period of the
outstanding aggregate principal amount of all Revolving Loans plus the
aggregate amount of Revolving LOC Obligations outstanding.
"Revolving LOC Obligations" means, at any time, the sum of (i)
the maximum amount which is, or at any time thereafter may become,
available to be drawn under Revolving Letters of Credit then
outstanding, assuming compliance with all requirements for drawings
referred to in such Revolving Letters of Credit plus (ii) the
aggregate amount of all drawings under Revolving Letters of Credit
honored by an Issuing Lender but not theretofore reimbursed.
"Revolving Note" or "Revolving Notes" means the amended and
restated promissory notes of the Borrower in favor of each of the
Lenders evidencing the Revolving Loans provided pursuant to Section
2.1 hereof, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of
such division in the business of rating securities.
"Scheduled Funded Debt Payments" means, as of the date of
determination, for the Borrower and its Subsidiaries on a consolidated
basis, the sum of all scheduled payments of principal on Funded Debt
for the twelve month period ending on the date of determination
(including the principal component of payments due on leases that are
required to be capitalized in accordance with GAAP during the twelve
month period ending on the date of determination); it being understood
that Scheduled Funded Debt Payments shall not include voluntary
prepayments or the mandatory prepayments required pursuant to Section
3.2 hereof.
17
24
"Security Agreement" means the Amended and Restated Security
Agreement executed and delivered by each of the Credit Parties in
favor of the Agent for the benefit of the Lenders to secure their
obligations under the Credit Documents, as amended, modified,
extended, renewed or replaced from time to time.
"Senior Funded Debt" means all Funded Debt of the Borrower and
its Subsidiaries other than Funded Debt specifically subordinated to
the Credit Party Obligations.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person as of a particular
date, that on such date (i) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (ii) such Person does
not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (iii) such Person is not
engaged in a business or a transaction, and is not about to engage in
a business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration
to the prevailing practice in the industry in which such Person is
engaged or is to engage, (iv) the fair value of the assets of such
Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person and (v) the
present fair saleable value of the assets of such Person is not less
than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Stand Alone Letters of Credit" means the Existing Stand Alone
Letters of Credit and any Letter of Credit issued for the account of a
Credit Party by an Issuing Lender pursuant to Section 2.4 hereof, as
such Stand Alone Letters of Credit may be amended, modified, extended,
renewed or replaced.
"Stand Alone Letter of Credit Facility" shall have the meaning
set forth in Section 2.4 hereof.
"Stand Alone Letter of Credit Maturity Date" means
September 30, 2001.
"Stand Alone LOC Committed Amount" means FORTY FIVE MILLION
DOLLARS ($45,000,000).
"Stand Alone LOC Commitment Percentage" means, for each
Lender, the percentage identified as its Stand Alone LOC Commitment
Percentage on Schedule 1.1(a) attached hereto, as such
percentage may be modified in connection with any assignment made in
accordance with the terms of Section 12.3 hereof.
"Stand Alone LOC Obligations" means, at any time, the sum of
(i) the maximum amount which is, or at any time thereafter may become,
available to be drawn under Stand Alone Letters of Credit then
outstanding, assuming compliance with all requirements for drawings
referred to in such Stand Alone Letters of Credit plus (ii) the
18
25
aggregate amount of all drawings under Stand Alone Letters of Credit
honored by an Issuing Lender but not theretofore reimbursed.
"Stand Alone LOC Unused Commitment" means, for any period, the
amount by which (i) the applicable aggregate Stand Alone LOC Committed
Amount exceeds (ii) the daily average sum for such period of
outstanding Stand Alone LOC Obligations.
"Subordinated Debt" means the Holdings Debentures and the
Subordinated Notes as such may be amended, modified, restated
substituted or replaced from time to time in accordance with the terms
of this Credit Agreement.
"Subordinated Notes" means those certain 12 1/2% Senior
Subordinated Notes due 2002 issued by IPC, Inc. f/k/a Ivex Packaging
Corporation as Issuer as of December 15, 1992.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries, and
(b) any partnership, association, joint venture or other entity in
which such person directly or indirectly through Subsidiaries has more
than 50% equity interest at any time.
"Taxes" has the meaning set forth in Section 4.5 hereof.
"Term Loans" means the Tranche A Term Loans.
"Termination Event" means (i) with respect to any Plan,
covered by Title IV of ERISA, the occurrence of a Reportable Event or
the substantial cessation of operations (within the meaning of Section
4062(e) of ERISA); (ii) the withdrawal of any Credit Party or any of
its Subsidiaries or any ERISA Affiliate from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan; (iii) the distribution of a notice of intent
to terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under
Section 4042 of ERISA; (v) any event or condition which might
reasonably constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Plan; or (vi) the complete or partial withdrawal of any Credit Party
or any of its Subsidiaries or any ERISA Affiliate from a Multiemployer
Plan.
"Total Assets" means, as of any date, all items which, in
accordance with GAAP, would be classified as assets of the Borrower
and its Subsidiaries on a consolidated basis.
"Tranche A Lenders" shall have the meaning set forth in
Section 2.3(a) hereof.
"Tranche A Term Loans" means the Term Loans made to the
Borrower pursuant to Section 2.3(a) hereof.
"Tranche A Term Loan Commitment Percentage" means, for each
Lender, the
19
26
percentage identified as its Tranche A Term Loan Commitment
Percentage on Schedule 1.1(a) attached hereto, as such percentage may
be modified in connection with any assignment made in accordance with
the provisions of Section 12.3 hereof.
"Tranche A Term Loan Committed Amount" means FIFTY FIVE
MILLION DOLLARS ($55,000,000).
"Tranche A Term Loan Maturity Date" means September 30, 2001.
"Tranche A Term Note" or "Tranche A Term Notes" means the
amended and restated promissory notes of the Borrower in favor of each
of the Lenders evidencing the Tranche A Term Loans provided pursuant
to Section 2.3(a) hereof, individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Unused Fees" means the fees payable to the agent for the
benefit of the Lenders pursuant to Section 3.4(a) hereof.
"Working Capital" means the excess of current assets
(excluding Cash and Cash Equivalents) over current liabilities
(excluding the current portion of Funded Debt), as determined in
accordance with GAAP.
1.2 Computation of Time Periods. For purposes of computation of
periods of time hereunder, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."
1.3 Accounting Terms. Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted, and all
financial statements and certificates and reports as to financial matters
required to be delivered to the Lenders hereunder shall be prepared, in
accordance with GAAP applied on a consistent basis. All calculations made for
the purposes of determining compliance with this Credit Agreement shall (except
as otherwise expressly provided herein) be made by application of GAAP applied
on a basis consistent with the most recent annual or quarterly financial
statements delivered pursuant to Section 8.1 hereof (or, prior to the delivery
of the first financial statements pursuant to Section 8.1 hereof, consistent
with the financial statements described in Section 6.1(f) hereof); provided,
however, if (a) the Borrower shall object to determining such compliance on
such basis at the time of delivery of such financial statements due to any
change in GAAP or the rules promulgated with respect thereto or (b) the Agent
or the Required Lenders shall so object in writing within 30 days after
delivery of such financial statements, then such calculations shall be made on
a basis consistent with GAAP as in effect as of the date of the most recent
financial statements delivered by the Borrower to the Lenders to which no such
objection shall have been made.
20
27
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Loan Commitment. The Credit Parties and
the Lenders agree that, as of the Closing Date, the amount of
Revolving Loans outstanding, as provided under the Original Credit
Agreement, equals $_______________. Each of the outstanding Revolving
Loans made under the Original Credit Agreement shall be, as of the
Effective Date, a Revolving Loan under this Credit Agreement. Subject
to the terms and conditions set forth herein, each Lender who has a
Revolving Loan Commitment Percentage that is greater than zero (the
"Revolving Loan Lenders") severally agrees to make revolving loans
(each a " Revolving Loan" and collectively the "Revolving Loans") to
the Borrower, in U.S. dollars, at any time and from time to time,
during the period from and including the Effective Date to but not
including the Revolving Loan Maturity Date (or such earlier date if
the obligation to make Revolving Loans has been terminated as provided
herein); provided, however, that (i) the sum of the aggregate amount
of Revolving Loans outstanding plus the aggregate amount of Revolving
LOC Obligations outstanding shall not exceed the aggregate Revolving
Committed Amount and (ii) with respect to each individual Revolving
Loan Lender, the Revolving Loan Lender's pro rata share of outstanding
Revolving Loans plus such Revolving Loan Lender's pro rata share of
outstanding Revolving LOC Obligations shall not exceed such Revolving
Loan Lender's Revolving Loan Commitment Percentage of the Revolving
Committed Amount. Subject to the terms of this Credit Agreement, the
Borrower may borrow, repay and reborrow the amount of the Revolving
Loan Commitment.
(b) Method of Borrowing for Revolving Loans.
(i) Base Rate Loans. By no later than
11:00 a.m. on the date of the request for the borrowing (or
for the conversion of Eurodollar Loans to Base Rate Loans),
the Borrower shall submit a Notice of
Borrowing/Continuation/Conversion to the Agent, via telecopy,
with original to follow, (A) setting forth (x) the amount
requested and (y) the desire to have such Revolving Loans
accrue interest at the Adjusted Base Rate and (B) complying in
all respects with Section 6.2 hereof; provided that existing
Eurodollar Loans may be converted into Base Rate Loans at the
end of an Interest Period without complying with Section 6.2
hereof.
(ii) Eurodollar Loans. By no later than
11:00 a.m. three Business Days prior to the date of the
request for the borrowing (or for the conversion of Base Rate
Loans to Eurodollar Loans or the continuation of existing
Eurodollar Loans), the Borrower shall submit a Notice of
Borrowing/Continuation/Conversion to the Agent (A) setting
forth (x) the amount requested, (y) the desire to have such
Revolving Loans accrue interest at the Adjusted Eurodollar
Rate, and (z) the Interest Period applicable thereto, and (B)
complying in all respects with Section 6.2 hereof.
(iii) Continuation and Conversion. The
Borrower shall have the option, on any Business Day, to
continue existing Eurodollar Loans for a subsequent Interest
Period, to convert Base Rate Loans into Eurodollar Loans or
21
28
to convert Eurodollar Loans into Base Rate Loans; provided,
however, that (A) except as provided in Section 4.3 hereof,
Eurodollar Loans may be converted to Base Rate Loans only on
the last day of an Interest Period applicable thereto; (B)
Eurodollar Loans may be continued and Base Rate Loans may be
converted to Eurodollar Loans only if no Default or Event of
Default is in existence on the date of extension or
conversion; (C) any continuation or conversion must comply
with all requirements of this Credit Agreement including
timely delivery of a properly completed Notice of
Borrowing/Continuation/Conversion; provided, however, that
existing Eurodollar Loans may be converted into Base Rate
Loans at the end of an Interest Period without complying with
Section 6.2 hereof and (D) failure by the Borrower to properly
continue Eurodollar Loans at the end of an Interest Period
shall be deemed a conversion to Base Rate Loans.
(c) Funding of Revolving Loans. Upon receipt of a Notice
of Borrowing/Continuation/Conversion, the Agent shall promptly inform
the Lenders as to the terms thereof. Each Revolving Loan Lender will
make its pro rata share of the Revolving Loans available to the Agent
by 2:00 p.m. on the date specified in the Notice of
Borrowing/Continuation/Conversion by deposit (in U.S. dollars) of
immediately available funds at the offices of the Agent at its
principal office in Charlotte, North Carolina, or at such other
address as the Agent may designate in writing. All Revolving Loans
shall be made by the Lenders pro rata on the basis of each Revolving
Loan Lender's Revolving Loan Commitment Percentage.
No Revolving Loan Lender shall be responsible for the failure
or delay by any other Revolving Loan Lender in its obligation to make
Revolving Loans hereunder; provided, however, that the failure of any
Lender to fulfill its obligations hereunder shall not relieve any
other Lender of its obligations hereunder. Unless the Agent shall
have been notified by any Revolving Loan Lender prior to the date of
any such Revolving Loan that such Revolving Loan Lender does not
intend to make available to the Agent its portion of the Revolving
Loans to be made on such date, the Agent may assume that such Lender
has made such amount available to the Agent on the date of such
Revolving Loans, and the Agent in reliance upon such assumption, may
(in its sole discretion without any obligation to do so) make
available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent, the
Agent shall be able to recover such corresponding amount from such
Revolving Loan Lender. If such Lender does not pay such corresponding
amount forthwith upon the Agent's demand therefor, the Agent will
promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Agent. The Agent shall also be
entitled to recover from the Revolving Loan Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of
each day from the date such corresponding amount was made available by
the Agent to the Borrower to the date such corresponding amount is
recovered by the Agent at a per annum rate equal to (i) from the
Borrower at the applicable rate for such Revolving Loan pursuant to
the Notice of Borrowing/Continuation/Conversion and (ii) from a Lender
at the Federal Funds Rate.
(d) Minimum Amounts of Revolving Loans. Each request for
Revolving Loans shall be (a) in the case of Eurodollar Loans, in an
aggregate principal amount that is not less than $1,000,000 and (b) in
the case of Base Rate Loans, in an aggregate principal amount that is
not less than the lesser of $1,000,000 or the remaining amount
available under the Revolving Committed Amount. Any Revolving Loan
requested shall be in an integral multiple of $100,000 unless the
request is for all of the remaining amount available to be borrowed
under the Revolving Committed Amount.
22
29
(e) Reductions of Revolving Committed Amount. Upon at
least three Business Days' notice, the Borrower shall have the right
to permanently terminate or reduce the aggregate unused amount of the
Revolving Committed Amount at any time or from time to time; provided
that (i) each partial reduction shall be in an aggregate amount at
least equal to $1,000,000 and in integral multiples of $100,000 above
such amount and (ii) no reduction shall be made which would reduce the
Revolving Committed Amount to an amount less than the aggregate amount
of outstanding Revolving Loans plus the aggregate amount of
outstanding Revolving LOC Obligations. Any reduction in (or
termination of) the Revolving Committed Amount shall be permanent and
may not be reinstated.
2.2 Revolving Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and conditions
which the Issuing Lender may reasonably require, the Issuing Lender
shall issue (in U.S. dollars) and the Revolving Loan Lenders shall
participate in, letters of credit (the "Revolving Letters of Credit")
for the account of the Borrower for its benefit or the benefit of any
other Credit Party from time to time upon request from the Effective
Date until the Revolving Loan Maturity Date in a form reasonably
acceptable to the Issuing Lender; provided, however, that (i) the
aggregate amount of Revolving LOC Obligations shall not at any time
exceed FIVE MILLION DOLLARS ($5,000,000) and (ii) the sum of the
aggregate amount of Revolving Loans outstanding plus the aggregate
amount of Revolving LOC Obligations outstanding shall not exceed the
Revolving Committed Amount. Revolving Letters of Credit shall be
issued for any lawful purpose. Except as otherwise expressly agreed
upon by all the Revolving Loan Lenders, no Revolving Letter of Credit
shall have an original expiry date more than one year from the date of
issuance or as extended, shall have an expiry date extending beyond 30
days prior to the Revolving Loan Maturity Date. Each Revolving Letter
of Credit shall comply with the related LOC Documents. The issuance
and expiry date of each Revolving Letter of Credit shall be a Business
Day.
(b) Request and Reports. The request for the issuance of
a Revolving Letter of Credit shall be submitted to the Issuing Lender
at least three Business Days prior to the requested date of issuance.
The Issuing Lender will, at least quarterly and more frequently upon
request, provide to the Agent for dissemination to the Lenders a
detailed report specifying the Revolving Letters of Credit which are
then issued and outstanding and any activity with respect thereto
which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the
beneficiary, the outstanding balance, and the expiry date as well as
any payments or expirations which may have occurred. The Issuing
Lender will further provide to the Agent, promptly upon request,
copies of the Revolving Letters of Credit.
(c) Participations.
(i) On the Effective Date, each Revolving Loan
Lender shall automatically acquire a participation in the
liability of the Issuing Lender under each Existing Revolving
Letter of Credit in an amount equal to its Revolving Loan
Commitment Percentage of such Existing Revolving Letters of
Credit. Each Existing Revolving Letter of Credit shall be
deemed for all purposes of this Credit Agreement and the other
Credit Documents to be a Revolving Letter of Credit.
23
30
(ii) Each Revolving Loan Lender, upon issuance of
a Revolving Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the
Issuing Lender in such Revolving Letter of Credit and the
obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its Revolving Loan
Commitment Percentage of the obligations under such Revolving
Letter of Credit and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and
be obligated to pay to the Issuing Lender therefor and
discharge when due, its Revolving Loan Commitment Percentage
of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Revolving Loan
Lender's participation in any Revolving Letter of Credit, to
the extent that the Issuing Lender has not been reimbursed as
required hereunder or under any such Revolving Letter of
Credit, each such Revolving Loan Lender shall pay to the
Issuing Lender its Revolving Loan Commitment Percentage of
such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The
obligation of each Revolving Loan Lender to so reimburse the
Issuing Lender shall be absolute and unconditional and shall
not be affected by the occurrence of a Default, an Event of
Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the
obligation of the Borrower or any other Credit Party to
reimburse the Issuing Lender under any Revolving Letter of
Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Revolving Letter of Credit, the Issuing Lender will promptly notify
the Borrower. Unless the Borrower shall immediately notify the
Issuing Lender of its intent to otherwise reimburse the Issuing
Lender, the Borrower shall be deemed to have requested a Revolving
Loan at the Adjusted Base Rate in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which will be used
to satisfy the reimbursement obligations. The Borrower shall reimburse
the Issuing Lender on the day the Issuing Lender pays a drawing under
any Revolving Letter of Credit either with the proceeds of a Revolving
Loan obtained hereunder or otherwise in same day funds as provided
herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal
to the Base Rate plus three and one quarter percent (3 1/4%) and shall
constitute an Event of Default. The Borrower's reimbursement
obligations hereunder shall be absolute and unconditional under all
circumstances irrespective of any rights of set-off, counterclaim or
defense to payment the Borrower may claim or have against the Issuing
Lender, the Agent, the Lenders, the beneficiary of the Revolving
Letter of Credit drawn upon or any other Person, including without
limitation any defense based on any failure of the Borrower to receive
consideration or the legality, validity, regularity or
unenforceability of the Revolving Letter of Credit; provided, however,
that the Borrower may have a claim against the Issuing Lender, and the
Issuing Lender may be liable to the Borrower, to the extent of any
actual damages suffered by the Borrower as a result of the Issuing
Lender's gross negligence or willful misconduct in failing to pay a
drawing under a Revolving Letter of Credit presented in strict
conformity therewith. The Issuing Lender will promptly notify the
other Revolving Loan Lenders of the amount of any unreimbursed drawing
and each Revolving Loan Lender shall promptly pay to the Agent for the
account of the Issuing Lender in U.S. dollars and in immediately
available funds, the amount of such Revolving Loan Lender's Revolving
Loan Commitment Percentage of such unreimbursed drawing. Such payment
shall be made on the day such notice is
24
31
received by such Revolving Loan Lender from the Issuing Lender if such
notice is received at or before 2:00 p.m., otherwise such payment
shall be made at or before 12:00 Noon on the Business Day next
succeeding the day such notice is received. If such Revolving Loan
Lender does not pay such amount to the Issuing Lender in full upon
such request, such Lender shall, on demand, pay to the Agent for the
account of the Issuing Lender interest on the unpaid amount during
the period from the date of payment by the Issuing Lender of such
drawing until such Revolving Loan Lender pays such amount to the
Issuing Lender in full at a rate per annum equal to, if paid within
two Business Days of the date of payment by the Issuing Lender of such
drawing, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each Revolving Loan Lender's obligation to make such
payment to the Issuing Lender, and the right of the Issuing Lender to
receive the same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the
existence of a Default or Event of Default or the acceleration of the
obligations hereunder and shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall have requested, or been deemed to have requested, a
Revolving Loan borrowing to reimburse a drawing under a Revolving
Letter of Credit, the Agent shall give notice to the Lenders that
Revolving Loans have been requested or deemed requested in connection
with a drawing under a Revolving Letter of Credit, in which case a
Revolving Loan borrowing comprised solely of Base Rate Loans (each
such borrowing, a "Mandatory Borrowing") shall be immediately made
from all Revolving Loan Lenders (without giving effect to any
termination of the Commitments pursuant to Section 10.2 hereof) pro
rata based on each Lender's respective Revolving Loan Commitment
Percentage and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective Revolving LOC
Obligations. Each such Revolving Loan Lender hereby irrevocably
agrees to make such Revolving Loans immediately upon any such request
or deemed request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the same
such date notwithstanding (i) the amount of Mandatory Borrowing may
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 6 hereof are then satisfied, (iii) whether a Default or Event
of Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required
in Section 2.1 hereof, (v) the date of such Mandatory Borrowing, or
(vi) any reduction in the Revolving Committed Amount after any such
Letter of Credit may have been drawn upon; provided that if a
Mandatory Borrowing occurs during or causes an Event of Default a
default rate of interest may be charged in accordance with Section
3.1(b) hereof. In the event that any Mandatory Borrowing cannot for
any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower or any other
Credit Party), then each such Revolving Loan Lender hereby agrees that
it shall forthwith fund (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding Revolving LOC Obligations;
provided, further, that in the event any Lender shall fail to fund its
Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such Revolving Loan
Lender's unfunded Participation Interest therein shall bear interest
payable to the Issuing Lender upon demand, at the rate equal to, if
paid within two
25
32
Business Days of such date, the Federal Funds Rate, and thereafter at
a rate equal to the Base Rate.
(f) Modification, Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Revolving Letter of Credit shall, for purposes hereof, be treated in
all respects the same as the issuance of a new Revolving Letter of
Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender
shall have the Revolving Letters of Credit be subject to The Uniform
Customs and Practice for Documentary Credits, as published as of the
date of issue by the International Chamber of Commerce (Publication
No. 500 or the most recent publication, the " UCP"), and the UCP shall
be incorporated therein and deemed in all respects to be a part
thereof.
2.3 Term Loans.
(a) Tranche A Term Loan. The Credit Parties acknowledge
and agree that the entire amount of the Tranche A Term Loan Commitment
(collectively, the " Tranche A Term Loans") was delivered to the
Borrower under the Original Credit Agreement on December 7, 1995.
Subject to the terms and conditions set forth herein, each Lender who
has a Tranche A Term Loan Commitment Percentage that is greater than
zero (the "Tranche A Lenders") severally agrees, on the Effective
Date, (to the extent not previously done) to make its Tranche A Term
Loan Commitment Percentage of the Tranche A Term Loan Committed Amount
available to the Agent. The outstanding Tranche A Term Loans shall be
governed by the terms of this Credit Agreement.
(b) Interest Rate Requests. The outstanding Tranche A
Term Loans made under the Original Credit Agreement shall continue to
accrue interest after the Effective Date at the rates and for the
Interest Periods provided in the Original Credit Agreement until the
end of an Interest Period or a Notice of
Borrowing/Continuation/Conversion is delivered by the Borrower. The
Borrower shall choose the interest rate to accrue on all or a portion
of the outstanding Term Loans as follows:
(i) Adjusted Base Rate. By no later
than 11:00 a.m. on the date of the request, the Borrower shall
provide to the Agent a Notice of
Borrowing/Continuation/Conversion setting forth the amount of
the Tranche A Term Loans that it wishes to have accrue
interest at the Adjusted Base Rate. From that date forward,
interest shall accrue on that portion of the Tranche A Term
Loans as set forth in the Notice of Borrowing until requested
otherwise by the Borrower.
(ii) Adjusted Eurodollar Rate. By no
later than 11:00 a.m. three Business Days prior to the date on
which the Borrower wishes to have all or a portion of the
Tranche A Term Loans accrue interest at the Adjusted
Eurodollar Rate, the Borrower shall provide to the Agent a
Notice of Borrowing/Continuation/Conversion setting forth the
amount of the Tranche A Term Loans it wishes to have accrue
interest at the Adjusted Eurodollar Rate and the Interest
Period for which such rate shall be applicable; provided,
however, that (A) the Borrower may not request all or part of
the Tranche A Term Loans to accrue interest at the Adjusted
Eurodollar Rate during the existence and continuation of a
Default or Event of Default and (B) the Borrower may only
26
33
continue an existing Eurodollar Loan or convert an existing
Eurodollar Loan into a Base Rate Loan at the end of an
Interest Period.
(iii) Failure to Submit an Interest Rate
Request. If the Borrower fails to timely submit a Notice of
Borrowing/Continuation/Conversion at the end of any Interest
Period stating a desire to have all or a portion of the
Tranche A Term Loans accrue interest at the Adjusted
Eurodollar Rate, or if the Borrower submits an improper
Interest Rate Request, then all (or such portion) of the
Tranche A Term Loans shall accrue interest at the Adjusted
Base Rate until the Agent receives a proper request from the
Borrower.
(c) Amortization. The principal amount of the Tranche A
Term Loans shall be repaid in quarterly payments on the last day of
each fiscal quarter of the Borrower as follows:
Tranche A
Principal Amortization Term Loan Principal
Payment Dates Amortization Payment
---------------------- --------------------
March 31, 1997 $1,250,000
June 30, 1997 $1,250,000
September 30, 1997 $1,250,000
December 31, 1997 $1,875,000
March 31, 1998 $1,875,000
June 30, 1998 $1,875,000
September 30, 1998 $1,875,000
December 31, 1998 $3,000,000
March 31, 1999 $3,000,000
June 30, 1999 $3,000,000
September 30, 1999 $3,000,000
December 31, 1999 $3,500,000
March 31, 2000 $3,500,000
June 30, 2000 $3,500,000
September 30, 2000 $3,500,000
December 31, 2000 $4,125,000
March 31, 2001 $4,125,000
June 30, 2001 $4,125,000
September 30, 2001 $5,375,000
-----------
Total $55,000,000
27
34
2.4 Stand Alone Letter of Credit Facility.
(a) Issuance. Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and conditions
which the Issuing Lender may reasonably require (and subject to the
provisions of Section 2.4(c)(i) below), the Issuing Lender shall issue
(in U.S. dollars) and the Lenders who have a Stand Alone LOC
Commitment Percentage greater than zero (the "Letter of Credit
Lenders") shall participate in, letters of credit (the "Stand Alone
Letters of Credit") for the account of the Borrower or any other
Credit Party from time to time upon request from the Effective Date
until the Stand Alone Letter of Credit Maturity Date in a form
reasonably acceptable to the Issuing Lender; provided, however, that
the aggregate amount of Stand Alone LOC Obligations shall not at any
time exceed the "Stand Alone LOC Committed Amount". Stand Alone
Letters of Credit shall be issued for any lawful purpose. Except as
otherwise expressly agreed upon by all the Letter of Credit Lenders,
no Stand Alone Letter of Credit shall have an expiry date extending
beyond 30 days prior to the Stand Alone Letter of Credit Maturity
Date. Each Stand Alone Letter of Credit shall comply with the related
LOC Documents. The issuance and expiry date of each Stand Alone
Letter of Credit shall be a Business Day.
(b) Request and Reports. The request for the issuance of
a Stand Alone Letter of Credit shall be submitted to the Issuing
Lender at least three Business Days prior to the requested date of
issuance. The Issuing Lender will, at least quarterly and more
frequently upon request, provide to the Agent for dissemination to the
Lenders a detailed report specifying the Stand Alone Letters of Credit
which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report,
and including therein, among other things, the account party, the
beneficiary, the outstanding balance, and the expiry date as well as
any payments or expirations which may have occurred. The Issuing
Lender will further provide to the Agent, promptly upon request,
copies of the Stand Alone Letters of Credit.
(c) Participations.
(i) On the Effective Date, each Letter
of Credit Lender shall automatically acquire a participation
in the liability of the Issuing Lender under each Existing
Stand Alone Letter of Credit in an amount equal to such
Lender's Stand Alone LOC Commitment Percentage of the Stand
Alone Committed Amount. Each Existing Stand Alone Letter of
Credit shall be deemed for all purposes of this Credit
Agreement and the other Credit Documents to be a Stand Alone
Letter of Credit.
(ii) Each Letter of Credit Lender, upon
issuance of a Stand Alone Letter of Credit, shall be deemed to
have purchased without recourse a risk participation from the
Issuing Lender in such Stand Alone Letter of Credit and the
obligations arising thereunder and any collateral relating
thereto, in each case in an amount equal to its Stand Alone
LOC Commitment Percentage of the obligations under such Stand
Alone Letter of Credit and shall absolutely, unconditionally
and irrevocably assume, as primary obligor and not as surety,
and be obligated to pay to the Issuing Lender therefor and
discharge when due, its Stand Alone LOC Commitment Percentage
of the obligations arising under such Stand Alone Letter of
Credit. Without limiting the scope and nature of each Letter
of Credit Lender's participation in any Stand Alone Letter of
Credit, to the
28
35
extent that the Issuing Lender has not been reimbursed as
required hereunder, each such Letter of Credit Lender shall
pay to the Issuing Lender its Stand Alone LOC Commitment
Percentage of such unreimbursed drawing in same day funds on
the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection
(d) hereof. The obligation of each Letter of Credit Lender to
so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event.
Any such reimbursement shall not relieve or otherwise impair
the obligation of the Borrower or any other Credit Party to
reimburse the Issuing Lender under any Stand Alone Letter of
Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Stand Alone Letter of Credit, the Issuing Lender will promptly notify
the Borrower. The Borrower shall reimburse the Issuing Lender on the
day the Issuing Lender pays a drawing under any Stand Alone Letter of
Credit in same day funds as provided herein or in the LOC Documents;
provided, however, if, pursuant to the terms of the corresponding LOC
Documents, any reimbursement obligation with respect to a draw under
such Stand Alone Letter of Credit is not required to be immediately
paid, such reimbursement obligation will be payable in accordance with
the related LOC Documents and will accrue interest, fees, and other
charges as if such reimbursement obligation constituted a Base Rate
Loan in accordance with the terms of this Agreement; and provided
further that, notwithstanding anything to the contrary in such LOC
Documents, if any such reimbursement obligation is not immediately due
and payable, the same shall nonetheless be paid in full on or before
the Stand Alone Letter of Credit Maturity Date. If the Borrower shall
fail to reimburse the Issuing Lender as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a per annum
rate equal to the Base Rate plus three and one quarter percent (3
1/4%) and shall constitute an Event of Default. The Borrower's
reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of
set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Agent, the Lenders, the
beneficiary of the Stand Alone Letter of Credit drawn upon or any
other Person, including without limitation any defense based on any
failure of the Borrower to receive consideration or the legality,
validity, regularity or unenforceability of the Stand Alone Letter of
Credit; provided, however, that the Borrower may have a claim against
the Issuing Lender, and the Issuing Lender may be liable to the
Borrower, to the extent of any actual damages suffered by the Borrower
as a result of the Issuing Lender's gross negligence or willful
misconduct in failing to pay a drawing under a Stand Alone Letter of
Credit presented in strict conformity therewith. The Issuing Lender
will promptly notify the other Letter of Credit Lenders of the amount
of any unreimbursed drawing and each Letter of Credit Lender shall
promptly pay to the Agent for the account of the Issuing Lender in
U.S. dollars and in immediately available funds, the amount of such
Letter of Credit Lender's Stand Alone LOC Commitment Percentage of
suchunreimbursed drawing. Such payment shall be made on the day such
notice is received by such Letter of Credit Lender from the Issuing
Lender if such notice is received at or before 2:00 p.m., otherwise
such payment shall be made at or before 12:00 Noon on the Business Day
next succeeding the day such notice is received. If such Letter of
Credit Lender does not pay such amount to the Issuing Lender in full
upon such request, such Letter of Credit Lender shall, on demand, pay
to the Agent for the account of the Issuing Lender interest on the
unpaid amount during the period from the date of payment by the
Issuing Lender of such drawing until such Lender pays such amount to
the Issuing Lender in full at a rate per annum equal to, if paid
within two Business Days of the date of
29
36
payment of such drawing, the Federal Funds Rate and thereafter at a
rate equal to the Base Rate. Each Letter of Credit Lender's
obligation to make such payment to the Issuing Lender, and the right
of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever
and without regard to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event of Default
or the acceleration of the obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
(e) Modification, Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Stand Alone Letter of Credit shall, for purposes hereof, be treated in
all respects the same as the issuance of a new Stand Alone Letter of
Credit hereunder.
(f) Uniform Customs and Practices. The Issuing Lender
shall have the Stand Alone Letters of Credit be subject to The Uniform
Customs and Practice for Documentary Credits, as published as of the
date of issue by the International Chamber of Commerce (Publication
No. 500 or the most recent publication, the " UCP"), and the UCP shall
be incorporated therein and deemed in all respects to be a part
thereof.
2.5 Indemnification of Issuing Lenders.
(a) In addition to its other obligations under this
Credit Agreement, the Borrower hereby agrees to protect, indemnify,
pay and save the Issuing Lender harmless from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called "
Government Acts").
(b) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary thereof. The Issuing Lender
shall not be responsible: (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any
party in connection with the application for and issuance of any
Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason;
(iii) for failure of the beneficiary of a Letter of Credit to comply
fully with conditions required in order to draw upon a Letter of
Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) for errors
in interpretation of technical terms; (vi) for any loss or delay in
the transmission or otherwise of any document required in order to
make a drawing under a Letter of Credit or of the proceeds thereof;
and (vii) for any consequences arising from causes beyond the control
of the Issuing Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting
of the Issuing Lender's rights or powers hereunder.
30
37
(c) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any Letter
of Credit or the related certificates, if taken or omitted in good
faith, shall not put such Issuing Lender under any resulting liability
to the Borrower. It is the intention of the parties that this Credit
Agreement shall be construed and applied to protect and indemnify the
Issuing Lender against any and all risks involved in the issuance of
the Letters of Credit, all of which risks are hereby assumed by the
Borrower, including, without limitation, any and all risks of the acts
or omissions, whether rightful or wrongful, of any present or future
Government Acts. The Issuing Lender shall not, in any way, be liable
for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts
or any other cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 2.5 is intended to limit the
reimbursement obligation of the Borrower contained in Sections 2.2 or
2.4 hereof. The obligations of the Borrower under this Section 2.5
shall survive the termination of this Credit Agreement. No act or
omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Credit Agreement.
(e) Notwithstanding anything to the contrary contained in
this Section 2.5, the Borrower shall have no obligation to indemnify
any Issuing Lender in respect of any liability incurred by such
Issuing Lender arising solely out of the gross negligence or willful
misconduct of the Issuing Lender, as determined by a court of
competent jurisdiction.
(f) To the extent the Borrower does not fulfill any or
all its obligations under this Section 2.5, each Letter of Credit
Lender agrees to reimburse the Issuing Lender for any losses incurred
thereby ratably in accordance with each such Letter of Credit Lender's
Stand Alone LOC Commitment Percentage.
2.6 Notes.
(a) Revolving Loan Notes. The Revolving Loans made by
each Lender shall be evidenced by a duly executed amended and restated
promissory note of the Borrower to each Lender in the face amount of
its Revolving Loan Commitment Percentage of the Revolving Committed
Amount and substantially in the form of Exhibit 2.6(a) attached
hereto.
(b) Tranche A Term Loan Notes. The Tranche A Term Loan
made by each Lender shall be evidenced by a duly executed amended and
restated promissory note of the Borrower to each Lender in the face
amount of its Tranche A Term Loan Commitment Percentage of the Tranche
A Term Loan Committed Amount and in substantially in the form of
Exhibit 2.6(b) attached hereto.
31
38
SECTION 3
PAYMENTS
3.1 Interest.
(a) Interest Rate.
(i) All Base Rate Loans shall accrue
interest at the Adjusted Base Rate.
(ii) All Eurodollar Loans shall accrue
interest at the Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and
during the continuance, of an Event of Default, the principal of and,
to the extent permitted by law, interest on the Loans and any other
amounts owing hereunder or under the other Loan Documents shall, after
written notice of same to the Borrower, bear interest, payable on
demand, at a per annum rate equal to 2% plus the rate which would
otherwise be applicable.
(c) Interest Payments. Interest on Loans shall be due
and payable in arrears on each Interest Payment Date.
3.2 Prepayments
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time without
premium or penalty; provided, however, that (i) Eurodollar Loans may
only be prepaid on three Business Days' prior written notice to the
Agent and any prepayment of Eurodollar Loans will be subject to
Section 4.6 hereof; (ii) each such partial prepayment of Loans shall
be in the minimum principal amount of $100,000 and (iii) voluntary
prepayments with respect to the Tranche A Term Loans shall be applied
pro rata among the remaining Principal Amortization Payments.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at
any time (A) the aggregate amount of Revolving Loans
outstanding plus Revolving LOC Obligations outstanding exceeds
the Revolving Committed Amount, the Borrower shall immediately
make a principal payment to the Agent in the manner and in an
amount necessary to be in compliance with Section 2.1 hereof.
Any payments made under this Section 3.2(b)(i) shall be
subject to Section 4.6 hereof and shall be applied first to
Revolving Loans (first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period
maturities) and then to a cash collateral account in respect
of Revolving LOC Obligations.
(ii) Excess Cash Flow. Within 10 days
after the date the audited financial statements are required
to be delivered pursuant to Section 8.1(a) hereof (commencing
with the fiscal year ending December 31, 1996), the Borrower
shall make a prepayment of the Loans in an amount equal to 50%
of the
32
39
Excess Cash Flow earned during such prior fiscal year (to be
applied as set forth in Section 3.2(c) below).
(iii) Asset Sales. Immediately upon
receipt by the Borrower or any of its Subsidiaries of proceeds
from any Asset Disposition, the Borrower shall forward the Net
Cash Proceeds of such Asset Disposition to the Lenders as a
prepayment of the Loans (to be applied as set forth in Section
3.2(c) below).
(iv) Receivables Transaction.
Immediately upon the receipt by Holdings, the Borrower or any
of their Subsidiaries of proceeds from a Receivables
Transaction, the Borrower shall forward the Net Cash Proceeds
of such Receivables Transaction to the Lenders as a prepayment
of the Loans (to be applied as set forth in Section 3.2(c)
below).
(c) Application of Certain Prepayments. All amounts
required to be paid pursuant to Section 3.2(b)(ii) and (iii) above
shall be applied first to the outstanding Tranche A Term Loans (pro
rata among the remaining Principal Amortization Payments), second, if
the Tranche A Term Loans have been paid in full, to the Revolving
Loans with a corresponding reduction in the Revolving Committed Amount
and third if the Tranche A Term Loan and Revolving Loans have been
paid in full then to the payment or cash collaterization of Revolving
LOC Obligations and Stand Alone LOC Obligations. All amounts required
to be prepaid pursuant to Section 3.2(b)(iv) above shall be applied
first pro rata among the Tranche A Term Loans and the Revolving Loans
(pro rata among the remaining Principal Amortization Payments with
respect to the Tranche A Term Loans and with a corresponding reduction
in the Revolving Committed Amount with respect to the Revolving Loans)
and second if the Tranche A Term Loan and Revolving Loans have been
paid in full then to the payment or cash collaterization of Revolving
LOC Obligations and Stand Alone LOC Obligations. Within the
parameters of the applications set forth above, prepayments shall be
applied first to Base Rate Loans and then to Eurodollar Loans in
direct order of Interest Period maturities.
3.3 Payment in full at Maturity.
(a) On the Revolving Loan Maturity Date, (i) the entire
outstanding principal balance of all Revolving Loans, together with
accrued but unpaid interest and all other sums owing with respect
thereto, shall be due and payable in full, unless accelerated sooner
pursuant to Section 10 hereof and (ii) all Revolving Letters of
Credit, if any, shall be terminated or sufficient cash collateral
shall be provided for the total amount of any outstanding Revolving
Letters of Credit.
(b) On the Tranche A Term Loan Maturity Date, the entire
outstanding principal balance of all Tranche A Term Loans, together
with accrued but unpaid interest and all other sums owing with respect
thereto, shall be due and payable in full, unless accelerated sooner
pursuant to Section 10 hereof.
(c) On the Stand Alone Letter of Credit Maturity Date,
all Stand Alone Letters of Credit, if any, shall be terminated or
sufficient cash collateral shall be provided for the total amount of
any outstanding Stand Alone Letters of Credit.
33
40
3.4 Fees.
(a) Unused Fees. In consideration of the Revolving
Committed Amount and the Stand Alone LOC Committed Amount being made
available by the Revolving Loan Lenders and the Letter of Credit
Lenders hereunder, the Borrower agrees to pay to the Agent, for the
pro rata benefit of each Revolving Loan Lender and Letter of Credit
Lender, as applicable, a fee equal to .5% per annum on the Revolving
Loan Unused Commitment and .5% per annum on the Stand Alone LOC Unused
Commitment (the " Unused Fees"), such Unused Fees beginning to accrue
as of the Effective Date. The accrued Unused Fees shall be due and
payable in arrears on the last Business Day of each fiscal quarter of
the Borrower (as well as on the Revolving Loan Maturity Date and the
Stand Alone Letter of Credit Maturity Date and on any date that the
Revolving Committed Amount or the Stand Alone LOC Committed Amount is
reduced) for the immediately preceding fiscal quarter (or portion
thereof), beginning with the first of such dates to occur after the
Effective Date.
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In
consideration of the issuance of Letters of Credit hereunder,
the Borrower agrees to pay to the Issuing Lender for the pro
rata benefit of the Letter of Credit Lenders, a fee (the
"Letter of Credit Fee") equal to the applicable Letter of
Credit Fee on the average daily maximum amount available to be
drawn under each such Letter of Credit from the date of
issuance to the date of expiration. The Letter of Credit Fee
will be payable quarterly in arrears 15 days after the end of
each fiscal quarter of Borrower and on the Revolving Loan
Maturity Date and the Stand Alone Letter of Credit Maturity
Date.
(ii) Issuing Lender Fees. In addition to
the Letter of Credit Fees payable pursuant to subsection (i)
above, the Borrower shall pay to the Issuing Lender for its
own account without sharing by the other Lenders a fee equal
to one-fourth of one percent (1/4%) on the total sum of all
Letters of Credit issued by such Issuing Lender, such fee to
be paid quarterly in arrears 15 days after the end of each
fiscal quarter of the Borrower (as well as on the Revolving
Loan Maturity Date and the Stand Alone Letter of Credit
Maturity Date, as applicable) (the "Issuing Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to
the Agent, for its own account, an annual fee as agreed to between the
Borrower and the Agent in the Fee Letter.
3.5 Place and Manner of Payments. All payments of principal,
interest, fees, expenses and other amounts to be made by a Credit Party under
this Agreement shall be received not later than 2:00 p.m. on the date when due
in U.S. dollars and in immediately available funds by the Agent at its offices
at NationsBank Corporate Center, Charlotte, North Carolina. The Borrower
shall, at the time it makes any payment under this Agreement, specify to the
Agent, the Loans, Letters of Credit, fees or other amounts payable by the
Borrower hereunder to which such payment is to be applied (and in the event
that it fails to specify, or if such application would be inconsistent with the
terms hereof, the Agent shall distribute such payment to the Lenders in such
manner as the Agent may deem appropriate subject to Section 3.6 hereof).
34
41
In any proceeding in which the amount of any obligation which is payable
hereunder in United States currency must be converted to the currency of
another jurisdiction (the "Other Currency"), the amount of such obligation
shall be converted into an amount in the Other Currency sufficient to purchase
the amount of the obligation in United States currency at a commercial bank in
such jurisdiction at the close of business on the first day on which such bank
quotes a rate in the Other Currency for purchase of such amount of United
States currency before the day payment of the obligation is received by the
Agent, but the Lenders shall have a separate cause of action against the Credit
Parties for the amount, if any, by which the amount paid to the Agent in
respect of the obligation in the Other Currency, when promptly converted to
United States currency under normal banking procedures and in an appropriate
market of the Agent's choice, fails to yield (net after any costs of
conversion) the full amount of the obligation in United States currency, and
the Credit Parties shall receive the benefit, if after conversion from the
Other Currency the Agent has received an amount in United States currency in
excess of such obligation owed by the Credit Parties.
3.6 Pro Rata Treatment. Except to the extent otherwise provided
herein:
(a) Loans. Each Revolving Loan borrowing (including
without limitation each Mandatory Borrowing), each payment or
prepayment of principal of any Loan, each payment of fees (other than
the Issuing Lender Fees retained by the Issuing Lender for its own
account and the Administrative Fees retained by the Agent for its own
account), each reduction of the Revolving Committed Amount, and each
conversion or continuation of any Loan, shall be allocated pro rata
among the relevant Lenders in accordance with the respective Revolving
Loan Commitment Percentages and Tranche A Term Loan Commitment
Percentages, as applicable, of such Lenders (or, if the Commitments of
such Lenders have expired or been terminated, in accordance with the
respective principal amounts of their outstanding Loans and
Participation Interests of such Lenders).
(b) Letters of Credit. Each payment of unreimbursed
drawings in respect of Revolving LOC Obligations and Stand Alone LOC
Obligations shall be allocated to each Lender entitled thereto pro
rata in accordance with its Revolving LOC Commitment Percentage or
Stand Alone LOC Commitment Percentage, as applicable; provided that,
if any Lender shall have failed to pay its applicable pro rata share
of any drawing under any Letter of Credit, then any amount to which
such Lender would otherwise be entitled pursuant to this subsection
(b) shall instead be payable to the Issuing Lender; provided further,
that in the event any amount paid to any Lender pursuant to this
subsection (b) is rescinded or must otherwise be returned by the
Issuing Lender, each Lender shall, upon the request of the Issuing
Lender, repay to the Agent for the account of the Issuing Lender the
amount so paid to such Lender, with interest for the period commencing
on the date such payment is returned by the Issuing Lender until the
date the Issuing Lender receives such repayment at a rate per annum
equal to, during the period to but excluding the date two Business
Days after such request, the Federal Funds Rate, and thereafter, the
Base Rate.
3.7 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses
35
42
(including without limitation reasonable attorneys' fees) of the Agent
in connection with enforcing the rights of the Lenders under the
Credit Documents and any protective advances made by the Agent with
respect to the Collateral under or pursuant to the terms of the
Collateral Documents;
SECOND, to payment of any fees owed to the Agent or a Issuing
Lender;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest
payable to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of
the Loans and to the payment or cash collateralization of the
outstanding Revolving LOC Obligations and Stand Alone LOC Obligations;
SIXTH, to all other obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans,
Revolving LOC Obligations and Stand Alone LOC Obligations held by such Lender
bears to the aggregate then outstanding Loans, Revolving LOC Obligations and
Stand Alone LOC Obligations) of amounts available to be applied pursuant to
clauses "THIRD", "FOURTH," "FIFTH," and "SIXTH" above; and (iii) to the extent
that any amounts available for distribution pursuant to clause "FIFTH" above
are attributable to the issued but undrawn amount of outstanding Letters of
Credit, such amounts shall be held by the Agent in a cash collateral account
and applied (A) first, to reimburse the Issuing Lender from time to time for
any drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FIFTH" and "SIXTH" above in the manner provided in this
Section 3.7.
3.8 Sharing of Payments. The Lenders agree among themselves that,
except to the extent otherwise provided herein, in the event that any Lender
shall obtain payment in respect of any Loan, unreimbursed drawing with respect
to any LOC Obligations or any other obligation owing to such Lender under this
Credit Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall promptly purchase from the other Lenders a participation in
such Loans, LOC Obligations, and other obligations in such amounts, and make
such other adjustments from time to time, as shall be equitable to the end that
all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Credit Agreement. The Lenders further agree
among themselves that if payment to a Lender obtained
36
43
by such Lender through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise
be restored, each Lender which shall have shared the benefit of such payment
shall, by repurchase of a participation theretofore sold, return its share of
that benefit (together with its share of any accrued interest payable with
respect thereto) to each Lender whose payment shall have been rescinded or
otherwise restored. The Borrower agrees that any Lender so purchasing such a
participation may, to the fullest extent permitted by law, exercise all rights
of payment, including setoff, banker's lien or counterclaim, with respect to
such participation as fully as if such Lender were a holder of such Loan, LOC
Obligation or other obligation in the amount of such participation. Except as
otherwise expressly provided in this Credit Agreement, if any Lender or the
Agent shall fail to remit to the Agent or any other Lender an amount payable by
such Lender or the Agent to the Agent or such other Lender pursuant to this
Credit Agreement on the date when such amount is due, such payments shall be
made together with interest thereon for each date from the date such amount is
due until the date such amount is paid to the Agent or such other Lender at a
rate per annum equal to the Federal Funds Rate. If under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a setoff to which this Section 3.8 applies, such Lender shall,
to the extent practicable, exercise its rights in respect of such secured claim
in a manner consistent with the rights of the Lenders under this Section 3.8 to
share in the benefits of any recovery on such secured claim.
3.9 Computations of Interest and Fees.
(a) Except for Base Rate Loans, in which interest shall
be computed on the basis of a 365 or 366 day year as the case may be,
all computations of interest and fees hereunder shall be made on the
basis of the actual number of days elapsed over a year of 360 days.
(b) It is the intent of the Lenders and the Credit
Parties to conform to and contract in strict compliance with
applicable usury law from time to time in effect. All agreements
between the Lenders and the Borrower are hereby limited by the
provisions of this paragraph which shall override and control all such
agreements, whether now existing or hereafter arising and whether
written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the
maturity of any obligation), shall the interest taken, reserved,
contracted for, charged, or received under this Credit Agreement,
under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction
of any of the Credit Documents or any other document, interest would
otherwise be payable in excess of the maximum nonusurious amount, any
such construction shall be subject to the provisions of this paragraph
and such documents shall be automatically reduced to the maximum
nonusurious amount permitted under applicable law, without the
necessity of execution of any amendment or new document. If any
Lender shall ever receive anything of value which is characterized as
interest on the Loans under applicable law and which would, apart from
this provision, be in excess of the maximum lawful amount, an amount
equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount
owing on the Loans and not to the payment of interest, or refunded to
the Borrower or the other payor thereof if and to the extent such
amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any
other indebtedness evidenced by any of the Credit Documents does not
include the right to receive any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand.
All interest paid or agreed to be paid to the Lenders with respect to
the Loans
37
44
shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term
(including any renewal or extension) of the Loans so that the amount
of interest on account of such indebtedness does not exceed the
maximum nonusurious amount permitted by applicable law.
SECTION 4
YIELD PROTECTION PROVISIONS
4.1 Capital Adequacy. If, after the date hereof, any Lender has
determined that the adoption or the becoming effective of, or any change in, or
any change by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof in the interpretation
or administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender or its parent with any request or
directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's or its parent's capital
or assets as a consequence of such Lender's commitments or obligations
hereunder to a level below that which such Lender or its parent could have
achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Lender's or its parent's policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. Each determination
by any such Lender of amounts owing under this Section shall, absent manifest
error, be conclusive and binding on the parties hereto. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
4.2 Inability To Determine Interest Rate. If prior to the first
day of any Interest Period, the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, the Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (a) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans, (b) any Loans that were to
have been converted on the first day of such Interest Period to or continued as
Eurodollar Loans shall be converted to or continued as Base Rate Loans and (c)
any outstanding Eurodollar Loans shall be converted, on the first day of such
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by
the Agent, no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Base Rate Loans to Eurodollar
Loans.
4.3 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof occurring after the Effective Date shall
make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrower and the Agent (which
notice shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall
forthwith be canceled and, until such time as it shall no longer be unlawful
for such Lender to make or maintain Eurodollar Loans, such Lender shall then
have a commitment only to make a Base Rate Loan when a Eurodollar Loan is
requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days or the then current Interest Periods with respect to
38
45
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section 4.6
hereof.
4.4 Requirements of Law. If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable
to any Lender, or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority, in each case made subsequent to the Effective Date (or,
if later, the date on which such Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 4.5 hereof
(including Non-Excluded Taxes imposed solely by reason of any failure
of such Lender to comply with its obligations under Section 4.5(b)
hereof) and changes in taxes measured by or imposed upon the overall
net income, or franchise tax (imposed in lieu of such net income tax),
of such Lender or its applicable lending office, branch, or any
affiliate thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(c) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing in (a), (b) or (c) above is to increase
the cost to such Lender, by an amount which such Lender deems to be material,
of making, converting into, continuing or maintaining Eurodollar Loans or
issuing or participating in Letters of Credit or to reduce any amount
receivable hereunder in respect thereof, then, in any such case, upon notice to
the Borrower from such Lender, through the Agent, in accordance herewith, the
Borrower shall be obligated to promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such increased cost
or reduced amount receivable, provided that, in any such case, the Borrower may
elect to convert the Eurodollar Loans made by such Lender hereunder to Base
Rate Loans by giving the Agent at least one Business Day's notice of such
election, in which case the Borrower shall promptly pay to such Lender, upon
demand, without duplication, such amounts, if any, as may be required pursuant
to Section 4.6. If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall provide prompt notice thereof to the
Borrower, through the Agent, certifying (x) that one of the events described in
this Section 4.4 has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount resulting from such
event and (z) as to the additional amount demanded by such Lender and a
reasonably detailed explanation of the calculation thereof. Such a certificate
as to any additional amounts payable pursuant to this subsection submitted by
such Lender, through the Agent, to the Borrower shall be conclusive and binding
on the parties hereto in the absence of manifest error. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
4.5 Taxes.
39
46
(a) Except as provided below in this subsection, all
payments made by a Credit Party under this Credit Agreement and any
Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (including, but not limited to, any withholding tax as a
result of Ivex Corporation being an Ontario corporation and being
located in Canada), now or hereafter imposed, levied, collected,
withheld or assessed by any court, or governmental body, agency or
other official, excluding taxes measured by or imposed upon the
overall net income of any Lender or its applicable lending office, or
any branch or affiliate thereof, and all franchise taxes, branch
taxes, taxes on doing business or taxes on the overall capital or net
worth of any Lender or its applicable lending office, or any branch or
affiliate thereof, in each case imposed in lieu of net income taxes,
imposed: (i) by the jurisdiction under the laws of which such Lender,
applicable lending office, branch or affiliate is organized or is
located, or in which its principal executive office is located, or any
nation within which such jurisdiction is located or any political
subdivision thereof; or (ii) by reason of any connection between the
jurisdiction imposing such tax and such Lender, applicable lending
office, branch or affiliate other than a connection arising solely
from such Lender having executed, delivered or performed its
obligations, or received payment under or enforced, this Credit
Agreement or any Notes. If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts
payable to the Agent or any Lender hereunder or under any Notes, (A)
the amounts so payable to the Agent or such Lender shall be increased
to the extent necessary to yield to the Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this
Credit Agreement and any Notes, provided, however, that the Borrower
shall be entitled to deduct and withhold any Non-Excluded Taxes and
shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of
America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as
possible thereafter the Borrower shall send to the Agent for its own
account or for the account of such Lender, as the case may be, a
certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may
become payable by the Agent or any Lender as a result of any such
failure. The agreements in this subsection shall survive the
termination of this Credit Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i)(A) on or before the date of any payment
by the Borrower under this Credit Agreement or Notes to such
Lender, deliver to the Borrower and the Agent (1) two (2) duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case
may be, certifying that it is entitled to receive payments
under this Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (2)
an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is
entitled to an exemption
40
47
from United States backup withholding tax;
(B) deliver to the Borrower and the
Agent two (2) further copies of any such form or certification
on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously
delivered by it to the Borrower; and
(C) obtain such extensions of time for
filing and complete such forms or certifications as may
reasonably be requested by the Borrower or the Agent; or
(ii) in the case of any such Lender that
is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code, (A) represent to the Borrower (for
the benefit of the Borrower and the Agent) that it is not a
bank within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (B) agree to furnish to the Borrower on
or before the date of any payment by the Borrower, with a copy
to the Agent 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 Internal Revenue
Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower and
the 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 Borrower or the Agent for filing
and completing such forms), and (C) agree, to the extent
legally entitled to do so, upon reasonable request by the
Borrower, to provide to the Borrower (for the benefit of the
Borrower and the 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 under this Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect
to it and such Lender so advises the Borrower and the Agent then such
Lender shall be exempt from such requirements. Each Person that shall
become a Lender or a participant of a Lender pursuant to Section 12.3
hereof shall, upon the effectiveness of the related transfer, be
required to provide all of the forms, certifications and statements
required pursuant to this subsection (b); provided that in the case of
a participant of a Lender the obligations of such participant of a
Lender pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such participant of
a Lender shall furnish all such required forms, certifications and
statements to the Lender from which the related participation shall
have been purchased.
4.6 Compensation. The Borrower promises to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by the Borrower in making
41
48
any prepayment of a Eurodollar Loan after the Borrower has given a notice
thereof in accordance with the provisions of this Credit Agreement, (c) the
making of a prepayment of Eurodollar Loans on a day which is not the last day
of an Interest Period with respect thereto or (d) the assignment of such
Lender's rights, interests and obligations under the Credit Documents in
accordance with Section 12.3 hereof during the first 180 days following the
Effective Date; provided that losses under subsection (d) shall be limited to
costs incurred as a result of a Eurodollar Loan being prepaid on a date other
than the last day of any Interest Period as a result of such assignment. With
respect to Eurodollar Loans, such indemnification shall be an amount equal to
(i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of
such prepayment or of such failure to borrow, convert or continue to the last
day of the applicable Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each case at the applicable rate of interest for such
Eurodollar Loans provided for herein (excluding, however, the Applicable
Percentage included therein, if any) minus (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. The agreements in this
Section shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
SECTION 5
GUARANTY
5.1 Guaranty of Payment. Subject to Section 5.7 below, (a) each
of the Guarantors hereby, jointly and severally, unconditionally guarantees to
each Lender and the Agent the prompt payment of the Credit Party Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise), (b) the Guarantors additionally, jointly and
severally, unconditionally guarantee to each Lender the timely performance of
all other obligations under the Credit Documents and (c) this Guaranty is a
guaranty of payment not of collection and is a continuing guaranty and shall
apply to all Credit Party Obligations whenever arising.
5.2 Obligations Unconditional. The obligations of the Guarantors
hereunder are absolute and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Credit
Documents, or any other agreement or instrument referred to therein, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor. Each Guarantor agrees that this
Guaranty may be enforced by the Lenders without the necessity at any time of
resorting to or exhausting any other security or collateral and without the
necessity at any time of having recourse to the Notes or any other of the
Credit Documents or any collateral, if any, hereafter securing the Credit Party
Obligations or otherwise and each Guarantor hereby waives the right to require
the Lenders to proceed against the Borrower or any other Person (including a
co-guarantor) or to require the Lenders to pursue any other remedy or enforce
any other right. Each Guarantor further agrees that such Guarantor shall have
no right of subrogation, indemnity, reimbursement or contribution against the
Borrower or any other Guarantor of the Credit Party Obligations for amounts
paid under this Guaranty until such time as the Lenders have been paid in full,
all Commitments under the Credit Agreement have been terminated and no Person
or Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received
under the Credit Documents. Each Guarantor further agrees that nothing
contained herein shall prevent the
42
49
Lenders from suing on the Notes or any of the other Credit Documents or
foreclosing its security interest in or Lien on any collateral, if any,
securing the Credit Party Obligations or from exercising any other rights
available to it under this Credit Agreement, the Notes, any other of the Credit
Documents, or any other instrument of security, if any, and the exercise of any
of the aforesaid rights and the completion of any foreclosure proceedings shall
not constitute a discharge of any of such Guarantor's obligations hereunder; it
being the purpose and intent of each Guarantor that such Guarantor's
obligations hereunder shall be absolute, independent and unconditional under
any and all circumstances. Neither any Guarantor's obligations under this
Guaranty nor any remedy for the enforcement thereof shall be impaired,
modified, changed or released in any manner whatsoever by an impairment,
modification, change, release or limitation of the liability of the Borrower or
by reason of the bankruptcy or insolvency of the Borrower.
5.3 Modifications. Each Guarantor agrees that (a) all or any part
of the security now or hereafter held for the Credit Party Obligations, if any,
may be exchanged, compromised or surrendered from time to time; (b) the Lenders
shall not have any obligation to protect, perfect, secure or insure any such
security interests, liens or encumbrances now or hereafter held, if any, for
the Credit Party Obligations or the properties subject thereto; (c) the time or
place of payment of the Credit Party Obligations may be changed or extended, in
whole or in part, to a time certain or otherwise, and may be renewed or
accelerated, in whole or in part; (d) the Borrower and any other party liable
for payment under the Credit Documents may be granted indulgences generally;
(e) any of the provisions of the Notes or any of the other Credit Documents may
be modified, amended or waived; (f) any party (including any co-guarantor)
liable for the payment thereof may be granted indulgences or be released; and
(g) any deposit balance for the credit of the Borrower or any other party
liable for the payment of the Credit Party Obligations or liable upon any
security therefor may be released, in whole or in part, at, before or after the
stated, extended or accelerated maturity of the Credit Party Obligations, all
without notice to or further assent by the Guarantor, which shall remain bound
thereon, notwithstanding any such exchange, compromise, surrender, extension,
renewal, acceleration, modification, indulgence or release.
5.4 Waiver of Rights. Each Guarantor expressly waives: (a)
notice of acceptance of this Guaranty by the Lenders and of all extensions of
credit to the Borrower by the Lenders; (b) presentment and demand for payment
or performance of any of the Credit Party Obligations; (c) protest and notice
of dishonor or of default (except as specifically required in the Credit
Agreement) with respect to the obligations or with respect to any security
therefor; (d) notice of the Lenders obtaining, amending, substituting for,
releasing, waiving or modifying any security interest, lien or encumbrance, if
any, hereafter securing the Credit Party Obligations, or the Lender's
subordinating, compromising, discharging or releasing such security interests,
liens or encumbrances, if any; (e) all other notices to which the Guarantor
might otherwise be entitled; and (f) demand for payment under this Guaranty.
5.5 Reinstatement. The obligations of the Guarantors under this
Section 5 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Credit Party
Obligations is rescinded or must be otherwise restored by any holder of any of
the Credit Party Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Guarantor agrees that it
will indemnify the Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable fees of counsel) incurred
by the Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
5.6 Remedies. The Guarantors agree that, as between the
Guarantors, on the one
43
50
hand, and the Agent and the Lenders, on the other hand, the Credit Party
Obligations may be declared to be forthwith due and payable as provided in
Section 10 hereof (and shall be deemed to have become automatically due and
payable in the circumstances provided in Section 10 hereof) notwithstanding any
stay, injunction or other prohibition preventing such declaration (or
preventing such Credit Party Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration
(or such Credit Party Obligations being deemed to have become automatically due
and payable), such Credit Party Obligations (whether or not due and payable by
any other Person) shall forthwith become due and payable by the Guarantors.
The Guarantors acknowledge and agree that their obligations hereunder are
secured in accordance with the terms of the Security Agreements and the other
Collateral Documents and that the Lenders may exercise their remedies
thereunder in accordance with their terms.
5.7 Limitation of Guaranty. Notwithstanding any provision to the
contrary contained herein or in any other of the Credit Documents, (a) to the
extent the obligations of a Guarantor shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers) then the obligations of each Guarantor hereunder shall be limited to
the maximum amount that is permissible under applicable law (whether federal or
state and including, without limitation, the Bankruptcy Code) and (b) the
obligations of Holdings hereunder and under the Credit Documents, in the
aggregate, shall be limited to an amount equal to $153,000,000.
5.8 Rights of Contribution. The Guarantors hereby agree, as among
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below), each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence hereof and to subsection (b)
below), pay to such Excess Funding Guarantor an amount equal to such
Guarantor's Pro Rata Share (as defined below and determined, for this purpose,
without reference to the properties, assets, liabilities and debts of such
Excess Funding Guarantor) of such Excess Payment (as defined below). The
payment obligation of any Guarantor to any Excess Funding Guarantor under this
Section 5.8 shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of such Guarantor under the other provisions
of this Section 5, and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations. For purposes hereof, (i) "Excess Funding
Guarantor" shall mean, in respect of any obligations arising under the other
provisions of this Section 5 (hereafter, the "Guaranteed Obligations"), a
Guarantor that has paid an amount in excess of its Pro Rata Share of the
Guaranteed Obligations; (ii) "Excess Payment" shall mean, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in
excess of its Pro Rata Share of such Guaranteed Obligations; and (iii) "Pro
Rata Share", for the purposes of this Section 5.8, shall mean, for any
Guarantor, the ratio (expressed as a percentage) of (a) the amount by which the
aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Guarantor hereunder) to (b) the amount by
which the aggregate present fair saleable value of all assets and other
properties of the Borrower and all of the Guarantors exceeds the amount of all
of the debts and liabilities (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of the Borrower and
the Guarantors hereunder) of the Borrower and all of the Guarantors, all as of
the Closing Date (if any Guarantor becomes a party hereto subsequent to the
Closing Date, then for the purposes of this Section 5.8 such subsequent
Guarantor shall be deemed to have been a Guarantor as of the Closing Date and
the information pertaining to, and only pertaining to, such Guarantor as of the
date such Guarantor became a Guarantor shall be
44
51
deemed true as of the Closing Date).
SECTION 6
CONDITIONS PRECEDENT
6.1 Closing Conditions. The obligation of the Lenders to enter
into this Credit Agreement is subject to satisfaction of the following
conditions (in form and substance acceptable to the Lenders in their sole
discretion):
(a) Executed Credit Documents. Receipt by the Agent of
duly executed copies of: (i) this Credit Agreement; (ii) the Notes;
(iii) the Collateral Documents and (iv) all other Credit Documents.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the
articles or certificates of incorporation or other charter
documents of each Credit Party certified to be true and
complete as of a recent date by the appropriate Governmental
Authority of the state or other jurisdiction of its
incorporation and certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of
the Effective Date.
(ii) Bylaws. A copy of the bylaws of
each Credit Party certified by a secretary or assistant
secretary of such Credit Party to be true and correct as of
the Effective Date.
(iii) Resolutions. Copies of resolutions
of the Board of Directors of each Credit Party approving and
adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution
and delivery thereof, certified by a secretary or assistant
secretary of such Credit Party to be true and correct and in
force and effect as of the Effective Date.
(iv) Good Standing. Copies of (A)
certificates of good standing, existence or its equivalent
with respect to each Credit Party certified as of a recent
date by the appropriate Governmental Authorities of the state
or other jurisdiction of incorporation and each other
jurisdiction in which the failure to so qualify and be in good
standing would have a Material Adverse Effect and (B) to the
extent available, a certificate indicating payment of all
corporate franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency
certificate of each Credit Party certified by a secretary or
assistant secretary to be true and correct as of the Effective
Date.
(c) Personal Property Collateral. The Agent shall have
received, in form and substance satisfactory to the Agent:
(i) searches of Uniform Commercial Code
("UCC") filings in
45
52
the jurisdiction of the chief executive office of each Credit
Party and each jurisdiction where any Collateral is located or
where a filing would need to be made in order to perfect the
Lenders' security interest in the Collateral, copies of the
financing statements on file in such jurisdictions and
evidence that no Liens exist other than Permitted Liens;
(ii) to the extent not previously
received by the Agent, duly executed financing statements
under the UCC for each appropriate jurisdiction as is
necessary, in the Agent's sole discretion, to perfect the
Lenders' security interest in the Collateral;
(iii) to the extent not previously
received by the Agent, searches of ownership of intellectual
property in the appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the
Collateral;
(iv) to the extent not previously
received by the Agent, all stock certificates evidencing the
stock pledged to the Agent pursuant to the Pledge Agreements,
together with duly executed in blank undated stock powers
attached thereto; and
(v) to the extent not previously
received by the Agent, all instruments and chattel paper in
the possession of a Credit Party together with allonges or
assignments as may be necessary or appropriate to perfect the
Lenders' security interest in the Collateral.
(d) Real Property Collateral. The Agent shall have
received, in form and substance satisfactory to the Agent:
(i) to the extent not previously
received by the Agent, fully executed and notarized mortgages,
deeds of trust or deeds to secure debt in registerable form
(each a "Mortgage" and collectively the "Mortgages"), or
modifications of such Mortgages delivered in connection with
the Original Credit Agreement, in each case encumbering the
fee interest (whether legal, equitable or otherwise) of the
Credit Parties in each real property asset owned in fee simple
(or the equivalent form of title under applicable law) by a
Credit Party (each a "Mortgaged Property" and collectively the
"Mortgaged Properties"), together with such UCC-1 or UCC-3
financing statements (or equivalent instruments) as the Agent
shall deem appropriate with respect to each such Mortgaged
Property;
(ii) to the extent not previously
received by the Agent, a fully executed collateral assignment
of leasehold interest (the "Collateral Assignment of Leasehold
Interest"), or modifications of such Collateral Assignments of
Leasehold Interests delivered in connection with the Original
Credit Agreement, assigning to the Agent and granting the
Agent a security interest in the leasehold interest of the
Credit Parties in each real property asset leased by a Credit
Party (each a "Leasehold Property" and collectively the
"Leasehold Properties"), except to the extent the applicable
lease prohibits such assignment and security interest and the
landlord thereunder has not waived or consented to the same;
(iii) an opinion of counsel (which counsel
shall be satisfactory to
46
53
the Agent) in the state in which each Real Property is located
with respect to the enforceability of the form of Mortgage or
the Collateral Assignment of Leasehold Interests (or the
modification thereto, as applicable), as applicable, and
sufficiency of the form of UCC-1 and/or UCC-3 financing
statements (or equivalent instruments) to be recorded or filed
in such state and such other matters as the Agent may request,
in form and substance satisfactory to the Agent;
(iv) ALTA mortgagee title insurance
policies (the "Mortgage Policies") issued by Chicago Title
Insurance Company (the "Title Insurance Company") or
sufficient endorsements to existing title insurance policies
issued by the Title Insurance Company, in amounts satisfactory
to the Agent with respect to all Mortgaged Properties,
assuring the Agent that the applicable Mortgages create valid
and enforceable mortgage liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances
except Permitted Liens, which Mortgage Policies and
endorsements to existing title insurance policies shall be in
form and substance satisfactory to the Agent and containing
such endorsements as shall be satisfactory to the Agent and
for any other matters that the Agent may request, and shall
provide for affirmative insurance and such reinsurance as the
Agent may request, all of the foregoing in form and substance
satisfactory to the Agent; and
(v) to the extent not previously
delivered to the Agent, maps or plats of an as-built survey of
the Real Properties certified to the Agent and the Title
Insurance Company in a manner reasonably satisfactory to them,
dated a date satisfactory to the Agent and the Title Insurance
Company by an independent professional licensed land surveyor
reasonably satisfactory to the Agent and the Title Insurance
Company, which maps or plats and the surveys on which they are
based shall be sufficient to delete any standard printed
survey exception contained in the applicable title policy and
be made in accordance with the Minimum Standard Detail
Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and,
without limiting the generality of the foregoing, there shall
be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the
buildings, structures and other improvements and the
established building setback lines; (B) the lines of streets
abutting the sites and width thereof; (C) all access and other
easements appurtenant to the sites necessary to use the sites;
(D) all roadways, paths, driveways, easements, encroachments
and overhanging projections and similar encumbrances affecting
the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor;
(E) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (F) if
the site is described as being on a filed map, a legend
relating the survey to said map;
(vi) to the extent not previously
delivered to the Agent, zoning letters from appropriate
authorities in form and substance acceptable to the Agent or
other evidence satisfactory to the Agent that each of the Real
Properties, and the uses of the Real Properties, are in
compliance in all material respects with all applicable zoning
laws, including the zoning designation made for each of the
Real Properties, the permitted uses of each such Real
Properties under such zoning designation and zoning
requirements as to parking, lot size, ingress, egress and
building setbacks;
47
54
(vii) to the extent not previously
delivered to the Agent, certification from Bankers Hazard
Determination Services or Borrower's land surveyor in a form
reasonably satisfactory to the Agent or other evidence
acceptable to the Agent that none of the improvements on the
Real Properties located within the United States are located
within any area designated by the Director of the Federal
Emergency Management Agency as a "special flood hazard" area
or if any improvements on the Real Properties are located
within a "special flood hazard" area, evidence of a flood
insurance policy from a company and in an amount satisfactory
to the Agent for the applicable portion of the premises,
naming the Agent, for the benefit of the Lenders, as
mortgagee;
(viii) to the extent not previously
delivered to the Agent, with respect to the Mortgaged
Properties located in Bridgeview, Illinois and Troy, Ohio, a
fully executed and notarized modification of the existing
mortgage or deed of trust in favor of the issuer of the
applicable letter of credit securing the bond financing on
such property, in form and substance acceptable to the Agent,
which amends and modifies such mortgage or deed of trust to
secure, among other things, the obligations of the Credit
Parties under this Agreement; and
(ix) to the extent not previously
delivered to the Agent, with respect to the Mortgaged Property
located in Grove City, Pennsylvania, (A) such estoppel
letters, consents and waivers from the owner of such Mortgaged
Property and the holder of any existing mortgage or deed of
trust on such Mortgaged Property, as may be reasonably
required by the Agent, which estoppel letters shall be in form
and substance reasonably satisfactory to the Agent and (B)
evidence that the installment sale contract pursuant to which
IPC, Inc.'s interest in such Mortgaged Property is derived or
a memorandum of such contract with respect thereto, or other
evidence of such contract in form and substance reasonably
satisfactory to the Agent, has been recorded in all places to
the extent necessary or desirable, in the reasonable judgment
of the Agent, so as to enable the Mortgage encumbering such
Mortgaged Property to effectively create a valid and
enforceable lien (subject only to Permitted Liens) on IPC,
Inc.'s rights and interests in such Mortgaged Property in
favor of the Agent (or such other Person as may be required or
desired under local law) for the benefit of Lenders.
(e) Environmental Reports. To the extent not previously
delivered to the Agent, the Agent shall have received, in form and
substance satisfactory to the Agent, environmental site assessment
reports and related documents of a recent date with respect to all
Real Properties.
(f) Financial Statements. Receipt and approval by the
Agent and the Lenders of any and all financial information deemed
reasonably necessary for review in connection herewith.
(g) Opinion of Counsel. Receipt by the Agent of an
opinion, or opinions, satisfactory to the Agent, addressed to the
Agent on behalf of the Lenders and dated as of the Effective Date,
from legal counsel to the Credit Parties.
(h) Availability. After giving effect to the Loans
outstanding and Letters of Credit issued (to the extent undrawn) as of
the Effective Date (including any Loans made or Letters of Credit
issued (to the extent undrawn) on the Effective Date), there shall be
at
48
55
least $50,000,000 of availability existing under the Revolving
Committed Amount.
(i) Evidence of Insurance. To the extent not previously
received by the Agent, copies of insurance policies or certificates of
insurance of the Credit Parties evidencing liability and casualty
insurance meeting the requirements set forth in the Credit Documents
and establishing the Agent, for the benefit of the Lenders, as loss
payee.
(j) Material Adverse Effect. No event shall have occurred
since December 31, 1995 that has had or would be reasonably expected
to have a Material Adverse Effect.
(k) Officer's Certificates.
(i) The Agent shall have received a
certificate or certificates executed by the chief financial
officer or treasurer of the Borrower as of the Effective Date
stating that (A) the Borrower and each of the Borrower's
Subsidiaries are in compliance with all existing financial
obligations, (B) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit
Documents and the transactions contemplated thereby have been
obtained, (C) no event or condition has occurred since
December 31, 1995 which has had or might be reasonably
expected to have a Material Adverse Effect and (D) immediately
after giving effect to this Credit Agreement, the other Credit
Documents and all the transactions contemplated therein to
occur on such date, (1) the Borrower and each of the
Borrower's Subsidiaries is Solvent, (2) no Default or Event of
Default exists, (3) all representations and warranties
contained herein and in the other Credit Documents are true
and correct in all material respects, and (4) the Credit
Parties are in compliance with each of the financial covenants
set forth in Section 8.12.
(ii) The Agent shall have received a
certificate or certificates executed by the chief financial
officer or treasurer of Holdings as of the Effective Date
stating that (A) Holdings is in compliance with all existing
financial obligations and (B) immediately after giving effect
to this Credit Agreement, the other Credit Documents and all
the transactions contemplated therein, Holdings is Solvent.
(l) Subordinated Debt. To the extent not previously
received by the Agent, copies of all documentation evidencing the
Subordinated Debt certified by an officer of the Borrower and
Holdings, as applicable, to be true and correct, and the Agent shall
be satisfied that the execution and delivery of the Credit Documents
does not conflict with the terms of the Holdings Debentures or the
Subordinated Notes.
(m) Fees and Expenses. Payment by the Borrower to the
Lenders of an upfront fee equal to .05% of the total Commitment of
each Lender and payment by the Credit Parties of all fees and expenses
owed by them to the Lenders and the Agent, including, without
limitation, payment to the Agent of the fees set forth in the Fee
Letter.
(n) Other. Receipt by the Lenders of such other
documents, instruments, agreements or information as reasonably
requested by any Lender, including, but not limited to, information
regarding litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of Holdings, the Borrower and their
49
56
respective Subsidiaries.
6.2 Conditions to All Extensions of Credit. In addition to the
conditions precedent stated elsewhere herein, the Lenders shall not be
obligated to make, continue or convert Revolving Loans (provided that
Eurodollar Loans may be converted into Base Rate Loans at the end of an
interest period without complying with the conditions of this Section 6.2) nor
shall an Issuing Lender be required to issue or extend a Letter of Credit
unless:
(a) Notice of Borrowing/Continuation/Conversion. The
Borrower shall have delivered (i) in the case of any Revolving Loan, a
Notice of Borrowing/Continuation/Conversion, duly executed and
completed, by the time specified in Section 2.1 hereof and (ii) in the
case of any Letter of Credit, an Issuing Lender shall have received an
appropriate request for issuance in accordance with the provisions of
Section 2.2 or 2.4 hereof;
(b) Representations and Warranties. The representations
and warranties made by the Credit Parties in any Credit Document are
true and correct in all material respects at and as if made as of such
date;
(c) No Default. No Default or Event of Default shall
exist or be continuing either prior to or after giving effect thereto;
(d) No Material Adverse Effect. There shall not have
occurred any Material Adverse Effect since the audited financial
statements dated December 31, 1995; and
(e) Availability. Immediately after giving effect to the
making of a Revolving Loan (and the application of the proceeds
thereof) or to the issuance of a Letter of Credit, as the case may be,
(A) the sum of the Revolving Loans outstanding plus Revolving LOC
Obligations outstanding shall not exceed the Revolving Commitment
Amount, and (B) the Stand Alone LOC Obligations shall not exceed the
Stand Alone LOC Committed Amount.
SECTION 7
REPRESENTATIONS AND WARRANTIES
Each Credit Party hereby represents and warrants to each Lender that:
7.1 Organization and Good Standing. Holdings, the Borrower and
each of their Subsidiaries (a) is a corporation duly incorporated, validly
existing and in good standing (or its equivalent) under the laws of the State
(or other jurisdiction) of its incorporation, (b) is duly qualified and in good
standing as a foreign corporation authorized to do business in every
jurisdiction where the failure to so qualify would have a Material Adverse
Effect and (c) has the requisite corporate power and authority to own its
properties and to carry on its business as now conducted and as proposed to be
conducted.
7.2 Due Authorization. Each Credit Party (a) has the requisite
corporate power and authority to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party and to incur
the obligations herein and therein provided for and (b) is duly authorized to,
and has been authorized by all necessary corporate action, to execute, deliver
and
50
57
perform this Credit Agreement and the other Credit Documents to which it is a
party.
7.3 No Conflicts. Neither the execution and delivery of the
Credit Documents, nor the consummation of the transactions contemplated
therein, nor performance of and compliance with the terms and provisions
thereof by such Credit Party will (a) violate or conflict with any provision of
its articles of incorporation or bylaws, (b) violate, contravene or materially
conflict with any law, regulation (including, without limitation, Regulation U
or Regulation X), order, writ, judgment, injunction, decree or permit
applicable to it, (c) violate, contravene or materially conflict with
contractual provisions of, or cause an event of default under, any indenture,
loan agreement, mortgage, deed of trust, contract or other agreement or
instrument to which it is a party or by which it may be bound, the violation of
which could have or might be reasonably expected to have a Material Adverse
Effect, or (d) result in or require the creation of any Lien (other than those
contemplated in or created in connection with the Credit Documents) upon or
with respect to its properties.
7.4 Consents. No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or Governmental Authority
or third party in respect of such Credit Party is required in connection with
the execution, delivery or performance of this Credit Agreement or any of the
other Credit Documents by a Credit Party, or if required, such consent,
approval and authorization has been obtained.
7.5 Enforceable Obligations. This Credit Agreement and the other
Credit Documents have been duly executed and delivered and constitute legal,
valid and binding obligations of such Credit Party enforceable against such
Credit Party in accordance with their respective terms, except as may be
limited by bankruptcy or insolvency laws or similar laws affecting creditors'
rights generally or by general equitable principles.
7.6 Financial Condition. The financial statements and financial
information provided to the Lenders as described in Section 8.1 hereof fairly
present the financial condition and operations of Holdings, the Borrower and
their Subsidiaries as of the date of each such statement. In addition, such
financial statements were prepared in accordance with GAAP and, since the
audited financial statements dated December 31, 1995, there have occurred no
changes or circumstances which have had or are likely to have a Material
Adverse Effect.
7.7 No Default. No Default or Event of Default exists and is
continuing.
7.8 Ownership. Other than Permitted Liens, each Credit Party is
the owner of (free and clear of all Liens) and has good and marketable title to
(a) all of its Mortgaged Properties (except as indicated on the Mortgage
Policies accepted by the Agent) and (b) all of its other assets.
7.9 Indebtedness. Each of the Credit Parties and their
Subsidiaries have no Indebtedness except (a) as disclosed in the financial
statements referenced in Section 7.6 hereof, (b) as set forth on Schedule 7.9
attached hereto and (c) as otherwise permitted by this Credit Agreement.
7.10 Litigation. Except as disclosed in Schedule 7.10 attached
hereto, there are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against Holdings, the Borrower or any of their Subsidiaries which,
if adversely determined, would have or would be reasonably expected to have a
Material Adverse Effect.
51
58
7.11 Material Agreements. Neither Holdings, the Borrower nor any
of their Subsidiaries is in default in any respect under any contract, lease,
loan agreement, indenture, mortgage, security agreement or other agreement or
obligation to which it is a party or by which any of its properties is bound
which default would have or would be reasonable expected to have a Material
Adverse Effect.
7.12 Taxes. Each of Holdings, the Borrower and their Subsidiaries
has filed, or caused to be filed, all tax returns (federal, state, local and
foreign) required to be filed and paid all amounts of taxes shown thereon to be
due (including interest and penalties) and has paid all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (a) which are not yet delinquent or (b) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP. No Credit Party is aware of any proposed
tax assessments against it, any of its Subsidiaries or any other Credit Party.
7.13 Compliance with Law. Each of Holdings, the Borrower and their
Subsidiaries is in compliance with all laws, rules, regulations, orders and
decrees (including without limitation Environmental Laws) applicable to it, or
to its properties, unless such failure to comply would not have or be
reasonably expected to have a Material Adverse Effect.
7.14 ERISA. Except as would not result in a Material Adverse
Effect:
(a) During the five-year period prior to the date on
which this representation is made or deemed made: (i) no Termination
Event has occurred, and, to the best knowledge of the Credit Parties,
no event or condition has occurred or exists as a result of which any
Termination Event could reasonably be expected to occur, with respect
to any Plan; (ii) no "accumulated funding deficiency," as such term is
defined in Section 302 of ERISA and Section 412 of the Code, whether
or not waived, has occurred with respect to any Plan; (iii) each Plan
has been maintained, operated, and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the
Code, and any other applicable federal or state laws; and (iv) no lien
in favor or the PBGC or a Plan has arisen on account of any Plan.
(b) Neither a Credit Party, nor any of its Subsidiaries
nor any ERISA Affiliate has incurred any withdrawal liability under
ERISA to any Multiemployer Plan or Multiple Employer Plan and, to the
best knowledge of the Credit Parties, no event or condition has
occurred or exists as a result of which such withdrawal liability
could reasonably be expected to be incurred. Neither the Borrower,
any of its Subsidiaries nor any ERISA Affiliate has received any
notification that any Multiemployer Plan is in reorganization (within
the meaning of Section 4241 of ERISA), is insolvent (within the
meaning of Section 4245 of ERISA), or has been terminated (within the
meaning of Title IV of ERISA).
(c) No prohibited transaction (within the meaning of
Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility has occurred with respect to a Plan which has
subjected a Credit Party or any of its Subsidiaries to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
the Borrower or any of its Subsidiaries has agreed or is required to
indemnify any person against any such liability.
52
59
(d) The present value (determined using actuarial and
other assumptions which are reasonable with respect to the benefits
provided and the employees participating) of the liability of the
Credit Parties and their Subsidiaries for post-retirement welfare
benefits to be provided to their current and former employees under
Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA), net of all assets under all such Plans allocable to such
benefits, are reflected on the Financial Statements in accordance with
FAS 106.
(e) The actuarial present value of all "benefit
liabilities" under each Single Employer Plan (determined in accordance
with Statement of Financial Accounting Standards No. 35 utilizing the
actuarial assumptions used to fund such Plans), whether or not vested,
did not, as of the last annual valuation date prior to the date on
which this representation is made or deemed made for which a valuation
is available (but in no event more than one year prior to the date on
which this representation is made or deemed made), exceed the current
fair market value of the assets of such Plan allocable to such accrued
liabilities by an amount in excess of $2,500,000.
7.15 Subsidiaries. Set forth on Schedule 7.15 attached hereto is a
complete and accurate list of all Subsidiaries of each Credit Party.
Information on the attached Schedule includes jurisdiction of incorporation;
the number of shares of each class of capital stock or other equity interests
outstanding; the number and percentage of outstanding shares of each class
owned (directly or indirectly) by such Credit Party; and the number and effect,
if exercised, of all outstanding options, warrants, rights of conversion or
purchase and all other similar rights. The outstanding capital stock and other
equity interests of all such Subsidiaries is validly issued, fully paid and
non-assessable and is owned by each such Credit Party, directly or indirectly,
free and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents).
7.16 Use of Proceeds; Margin Stock. The proceeds of the Loans
hereunder will be used solely for the purposes specified in Section 8.10
hereof. None of such proceeds will be used for the purpose of purchasing or
carrying any "margin stock" as defined in Regulation U, Regulation X or
Regulation G, or for the purpose of reducing or retiring any Indebtedness which
was originally incurred to purchase or carry "margin stock" or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of Regulation U, Regulation X or Regulation G. None of the Credit
Parties owns any "margin stock".
7.17 Government Regulation. No Credit Party is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Investment Company Act of 1940 or the Interstate Commerce Act,
each as amended. In addition, no Credit Party is (a) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or controlled by such a company, or (b) a "holding company,"
or a "Subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "Subsidiary" or a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
7.18 Environmental Matters. (a) Except to the extent it would not
cause or be reasonably expected to cause a Material Adverse Effect:
(i) each of the Real Properties and all
other real property owned by a Credit Party or one of their
Subsidiaries (collectively, the "Properties") and all
operations at the Properties are in compliance with all
53
60
applicable Environmental Laws, and there is no violation of
any Environmental Law with respect to the Properties or the
businesses operated by a Credit Party or any of their
Subsidiaries (the "Businesses"), and there are no conditions
relating to the Businesses or Properties that could give rise
to liability under any applicable Environmental Laws.
(ii) None of the Properties contains, or
has previously contained, any Hazardous Materials at, on or
under the Properties in amounts or concentrations that, if
release, constitute or constituted a violation of, or could
give rise to liability under, Environmental Laws.
(iii) No Credit Party has received any
written or verbal notice of, or inquiry from any Governmental
Authority, any violation, alleged violation, non-compliance,
liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to
any of the Properties or the Businesses, nor does any Credit
Party have knowledge or reason to believe that any such notice
is being threatened.
(iv) Hazardous Materials have not been
transported or disposed of from the Properties, or generated,
treated, stored or disposed of at, on or under any of the
Properties or any other location, in each case by or on behalf
of any Credit Party or any of their Subsidiaries.
(v) No judicial proceeding or
governmental or administrative action is pending or, to the
knowledge of a Credit Party, threatened, under any
Environmental Law to which a Credit Party or any of their
Subsidiaries is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental
Law with respect to a Credit Party or any of their
Subsidiaries, the Properties or the Businesses.
(vi) There has been no release or threat
of release of Hazardous Materials at or from the Properties,
or arising from or related to the operations (including,
without limitation, disposal) of a Credit Party or any of
their Subsidiaries in connection with the Properties or
otherwise in connection with the Businesses.
(vii) Neither a Credit Party nor any of
their Subsidiaries has assumed any liability of any Person
(other than another Credit Party) under any Environmental Law.
(b) The Borrower has adopted procedures that are designed
to (i) ensure that each Credit Party and their Subsidiaries, any of
their operations and each of the properties owned or leased by each
Credit Party and their Subsidiaries remains in compliance with
applicable Environmental Laws and (ii) minimize any liabilities or
potential liabilities that each Credit Party and their Subsidiaries,
any of their operations and each of the properties owned or leased by
each Credit Party and their Subsidiaries may have under applicable
Environmental Laws.
(c) As of the Closing Date, no Credit Party is aware of
any material environmental issues other than as set forth on Schedule
7.18 attached hereto, none of which has caused or could be reasonably
expected to cause a Material Adverse Effect.
54
61
7.19 Intellectual Property. Each Credit Party and each of their
Subsidiaries owns, or has the legal right to use, all trademarks, tradenames,
copyrights, technology, know-how and processes (the "Intellectual Property")
necessary for each of them to conduct its business as currently conducted
except for those the failure to own or have such legal right to use would not
have or be reasonably expected to have a Material Adverse Effect. Set forth on
Schedule 7.19(a) attached hereto is a list of all material Intellectual
Property owned by each Credit Party or that a Credit Party has the right to
use. Except as provided on Schedule 7.19(b) attached hereto, no claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and to
the Credit Parties' knowledge the use of such Intellectual Property by a Credit
Party or any of their Subsidiaries does not infringe on the rights of any
Person, except for such claims and infringements that in the aggregate, would
not have or be reasonably expected to have a Material Adverse Effect.
7.20 Solvency. Each Credit Party is and, after consummation of the
transactions contemplated by this Credit Agreement, will be Solvent.
7.21 Investments. All Investments of each Credit Party and each of
their Subsidiaries are either Permitted Investments or otherwise permitted by
the terms of this Credit Agreement.
7.22 No Financing of Corporate Takeovers. No proceeds of the Loans
hereunder have been or will be used to acquire, directly or indirectly, any
security in any transaction which is subject to Sections 13 or 14 of the
Securities Exchange Act of 1934, as amended, (including, without limitation,
Sections 13(d) and 14(d) thereof) or to refinance any Indebtedness used to
acquire any such securities.
7.23 Location of Collateral. Set forth on Schedule 7.23(a)
attached hereto is a list of all Real Properties with street address, county or
district and state or province where located (and legal descriptions with
respect thereto). Set forth on Schedule 7.23(b) attached hereto is a list of
all locations where any personal property of a Credit Party is located,
including county or district and state or province where located. Set forth on
Schedule 7.23(c) attached hereto is the chief executive office and principal
place of business of each Credit Party.
SECTION 8
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations hereunder, have been paid in full and
the Commitments hereunder shall have terminated:
8.1 Information Covenants. The Borrower will furnish, or cause to
be furnished, to the Agent:
(a) Annual Financial Statements. As soon as available,
and in any event within 90 days after the close of each fiscal year of
the Borrower, a consolidated balance sheet and income statement of
Holdings and its Subsidiaries, and the Borrower and its Subsidiaries,
as of the end of such fiscal year, together with related consolidated
55
62
statements of operations and retained earnings and of cash flows for
such fiscal year, setting forth in comparative form consolidated
figures for the preceding fiscal year, all such financial information
described above to be in reasonable form and detail and audited by
independent certified public accountants of recognized national
standing reasonably acceptable to the Agent and whose opinion shall be
to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or
qualified in any manner.
(b) Quarterly Financial Statements. As soon as
available, and in any event within 45 days after the close of each
fiscal quarter of the Borrower (other than the fourth fiscal quarter,
in which case 90 days after the end thereof) a consolidated balance
sheet and income statement of Holdings and its Subsidiaries, and the
Borrower and its Subsidiaries, as of the end of such fiscal quarter,
together with related consolidated statements of operations and
retained earnings and of cash flows for such fiscal quarter in each
case setting forth in comparative form consolidated figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a management
discussion as to such financial information and a certificate of the
chief financial officer or treasurer of the Borrower to the effect
that such quarterly financial statements fairly present in all
material respects the financial condition and results of operations of
Holdings, the Borrower and their Subsidiaries and have been prepared
in accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments.
(c) Monthly Financial Statements. As soon as available
and in any event within 35 days after the end of each month of the
Borrower (other than the last month of the first three fiscal quarters
in which case 45 days after the end thereof), a consolidated balance
sheet and income statement of Holdings and its Subsidiaries, and the
Borrower and its Subsidiaries as at the end of such month together
with related consolidated statements of operations and retained
earnings and of cash flows for such month in each case setting forth
in comparative form consolidated figures for the corresponding period
of the preceding fiscal year (and such other financial information as
reasonably requested by the Agent or the Required Lenders, including
financial information regarding the divisions of the Borrower), all
such financial information described above to be in reasonable form
and detail and reasonably acceptable to the Agent, and accompanied by
a management discussion as to such financial information and a
certificate of the chief financial officer or treasurer of the
Borrower to the effect that such monthly financial statements fairly
present in all material respects the financial condition and results
of operations of Holdings, the Borrower and their Subsidiaries and
have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.
(d) Officer's Certificate. At the time of delivery of
the financial statements provided for in Sections 8.1(a) and 8.1(b)
above, a certificate of the chief financial officer or treasurer of
the Borrower substantially in the form of Exhibit 8.1(d) attached
hereto, (i) demonstrating compliance with the financial covenants
contained in Section 8.12 by calculation thereof as of the end of each
such fiscal period and (ii) stating that no Default or Event of
Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Borrower
proposes to take with respect thereto.
56
63
(e) Annual Business Plan and Budgets. At least 30 days
after the end of each fiscal year of the Borrower, beginning with the
fiscal year ending December 31, 1995, an annual business plan and
budget of Holdings, the Borrower and each of its operating groups
containing, among other things, pro forma financial statements for the
next fiscal year.
(f) Compliance With Certain Provisions of the Credit
Agreement. Within 90 days after the end of each fiscal year of the
Borrower, the Borrower shall deliver a certificate, containing
information regarding (i) the calculation of Excess Cash Flow, and
(ii) the amount of Asset Dispositions and Receivables Transactions
that were made during the prior fiscal year.
(g) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section
8.1(a), a certificate of the accountants conducting the annual audit
stating that they have reviewed this Credit Agreement and stating
further whether, in the course of their audit, they have become aware
of any Default or Event of Default and, if any such Default or Event
of Default exists, specifying the nature and extent thereof.
(h) Auditor's Reports. Promptly upon receipt thereof, a
copy of any "management letter" submitted by independent accountants
to Holdings, the Borrower or any of its Subsidiaries in connection
with any annual, interim or special audit of the books of Holdings,
the Borrower or any of its Subsidiaries.
(i) Reports. Promptly upon transmission or receipt
thereof, (a) copies of any filings and registrations with, and reports
to or from, the Securities and Exchange Commission, or any successor
agency, and copies of all financial statements, proxy statements,
notices and reports as Holdings, the Borrower or any of their
Subsidiaries shall send to its shareholders generally or to a holder
of any Indebtedness owed by Holdings, the Borrower or any of their
Subsidiaries in its capacity as such a holder and (b) upon the written
request of the Agent, all reports and written information to and from
the United States Environmental Protection Agency, or any state or
local agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(j) Notices. Upon a Credit Party obtaining knowledge
thereof, such Credit Party will give written notice to the Agent
immediately of (a) the occurrence of an event or condition consisting
of a Default or Event of Default, specifying the nature and existence
thereof and what action the Borrower proposes to take with respect
thereto, and (b) the occurrence of any of the following with respect
to Holdings, the Borrower or any of their Subsidiaries (i) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against Holdings, the Borrower or any of their Subsidiaries
which if adversely determined would have or would be reasonably
expected to have a Material Adverse Effect, or (ii) the institution of
any proceedings against Holdings, the Borrower or any of their
Subsidiaries with respect to, or the receipt of written notice by such
Person of potential liability or responsibility for violation, or
alleged violation of any federal, state or local law, rule or
regulation, including but not limited to, Environmental Laws, the
violation of which would have or would be reasonably expected to have
a Material Adverse Effect.
57
64
(k) ERISA. Upon any of the Credit Parties or any ERISA
Affiliate obtaining knowledge thereof, Borrower will give written
notice to the Agent promptly (and in any event within five Business
Days) of any of the following which would have or would be reasonably
expected to have a Material Adverse effect: (i) of any event or
condition, including, but not limited to, any Reportable Event, that
constitutes a Termination Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrowers
or any of their ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the
meaning of Title IV of ERISA); (iii) the failure to make full payment
on or before the due date (including extensions) thereof of all
amounts which the Borrower or any of its Subsidiaries or ERISA
Affiliate is required to contribute to each Plan pursuant to its terms
and as required to meet the minimum funding standard set forth in
ERISA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan that has a Material Adverse Effect;
together, with a description of any such event or condition or a copy
of any such notice and a statement by the principal financial officer
of the Borrower briefly setting forth the details regarding such
event, condition, or notice, and the action, if any, which has been or
is being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the Borrower shall furnish
the Agent with such additional information concerning any Plan as may
be reasonably requested (and which in the case of a Multiemployer Plan
is reasonably available to Credit Parties or their Subsidiaries),
including, but not limited to, copies of each annual report/return
(Form 5500 series), as well as all schedules and attachments thereto
required to filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA and the Code, respectively, for each
"plan year" (within the meaning of Section 3(39) of ERISA).
(l) Environmental.
(i) Upon the reasonable written request
of the Agent, Borrower will furnish or cause to be furnished
to the Agent at Borrower's expense a report of an
environmental assessment of reasonable scope, form and depth,
(including, where appropriate, invasive soil or groundwater
sampling) by a consultant reasonably acceptable to Agent as to
the nature and extent of the presence of any Hazardous
Materials on any Real Property owned, leased or operated by
any Credit Party and as to the compliance by such Credit Party
with Environmental Laws. If Borrower fails to deliver such an
environmental report within seventy-five (75) days after
receipt of Agent's written request then Agent may arrange for
same, and Borrower hereby grants to the Agent and its
representatives access to the Real Properties and a license to
undertake such an assessment (including, where appropriate,
invasive soil or groundwater sampling). The reasonable cost
of any assessment arranged for by the Agent pursuant to this
provision will be payable by Borrower on demand and added to
the obligations secured by the Collateral Documents.
(ii) Each Credit Party will conduct and
complete all investigations, studies, sampling, and testing
and all remedial, removal, and other actions necessary to
address all Hazardous Materials on, from, or affecting the
Real Properties or to otherwise comply with Environmental Laws
to the extent required by any applicable federal, state, or
local laws, regulations, rules, and policies and with their
orders and directives of all policies and with the orders and
directives of all federal, state and local governmental
authorities exercising jurisdiction over such Real Properties
if any failure to do so would cause or be
58
65
reasonably expected to cause a Material Adverse Effect.
(m) Other Information. With reasonable promptness upon
any such request, such other information regarding the business,
properties or financial condition of the Credit Parties and their
Subsidiaries as the Agent or the Required Lenders may reasonably
request.
8.2 Preservation of Existence and Franchises. Each of the Credit
Parties will, and will cause its Subsidiaries to, do all things necessary to
preserve and keep in full force and effect its existence, rights, franchises
and authority unless any such Credit Party determines that any such rights,
franchises or authority is no longer necessary to the conduct of its business.
8.3 Books and Records. Each of the Credit Parties will, and will
cause its Subsidiaries to keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
8.4 Compliance with Law. Each of the Credit Parties will, and
will cause its Subsidiaries to, comply with all laws, rules, regulations and
orders, and all applicable restrictions imposed by all Governmental
Authorities, applicable to it and its property (including, without limitation,
Environmental Laws) if noncompliance with any such law, rule, regulation, order
or restriction would have or reasonably be expected to have a Material Adverse
Effect.
8.5 Payment of Taxes and Other Indebtedness. Each of the Credit
Parties will and will cause its Subsidiaries to, pay and discharge (a) all
taxes, assessments and governmental charges or levies imposed upon it, or upon
its income or profits, or upon any of its properties, before they shall become
delinquent, (b) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that a Credit Party or
its Subsidiary shall not be required to pay (i) any such tax, assessment,
charge, levy, claim or Indebtedness which is being contested in good faith by
appropriate proceedings and as to which adequate reserves therefor have been
established in accordance with GAAP or (ii), any such payment in (a), (b) or
(c) above if the failure to make such payment does not give rise to an
immediate right to foreclose on a Lien securing such amounts or (ii) would have
or be reasonably expected to cause a Material Adverse Effect.
8.6 Insurance. Each of the Credit Parties will at all times
maintain in full force and effect insurance (including worker's compensation
insurance, liability insurance, casualty insurance and business interruption
insurance) in such amounts, covering such risks and liabilities and with such
deductibles or self-insurance retentions as are in accordance with normal
industry practice and naming the Agent, for the benefit of the Lenders, as loss
payee.
In case of any material loss, damage to or destruction of the Collateral of any
Credit Party or any part thereof, such Credit Party shall promptly give written
notice thereof to the Agent generally describing the nature and extent of such
damage or destruction. In case of any loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party, whether
or not the insurance proceeds, if any, received on account of such damage or
destruction shall be sufficient for that purpose, at such Credit Party's cost
and expense, will promptly repair or replace the Collateral of such Credit
Party so lost, damaged or destroyed; provided, however, that such Credit Party
need not repair or replace the Collateral of such Credit Party so lost, damaged
or destroyed to the extent the failure to make such repair or replacement (a)
is desirable
59
66
to the proper conduct of the business of such Credit Party in the ordinary
course and otherwise in the best interest of such Credit Party; and (b) would
not materially impair the rights and benefits of the Agent or the Lenders under
this Credit Agreement or any other Credit Document. In the event a Credit
Party shall receive any proceeds of such insurance in a net amount in excess of
$5,000,000, such Credit Party will immediately pay over such proceeds to the
Agent, for payment on the Credit Party Obligations; provided, however, that the
Agent agrees to release such insurance proceeds to such Credit Party for
replacement or restoration of the portion of the Collateral of such Credit
Party lost, damaged or destroyed if, but only if, (A) no Default or Event of
Default shall have occurred and be continuing at the time of release, (B)
written application for such release is received by the Agent from such Credit
Party within 30 days after written notice of receipt of such proceeds and (C)
the Agent has received evidence reasonably satisfactory to it that the
Collateral lost, damaged or destroyed has been or will be replaced or restored
to its condition immediately prior to the loss, destruction or other event
giving rise to the payment of such insurance proceeds or such proceeds are used
in a manner reasonably acceptable to the Agent. All insurance proceeds shall
be subject to the security interest of the Lenders under the Security
Agreements.
The present coverage of Holdings, the Borrower and their Subsidiaries is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 8.6 attached hereto, as Schedule 8.6 may be amended from time to time
by written notice to the Agent.
8.7 Maintenance of Property. Each of the Credit Parties will, and
will cause its Subsidiaries to, maintain and preserve its properties and
equipment material to the conduct of its business in good repair, working order
and condition, normal wear and tear excepted, and will make, or cause to be
made, in such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as
may be needed or proper, to the extent and in the manner customary for
companies in similar businesses unless any such Credit Party determines any
such properties or equipment are no longer necessary to the conduct of its
business.
8.8 Performance of Obligations. Each of the Credit Parties will,
and will cause its Subsidiaries to, perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by
which it is bound.
8.9 Collateral. If a Credit Party shall acquire any real
property, intellectual property or any securities subsequent to the Effective
Date, the Borrower shall immediately notify the Agent of same. Each Credit
Party shall adhere to the covenants regarding the location of personal property
as set forth in the Security Agreements. Each Credit Party shall take such
action, as requested by the Agent, to ensure that the Lenders have a first
priority perfected Lien in all real and personal property of the Credit Parties
(whether now owned or hereafter acquired), subject only to Permitted Liens.
8.10 Use of Proceeds. The Credit Parties will use proceeds of the
Loans solely (a) to replace the existing Loans and Letters of Credit
outstanding under the Original Credit Agreement (b) to redeem certain
Subordinated Debt as permitted hereunder, (c) to provide working capital, (d)
for general corporate purposes and (e) as otherwise permitted under this Credit
Agreement.
8.11 Audits/Inspections. Upon reasonable notice and during normal
business hours, each Credit Party will permit, and will cause their
Subsidiaries to permit, representatives appointed by the Agent, including,
without limitation, independent accountants, agents,
60
67
attorneys, and appraisers to visit and inspect the Credit Parties' property,
including their books and records, their accounts receivable and inventory,
Credit Parties' facilities and their other business assets, and to make
photocopies or photographs thereof and to write down and record any information
such representative obtains and shall permit the Agent or its representatives
to investigate and verify the accuracy of information provided to the Lenders
and to discuss all such matters with the officers, employees and
representatives of the Credit Parties. The Credit Parties agree that the
Agent, and its representatives, may conduct an annual audit of the Collateral,
at the expense of the Borrower.
8.12 Financial Covenants.
(a) Interest Coverage Ratio. The Interest Coverage
Ratio, as of the end of each fiscal quarter, for the twelve month
period ending on such date, shall be greater than or equal to:
As of December 31, 1996, 1.90 to 1.0;
From the Effective Date to December 31, 1997, 2.05 to 1.0;
From January 1, 1998 to December 31, 1998, 2.20 to 1.0;
From January 1, 1999 to December 31, 1999, 2.40 to 1.0;
From January 1, 2000 to December 31, 2000, 2.65 to 1.0; and
From January 1, 2001 and thereafter, 3.0 to 1.0.
(b) Fixed Charge Coverage. The Fixed Charge Coverage
Ratio, as of the end of each fiscal quarter, for the twelve month
period ending on such date, shall be greater than or equal to 1.0 to
1.0.
(c) Debt Coverage Ratio. The Debt Coverage Ratio, as of
the end of each fiscal quarter, for the twelve month period ending on
such date, shall be less than or equal to:
As of December 31, 1996, 4.65 to 1.0;
From the Effective Date to December 31, 1997, 4.25 to 1.0;
From January 1, 1998 to December 31, 1998, 3.90 to 1.0;
From January 1, 1999 to December 31, 1999, 3.50 to 1.0;
From January 1, 2000 to December 31, 2000, 3.05 to 1.0; and
From January 1, 2001 and thereafter, 2.65 to 1.0.
(d) Net Worth. At all times Net Worth shall be greater
than or equal to (i) a negative Fifty Million (- $50,000,000) plus
(ii) 75% of Net Income on a cumulative basis (without deduction for
any losses) minus (iii) dividends paid to Holdings as permitted under
this Credit Agreement.
8.13 Additional Credit Parties. At the time any Person becomes a
Subsidiary of a Credit Party, the Borrower shall so notify the Agent and
promptly thereafter (but in any event within 30 days after the date thereof)
shall cause such Person to (a) if it is a Domestic Subsidiary, execute a
Joinder Agreement in substantially the same form as Exhibit 8.13 attached
hereto, (b) cause all of the capital stock of such Person (if it is a Domestic
Subsidiary) or 65% of the capital stock of such Person (if it is a direct
Foreign Subsidiary) to be delivered to the Agent (together with undated stock
powers signed in blank) and pledged to the Agent pursuant to an appropriate
pledge agreement in substantially the form of the Pledge Agreement and
otherwise in a form acceptable to the Agent, (c) if such Person is a Domestic
Subsidiary, pledge all of its assets to the Lenders pursuant to a security
agreement in substantially the form of the Security Agreement and
61
68
otherwise in a form acceptable to the Agent, and (d) if such Person is a
Domestic Subsidiary and has any Subsidiaries, (A) deliver all of the capital
stock of such Domestic Subsidiaries and 65% of the stock of the direct Foreign
Subsidiaries (together with undated stock powers signed in blank) to the Agent
and (B) execute a pledge agreement in substantially the form of the Pledge
Agreement and otherwise in a form acceptable to the Agent, (e) if such Person
is a Domestic Subsidiary and owns or leases any real property, execute any and
all necessary mortgages, deeds of trust, deeds to secure debt or other
appropriate real estate collateral documentation in a form acceptable to the
Agent and (f) deliver such other documentation as the Agent may reasonably
request in connection with the foregoing, including, without limitation,
appropriate UCC-1 financing statements, real estate title insurance policies,
environmental reports, landlord's waivers, certified resolutions and other
organizational and authorizing documents of such Person and favorable opinions
of counsel to such Person (which shall cover, among other things, the legality,
validity, binding effect and enforceability of the documentation referred to
above), all in form, content and scope reasonably satisfactory to the Agent.
8.14 Interest Rate Protection Agreements. The Borrower shall,
maintain interest rate protection agreements protecting against fluctuations in
interest rates as to which the material terms are reasonably satisfactory to
the Agent and in a notional amount of at least 65% of the principal amount of
the Tranche A Term Loans.
SECTION 9
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations hereunder, have been paid in full and
the Commitments hereunder shall have terminated:
9.1 Indebtedness. Neither Holdings, the Borrower nor any of their
Subsidiaries will contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness existing as of the Effective Date as
referenced in Section 7.9 (and renewals, refinancings or extensions
thereof on terms and conditions no more favorable (subject to market
rates of interest), in the aggregate, to such Person than such
existing Indebtedness and in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension);
(c) Indebtedness in respect of current accounts payable
and accrued expenses incurred in the ordinary course of business
including, to the extent not current, accounts payable and accrued
expenses that are subject to bona fide dispute;
(d) Indebtedness owing by (i) one Credit Party to another
Credit Party or (ii) by a Foreign Subsidiary to another Foreign
Subsidiary;
(e) Indebtedness issued by the Borrower (on a basis fully
subordinate to the Credit Party Obligations) to replace the
Subordinated Notes (on terms no more onerous (including maturity and
subordination provisions and subject to market rates of interest) than
the existing Subordinated Notes as determined by the Required
Lenders);
62
69
(f) Indebtedness in an amount up to $60,000,000, in the
aggregate, if such Indebtedness (i) is used (A) to redeem or otherwise
acquire Holdings Debentures (provided that in no event shall more than
$25,000,000, in the aggregate, be used to redeem or acquire Holdings
Debentures from the Closing Date until all of the Credit Party
Obligations are satisfied in full), (B) to redeem or otherwise acquire
Subordinated Notes, or (C) to make Permitted Acquisitions, (ii) is
documented under this Credit Agreement and becomes a part of this
Credit Agreement for all purposes, including, but not limited to, such
Indebtedness being secured by the Collateral and the lenders of such
Indebtedness become Lenders hereunder, (iii) is approved by the
Required Lenders, (iv) matures no earlier than March 31, 2002 and (v)
does not require amortization in excess of 1% of the outstanding
principal amount per annum;
(g) Indebtedness with respect to capital leases, purchase
money Indebtedness or other unsecured Indebtedness (in addition to
Indebtedness otherwise permitted under this Section 9.1) which does
not exceed $7,500,000, in the aggregate, at any one time;
(h) Indebtedness in connection with a Receivables
Transaction;
(i) Indebtedness evidenced by the interest rate
protection agreements referred to in Section 8.14;
(j) Indebtedness existing with respect to real property
of a corporation which becomes a Subsidiary of the Borrower or is
merged with or into a Credit Party after the date hereof; provided
that (A) such Indebtedness existed at the time such corporation became
a Subsidiary of the Borrower or was merged with or into a Credit
Party, (B) such Indebtedness was not incurred in anticipation thereof,
(C) at such time no Default or Event of Default exists or shall result
from such transaction and (D) such Indebtedness is of a tax advantage
nature and is more favorable than available under this Credit
Agreement;
(k) Indebtedness with respect to the ▇▇▇▇▇▇ Property not
to exceed $9,000,000; and
(l) Indebtedness incurred by Foreign Subsidiaries not to
exceed $5,000,000, in the aggregate, at any one time.
9.2 Liens. Neither Holdings, the Borrower nor any of their
Subsidiaries will contract, create, incur, assume or permit to exist any Lien
with respect to any of its property or assets of any kind (whether real or
personal, tangible or intangible), whether now owned or after acquired, except
for Permitted Liens.
9.3 Nature of Business. Neither Holdings, the Borrower nor any of
their Subsidiaries will alter the character of its business from that conducted
as of the Effective Date or engage in any business other than the business
conducted as of the Effective Date and activities which are substantially
similar or related thereto.
9.4 Consolidation and Merger. Neither Holdings, the Borrower nor
any of their Subsidiaries will enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution); provided that notwithstanding the foregoing
provisions of this Section 9.4, the following actions may be taken if after
giving effect thereto no Default or Event of Default exists:
63
70
(a) any Credit Party other than Holdings may be merged or
consolidated with or into the Borrower or any other Credit Party;
provided that if such transaction shall be between the Borrower and
another Credit Party, the Borrower shall be the continuing or
surviving corporation;
(b) any Credit Party other than Holdings may merge or
consolidate with any other Person (other than another Credit Party) if
such Credit Party shall be the continuing or surviving corporation;
and
(c) any Foreign Subsidiary may merge or consolidate with
any other Foreign Subsidiary.
9.5 Sale or Lease of Assets. Unless the Net Cash Proceeds are
forwarded to the Agent as set forth in Section 3.2(b)(iii), neither Holdings,
the Borrower nor any of their Subsidiaries will convey, sell, lease, transfer
or otherwise dispose of, in one transaction or a series of transactions, all or
any part of its business or assets whether now owned or hereafter acquired,
including, without limitation, inventory, receivables, leasehold interests, and
securities but excluding (i) any inventory or other assets sold, leased or
disposed of (or simultaneously replaced with like goods) in the ordinary course
of business, (ii) obsolete, idle or worn-out assets no longer used or useful in
its business, (iii) subject to Section 9.4 hereof, the sale, lease or transfer
or other disposal by the Borrower or another Credit Party of any or all of its
assets or the capital stock of any other Credit Party to the Borrower or
another Credit Party, (iv) Receivables Transactions, if consideration paid by
third parties does not exceed, in the aggregate, $50,000,000, and all proceeds
from same are paid to the Lenders as set forth in Section 3.2(b)(iv) hereof,
(v) license agreements entered, as licensor, in the ordinary course of business
for use of intellectual property or other intangible assets of any Credit
Party, (vi) transfers constituting Permitted Investments, or (vii) other sales
of assets not to exceed $1,000,000 during any fiscal year of the Borrower.
[IVEX HAS ASKED FOR UNLIMITED SALES OF ASSETS FOR FOREIGN SUBSIDIARIES]
9.6 Advances, Investments and Loans. Neither Holdings, the
Borrower nor any of their Subsidiaries will make any investments except for
Permitted Investments.
9.7 Dividends. Neither Holdings, the Borrower nor any of their
Subsidiaries will, directly or indirectly, (a) declare or pay any dividends
(whether cash or otherwise) or make any other distribution upon any shares of
its capital stock of any class or (b) purchase, redeem or otherwise acquire or
retire or make any provisions for redemption, acquisition or retirement of any
shares of its capital stock of any class or any warrants or options to purchase
any such shares other than a Permitted Investment; provided that (x) if no
Default or Event of Default exists and is continuing, the Borrower may pay
dividends to Holdings, (i) for administration expenses up to $250,000 per year,
(ii) to allow for the repurchase of stock or options of Holdings or the
Borrower from employees as permitted under this Credit Agreement, (iii) to
allow for the payment of taxes in accordance with that certain Tax Allocation
Agreement dated as of December 17, 1992 among Ivex Packaging Corporation f/k/a
Ivex Holdings Corporation and its Subsidiaries, (iv) subsequent to September
14, 2000, to pay interest on the Holdings Debentures, and (v) if the Redemption
Conditions are satisfied, to redeem Holdings Debentures, (y) Subsidiaries of
the Borrower may pay dividends to the Borrower or to another Credit Party that
is a Subsidiary of the Borrower and (z) Holdings may redeem Holdings Debentures
in accordance with the terms of this Credit Agreement.
9.8 Transactions with Affiliates. Except as set forth on Schedule
9.8 attached hereto,
64
71
neither Holdings, the Borrower nor any of their Subsidiaries will enter into
any transaction or series of transactions, whether or not in the ordinary
course of business, with any officer, director, shareholder, Subsidiary or
Affiliate other than on terms and conditions substantially as favorable than
would be obtainable in a comparable arm's-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
9.9 Ownership of the Borrower. Holdings will not sell, transfer
or otherwise dispose of any shares of capital stock of the Borrower.
9.10 Fiscal Year. Neither Holdings, the Borrower or any of their
Subsidiaries will change its fiscal year without the prior written consent of
the Required Lenders.
9.11 Subordinated Debt. Other than (i) the replacement of
Subordinated Notes in accordance with the terms of Section 9.1(e) hereof or
(ii) the redemption of Subordinated Debt from the net proceeds of an equity
offering by Holdings, neither Holdings, the Borrower nor any of their
Subsidiaries may, unless the Redemption Conditions are satisfied, (a) make or
offer to make any principal payments with respect to the Subordinated Debt, (b)
redeem or offer to redeem any of the Subordinated Debt, (c) deposit any funds
intended to discharge or defease any or all of the Subordinated Debt, or (d)
make or offer to make any voluntary principal prepayments on Funded Debt other
than the Loans. Furthermore, neither Holdings nor the Borrower will amend,
modify or waive any of the terms and conditions of the Holdings Debentures or
the Subordinated Notes, as applicable, in a manner that would adversely affect
the Lenders, or their rights under the Credit Documents, without the prior
written consent of the Required Lenders; provided that any amendment to the
terms and conditions of the Subordinated Debt solely to allow for the
redemption or other acquisition of Holdings Debentures in accordance with the
terms hereof shall not be deemed to adversely affect the Lenders.
9.12 Assets of Holdings. Holdings may not hold any assets other
than (a) the stock of the Borrower, (b) such amounts allowed to be transferred
to Holdings pursuant to Section 9.7 hereof and (c) net proceeds from an equity
offering by Holdings for a period not to exceed 90 days. Holdings may not have
any liabilities other than the liabilities under the Credit Documents, the
Holdings Debentures and tax liabilities and other liabilities in the ordinary
course of business.
9.13 Sale Leasebacks. Except with the consent of the Required
Lenders, none of the Credit Parties will, nor will it permit any of its
Subsidiaries to, directly or indirectly become or remain liable as lessee or as
guarantor or other surety with respect to any lease, whether an operating lease
or a capital lease, of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, (a) which such Credit Party or
Subsidiary has sold or transferred or is to sell or transfer to any other
Person other than a Credit Party or (b) which such Credit Party or Subsidiary
intends to use for substantially the same purpose as any other property which
has been sold or is to be sold or transferred by such Credit Party or
Subsidiary to any Person in connection with such lease.
9.14 Negative Pledges. Except as set forth in the Credit Documents
and on Schedule 9.2 attached hereto, a Credit Party will not, nor will it
permit any of its Domestic Subsidiaries to, enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation.
65
72
9.15 Limitation on Foreign Operations. The Credit Parties will
not, nor will it permit any of its Subsidiaries to, allow the Foreign
Subsidiaries to have assets which in the aggregate constitute more than 15% of
Total Assets at any time.
SECTION 10
EVENTS OF DEFAULT
10.1 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall:
(i) default in the payment when due of
any principal of any of the Loans or of any reimbursement
obligation arising from drawings under Letters of Credit; or
(ii) default, and such default shall
continue for three or more days, in the payment when due of
any interest on the Loans, or of any fees or other amounts
owing hereunder, under any of the other Credit Documents or in
connection herewith.
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein, in any
of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall
prove untrue in any material respect on the date as of which it was
deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or
observance of any term, covenant or agreement contained in
Sections 8.2, 8.4, 8.10, 8.12 or 9.1 through 9.15, inclusive;
or
(ii) default in the due performance or
observance by it of any term, covenant or agreement contained
in Section 8.1 and such default shall continue unremedied for
a period of five Business Days after the earlier of an officer
of a Credit Party becoming aware of such default or notice
thereof given by the Agent; or
(iii) default in the due performance or
observance by it of any term, covenant or agreement (other
than those referred to in subsections (a), (b) or (c)(i) or
(ii) of this Section 10.1) contained in this Credit Agreement
and such default shall continue unremedied for a period of at
least 30 days after the earlier of an officer of a Credit
Party becoming aware of such default or notice thereof given
by the Agent.
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents and such default shall
continue unremedied for a period of at least 30 days
66
73
after the earlier of an officer of a Credit Party becoming
aware of such default or notice thereof given by the Agent, or (ii)
any Credit Document shall fail to be in full force and effect or to
give the Agent and/or the Lenders the security interests, liens,
rights, powers and privileges purported to be created thereby or any
Credit Party or any Person acting by or on behalf of any Credit Party
shall deny or disaffirm the its obligations under the Credit
Documents.
(e) Guaranties. The guaranty given by the Credit Parties
hereunder or by any Additional Credit Party hereafter or any provision
thereof shall cease to be in full force and effect, or any guarantor
thereunder or any Person acting by or on behalf of such guarantor
shall deny or disaffirm such Guarantor's obligations under such
guaranty.
(f) Bankruptcy, etc. The occurrence of any of the
following with respect to Holdings, the Borrower or any of their
Subsidiaries: (i) a court or governmental agency having jurisdiction
in the premises shall enter a decree or order for relief in respect of
Holdings, Borrower or any of their Subsidiaries in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, or appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of any of
Holdings, the Borrower or any of their Subsidiaries or for any
substantial part of its property or ordering the winding up or
liquidation of its affairs; or (ii) an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect is commenced against Holdings, the Borrower or any
of their Subsidiaries and such petition remains unstayed and in effect
for a period of 60 consecutive days; or (iii) Holdings, the Borrower
or any of their Subsidiaries shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of such Person or any
substantial part of its property or make any general assignment for
the benefit of creditors; or (iv) Holdings, the Borrower or any of
their Subsidiaries shall admit in writing its inability to pay its
debts generally as they become due or is not generally paying its
debts as they become due; or (v) Holdings, the Borrower or any of
their Subsidiaries shall take any action in furtherance of any of the
aforesaid purposes.
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of Holdings, the Borrower or any of their Subsidiaries in a
principal amount in excess of $1,000,000, including, without
limitation, the Subordinated Debt (i) a Credit Party or any of its
Subsidiaries shall (A) default in any payment (beyond the applicable
grace period with respect thereto, if any) with respect to any such
Indebtedness, or (B) default (after giving effect to any applicable
grace period) in the observance or performance relating to such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event or condition shall
occur or condition exist, the effect of which default or other event
or condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is
required) any such Indebtedness to become due prior to its stated
maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof.
(h) Judgments. One or more judgments, orders, or decrees
shall be entered against any one or more of Holdings, the Borrower or
any of their Subsidiaries involving
67
74
a liability of $1,000,000 or more, in the aggregate, (to the extent
not paid or covered by insurance provided by a carrier who has
acknowledged coverage) and such judgments, orders or decrees shall
continue unsatisfied, undischarged and unstayed for a period ending on
the first to occur of (i) the last day on which such judgment, order
or decree becomes final and unappealable or (ii) 60 days.
(i) ERISA. Any of the following events or conditions
which is the aggregate would have a Material Adverse Effect: (1) any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets
of a Credit Party or any of its Subsidiaries or any ERISA Affiliate in
favor of the PBGC or a Plan; (2) a Termination Event shall occur with
respect to a Single Employer Plan, which is the termination of such
Plan for purposes of Title IV of ERISA; (3) a Termination Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is (i) the termination of such Plan for purposes of Title IV of
ERISA, or (ii) a Credit Party or any of its Subsidiaries or any ERISA
Affiliate incurring liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or
insolvency of (within the meaning of Section 4245 of ERISA) such Plan;
or (4) any prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which subjects Borrower or any of its
Subsidiaries to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which a Credit Party or any of its
Subsidiaries has agreed or is required to indemnify any person against
any such liability; or
(j) Ownership. There shall occur a Change of Control; or
(k) Subordinated Debt. The holders of the Subordinated
Notes or the holders of the Holdings Debentures assert in a legal
proceeding (or any Governmental Authority with applicable jurisdiction
determines) that the Lenders are not either (i) holders of Senior
Indebtedness (as defined in the Subordinated Notes) or (ii) holders of
Senior Obligations (as defined in the Holdings Debentures), as
applicable.
10.2 Acceleration; Remedies. Upon the occurrence of an Event of
Default, and at any time thereafter unless and until such Event of Default has
been waived by the Required Lenders or cured to the satisfaction of the
Required Lenders, the Agent shall, upon the request and direction of the
Required Lenders, by written notice to the Borrower take any of the following
actions without prejudice to the rights of the Agent or any Lender to enforce
its claims against the Credit Parties, except as otherwise specifically
provided for herein:
(i) Termination of Commitments. Declare
the Commitments terminated whereupon the Commitments shall be
immediately terminated.
(ii) Acceleration of Loans. Declare the
unpaid principal of and any accrued interest in respect of
all Loans and any and all other indebtedness or obligations of
any and every kind owing by the Borrower to any of the Lenders
hereunder to be due whereupon the same shall be immediately
due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the
Borrower.
(iii) Cash Collateral. Direct the
Borrower to pay (and the
68
75
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 10.1(f), it
will immediately pay) to the Agent additional cash, to be held
by the Agent, for the benefit of the applicable Lenders, in a
cash collateral account as additional security for the LOC
Obligations in respect of subsequent drawings under all then
outstanding Letters of Credit in an amount equal to the
maximum aggregate amount which may be drawn under all Letters
of Credits then outstanding.
(iv) Enforcement of Rights. Enforce any
and all rights and interests created and existing under the
Credit Documents, including, without limitation, all rights
and remedies existing under the Collateral Documents, all
rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
10.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Agent or the
Lenders.
SECTION 11
AGENCY PROVISIONS
11.1 Appointment. Each Lender hereby designates and appoints
NationsBank, N.A. as agent of such Lender to act as specified herein and the
other Credit Documents, and each such Lender hereby authorizes the Agent, as
the agent for such Lender, to take such action on its behalf under the
provisions of this Credit Agreement and the other Credit Documents and to
exercise such powers and perform such duties as are expressly delegated by the
terms hereof and of the other Credit Documents, together with such other powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere herein and in the other Credit Documents, the Agent shall
not have any duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the other
Credit Documents, or shall otherwise exist against the Agent. The provisions
of this Section are solely for the benefit of the Agent and the Lenders and
none of the Credit Parties shall have any rights as a third party beneficiary
of the provisions hereof. In performing its functions and duties under this
Credit Agreement and the other Credit Documents, the Agent shall act solely as
agent of the Lenders and does not assume and shall not be deemed to have
assumed any obligation or relationship of agency or trust with or for the
Borrower or any other Credit Party.
11.2 Delegation of Duties. The Agent may execute any of its duties
hereunder or under the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
11.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall
be (a) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection herewith or in connection with
69
76
any of the other Credit Documents (except for its or such Person's own gross
negligence or willful misconduct), or (b) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any of the Credit Parties contained herein or in any of the other Credit
Documents or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in connection herewith
or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure
of the Borrower to perform its obligations hereunder or thereunder. The Agent
shall not be responsible to any Lender for the effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Credit
Agreement, or any of the other Credit Documents or for any representations,
warranties, recitals or statements made herein or therein or made by the
Borrower or any Credit Party in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the Agent to
the Lenders or by or on behalf of the Credit Parties to the Agent or any
Lender or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Loans or of
the existence or possible existence of any Default or Event of Default or to
inspect the properties, books or records of the Credit Parties. The Agent is
not a trustee for the Lenders and owes no fiduciary duty to the Lenders.
11.4 Reliance on Communications. The Agent shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower or any of the other Credit Parties, independent accountants and other
experts selected by the Agent with reasonable care). The Agent may deem and
treat the Lenders as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent in accordance with Section 12.3(b) hereof. The
Agent shall be fully justified in failing or refusing to take any action under
this Credit Agreement or under any of the other Credit Documents unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
or under any of the other Credit Documents in accordance with a request of the
Required Lenders (or to the extent specifically provided in Section 12.6, all
the Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).
11.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders.
Subsequent to an Event of Default, the Agent shall, if requested by a Lender,
conduct a phase I environmental audit, and, where necessary, a phase II
environmental audit on any parcel of real estate owned by a Credit Party prior
to proceeding with foreclosing on any real property of a Credit Party or
exercising voting rights or other remedies with respect to any Pledged Shares.
70
77
11.6 Non-Reliance on Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other conditions, prospects and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Credit Agreement. Each Lender also represents that it will, independently
and without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Borrower which may come
into the possession of nor the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
11.7 Indemnification. The Lenders agree to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to its
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment of the Credit Party Obligations) be imposed on,
incurred by or asserted against the Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided that
no Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent. If any indemnity furnished to the Agent for any
purpose shall, in the opinion of the Agent, be insufficient or become
impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section shall survive the payment of the
Obligations and all other amounts payable hereunder and under the other Credit
Documents.
11.8 Agent in Its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower or any other Credit Party as though the
Agent were not Agent hereunder. With respect to the Loans made and all
Obligations owing to it, the Agent shall have the same rights and powers under
this Credit Agreement as any Lender and may exercise the same as though they
were not Agent, and the terms "Lender" and "Lenders" shall include the Agent in
their individual capacity.
11.9 Successor Agent. The Agent may, at any time, resign upon 20
days written notice to the Lenders. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders,
71
78
and shall have accepted such appointment, within 30 days after the notice of
resignation, then the retiring Agent shall select a successor Agent provided
such successor is a Lender hereunder or a commercial bank organized under the
laws of the United States of America or of any State thereof and has a combined
capital and surplus of at least $400,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations as Agent, as appropriate, under this Credit
Agreement and the other Credit Documents and the provisions of this Section
11.9 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Credit Agreement.
SECTION 12
MISCELLANEOUS
12.1 Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (i) when delivered, (ii) when transmitted via telecopy (or other
facsimile device) to the number set out below, (iii) the Business Day following
the day on which the same has been delivered prepaid to a reputable national
overnight air courier service, or (iv) the third Business Day following the day
on which the same is sent by certified or registered mail, postage prepaid, in
each case to the respective parties at the address or telecopy numbers set
forth on Schedule 12.1, or at such other address as such party may specify by
written notice to the other parties hereto.
12.2 Right of Set-Off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default and the commencement of
remedies described in Section 10.2 hereof, each Lender is authorized at any
time and from time to time, without presentment, demand, protest or other
notice of any kind (all of which rights being hereby expressly waived), to
set-off and to appropriate and apply any and all deposits (general or special)
and any other indebtedness at any time held or owing by such Lender (including,
without limitation branches, agencies or Affiliates of such Lender wherever
located) to or for the credit or the account of the Borrower or any other
Credit Party against obligations and liabilities of the Borrower or any other
Credit Party to the Lenders hereunder, under the Notes, the other Credit
Documents or otherwise, irrespective of whether the Agent or the Lenders shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set-off
shall be deemed to have been made immediately upon the occurrence of an Event
of Default even though such charge is made or entered on the books of such
Lender subsequent thereto. The Credit Parties hereby agree that any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 12.3(c) may exercise all rights of set-off with respect to its
participation interest as fully as if such Person were a Lender hereunder.
12.3 Benefit of Agreement.
(a) Generally. This Credit Agreement 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
Borrower may not assign and transfer any of its interests without
prior written consent of the Lenders; and provided further that the
rights of each Lender to transfer, assign or grant participations in
its rights and/or obligations hereunder shall be limited as set forth
in this Section 12.3. Notwithstanding the above, nothing herein shall
72
79
prevent or prohibit any Lender from (i) pledging its Loans hereunder
to a Federal Reserve Bank in support of borrowings made by such Lender
from such Federal Reserve Bank, or (ii) granting assignments or
participation in such Lender's Loans and/or Commitments hereunder to
its parent company and/or to any Affiliate of such Lender.
(b) Assignments. Each Lender may, with the prior written
consent of the Borrower, each Issuing Lender (subject to the
limitations set forth below) and the Agent (provided that no consent
shall be required during the existence and continuation of an Event of
Default), which consent shall not be unreasonably withheld or delayed
(it being understood that the Borrower may refuse to consent to an
assignment to a potential competitor of the Borrower), assign all or a
portion of its rights and obligations hereunder pursuant to an
assignment agreement substantially in the form of Exhibit 12.3 to one
or more Eligible Assignees; provided that (i) any such assignment
shall be in a minimum aggregate amount of $5,000,000 of the
Commitments and in integral multiples of $1,000,000 (or the remaining
amount of Commitments held by such Lender) above such amount and (ii)
each such assignment shall be of a constant, not varying, percentage
of all of the assigning Lender's rights and obligations under the
Commitment being assigned. Any assignment hereunder shall be
effective only upon satisfaction of the conditions set forth above,
recordation of such assignment in the Register (as defined in (d)
below) and delivery to the Agent of a duly executed assignment
agreement together with a transfer fee of $3,500 payable to the Agent
for its own account. The consent of an Issuing Lender hereunder shall
only be required in connection with an assignment of all or a portion
of the Revolving Committed Amount or the Stand Alone LOC Committed
Amount, as applicable, and each Issuing Lender hereby agrees it will
consent to any assignee that is a commercial bank that (A) is rated
B/C or better by the ▇▇▇▇▇▇▇▇ Bankwatch and (B) has assets in excess
of $1,000,000,000. Upon the effectiveness of any such assignment, the
assignee shall become a "Lender" for all purposes of this Credit
Agreement and the other Credit Documents and, to the extent of such
assignment, the assigning Lender shall be relieved of its obligations
hereunder to the extent of the Loans and Commitment components being
assigned. Along such lines the Borrower agrees that upon notice of
any such assignment and surrender of the appropriate Note or Notes, it
will promptly provide to the assigning Lender and to the assignee
separate promissory notes in the amount of their respective interests
substantially in the form of the original Note or Notes (but with
notation thereon that it is given in substitution for and replacement
of the original Note or Notes or any replacement notes thereof).
(c) Participations. Each Lender may sell, transfer,
grant or assign participations in all or any part of such Lender's
interests and obligations hereunder; provided that (i) such selling
Lender shall remain a "Lender" for all purposes under this Credit
Agreement (such selling Lender's obligations under the Credit
Documents remaining unchanged) and the participant shall not
constitute a Lender hereunder, (ii) no such participant shall have, or
be granted, rights to approve any amendment or waiver relating to this
Credit Agreement or the other Credit Documents except to the extent
any such amendment or waiver would (A) reduce the principal of or rate
of interest on or fees in respect of any Loans in which the
participant is participating, (B) postpone the date fixed for any
payment of principal (including extension of the Termination Date),
interest or fees in which the participant is participating, or (C)
release all or substantially all of the collateral or guaranties
(except as expressly provided in the Credit Documents) supporting any
of the Loans or Commitments in which the participant is participating,
(iii) sub-participations by the participant (except to an Affiliate,
parent company or Affiliate of a parent company of the participant)
shall be prohibited and (iv) any such participations
73
80
shall be in a minimum aggregate amount of $2,000,000 of the
Commitments and in integral multiples of $500,000 in excess thereof.
In the case of any such participation, the participant shall not have
any rights under this Credit Agreement or the other Credit Documents
(the participant's rights against the selling Lender in respect of
such participation to be those set forth in the participation
agreement with such Lender creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as if
such Lender had not sold such participation; provided, however, that
such participant shall be entitled to receive additional amounts under
Section 4.6 and 12.2 to the same extent that the Lender from which
such participant acquired its participation would be entitled to the
benefit of such cost protection provisions.
(d) Registration. The Agent, acting for this purpose
solely on behalf of the Borrower, shall maintain a register (the
"Register") for the recordation of the names and addresses of the
Lenders and the principal amount of the Loans owing to each Lender
from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Agent and the
Lenders shall treat each Person whose name is recorded in the Register
as the owner of a Loan or other obligation hereunder for all purposes
of this Agreement and the other Credit Documents, notwithstanding
notice to the contrary. Any assignment of any Loan or other
obligation hereunder shall be effective only upon appropriate entries
with respect thereto being made in the Register. The Register shall
be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
12.4 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower or any Credit Party and the Agent or any Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies provided herein are
cumulative and not exclusive of any rights or remedies which the Agent or any
Lender would otherwise have. No notice to or demand on the Borrower in any
case shall entitle the Borrower or any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of the Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
12.5 Payment of Expenses; Indemnification. The Credit Parties
agree to: (i) pay all reasonable out-of-pocket costs and expenses of the Agent
and the Issuing Lenders in connection with the negotiation, preparation,
execution and delivery and administration of this Credit Agreement and the
other Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and expenses of ▇▇▇▇▇ & ▇▇▇
▇▇▇▇▇, special counsel to the Agent, the fees and expenses of counsel in
connection with collateral or foreign issues and the fees and expenses of
counsel to the Issuing Lenders in connection with the amendments to the
Existing Letters of Credit), and any amendment, waiver or consent relating
hereto and thereto including, but not limited to, any amendments, waivers or
consents resulting from or related to any renegotiation or restructure relating
to the performance by the Borrower under this Credit Agreement and of the Agent
and the Lenders (during the existence of an Event of Default) in connection
with any work-out situation or enforcement of the Credit Documents and the
documents and instruments referred to therein and the protection of rights
thereunder (including, without limitation, in connection with any such
work-out, enforcement or protection, the reasonable fees and disbursements of
counsel for the Agent and each of the Lenders) and (ii) indemnify each Lender,
its officers, directors, employees, representatives and agents from and hold
each of them harmless against any and all losses, liabilities, claims, damages
or expenses
74
81
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other proceeding
(whether or not any Lender is a party thereto) related to (A) the entering into
and/or performance of any Credit Document or the use of proceeds of any Loans
(including other extensions of credit) hereunder or the consummation of any
other transactions contemplated in any Credit Document, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of gross negligence or willful misconduct on the part
of the Person to be indemnified) (B) any Environmental Claim and (C) any claims
for Taxes and Non-Excluded Taxes.
12.6 Amendments, Waivers and Consents. Neither this Credit
Agreement nor any other Credit Document nor any of the terms hereof or thereof
may be amended, changed, waived, discharged or terminated unless such
amendment, change, waiver, discharge or termination is in writing signed by the
Required Lenders; provided that no such amendment, change, waiver, discharge or
termination shall, without the consent of each Lender, (a) extend the scheduled
maturities (including the final maturity) or any Principal Amortization
Payments of any Loan, or any portion thereof, or reduce the rate or extend the
time of payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) thereon or fees
hereunder or reduce the principal amount thereof, or (other than as
contemplated pursuant to Section 9.1(f) hereof) increase the Commitments of the
Lenders or any individual Lender over the amount thereof in effect (it being
understood and agreed that a waiver of any Default or Event of Default shall
not constitute a change in the terms of any Commitment of any Lender), (b)
release all or substantially all of the Collateral securing the Credit Party
Obligations hereunder, (c) release the Borrower or substantially all of the
other Credit Parties from its obligations under the Credit Documents, (d)
amend, modify or waive any provision of this Section or Section 3.6, 3.8, 3.9,
4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 6.2, 10.1(a), 12.2, 12.3 or 12.5 hereof, (e)
reduce any percentage specified in, or otherwise modify, the definition of
Required Lenders, or (f) allow the assignment or transfer by the Borrower (or
another Credit Party) of any of its rights and obligations under (or in respect
of) the Credit Documents except as permitted by Section 9.4 hereof. No
amendment, change, waiver, discharge or termination shall, without the consent
of Lenders holding in the aggregate at least 51% of the outstanding Tranche A
Term Loans, extend the time for, or the amount or the manner of application of
proceeds of, any mandatory prepayment required by Section 3.2(b)(ii), (iii) or
(iv). No provision of Section 11 may be amended without the consent of the
Agent.
12.7 Counterparts. This Credit Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart.
12.8 Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning
or construction of any provision of this Credit Agreement.
12.9 Defaulting Lender. Each Lender understands and agrees that if
such Lender is a Defaulting Lender then it shall not be entitled to vote on any
matter requiring the consent of the Required Lenders or to object to any matter
requiring the consent of all the Lenders; provided, however, that all other
benefits and obligations under the Loan Documents shall apply to such
Defaulting Lender.
75
82
12.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties made
herein shall survive the execution and delivery of this Credit Agreement, the
making of the Loans, and the repayment of the Loans and other obligations and
the termination of the Commitments hereunder.
12.11 Governing Law; Venue.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. Any legal action or proceeding with
respect to this Agreement or any other Credit Document may be brought
in the courts of the State of North Carolina, or of the United States
for the Western District of North Carolina, and, by execution and
delivery of this Credit Agreement, each Credit Party hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of such courts. Each
Credit Party further irrevocably consents to the service of process
out 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 it at the address for notices pursuant to
Section 12.1, such service to become effective 30 days after such
mailing. Nothing herein shall affect the right of a Lender to serve
process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against a Credit Party in any
other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Agreement or any other Credit Document brought in
the courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
12.12 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OF THE OTHER
CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.13 Time. All references to time herein shall be references to
Eastern Standard Time or Eastern Daylight time, as the case may be, unless
specified otherwise.
12.14 Severability. If any provision of any of the Credit Documents is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
12.15 Binding Effect; Termination of Original Credit Agreement; Release
of Foreign Subsidiary Guarantors and Collateral. This Credit Agreement shall
become effective at such time, on or after the Closing Date, that the
conditions precedent set forth in Section 6.1 have been satisfied and when it
shall have been executed by each of the Credit Parties and the Agent,
76
83
and the Agent shall have received copies hereof (telefaxed or otherwise) which,
when taken together, bear the signatures of each Lender (including the Issuing
Lender), and thereafter this Credit Agreement shall be binding upon and inure
to the benefit of each Credit Party, each Lender (including the Issuing Lender)
and the Agent, together with their respective successors and assigns. The
Credit Parties and the Lenders (including the Issuing Lender) party to the
Original Credit Agreement each hereby agrees that, at such time as this Credit
Agreement shall have become effective pursuant to the terms of the immediately
preceding sentence, (a) the Original Credit Agreement automatically shall be
deemed amended and restated in its entirety by this Credit Agreement, (b) the
Commitments under the Original Credit Agreement (as defined therein)
automatically shall be terminated and the lenders party to the original Credit
Agreement shall no longer have any obligations thereunder, (c) all of the
promissory notes executed by the Borrower in connection with the Original
Credit Agreement automatically shall be canceled, and the Lenders agree to
promptly return such notes to the Borrower, (d) Ivex Corporation, Kama Europe
Limited, Ivex Holding, Ltd., M&R Plastics Inc., M&R Plastics Canada Inc. and
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, Inc. automatically shall be released as Guarantors under the
Original Credit Agreement, and (e) the Liens on the personal property and real
estate owned by Ivex Corporation in Canada shall automatically be released.
The Lenders authorize the Agent to execute such releases as may be necessary to
give effect to this Section 12.15.
12.16 Entirety. This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
[Remainder of page intentionally left blank]
84
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
IPC, INC.
a Delaware corporation
By:____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Treasurer
78
85
GUARANTORS: IVEX PACKAGING CORPORATION
a Delaware corporation
IVEX PAPER MILL CORPORATION
a Delaware corporation
IPMC HOLDING CORPORATION
a Delaware corporation
IPMC, INC.
a Delaware corporation
VALLEY EXPRESS LINES, INC.
a Delaware corporation
KAMA OF ILLINOIS CORPORATION
a Delaware corporation
PACKAGING PRODUCTS, INC.
a Delaware corporation
CFI INDUSTRIES, INC.
a Delaware corporation
CFI RECYCLING, INC.
a Delaware corporation
PLASTOFILM INDUSTRIES, INC.
a Delaware corporation
TRIO PRODUCTS, INC.
a Delaware corporation
By:____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President and Treasurer
of each of the above named Guarantors
86
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By:__________________________________
Name:________________________________
Title:_______________________________
87
BANKERS TRUST COMPANY
By:__________________________________
Name:________________________________
Title:_______________________________
88
GENERAL ELECTRIC CAPITAL COMME
FINANCE
By:__________________________________
Name:________________________________
Title:_______________________________
89
SOCIETE GENERALE, SOUTHWEST AGENCY
By:__________________________________
Name:________________________________
Title:_______________________________
90
BANQUE PARIBAS
By:__________________________________
Name:________________________________
Title:_______________________________
By:__________________________________
Name:________________________________
Title:_______________________________
91
ABN AMRO BANK N.A.
By:__________________________________
Name:________________________________
Title:_______________________________
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
By:__________________________________
Name:________________________________
Title:_______________________________
93
FIRST BANK NATIONAL ASSOCIATION
By:__________________________________
Name:________________________________
Title:_______________________________
94
IMPERIAL BANK
By:__________________________________
Name:________________________________
Title:_______________________________
95
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE FUND, INC.
By:__________________________________
Name:________________________________
Title:_______________________________
96
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By:__________________________________
Name:________________________________
Title:_______________________________
97
SENIOR DEBT PORTFOLIO
By: Boston Management and Research, as
Investment Advisor
By:__________________________________
Name:________________________________
Title:_______________________________