EXHIBIT 10.23
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SECOND LIEN CREDIT AGREEMENT
DATED AS OF MARCH 22, 2005
BY AND AMONG
ATLANTIS PLASTIC FILMS, INC.
ATLANTIS MOLDED PLASTICS, INC.
ATLANTIS FILMS, INC.,
RIGAL PLASTICS, INC.,
ATLANTIS PLASTICS INJECTION MOLDING, INC.,
▇▇▇▇▇▇ PLASTICS, INC.
AND
EXTRUSION MASTERS, INC.
AS BORROWERS
AND
THE OTHER PERSONS PARTY HERETO THAT
ARE DESIGNATED AS CREDIT PARTIES
AND
THE BANK OF NEW YORK,
AS ADMINISTRATIVE AGENT
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
AS LENDERS
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TABLE OF CONTENTS
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SECTION 1 AMOUNTS AND TERMS OF TERM LOAN........................................................................ 2
Section 1.1 Term Loan.................................................................................. 2
Section 1.2 Interest and Applicable Margins............................................................ 2
Section 1.3 Fees....................................................................................... 4
Section 1.4 Payments................................................................................... 5
Section 1.5 Prepayments................................................................................ 6
Section 1.6 Maturity................................................................................... 7
Section 1.7 Loan Accounts.............................................................................. 7
Section 1.8 Yield Protection; Illegality............................................................... 7
Section 1.9 Taxes...................................................................................... 8
Section 1.10 Borrower Representative.................................................................... 10
SECTION 2 AFFIRMATIVE COVENANTS................................................................................. 10
Section 2.1 Compliance With Laws and Contractual Obligations........................................... 10
Section 2.2 Maintenance of Properties; Insurance....................................................... 11
Section 2.3 Inspection; Lender Meeting................................................................. 12
Section 2.4 Organizational Existence................................................................... 12
Section 2.5 Environmental Matters...................................................................... 12
Section 2.6 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases...... 13
Section 2.7 Further Assurances......................................................................... 13
Section 2.8 Payment of Taxes........................................................................... 14
SECTION 3 NEGATIVE COVENANTS.................................................................................... 14
Section 3.1 Indebtedness............................................................................... 14
Section 3.2 Liens and Related Matters.................................................................. 15
Section 3.3 Investments................................................................................ 15
Section 3.4 Contingent Obligations..................................................................... 16
Section 3.5 Restricted Payments........................................................................ 17
Section 3.6 Restriction on Fundamental Changes......................................................... 18
Section 3.7 Disposal of Assets or Subsidiary Stock..................................................... 18
Section 3.8 Transactions with Affiliates............................................................... 19
Section 3.9 Conduct of Business........................................................................ 19
Section 3.10 Fiscal Year................................................................................ 19
Section 3.11 Press Release; Public Offering Materials................................................... 19
Section 3.12 Subsidiaries............................................................................... 20
Section 3.13 Bank Accounts.............................................................................. 20
Section 3.14 Hazardous Materials........................................................................ 20
Section 3.15 ERISA...................................................................................... 20
Section 3.16 Sale-Leasebacks............................................................................ ▇▇
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▇▇▇▇▇▇▇ ▇.▇▇ ▇▇▇▇▇▇▇ to Material Contracts.............................................................. 20
Section 3.18 Prepayments of Other Indebtedness.......................................................... 21
SECTION 4 FINANCIAL COVENANTS/REPORTING......................................................................... 21
Section 4.1 Lease Limits............................................................................... 21
Section 4.2 Minimum EBITDA............................................................................. 21
Section 4.3 Minimum Fixed Charge Coverage Ratio........................................................ 21
Section 4.4 Maximum Leverage Ratio..................................................................... 22
Section 4.5 Financial Statements and Other Reports..................................................... 23
Section 4.6 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement......... 26
SECTION 5 REPRESENTATIONS AND WARRANTIES........................................................................ 26
Section 5.1 Disclosure................................................................................. 27
Section 5.2 No Material Adverse Effect................................................................. 27
Section 5.3 No Conflict................................................................................ 27
Section 5.4 Organization, Powers, Capitalization and Good Standing..................................... 27
Section 5.5 Financial Statements and Projections....................................................... 28
Section 5.6 Intellectual Property...................................................................... 29
Section 5.7 Investigations, Audits, Etc................................................................ 29
Section 5.8 Employee Matters........................................................................... 29
Section 5.9 Solvency................................................................................... 29
Section 5.10 Litigation; Adverse Facts.................................................................. 30
Section 5.11 Use of Proceeds; Margin Regulations........................................................ 30
Section 5.12 Ownership of Property; Liens............................................................... 30
Section 5.13 Environmental Matters...................................................................... 31
Section 5.14 ERISA...................................................................................... 32
Section 5.15 Brokers.................................................................................... 33
Section 5.16 Deposit and Disbursement Accounts.......................................................... 33
Section 5.17 Agreements and Other Documents............................................................. 33
Section 5.18 Insurance.................................................................................. 33
Section 5.19 Taxes and Tax Returns...................................................................... 33
Section 5.20 Compliance with Laws....................................................................... 34
SECTION 6 DEFAULT, RIGHTS AND REMEDIES.......................................................................... 34
Section 6.1 Event of Default........................................................................... 34
Section 6.2 Acceleration and other Remedies............................................................ 37
Section 6.3 Performance by Agent....................................................................... 37
Section 6.4 Application of Proceeds.................................................................... 37
SECTION 7 CONDITIONS TO LOAN.................................................................................... 38
SECTION 8 ASSIGNMENT AND PARTICIPATION.......................................................................... 38
Section 8.1 Assignment and Participations.............................................................. 38
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Section 8.2 Agent...................................................................................... 41
Section 8.3 Set Off and Sharing of Payments............................................................ 47
Section 8.4 Disbursements of Payment................................................................... 48
SECTION 9 MISCELLANEOUS......................................................................................... 49
Section 9.1 Indemnities................................................................................ 49
Section 9.2 Amendments and Waivers..................................................................... 50
Section 9.3 Notices.................................................................................... 51
Section 9.4 Failure or Indulgence Not Waiver; Remedies Cumulative...................................... 52
Section 9.5 Marshaling; Payments Set Aside............................................................. 52
Section 9.6 Severability............................................................................... 52
Section 9.7 Lenders' Obligations Several; Independent Nature of Lenders' Rights........................ 53
Section 9.8 Headings................................................................................... 53
Section 9.9 Applicable Law............................................................................. 53
Section 9.10 Successors and Assigns..................................................................... 53
Section 9.11 No Fiduciary Relationship; Limited Liability............................................... 53
Section 9.12 Construction............................................................................... 54
Section 9.13 Confidentiality............................................................................ 54
Section 9.14 CONSENT TO JURISDICTION.................................................................... 54
Section 9.15 WAIVER OF JURY TRIAL....................................................................... 55
Section 9.16 Survival of Warranties and Certain Agreements.............................................. 56
Section 9.17 Entire Agreement........................................................................... 56
Section 9.18 Counterparts; Effectiveness................................................................ 56
Section 9.19 Replacement of Lenders..................................................................... 56
Section 9.20 Delivery of Termination Statements and Mortgage Releases................................... 57
Section 9.21 Subordination of Intercompany Indebtedness................................................. 58
SECTION 10 JOINT AND SEVERAL LIABILITY.......................................................................... 58
Section 10.1 Joint and Several Liability................................................................ 58
Section 10.2 Waivers by Borrowers....................................................................... 59
Section 10.3 Benefit.................................................................................... 59
Section 10.4 Waiver of Subrogation, Etc. ............................................................... 59
Section 10.5 Election of Remedies....................................................................... 59
Section 10.6 Limitation................................................................................. 60
Section 10.7 Contribution with Respect to Obligations................................................... 60
Section 10.8 Liability Cumulative....................................................................... 61
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INDEX OF APPENDICES
Annexes
Annex A - Definitions
Annex B - Pro Rata Shares and Term Loan Commitment Amounts
Annex C - Closing Checklist
Annex D - Pro Forma
Exhibits
Exhibit 1.1 - Term Notes
Exhibit 1.2 - Notice of Continuation/Conversion
Exhibit 4.5(n) - Compliance and Excess Cash Flow Certificate
Exhibit 8.1 - Assignment Agreement
Schedules
Schedule 3.2 - Liens
Schedule 3.4 - Contingent Obligations
Schedule 3.8 - Affiliate Transactions
Schedule 3.9 - Business Description
Schedule 5.4(a) - Jurisdictions of Organization and Qualifications
Schedule 5.4(b) - Capitalization
Schedule 5.6 - Intellectual Property
Schedule 5.7 - Investigations and Audits
Schedule 5.8 - Employee Matters
Schedule 5.10 - Litigation
Schedule 5.11 Use of Proceeds
Schedule 5.12 - Real Estate
Schedule 5.13 - Environmental Matters
Schedule 5.14 - ERISA
Schedule 5.16 - Deposit and Disbursement Accounts
Schedule 5.17 - Agreements and Other Documents
Schedule 5.18 Insurance
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SECOND LIEN CREDIT AGREEMENT
This SECOND LIEN CREDIT AGREEMENT is dated as of March 22, 2005 and
entered into by and among ATLANTIS PLASTIC FILMS, INC., a Delaware corporation
("Atlantis Plastic Films"), ATLANTIS MOLDED PLASTICS, INC., a Florida
corporation ("Atlantis Molded Plastics"), ATLANTIS FILMS, INC., a Delaware
corporation ("Atlantis Films"), RIGAL PLASTICS, INC., a Florida corporation
("Rigal Plastics"), ATLANTIS PLASTICS INJECTION MOLDING, INC., a Kentucky
corporation ("Injection Molding"), ▇▇▇▇▇▇ PLASTICS, INC., a Delaware corporation
("▇▇▇▇▇▇ Plastics"), and EXTRUSION MASTERS, INC., an Indiana corporation
("Extrusion Masters" and together with Atlantis Plastic Films, Atlantis Molded
Plastics, Atlantis Films, Rigal Plastics, Injection Molding and ▇▇▇▇▇▇ Plastics,
collectively, "Borrowers" and, individually, a "Borrower"), the other persons
designated as "Credit Parties" on the signature pages hereof, the financial
institutions who are or hereafter become parties to this Agreement as Lenders,
and THE BANK OF NEW YORK, as Administrative Agent.
RECITALS:
WHEREAS, Borrowers desire that Lenders extend a term credit facility
to Borrowers (i) to fund the repayment of certain
indebtedness of Borrowers, (ii) to fund a dividend to the shareholders of
Holdings (as hereinafter defined), (iii) to fund a payment for the cancellation
of options of Holdings held by officers of the Borrowers, the aggregate amount
of which dividend and cancellation payment will not exceed $106,300,000 (the
"Permitted Dividend/Option Cancellation") and (iv) to pay related fees and
expenses; and
WHEREAS, Borrowers desire to secure all of their Obligations (as
hereinafter defined) under the Loan Documents (as hereinafter defined) by
granting to Agent, for the benefit of Agent and Lenders, a second priority
security interest in and lien upon substantially all of their personal and real
property; and
WHEREAS, Atlantis Plastics, Inc., a Delaware corporation
("Holdings"), is willing to guaranty all of the Obligations, to secure all of
the Obligations under the Loan Documents by granting to Agent, for the benefit
of Agent and Lenders, a second priority security interest in and lien upon
substantially all of its personal and real property, and to pledge (on a second
priority basis) to Agent, for the benefit of Agent and Lenders, all of the Stock
of Borrowers to secure the Obligations; and
WHEREAS, all capitalized terms herein shall have the meanings
ascribed thereto in Annex A hereto which is incorporated herein by reference.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrowers, the other Credit Parties,
Lenders and Agent agree as follows:
SECTION 1
AMOUNTS AND TERMS OF TERM LOAN
Section 1.1 Term Loan.
Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrowers and the other
Credit Parties contained herein, each Lender agrees, severally and not jointly,
to lend to Borrowers in one draw, on the Closing Date, its pro rata share (based
upon each Lender's respective Term Loan Commitment) of a term loan (the "Term
Loan") in an aggregate principal amount equal to $75,000,000. Borrowers shall
repay the Term Loan in its entirety on March 22, 2012.
The Term Loan shall be evidenced by promissory notes substantially
in the form of Exhibit 1.1 (each a "Term Note" and, collectively, the "Term
Notes"), and, except as provided in Section 1.7, the Borrowers shall jointly
execute and deliver a Term Note to each Lender in the aggregate principal amount
of such Lender's respective Term Loan Commitment. Each Term Note shall represent
the obligation of Borrowers to pay the amount of the applicable Lender's Term
Loan, together with interest thereon.
The aggregate principal amount of the Term Loan shall be the primary
obligation of each Borrower.
Section 1.2 Interest and Applicable Margins.
(a) Borrowers shall pay interest on the Term Loan to Agent, for the
ratable benefit of Lenders, in arrears on each applicable Interest Payment Date,
at the following rates: (i) with respect to such portion of the Term Loan
designated as an Index Rate Loan, the Index Rate plus the Applicable Term Loan
Index Margin per annum or, (ii) with respect to such portion of the Term Loan
designated as a LIBOR Loan, the applicable LIBOR Rate plus the Applicable Term
Loan LIBOR Margin per annum. The Applicable Margins are as follows:
Applicable Term Loan Index Margin 5.25%
Applicable Term Loan LIBOR Margin 7.25%
(b) If any payment on the Term Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of "LIBOR
Period") and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
(c) All computations of interest shall be made by Agent on the basis
of a 360-day year for the actual number of days occurring in the period for
which interest is payable. The Index Rate is a floating rate determined for each
day. Each determination by Agent of an interest rate hereunder shall be
presumptively correct, absent manifest error.
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(d) So long as an Event of Default has occurred and is continuing
under Section 6.1(a), (f) or (g) and without notice of any kind, or so long as
any other Event of Default has occurred and is continuing and at the election of
Agent (or upon the written request of Requisite Lenders) confirmed by written
notice from Agent to Borrower Representative, the interest rates applicable to
the Term Loan shall be increased by two percentage points (2%) per annum above
the rates of interest otherwise applicable hereunder ("Default Rate"), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest at the Default Rate shall accrue from the initial
date of such Event of Default until that Event of Default is cured or waived and
shall be payable upon demand, but in any event, shall be payable on the next
regularly scheduled payment date set forth herein for such Obligation.
(e) At any time after the tenth (10th) Business Day after the
Closing Date, Borrower Representative shall have the option to (i) convert at
any time all or any part of the outstanding Term Loan from Index Rate Loans to
LIBOR Loans, (ii) convert any LIBOR Loan to an Index Rate Loan, subject to
payment of the LIBOR Breakage Fee in accordance with Section 1.3(c) if such
conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iii) continue all or any portion of the Term Loan as a LIBOR Loan
upon the expiration of the applicable LIBOR Period and the succeeding LIBOR
Period of that continued portion of the Term Loan shall commence on the first
day after the last day of the LIBOR Period of the portion of the Term Loan to be
continued. Any portion of the Term Loan or group of portions of the Term Loan
having the same proposed LIBOR Period to be made or continued as, or converted
into, a LIBOR Loan must be in a minimum amount of $1,000,000 and integral
multiples of $250,000 in excess of such amount. Any such election must be made
by noon (New York time) on the 3rd Business Day prior to (1) the end of each
LIBOR Period with respect to any LIBOR Loans to be continued as such, or (2) the
date on which Borrower Representative wishes to convert any Index Rate Loan to a
LIBOR Loan for a LIBOR Period designated by Borrower Representative in such
election. If no election is received with respect to a LIBOR Loan by noon (New
York time) on the 3rd Business Day prior to the end of the LIBOR Period with
respect thereto, that LIBOR Loan shall be converted to an Index Rate Loan at the
end of its LIBOR Period. Borrower Representative must make such election by
notice to Agent in writing, by fax or overnight courier. In the case of any
conversion or continuation, such election must be made pursuant to a written
request in the form attached as Exhibit 1.2 ("Notice of
Continuation/Conversion"). No portion of the Term Loan shall be made, converted
into or continued as a LIBOR Loan, if an Event of Default has occurred and is
continuing and Agent or Requisite Lenders have determined not to make or
continue any portion of the Term Loan as a LIBOR Loan as a result thereof.
(f) Notwithstanding anything to the contrary set forth in this
Section 1.2, if a court of competent jurisdiction determines in a final
non-appealable order that the rate of interest payable hereunder exceeds the
highest rate of interest permissible under law (the "Maximum Lawful Rate"), then
so long as the Maximum Lawful Rate would be so exceeded, the rate of interest
payable hereunder shall be equal to the Maximum Lawful Rate; provided, however,
that if at any time thereafter the rate of interest payable hereunder is less
than the
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Maximum Lawful Rate, Borrowers shall continue to pay interest hereunder at the
Maximum Lawful Rate until such time as the total interest received by Agent, on
behalf of Lenders, is equal to the total interest that would have been received
had the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, interest hereunder shall be paid at the
rate(s) of interest and in the manner provided in Sections 1.2(a) through (e),
unless and until the rate of interest again exceeds the Maximum Lawful Rate, and
at that time this paragraph shall again apply. In no event shall the total
interest received by any Lender pursuant to the terms hereof exceed the amount
that such Lender could lawfully have received had the interest due hereunder
been calculated for the full term hereof at the Maximum Lawful Rate. If the
Maximum Lawful Rate is calculated pursuant to this paragraph, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate divided by
the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.2(f), a court of competent
jurisdiction shall determine by a final, non-appealable order that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Agent shall,
to the extent permitted by applicable law, promptly apply such excess as
specified in Section 1.5(e) and thereafter shall promptly refund any excess to
Borrowers or as such court of competent jurisdiction may otherwise order.
Section 1.3 Fees.
(a) [INTENTIONALLY OMITTED.]
(b) LIBOR Breakage Fee. Upon (i) any default by any Borrower in
making any borrowing of, conversion into or continuation of any LIBOR Loan
following Borrower Representative's delivery to Agent of any LIBOR Loan request
in respect thereof or (ii) any payment of a LIBOR Loan, or conversion of a LIBOR
Loan into an Index Rate Loan pursuant to Section 1.8, in each instance, on any
day that is not the last day of the LIBOR Period applicable thereto (regardless
of the source of such prepayment or reason for such conversion and whether
voluntary, by acceleration or otherwise), Borrowers shall pay Agent, for the
ratable benefit of all Lenders that funded or were prepared to fund any such
LIBOR Loan, the LIBOR Breakage Fee.
(c) Expenses and Attorneys' Fees. Borrowers agree to promptly pay
all reasonable fees, charges, costs and expenses (including reasonable
attorneys' fees and expenses) and, in instances where outside counsel is not
used, the reasonable allocated cost of internal legal staff incurred by Agent in
connection with any matters contemplated by or arising out of the Loan
Documents, in connection with the examination, review, due diligence
investigation, documentation, negotiation, closing and syndication of the
transactions contemplated herein and in connection with the continued
administration of the Loan Documents including any amendments, modifications,
consents and waivers. Borrowers agree to promptly pay reasonable documentation
charges assessed by Agent for amendments, waivers, consents and any of the
documentation prepared by Agent's internal legal staff and out-of-pocket fees
and costs paid to third party auditors retained by Agent (or $800 per audit day
plus out-of-pocket expenses for in-house auditors). Borrowers agree to
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promptly pay all fees, charges, costs and expenses (including fees, charges,
costs and expenses of attorneys, auditors (whether internal or external),
appraisers, consultants and advisors and the allocated cost of internal legal
staff) incurred by Agent in connection with any Event of Default, work-out or
action to enforce any Loan Document or to collect any payments due from
Borrowers or any other Credit Party. In addition, in connection with any
work-out or action to enforce any Loan Document or to collect any payments due
from Borrowers or any other Credit Party, Borrowers agree to promptly pay all
fees, charges, costs and expenses incurred by Lenders for one (1) counsel acting
for all Lenders other than Agent. All fees, charges, costs and expenses for
which Borrowers are responsible under this Section 1.3(c) shall be deemed part
of the Obligations when incurred, payable upon demand or in accordance with the
final sentence of Section 1.4 and secured by the Collateral.
(d) Prepayment Fee. In the event that any Borrower voluntarily
prepays the Obligations, in whole or in part, (i) prior to the first anniversary
of the Closing Date, Borrowers shall pay to Agent, for the ratable benefit of
Lenders, a fee equal to two percent (2.0%) of the amount of such prepayment and
(ii) after the first anniversary of the Closing Date but prior to or on the
second anniversary of the Closing Date, Borrowers shall pay to Agent, for the
ratable benefit of Lenders, a fee equal to one percent (1.0%) of the amount of
such prepayment. In the event that Borrowers prepay the Obligations, in whole or
in part, after the second anniversary of the Closing Date, no prepayment fee of
the type described in this clause shall be owed. A prepayment of the Obligation
in connection with a sale of all or substantially all of the stock or assets of
Borrowers will not give rise to an obligation to pay the fee described in this
clause.
Section 1.4 Payments.
All payments by Borrowers of the Obligations shall be without
deduction, defense, setoff or counterclaim and shall be made in same day funds
and delivered to Agent, for the benefit of Agent and Lenders, as applicable, by
wire transfer to the following account or such other place as Agent may from
time to time designate in writing.
_______________________________
_______________________________
_______________________________
_______________________________
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Borrowers shall receive credit for any payment on the day such payment is
received by Agent; provided that any payment received by the Agent after noon
(New York time) shall be deemed to have been paid on the next Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day
that is not a Business Day, the payment may be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the amount of interest and Fees due hereunder.
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Section 1.5 Prepayments.
(a) Voluntary Prepayments of Term Loan. At any time after the
repayment in full of the First Lien Debt and the termination of all commitments
with respect thereto, Borrowers may prepay the Term Loan, in whole or in part,
without premium or penalty, subject to the payment of LIBOR Breakage Fees, if
applicable, and the fee described in Section 1.3(d), if applicable. Prepayments
of the Term Loan shall be applied in accordance with Section 1.5(e) or as
otherwise may be agreed by Requisite Lenders.
(b) Prepayments from Excess Cash Flow. After the repayment in full
of the First Lien Debt and the termination of all commitments with respect
thereto, within one hundred (100) days after the end of each Fiscal Year
commencing with the Fiscal Year ended December 31, 2005, Borrowers shall prepay
the Term Loan in an amount equal to fifty percent (50%) of the Excess Cash Flow
for such Fiscal Year. The calculation shall be based on the audited Financial
Statements for Holdings and its Subsidiaries.
(c) Prepayments from Asset Dispositions. To the extent Borrowers
have received less than $750,000 of Net Proceeds in the aggregate for the
applicable Fiscal Year, Borrowers may retain such Net Proceeds. After the
repayment in full of the First Lien Debt and the termination of all commitments
with respect thereto, to the extent Borrowers have received Net Proceeds in
excess of $750,000 in the aggregate during the applicable Fiscal Year, Borrowers
or their Subsidiaries may reinvest all remaining Net Proceeds of such Asset
Disposition in productive replacement fixed assets of a kind then used or usable
in the business of Borrowers; provided, Borrowers must have contracted to
reinvest such funds within ninety (90) days and must have reinvested such funds
within one hundred eighty (180) days. If Borrowers do not intend to so reinvest
such Net Proceeds or if the applicable period set forth in the immediately
preceding sentence expires without Borrowers having contracted to reinvest or
reinvested such Net Proceeds, as applicable, Borrowers shall prepay the Term
Loan in an amount equal to such remaining Net Proceeds of such Asset
Disposition. The payments shall be applied in accordance with Section 1.5(e).
(d) Prepayments from Issuance of Securities. After the repayment
in full of the First Lien Debt and the termination of all commitments with
respect thereto, immediately upon the receipt by Holdings, any Borrower or any
of their Subsidiaries of the proceeds of the issuance of Stock (other than (1)
proceeds of the issuance of Stock by Holdings received on or before the Closing
Date, (2) proceeds from the issuance of Stock to employees or board members of
Holdings or any Borrower not in excess of $500,000 in any year, and (3) proceeds
of the issuance of Stock to any Borrower or any Subsidiary of any Borrower), all
Borrowers (in the case of an issuance by Holdings) or the issuing Borrower shall
prepay the Term Loan in an amount equal to 100% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs associated
therewith. The payments shall be applied in accordance with Section 1.5(e).
(e) Application of Proceeds. With respect to any prepayments made
by any Borrower pursuant to Sections 1.5(a), 1.5(b), 1.5(c) and 1.5(d), such
prepayments shall be applied first to Index Rate Loans required to be prepaid
before application to LIBOR
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Loans required to be prepaid, in each case, in a manner which minimizes any
resulting LIBOR Breakage Fee.
Section 1.6 Maturity.
All of the Obligations shall become due and payable as otherwise set
forth herein, but, in any event, all remaining Obligations hereunder shall
become due and payable upon termination of this Agreement. Until all Obligations
have been fully paid and satisfied (other than contingent indemnification
obligations to the extent no unsatisfied claim has been asserted), Agent shall
be entitled to retain the security interests in the Collateral granted under the
Collateral Documents and the ability to exercise all rights and remedies
available to them under the Loan Documents and applicable laws.
Section 1.7 Loan Accounts.
Agent shall maintain a loan account (the "Loan Account") on its
books to record: the Term Loan, all payments made by Borrowers, and all other
debits and credits as provided in this Agreement with respect to the Term Loan
or any other Obligations. All entries in the Loan Account shall be made in
accordance with Agent's customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to Agent and Lenders by
Borrowers; provided, that any failure to so record or any error in so recording
shall not limit or otherwise affect any Borrower's duty to pay the Obligations.
At the request of Borrower Representative, to be made not more than once each
month, Agent shall provide to Borrower Representative an accounting of
transactions with respect to the Term Loan setting forth the balance of the Loan
Account as to each Borrower for the immediately preceding month. Unless Borrower
Representative notifies Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within ninety (90) days
after the date thereof, each and every such accounting shall, absent manifest
error, be deemed final, binding and conclusive on Borrowers in all respects as
to all matters reflected therein. Only those items expressly objected to in such
notice shall be deemed to be disputed by Borrowers. Notwithstanding any
provision herein contained to the contrary, any Lender may elect (which election
may be revoked) to dispense with the issuance of a Term Note to that Lender and
may rely on the Loan Account as evidence of the amount of Obligations from time
to time owing to it.
Section 1.8 Yield Protection; Illegality.
(a) Capital Adequacy and Other Adjustments. In the event that any
Lender shall have determined that the adoption after the date hereof of any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from any central bank or
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governmental agency or body having jurisdiction does or shall have the effect of
increasing the amount of capital, reserves or other funds required to be
maintained by such Lender or any corporation controlling such Lender and thereby
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder, then Borrowers shall from time to time
within fifteen (15) days after notice and demand from such Lender (together with
the certificate referred to in the next sentence and with a copy to Agent) pay
to Agent, for the account of such Lender, additional amounts sufficient to
compensate such Lender for such reduction. A certificate as to the amount of
such cost and showing the basis of the computation of such cost submitted by
such Lender to Borrower Representative and Agent shall, absent manifest error,
be presumptively correct.
(b) Increased LIBOR Funding Costs; Illegality. Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law, rule, regulation, treaty or directive (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Term Loan or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to Borrower
Representative through Agent, (i) the obligation of such Lender to agree to make
or to make or to continue to fund or maintain LIBOR Loans shall terminate and
(ii) all LIBOR Loans shall be automatically converted into Index Rate Loans. If,
after the date hereof, the introduction of, change in or interpretation of any
law, rule, regulation, treaty or directive would impose or increase reserve
requirements (other than to the extent Lenders are compensated for the same
pursuant to the definition of LIBOR) or otherwise increase the cost to any
Lender of making or maintaining a LIBOR Loan, then Borrowers shall from time to
time within fifteen (15) days after notice and demand from Agent to Borrower
Representative (together with the certificate referred to in the next sentence)
pay to Agent, for the account of all such affected Lenders, additional amounts
sufficient to compensate such Lenders for such increased cost. A certificate as
to the amount of such cost and showing the basis of the computation of such cost
submitted by Agent on behalf of all such affected Lenders to Borrower
Representative shall, absent manifest error, be presumptively correct.
Section 1.9 Taxes.
(a) No Deductions. Any and all payments or reimbursements made
hereunder (including any payments made pursuant to Section 10) or under the Term
Notes shall be made free and clear of and without deduction for any and all
Charges, taxes, levies, imposts, deductions or withholdings, and all liabilities
with respect thereto of any nature whatsoever imposed by any taxing authority,
excluding such taxes to the extent imposed on Agent's or a Lender's net income
by the jurisdiction in which Agent or such Lender is organized. If any Borrower
shall be required by law to deduct any such amounts from or in respect of any
sum payable hereunder to any Lender or Agent, then the sum payable hereunder
shall be increased as may be necessary so that, after making all required
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deductions, such Lender or Agent receives an amount equal to the sum it would
have received had no such deductions been made.
(b) Changes in Tax Laws. In the event that, subsequent to the
Closing Date, (1) any changes in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (2) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (3) compliance by Agent or any Lender with any request or directive
(whether or not having the force of law) from any Governmental Authority:
(i) does or shall subject Agent or any Lender to any tax of
any kind whatsoever with respect to this Agreement, the other Loan
Documents or the Term Loan made hereunder, or change the basis of taxation
of payments to Agent or such Lender of principal, fees, interest or any
other amount payable hereunder (except for net income taxes, or franchise
taxes imposed in lieu of net income taxes, imposed generally by federal,
state or local taxing authorities with respect to interest or Fees payable
hereunder or changes in the rate of tax on the overall net income of Agent
or such Lender); or
(ii) does or shall impose on Agent or any Lender any other
condition or increased cost in connection with the transactions
contemplated hereby or participations herein;
and the result of any of the foregoing is to increase the cost to Agent or any
such Lender of making or continuing the Term Loan hereunder, as the case may be,
or to reduce any amount receivable hereunder, then, in any such case, Borrowers
shall promptly pay to Agent or such Lender, upon its demand, any additional
amounts necessary to compensate Agent or such Lender, on an after-tax basis, for
such additional cost or reduced amount receivable, as determined by Agent or
such Lender with respect to this Agreement or the other Loan Documents. If Agent
or such Lender becomes entitled to claim any additional amounts pursuant to this
Section 1.9(b), it shall promptly notify Borrower Representative of the event by
reason of which Agent or such Lender has become so entitled. A certificate as to
any additional amounts payable pursuant to the foregoing sentence submitted by
Agent or such Lender to Borrower Representative (with a copy to Agent) shall,
absent manifest error, be presumptively correct.
(c) Foreign Lenders. Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") shall provide to
Borrower Representative and Agent a properly completed and executed IRS Form
W-8BEN or Form W-8ECI or other applicable form, certificate or document
prescribed by the IRS of the United States certifying as to such Foreign
Lender's entitlement to such exemption with respect to payments to be made to
such Foreign Lender under this Agreement and under its Term Note (a "Certificate
of Exemption"). Prior to becoming a Lender under this Agreement and within
fifteen (15) days after a reasonable written request of Borrower Representative
or Agent from time to time thereafter, each Foreign Lender that becomes a Lender
under this
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Agreement shall provide a Certificate of Exemption to Borrower Representative
and Agent. If a Foreign Lender is entitled to an exemption with respect to
payments to be made to such Foreign Lender under this Agreement and does not
provide a Certificate of Exemption to Borrower Representative and Agent within
the time periods set forth in the preceding sentence, Borrowers shall withhold
taxes from payments to such Foreign Lender at the applicable statutory rates and
Borrowers shall not be required to pay any additional amounts as a result of
such withholding, provided that all such withholding shall cease upon delivery
by such Foreign Lender of a Certificate of Exemption to Borrower Representative
and Agent.
Section 1.10 Borrower Representative.
Each Borrower hereby designates Atlantis Plastic Films as its
representative and agent on its behalf for the purposes of issuing any Notice of
Continuation/Conversion, giving instructions with respect to the disbursement of
the proceeds of the Term Loan, selecting interest rate options, giving and
receiving all other notices and consents hereunder or under any of the other
Loan Documents and taking all other actions (including in respect of compliance
with covenants) on behalf of any Borrower or Borrowers under the Loan Documents.
Borrower Representative hereby accepts such appointment. Agent and each Lender
may regard any notice or other communication pursuant to any Loan Document from
Borrower Representative as a notice or communication from all Borrowers. Each
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as it if the same had been made directly by such Borrower.
SECTION 2
AFFIRMATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof and until
the Termination Date:
Section 2.1 Compliance With Laws and Contractual Obligations.
Each Credit Party will (a) comply with and shall cause each of its
Subsidiaries to comply with (i) the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including, without
limitation, laws, rules, regulations and orders relating to taxes, employer and
employee contributions, securities, employee retirement and welfare benefits,
environmental protection matters and employee health and safety) as now in
effect and which may be imposed in the future in all jurisdictions in which any
Credit Party or any of its Subsidiaries is now doing business or may hereafter
be doing business and (ii) the obligations, covenants and conditions contained
in all Contractual Obligations of such Credit Party or any of its Subsidiaries
other than those laws, rules, regulations, orders and provisions of such
Contractual Obligations the noncompliance with which could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect, and (b) maintain or obtain and shall cause each of its Subsidiaries to
maintain or obtain all licenses, qualifications and permits now held or
hereafter required to
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be held by such Credit Party or any of its Subsidiaries, for which the loss,
suspension, revocation or failure to obtain or renew, could reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect. This Section 2.1 shall not preclude any Credit Party or its Subsidiaries
from contesting any taxes or other payments, if they are being diligently
contested in good faith in a manner which stays enforcement thereof and if
appropriate expense provisions have been recorded in conformity with GAAP,
subject to Section 3.2. Each Credit Party represents and warrants that it (i) is
in compliance and each of its Subsidiaries is in compliance with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority and the obligations, covenants and conditions contained
in all Contractual Obligations other than those laws, rules, regulations, orders
and provisions of such Contractual Obligations the noncompliance with which
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, and (ii) maintains and each of its
Subsidiaries maintains all licenses, qualifications and permits referred to
above, except where the failure to do so could not reasonably be expected to
have either individually or in the aggregate a Material Adverse Effect.
Section 2.2 Maintenance of Properties; Insurance.
Each Credit Party will maintain or cause to be maintained in good
repair, working order and condition all material properties used in the business
of such Credit Party and its Subsidiaries and will make or cause to be made all
appropriate repairs, renewals and replacements thereof. Each Credit Party will
maintain or cause to be maintained, with financially sound and reputable
insurers, public liability and property damage insurance with respect to its
business and properties and the business and properties of its Subsidiaries
against loss or damage of the kinds customarily carried or maintained by
corporations of established reputation engaged in similar businesses and in
amounts reasonably acceptable to Agent and will deliver evidence thereof to
Agent. Credit Parties will maintain business interruption insurance providing
coverage for a period of at least six (6) months and in an amount not less than
$15,000,000. Each Credit Party shall cause Agent, pursuant to endorsements
and/or assignments in form and substance reasonably satisfactory to Agent, to be
named as second priority lender's loss payee in the case of casualty insurance,
second priority additional insured in the case of all liability insurance and
second priority assignee in the case of all business interruption insurance, in
each case for the benefit of Agent and Lenders. Each Credit Party represents and
warrants that it and each of its Subsidiaries currently maintains all material
properties as set forth above and maintains all insurance described above. After
the repayment in full of the First Lien Debt and the termination of all
commitments with respect thereto, in the event any Credit Party fails to provide
Agent with evidence of the insurance coverage required by this Agreement, Agent
may, upon prior written notice to Borrowers, purchase insurance at such Credit
Party's expense to protect Agent's interests in the Collateral. This insurance
may, but need not, protect such Credit Party's interests. The coverage purchased
by Agent may not pay any claim made by such Credit Party or any claim that is
made against such Credit Party in connection with the Collateral. Such Credit
Party may later cancel any insurance purchased by Agent, but only after
providing Agent with evidence that such Credit Party has obtained insurance as
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required by this Agreement. If Agent purchases insurance for the Collateral,
such Credit Party will be responsible for the costs of that insurance, including
reasonable interest and other reasonable Charges imposed by Agent in connection
with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. The costs of the insurance may be
added to the Obligations. The costs of the insurance may be more than the cost
of insurance such Credit Party is able to obtain on its own.
Section 2.3 Inspection; Lender Meeting.
So long as an Event of Default has occurred and is continuing, each
Credit Party shall permit any authorized representatives of Agent to visit,
audit and inspect any of the properties of such Credit Party and its
Subsidiaries, including its and their financial and accounting records, and to
make copies and take extracts therefrom, and to discuss its and their affairs,
finances and business with its and their officers and certified public
accountants, at such reasonable times during normal business hours; provided,
Agent shall not conduct more than one collateral audit per year. Representatives
of each Lender will be permitted to accompany representatives of Agent during
each visit, inspection and discussion referred to in the immediately preceding
sentence. Without in any way limiting the foregoing, each Credit Party will
participate and will cause key management personnel of the Credit Parties to
participate in a meeting with Agent and Lenders at least once during each year,
which meeting shall be held at such time and such place as may be reasonably
requested by Agent and reasonably agreed to by Credit Parties.
Section 2.4 Organizational Existence.
Except as otherwise permitted by Section 3.6, each Credit Party will
and will cause its Subsidiaries to at all times preserve and keep in full force
and effect its organizational existence and all rights and franchises material
to its business.
Section 2.5 Environmental Matters.
Each Credit Party shall and shall cause each Person within its
control to (a) conduct its operations and keep and maintain its Real Estate in
compliance with all Environmental Laws and Environmental Permits other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions that are appropriate or necessary to maintain the value and
marketability of the Real Estate or to otherwise comply with Environmental Laws
and Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify Agent
promptly after such Credit Party or any of its Subsidiaries becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at,
in, under, above, to, from or about any Real Estate that is reasonably likely to
result in Environmental Liabilities to a Credit Party or its Subsidiaries in
excess of $100,000; and (d) promptly forward to Agent a copy of any order,
notice, request for information or any communication or report received by such
Credit Party or any of its Subsidiaries in connection with any such violation or
Release or
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any other matter relating to any Environmental Laws or Environmental Permits
that could reasonably be expected to result in Environmental Liabilities in
excess of $100,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
connection with any such violation, Release or other matter. If Agent at any
time has a reasonable basis to believe that there may be a violation of any
Environmental Laws or Environmental Permits by any Credit Party or any Person
under its control or any Environmental Liability arising thereunder, or a
Release of Hazardous Materials on, at, in, under, above, to, from or about any
of its Real Estate, that, in each case, could reasonably be expected to have a
Material Adverse Effect, then each Credit Party and its Subsidiaries shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse Agent for
the reasonable costs of such audits and tests and the same will constitute a
part of the Obligations secured hereunder.
Section 2.6 Landlords' Agreements, Mortgagee Agreements, Bailee
Letters and Real Estate Purchases.
Each Credit Party shall use reasonable efforts to obtain a
landlord's agreement, mortgagee agreement or bailee letter, as applicable, from
the lessor of each leased property, mortgagee of owned property or bailee with
respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall contain a
waiver or subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall otherwise
be reasonably satisfactory in form and substance to Agent. After the Closing
Date, no real property or warehouse space shall be leased by any Credit Party or
its Subsidiary and no Inventory shall be shipped to a processor or converter
under arrangements established after the Closing Date without prior written
notice to Agent or, unless and until a satisfactory landlord agreement or bailee
letter, as appropriate, shall first have been obtained with respect to such
location. Each Credit Party shall and shall cause its Subsidiaries to timely and
fully pay and perform in all material respects their obligations under all
leases and other agreements with respect to each leased location or public
warehouse where any Collateral is or may be located.
Section 2.7 Further Assurances.
(a) Each Credit Party shall, from time to time, execute such
guaranties, financing statements, documents, security agreements and reports as
Agent or Requisite Lenders at any time may reasonably request to evidence,
perfect or otherwise implement the guaranties and security for repayment of the
Obligations contemplated by the Loan Documents.
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(b) In the event any Credit Party acquires an interest in real
property after the Closing Date, such Credit Party shall deliver to Agent a
fully executed second priority mortgage or deed of trust over such real property
in form and substance reasonably satisfactory to Agent and similar in form to
the mortgages and deeds of trust delivered by Credit Parties to Agent prior to
the Closing Date, together with such title insurance policies, surveys,
appraisals, evidence of insurance, legal opinions, environmental assessments and
other documents and certificates as shall be reasonably required by Agent.
(c) Each Credit Party shall (i) cause each Person, upon its
becoming a Subsidiary of such Credit Party (provided that this shall not be
construed to constitute consent by any of the Lenders to any transaction not
expressly permitted by the terms of this Agreement), promptly to guaranty the
Obligations and to grant to Agent, for the benefit of Agent and Lenders, a
second priority security interest in the real, personal and mixed property of
such Person to secure the Obligations and (ii) pledge, or cause to be pledged,
to Agent, for the benefit of Agent and Lenders on a second priority basis, all
of the Stock of such Subsidiary to secure the Obligations. The documentation for
such guaranty, security and pledge shall be substantially similar to the Loan
Documents executed concurrently herewith with such modifications as are
reasonably requested by Agent.
Section 2.8 Payment of Taxes.
Each Credit Party shall, prior to any delinquency thereof, pay and
discharge (or cause to be paid and discharged) all material taxes, assessments
and governmental and other charges or levies imposed upon it or upon its income
or profits, or upon property belonging to it; provided that such Credit Party
shall not be required to pay any such tax, assessment, charge or levy that is
being contested in good faith by appropriate proceedings and for which the
affected Credit Party shall have set aside on its books adequate reserves with
respect thereto in conformance with GAAP.
SECTION 3
NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
Section 3.1 Indebtedness.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries directly or indirectly to create, incur, assume, or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness
(other than pursuant to a Contingent Obligation permitted under Section 3.4)
except:
(a) the Obligations;
(b) intercompany Indebtedness arising from loans made by Borrowers
(i) to each other or (ii) so long as no Event of Default exists, to any other
Credit Party other than Holdings to fund working capital requirements of such
Credit Parties in the ordinary
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course of business; provided, however, that such Indebtedness shall be evidenced
by promissory notes having terms reasonably satisfactory to Agent;
(c) the First Lien Debt;
(d) Indebtedness not to exceed $11,000,000 in the aggregate at any
time outstanding secured by purchase money Liens or incurred with respect to
Capital Leases; and
(e) any other unsecured Indebtedness not to exceed $1,100,000 in
the aggregate at any time outstanding.
Section 3.2 Liens and Related Matters.
(a) No Liens. The Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of such
Credit Party or any such Subsidiary, whether now owned or hereafter acquired, or
any income or profits therefrom, except Permitted Encumbrances (including,
without limitation, those Liens constituting Permitted Encumbrances existing on
the date hereof and renewals and extensions thereof, as set forth on Schedule
3.2).
(b) No Negative Pledges. The Credit Parties shall not and shall
not cause or permit their Subsidiaries to directly or indirectly enter into or
assume any agreement (other than the Loan Documents) prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, other than (i) prohibitions in the First Lien Debt Documents
and (ii) prohibitions of encumbrances on equipment acquired with the
Indebtedness permitted by Section 3.1(d) contained on the documents relating to
such Indebtedness.
(c) No Restrictions on Subsidiary Distributions to Borrowers.
Except as provided herein, the Credit Parties shall not and shall not cause or
permit their Subsidiaries to directly or indirectly create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any such Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary's Stock owned by any Borrower or
any other Subsidiary; (2) pay any Indebtedness owed to any Borrower or any other
Subsidiary; (3) make loans or advances to any Borrower or any other Subsidiary;
or (4) transfer any of its property or assets to any Borrower or any other
Subsidiary.
Section 3.3 Investments.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly make or own any Investment in any Person
except:
(a) Borrowers and their Subsidiaries may make and own Investments
in Cash Equivalents subject to control agreements in favor of Agent; provided
that such Cash Equivalents are not subject to setoff rights;
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(b) Borrowers may make intercompany loans to other Credit Parties
to the extent permitted under Section 3.1;
(c) Borrowers and their Subsidiaries may make loans and advances
to employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $500,000 in the aggregate at any time
outstanding;
(d) Borrowers and their Subsidiaries may make capital
contributions to (i) their wholly-owned domestic Subsidiaries that are Borrowers
and (ii) so long as no Event of Default exists, other Subsidiaries provided the
amount contributed to all of such other Subsidiaries does not exceed $600,000 in
the aggregate; and
(e) notes received in accordance with Section 3.7(b)(iii).
Section 3.4 Contingent Obligations.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly create or become or be liable with
respect to any Contingent Obligation except:
(a) Letter of Credit Obligations;
(b) those resulting from endorsement of negotiable instruments for
collection in the ordinary course of business;
(c) those existing on the Closing Date and described in Schedule
3.4;
(d) those arising under indemnity agreements to title insurers to
cause such title insurers to issue to Agent mortgagee title insurance policies;
(e) those arising with respect to customary indemnification
obligations incurred in connection with Asset Dispositions permitted hereunder;
(f) those incurred in the ordinary course of business with respect
to surety and appeal bonds, performance and return-of-money bonds and other
similar obligations not exceeding at any time outstanding $600,000 in aggregate
liability;
(g) those incurred with respect to Indebtedness permitted by
Section 3.1; provided that any such Contingent Obligation is subordinated to the
Obligations to the same extent as the Indebtedness to which it relates is
subordinated to the Obligations;
(h) those incurred with respect to swap agreements (as such term
is defined in Section 101 of the Bankruptcy Code) and any other agreements or
arrangements designed to provide protection against fluctuations in interest or
currency exchange rates, including, without limitation, Interest Rate Agreements
(as defined in the First Lien Debt Documents), in all such cases entered into in
the ordinary course of business for bona fide hedging
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purposes and not for speculation, provided that all such agreements or
arrangements are subject to written approval by Agent, not to be unreasonably
withheld;
(i) any other Contingent Obligation not expressly permitted by
clauses (a) through (h) above, so long as any such other Contingent Obligations,
in the aggregate at any time outstanding, do not exceed $600,000.
Section 3.5 Restricted Payments.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly declare, order, pay, make or set apart
any sum for any Restricted Payment, except that:
(a) Any Borrower may make payments and distributions to Holdings
that are used by Holdings to pay federal and state income taxes then due and
owing, franchise taxes and other similar licensing expenses incurred in the
ordinary course of business; provided that such Borrower's aggregate
contribution to taxes as a result of the filing of a consolidated or combined
return by Holdings shall not be greater, nor the aggregate receipt of tax
benefits less, than they would have been had such Borrower not filed a
consolidated or combined return with Holdings;
(b) Wholly-owned Subsidiaries of a Borrower may make Restricted
Payments to such Borrower;
(c) Borrowers may pay the base management fee under Section 6.1 of
the Management Agreement, the incentive compensation under Section 6.3 of the
Management Agreement and reasonable out-of-pocket expenses pursuant to the
Management Agreement; provided that the Borrowers may amend, restate or replace
the Management Agreement but only if the amounts permitted to be paid pursuant
to the Management Agreement shall not be increased or accelerated as a result of
any such amendment, restatement or replacement, and provided, further, upon the
election of the Agent, Borrowers may not make any payment of fees, incentive
compensation or other similar amounts (excluding out-of-pocket expenses)
otherwise permitted under this Section 3.5(c) during the existence and
continuance of any Event of Default;
(d) Borrowers may make dividends to Holdings that are promptly
used by Holdings to purchase up to $2,500,000 of its Stock each year (but not
more than $5,000,000 during the term of this Agreement) so long as (i) both
before and after giving effect to each such purchase, no Default or Event of
Default exists, (ii) as of the Fiscal Quarter then most recently ended,
Borrowers are in compliance with Section 4.3 on a pro forma basis calculated as
if such purchase was made during such Fiscal Quarter, (iii) using EBITDA for the
Fiscal Quarter then most recently ended, Borrowers are in compliance with
Section 4.4 on a pro forma basis calculated as if such purchase was made and
assuming that the required "maximum leverage ratio" as of the date of such
purchase was 50 basis points less than the then applicable level set forth in
Section 4.4, and (iv) after giving effect to such purchase, Borrowing
Availability (as defined in the First Lien Debt Documents) is not less than
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$12,500,000 (the foregoing clauses (iii) and (iv) shall only apply with respect
to aggregate dividends of greater than $1,000,000 made for a purchase or group
of related purchases); and
(e) Borrowers may make dividends to Holdings that are used by
Holdings within thirty (30) days after the Closing Date to make the Permitted
Dividend/Option Cancellation.
Section 3.6 Restriction on Fundamental Changes.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly: (a) amend, modify or waive any material
term or provision of its organizational documents, including its articles of
incorporation, certificates of designations pertaining to preferred stock,
by-laws, partnership agreement or operating agreement unless required by law;
(b) enter into any transaction of merger or consolidation except, upon not less
than five (5) Business Days prior written notice to Agent, any wholly-owned
Subsidiary of a Borrower may be merged with or into such Borrower (provided that
such Borrower is the surviving entity) or any other wholly-owned Subsidiary of
such Borrower; (c) liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution) (other than the dissolution of Atlantis Plastics
Foreign Sales, Inc.); or (d) acquire by purchase or otherwise all or any
substantial part of the business or assets of any other Person.
Section 3.7 Disposal of Assets or Subsidiary Stock.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly convey, sell, lease, sublease, transfer
or otherwise dispose of, or grant any Person an option to acquire, in one
transaction or a series of related transactions, any of its property, business
or assets, whether now owned or hereafter acquired, except for (a) sales of
inventory in good faith to customers for fair value in the ordinary course of
business and dispositions of obsolete equipment not used or useful in the
business and (b) Asset Dispositions by Borrowers and their Subsidiaries
(excluding sales of Accounts and Stock of any of Holdings' Subsidiaries) if all
of the following conditions are met: (i) the market value of assets sold or
otherwise disposed of in any single transaction or series of related
transactions does not exceed $600,000 and the aggregate market value of assets
sold or otherwise disposed of in any Fiscal Year does not exceed $1,100,000;
(ii) the consideration received is at least equal to the fair market value of
such assets; (iii) the sole consideration received is cash other than notes
received from the buyer of any such assets not exceeding $600,000 outstanding at
any time (such amount being determined without giving effect to any write-offs
or write-downs of such notes); (iv) the Net Proceeds of such Asset Disposition
are applied as required by Section 1.5(c); (v) after giving effect to the Asset
Disposition and the repayment of Indebtedness with the proceeds thereof,
Borrowers are in compliance on a pro forma basis with the covenants set forth in
Section 4 recomputed for the most recently ended quarter for which information
is available and is in compliance with all other terms and conditions of this
Agreement; and (vi) no Default or Event of Default then exists or would result
from such Asset Disposition. In all respects, the foregoing is subject to the
provisions of the Intercreditor Agreement.
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Section 3.8 Transactions with Affiliates.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any management, consulting, investment banking, advisory or
other similar services) with any Affiliate or with any director, officer or
employee of any Credit Party, except (a) as set forth on Schedule 3.8, (b)
transactions in the ordinary course of and pursuant to the reasonable
requirements of the business of any such Credit Party or any of its Subsidiaries
and upon fair and reasonable terms which are fully disclosed to Agent and are no
less favorable to any such Credit Party or any of its Subsidiaries than would be
obtained in a comparable arm's length transaction with a Person that is not an
Affiliate, and (c) payment of reasonable compensation to officers, directors and
employees for services actually rendered to any such Credit Party or any of its
Subsidiaries.
Section 3.9 Conduct of Business.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly engage in any business other than
businesses of the type described on Schedule 3.9.
Section 3.10 Fiscal Year.
No Credit Party shall change its Fiscal Year or permit any of its
Subsidiaries to change their respective fiscal years without the consent of
Agent.
Section 3.11 Press Release; Public Offering Materials.
Each Credit Party executing this Agreement agrees that neither it
nor its Affiliates will in the future issue any press releases or other public
disclosure, including any prospectus, proxy statement or other materials filed
with any Governmental Authority relating to a public offering of the Stock of
any Credit Party, using the name of Agent, or any Lender or any of their
respective affiliates or referring to this Agreement, the other Loan Documents
or the Related Transactions Documents without at least two (2) Business Days'
prior notice to each such named Person and without the prior written consent of
each such named Person unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with each such named Person before issuing such
press release or other public disclosure. Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agent or such Lender shall provide a draft of any such tombstone or similar
advertising material to each Credit Party for review and comment prior to the
publication thereof. Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements.
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Section 3.12 Subsidiaries.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to directly or indirectly establish, create or acquire any new
Subsidiary.
Section 3.13 Bank Accounts.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to establish any new bank accounts without prior written notice to
Agent and unless Agent and the bank at which the account is to be opened enter
into a tri-party agreement regarding such bank account pursuant to which such
bank acknowledges the second priority security interest of Agent in such bank
account, agrees to comply with instructions originated by Agent directing
disposition of the funds in the bank account without further consent from such
Credit Party or Subsidiary, and agrees to subordinate and limit any security
interest the bank may have in the bank account on terms satisfactory to Agent.
Section 3.14 Hazardous Materials.
The Credit Parties shall not and shall not cause or permit their
Subsidiaries to cause or permit a Release of any Hazardous Material on, at, in,
under, above, to, from or about any of the Real Estate where such Release would
(a) violate in any respect, or form the basis for any Environmental Liabilities
by the Credit Parties or any of their Subsidiaries under, any Environmental Laws
or Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
Section 3.15 ERISA.
The Credit Parties shall not and shall not cause or permit any ERISA
Affiliate to, cause or permit to occur an ERISA Event to the extent such ERISA
Event could reasonably be expected to have a Material Adverse Effect.
Section 3.16 Sale-Leasebacks.
The Credit Parties shall not and shall not cause or permit any of
their Subsidiaries to engage in any sale-leaseback, synthetic lease or similar
transaction involving any of its assets if the fair market value of the assets
subject to such transactions in effect at any time exceeds $600,000 in the
aggregate.
Section 3.17 Changes to Material Contracts.
The Credit Parties shall give Agent prior written notice of any
material change or amendment to any of the following agreements: (a) Strategic
Alliance Agreement between Maytag Corporation and Injection Molding dated June
1, 2001, and (b) any Resin Contract. On or before February 10, 2008, the Credit
Parties shall not and shall not cause or permit any of their Subsidiaries to
change or amend any material term of that certain Supply
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Agreement dated as of February 10, 2005 between Whirlpool Corporation and
Atlantis Plastics Injection Molding, Inc., provided that such agreement may be
extended or renewed pursuant to the existing terms.
Section 3.18 Prepayments of Other Indebtedness.
The Credit Parties shall not, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the First
Lien Debt; (ii) the Obligations; (iii) Indebtedness secured by a Permitted
Encumbrance if the asset securing such Indebtedness has been sold or otherwise
disposed of in accordance with Section 3.7(b), and (iv) intercompany
Indebtedness reflecting amounts owing to Borrowers.
SECTION 4
FINANCIAL COVENANTS/REPORTING
Borrowers covenant and agree that from and after the date hereof
until the Termination Date, Borrowers shall perform and comply with, and shall
cause each of the other Credit Parties to perform and comply with, all covenants
in this Section 4 applicable to such Person.
Section 4.1 Lease Limits.
Borrowers will not and will not permit any of their Subsidiaries
directly or indirectly to become or remain liable in any way, whether directly
or by assignment or as a guarantor or other surety, for the obligations of the
lessee under any operating lease, synthetic lease or similar off-balance sheet
financing, if the aggregate amount of all rents (or substantially equivalent
payments) paid by Borrowers and their Subsidiaries under all such leases would
exceed $8,250,000 in any Fiscal Year of Borrowers.
Section 4.2 Minimum EBITDA.
Holdings, Borrowers and their Subsidiaries on a consolidated basis
shall have, for each period set forth below, EBITDA of not less than the
following:
Fiscal Quarter EBITDA
--------------------------------- -----------
3 months ended June 30, 2005 $ 8,500,000
6 months ended September 30, 2005 $18,000,000
9 months ended December 31, 2005 $27,000,000
12 months ended March 31, 2006 $36,200,000
Section 4.3 Minimum Fixed Charge Coverage Ratio.
Holdings, Borrowers and their Subsidiaries shall have on a
consolidated basis at the end of each Fiscal Quarter set forth below, a Fixed
Charge Coverage Ratio for the
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twelve (12) month period then ended of not less than the following (but for the
Fiscal Quarters ended September 30, 2005 and December 31, 2005 such period will
be six (6) month and nine (9) month respectively, rather than twelve (12)
month):
Minimum Fixed Charge
Fiscal Quarter Coverage Ratio
-------------- --------------------
September 30, 2005 0.95 to 1.0
December 31, 2005 0.95 to 1.0
March 31, 2006 1.025 to 1.0
June 30, 2006 1.025 to 1.0
September 30, 2006 1.025 to 1.0
December 31, 2006 1.025 to 1.0
March 31, 2007 1.075 to 1.0
June 30, 2007 1.075 to 1.0
September 30, 2007 1.10 to 1.0
December 31, 2007 1.10 to 1.0
March 31, 2008 1.10 to 1.0
June 30, 2008 1.10 to 1.0
September 30, 2008 1.15 to 1.0
December 31, 2008 and each 1.15 to 1.0
Fiscal Quarter ending thereafter
Section 4.4 Maximum Leverage Ratio.
Holdings, Borrowers and their Subsidiaries on a consolidated basis
shall have, at the end of each Fiscal Quarter set forth below, a Leverage Ratio
as of the last day of such Fiscal Quarter and for the twelve (12) month period
then ended of not more than the following:
Maximum
Fiscal Quarter Leverage Ratio
------------------ --------------
June 30, 2006 5.45 to 1.0
September 30, 2006 5.30 to 1.0
December 31, 2006 5.30 to 1.0
March 31, 2007 5.20 to 1.0
June 30, 2007 5.20 to 1.0
September 30, 2007 5.05 to 1.0
December 31, 2007 4.90 to 1.0
March 31, 2008 4.85 to 1.0
June 30, 2008 4.85 to 1.0
September 30, 2008 4.65 to 1.0
December 31, 2008 4.65 to 1.0
March 31, 2009 4.55 to 1.0
June 30, 2009 4.55 to 1.0
September 30, 2009 4.40 to 1.0
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Maximum
Fiscal Quarter Leverage Ratio
------------------ --------------
December 31, 2009 and each 4.25 to 1.0
Fiscal Quarter ending thereafter
Section 4.5 Financial Statements and Other Reports.
Holdings and Borrowers will maintain, and cause each of their
Subsidiaries to maintain, a system of accounting established and administered in
accordance with sound business practices to permit preparation of Financial
Statements in conformity with GAAP (it being understood that monthly Financial
Statements are not required to have footnote disclosures). Borrower
Representative will deliver each of the Financial Statements and other reports
described below to Agent (and each Lender in the case of the Financial
Statements and other reports described in Sections 4.5(a), (b), (d), (e), (f),
(g), (h), (i), (j), (k), (l), and (n)).
(a) Monthly Financials. As soon as available and in any event
within thirty (30) days after the end of each month (including the last month of
Borrowers' Fiscal Year), Borrower Representative will deliver (1) the
consolidated balance sheets of Holdings and its Subsidiaries, as of the end of
such month, and the related consolidated statements of income and cash flow for
such month and for the period from the beginning of the then current Fiscal Year
of Holdings to the end of such month (together with division by division
information), (2) a report setting forth in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the most recent Projections for the current Fiscal
Year delivered pursuant to Section 4.5(f) and (3) a schedule of the outstanding
Indebtedness for borrowed money of Holdings and its Subsidiaries describing in
reasonable detail each such debt issue or loan outstanding and the principal
amount and amount of accrued and unpaid interest with respect to each such debt
issue or loan.
(b) Year-End Financials. As soon as available and in any event
within ninety (90) days after the end of each Fiscal Year of Borrowers, Borrower
Representative will deliver (1) the audited consolidated balance sheet of
Holdings and its Subsidiaries, as at the end of such year, and the related
consolidated statements of income, stockholders' equity and cash flow for such
Fiscal Year, (2) a schedule of the outstanding Indebtedness for borrowed money
of Holdings and its Subsidiaries describing in reasonable detail each such debt
issue or loan outstanding and the principal amount and amount of accrued and
unpaid interest with respect to each such debt issue or loan and (3) a report
with respect to the consolidated Financial Statements from a firm of Certified
Public Accountants selected by Borrowers and reasonably acceptable to Agent,
which report shall be prepared in accordance with Statement of Auditing
Standards No. 58 (the "Statement") "Reports on Audited Financial Statements" and
such report shall be "Unqualified" (as such term is defined in such Statement).
(c) Accountants' Reports. Promptly upon receipt thereof, Borrower
Representative will deliver copies of all significant reports submitted by
Borrowers' firm of
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certified public accountants in connection with each annual, interim or special
audit or review of any type of the Financial Statements or related internal
control systems of Holdings or its Subsidiaries made by such accountants,
including any comment letter submitted by such accountants to management in
connection with their services.
(d) Management Report. Together with each delivery of Financial
Statements of Borrowers pursuant to Sections 4.5(a) and (b), Borrower
Representative will deliver a management report in the form previously provided
to the Borrowers' lenders (1) describing the operations and financial condition
of Holdings and its Subsidiaries for the month then ended and the portion of the
current Fiscal Year then elapsed (or for the Fiscal Year then ended in the case
of year-end financials) and (2) discussing the reasons for any significant
variations.
(e) Collateral Value Report. Upon the election of Agent, which may
be made not more than once each year and while and so long as an Event of
Default shall be continuing, Agent may obtain, at Borrowers' reasonable expense,
a report of a collateral auditor satisfactory to Agent (which may be, or be
affiliated with, a Lender) with respect to Accounts and Inventory (including
verification with respect to the amount, aging, identity and credit of the
respective account debtors of Accounts and the billing practices of Borrowers
and including verification as to the value, location and respective types of
Inventory. The current charge for Agent's internal collateral auditors is $800
per auditor per day plus out of pocket costs and expenses.
(f) Appraisals. From time to time, if Agent or any Lender
determines that obtaining appraisals is necessary in order for Agent or such
Lender to comply with applicable laws or regulations, Agent will, at Borrowers'
reasonable expense, obtain appraisal reports in form and substance and from
appraisers reasonably satisfactory to Agent stating the then current fair market
values of all or any portion of the Real Estate owned by Credit Parties.
(g) Projections. As soon as available and in any event no later
than the last day of each of Borrowers' Fiscal Years, Borrower Representative
will deliver Projections of Holdings and its Subsidiaries for the forthcoming
fiscal year, month by month and for the two (2) subsequent years on an annual
basis.
(h) SEC Filings and Press Releases. Promptly upon their becoming
available, Borrower Representative will deliver copies of (1) all Financial
Statements, reports, notices and proxy statements sent or made available by
Holdings, Borrowers or any of their Subsidiaries to their Stockholders, (2) all
regular and periodic reports and all registration statements and prospectuses,
if any, filed by Holdings, Borrowers or any of their Subsidiaries with any
securities exchange or with the Securities and Exchange Commission, any
Governmental Authority or any private regulatory authority, and (3) all press
releases and other statements made available by Holdings, Borrowers or any of
their respective Subsidiaries to the public concerning developments in the
business of any such Person.
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(i) Events of Default, Etc. Promptly upon any officer of any
Credit Party obtaining knowledge of any of the following events or conditions,
Borrower Representative shall deliver copies of all notices given or received by
such Borrower or Holdings or any of their Subsidiaries with respect to any such
event or condition and a certificate of Borrower Representative's chief
executive officer or chief financial officer specifying the nature and period of
existence of such event or condition and what action or actions Holdings,
Borrowers or any of their Subsidiaries has taken, is taking and proposes to take
with respect thereto: (1) any condition or event that constitutes, or which
could reasonably be expected to result in the occurrence of, an Event of Default
or Default; (2) any notice that any Person has given to any Borrower or any of
their Subsidiaries or any other action taken with respect to a claimed default
or event or condition of the type referred to in Section 6.1(b); (3) any event
or condition that could reasonably be expected to result in any Material Adverse
Effect; or (4) any material default or event of default with respect to any
Indebtedness or Contingent Obligation of any Borrower or any of its
Subsidiaries.
(j) Litigation. Promptly upon any officer of any Credit Party
obtaining knowledge of (1) the institution of any action, charge, claim, demand,
suit, proceeding, petition, governmental investigation, tax audit or arbitration
now pending or, to the best knowledge of such Credit Party, threatened against
or affecting any Credit Party or any of its Subsidiaries or any property of any
Credit Party or any of its Subsidiaries ("Litigation") not previously disclosed
by Borrower Representative to Agent or (2) any material development in any
action, suit, proceeding, governmental investigation or arbitration at any time
pending against or affecting any Credit Party or any property of any Credit
Party which, in each case, could reasonably be expected to have a Material
Adverse Effect, Borrower Representative will promptly give notice thereof to
Agent and provide such other information as may be reasonably available to them
to enable Agent and its counsel to evaluate such matter.
(k) Notice of Corporate and other Changes. Borrower Representative
shall provide prompt written notice of (1) all jurisdictions in which a Credit
Party becomes qualified after the Closing Date to transact business, (2) any
change after the Closing Date in the authorized and issued Stock of any Credit
Party or any Subsidiary of any Credit Party or any amendment to their articles
or certificate of incorporation, by-laws, partnership agreement or other
organizational documents, (3) any Subsidiary created or acquired by any Credit
Party or any of its Subsidiaries after the Closing Date, such notice, in each
case, to identify the applicable jurisdictions, capital structures or
Subsidiaries, as applicable, and (4) any other event that occurs after the
Closing Date which would cause any of the representations and warranties in
Section 5 of this Agreement or in any other Loan Document to be untrue or
misleading in any material respect. The foregoing notice requirement shall not
be construed to constitute consent by any of the Lenders to any transaction
referred to above which is not expressly permitted by the terms of this
Agreement.
(l) Customer Concentration. Borrower Representative shall provide
prompt written notice if the Accounts of any customer exceed in the aggregate an
amount equal to twenty (20%) percent of the aggregate of all Accounts of
Borrowers at any time.
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(m) Other Information. With reasonable promptness, Borrower
Representative will deliver such other information and data with respect to any
Credit Party or any Subsidiary of any Credit Party as from time to time may be
reasonably requested by Agent or any Lender.
(n) Compliance and Excess Cash Flow Certificate. Together with
each delivery of Financial Statements of Holdings and its Subsidiaries pursuant
to Sections 4.5(a) and (b), Borrower Representative will deliver a fully and
properly completed Compliance and Excess Cash Flow Certificate (in form
substantially similar to Exhibit 4.5(n) (the "Compliance and Excess Cash Flow
Certificate") duly executed by Borrower Representative's chief executive officer
or chief financial officer or another officer designated by the chief executive
officer or chief financial officer.
(o) Taxes. Borrower Representative shall provide prompt written
notice of (i) the execution or filing with the IRS or any other Governmental
Authority of any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any Charges by any Credit
Party or any of its Subsidiaries and (ii) any agreement by any Credit Party or
any of its Subsidiaries or request directed to any Credit Party or any of its
Subsidiaries to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which could reasonably be expected to
have a Material Adverse Effect.
Section 4.6 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.
For purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to such terms in conformity with
GAAP. Financial statements and other information furnished to Agent pursuant to
Section 4.5 or any other Section (unless specifically indicated otherwise) shall
be prepared in accordance with GAAP as in effect at the time of such
preparation; provided that no Accounting Change shall affect financial
covenants, standards or terms in this Agreement; provided further that Borrowers
shall prepare footnotes to the Financial Statements required to be delivered
hereunder that show the differences between the Financial Statements delivered
(which reflect such Accounting Changes) and the basis for calculating financial
covenant compliance (without reflecting such Accounting Changes). All such
adjustments described in clause (c) of the definition of the term Accounting
Changes resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made.
SECTION 5
REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into the Loan Documents, and to
make the Term Loan, Borrowers and the other Credit Parties executing this
Agreement, jointly and severally, represent, warrant and covenant to Agent and
each Lender that the following
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statements are and, on the Closing Date, after giving effect to the Related
Transactions, will be, true, correct and complete with respect to all Credit
Parties:
Section 5.1 Disclosure.
No representation or warranty of any Credit Party contained in this
Agreement, the Financial Statements referred to in Section 5.5, the other
Related Transactions Documents or any other document, certificate or written
statement furnished to Agent or any Lender by or on behalf of any Credit Party
for use in connection with the Loan Documents or the Related Transactions
Documents contains any untrue statement of a material fact or omitted, omits or
will omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made.
Section 5.2 No Material Adverse Effect.
Since December 31, 2003, there have been no events or changes in
facts or circumstances affecting any Credit Party or any of its Subsidiaries
which individually or in the aggregate have had or could reasonably be expected
to have a Material Adverse Effect and that have not been disclosed herein or in
the attached Disclosure Schedules.
Section 5.3 No Conflict.
None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or the consummation of the
Related Transactions does or will violate or conflict with any laws, rules,
regulations or orders of any Governmental Authority or violate, conflict with,
result in a breach of, or constitute a default (with due notice or lapse of time
or both) under any Contractual Obligation or organizational documents of any
Credit Party or any of its Subsidiaries except if such violations, conflicts,
breaches or defaults could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Section 5.4 Organization, Powers, Capitalization and Good Standing.
(a) Organization and Powers. Each of the Credit Parties and each
of their Subsidiaries is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization and qualified to do business
in all states where such qualification is required except where failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect.
The jurisdiction of organization and all jurisdictions in which each Credit
Party is qualified to do business are set forth on Schedule 5.4(a). Each of the
Credit Parties and each of their Subsidiaries has (i) all requisite
organizational power and authority to own and operate its properties, to carry
on its business as now conducted and proposed to be conducted, to enter into
each Related Transactions Document to which it is a party and to incur the
Obligations, grant liens and security interests in the Collateral and carry out
the Related Transactions and (ii) authorized by all necessary action the entry
into each Related Transactions Document to which it is a party, the incurrence
of the Obligations, the granting
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of the liens and security interests in the Collateral and the performance of the
Related Transactions.
(b) Capitalization. (i) The authorized Stock of each of the Credit
Parties and each of their Subsidiaries is as set forth on Schedule 5.4(b); (ii)
all issued and outstanding Stock of each of the Credit Parties and each of their
Subsidiaries is duly authorized and validly issued, fully paid, nonassessable,
free and clear of all Liens other than those in favor of Agent for the benefit
of Agent and Lenders, and such Stock was issued in compliance with all
applicable state, federal and foreign laws concerning the issuance of
securities; (iii) the identity of the holders of the Stock of each of the Credit
Parties and the percentage of their fully-diluted ownership of the Stock of each
of the Credit Parties is set forth on Schedule 5.4(b) (provided that for
Holdings, only direct or beneficial holders of more than five percent (5%) of
any class of Stock are listed); and (iv) no Stock of any Credit Party or any of
their Subsidiaries, other than those described above, are issued and
outstanding. Except as provided in Schedule 5.4(b), there are no preemptive or
other outstanding rights, options, warrants, conversion rights or similar
agreements or understandings for the purchase or acquisition from any Credit
Party or any of their Subsidiaries of any Stock of any such entity.
(c) Binding Obligation. This Agreement is, and the other Related
Transactions Documents when executed and delivered will be, the legally valid
and binding obligations of the applicable parties thereto, each enforceable
against each of such parties, as applicable, in accordance with their respective
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance and other laws affecting creditors' rights, and by general
limitations in the availability of equitable remedies.
Section 5.5 Financial Statements and Projections.
All Financial Statements concerning Holdings, Borrowers and their
Subsidiaries which have been or will hereafter be furnished to Agent pursuant to
this Agreement, including those listed below, have been or will be prepared in
accordance with GAAP consistently applied (except as disclosed therein) and do
or will present fairly the financial condition of the entities covered thereby
as at the dates thereof and the results of their operations for the periods then
ended, subject to, in the case of unaudited Financial Statements, the absence of
footnotes and normal year-end adjustments.
(a) The consolidated balance sheet at December 31, 2003 and the
related statement of income of Holdings and its Subsidiaries, for the Fiscal
Year then ended, audited by Ernst & Young.
(b) The consolidated balance sheet at December 31, 2004 and the
related statements of income and cash flow of Holdings and its Subsidiaries for
the twelve (12) months then ended.
The Projections delivered on or prior to the Closing Date and the updated
Projections delivered pursuant to Section 4.5(f) represent and will represent as
of the date thereof the
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good faith estimate of Borrowers and their senior management concerning the most
probable course of their business.
Section 5.6 Intellectual Property.
Each of the Credit Parties and its Subsidiaries owns, is licensed to
use or otherwise has the right to use, all Intellectual Property used in or
necessary for the conduct of its business as currently conducted that is
material to the condition (financial or other), business or operations of such
Credit Party and its Subsidiaries and all such Intellectual Property is
identified on Schedule 5.6 and fully protected and/or duly and properly
registered, filed or issued in the appropriate office and jurisdictions for such
registrations, filings or issuances. Except as disclosed in Schedule 5.6, the
use of such Intellectual Property by the Credit Parties and their Subsidiaries
and the conduct of their businesses does not and has not been alleged by any
Person to infringe on the rights of any Person.
Section 5.7 Investigations, Audits, Etc.
Except as set forth on Schedule 5.7, no Credit Party or any of their
Subsidiaries to their knowledge is the subject of any review or audit by the IRS
or any governmental investigation concerning the violation or possible violation
of any law.
Section 5.8 Employee Matters.
Except as set forth on Schedule 5.8, (a) no Credit Party or
Subsidiary of a Credit Party nor any of their respective employees is subject to
any collective bargaining agreement, (b) no petition for certification or union
election is pending with respect to the employees of any Credit Party or any of
their Subsidiaries and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any Credit Party
or any of their Subsidiaries, (c) there are no strikes, slowdowns, work
stoppages or controversies pending or, to the best knowledge of any Credit Party
after due inquiry, threatened between any Credit Party or any of their
Subsidiaries and its respective employees, other than employee grievances
arising in the ordinary course of business which could not reasonably be
expected to have, either individually or in the aggregate, a Material Adverse
Effect and (d) hours worked by and payment made to employees of each Credit
Party and each of their Subsidiaries comply with the Fair Labor Standards Act
and each other federal, state, local or foreign law applicable to such matters
except to the extent such non-compliance could not be reasonably expected to
have, either individually or in the aggregate, a Material Adverse Effect. Except
as set forth on Schedule 5.8, neither Borrower nor any of its Subsidiaries is
party to an employment contract.
Section 5.9 Solvency.
Each of the Credit Parties and its Subsidiaries is Solvent.
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Section 5.10 Litigation; Adverse Facts.
Except as set forth on Schedule 5.10, there are no judgments
outstanding against any Credit Party or any of its Subsidiaries or affecting any
property of any Credit Party or any of its Subsidiaries, nor is there any
Litigation pending, or to the best knowledge of any Credit Party threatened,
against any Credit Party or any of its Subsidiaries which could reasonably be
expected to result in any Material Adverse Effect.
Section 5.11 Use of Proceeds; Margin Regulations.
(a) No part of the proceeds of the Term Loan will be used for
"buying" or "carrying" "margin stock" within the respective meanings of such
terms under Regulation U of the Federal Reserve Board as now and from time to
time hereafter in effect or for any other purpose that violates the provisions
of the regulations of the Board of Governors of the Federal Reserve System. If
requested by Agent, each Credit Party will furnish to Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U.
(b) Borrowers shall utilize the proceeds of the Term Loan solely
as provided for in the first recital of this Agreement (and to pay any related
transaction expenses). Schedule 5.11 contains a description of Borrowers'
sources and uses of funds as of the Closing Date, including the Term Loan to be
made on that date, and a funds flow memorandum detailing how funds from each
source are to be transferred for particular uses.
Section 5.12 Ownership of Property; Liens.
The real estate ("Real Estate") listed in Schedule 5.12 constitutes
all of the real property owned, leased, subleased, or used by any Credit Party
or any of its Subsidiaries. Each of the Credit Parties and each of its
Subsidiaries owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Schedule 5.12, and copies of all such leases or a
summary of terms thereof reasonably satisfactory to Agent have been delivered to
Agent. Schedule 5.12 further describes any Real Estate with respect to which any
Credit Party or any of its Subsidiaries is a lessor, sublessor or assignor. Each
of the Credit Parties and each of its Subsidiaries also has good and marketable
title to, or valid leasehold interests in, all of its personal property and
assets. None of the properties and assets of any Credit Party or any of its
Subsidiaries are subject to any Liens other than Permitted Encumbrances, and
there are no facts, circumstances or conditions known to any Borrower that may
result in any Liens (including Liens arising under Environmental Laws) other
than Permitted Encumbrances against the properties or assets of any Credit Party
or any of its Subsidiaries. Each of the Credit Parties and each of its
Subsidiaries has received all deeds, assignments, waivers, consents,
nondisturbance and attornment or similar agreements, bills of sale and other
documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect such Credit Party's or Subsidiary's
right, title and interest in and to all such Real Estate and other properties
and assets. Schedule 5.12 also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any
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Real Estate. No portion of any Credit Party's or any of its Subsidiaries' Real
Estate has suffered any material damage by fire or other casualty loss that has
not heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied. All material permits required to have
been issued or appropriate to enable the Real Estate to be lawfully occupied and
used for all of the purposes for which it is currently occupied and used have
been lawfully issued and are in full force and effect.
Section 5.13 Environmental Matters.
(a) Except as set forth in Schedule 5.13: (i) the Real Estate is
free of contamination from any Hazardous Material except for such contamination
that could not reasonably be expected to adversely impact the value or
marketability of such Real Estate and that could not reasonably be expected to
result in Environmental Liabilities of the Credit Parties or their Subsidiaries
in excess of $250,000 in the aggregate; (ii) no Credit Party and no Subsidiary
of a Credit Party has caused or suffered to occur any Release of Hazardous
Materials in violation of applicable law on, at, in, under, above, to, from or
about any of their Real Estate; (iii) the Credit Parties and their Subsidiaries
are and have been in compliance with all Environmental Laws, except for such
noncompliance that could not reasonably be expected to result in Environmental
Liabilities of the Credit Parties or their Subsidiaries in excess of $250,000 in
the aggregate; (iv) the Credit Parties and their Subsidiaries have obtained, and
are in compliance with, all Environmental Permits required by Environmental Laws
for the operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain or comply with
such Environmental Permits could not reasonably be expected to result in
Environmental Liabilities of the Credit Parties or their Subsidiaries in excess
of $250,000 in the aggregate, and all such Environmental Permits are valid,
uncontested and in good standing; (v) no Credit Party and no Subsidiary of a
Credit Party is involved in operations or knows of any facts, circumstances or
conditions, including any Releases of Hazardous Materials, that are likely to
result in any Environmental Liabilities of such Credit Party or Subsidiary which
could reasonably be expected to be in excess of $250,000 in the aggregate, and
no Credit Party or Subsidiary of a Credit Party has permitted any current or
former tenant or occupant of the Real Estate to engage in any such operations;
(vi) there is no Litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material that seeks damages, penalties,
fines, costs or expenses in excess of $100,000 in the aggregate or injunctive
relief against, or that alleges criminal misconduct by any Credit Party or any
Subsidiary of a Credit Party; (vii) no notice has been received by any Credit
Party or any Subsidiary of a Credit Party identifying any of them as a
"potentially responsible party" or requesting information under CERCLA or
analogous state statutes, and to the knowledge of the Credit Parties, there are
no facts, circumstances or conditions that may result in any of the Credit
Parties or their Subsidiaries being identified as a "potentially responsible
party" under CERCLA or analogous state statutes; and (viii) the Credit Parties
have provided to Agent copies of all existing environmental reports, reviews and
audits and all written information pertaining to actual or potential
Environmental Liabilities, in each case relating to any of the Credit Parties or
their Subsidiaries.
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(b) Each Credit Party hereby acknowledges and agrees that neither
Agent nor any Lender (i) is now, or has ever been, in control of any of the Real
Estate or affairs of such Credit Party or its Subsidiaries, or (ii) has the
capacity through the provisions of the Loan Documents or otherwise to influence
any Credit Party's or its Subsidiaries' conduct with respect to the ownership,
operation or management of any of their Real Estate or compliance with
Environmental Laws or Environmental Permits.
Section 5.14 ERISA.
(a) Schedule 5.14 lists all Plans and separately identifies all
Pension Plans, including Title IV Plans, Multiemployer Plans, ESOPs and Welfare
Plans, including all Retiree Welfare Plans. Copies of all such listed Plans,
together with a copy of the latest form IRS/DOL 5500-series for each such Plan
have been delivered to Agent. Except with respect to Multiemployer Plans, each
Qualified Plan has been determined by the IRS to qualify under Section 401 of
the IRC, the trusts created thereunder have been determined to be exempt from
tax under the provisions of Section 501 of the IRC, and nothing has occurred
that would cause the loss of such qualification or tax-exempt status. Each Plan
is in compliance with the applicable provisions of ERISA and the IRC, including
the timely filing of all reports required under the IRC or ERISA, including the
statement required by 29 CFR Section 2520.104-23. Neither any Credit Party nor
ERISA Affiliate has failed to make any contribution or pay any amount due as
required by either Section 412 of the IRC or Section 302 of ERISA or the terms
of any such Plan. Neither any Credit Party nor ERISA Affiliate has engaged in a
"prohibited transaction," as defined in Section 406 of ERISA and Section 4975 of
the IRC, in connection with any Plan, that would subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.
(b) Except as set forth in Schedule 5.14: (i) no Title IV Plan has
any Unfunded Pension Liability; (ii) no ERISA Event or event described in
Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
any Borrower, threatened claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any liability as a result
of a complete or partial withdrawal from a Multiemployer Plan; (v) within the
last five years no Title IV Plan of any Credit Party or ERISA Affiliate has been
terminated, whether or not in a "standard termination" as that term is used in
Section 404(b)(1) of ERISA, nor has any Title IV Plan of any Credit Party or
ERISA Affiliate (determined at any time within the past five years) with
Unfunded Pension Liabilities been transferred outside of the "controlled group"
(within the meaning of Section 4001(a)(14) of ERISA) of any Credit Party or
ERISA Affiliate; (vi) except in the case of any ESOP, Stock of all Credit
Parties and their ERISA Affiliates makes up, in the aggregate, no more than ten
percent (10%) of fair market value of the assets of any Plan measured on the
basis of fair market value as of the latest valuation date of any Plan; and
(vii) no liability under any Title IV Plan has been satisfied with the purchase
of a contract from an insurance company that is not rated AAA by the S&P or an
equivalent rating by another nationally recognized rating agency.
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Section 5.15 Brokers.
No broker or finder acting on behalf of any Credit Party or
Affiliate thereof brought about the obtaining, making or closing of the Term
Loan or the Related Transactions other than Trivest Partners, L.P., and no
Credit Party or Affiliate thereof has any obligation to any Person in respect of
any finder's or brokerage fees in connection therewith other than the $750,000
fee payable to Trivest Partners, L.P.
Section 5.16 Deposit and Disbursement Accounts.
Schedule 5.16 lists all banks and other financial institutions at
which any Credit Party maintains deposit or other accounts, including any
disbursement accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.
Section 5.17 Agreements and Other Documents.
Each Credit Party has provided to Agent or its counsel, on behalf of
Lenders, accurate and complete copies (or summaries) of each agreement or
document listed in Schedule 5.17: supply agreements and purchase agreements not
terminable by such Credit Party within sixty (60) days following written notice
issued by such Credit Party and involving transactions in excess of $1,000,000
per annum; leases of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $500,000 per annum;
licenses and permits held by the Credit Parties, the absence of which could
reasonably be expected to have a Material Adverse Effect; instruments and
documents evidencing any Indebtedness or Guaranteed Indebtedness of such Credit
Party and any Lien granted by such Credit Party with respect thereto; and
instruments and agreements evidencing the issuance of any equity securities,
warrants, rights or options to purchase equity securities of such Credit Party.
Section 5.18 Insurance.
Schedule 5.18 lists all insurance policies of any nature maintained
for current occurrences by each Credit Party, as well as a summary of the key
business terms of each such policy such as deductibles, coverage limits and term
of policy.
Section 5.19 Taxes and Tax Returns.
(a) (i) All Tax Returns required to be filed by the Credit Parties
have been properly filed prior to the due date thereof and (ii) all taxes that
are due (other than taxes being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided for in accordance
with GAAP) have been paid, except where the failure to file Tax Returns or pay
taxes would not have a Material Adverse Effect. No Governmental Authority has
asserted any claim for taxes, or to any Credit Party's knowledge, has threatened
to assert any claim for taxes that would, if not paid by a Credit Party, have a
Material Adverse Effect. All taxes required by law to be withheld or collected
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and remitted (including, without limitation, income tax, unemployment insurance
and workmen's compensation premiums) with respect to the Credit Parties have
been withheld or collected and paid to the appropriate Governmental Authorities
(or are properly being held for such payment), except for amounts the nonpayment
of which would not be reasonably likely to have a Material Adverse Effect.
(b) None of the Credit Parties has been notified that the IRS or
any other Governmental Authority, has raised, or intends to raise, any
adjustments with respect to Taxes of the Credit Parties, which adjustments would
be reasonably likely to have a Material Adverse Effect.
Section 5.20 Compliance with Laws.
Each Credit Party (i) is in compliance and each of its Subsidiaries
is in compliance with the requirements of all applicable laws, rules,
regulations and orders of any Governmental Authority (including, without
limitation, Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, and the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Public Law 107-56) and the obligations, covenants and conditions contained in
all Contractual Obligations other than those laws, rules, regulations, orders
and provisions of such Contractual Obligations the noncompliance with which
could not be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect, and (ii) maintains and each of its
Subsidiaries maintains all licenses, qualifications and permits referred to
above other than those which the failure to maintain could not be reasonably
expected to have, either individually or in the aggregate a Material Adverse
Effect.
SECTION 6
DEFAULT, RIGHTS AND REMEDIES
Section 6.1 Event of Default.
"Event of Default" shall mean the occurrence or existence of any one
or more of the following:
(a) Payment. (1) Failure to pay any installment or other payment
of principal of the Term Loan when due, or (2) failure to pay, within three (3)
Business Days after the due date, any interest on the Term Loan or any other
amount due under this Agreement or any of the other Loan Documents; or
(b) Default in Other Agreements. (1) Any Credit Party or any of
its Subsidiaries fails to pay when due or within any applicable grace period any
principal or interest on Indebtedness (excluding the First Lien Debt and the
Term Loan) or any Contingent Obligations or (2) breach or default of any Credit
Party or any of its Subsidiaries, or the occurrence of any condition or event,
with respect to any Indebtedness (excluding the First Lien Debt and the Term
Loan) or any Contingent Obligations in an individual principal amount in excess
of $350,000 or an aggregate principal amount in excess of $600,000, if
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such breach is the failure to pay such Indebtedness and/or Contingent Obligation
at its stated maturity or if the effect of such breach, default or occurrence is
to cause or to permit the holder or holders then to cause, Indebtedness and/or
Contingent Obligations to become or be declared due prior to their stated
maturity or (3) acceleration of the First Lien Debt; or
(c) Breach of Certain Provisions. Failure of any Credit Party to
perform or comply with any term or condition contained in that portion of
Section 2.2 relating to the Credit Parties' obligation to maintain insurance,
Section 2.3, Section 3 (other than (i) a failure to comply with Section 3.2 as a
result of a non-consensual Lien or (ii) a failure to give notice under Section
3.17) or Section 4 (other than Sections 4.5(a), (b), (d), and (g) violations of
which shall constitute an Event of Default three (3) Business Days after the
occurrence of such violation unless cured within such period); or
(d) Breach of Warranty. Any representation, warranty,
certification or other statement made by any Credit Party in any Loan Document
or in any statement or certificate at any time given by such Person in writing
pursuant or in connection with any Loan Document is false in any material
respect (without duplication of materiality qualifiers contained therein) on the
date made; or
(e) Other Defaults Under Loan Documents. Any Credit Party defaults
in the performance of or compliance with any term contained in this Agreement or
the other Loan Documents (other than occurrences described in other provisions
of this Section 6.1 for which a different grace or cure period is specified, or
for which no cure period is specified and which constitute immediate Events of
Default) and such default is not remedied or waived within thirty (30) days
after the earlier of (1) receipt by Borrower Representative of notice from Agent
or Requisite Lenders of such default or (2) actual knowledge by the chief
executive officer, chief financial officer or other senior management of any
Borrower or any other Credit Party of such default; or
(f) Involuntary Bankruptcy; Appointment of Receiver, Etc. (1) A
court enters a decree or order for relief with respect to any Credit Party in an
involuntary case under the Bankruptcy Code, which decree or order is not stayed
or other similar relief is not granted under any applicable federal or state
law; or (2) the continuance of any of the following events for sixty (60) days
unless dismissed, bonded or discharged: (a) an involuntary case is commenced
against any Credit Party, under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect; or (b) a decree or order of a court for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over any Credit Party, or over all or a
substantial part of its property, is entered; or (c) a receiver, trustee or
other custodian is appointed without the consent of a Credit Party, for all or a
substantial part of the property of the Credit Party; or
(g) Voluntary Bankruptcy; Appointment of Receiver, Etc. (1) any
Credit Party commences a voluntary case under the Bankruptcy Code, or consents
to the entry of an order for relief in an involuntary case or to the conversion
of an involuntary case to a voluntary case under any such law or consents to the
appointment of or taking possession by a receiver, trustee or other custodian
for all or a substantial part of its property; or (2) any
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Credit Party makes any assignment for the benefit of creditors; or (3) the Board
of Directors of any Credit Party adopts any resolution or otherwise authorizes
action to approve any of the actions referred to in this Section 6.1(g); or
(h) Judgment and Attachments. Any money judgment, writ or warrant
of attachment, or similar process (other than those described elsewhere in this
Section 6.1) involving (1) an amount in any individual case in excess of
$600,000 or (2) an amount in the aggregate at any time in excess of $1,100,000
(in either case to the extent not adequately covered by insurance in Agent's
reasonable discretion as to which the insurance company has acknowledged
coverage) is entered or filed against one or more of the Credit Parties or any
of their respective assets and remains undischarged, unvacated, unbonded or
unstayed for a period of thirty (30) days or in any event later than five (5)
Business Days prior to the date of any proposed sale thereunder; or
(i) Dissolution. Any order, judgment or decree is entered against
any Credit Party decreeing the dissolution or split up of such Credit Party and
such order remains undischarged or unstayed for a period in excess of twenty
(20) days; or
(j) Solvency. Any Credit Party ceases to be Solvent, fails to pay
its debts as they become due or admits in writing its present or prospective
inability to pay its debts as they become due; or
(k) Invalidity of Loan Documents. Any of the Loan Documents for
any reason, other than a partial or full release in accordance with the terms
thereof, ceases to be in full force and effect or is declared to be null and
void or any Lien intended to be created under any Loan Document ceases to be, or
is not, valid, perfected and prior to all other Liens (other than (i) Permitted
Encumbrances, (ii) as a result of the action of Agent, or (iii) with respect to
Collateral having a value in the aggregate of less than $50,000), or any Credit
Party denies that it has any further liability under any Loan Documents to which
it is party, or gives notice to such effect; or
(l) Damage; Casualty. Any event occurs, whether or not insured or
insurable, as a result of which revenue-producing activities cease or are
substantially curtailed at any facility of any Credit Party generating more than
twenty percent (20%) of the consolidated revenues of Holdings and its
Subsidiaries for the Fiscal Year preceding such event and such cessation or
curtailment continues for more than thirty (30) days; or
(m) Business Activities. Holdings engages in any type of business
activity other than the ownership of Stock of Borrowers, the performance of its
obligations under the Loan Documents to which it is a party, and activities
incidental to being a holding company, including entering into leases of
properties occupied or used by any of the other Credit Parties and entering into
supply and purchase agreements on behalf of its Subsidiaries; or
(n) Change of Control. A Change of Control occurs; or
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(o) Subordinated Indebtedness. The failure of any Credit Party or
any creditor of any Borrower or any of its Subsidiaries to comply with the terms
of any subordination or intercreditor agreement or any subordination provisions
of any note or other document running to the benefit of Agent or Lenders, or if
any such document becomes null and void or any party denies further liability
under any such document or provides notice to that effect.
Section 6.2 Acceleration and other Remedies.
Upon the occurrence of any Event of Default described in Sections
6.1(f) or 6.1(g), all of the Obligations shall automatically become immediately
due and payable, without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration or other requirements of any kind, all of
which are hereby expressly waived (including for purposes of Section 10) by
Borrowers. Upon the occurrence and during the continuance of any other Event of
Default, Agent may, and at the request of the Requisite Lenders, Agent shall, by
written notice to Borrower Representative (a) declare all or any portion of the
Term Loan and all or any portion of the other Obligations to be, and the same
shall forthwith become, immediately due and payable together with accrued
interest thereon, and (b) exercise any other remedies which may be available
under the Loan Documents or applicable law.
Section 6.3 Performance by Agent.
If any Credit Party shall fail to perform any covenant, duty or
agreement contained in any of the Loan Documents, Agent may perform or attempt
to perform such covenant, duty or agreement on behalf of such Credit Party after
the expiration of any cure or grace periods set forth herein. In such event,
such Credit Party shall, at the request of Agent, promptly pay any amount
reasonably expended by Agent in such performance or attempted performance to
Agent, together with interest thereon at the highest rate of interest in effect
upon the occurrence of an Event of Default as specified in Section 1.2(d) from
the date of such expenditure until paid. Notwithstanding the foregoing, it is
expressly agreed that Agent shall not have any liability or responsibility for
the performance of any obligation of any Credit Party under this Agreement or
any other Loan Document.
Section 6.4 Application of Proceeds.
Notwithstanding anything to the contrary contained in this
Agreement, upon the occurrence and during the continuance of an Event of
Default, (a) Borrowers irrevocably waive the right to direct the application of
any and all payments at any time or times thereafter received by Agent from or
on behalf of Borrowers, and Agent shall have the continuing and exclusive right
to apply and to reapply any and all payments received at any time or times after
the occurrence and during the continuance of an Event of Default against the
Obligations in such manner as Agent may deem advisable notwithstanding any
previous application by Agent and (b) in the absence of a specific determination
by Agent with respect thereto, the proceeds of any sale of, or other realization
upon, all or any part of the Collateral shall be applied: first, to all Fees,
costs and expenses incurred by or owing to Agent and any
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Lender with respect to this Agreement, the other Loan Documents or the
Collateral (with preference first being made to Agent and then to Lenders);
second, to accrued and unpaid interest on the Obligations (including any
interest which but for the provisions of the Bankruptcy Code, would have accrued
on such amounts); and third, to the principal amount of the Obligations
outstanding. Any balance remaining shall be delivered to Borrowers or to
whomever may be lawfully entitled to receive such balance or as a court of
competent jurisdiction may direct.
SECTION 7
CONDITIONS TO LOAN
The obligation of Lenders to make the Term Loan is subject to (a)
the delivery of all documents listed on, the taking of all actions set forth on
and the satisfaction of all other conditions precedent listed in the Closing
Checklist attached hereto as Annex C, all in form and substance, or in a manner,
satisfactory to Agent and Lenders and (b) the satisfaction of the following
conditions: (i) after giving effect to all payments to be made in connection
with the Related Transactions, including the payment of all fees and expenses
related thereto, the Leverage Ratio shall be no greater than 5.00 to 1.0 (with
the Leverage Ratio being calculated with $6,300,000 of add backs to EBITDA for
this purpose only); (ii) the transactions contemplated by the First Lien Debt
Documents shall have been consummated in accordance with the terms thereof;
(iii) Borrowers shall have demonstrated to the satisfaction of Agent that the
consolidated EBITDA of Holdings and its Subsidiaries for the twelve (12) month
period then most recently ended shall not be less than $39,900,000 (after giving
effect to $6,300,000 of add backs); (iv) any representation or warranty by any
Credit Party contained herein or in any other Loan Document is untrue or
incorrect in any material respect (without duplication of any materiality
qualifier contained therein) as of the Closing Date; (v) Holdings and Trivest
Partners, L.P. shall have duly executed and delivered the Management Fee
Subordination Agreement; and (vi) payment of all fees and expenses due to the
Agent and its counsel.
SECTION 8
ASSIGNMENT AND PARTICIPATION
Section 8.1 Assignment and Participations.
(a) Subject to the terms of this Section 8.1, any Lender may make
an assignment to a Qualified Assignee of, or sale of participations in, at any
time or times, the Loan Documents, the Term Loan or any portion thereof or
interest therein, including any Lender's rights, title, interests, remedies,
powers or duties thereunder. Any assignment by a Lender shall: (i) require (A)
the execution of an assignment agreement (an "Assignment Agreement"
substantially in the form attached hereto as Exhibit 8.1) and (B) notice of such
assignment to Agent; (ii) except with respect to assignments to a fund managed
by the same Person managing the assigning Lender, after giving effect to any
such partial assignment, the assignee Lender shall hold a portion of the Term
Loan in an amount at least equal to $1,000,000 and the assigning Lender shall
have retained a portion of the Term Loan in an amount at least equal to
$1,000,000; and (iii) except with respect to assignments by a Lender
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to another Lender, an Affiliate of such Lender or a fund managed by the same
Person managing such Lender, and except with respect to assignments made within
thirty (30) days after the Closing Date, require a payment to Agent of an
assignment fee of $3,500. In the case of an assignment by a Lender under this
Section 8.1, the assignee shall have, to the extent of such assignment, the same
rights, benefits and obligations as all other Lenders hereunder. The assigning
Lender shall be relieved of its obligations hereunder with respect to the
assigned portion from and after the date of such assignment. Borrowers hereby
acknowledge and agree that any assignment shall give rise to a direct obligation
of Borrowers to the assignee and that the assignee shall be considered to be a
"Lender." In all instances, each Lender's liability to make a portion of the
Term Loan hereunder shall be several and not joint and shall be limited to such
Lender's Term Loan Commitment. In the event Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Agent or any such Lender
shall so notify Borrowers and Borrowers shall, upon the request of Agent or such
Lender, execute new Term Notes in exchange for the Term Note, if any, being
assigned. Notwithstanding the foregoing provisions of this Section 8.1(a), (a)
any Lender may at any time without obtaining the consent of Agent or any
Borrower pledge the Obligations held by it and such Lender's rights under this
Agreement and the other Loan Documents, including to a Federal Reserve Bank,
provided, that no such pledge shall release a Lender from its obligations
hereunder, (b) any Lender that is an investment fund may assign the Obligations
held by it and such Lender's rights under this Agreement and the other Loan
Documents to another investment fund managed by the same investment advisor or
pledge such Obligations and rights to trustee for the benefit of its investors
and (c) any Lender may assign the Obligations to an Affiliate of such Lender or
to a Person that is a Lender prior to the date of such assignment.
(b) Any participation by a Lender of all or any part of its portion
of the Term Loan shall be made with the understanding that all amounts payable
by Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of
or interest rate or Fees payable with respect to any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of the Term Loan in which such holder participates or the final maturity
date thereof, and (iii) any release of all or substantially all of the
Collateral (other than in accordance with the terms of this Agreement, the
Collateral Documents or the other Loan Documents). Solely for purposes of
Sections 1.8, 1.9, 8.3 and 9.1, Borrowers acknowledge and agree that a
participation shall give rise to a direct obligation of Borrowers to the
participant and the participant shall be considered to be a "Lender." Except as
set forth in the preceding sentence no Borrower or any other Credit Party shall
have any obligation or duty to any participant. Neither Agent nor any Lender
(other than the Lender selling a participation) shall have any duty to any
participant and the Borrowers, Agent and each other Lender may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.
Each Borrower agrees that if amounts outstanding under this Agreement are due
and payable (as a result of acceleration or otherwise), each Person holding a
participation herein shall be deemed to have the right of set-off in respect of
its participating interest in amounts owing
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under this Agreement to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement; provided
that such right of set-off shall be subject to the obligation of each such
Person to share any amount set off with all Lenders.
(c) Except as expressly provided in this Section 8.1, no Lender
shall, as between Borrowers and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of a participation in, all
or any part of the Term Loan, the Term Notes or other Obligations owed to such
Lender.
(d) Each Credit Party shall reasonably assist each Lender permitted
to sell assignments or participations under this Section 8.1 as required to
enable the assigning or selling Lender to effect any such assignment or
participation, including the execution and delivery of any and all agreements,
notes and other documents and instruments as shall be requested and the prompt
preparation of informational materials (including financial materials, marketing
materials and projections) for, and the participation of management in meetings
with, potential assignees or participants, all on a timetable established by
Agent in its reasonable discretion. Each Credit Party executing this Agreement
shall certify the correctness, completeness and accuracy of all descriptions of
the Credit Parties and their respective affairs contained in any selling
materials provided by it and all other information provided by it and included
in such materials, except that any Projections delivered by Borrowers shall only
be certified by Borrowers as having been prepared by Borrowers in compliance
with the representations contained in Section 5.5. Agent shall maintain, on
behalf of Borrowers, a "register" for recording the name, address, and portion
of the Term Loan owing to each Lender. The entries in such register shall be
presumptive evidence of the amounts due and owing to each Lender in the absence
of manifest error. Borrowers, Agent and each Lender may treat each Person whose
name is recorded in such register pursuant to the terms hereof as a Lender for
all purposes of this Agreement. The register described herein shall be available
for inspection by Borrower and any Lender, at any reasonable time upon
reasonable prior notice.
(e) A Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 9.13.
(f) So long as no Event of Default has occurred and is continuing,
no Lender, without the prior written consent of Borrower Representative and
Agent, shall assign or sell participations in any portion of the Term Loan to a
potential Lender or participant, if, as of the date of the proposed assignment
or sale, the assignee Lender or participant would be subject to capital adequacy
or similar requirements under Section 1.8(a), increased costs or an inability to
fund LIBOR Loans under Section 1.8(b), or withholding taxes in accordance with
Section 1.9.
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(g) Notwithstanding the foregoing provisions of this Section 8.1 or
any other provision of this Agreement, Agent has the right, but not the
obligation, to effectuate assignments of the Term Loan via an electronic
settlement system acceptable to Agent as designated in writing from time to time
to the Lenders by Agent (the "Settlement Service"). At any time when the Agent
elects, in its sole discretion, to implement such Settlement Service, each such
assignment shall be effected by the assigning Lender and proposed assignee
pursuant to the procedures then in effect under the Settlement Service, which
procedures shall be consistent with the other provisions of this Section 8.1.
Each assigning Lender and proposed Qualified Assignee shall comply with the
requirements of the Settlement Service in connection with effecting any
assignment of the Term Loan pursuant to the Settlement Service. If so elected by
each of Agent and the Borrowers, Agent's and the Borrowers' approval of such
Qualified Assignee shall be deemed to have been automatically granted with
respect to any transfer effected through the Settlement Service. Assignments and
assumptions of the Term Loan shall be effected by the provisions otherwise set
forth herein until Agent notifies Lenders of the Settlement Service as set forth
herein.
Section 8.2 Agent.
(a) Appointment. Each Lender hereby (1) designates and appoints The
Bank of New York as its Agent under this Agreement and the other Loan Documents
and (2) irrevocably authorizes Agent to execute and deliver the Collateral
Documents and the Intercreditor Agreement and to take such action or to refrain
from taking such action on its behalf under the provisions of this Agreement,
the other Loan Documents and the Intercreditor Agreement and to exercise such
powers as are set forth herein or therein, together with such other powers as
are reasonably incidental thereto. Agent is authorized and empowered to amend,
modify, or waive any provisions of this Agreement or the other Loan Documents on
behalf of Lenders subject to the requirement that certain of Lenders' consent be
obtained in certain instances as provided in this Section 8.2 and Section 9.2.
The provisions of this Section 8.2 are solely for the benefit of Agent and
Lenders and neither Borrowers nor any other Credit Party shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Borrowers or
any other Credit Party. Agent may perform any and all of its duties and exercise
its rights and powers hereunder, under any other Loan Document or under the
Intercreditor Agreement by or through any one or more sub agents appointed by
Agent. Agent and any such sub agent may perform any and all of its duties and
exercise its rights and powers by or through their respective Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and
of such Person's Affiliates ("Related Parties"). The exculpatory provisions of
this Section and the reimbursement provisions of Section 1.3(c) shall apply to
any such sub agent and to any Related Parties of Agent and any such sub agent,
and shall apply to their respective activities in connection with the activities
as Administrative Agent.
(b) Nature of Duties. The duties of Agent shall be mechanical and
administrative in nature. Agent shall not by reason of this Agreement have a
fiduciary relationship or other implied relationships in respect of any Lender,
regardless of whether a
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Default or Event of Default exists hereunder. Nothing in this Agreement or any
of the Loan Documents, express or implied, is intended to or shall be construed
to impose upon Agent any obligations in respect of this Agreement or any of the
Loan Documents except as expressly set forth herein or therein. Furthermore,
Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that Agent is required to
exercise as directed in writing by the Requisite Lenders (or such other number
or percentage of the Lenders as shall be expressly provided for herein or in the
other Loan Documents). Each Lender shall make its own independent investigation
of the financial condition and affairs of each Credit Party in connection with
the extension of credit hereunder and shall make its own appraisal of the
creditworthiness of each Credit Party, and Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto (other than as
expressly required herein). Each Lender also acknowledges that it will,
independently and without reliance upon Agent or any other Lender or any of
their Affiliates and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Loan Document or
any related agreement or any document furnished hereunder or thereunder. If
Agent seeks the consent or approval of any Lenders to the taking or refraining
from taking any action hereunder, then Agent shall use reasonable efforts to
notify each Lender. Agent shall not, except as expressly set forth herein and in
the other Loan Documents, have any duty to disclose, and shall not be liable for
the failure to disclose, any information relating to any Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as the
Agent or any of its Affiliates in any capacity. If any Loan Document or any
other agreement or document entered into by Agent in connection with the Loans
(including without limitation any landlord agreement or waiver), obligates the
Agent to expend or advance or expend funds, Agent shall have no obligation to
advance or expend any such funds until the Lenders have provided Agent with the
funds necessary for Agent to make such expenditures or advances.
(c) Rights, Exculpation, Etc. Neither Agent nor any of its officers,
directors, employees or agents shall be liable to any Lender for any action
taken or omitted by them hereunder or under any of the Loan Documents, or in
connection herewith or therewith, except that Agent shall be liable to the
extent of its own gross negligence or willful misconduct as determined by a
final non-appealable order by a court of competent jurisdiction. Agent shall not
be liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them). In no event shall Agent be liable for punitive, special,
consequential, incidental, exemplary or other similar damages. In performing its
functions and duties hereunder, Agent shall exercise the same care which it
would in dealing with loans for its own account, but neither Agent nor any of
its agents or representatives shall be responsible to any Lender for any
recitals, statements,
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representations, warranties or covenants herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility, or
sufficiency of this Agreement or any of the Loan Documents or the transactions
contemplated thereby, or for the financial condition of any Credit Party. Agent
shall not be responsible for or have any duty to ascertain or inquire into the
satisfaction of any condition set forth in Section 7.1 or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to
Agent. Agent shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of any Credit
Party, or the existence or possible existence of any Default or Event of
Default. Agent may at any time request instructions from Requisite Lenders or
all affected Lenders with respect to any actions or approvals, which by the
terms of this Agreement or any of the Loan Documents, Agent is permitted or
required to take or to grant. If such instructions are promptly requested, Agent
shall be absolutely entitled to refrain from taking any action or to withhold
any approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Requisite
Lenders or such other portion of the Lenders as shall be prescribed by this
Agreement. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against Agent as a result of Agent acting or refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of Requisite Lenders or all affected Lenders, as
applicable; and, notwithstanding the instructions of Requisite Lenders or all
affected Lenders, as applicable, Agent shall have no obligation to take any
action that in its opinion or the opinion of its counsel may expose Agent to any
liability or is illegal or is contrary to the Loan Documents.
(d) Reliance. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any written or oral notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, fax or telegram) believed to be
genuine and correct and to have been signed, sent or made by the proper Person,
and with respect to all matters pertaining to this Agreement or any of the Loan
Documents and its duties hereunder or thereunder. Agent shall be entitled to
rely upon the advice of legal counsel, independent accountants, and other
experts selected by Agent in its sole discretion, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts. In addition, in determining compliance with any
condition hereunder to the making of a Loan, that by its terms must be fulfilled
to the satisfaction of a Lender, Agent may presume that such condition is
satisfactory to such Lender unless Agent shall have received notice to the
contrary from such Lender prior to the making of such Loan.
(e) Indemnification. Lenders will reimburse and indemnify Agent, any
sub agent, any Affiliates and each of their Related Parties (the "Agent
Indemnified Parties") for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including, without limitation, reasonable attorneys' fees and expenses),
advances or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against any Agent Indemnified Party in any way
relating to or arising
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out of this Agreement or any of the Loan Documents or any action taken or
omitted by any Agent Indemnified Party under this Agreement or any of the Loan
Documents, in proportion to each Lender's Pro Rata Share, but only to the extent
that any of the foregoing is not reimbursed by Borrowers; provided, however,
that no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements to the extent resulting from any Agent Indemnified Party's
gross negligence or willful misconduct as determined by a final non-appealable
order by a court of competent jurisdiction. If any indemnity furnished to any
Agent Indemnified Party for any purpose shall, in the reasonable opinion of
Agent, be insufficient or become impaired, Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against even if
so directed by the Requisite Lenders or such other portion of the Lenders as
shall be prescribed by this Agreement until such additional indemnity is
furnished. The obligations of Lenders under this Section 8.2(e) shall survive
the payment in full of the Obligations and the termination of this Agreement and
the resignation of Agent.
(f) Individually. With respect to any portion of the Term Loan held
by it hereunder, The Bank of New York shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender. The
terms "Lenders," "Requisite Lenders," or any similar terms shall, unless the
context clearly otherwise indicates, include The Bank of New York in its
individual capacity as a Lender or one of the Requisite Lenders (if it is a
Lender). The Bank of New York, and each other Lender either directly or through
strategic affiliations, may lend money to, acquire equity or other ownership
interests in, provide advisory services to and generally engage in any kind of
banking, trust or other business with any Credit Party as if it were not acting
as Agent or a Lender pursuant hereto and without any duty to account therefor to
any other Lenders. The Bank of New York and each other Lender, either directly
or through strategic affiliations, may accept fees and other consideration from
any Credit Party for services in connection with this Agreement or otherwise
without having to account for the same to the other Lenders.
(g) Successor Agent.
(i) Resignation. Agent may resign from the performance of all
its agency functions and duties hereunder at any time by giving at least
thirty (30) Business Days' prior written notice to Borrower Representative
and Lenders. Such resignation shall take effect upon the acceptance by a
successor Agent of appointment pursuant to clause (ii) below or as
otherwise provided in clause (ii) below.
(ii) Appointment of Successor. Upon any such notice of
resignation pursuant to clause (i) above, Requisite Lenders shall appoint
a successor Agent which, unless an Event of Default has occurred and is
continuing, shall be reasonably acceptable to Borrowers. If a successor
Agent shall not have been so appointed within the thirty (30) Business Day
period referred to in clause (i) above, the retiring Agent, upon notice to
Borrower Representative, shall then appoint a successor Agent who shall
serve as Agent
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until such time, if any, as Requisite Lenders appoint a successor Agent as
provided above; provided that if Agent shall notify the Borrowers and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Agent shall be discharged from its prospective
duties and obligations hereunder and under the other Loan Documents
(except that in the case of any collateral security held by the retiring
Agent on behalf of the Lenders under any of the Loan Documents, the
retiring Agent shall continue to hold such collateral security until such
time as a successor Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through
Agent shall instead be made by or to each Lender directly, until such time
as the Requisite Lenders appoint a successor Agent as provided for above
in this paragraph.
(iii) Successor Agent. Upon the acceptance of any appointment
as Agent under the Loan Documents by a successor Agent, 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 all prospective duties and obligations
under the Loan Documents (if not already discharged therefrom as provided
above in subsection (ii)). After any retiring Agent's resignation as
Agent, the provisions of this Section 8.2 and all other reimbursement
rights and indemnities set forth in the Loan Documents shall continue to
inure to the benefit of Agent, its sub agents, and their Related Parties
as to any actions taken or omitted to be taken by it in its capacity as
Agent.
(h) Collateral Matters.
(i) Release of Collateral. Lenders hereby irrevocably
authorize Agent, at its option and in its reasonable discretion, to
release any Lien granted to or held by Agent upon any Collateral (x) upon
payment and satisfaction of all Obligations (other than contingent
indemnification obligations to the extent no claims giving rise thereto
have been asserted), (y) constituting property being sold or disposed of
if Borrowers (or any of them) certify to Agent that the sale or
disposition is made in compliance with the provisions of this Agreement
(and Agent may rely in good faith conclusively on any such certificate,
without further inquiry), or (z) as required by the Intercreditor
Agreement.
(ii) Confirmation of Authority; Execution of Releases. Without
in any manner limiting Agent's authority to act without any specific or
further authorization or consent by Lenders (as set forth in Section
8.2(h)(i)), each Lender agrees to confirm in writing, upon request by
Agent or Borrower Representative, the authority to release any Collateral
conferred upon Agent under clauses (x) and (y) of Section 8.2(h)(i). Upon
receipt by Agent of any required confirmation from the Requisite Lenders
of its authority to release
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any particular item or types of Collateral, and upon at least ten (10)
Business Days' prior written request by Borrower Representative, Agent
shall (and is hereby irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted
to Agent upon such Collateral; provided, however, that (x) Agent shall not
be required to execute any such document on terms which, in Agent's
opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without
recourse or warranty, and (y) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or
obligations of any Credit Party, in respect of), all interests retained by
any Credit Party, including the proceeds of any sale, all of which shall
continue to constitute part of the Collateral. Notwithstanding the
foregoing, upon request by Agent at any time, the Requisite Lenders will
confirm in writing Agent's authority to release any Collateral or
Guaranties.
(iii) Absence of Duty. Agent shall have no obligation
whatsoever to any Lender or any other Person to assure that the property
covered by the Collateral Documents exists or is owned by Borrowers or any
other Credit Party or is cared for, protected or insured or has been
encumbered or that the Liens granted to Agent have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent in this Section 8.2(h) or in any of the Loan Documents,
it being understood and agreed that in respect of the property covered by
the Collateral Documents or any act, omission or event related thereto,
Agent may act in any manner it may deem appropriate, in its discretion,
given Agent's own interest in property covered by the Collateral Documents
as one of the Lenders and that Agent shall have no duty or liability
whatsoever to any of the other Lenders, provided that Agent shall exercise
the same care which it would in dealing with loans for its own account.
(i) Agency for Perfection. Agent and each Lender hereby appoint each
other Lender as agent for the purpose of perfecting Agent's security interest in
assets which, in accordance with the Code in any applicable jurisdiction, can be
perfected by possession or control. Should any Lender (other than Agent) obtain
possession or control of any such assets, such Lender shall notify Agent thereof
and, promptly upon Agent's request therefor, shall deliver such assets to Agent
in accordance with Agent's instructions or transfer control to Agent in
accordance with Agent's instructions. Each Lender agrees that it will not have
any right individually to enforce or seek to enforce any Collateral Document or
to realize upon any collateral security for the Term Loan unless instructed to
do so by Agent in writing, it being understood and agreed that such rights and
remedies may be exercised only by Agent.
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(j) Notice of Default. Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless Agent
shall have received written notice from a Lender or Borrower Representative
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". Agent shall use reasonable
efforts to notify each Lender of its receipt of any such notice. Agent shall
take such action with respect to such Default or Event of Default as may be
requested by Requisite Lenders in accordance with Section 6. Unless and until
Agent has received any such request, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interests
of Lenders.
(k) Lender Actions Against Collateral. Each Lender agrees that it
will not take any action, nor institute any actions or proceedings, with respect
to the Term Loan, against any Borrower or any Credit Party hereunder or under
the other Loan Documents or against any of the Real Estate encumbered by
Mortgages without the consent of the Required Lenders. With respect to any
action by Agent to enforce the rights and remedies of Agent and the Lenders
under this Agreement and the other Loan Documents, each Lender hereby consents
to the jurisdiction of the court in which such action is maintained, and agrees
to deliver its Term Note to Agent to the extent necessary to enforce the rights
and remedies of Agent for the benefit of the Lenders under the Mortgages in
accordance with the provisions hereof.
(l) Additional Titled Agents. Except for rights and powers, if any,
expressly reserved under this Agreement to any bookrunner, arranger or to any
titled agent named on the cover page of this Agreement (collectively, the
"Additional Titled Agents"), other than, and except for obligations,
liabilities, duties and responsibilities, if any, expressly assumed under this
Agreement by any Additional Titled Agent, no Additional Titled Agent, in such
capacity, has any rights, powers, liabilities, duties or responsibilities
hereunder or under any of the other Loan Documents. Without limiting the
foregoing, no Additional Titled Agent shall have nor be deemed to have a
fiduciary relationship with any Lender. At any time that any Lender serving as
an Additional Titled Agent shall have transferred to any other Person (other
than any Affiliates) all of its interests in the Term Loan, such Lender shall be
deemed to have concurrently resigned as such Additional Titled Agent.
Section 8.3 Set Off and Sharing of Payments.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, during the continuance of
any Event of Default, Agent, any Affiliate of Agent, any Lender and any
Affiliate of any Lender is hereby authorized by Borrowers at any time or from
time to time, with reasonably prompt subsequent notice to Borrower
Representative (any prior or contemporaneous notice being hereby expressly
waived) to set off and to appropriate and to apply any and all (A) balances held
by such Person at any of its offices for the account of any Borrower or any of
its Subsidiaries (regardless of whether such balances are then due to any
Borrower or its Subsidiaries), and (B) other property at any time held or owing
by such Person to or for the credit or for the account of any Borrower or any of
its Subsidiaries, against and on account of
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any of the Obligations; except that no Lender shall exercise any such right
without the prior written consent of Agent. Any Person exercising a right to set
off shall purchase for cash (and the other Lenders shall sell) interests in each
of such other Lender's Pro Rata Share of the Obligations as would be necessary
to cause all Lenders to share the amount so set off with each other Lender in
accordance with their respective Pro Rata Shares. Borrowers agree, to the
fullest extent permitted by law, that during the continuance of an Event of a
Default Agent, any Affiliate of Agent, any Lender and any Affiliate of any
Lender may exercise its right to set off with respect to amounts in excess of
its Pro Rata Share of the Obligations and upon doing so shall deliver such
amount so set off to the Agent for the benefit of all Lenders in accordance with
their Pro Rata Shares.
Section 8.4 Disbursements of Payment.
(a) Advances; Payments.
Upon the written request of any Lender, Agent shall advise each
Lender by telephone or fax of the amount of such Lender's Pro Rata Share of
principal, interest and Fees (exclusive of closing fees) paid for the benefit of
Lenders with respect to the Term Loan. At least once each month (each a
"Settlement Date") provided that each Lender has funded all payments required to
be made by it and purchased all participations required to be purchased by it
under this Agreement and the other Loan Documents as of such Settlement Date,
Agent shall pay to each Lender such Lender's Pro Rata Share of principal,
interest and Fees (exclusive of closing fees) paid by Borrowers since the
previous Settlement Date for the benefit of such Lender on the Term Loan held by
it; provided that Agent shall pay to each Lender such Lender's Pro Rata Share of
principal and interest payments with respect to the Term Loan within two (2)
Business Days of Agent's receipt of such payments. Such payments shall be made
by wire transfer to such Lender's account (as specified by such Lender on its
signature page hereto or the applicable Assignment Agreement) not later than
2:00 p.m. (New York time) on the next Business Day following each Settlement
Date.
(b) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be
received by Agent from Borrowers and such related payment is not received
by Agent, then Agent will be entitled to recover such amount from such
Lender on demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent reasonably determines at any time that any
amount received by Agent under this Agreement must be returned to any
Borrower or paid to any other Person pursuant to any insolvency law or
otherwise, then, notwithstanding any other term or condition of this
Agreement or any other Loan Document, Agent will not be required to
distribute any portion thereof to any Lender. In addition, each Lender
will repay to Agent on demand any portion of such amount that Agent has
distributed to such Lender, together with interest at such rate, if any,
as Agent
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is required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
(c) Dissemination of Information. Agent shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by
Agent from, or delivered by Agent to, any Credit Party, with notice of any Event
of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Event of Default; provided, that Agent shall
not be liable to any Lender for any failure to do so.
(d) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Term Note (including exercising any rights of setoff) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Term Note shall be taken in concert and at the
direction or with the consent of Agent or Requisite Lenders. Agent is authorized
to issue all notices to be issued by or on behalf of the Lenders with respect to
any Subordinated Debt.
SECTION 9
MISCELLANEOUS
Section 9.1 Indemnities.
(a) Borrowers agree, jointly and severally, to indemnify, pay, and
hold Agent (and each sub agent), each Lender, and their Affiliates, and each of
their respective officers, directors, employees, agents, advisors, and attorneys
(the "Indemnitees") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs and expenses (including all reasonable fees and expenses of counsel to
such Indemnitees) of any kind or nature whatsoever that may be imposed on,
incurred by, or asserted against the Indemnitee as a result of (i) the execution
or delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or the consummation of the
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrowers or any of
their Subsidiaries, or any Environmental Liability related in any way to the
Borrowers or any of their Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that Borrowers shall have no
obligation to an Indemnitee hereunder with respect to liabilities to the extent
resulting from the gross negligence or willful misconduct of that Indemnitee as
determined by a final non-appealable order of a court of competent jurisdiction.
If and to the extent that the foregoing undertaking may be unenforceable for any
reason, Borrowers agree to make the maximum contribution to the payment and
satisfaction thereof which is permissible under applicable law. The obligations
of Borrowers under this Section 9.1(a) shall survive the
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payment in full of the Obligations and the termination of this Agreement and the
resignation of Agent.
(b) To the extent that the Borrowers for any reason fails to
indefeasibly pay any amount required under Section 1.3 to be paid by it to Agent
(or any sub agent thereof), or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such sub
agent) or such Related Party, as the case may be, such Lender's Pro Rata Share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against Agent (or any such sub agent) or
against any Related Party of any of the foregoing acting for Agent (or any such
sub agent) in connection with such capacity. The obligations of Lenders under
this Section 9.1(b) shall survive the payment in full of the Obligations and the
termination of this Agreement and the resignation of Agent.
Section 9.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Borrowers, and by Requisite Lenders or all affected
Lenders, as applicable. Except as set forth in clause (b) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver shall, unless
in writing and signed by Agent and each Lender directly affected thereby: (i)
increase the principal amount of any Lender's Term Loan Commitment (which action
shall be deemed only to affect those Lenders whose Term Loan Commitments are
increased and may be approved by Requisite Lenders, including those Lenders
whose Term Loan Commitments are increased); reduce the principal of, rate of
interest on or Fees payable with respect to the Term Loan of any affected
Lender; (ii) extend any scheduled payment date or final maturity date of the
principal amount of the Term Loan of any affected Lender; (iii) waive, forgive,
defer, extend or postpone any payment of interest or Fees as to any affected
Lender (which action shall be deemed only to affect those Lenders to whom such
payments are made); (iv) release any Guaranty or, except as otherwise permitted
in Section 3.7, release all or substantially all of the Collateral (which action
shall be deemed to directly affect all Lenders), provided that the prior
approval of the Lenders shall not be required if Agent is required to release
any of the foregoing as required by the Intercreditor Agreement; (v) change the
percentage of the aggregate unpaid principal amount of the Term Loan that shall
be required for Lenders or any of them to take any action hereunder (any such
change shall be deemed to affect all Lenders); and (vi) amend or waive this
Section 9.2 or the definitions of the term "Requisite Lenders", insofar as such
definition affects the substance of this Section 9.2 (any such amendment or
waiver shall be deemed to affect all Lenders). Notwithstanding the foregoing,
any release contemplated by clause (iv) of the preceding
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sentence shall not require a writing signed by Agent and each Lender directly
affected thereby, but instead shall require a writing signed by Agent and
Lenders having (a) more than seventy-five percent (75%) of the aggregate
outstanding amount of the Term Loan. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent under this
Agreement or any other Loan Document shall be effective unless in writing and
signed by Agent, as the case may be, in addition to Lenders required hereinabove
to take such action. Each amendment, modification, termination or waiver shall
be effective only in the specific instance and for the specific purpose for
which it was given. No amendment, modification, termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan Document.
No amendment, modification, termination or waiver of any provision of any Term
Note shall be effective without the written concurrence of the holder of that
Term Note. No notice to or demand on any Credit Party in any case shall entitle
such Credit Party or any other Credit Party to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 9.2
shall be binding upon each holder of a Term Note at the time outstanding and
each future holder of a Term Note.
Section 9.3 Notices.
Any notice or other communication required shall be in writing
addressed to the respective party as set forth below and may be personally
served, telecopied, sent by overnight courier service or U.S. mail and shall be
deemed to have been given: (a) if delivered in person, when delivered; (b) if
delivered by fax, on the date of transmission if transmitted on a Business Day
before 5:00 p.m. New York time; (c) if delivered by overnight courier, one (1)
Business Day after delivery to the courier properly addressed; or (d) if
delivered by U.S. mail, four (4) Business Days after deposit with postage
prepaid and properly addressed.
Notices shall be addressed as follows:
If to Borrower ATLANTIS PLASTIC FILMS, INC.
Representative: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: TRIVEST PARTNERS, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇▇▇ TRAURIG, LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent: THE BANK OF NEW YORK
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Lender: To the address set forth on the
signature page hereto or in the
applicable Assignment Agreement
Section 9.4 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Agent or any Lender to exercise,
nor any partial exercise of, any power, right or privilege hereunder or under
any other Loan Documents shall impair such power, right, or privilege or be
construed to be a waiver of any Default or Event of Default. All rights and
remedies existing hereunder or under any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
Section 9.5 Marshaling; Payments Set Aside.
Neither Agent nor any Lender shall be under any obligation to
marshal any assets in payment of any or all of the Obligations. To the extent
that Borrowers make payment(s) or Agent enforces its Liens or Agent or any
Lender exercises its right of set-off, and such payment(s) or the proceeds of
such enforcement or set-off is subsequently invalidated, declared to be
fraudulent or preferential, set aside, or required to be repaid by anyone, then
to the extent of such recovery, the Obligations or part thereof originally
intended to be satisfied, and all Liens, rights and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or set-off had not occurred.
Section 9.6 Severability.
The invalidity, illegality, or unenforceability in any jurisdiction
of any provision under the Loan Documents shall not affect or impair the
remaining provisions in the Loan Documents.
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Section 9.7 Lenders' Obligations Several; Independent Nature of
Lenders' Rights.
The obligation of each Lender hereunder is several and not joint and
no Lender shall be responsible for the obligation or commitment of any other
Lender hereunder. In the event that any Lender should fail to advance its
portion of the Term Loan as herein provided, the Lenders, or any of them, at
their sole option, may advance the portion of the Term Loan that was to have
been made by the Lender so failing to make such portion of the Term Loan.
Nothing contained in any Loan Document and no action taken by Agent or any
Lender pursuant hereto or thereto shall be deemed to constitute Lenders to be a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt.
Section 9.8 Headings.
Section and subsection headings are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purposes or be given substantive effect.
Section 9.9 Applicable Law.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS WHICH DOES NOT
EXPRESSLY SET FORTH APPLICABLE LAW SHALL BE GOVERNED BY AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
Section 9.10 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns except that Borrowers
may not assign their rights or obligations hereunder without the written consent
of all Lenders.
Section 9.11 No Fiduciary Relationship; Limited Liability.
No provision in the Loan Documents and no course of dealing between
the parties shall be deemed to create any fiduciary duty owing to Borrowers by
Agent or any Lender. Borrowers agree that neither Agent nor any Lender shall
have liability to Borrowers (whether sounding in tort, contract or otherwise)
for losses suffered by Borrowers in connection with, arising out of, or in any
way related to the transactions contemplated and the relationship established by
the Loan Documents, or any act, omission or event occurring in connection
therewith, unless and to the extent that it is determined that such losses
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought as determined by a final non-appealable order by a court of
competent jurisdiction. Neither Agent nor any Lender shall have any liability
with respect to, and Borrowers hereby waive, release and agree not to ▇▇▇ for,
any special, indirect or consequential damages suffered by
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Borrowers in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.
Section 9.12 Construction.
Agent, each Lender, Borrowers and each other Credit Party
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review the Loan Documents with
its legal counsel and that the Loan Documents shall be construed as if jointly
drafted by Agent, each Lender, Borrowers and each other Credit Party. Agent,
each Lender, Borrowers and each other Credit Party has relied solely on its own
legal counsel and has not relied upon the legal counsel of any other Person with
respect to this Agreement, any other Loan Document or any other aspect of the
transactions contemplated hereby.
Section 9.13 Confidentiality.
Agent and each Lender shall hold all non-public information
regarding the Credit Parties and their respective businesses and obtained by
Agent or any Lender pursuant to the requirements hereof in accordance with such
Person's customary procedures for handling information of such nature, except
that disclosure of such information may be made (i) to their respective agents,
employees, Subsidiaries, Affiliates, attorneys, auditors, professional
consultants, rating agencies, insurance industry associations and portfolio
management services, (ii) to prospective transferees or purchasers of any
interest in the Term Loan, and to prospective contractual counterparties (or the
professional advisors thereto) in swap agreements permitted hereby, provided
that any such Persons shall have agreed to be bound by the provisions of this
Section 9.13, (iii) as required by law, subpoena, judicial order or similar
order and in connection with any litigation, (iv) as may be required in
connection with the examination, audit or similar investigation of such Person
and (v) to a Person that is a trustee, investment advisor, collateral manager,
servicer, noteholder or secured party in a Securitization (as hereinafter
defined) in connection with the administration, servicing and reporting on the
assets serving as collateral for such Securitization. For the purposes of this
Section 9.13, "Securitization" shall mean a public or private offering by a
Lender or any of its Affiliates or their respective successors and assigns, of
securities which represent an interest in, or which are collateralized, in whole
or in party, by the Term Loan. Confidential information shall not include
information that either: (i) is in the public domain, or becomes part of the
public domain after disclosure to such Person through no fault of such Person,
or (ii) is disclosed to such Person by a Person other than a Credit Party,
provided Agent does not have actual knowledge that such Person is prohibited
from disclosing such information. The obligations of Agent and Lenders under
this Section 9.13 shall supersede and replace the obligations of Agent and
Lenders under any confidentiality agreement in respect of this financing
executed and delivered by Agent or any Lender prior to the date hereof.
Section 9.14 CONSENT TO JURISDICTION.
BORROWERS AND CREDIT PARTIES HEREBY CONSENT TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED WITHIN ▇▇▇
-▇▇-
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ AND IRREVOCABLY AGREE THAT, SUBJECT TO AGENT'S
ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS.
BORROWERS AND CREDIT PARTIES EXPRESSLY SUBMIT AND CONSENT TO THE JURISDICTION OF
THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS. BORROWERS
AND CREDIT PARTIES HEREBY WAIVE PERSONAL SERVICE OF ANY AND ALL PROCESS AND
AGREE THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON BORROWERS AND CREDIT
PARTIES BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
BORROWER REPRESENTATIVE, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE
SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED. IN ANY
LITIGATION, TRIAL, ARBITRATION OR OTHER DISPUTE RESOLUTION PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, ALL DIRECTORS, OFFICERS,
EMPLOYEES AND AGENTS OF BORROWERS, CREDIT PARTIES OR ANY OF THEIR AFFILIATES
SHALL BE DEEMED TO BE EMPLOYEES OR MANAGING AGENTS OF BORROWERS OR SUCH CREDIT
PARTIES FOR PURPOSES OF ALL APPLICABLE LAW OR COURT RULES REGARDING THE
PRODUCTION OF WITNESSES BY NOTICE FOR TESTIMONY (WHETHER IN A DEPOSITION, AT
TRIAL OR OTHERWISE). BORROWERS AND CREDIT PARTIES AGREE THAT AGENT'S OR ANY
LENDER'S COUNSEL IN ANY SUCH DISPUTE RESOLUTION PROCEEDING MAY EXAMINE ANY OF
THESE INDIVIDUALS AS IF UNDER CROSS-EXAMINATION AND THAT ANY DISCOVERY
DEPOSITION OF ANY OF THEM MAY BE USED IN THAT PROCEEDING AS IF IT WERE AN
EVIDENCE DEPOSITION. BORROWERS AND CREDIT PARTIES IN ANY EVENT WILL USE ALL
COMMERCIALLY REASONABLE EFFORTS TO PRODUCE IN ANY SUCH DISPUTE RESOLUTION
PROCEEDING, AT THE TIME AND IN THE MANNER REQUESTED BY AGENT OR ANY LENDER, ALL
PERSONS, DOCUMENTS (WHETHER IN TANGIBLE, ELECTRONIC OR OTHER FORM) OR OTHER
THINGS UNDER THEIR CONTROL AND RELATING TO THE DISPUTE.
Section 9.15 WAIVER OF JURY TRIAL.
BORROWERS, CREDIT PARTIES, AGENT AND EACH LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. BORROWERS, CREDIT
PARTIES, AGENT AND EACH LENDER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
BORROWERS, CREDIT PARTIES, AGENT AND EACH LENDER WARRANT AND REPRESENT THAT EACH
HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL
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COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.
Section 9.16 Survival of Warranties and Certain Agreements.
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making of the Term
Loan and the execution and delivery of the Term Notes. Notwithstanding anything
in this Agreement or implied by law to the contrary, the agreements of Borrowers
set forth in Sections 1.3(c), 1.8, 1.9 and 9.1 shall survive the repayment of
the Obligations and the termination of this Agreement.
Section 9.17 Entire Agreement.
This Agreement, the Term Notes and the other Loan Documents embody
the entire agreement among the parties hereto and supersede all prior
commitments, agreements, representations, and understandings, whether oral or
written, relating to the subject matter hereof, and may not be contradicted or
varied by evidence of prior, contemporaneous, or subsequent oral agreements or
discussions of the parties hereto. All Exhibits, Schedules and Annexes referred
to herein are incorporated in this Agreement by reference and constitute a part
of this Agreement.
Section 9.18 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one in the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto.
Section 9.19 Replacement of Lenders.
(a) Within fifteen (15) days after receipt by Borrower
Representative of written notice and demand from any Lender for payment pursuant
to Section 1.8 or 1.9 or, as provided in this Section 9.19(b), in the case of
certain refusals by any Lender to consent to certain proposed amendments,
modifications, terminations or waivers with respect to this Agreement that have
been approved by Requisite Lenders (any such Lender demanding such payment or
refusing to so consent being referred to herein as an "Affected Lender"),
Borrowers may, at their option, notify Agent and such Affected Lender of its
intention to do one of the following (provided, if a Default or Event of Default
exists Requisite Lenders have consented to the same):
(i) Borrowers may obtain, at Borrowers' expense, a replacement
Lender ("Replacement Lender") for such Affected Lender, which Replacement
Lender shall be reasonably satisfactory to Agent. In the event Borrowers
obtain a Replacement Lender that will purchase all outstanding Obligations
owed to such Affected Lender within ninety (90) days following
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notice of Borrowers' intention to do so, the Affected Lender shall (x)
sell and assign all of its rights for an amount equal to the principal
balance of the Term Loan held by such Affected Lender and all accrued
interest and Fees and other Obligations owing to such Lender through the
date of such sale and (y) delegate all of its obligations under this
Agreement to such Replacement Lender in accordance with the provisions of
Section 8.1, provided that Borrowers have reimbursed such Affected Lender
for any administrative fee payable pursuant to Section 8.1 and, in any
case where such replacement occurs as the result of a demand for payment
pursuant to Section 1.8 or 1.9, paid all amounts required to be paid to
such Affected Lender pursuant to Section 1.8 or 1.9 through the date of
such sale and assignment; or
(ii) Borrowers may, with Agent's consent, prepay in full all
outstanding Obligations owed to such Affected Lender. Borrowers shall,
within ninety (90) days following notice of their intention to do so,
prepay in full all outstanding Obligations owed to such Affected Lender
(including, in any case where such prepayment occurs as the result of a
demand for payment for increased costs, such Affected Lender's increased
costs for which it is entitled to reimbursement under this Agreement
through the date of such prepayment).
(b) If, in connection with any proposed amendment, modification,
waiver or termination pursuant to Section 9.2 (a "Proposed Change") requiring
the consent of all affected Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not so obtained being referred to as
a "Non-Consenting Lender"), then, so long as (x) Agent is not a Non-Consenting
Lender, and (y) if a Default or Event of Default exists, Requisite Lenders have
consented to such repayment, at Borrower Representative's request Agent, or a
Person reasonably acceptable to Agent, shall have the right with Agent's consent
and in Agent's sole discretion (but shall have no obligation) to purchase from
such Non-Consenting Lenders, and such Non-Consenting Lenders agree that they
shall, upon Agent's request, sell and assign to Agent or such Person, all of the
Obligations of such Non-Consenting Lenders for an amount equal to the principal
balance of the Term Loan held by the Non-Consenting Lenders and all accrued
interest and Fees and other Obligations owing to such Non-Consenting Lenders
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.
Section 9.20 Delivery of Termination Statements and Mortgage
Releases.
Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), and a release of all
claims against Agent and Lenders, and so long as no suits, actions proceedings,
or claims are pending or threatened against any Indemnitee asserting any
damages, losses or liabilities that are indemnified liabilities hereunder, Agent
shall deliver to Borrower Representative termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
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Section 9.21 Subordination of Intercompany Indebtedness.
(a) Each Credit Party hereby agrees that any intercompany
Indebtedness or other intercompany payables or receivables, or intercompany
advances directly or indirectly made by or owed to such Credit Party by any
other Credit Party (collectively, "Intercompany Debt"), of whatever nature at
any time outstanding shall be subordinate and subject in right of payment to the
prior payment in full in cash of the Obligations.
(b) Upon any payment or distribution of any assets of any Credit
Party of any kind or character, whether in cash, property or securities by
set-off, recoupment or otherwise, to creditors in any liquidation or other
winding-up of such Credit Party or in the event of any insolvency proceeding,
Agent and Lenders shall first be entitled to receive payment in full in cash, in
accordance with the terms of the Obligations and of this Agreement, of all
amounts payable under or in respect of such Obligations, before any payment or
distribution is made on, or in respect of, any Intercompany Debt, in any such
insolvency proceeding, any distribution or payment, to which Agent or any Lender
would be entitled except for the provisions hereof shall be paid by such Credit
Party, or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other person making such payment or distribution directly to Agent (for the
benefit of Agent and the Lenders) to the extent necessary to pay all such
Obligations in full in cash, after giving effect to any concurrent payment or
distribution to Agent and Lenders (or to Agent for the benefit of Agent and
Lenders).
SECTION 10
JOINT AND SEVERAL LIABILITY
Section 10.1 Joint and Several Liability.
Each Borrower hereby agrees that such Borrower is jointly and
severally liable for the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or hereafter
owing to Agents and Lenders. Each Borrower agrees that its obligations under
this Section 10 shall not be discharged until payment and performance, in full
in cash, of the Obligations has occurred, and that its obligations under this
Agreement shall be absolute and unconditional, irrespective of, and unaffected
by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by Agents and Lenders in respect thereof (including the release of
any such security); or
(c) the insolvency of any Credit Party.
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Section 10.2 Waivers by Borrowers.
Each Borrower expressly waives all rights it may have now or in the
future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Agent or Lenders to marshal assets or to proceed in respect
of the Obligations hereunder against any other Credit Party, any other party or
against any security for the payment and performance of the Obligations before
proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, Agent and Lenders that the foregoing waivers are
of the essence of the transaction contemplated by this Agreement and the other
Loan Documents and that, but for the provisions of this Section 10 and such
waivers, Agent and Lenders would decline to enter into this Agreement.
Section 10.3 Benefit.
Each Borrower agrees that the provisions of this Section 10 are for
the benefit of Agent and Lenders and their respective successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between any
other Borrower and Agent or Lenders, the obligations of such other Borrower
under the Loan Documents.
Section 10.4 Waiver of Subrogation, Etc.
Notwithstanding anything to the contrary in this Agreement or in any
other Loan Document, and except as set forth in Section 10.7, each Borrower
hereby expressly and irrevocably waives any and all rights at law or in equity
to subrogation, reimbursement, exoneration, contribution, indemnification or set
off and any and all defenses available to a co-obligor. Each Borrower
acknowledges and agrees that this waiver is intended to benefit Agent and
Lenders and shall not limit or otherwise affect such Borrower's liability
hereunder or the enforceability of this Section 10, and that Agent, Lenders and
their respective successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Section 10.4.
Section 10.5 Election of Remedies.
If Agent or any Lender may, under applicable law, proceed to realize
its benefits under any of the Loan Documents giving Agent or such Lender a Lien
upon any Collateral, whether owned by any Borrower or by any other Person,
either by judicial foreclosure or by non-judicial sale or enforcement, Agent or
any Lender may, at its sole option, determine which of its remedies or rights it
may pursue without affecting any of its rights and remedies under this Section
10. If, in the exercise of any of its rights and remedies, Agent or any Lender
shall forfeit any of its rights or remedies, including its right to enter a
deficiency judgment against any Borrower or any other Person, whether because of
any applicable laws pertaining to "election of remedies" or the like, each
Borrower hereby consents to such action by Agent or such Lender and waives any
claim based upon such action, even if such action by Agent or such Lender shall
result in a full or partial loss of any rights of subrogation that each Borrower
might otherwise have had but for such action by Agent or such Lender. Any
election of remedies that results in the denial or impairment of
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the right of Agent or any Lender to seek a deficiency judgment against any
Borrower shall not impair any other Borrower's obligation to pay the full amount
of the Obligations. In the event Agent or any Lender shall bid at any
foreclosure or trustee's sale or at any private sale permitted by law or the
Loan Documents, Agent or such Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Agent or such Lender
but shall be credited against the Obligations. The amount of the successful bid
at any such sale, whether Agent, Lender or any other party is the successful
bidder, shall be conclusively deemed to be the fair market value of the
Collateral and the difference between such bid amount and the remaining balance
of the Obligations shall be conclusively deemed to be the amount of the
Obligations under this Section 10, notwithstanding that any present or future
law or court decision or ruling may have the effect of reducing the amount of
any deficiency claim to which Agent or any Lender might otherwise be entitled
but for such bidding at any such sale.
Section 10.6 Limitation.
Notwithstanding any provision herein contained to the contrary, each
Borrower's liability shall be limited to an amount not to exceed as of any date
of determination the amount that could be claimed by Agent and Lenders from such
Borrower without rendering such claim voidable or avoidable under Section 548 of
Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law after taking into account, among other things, such Borrower's right
of contribution and indemnification from each other Borrower under Section 10.7.
Section 10.7 Contribution with Respect to Obligations.
(a) To the extent that any Borrower shall make a payment of all or
any of the Obligations (a "Payment") that, taking into account all other
Payments then previously or concurrently made by any other Borrower, exceeds the
amount that such Borrower would otherwise have paid if each Borrower had paid
the aggregate Obligations satisfied by such Payment in the same proportion that
such Borrower's Allocable Amount (as defined below) (as determined immediately
prior to such Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Payment, then,
following indefeasible payment in full in cash of the Obligations, such Borrower
shall be entitled to receive contribution and indemnification payments from, and
be reimbursed by, each other Borrower for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower without rendering such claim voidable or avoidable
under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable
state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or
similar statute or common law.
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(c) This Section 10.7 is intended only to define the relative rights
of Borrowers and nothing set forth in this Section 10.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including Section 10.1. Nothing contained in this Section
10.7 shall limit the liability of any Borrower to pay the Term Loan made to any
Borrower and accrued interest, Fees and expenses with respect thereto.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Borrower to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Credit
Parties under this Section 10.7 shall be exercisable upon the full and
indefeasible payment of the Obligations.
Section 10.8 Liability Cumulative.
The liability of Borrowers under this Section 10 is in addition to
and shall be cumulative with all liabilities of each Borrower to Agent and
Lenders under this Agreement and the other Loan Documents to which such Borrower
is a party or in respect of any Obligations or obligation of the other
Borrowers, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
-61-
Witness the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
ATLANTIS PLASTIC FILMS, INC.,
ATLANTIS MOLDED PLASTICS, INC.
ATLANTIS FILMS, INC.
RIGAL PLASTICS, INC.
ATLANTIS PLASTICS INJECTION
MOLDING, INC.
▇▇▇▇▇▇ PLASTICS, INC.
EXTRUSION MASTERS, INC.
each as a Borrower
Each By:_________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
ATLANTIS PLASTICS, INC.,
as a Credit Party
By:______________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and Chief
Financial Officer
Signature Page to Second Lien Credit Agreement
THE BANK OF NEW YORK,
as Administrative Agent
By:______________________________________
Name:____________________________________
Title:___________________________________
Signature Page to Second Lien Credit Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇ PCG, INC.,
as a Lender
By:_________________________________
Name:_______________________________
Title:______________________________
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. First
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No.: 066-922119
Account Name: ML IBK Positions, Inc.
Reference: Atlantis Plastics
Bank: ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PRODUCTS, LLC,
as a Lender
By:_________________________________
Name:_______________________________
Title:______________________________
Address: ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇
Account No.: 066-622271
Account Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Products
Reference: Atlantis Plastics
Bank: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, A DIVISION OF
▇▇▇▇▇▇▇ ▇▇▇▇▇ BUSINESS FINANCIAL
SERVICES INC., as a Lender
By:_______________________________
Name:_____________________________
Title:____________________________
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Atlantis Plastics Account
Manager
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
Bank: LaSalle Bank, NA
City: Chicago, Illinois
ABA No.: ▇▇▇▇▇▇▇▇▇
Account Name: MLBFS - Corporate Finance
Account Number: 5800393182
Account Holder's Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Reference: Atlantis Plastics, Inc.
ANNEX A
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" means: (a) changes in accounting principles
required by GAAP and implemented by any Holdings or any of its Subsidiaries; (b)
changes in accounting principles recommended by Borrowers' certified public
accountants and implemented by any Borrower; and (c) changes in carrying value
of any Borrower's or any of its Subsidiaries' assets, liabilities or equity
accounts resulting from (i) the application of purchase accounting principles
(A.P.B. 16 and/or 17 and EITF 88-16 and FASB 109) to the Related Transactions or
(ii) as the result of any other adjustments that, in each case, were applicable
to, but not included in, the Pro Forma.
"Accounts" means all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all healthcare insurance receivables, and (f) all
collateral security of any kind, now or hereafter in existence, given by any
Account Debtor or other Person with respect to any of the foregoing.
"Affected Lender" has the meaning ascribed to it in Section 9.19(a).
Annex A
Page 1
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, ten percent (10%) or more of the Stock having
ordinary voting power in the election of directors of such Person, (b) each
Person that controls, is controlled by or is under common control with such
Person, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in the case of Borrowers, the immediate family members, spouses
and lineal descendants of individuals who are Affiliates of any Borrower. For
the purposes of this definition, "control" of a Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall specifically exclude Agent and each Lender.
"Agent" means The Bank of New York in its capacity as administrative
agent for Lenders or its successor appointed pursuant to Section 8.2.
"Agreement" means this Credit Agreement (including all schedules,
subschedules, annexes and exhibits hereto), as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Allocable Amount" has the meaning ascribed to it in Section 10.7.
"Applicable Margins" means collectively the Applicable Term Loan
Index Margin and the Applicable Term Loan LIBOR Margin.
"Applicable Term Loan Index Margin" means the per annum interest
rate from time to time in effect and payable in addition to the Index Rate
applicable to the Term Loan, as determined by reference to Section 1.2(a).
"Applicable Term Loan LIBOR Margin" means the per annum interest
rate from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Term Loan, as determined by reference to Section 1.2(a).
"Asset Disposition" means the disposition whether by sale, lease,
transfer, loss, damage, destruction, casualty, condemnation or otherwise of any
of the following: (a) any of the Stock or other equity or ownership interest of
any of Borrowers' Subsidiaries or (b) any or all of the assets of Borrowers or
any of their Subsidiaries other than sales of Inventory in the ordinary course
of business.
"Assignment Agreement" has the meaning ascribed to it in Section
8.1(a).
"Atlantis Films" has the meaning ascribed to it in the preamble to
the Agreement.
"Atlantis Molded Plastics" has the meaning ascribed to it in the
preamble to the Agreement.
Annex A
Page 2
"Atlantis Plastic Films" has the meaning ascribed to it in the
preamble to the Agreement.
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. Sections 101 et seq. or other applicable bankruptcy,
insolvency or similar laws.
"Borrower" and "Borrowers" have the respective meanings ascribed to
them in the preamble to the Agreement.
"Borrower Representative" means Atlantis Plastic Films in its
capacity as Borrower Representative pursuant to the provisions of Section 1.10.
"Borrowers Stockholders Pledge Agreement" means the Pledge Agreement
of even date herewith executed by each of the Borrowers' Stockholders in favor
of Agent, on behalf of itself and Lenders, pledging on a subordinate basis, all
Stock of Borrowers and their other Subsidiaries.
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State of New
York or Georgia or Dallas, Texas and in reference to LIBOR Loans shall mean any
such day that is also a LIBOR Business Day.
"Capital Expenditures" has the meaning ascribed to it in Section 4.1
of Schedule 1 to Exhibit 4.8(m).
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Equivalents" means: (i) marketable securities (A) issued or
directly and unconditionally guaranteed as to interest and principal by the
United States government or (B) issued by any agency of the United States
government the obligations of which are backed by the full faith and credit of
the United States, in each case maturing within one (1) year after acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after acquisition
thereof and having, at the time of acquisition, a rating of at least A-1 from
S&P or at least P-1 from ▇▇▇▇▇'▇; (iii) commercial paper maturing no more than
one year from the date of acquisition and, at the time of acquisition, having a
rating of at least A-1 from S&P or at least P-1 from ▇▇▇▇▇'▇; (iv) certificates
of deposit or bankers' acceptances issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America
Annex A
Page 3
or any state thereof or the District of Columbia that is at least (A)
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (B) has Tier 1 capital (as defined in such regulations)
of not less than $250,000,000, in each case maturing within one year after
issuance or acceptance thereof; and (v) shares of any money market mutual or
similar funds that (A) has substantially all of its assets invested continuously
in the types of investments referred to in clauses (i) through (iv) above, (B)
has net assets of not less than $500,000,000 and (C) has the highest rating
obtainable from either S&P or ▇▇▇▇▇'▇.
"Certificate of Exemption" has the meaning ascribed to it in Section
1.9(c).
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934),
other than ▇▇▇▇ ▇. ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of shares of
Stock of Holdings that are able to cast more than twenty-five percent (25%) of
the votes for the election of directors of Holdings under ordinary
circumstances; (b) during any period of twelve (12) consecutive calendar months,
individuals who at the beginning of such period constituted the board of
directors of Holdings (together with any new directors whose election by the
board of directors of Holdings or whose nomination for election by the
Stockholders of Holdings was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason other than death or disability to constitute a
majority of the directors then in office; (c) Holdings ceases to own and control
all of the economic and voting rights associated with all of the outstanding
Stock of Atlantis Films, Atlantis Molded Plastics, Atlantis Plastic Films,
Atlantis Plastics Foreign Sales, Inc. (other than as a result of the dissolution
of Atlantis Plastics Foreign Sales, Inc.), or Rigal Plastics or any of its
Subsidiaries formed or acquired after the Closing Date; (d) Atlantis Films,
Atlantis Molded Plastics, Atlantis Plastic Films, Atlantis Plastics Foreign
Sales, Inc., or Rigal Plastics ceases to own and control all of the economic and
voting rights associated with all of the outstanding Stock of any of its
Subsidiaries (other than as a result of the dissolution of Atlantis Plastics
Foreign Sales, Inc.); (e) ▇▇▇▇ ▇. ▇▇▇▇▇▇, directly or beneficially, during his
lifetime ceases to own and control at least sixty percent (60%) of the Stock of
Holdings owned by him on December 27, 2002; or (f) the Management Agreement
ceases to be in effect.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental premiums and other amounts (including premiums and
other amounts owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the
Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of any Credit Party, (d) any Credit Party's ownership or use of any
properties or other assets, or (e) any other aspect of any Credit Party's
business.
Annex A
Page 4
"Chattel Paper" means any "chattel paper," as such term is defined
in the Code, including electronic chattel paper, now owned or hereafter acquired
by any Credit Party, wherever located.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex C.
"Closing Date" means March 22, 2005.
"Code" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, that to
the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security Agreement,
the Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations or any portion
thereof.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Guaranties, the Mortgages, the Patent Security Agreements, the
Trademark Security Agreements, the Copyright Security Agreements and all similar
agreements entered into from time to time guaranteeing payment of, or granting a
subordinate Lien upon property as security for payment of, the Obligations or
any portion thereof.
"Compliance and Excess Cash Flow Certificate" has the meaning
ascribed to it in Section 4.5(n).
"Consolidated Net Income" has the meaning ascribed to it in Section
4.2 of Schedule 1 to Exhibit 4.5(n).
"Contingent Obligation" means, as applied to any Person, any direct
or indirect liability of that Person: (i) with respect to Guaranteed
Indebtedness and with respect to any Indebtedness, lease, dividend or other
obligation of another Person if the purpose or intent of
Annex A
Page 5
the Person incurring such liability, or the effect thereof, is to provide
assurance to the obligee of such liability that such liability will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such liability will be protected (in whole or in part)
against loss with respect thereto; (ii) with respect to any letter of credit
issued for the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings; (iii) under any foreign exchange contract,
currency swap agreement, interest rate swap agreement or other similar agreement
or arrangement designed to alter the risks of that Person arising from
fluctuations in currency values or interest rates, (iv) any agreement, contract
or transaction involving commodity options or future contracts, (v) to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement, or (vi) pursuant to any agreement to
purchase, repurchase or otherwise acquire any obligation or any property
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to maintain the solvency, financial condition or any balance
sheet item or level of income of another. The amount of any Contingent
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if not a fixed and determined amount, the maximum amount
so guaranteed.
"Contractual Obligations" means, as applied to any Person, any
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject including
the Related Transactions Documents.
"Copyright License" means any and all rights nor owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" means the copyright security
agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Copyrights" means all of the following now owned or hereafter
created or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof; and (b) all reissues, extensions or renewals thereof.
"Credit Parties" means Holdings, Borrowers, and each of their
respective Subsidiaries and each other Person who executes this Agreement as a
"Credit Party" or a Guaranty or who grants a Lien on all or part of its assets
to secure all of part of the Obligations.
Annex A
Page 6
"Current Assets" means, with respect to any Person, all current
assets of such Person as of any date of determination calculated in accordance
with GAAP, but excluding cash, cash equivalents and debts due from Affiliates.
"Current Liabilities" means, with respect to any Person, all
liabilities that should, in accordance with GAAP, be classified as current
liabilities, and in any event shall include all Indebtedness payable on demand
or within one year from any date of determination without any option on the part
of the obligor to extend or renew beyond such year, all accruals for federal or
other taxes based on or measured by income and payable within such year, but
excluding the current portion of long-term debt required to be paid within one
year and the aggregate outstanding principal balances of the "Revolving Loan"
and the "Swing Line Loan" (each as defined in the First Lien Debt Documents).
"Default" means any event that, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.2(d).
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as Schedules 3.2 through 5.18 in the index to the Agreement.
"Documents" means any "document," as such term is defined in the
Code, including electronic documents, now owned or hereafter acquired by any
Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"EBITDA" has the meaning ascribed to it in Section 4.2 of Schedule 1
to Exhibit 4.5(n).
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), and any and
Annex A
Page 7
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including, but not limited to, processing equipment, conveyors, machine tools,
data processing and computer equipment, including embedded software and
peripheral equipment and all engineering, processing and manufacturing
equipment, office machinery, furniture, materials handling equipment, tools,
attachments, accessories, automotive equipment, trailers, trucks, forklifts,
molds, dies, stamps, motor vehicles, rolling stock and other equipment of every
kind and nature, trade fixtures and fixtures not forming a part of real
property, together with all additions and accessions thereto, replacements
therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as
Annex A
Page 8
defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal
of any Credit Party or any ERISA Affiliate from any Multiemployer Plan; (d) the
filing of a notice of intent to terminate a Title IV Plan or the treatment of a
plan amendment as a termination under Section 4041 of ERISA; (e) the institution
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(f) the failure by any Credit Party or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within thirty (30) days; (g) any other event or condition that might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the termination of a Multiemployer Plan under Section
4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; or (i) the loss of a Qualified Plan's
qualification or tax exempt status; or (j) the termination of a Plan described
in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 6.1.
"Excess Cash Flow" has the meaning ascribed to it in Schedule 2 to
Exhibit 4.5(n).
"Extrusion Masters" has the meaning ascribed to it in the preamble
to the Agreement.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. Section 01 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal to
the weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Statements" means the consolidated income statements,
statements of cash flows and balance sheets of Holdings, Borrowers and their
Subsidiaries delivered in accordance with Section 4.5.
"First Lien Debt" means the Indebtedness outstanding from time to
time under the First Lien Debt Documents.
Annex A
Page 9
"First Lien Debt Documents" means that certain Credit Agreement of
even date herewith among the Borrower, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, a division of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as administrative agent, General
Electric Capital Corporation, as syndication agent, and the various Lenders
party thereto from time to time, together with all other "Loan Documents" (as
defined in such Credit Agreement), each as amended, restated, replaced,
refinanced, supplemented or otherwise modified from time to time.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrowers, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of
Borrowers ending on December 31 of each year.
"Fixed Charges" has the meaning ascribed to it in Section 4.3 of
Schedule 1 to Exhibit 4.5(n).
"Fixed Charge Coverage Ratio" has the meaning ascribed to it in
Section 4.3 of Schedule 1 to Exhibit 4.5(n).
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"Foreign Lender" has the meaning ascribed to it in Section 1.9(c).
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness (which shall exclude Letter of
Credit Obligations and Indebtedness of the type described in clause (g) of the
defined term "Indebtedness"), and specifically including Capital Lease
Obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrowers, the Obligations (excluding Letter of Credit
Obligations) and, without duplication, Guaranteed Indebtedness consisting of
guaranties of Funded Debt of other Persons.
"Funding Date" has the meaning ascribed to it in Section 7.2.
"GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
"General Intangibles" means "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contractual Obligation, all payment intangibles,
customer lists, Licenses, Copyrights, Trademarks, Patents, and all applications
therefor and reissues, extensions or renewals thereof, rights in Intellectual
Property, interests in partnerships, joint ventures and other business
associations,
Annex A
Page 10
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, chooses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Credit Party or any
computer bureau or service company from time to time acting for such Credit
Party.
"Goods" means any "goods," as such term is defined in the Code, now
owned or hereafter acquired by any Credit Party, wherever located, including
embedded software to the extent included in "goods" as defined in the Code,
manufactured homes, standing timber that is cut and removed for sale and unborn
young of animals.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means, as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
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"Guaranties" means, collectively, the Holdings Guaranty and any
other guaranty executed by any Guarantor in favor of Agent and Lenders in
respect of the Obligations.
"Guarantor Payment" has the meaning ascribed to it on Section 10.7.
"Guarantors" means Holdings and each other Person, if any, that
executes a guaranty or other similar agreement in favor of Agent, for itself and
the ratable benefit of Lenders, in connection with the transactions contemplated
by the Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Holdings" has the meaning ascribed thereto in the recitals to the
Agreement.
"Holdings Guaranty" means the guaranty of even date herewith
executed by Holdings in favor of Agent, on behalf of itself and Lenders.
"Indebtedness" means, with respect to any Person, without
duplication (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred six (6) months
or more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than six (6)
months unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon
Annex A
Page 12
or in property or other assets (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness, (i) "earnouts" and similar payment obligations,
and (j) the Obligations.
"Indemnitees" has the meaning ascribed to it in Section 9.1.
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the Federal Funds Rate plus one-half of one percent (0.50%) per annum and
(ii) the rate of interest which is identified and normally published by
Bloomberg Professional Service Page Prime as the "Prime Rate" (or, if more than
one rate is published as the Prime Rate, then the highest of such rates). Any
change in Index Rate will become effective as of the date the rate of interest
which is so identified as the "Prime Rate" is different from that published on
the preceding Business Day. If Bloomberg Professional Service no longer reports
the Prime Rate, or if such Page Prime no longer exists, or Agent reasonably
determines in good faith that the rate so reported no longer accurately reflects
an accurate determination of the prevailing Prime Rate, Agent may select a
reasonably comparable index or source to use as the basis for the Index Rate.
Each change in any interest rate provided for in the Agreement based upon the
Index Rate shall take effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest
by reference to the Index Rate.
"Injection Molding" has the meaning ascribed to it in the preamble
to the Agreement.
"Instruments" means all "instruments," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercreditor Agreement" means that certain Intercreditor Agreement
of even date herewith, among Agent, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital, a division of ▇▇▇▇▇▇▇
▇▇▇▇▇ Business Financial Services Inc., as Agent for the lenders under the First
Lien Debt Documents, Borrowers, and certain affiliates of Borrowers, as the same
may be amended, restated, supplemented or otherwise modified from time to time.
"Interest Payment Date" means (a) as to any Index Rate Loan, the
first Business Day of each month to occur while such Index Rate Loan is
outstanding, and (b) as to any LIBOR Loan, the last day of the applicable LIBOR
Period; provided that, in the case of any LIBOR Period greater than three (3)
months in duration, interest shall be payable at three (3) month intervals and
on the last day of such LIBOR Period; and provided further
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that, in addition to the foregoing, the date upon which the Term Loan is paid in
full shall be deemed to be an "Interest Payment Date" with respect to any
interest that has then accrued under the Agreement.
"Inventory" means any "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
including inventory, merchandise, goods and other personal property that are
held by or on behalf of any Credit Party for sale or lease or are furnished or
are to be furnished under a contract of service, or that constitute raw
materials, work in process, finished goods, returned goods, supplies or
materials of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Borrowers or any of their Subsidiaries of any Stock, or other
ownership interest in, or the obligations of, any other Person, and (ii) any
direct or indirect loan, advance or capital contribution by Borrowers or any of
their Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"Investment Property" means all "investment property," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located, including: (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of such Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"LaVanture Acquisition" means the acquisition by Extrusion Masters
of certain of the assets of LaVanture Products Company Inc., an Indiana
corporation ("LaVanture Products"), LaVanture Plastic Extrusion Technologies,
Inc., an Indiana corporation ("LaVanture Extrusion") and Molded Designs
Technology, Inc., an Indiana corporation ("Molded Designs"; and, collectively
with LaVanture Products and LaVanture
Annex A
Page 14
Extrusion, the "Sellers"), pursuant to the terms of that certain Asset Purchase
Agreement dated as of November 9, 2004, by and among the Sellers and Extrusion
Masters.
"Lenders" means the Lenders named on the signature pages of the
Agreement, and each Person that becomes a Lender pursuant to Section 8.1(a),
each together with their respective successors and assigns.
"Letter of Credit Obligations" means all "Letter of Credit
Obligations" (as defined in the First Lien Debt Documents).
"Leverage Ratio" has the meaning ascribed to it in Section 4.4 of
Schedule 1 to Exhibit 4.5(n).
"LIBOR Breakage Fee" means an amount equal to the amount of any
losses, expenses, liabilities (including, without limitation, any loss
(including interest paid) and lost opportunity cost in connection with the
re-employment of such funds) that any Lender may sustain as a result of (i) any
default by any Borrower in making any borrowing of, conversion into or
continuation of any LIBOR Loan following Borrower Representative's delivery to
Agent of any LIBOR Loan request in respect thereof or (ii) any payment of a
LIBOR Loan on any day that is not the last day of the LIBOR Period applicable
thereto (regardless of the source of such prepayment and whether voluntary, by
acceleration or otherwise). For purposes of calculating amounts payable to a
Lender under Section 1.3(c), each Lender shall be deemed to have actually funded
its relevant LIBOR Loan through the purchase of a deposit bearing interest at
LIBOR in an amount equal to the amount of that LIBOR Loan and having a maturity
and repricing characteristics comparable to the relevant LIBOR Period; provided,
however, that each Lender may fund each of its LIBOR Loans in any manner it sees
fit, and the foregoing assumption shall be utilized only for the calculation of
amounts payable under Section 1.3(c).
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loans" means the Term Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower Representative pursuant
to the Agreement and ending one, two, three or six months thereafter, as
selected by Borrower Representative's irrevocable notice to Agent as set forth
in Section 1.2(e); provided, that the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR
Annex A
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Period into another calendar month in which event such LIBOR Period shall
end on the immediately preceding LIBOR Business Day;
(b) no LIBOR Period shall extend beyond the maturity date of the
Term Loan.;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period
for such Loan; and
(e) Borrower Representative shall select LIBOR Periods so that there
shall be no more than six (6) separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" means for each LIBOR Period, a per annum rate of
interest (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined
by Agent equal to (i) the rate of interest which is identified and normally
published by Bloomberg Professional Service Page BBAM 1 as the offered rate for
loans in United States dollars for the applicable LIBOR Period under the caption
British Bankers Association LIBOR Rates as of 11:00 a.m. (London time), on the
second full Business Day next preceding the first day of such LIBOR Period
(unless such date is not a Business Day, in which event the next succeeding
Business Day will be used); divided by (ii) the sum of one minus the daily
average during such LIBOR Period of the aggregate maximum reserve requirement
(expressed as a decimal) then imposed under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor thereto) for
"Eurocurrency Liabilities" (as defined therein). If Bloomberg Professional
Service no longer reports the LIBOR or Agent determines in good faith that the
rate so reported no longer accurately reflects the rate available to Agent in
the London Interbank Market or if such index no longer exists or if Page BBAM 1
no longer exists or accurately reflects the rate available to Agent in the
London Interbank Market, Agent may select a replacement index or replacement
page, as the case may be.:
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
Annex A
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"Litigation" has the meaning ascribed to it in Section 4.5(i).
"Loan Account" has the meaning ascribed to it in Section 1.7.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, and all other agreements, instruments, documents and certificates
identified in the Closing Checklist executed and delivered to, or in favor of,
Agent or any Lenders and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in
connection with the Agreement or the transactions contemplated thereby. Any
reference in the Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to the
Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.
"Management Agreement" means the Management Agreement dated as of
January 1, 2003, as amended on the Closing Date, between Holdings and Trivest
Partners, L.P., a Florida limited partnership, as the same may be amended,
restated or replaced in accordance with the proviso to Section 3.5(c).
"Management Fee Subordination Agreement" means a side letter
agreement, dated as of the date hereof, by and among Holdings, Trivest Partners,
L.P., and the Agent, in form and substance reasonably satisfactory to the Agent.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of the
Credit Parties taken as a whole, (b) Borrowers' ability to pay the Term Loan or
any of the other Obligations in accordance with the terms of the Agreement, (c)
the Collateral or Agent's Liens, on behalf of itself and Lenders, on the
Collateral or the priority of such Liens, or (d) Agent's or any Lender's rights
and remedies under the Agreement and the other Loan Documents.
"Maximum Lawful Rate" has the meaning ascribed to it in Section
1.2(f).
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investor's Services, Inc.
"Mortgages" means each of the second priority mortgages, deeds of
trust, leasehold mortgages, leasehold deeds of trust, collateral assignments of
leases or other real estate security documents delivered by any Credit Party to
Agent on behalf of itself and Lenders with respect to the Real Estate.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
Annex A
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"Net Proceeds" means cash proceeds received by Borrowers or any of
their Subsidiaries from any Asset Disposition (including insurance proceeds,
awards of condemnation, and payments under notes or other debt securities
received in connection with any Asset Disposition), net of (a) the costs of such
Asset Disposition (including taxes attributable to such sale, lease or transfer)
and (b) amounts applied to repayment of Indebtedness (other than the
Obligations) secured by a Lien on the asset or property disposed.
"Non-Consenting Lender" has the meaning ascribed to it in Section
9.19(b).
"Notice of Continuation/Conversion" has the meaning ascribed to it
in Section 1.2(e).
"Obligations" means all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable), owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the patent security agreements
made in favor of Agent, on behalf of itself and Lenders, by each applicable
Credit Party.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or of any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Dividend/Option Cancellation" has the meaning ascribed to
it in the recitals to the Agreement.
Annex A
Page 18
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet delinquent; (b)
pledges or deposits of money securing statutory obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in an outstanding aggregate
amount not in excess of $500,000 at any time, so long as such Liens attach only
to Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 6.1; (h) zoning
restrictions, easements, licenses, or other restrictions on the use of any Real
Estate or other minor irregularities in title (including leasehold title)
thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter created
Liens in favor of Agent, on behalf of Lenders; (j) Liens existing on the date
hereof and renewal, and extensions thereof which Liens are set forth on Schedule
3.2; (k) Liens securing Indebtedness permitted by Section 3.1(d), provided that
the Liens attach only to the assets financed by such Indebtedness; and (l) Liens
securing the First Lien Debt.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
"▇▇▇▇▇▇ Plastics" has the meaning ascribed to it in the preamble to
the Agreement.
"Plan" means, at any time, an "employee benefit plan," as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any Credit Party.
"Pledge Agreements" means the Borrowers Stockholders Pledge
Agreement and any other pledge agreement entered into after the Closing Date by
any Credit Party with respect to the Obligations.
"Prior Lender Obligations" means all obligations of Holdings and
Borrowers under or in connection with the Credit Agreement, dated as of December
27, 2002, among Borrowers, General Electric Capital Corporation, as Agent and
the lenders party thereto, as amended.
Annex A
Page 19
"Pro Forma" means the unaudited consolidated and consolidating
balance sheets of Holdings, Borrowers and their Subsidiaries prepared in
accordance with GAAP as of the Closing Date after giving effect to the Related
Transactions. The Pro Forma is annexed hereto as Annex D.
"Pro Rata Share" means with respect to all matters relating to any
Lender the percentage obtained by dividing (i) the aggregate outstanding
principal balance of the Term Loan held by that Lender, by (ii) the outstanding
principal balance of the Term Loan held by all Lenders, as any such percentages
may be adjusted by assignments pursuant to Section 8.1.
"Projections" means Holdings forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; and (c) cash flow statements, in a form
consistent with the historical Financial Statements of Borrowers.
"Proposed Change" has the meaning ascribed to it in Section 9.19(b).
"Qualified Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in (or warehouses)
commercial loans and that is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor, and (b) any
commercial bank, savings and loan association or savings bank or any other
entity which is an "accredited investor" (as defined in Regulation D under the
Securities Act of 1933) which extends credit or buys loans as one of its
businesses, including insurance companies, mutual funds, lease financing
companies and commercial finance companies, in each case, which has a rating of
BBB or higher from S&P and a rating of Baa2 or higher from ▇▇▇▇▇'▇ at the date
that it becomes a Lender and which, through its applicable lending office, is
capable of lending to Borrowers without the imposition of any withholding or
similar taxes; provided that no Person or Affiliate of such Person (other than a
Person that is already a Lender) holding Subordinated Debt or Stock issued by
any Credit Party shall be a Qualified Assignee.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" has the meaning ascribed to it in Section 5.12.
"Refinancing" means the repayment in full by Borrowers of the Prior
Lender Obligations on the Closing Date.
"Related Transactions" means the borrowing of the Term Loan on the
Closing Date, the Refinancing, the issuance of the First Lien Debt, the payment
of all Fees, costs and expenses associated with all of the foregoing and the
execution and delivery of all of the Related Transactions Documents.
Annex A
Page 20
"Related Transactions Documents" means the Loan Documents, the First
Lien Debt Documents and all other agreements or instruments executed in
connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Replacement Lender" has the meaning ascribed to it in Section
9.19(a).
"Requisite Lenders" means Lenders holding more than fifty percent
(50%) of the Term Loans.
"Resin Contracts" means the contracts for the supply of resin
entered into by Borrowers and/or Holdings following the Closing Date in form and
substance reasonably satisfactory to Agent with each of Exxon Mobil Chemical
Company, Equistar Chemicals, LP and the Dow Chemical Company.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees, liquidated damages or other charges on or with respect to, and
any redemption, purchase, retirement, defeasance, sinking fund or similar
payment and any claim for rescission with respect to, any Subordinated Debt; (d)
any payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire Stock
of such Credit Party now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Credit Party's Stock or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder of
such Credit Party other than payment of compensation in the ordinary course of
business to Stockholders who are employees of such Credit Party; and (g) any
payment of management fees (or other fees of a similar nature) or out-of-pocket
expenses in connection therewith by such Credit Party to any Stockholder of such
Credit Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided
Annex A
Page 21
pursuant to Section 4980B of the IRC and at the sole expense of the participant
or the beneficiary of the participant.
"Rigal Plastics" has the meaning ascribed to it in the preamble to
the Agreement.
"S&P" means Standard & Poor's Ratings Services, a division of the
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Settlement Date" has the meaning ascribed to it in Section 8.4(a).
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including subordinated and contingent
liabilities, of such Person; (b) 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 and liabilities, including
subordinated and contingent liabilities as they become absolute and matured; (c)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as Litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that can
be reasonably be expected to become an actual or matured liability.
"Statement" has the meaning ascribed to it in Section 4.5(b).
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of
Stock of such Person.
Annex A
Page 22
"Subordinated Debt" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Requisite Lenders in their sole discretion, as to right and time of payment and
as to any other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other 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, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.
"Tax Returns" means all reports, returns, information returns,
claims for refund, elections, estimated tax filings or payments, requests for
extension, documents, statements, declarations and certifications and other
information required to be filed with respect to taxes, including attachments
thereto and amendments thereof.
"Term Loan" has the meaning ascribed to it in Section 1.1.
"Term Loan Commitment" means (a) as to any Lender, the commitment of
such Lender to make a portion of the Term Loan (as set forth on Annex B) in the
maximum aggregate amount set forth in Section 1.1 or in the most recent
Assignment Agreement, if any, executed by such Lender and (b) as to all Lenders,
the aggregate commitment of all Lenders to make the Term Loan, which aggregate
commitment shall be Seventy-Five Million Dollars ($75,000,000) on the Closing
Date, as such commitments may be reduced, amortized or adjusted from time to
time in accordance with the Agreement.
"Term Notes" has the meaning ascribed to it in Section 1.1.
"Termination Date" means the date on which (a) the Term Loan has
been repaid in full, and (b) all other Obligations under the Agreement and the
other Loan Documents have been completely discharged (other than unasserted
contingent indemnification obligations).
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains,
Annex A
Page 23
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademark Security Agreements" means the trademark security
agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Trademarks" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, internet
domain names, other source or business identifiers, prints and labels on which
any of the foregoing have appeared or appear, designs and general intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state or territory thereof, or any other country or any political subdivision
thereof; (b) all reissues, extensions or renewals thereof; and (c) all goodwill
associated with or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of 5 years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(l) of ERISA.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth or referred to in
this Annex A. All other undefined terms contained in any of the Loan Documents
shall, unless the context indicates otherwise, have the meanings provided for by
the Code to the extent the same are used or defined therein; in the event that
any term is defined differently in different Articles or Divisions of the Code,
the definition contained in Article or Division 9 shall control. Unless
otherwise specified, references in the Agreement or any of the Appendices to a
section, subsection or clause refer to such section, subsection or clause as
contained in the Agreement. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to the Agreement as a whole, including all
Annexes, Exhibits and Schedules, as the same may from time to time be amended,
restated, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement or any such Annex, Exhibit or
Schedule.
Annex A
Page 24
Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
Annex A
Page 25
ANNEX B (FROM ANNEX A - TERM LOAN COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
PRO RATA SHARES AND TERM LOAN COMMITMENT AMOUNTS
Lender(s)
---------
Term Loan Commitment: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital
$21,000,000
Term Loan Commitment: ▇▇▇▇▇▇▇ ▇▇▇▇▇ PCG, Inc.
$39,500,000
Term Loan Commitment: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Products, LLC
$14,500,000
Annex B
ANNEX C
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
[INSERT CLOSING CHECKLIST]
ANNEX C
ANNEX D
TO
CREDIT AGREEMENT
PRO FORMA
[INSERT PRO FORMA]
ANNEX D
EXHIBIT 1.1
TO
CREDIT AGREEMENT
FORM OF TERM NOTE
New York, New York
$___,___,___ March ____, 2005
FOR VALUE RECEIVED, each of the undersigned (each individually a
"Borrower" and collectively, the "Borrowers"), jointly and severally, HEREBY
PROMISES TO PAY to the order of ___________________ ("Lender") at the offices of
The Bank of New York, as Agent for Lenders ("Agent"), at its address at ▇▇▇ ▇.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or at such other place as
Agent may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the amount of
__________________________ DOLLARS AND _____ CENTS ($___,___,___). All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the "Credit Agreement" (as hereinafter defined) or in Annex A
thereto.
This Term Note is one of the Term Notes issued pursuant to that
certain Second Lien Credit Agreement dated as of March 22, 2005 by and among
Borrowers, the other Persons named therein as Credit Parties, Agent, Lender
and the other Persons signatory thereto from time to time as Lenders (including
all annexes, exhibits and schedules thereto and as from time to time amended,
restated, supplemented or otherwise modified, the "Credit Agreement"), and is
entitled to the benefit and security of the Credit Agreement, the Security
Agreement and all of the other Loan Documents referred to therein. Reference is
hereby made to the Credit Agreement for a statement of all of the terms and
conditions under which the portion of the Term Loan evidenced hereby are made
and are to be repaid. The principal balance of the Term Loan, the rates of
interest applicable thereto and the date and amount of each payment made on
account of the principal thereof, shall be recorded by Agent on its books;
provided, that the failure of Agent to make any such recordation shall not
affect the obligations of Borrowers to make a payment when due of any amount
owing under the Credit Agreement or this Term Note.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement.
Interest thereon shall be paid until such principal amount is paid in full at
such interest rates and at such times, and pursuant to such calculations, as are
specified in the Credit Agreement. The terms of the Credit Agreement are hereby
incorporated herein by reference.
If any payment on this Term Note becomes due and payable on a day
other than a Business Day, the payment thereof shall be extended to the next
succeeding Business
Exhibit 1.1(a)
Page 1
Day and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension.
Upon and during the continuance of any Event of Default, this Term
Note may, as provided in the Credit Agreement, and without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other legal
requirement of any kind (all of which are hereby expressly waived by Borrowers),
be declared, and immediately shall become, due and payable.
Time is of the essence of this Term Note.
Except as provided in the Credit Agreement, this Term Note may not
be assigned by Lender to any Person.
THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.
ATLANTIS PLASTIC FILMS, INC.,
ATLANTIS MOLDED PLASTICS, INC.
ATLANTIS FILMS, INC.
RIGAL PLASTICS, INC.
ATLANTIS PLASTICS INJECTION
MOLDING, INC.
▇▇▇▇▇▇ PLASTICS, INC.
EXTRUSION MASTERS, INC.
Each By: ______________________________
Name: _________________________________
Title :________________________________
Exhibit 1.1(a)
Page 2
EXHIBIT 1.1(b)(ii)
TO
CREDIT AGREEMENT
FORM OF NOTICE OF CONTINUATION/CONVERSION
ATLANTIS PLASTICS FILMS, INC.
DATE: ___________, ______
This notice is given by ____________________, an officer of Atlantis
Plastics Films, Inc. ("BORROWER REPRESENTATIVE"), pursuant to Section 1.2(e) of
that certain Second Lien Credit Agreement dated as of March 22, 2005 among
Borrower Representative and certain of its affiliates ("BORROWERS"), the Lenders
from time to time party thereto and The Bank of New York, as Administrative
Agent for Lenders (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time the "CREDIT Agreement").
Capitalized terms used herein without definition shall have the meanings set
forth in the Credit Agreement.
The undersigned officer hereby gives notice to Agent of Borrower
Representative's request to: [COMPLETE AS APPROPRIATE]
(a) on [DATE] convert $[________] of the aggregate outstanding
principal amount of the Term Loan, bearing interest at the
[________] Rate, into a(n) [________] Loan [AND, IN THE CASE
OF A LIBOR LOAN, HAVING A LIBOR PERIOD OF [_____] MONTH(s)];
and
(b) on [DATE] continue $[________] of the aggregate outstanding
principal amount of the Term Loan, bearing interest at the
LIBOR Rate, as a LIBOR Loan having a LIBOR Period of [_____]
month(s).
[BORROWER REPRESENTATIVE]
By: ___________________________________
Name: _________________________________
Title: ________________________________
Exhibit 1.1(a)
Page 1
EXHIBIT 4.5(n)
COMPLIANCE [AND EXCESS CASH FLOW CERTIFICATE]
ATLANTIS PLASTIC FILMS, INC.
DATE: __________, _____
This Certificate is given by Atlantis Plastic Films, Inc. ("Borrower
Representative") pursuant to Section 4.5(n) of that certain Second Lien Credit
Agreement dated as of March 22, 2005 among Borrowers, the other Credit Parties
party thereto, the Lenders from time to time party thereto and The Bank of New
York, as agent for the Lenders (as such agreement may have been amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"). Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.
The undersigned is duly authorized to execute and deliver this
Certificate on behalf of Borrower Representative. By executing this Certificate
such officer hereby certifies to Agent and Lenders that:
(a) ______ the financial statements delivered with this Certificate
in accordance with Section 4.5(a) and/or 4.5(b) of the Credit Agreement fairly
present in all material respects the results of operations and financial
condition of Holdings, Borrowers and their Subsidiaries as of the dates of such
financial statements;
(b) I have reviewed the terms of the Credit Agreement and have made,
or caused to be made under my supervision, a review in reasonable detail of the
transactions and conditions of the Credit Parties during the accounting period
covered by such financial statements;
(c) such review has not disclosed the existence during or at the end
of such accounting period, and I have no knowledge of the existence as of the
date hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth on Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action Borrowers have taken, are taking and propose to take with respect
thereto;
(d) except as set forth on Schedule 1 hereto, Borrowers are in
compliance with the covenants contained in Sections 3.1, 3.3, 3.4, 3.5, 3.7 and
3.8 and Section 4 of the Credit Agreement, as demonstrated on Schedule 1 hereto
[NOTE TO BORROWERS: THE PORTION OF SCHEDULE 1 PERTAINING TO FINANCIAL COVENANTS
IS ONLY REQUIRED TO BE COMPLETED AS OF THE END OF EACH FISCAL QUARTER];
(e) Excess Cash Flow, as demonstrated by the calculation on Schedule
2 hereto, for the Fiscal Year ending ___________ equals $__________. [NOTE TO
Exhibit 4.5(n)
Page 1
BORROWERS: THIS CLAUSE IS ONLY REQUIRED TO BE COMPLETED IN CONNECTION WITH THE
DELIVERY OF AUDITED FINANCIAL STATEMENTS PURSUANT TO SECTION 4.5(B) OF THE
CREDIT AGREEMENT];
(f) except as set forth on Schedule 3 hereto, subsequent to the date
of the most recent Certificate submitted by Borrower Representative pursuant to
Section 4.5(n) of the Credit Agreement, no Credit Party has (i) changed its name
as it appears in official filings in the jurisdiction of its organization, (ii)
changed its chief executive office, principal place of business, corporate
offices, warehouses or locations at which Collateral is held or stored, or the
location of its records concerning Collateral, (iii) changed the type of entity
that it is, (iv) changed (or has had changed) its organization identification
number, if any, issued by its jurisdiction of organization, (v) changed its
jurisdiction of organization, (vi) changed the end of its Fiscal Year, or (vii)
formed any new Subsidiary or entered into any partnership or joint venture with
any other Person; and
(g) except as set forth on Schedule 4 hereto, subsequent to the date
of the most recent Certificate submitted by Borrower Representative pursuant to
Section 4.5(n) of the Credit Agreement, there has been no event which would
alter any of the disclosures set forth on Schedule 5.4(b) of the Credit
Agreement.
IN WITNESS WHEREOF, Borrower Representative has caused this
Certificate to be executed by its __________________ this ____ day of
___________, ____.
ATLANTIS PLASTIC FILMS, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
Exhibit 4.5(n)
Page 2
SCHEDULE 1
EXHIBIT 4.5(n)
ALL AMOUNTS IN EXHIBIT 4.5(N) ARE WITHOUT DUPLICATION AND, UNLESS OTHERWISE
INDICATED, ARE CALCULATED FOR HOLDINGS AND ITS SUBSIDIARIES ON A CONSOLIDATED
BASIS
INDEBTEDNESS
(SECTION 3.1)
Indebtedness secured by purchase money Liens or incurred with respect to Capital
Leases:
Actual in the aggregate $_______________
Permitted in the aggregate $_______________
In Compliance Yes/No
Schedule 1 to Exhibit 4.5(n)
Page 1
INVESTMENTS
(SECTION 3.3)
Loans and advances to employees for moving, traveling and other similar expenses
in the ordinary course of business:
Actual in the aggregate $_______________
Permitted in the aggregate $_______________
In Compliance Yes/No
Capital contributions to non-Borrower Subsidiaries:
Actual in the aggregate $_______________
Permitted in the aggregate $_______________
In Compliance Yes/No
Schedule 1 to Exhibit 4.5(n)
Page 2
CONTINGENT OBLIGATIONS
(SECTION 3.4)
Contingent Obligations incurred in the ordinary course of business with respect
to surety and appeal bonds, performance and return-of-money bonds and other
similar obligations:
Actual in the aggregate $_______________
Permitted in the aggregate $_______________
In Compliance Yes/No
Other Contingent Obligations not otherwise permitted in Sections 3.4(a) through
(h):
Actual in the aggregate $_______________
Permitted in the aggregate $_______________
In Compliance Yes/No
Schedule 1 to Exhibit 4.5(n)
Page 3
RESTRICTED JUNIOR PAYMENTS
(SECTION 3.5)
Dividends paid to Holdings to permit repurchase of Stock:
Actual (current Fiscal Year) $_______________
Current (current Fiscal Year) $_______________
In Compliance Yes/No
Schedule 1 to Exhibit 4.5(n)
Page 4
DISPOSAL OF ASSETS
(SECTION 3.7)
Describe any Asset Dispositions made during the period (list each transaction by
market value of assets sold):
_______________________________________________ $_______________
_______________________________________________ $_______________
_______________________________________________ $_______________
_______________________________________________ $_______________
Permitted Asset Dispositions in a single transaction or
series of related transactions (asset market value) $_______________
In Compliance Yes/No
Aggregate market value of Asset Dispositions in Fiscal Year $_______________
Permitted aggregate market value of Asset Dispositions in
Fiscal Year $_______________
In Compliance Yes/No
Schedule 1 to Exhibit 4.5(n)
Page 5
LEASE LIMITS
(SECTION 4.1)
All rents (or substantially equivalent payments) paid during
the measuring period for operating leases, synthetic leases
and similar off-balance sheet financing $_______________
Permitted Lease Payments $_______________
In Compliance Yes/No
Schedule 1 to Exhibit 4.5(n)
Page 6
MINIMUM EBITDA
(SECTION 4.2)
Consolidated Net Income is defined as follows:
Consolidated net income during the measuring period excluding: $__________
the income (or deficit) of any Person accrued prior to the
date it became a Subsidiary of, or was merged or
consolidated into, Holdings or any of Holdings'
Subsidiaries ___________
the income (or deficit) of any Person (other than a
Subsidiary) in which Holdings has an ownership interest,
except to the extent any such income has actually been
received by Borrowers or any of their Subsidiaries in the
form of cash dividends or distributions ___________
the undistributed earnings of any Subsidiary of Holdings to
the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary ___________
any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was
made out of income accrued during such period ___________
any net gain attributable to the write-up of any asset ___________
any net gain from the collection of the proceeds of life
insurance policies ___________
any net gain arising from the acquisition of any
securities, or the extinguishment of any Indebtedness, of
Holdings or any of their Subsidiaries ___________
in the case of a successor to Holdings or any of their
Subsidiaries by consolidation or merger or as a transferee
of its assets, any earnings of such successor prior to such
consolidation, merger or transfer of assets ___________
Schedule 1 to Exhibit 4.5(n)
Page 7
any deferred credit representing the excess of equity in
any Subsidiary of Holdings at the date of acquisition of
such Subsidiary over the cost to Holdings of the investment
in such Subsidiary ___________
Consolidated Net Income $
==========
EBITDA is defined as follows:
Consolidated Net Income (from above) $__________
Less: (in each case to the extent included in the calculation of
Consolidated Net Income, but without duplication):
income tax credits ___________
interest income ___________
gain from extraordinary items (net of loss from
extraordinary items) ____________
any aggregate net gain (but not any aggregate net loss)
arising from the sale, exchange or other disposition of
capital assets (including any fixed assets, whether
tangible or intangible, all inventory sold in conjunction
with the disposition of fixed assets and all securities) ___________
any other non-cash gains ___________
expenditures pursuant to the last sentence of Section 4.6
of the Credit Agreement applicable to, but not included
on, the Pro Forma, including expenditures made in
connection with Related Transactions and payment of
liabilities on the Closing Date ___________
Plus: (in each case to the extent deducted in the calculation
of Consolidated Net Income, but without duplication):
any provision for income taxes (calculated as provided in
Section 4.3 of this Exhibit) ___________
Interest expense (whether cash or non-cash) deducted in
the determination of Consolidated Net Income, including
interest expense with respect to any Funded Debt and
interest expense that has been capitalized ___________
Schedule 1 to Exhibit 4.5(n)
Page 8
depreciation and amortization ___________
amortized debt discount (but in the case of amortization
and expenses of Related Transactions, only to the extent
included in the Pro Forma) ___________
any deduction as the result of any grant to any members
of the management of Holdings or any of their Subsidiaries
of any Stock ___________
any deduction for fees paid under the Management Agreement ___________
any deduction attributable to the issuance to employees of
awards to acquire stock of Holdings and any deduction
attributable to the Permitted Dividend/Option Cancellation ___________
expenses of the Related Transactions acceptable to Agent,
provided that such expenses were included in the Pro Forma,
or disclosed in any notes thereto, and are deducted from
Net Income (other than as amortization expenses) ___________
up to $531,500 of expenses attributable to the failed
senior note offering conducted during the first quarter of
2005, provided that such expenses were included in the Pro
Forma, or disclosed in any notes thereto ___________
EBITDA* $
==========
Required EBITDA $
==========
In Compliance Yes/No
------------
* For purpose of calculating EBITDA as of June 30,2005 and
September 30,2005, EBITDA will be increased by $973,000 and
$313,000 respectively, which amounts reflect pro forma
earnings for the assets acquired pursuant to the LaVanture
Acquisition.
Schedule 1 to Exhibit 4.5(n)
Page 9
MINIMUM FIXED CHARGE COVERAGE RATIO
(SECTION 4.3)
Fixed Charge Coverage Ratio is defined as follows(2/):
Interest expense (whether cash or non-cash) deducted in the
determination of Consolidated Net Income, including interest
expense with respect to any Funded Debt and interest expense that
has been capitalized $__________
Less: Amortization of capitalized fees and expenses incurred
with respect to the Related Transactions included in
interest expense above ___________
Amortization of any original discount attributable to
any Funded Debt or warrants included in interest expense
above ___________
Interest paid in kind and included in interest expense
above ___________
Interest Expense $__________
Plus: Any provision for income taxes (whether paid or payable
in cash)
Scheduled payments of principal with respect to all
Indebtedness ___________
Fees paid under the Management Agreement ___________
Fixed Charges $
===========
EBITDA (calculated in Section 4.2 of this Exhibit) $__________
Less: Capital Expenditures (calculated in the manner set forth
below for the trailing four quarters), other than the
portion thereof funded by third party financing ___________
--------
(2/) In computing Fixed Charge Coverage Ratio for any period, interest and
principal payments that principal payments that are due within one week after
the end of the period,without duplication, shall be deemed to have been paid on
the last day of the fiscal period.
Schedule 1 to Exhibit 4.5(n)
Page 10
Amounts paid to purchase Stock of Holdings as permitted
pursuant to Section 3.5(d) ___________
Subtotal $
==========
Fixed Charge Coverage Ratio (Subtotal from above, divided by
Fixed Charges) ===========
Required Fixed Charge Coverage Ratio ===========
In Compliance Yes/No
* * * * *
Capital Expenditures are defined as follows:
All expenditures (by the expenditure of cash or the incurrence of
Indebtedness) during the measuring period for any fixed asset or
improvements or for replacements, substitutions or additions thereto
that have a useful life of more than one year and that are required
to be capitalized under GAAP $__________
Plus: deposits made during the measuring period in connection
with fixed assets; less deposits of a prior period included
above ___________
Less: Net Proceeds of Asset Dispositions which Borrowers are
permitted to reinvest under Section 1.5(c) of the Credit
Agreement (or under the First Lien Debt Documents) and are
included in the expenditures above ___________
The purchase price of the LaVanture Acquisition to the
extent such purchase price is included in the expenditures
above ___________
Capital Expenditures $
==========
Schedule 1 to Exhibit 4.5(n)
Page 11
MAXIMUM LEVERAGE RATIO
(SECTION 4.4)
Leverage Ratio is defined as follows:
Funded Debt as of the date of determination $
===========
EBITDA (calculated in Section 4.2 of this Exhibit) $__________
Leverage Ratio (Funded Debt divided by EBITDA) ===========
Maximum Leverage Ratio ===========
In Compliance Yes/No
Schedule 1 to Exhibit 4.5(n)
Page 12
CONDITIONS OR EVENTS WHICH CONSTITUTE A DEFAULT OR
EVENT OF DEFAULT
[IF ANY CONDITION OR EVENT EXISTS THAT CONSTITUTES A DEFAULT OR
EVENT OF DEFAULT, SPECIFY NATURE AND PERIOD OF EXISTENCE AND WHAT
ACTION BORROWERS HAVE TAKEN, IS TAKING OR PROPOSES TO TAKE WITH
RESPECT THERETO; IF NO CONDITION OR EVENT EXISTS, STATE "NONE."]
Schedule 1 to Exhibit 4.5(n)
Page 13
SCHEDULE 2
EXHIBIT 4.5(n)
EXCESS CASH FLOW
(SECTION 1.5)
Excess Cash Flow is calculated for Holdings, Borrowers and their Subsidiaries,
and is defined as follows:
EBITDA (calculated in Section 4.2 of this Exhibit) $____________
Plus: decreases in Working Capital during the Fiscal Year* ____________
extraordinary gains which are cash items not included in
the calculation of EBITDA ____________
Less: Capital Expenditures (calculated in Section 4.3 of this
Exhibit)(excluding the financed portion thereof) ____________
Interest Expense (calculated in Section 4.3 of this
Exhibit) ____________
scheduled principal payments paid or payable in respect
of Funded Debt ____________
income taxes paid in cash ____________
increases in Working Capital during the Fiscal Year* ____________
losses which are cash items not included in the
calculation of EBITDA ____________
Subtotal $
===========
Required Prepayment Percentage 50%
Excess Cash Flow $
===========
* Working Capital means Current Assets minus Current Liabilities.
Schedule 2 to Exhibit 4.5(n)
Page 1
SCHEDULE 3
EXHIBIT 4.5(n)
ORGANIZATION/LOCATION CHANGES
[IF ANY CREDIT PARTY HAS (i) CHANGED ITS NAME AS IT APPEARS IN OFFICIAL FILINGS
IN THE STATE OF ITS ORGANIZATION, (ii) CHANGED ITS CHIEF EXECUTIVE OFFICE,
PRINCIPAL PLACE OF BUSINESS, CORPORATE OFFICES, WAREHOUSES OR LOCATIONS AT WHICH
COLLATERAL IS HELD OR STORED, OR THE LOCATION OF ITS RECORDS CONCERNING
COLLATERAL, (iii) CHANGED THE TYPE OF ENTITY THAT IT IS, (iv) CHANGED (OR HAS
HAD CHANGED) ITS ORGANIZATION IDENTIFICATION NUMBER, IF ANY, ISSUED BY ITS
JURISDICTION OR ORGANIZATION, (v) CHANGED ITS JURISDICTION OF ORGANIZATION, (vi)
CHANGED THE END OF ITS FISCAL YEAR, OR (vii) FORMED ANY NEW SUBSIDIARY OR
ENTERED INTO ANY PARTNERSHIP OR JOINT VENTURE WITH ANY PERSON, SUCH CHANGE SHALL
BE SPECIFIED BELOW; IF NO SUCH CHANGE HAS BEEN MADE, STATE "NONE."]
Schedule 3 to Exhibit 4.5(n)
Page 1
SCHEDULE 4
EXHIBIT 4.5(n)
CAPITALIZATION CHANGES
[IF WITH RESPECT TO ANY CREDIT PARTY THERE HAS BEEN A CHANGE IN AUTHORIZED
STOCK, ISSUED AND OUTSTANDING STOCK, OR IF WITH RESPECT TO ANY CREDIT PARTY
THERE HAS BEEN A CHANGE PERTAINING TO PREEMPTIVE RIGHTS OR ANY OTHER OUTSTANDING
RIGHTS, OPTIONS, WARRANTS, CONVERSION RIGHTS OR SIMILAR AGREEMENTS OR
UNDERSTANDINGS FOR THE PURCHASE OR ACQUISITION OF ANY STOCK, SUCH CHANGE SHALL
BE SET FORTH BELOW; IF NO SUCH CHANGE HAS OCCURRED, STATE "NONE."]
Schedule 4 to Exhibit 4.5(n)
Page 1
EXHIBIT 8.1
TO
CREDIT AGREEMENT
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement") is made as of ___________ __,
____ by and between __________________________________ ("Assignor Lender") and
________________________ ("Assignee Lender") and acknowledged and consented to
by The Bank of New York, as agent ("Agent"). All capitalized terms used in this
Agreement and not otherwise defined herein will have the respective meanings set
forth in the Credit Agreement as hereinafter defined.
[DRAFTING NOTE: THE TERMS OF THIS AGREEMENT WILL VARY SUBSTANTIALLY FOR
ASSIGNMENTS OF 100% OF A LENDER'S TERM LOAN COMMITMENTS AS OPPOSED TO PARTIAL
ASSIGNMENT]
RECITALS:
WHEREAS, various subsidiaries of Atlantis Plastics, Inc., a Delaware
corporation ("Credit Parties"), The Bank of New York, as agent, Assignor Lender
and other Persons signatory thereto as Lenders have entered into that certain
Second Lien Credit Agreement dated as of March 22, 2005 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement")
pursuant to which Assignor Lender has agreed to make a certain Term Loan to
Borrowers;
WHEREAS, Assignor Lender desires to assign to Assignee Lender [ALL/A
PORTION] of its interest in the Term Loan (as described below) and the
Collateral and to delegate to Assignee Lender [ALL/A PORTION] of its Term Loan
Commitments and other duties with respect to such Term Loan and Collateral;
WHEREAS, Assignee Lender desires to become a Lender under the Credit
Agreement and to accept such assignment and delegation from Assignor Lender; and
WHEREAS, Assignee Lender desires to appoint Agent to serve as agent for
Assignee Lender under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions, and covenants herein contained, Assignor Lender and Assignee Lender
agree as follows:
1. ASSIGNMENT, DELEGATION, AND ACCEPTANCE
1.1______Assignment. Assignor Lender hereby transfers and assigns to
Assignee Lender, without recourse and without representations or warranties of
any kind (except as set forth in Section 3.2), [ALL/SUCH PERCENTAGE] of Assignor
Lender's right, title, and interest in
the Term Loan, Loan Documents and the Collateral as will result in Assignee
Lender having as of the Effective Date (as hereinafter defined) a Pro Rata Share
thereof, as follows:
Assignee Lender's Loans Principal Amount Pro Rata Share
----------------------- ---------------- --------------
Term Loan $____________ ____%
1.2 Delegation. Assignor Lender hereby irrevocably assigns and delegates
to Assignee Lender [ALL/A PORTION] of its duties and obligations as a Lender
under the Loan Documents equivalent to the Pro Rata Shares set forth above.
1.3 Acceptance by Assignee Lender. By its execution of this
Agreement, Assignee Lender irrevocably purchases, assumes and accepts such
assignment and delegation and agrees to be a Lender with respect to the
delegated interest under the Loan Documents and to be bound by the terms and
conditions thereof. By its execution of this Agreement, Assignor Lender agrees,
to the extent provided herein, to relinquish its rights and be released from its
obligations and duties under the Credit Agreement.
1.4 Effective Date. Such assignment and delegation by Assignor Lender
and acceptance by Assignee Lender will be effective and Assignee Lender will
become a Lender under the Loan Documents as of [THE DATE OF THIS
AGREEMENT][_____ __, ____] ("Effective Date") and upon payment of the Assigned
Amount and the Assignment Fee (as each term is defined below). [INTEREST ACCRUED
PRIOR TO THE EFFECTIVE DATE ARE FOR THE ACCOUNT OF ASSIGNOR LENDER, AND INTEREST
AND FEES ACCRUED FROM AND AFTER THE EFFECTIVE DATE ARE FOR THE ACCOUNT OF
ASSIGNEE LENDER.]
[DRAFTING NOTE: EITHER AGENT SPLITS THE MONTH AND PAYS ASSIGNOR LENDER AND
ASSIGNEE PRORATED SHARES OF INTEREST AND FEES OR ASSIGNEE LENDER PAYS FOR
ACCRUED INTEREST AND FEES PER SCHEDULE 2.1.]
2. INITIAL PAYMENT AND DELIVERY OF TERM NOTES
2.1 Payment of the Assigned Amount. Assignee Lender will pay to
Assignor Lender, in immediately available funds, not later than noon (New York
time) on the Effective Date, an amount equal to its Pro Rata Share of the then
outstanding principal amount of the Term Loan as set forth above in Section 1.1
[TOGETHER WITH ACCRUED INTEREST, FEES AND OTHER AMOUNTS AS SET FORTH ON SCHEDULE
2.1] (the "Assigned Amount").
2.2 Payment of Assignment Fee. To the extent required by the Credit
Agreement, [ASSIGNOR LENDER AND/OR ASSIGNEE LENDER] will pay to Agent, for its
own account in immediately available funds, not later than 12:00 a.m. (New York
time) on the Effective Date, the assignment fee in the amount of $3,500 (the
"Assignment Fee") as required pursuant to Section 8.1(a) of the Credit
Agreement.
Exhibit 8.1
Page 2
2.3 Execution and Delivery of Notes. Following payment of the Assigned
Amount and the Assignment Fee, Assignor Lender will deliver to Agent the Term
Notes previously delivered to Assignor Lender for redelivery to Borrowers and
Agent will obtain from Borrowers for delivery to [ASSIGNOR LENDER AND] Assignee
Lender, new executed Term Notes evidencing Assignee Lender's [AND ASSIGNOR
LENDER'S RESPECTIVE] Pro Rata Share[s] in the Term Loan after giving effect to
the assignment described in Section 1.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Assignee Lender's Representations, Warranties and Covenants. Assignee
Lender hereby represents, warrants, and covenants the following to Assignor
Lender and Agent:
(a) This Agreement is a legal, valid, and binding agreement of Assignee
Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its duties and
obligations under this Agreement and the Loan Documents will not require any
registration with, notice to, or consent or approval by any Governmental
Authority;
(c) Assignee Lender is familiar with transactions of the kind and scope
reflected in the Loan Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation and
appraisal of the financial condition and affairs of each Credit Party, has
conducted its own evaluation of the Term Loan, the Loan Documents and each
Credit Party's creditworthiness, has made its decision to become a Lender to
Borrowers under the Credit Agreement independently and without reliance upon
Assignor Lender or Agent, and will continue to do so;
(e) Assignee Lender is entering into this Agreement in the ordinary course
of its business, and is acquiring its interest in the Term Loan for its own
account and not with a view to or for sale in connection with any subsequent
distribution; provided, however, that at all times the distribution of Assignee
Lender's property shall, subject to the terms of the Credit Agreement, be and
remain within its control;
(f) No future assignment or participation granted by Assignee Lender
pursuant to Section 8.1 of the Credit Agreement will require Assignor Lender,
Agent, or Borrower to file any registration statement with the Securities and
Exchange Commission or to apply to qualify under the blue sky laws of any state;
(g) Assignee Lender has no loans to, written or oral agreements with, or
equity or other ownership interest in any Credit Party;
(h) Assignee Lender will not enter into any written or oral agreement
with, or acquire any equity or other ownership interest in, any Credit Party
without the prior written consent of Agent; and
Exhibit 8.1
Page 3
(i) As of the Effective Date, Assignee Lender (i) is entitled to receive
payments of principal and interest in respect of the Obligations without
deduction for or on account of any taxes imposed by the United States of America
or any political subdivision thereof [, (ii) IS NOT SUBJECT TO CAPITAL ADEQUACY
OR SIMILAR REQUIREMENTS UNDER SECTION 1.8(a) OF THE CREDIT AGREEMENT, (iii) DOES
NOT REQUIRE THE PAYMENT OF ANY INCREASED COSTS UNDER SECTION 1.8(b) OF THE
CREDIT AGREEMENT, AND (iv) IS NOT UNABLE TO FUND LIBOR LOANS UNDER SECTION
1.8(b) OF THE CREDIT AGREEMENT,] and Assignee Lender will indemnify Agent from
and against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, or expenses that result from Assignee Lender's failure
to fulfill its obligations under the terms of Section 1.9(c) of the Credit
Agreement [OR FROM ANY OTHER INACCURACY IN THE FOREGOING]. [DRAFTING NOTE: THE
REPS IN CLAUSES (ii) THROUGH (iv) SHOULD BE DELETED USED TO EFFECT AN ACTUAL
ASSIGNMENT AT A TIME WHEN AN EVENT OF DEFAULT EXISTS AND IS CONTINUING UNDER THE
CREDIT AGREEMENT.]
3.2 Assignor Lender's Representations, Warranties and Covenants. Assignor
Lender hereby represents, warrants and covenants the following to Assignee
Lender:
(a) Assignor Lender is the legal and beneficial owner of the Assigned
Amount;
(b) This Agreement is a legal, valid and binding agreement of Assignor
Lender, enforceable according to its terms;
(c) The execution and performance by Assignor Lender of its duties and
obligations under this Agreement and the Loan Documents will not require any
registration with, notice to or consent or approval by any Governmental
Authority;
(d) Assignor Lender has full power and authority, and has taken all action
necessary to execute and deliver this Agreement and to fulfill the obligations
hereunder and to consummate the transactions contemplated hereby;
(e) Assignor Lender is the legal and beneficial owner of the interests
being assigned hereby, free and clear of any adverse claim, lien, encumbrance,
security interest, restriction on transfer, purchase option, call or similar
right of a third party; and
(f) This Assignment by Assignor Lender to Assignee Lender complies, in all
material respects, with the terms of the Loan Documents.
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2) nor Agent
makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents or
any other document or instrument furnished pursuant thereto or the Term Loan or
other Obligations, (b) the creation, validity, genuineness, enforceability,
sufficiency, value or collectibility of any of them, (c) the amount, value or
existence of the Collateral, (d) the perfection or priority of any Lien upon
Exhibit 8.1
Page 4
the Collateral, or (e) the financial condition of any Credit Party or other
obligor or the performance or observance by any Credit Party of its obligations
under any of the Loan Documents. Neither Assignor Lender nor Agent has or will
have any duty, either initially or on a continuing basis, to make any
investigation, evaluation, appraisal of, or any responsibility or liability with
respect to the accuracy or completeness of, any information provided to Assignee
Lender which has been provided to Assignor Lender or Agent by any Credit Party.
Nothing in this Agreement or in the Loan Documents shall impose upon the
Assignor Lender or Agent any fiduciary relationship in respect of the Assignee
Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of Agent or Assignor Lender in the
exercise of any power, right, or privilege hereunder or under any Loan Document
will impair such power, right, or privilege or be construed to be a waiver of
any default or acquiescence therein. No single or partial exercise of any such
power, right, or privilege will preclude further exercise thereof or of any
other right, power, or privilege. All rights and remedies existing under this
Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision of
this Agreement will be effective without the written concurrence of Assignor
Lender, Agent and Assignee Lender.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be interpreted in
such manner as to be effective and valid under applicable law. In the event any
provision of this Agreement is or is held to be invalid, illegal, or
unenforceable under applicable law, such provision will be ineffective only to
the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
Exhibit 8.1
Page 5
9. SECTION TITLES
Section and subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT
STATE.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
Exhibit 8.1
Page 6
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
ASSIGNEE LENDER: ASSIGNOR LENDER:
___________________________ _________________________
By: _______________________ By: _____________________
Title: ____________________ Title: __________________
Notice Address: Notice Address:
___________________________ _________________________
___________________________ _________________________
___________________________ _________________________
ACKNOWLEDGED AND CONSENTED TO:
THE BANK OF NEW YORK,
as Agent
By: _______________________
Title: ____________________
SCHEDULE 2.1
Assignor Lender's Loans
Principal Amount
Term Loan $__________________
Accrued Interest $__________________
Other + or - $ $__________________
Total $__________________
All determined as of the Effective Date.
Payment Instructions for Assignee
Name: ___________________
Bank: ___________________
ABA: ___________________
Account #: ___________________
Account Name: ___________________
Reference: ___________________
SCHEDULE 3.2
TO
CREDIT AGREEMENT
Liens
DEBTOR: ATLANTIS PLASTICS, INC.
ORIGINAL ORIGINAL DESCRIPTION
JURISDICTION SECURED PARTY FILE NO. FILE DATE OF COLLATERAL
---------------------------- ------------------------------ --------------- ---------- -------------------
Florida Secured Transaction Exxon Mobil Chemical Company, a 20030555900X 11/26/2003 Consigned products.
Registry division of Exxon Mobil
Corporation
Florida Secured Transaction Citicorp Leasing, Inc. 200405892932 1/12/2004 Specific equipment.
Registry
Georgia Cooperative Citicorp Del Lease, Inc. ▇▇▇-▇▇▇▇-▇▇▇▇▇▇ 10/3/2003 Specific equipment.
Authority (Bartow County,
Georgia)
Kentucky Secretary of State ▇▇▇▇▇ Fargo Financial Leasing ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 11/13/2002 Specific equipment.
Minnesota Secretary of State Forklifts of Minnesota, Inc. 2233561 6/5/2000 Specific equipment.
Minnesota Secretary of State Forklifts of Minnesota, Inc. 2285311 12/26/2000 Specific equipment.
Minnesota Secretary of State Forklifts of Minnesota, Inc. 20011580466 9/17/2001 Specific equipment.
Minnesota Secretary of State Forklifts of Minnesota, Inc. ▇▇▇▇▇▇▇▇▇▇▇ 9/17/2001 Specific equipment.
DEBTOR: ATLANTIS PLASTIC FILMS, INC.
ORIGINAL
JURISDICTION SECURED PARTY FILE NO. FILE DATE DESCRIPTION OF COLLATERAL
----------------------------- ------------------------------------ --------- ---------- -------------------------
California Secretary of State Associates Leasing 003260284 11/13/2000 Specific equipment.
Delaware Secretary of State General Electric Capital Corporation 3070791 2 3/20/2003 Specific equipment.
Delaware Secretary of State General Electric Capital Corporation 3337489 2 12/22/2003 Specific equipment.
Delaware Secretary of State General Electric Capital Corporation 4002671 8 1/6/2004 Specific equipment.
Oklahoma County, Oklahoma Associates Leasing, Inc. 0060658 11/13/2000 Specific equipment.
DEBTOR: ATLANTIS PLASTICS INJECTION MOLDING, INC.
ORIGINAL DESCRIPTION OF
JURISDICTION SECURED PARTY FILE NO. FILE DATE COLLATERAL
--------------------------- -------------------------------- ---------------- ---------- --------------------------
Kentucky Secretary of State TMCC ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 9/4/2001 Specific equipment.
Kentucky Secretary of State U.S. Bankcorp Equipment Finance, ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 10/22/2001 Specific equipment.
Inc. - Plastics Equipment Group
Kentucky Secretary of State General Electric Capital ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 3/24/2003 Specific leased equipment.
Corporation
Kentucky Secretary of State General Electric Capital ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 3/24/2003 Specific leased equipment.
Corporation
Kentucky Secretary of State U.S. Bancorp Equipment Finance, ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 4/10/2003 Specific equipment.
Inc.
Kentucky Secretary of State U.S. Bancorp Equipment Finance, ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 4/10/2003 Specific equipment.
Inc.
Kentucky Secretary of State U.S. Bancorp Equipment Finance, 2003-194-8688-79 8/19/2003 Specific equipment.
Inc.
Kentucky Secretary of State General Electric Capital ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 12/24/2003 Specific equipment.
Corporation
Kentucky Secretary of State General Electric Capital ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 1/8/2004 Specific equipment.
Corporation
Kentucky Secretary of State Toyota Motor Credit Corporation ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 1/9/2004 Specific leased equipment.
Kentucky Secretary of State General Electric Capital ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 6/8/2004 Specific equipment.
Corporation
Kentucky Secretary of State General Electric Capital ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 6/9/2004 Specific equipment.
Corporation
Kentucky Secretary of State General Electric Capital ▇▇▇▇-▇▇▇▇▇▇▇-▇▇ 6/9/2004 Specific equipment.
Corporation
Trumbull County, Ohio (1) The CIT Group/Equipment 200106040019997 6/4/2001 Specific equipment.
Financing, Inc.
Note:
(1) No debt is outstanding. Best efforts are being used to obtain
authorization to record a UCC Financing Statement termination.
SCHEDULE 3.4
TO
CREDIT AGREEMENT
Contingent Obligations
1. Letters of Credit issued by Bank of America relating to self-insured
▇▇▇▇▇▇▇'▇ compensation policies, as follows:
Beneficiary Issuance Date Current Amount
----------------------- -------------- -----------------------------
Liberty Mutual March 20, 1996 $1,500,000 (Amendment No. 4,
Insurance Company dated April 3, 2003);
Expires March 1, 2006
The Travelers Indemnity March 20, 1996 $74,000 (Amendment No. 2,
Company of Illinois dated February 9, 2003)
Expires April 1, 2005
2. Indemnification obligations under charter documents and indemnification
agreements entered into from time to time between the Credit Parties and
their directors and officers.
3. Indemnification obligations under "Blue Totes" License Agreement, dated as
of May 22, 2001, between Delphi Technologies, Inc. and Atlantis Plastics,
Inc.
4. Continuing indemnity obligations under the Prior Lender Obligations.
SCHEDULE 3.8
TO
CREDIT AGREEMENT
Affiliate Transactions
1. Management fee of $750,000 to be paid to Trivest Partners, L.P.
2. Management Agreement.
SCHEDULE 3.9
TO
CREDIT AGREEMENT
Business Description
Credit Party Business Description
------------------------------ -------------------------------------------------------------
Atlantis Plastics, Inc. A holding company and, through its subsidiaries, is a
U.S. plastics and packaging manufacturer and importer.
Atlantis Plastics Injection Manufactures plastic parts by injection molding.
Molding, Inc.
Atlantis Plastic Films, Inc. Manufactures and imports multi-layer stretch and custom
films, converted end-products and packaging materials.
▇▇▇▇▇▇ Plastics, Inc. Manufactures standard and custom extruded plastic components.
Extrusion Masters, Inc. Manufactures standard and custom extruded plastic components.
Atlantis Films, Inc. Not actively engaged in a trade or business.
Atlantis Molded Plastics, Inc. A holding company and, through its subsidiaries, in the
molded plastics business.
Linear Films, Inc. (Canada) Sells and distributes multi-layer stretch film and
packaging products.
Rigal Plastics, Inc. Not actively engaged in a trade or business.
Atlantis Plastics Foreign Not actively engaged in a trade or business.
Sales Inc.
* The business described above with respect to the Credit Parties includes
ancillary and incidental processes and procedures, including, without
limitation, packaging, shipping and transportation.
SCHEDULE 5.4(a)
TO
CREDIT AGREEMENT
Jurisdictions of Organization and Qualifications
Jurisdiction Jurisdictions
Credit Party of Incorporation of Qualification
------------------------------ ---------------- ----------------------
Atlantis Plastics, Inc. Delaware Georgia (In process)(3)
Atlantis Films, Inc. Delaware N/A
Atlantis Molded Plastics, Inc. Florida N/A
Atlantis Plastic Films, Inc. Delaware Arkansas
California
Connecticut
Georgia
Kentucky
Minnesota
Oklahoma
▇▇▇▇▇▇ Plastics, Inc. Delaware Indiana
Rigal Plastics, Inc. Florida N/A
Atlantis Plastics Injection Kentucky Arkansas
Molding, Inc. Ohio
Tennessee
Texas
Extrusion Masters, Inc. Indiana N/A
---------------------
(3) Qualification in Georgia to be filed within thirty (30) days after the
Closing
SCHEDULE 5.4(b)
TO
CREDIT AGREEMENT
Capitalization
Authorized
Credit Party Capital Stock Stock Ownership
----------------------- --------------------------------- ------------------------------- ---------------------------
Atlantis Plastics, Inc. 20,000,000 Shares Class A ▇▇▇▇ ▇. ▇▇▇▇▇▇: 906,836 Shares (15.8622%)
Common Stock ($0.0001 par value) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇: 606,591 Shares (10.6104%)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Asset 570,205 Shares (9.9739%)
Management Inc.
7,000,000 Shares Class B ▇▇▇▇ ▇. ▇▇▇▇▇▇: 1,208,720 Shares (56.4120%)
Common Stock ($0.0001 par value) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇: 788,828 Shares (36.8153%)
500,000 Shares Preferred Stock None outstanding.
($0.0001 par value);
no series designated
Atlantis Films, Inc. 1,000 Shares Common Stock Atlantis Plastics, Inc.: 1,000 Shares (100%)
($0.01 par value)
Atlantis Molded 1,000 Shares Common Stock Atlantis Plastics, Inc.: 1,000 Shares (100%)
Plastics, Inc. ($0.01 par value)
Atlantis Plastics 2,000 Shares Common Stock Atlantis Molded Plastics, Inc.: 1,000 Shares (100%)
Injection Molding, Inc. ($1.00 par value)
Linear Films, Inc. Unlimited (no par value) Atlantis Plastic Films, Inc.: 100 Shares (100%)
(Canada)
Atlantis Plastic 10,000 Shares Common Stock Atlantis Plastics, Inc.: 1,000 Shares (100%)
Films, Inc. ($1.00 par value)
▇▇▇▇▇▇ Plastics, Inc. 1,000 Shares Common Stock Atlantis Molded Plastics, Inc.: 1,000 Shares (100%)
($0.01 par value)
Rigal Plastics, Inc. 100,000 Shares Common Stock Atlantis Plastics, Inc.: 1,980 Shares (100%)
($0.10 par value)
Extrusion Masters, Inc. 1,000 Shares Common Stock ▇▇▇▇▇▇ Plastics, Inc.: 100 Shares (100%)
(no par value)
Atlantis Plastics Unlimited Number of Common Shares Atlantis Plastics, Inc.: 1,000 Shares (100%)
Foreign Sales, Inc.
SCHEDULE 5.6
TO
CREDIT AGREEMENT
Intellectual Property
1. Trademarks
- See Exhibit A attached hereto.
2. Patents
- See Exhibit B attached hereto.
3. Copyrights
- TX3595523, New Ply-J flexible channel, owned by ▇▇▇▇▇▇ Plastics,
Inc., registered July 7, 1993.
4. Licenses
- Licenses granted pursuant to Settlement Agreement between Mobil Oil
Corporation and Linear Films, Inc., effective as of February 21,
1992 (U.S. Patent Nos. 4, 399, 180; 4, 418, 114; 4,436,788).
(Approx. percentage of Borrowers' inventory affected: 0%)
- License Agreement, effective as of February 21, 1992, between Mobil
Oil Corporation and Linear Films, Inc. (U.S. Patent No. 4,518,654).
(Approx. percentage of Borrowers' inventory affected: 0%)
- "Blue Totes" License Agreement, dated as of May 22, 2001, between
Delphi Technologies, Inc. and Atlantis Plastics, Inc. ). (Approx.
percentage of Borrowers' inventory affected: 0%)
- License Agreement, effective as of July 1, 2001, between CertainTeed
Corporation and Atlantis Building Products, a division of Atlantis
Plastics Injection Molding, Inc. ). (Approx. percentage of APIMI's
inventory affected: <1%)
5. Infringement Claims
- Infringement claims by Mobil Oil Corporation against Linear Films,
Inc. were settled pursuant to The Settlement Agreement between Mobil
Oil Corporation and Linear Films, Inc., effective as of February 21,
1992.
- Patent infringement claim: Pliant Corporation v. MSC Marketing &
Technology, Inc. d/b/a/ Sigma Stretch Film, and Atlantis Plastics,
Inc.; United States District Court, Northern District of Illinois
Eastern Division; Case No. 04 C 3509; filed on May 19, 2004. The
lawsuit asserts the infringement of U.S. Patent No. 5,531,393 for
STRETCHED FILM. Atlantis Plastics, Inc. filed its answer to the
plaintiff's complaint, denied infringement of the patent, and asserted
various counterclaims. The case is in initial discovery phase. Atlantis
Plastics, Inc. is vigorously defending the claim and believes the claim
has no merit. Atlantis Plastics, Inc. believes that an adverse outcome
will not materially affect the company.
EXHIBIT A
TRADEMARKS
- Name of - - - Registration - Registration -
Trademark - Owner - Country No. Date - Class
------------- --------------------- ---------------- --------------- -------------------- ----------
-
- A and - Atlantis Plastics, - United States - 1,872,481 - 01/10/95, - 17
Design Inc. Renewal 01/10/05
- Not yet
renewed. Grace
period expires
▇/▇▇/▇▇
- ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇ ▇▇▇▇▇▇ - 2,595,463 - 07/16/02 - 19
Inc.
- Ply-J - Atlantis Plastics, - United States - 2,152,268 - 04/21/98, Renewal - 17
Inc. ▇▇/▇▇/▇▇
- ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇ ▇▇▇▇▇▇ - 2,536,083 - 02/05/02, Renewal - 17, 40
Plastics Logo Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ - 07/03/96, Renewal - 16 & 17
Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ - 01/12/96, Renewal - 16 & 17
Inc. 01/12/06
- - Atlantis Plastics, - Denmark - 6276/1996 - 11/08/06 - 16
Inc.
- - Atlantis Plastics, - Finland - 203793 - 12/31/96, Renewal - 16
Inc. 12/31/06
- - Atlantis Plastics, - France - 96605545 - 01/12/96, Renewal - 16 & 17
Inc. 01/11/06
- - Atlantis Plastics, - Germany - 39602870 - 08/30/96, Renewal - 16 & 17
Inc. 01/31/06
- - Atlantis Plastics, - Great Britain - 2052080 - 01/17/96, Renewal - 16 & 17
Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇ - ▇▇▇▇▇▇ - 06/17/98, Renewal - 16 & 17
Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇ - ▇▇▇▇▇▇ - 08/25/98, Renewal - 16 & 17
Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇ - ▇▇▇▇▇▇ - 09/06/96, Renewal - 16 & 17
Inc. 09/06/06
- Name of - - - Registration - Registration -
Trademark - Owner - Country No. Date - Class
------------- --------------------- ---------------- --------------- -------------------- ----------
-
- ▇▇▇▇ - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ - 04/17/96, Renewal - 16 & 17
Seasons Logo Inc. 04/30/06
- - Atlantis Plastics, - Benelux - 589227 - 01/16/96, Renewal - 16 & 17
Inc. 01/16/06
- - Atlantis Plastics, - Denmark - 77/1997 - 01/17/97, Renewal - 16 & 17
Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇ - 03/14/97, Renewal - 16
Inc. 03/14/07
- - Atlantis Plastics, - France - 96606179 - 01/17/96, Renewal - 16 & 17
Inc. 01/16/06
- - Atlantis Plastics, - Germany - 39602871 - 06/18/96, Renewal - 17
Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇▇ - ▇▇▇▇▇▇ - 11/17/98, Renewal - 17
Inc. ▇▇/▇▇/▇▇
- - ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, - ▇▇▇▇▇ - ▇▇▇▇▇▇ - 08/25/98, Renewal - 16 & 17
Inc. 01/30/06
- Pro-Label - Atlantis Plastic - United States - 1,859,167 - 10/18/94, Renewal - 17
Films, Inc. 10/18/04
- Not yet renewed.
Grace period
expires 04/18/05
- Sta-Dri - Atlantis Plastic - United States - 2,313,280 - 02/01/00 , - 20, 24, 25
Films, Inc. Renewal 02/01/10
- (a Section 8
declaration is due
02/01/06)
- - - - - -
- Pending - - - - -
Applications
- Kwikcut - Atlantis Plastics, - United States - Application - Filing Date: - 19
Inc. No. 78/463,648 08/06/04
- Kwikcut - Atlantis Plastics, - Canada - Application - Filing Date: - 19
Inc. No. 1,245,540 01/27/05
- Atlantis - Atlantis Plastics, - United States - U.S. Serial - Filing Date: - 17
Plastics Inc. No. 78/429,685 06/03/04
Linear (Pending, the
Stretch Films subject of an
Office Action with
a deadline of
07/19/05)
- Name of - - - Registration - Registration -
Trademark - Owner - Country No. Date - Class
------------- --------------------- ---------------- --------------- -------------------- ----------
-
- LINEAR - Atlantis Plastics, - United States - U.S. Serial - Filing Date: - 17
Inc. No. 78/429,650 06/03/04
(Pending, the
subject of an
Office Action with
a deadline of
07/07/05)
EXHIBIT B
PATENTS
- Filing/
- Name of Patent - Serial/Patent Registration - -
- - Number - Date - Status - Owner
--------------------------------- ------------------ ------------- ------------------- ---------------------------
-
- Flexible Drip Rail - 5,918,426 - 01/21/98 - Issued 07/06/99 - Atlantis Plastics, Inc.
-
- Window Molding Extrusion - D407,831 - 03/26/97 - Issued 04/06/99 - Atlantis Plastics, Inc.
-
- Brick Molding having an - 6,050,037 - 01/21/98 - Issued 04/18/00 - Atlantis Plastics, Inc.
Integral Hinge and a Concealed
Mounting Surface
-
- Deformable Label - 5,302,431 - 01/06/92 - Issued 04/12/94 - Atlantis Plastic Films,
Inc
(National Poly Products,
Inc.)
-
- Apparatus for Controlled - 4,600,163 - 12/10/82 - Issued 07/15/86 - Atlantis Plastic Films,
Manual Unrolling of rolled Inc.
flexible Material (Linear Films, Inc.)
-
- Injection Molded Exterior - 6,336,303 - 05/07/99 - Issued 01/08/02 - Atlantis Plastics, Inc.
Siding Panel with Positioning
Relief and Method of
Installation
-
- Injection Molded Exterior - Application - 03/22/00 - Issued 06/01/04 - Atlantis Plastics, Inc.
Siding Panel with Positioning No. 2,302,598
Relief and Method of - Granted (Canada)
Installation (Canada)
-
- Siding Panels for Wall - 10/285,232 - 10/31/02 - Pending - Atlantis Plastics, Inc.
Coverings
-
- Corner Trim Piece for Siding - 10/852,993 - 05/25/04 - Pending - Atlantis Plastics, Inc.
- Battery Tray - 6,521,371 - 11/28/00 - 2/18/03 - Atlantis Plastics, Inc.
SCHEDULE 5.7
TO
CREDIT AGREEMENT
Investigations and Audits
None
SCHEDULE 5.8
TO
CREDIT AGREEMENT
Employee Matters
Collective bargaining agreements:
None.
Petitions for certification or union election:
None.
Strikes, work stoppages, or other employee grievances other than those in the
ordinary course of business not reasonably expected to have Material Adverse
Effect:
None.
Violations of wage and hours requirements:
None.
Employment contracts:
1. Executive Employment Agreement, dated as of December 31, 2002, by and
between Atlantis Plastics, Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇.
2. Change in Control Agreement (Severance Agreement), dated as of December
31, 2002, by and between Atlantis Plastics, Inc. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇.
3. Executive Employment Agreement, dated as of October 7, 2002, by and
between Atlantis Plastics Injection Molding, Inc. and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇.
4. Executive Employment Agreement, dated as of October 7, 2002, by and
between Atlantis Plastics Injection Molding, Inc. and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
5. Employment Letter, dated October 21, 2003, by Atlantis Plastics, Inc.,
with respect to ▇▇▇ ▇▇▇▇▇▇▇▇▇.
6. Employment Letter, dated November 29, 2000, by Atlantis Plastics, Inc.,
and accepted by ▇▇▇▇ ▇. ▇▇▇▇▇.
7. Change in Control Agreement (Severance Agreement), dated as of August 2,
1999, by and between Atlantis Plastics, Inc. and ▇▇▇▇ ▇. ▇▇▇▇▇.
8. Employment Letter, dated March 2, 2000, by Atlantis Plastics, Inc. and
accepted by ▇▇▇▇▇▇ ▇▇▇▇▇▇.
9. Employment Letter, dated March 5, 2001, by Atlantis Plastics, Inc., and
accepted by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇.
10. Employment Letter, dated September 10, 2002, by Atlantis Plastics, Inc.,
and accepted by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
11. Change in Control Agreement (Severance Agreement), dated August 2, 1999,
by and between Atlantis Plastics, Inc. and ▇▇▇▇ ▇. ▇▇▇▇▇▇.
SCHEDULE 5.10
TO
CREDIT AGREEMENT
Litigation
Outstanding Judgments:
None.
Pending or Threatened Litigation:
None.
SCHEDULE 5.11
TO
CREDIT AGREEMENT
Use of Proceeds
SOURCES
SOURCE AMOUNT
Second Lien 75,000,000.00
-------------
TOTAL SOURCES OF FUNDS 75,000,000.00
-------------
USE OF PROCEEDS
PURPOSE WIRING INSTRUCTIONS AMOUNT
------- ------------------- ------
Bank of New York Admin Fee Bank Name: The Bank of New York 30,000.00
City, State: New York, NY
ABA #: 8900393297
Account Name: Cash Clearing
Account Number: 8900415460
Reference: Atlantis/Tequlla English 972.401.8569
▇▇▇▇▇▇▇ ▇▇▇▇▇ Commitment Fee Bank Name: LaSalle Bank, NA 1,500,000.00
City, State: Chicago, IL
ABA #: ▇▇▇▇▇▇▇▇▇
Account Name: MLBFS-Corporate Finance
Account Number: 5800393182
Reference: Atlantis Plastics, Inc.
Commonwealth Land Title Bank Name: LaSalle Bank, N.A. 47,980.24
Insurance Company(1) City, State: Chicago, IL
ABA #: ▇▇▇▇▇▇▇▇▇
Account Name: Commonwealth Land Title Insurance Co.
Account Number: ▇▇▇▇▇▇▇
Reference: Escrow No. 05-034931
Atlantis Plastics - ▇▇▇▇▇▇▇ ▇▇▇▇▇ Capital Ref
▇▇▇▇▇▇▇ ▇▇▇▇ Legal Fees Bank Name: Citibank, NA 25,000.00
City, State: New York, NY
ABA #: ▇▇▇▇▇▇▇▇▇
Account Name: SASM & F LLP
Account Number: ▇▇▇▇▇▇▇▇
Reference: Atlantis Plastics, ▇▇▇▇ Number 1051696
▇▇▇▇▇▇ & ▇▇▇▇▇ Bank Name: Bank of America, NA 7,500.00
City, State: Dallas, TX
ABA #: ▇▇▇▇▇▇▇▇▇
Account Name: ▇▇▇▇▇▇ and ▇▇▇▇▇ Operating Account
Account Number: 018-08-3729-4
Reference: ▇▇▇▇▇ ▇▇▇▇ (214.651.5766)
Remainder Funds to Company(2) Bank Name: Bank of America, NA 73,389,519.76
City, State: Atlanta, GA
ABA #: ▇▇▇▇▇▇▇▇▇
Account Name: Atlantis Plastics Films
Account Number: 000090171942
-------------
TOTAL USES OF FUNDS 75,000,000.00
-------------
(2) $103,197,787.50 due as a special dividend, and $4,350,820.00 due as cash
payment to option holders in early April.
SCHEDULE 5.12
TO
CREDIT AGREEMENT
Real Estate
I REAL PROPERTY OWNED BY CREDIT PARTIES
Owner Facility Name Address of Owned Property
----------------------- --------------------------------- ---------------------------
Atlantis Plastics ▇▇▇▇▇▇▇ Injection Molded Plant ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Injection Molding, Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastics Ft. ▇▇▇▇▇ Injection Molded Plant ▇▇▇ ▇▇▇▇▇ "▇" ▇▇▇▇▇▇
Injection Molding, Inc. ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastics Henderson Injection Molded Plant ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Injection Molding, Inc. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Nicholasville Stretch Films Plant ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Films, Inc. ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Tulsa/Sapulpa Stretch Films Plant ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ South
Films, Inc. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Mankato Custom Films Plant ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Films, Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastics Warren Injection Molded Plant ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Injection Molding, Inc. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Plastics, Inc. Elkhart Profile Extrusion Plant ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
II REAL PROPERTY LEASED BY CREDIT PARTIES
Lessee Facility Name Address of Leased Property
---------------------------- ------------------------------ --------------------------
Atlantis Plastic Films, Inc. Corporate Headquarters ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Films, Inc. Fontana, CA Stretch Plant-2240 ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Films, Inc. Cartersville, GA Stretch Plant ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Lessee Facility Name Address of Leased Property
---------------------------- ------------------------------ --------------------------
Atlantis Plastics Injection LaVergne, TN Extrusion Plant ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Molding, Inc. ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Films, Inc. Mankato, MN Institutional Plant ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastics Injection Alamo, Texas Facility ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Extrusion Masters, Inc. Extrusion Masters, Elkhart, IN ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Extrusion Masters, Inc. LaVanture Extrusion ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Extrusion Masters, Inc. LaVanture Molded ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Extrusion Masters, Inc. LaVanture Distribution ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
III REAL PROPERTY, PURCHASE OPTIONS, RIGHTS OF FIRST REFUSAL AND SIMILAR
CONTRACTUAL RIGHTS
Credit Party/Real Property Description of Contractual Right
-------------------------- --------------------------------
Atlantis Plastic Films, Inc. (Lessee) Lessee has right of first refusal to lease any
vacant
Corporate Headquarters space on second floor of leased premises.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ Lessee has option to renew lease.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Films, Inc. (Lessee) Lessee has option to extend lease term.
Fontana, CA Stretch Plant-2240 Lessor has option to assume ownership of
Lessee's
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ alterations and utility installations on leased
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ premises.
Lessee's option to purchase the building in which
leased premises located or extend option to
purchase are expired.
Atlantis Plastic Films, Inc. (Lessee) Lessee's option to purchase has expired.
Cartersville, GA Stretch Plant Lessee has option to request expansion of leased
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ premises.
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastics Injection Molding, Inc. Lessee has option to renew lease.
(Lessee)
LaVergne, TN Extrusion Plant
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastic Films, Inc. (Lessee) Lessee has option to renew lease and option to
Mankato, MN Institutional Plant purchase.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Atlantis Plastics Injection Molding, Inc. Lessee has option to renew lease.
(Lessee) Lessee has option to purchase and right of first
Alamo, Texas Facility refusal.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Extrusion Masters, Inc. (Lessee) Lessee has option to
extend lease term.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Lessee has right of first refusal to purchase
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ property.
Extrusion Masters, Inc. (Lessee) Lessee has the option to renew lease term.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Lessee has option to purchase.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Party/Real Property Description of Contractual Right
-------------------------- --------------------------------
Extrusion Masters, Inc. (Lessee) Lessee has right to terminate month-to-month
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ lease upon not less than 60 days prior written
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ notice.
Extrusion Masters, Inc. (Lessee) Lessee has right to terminate month-to-month
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ lease upon not less than 60 days prior written
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ notice after the completion of expansion space at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇.
SCHEDULE 5.13
TO
CREDIT AGREEMENT
Environmental Matters
Hazardous Material Contamination:
None.
Unlawful Releases of Hazardous Material:
None.
Violations of Environmental Laws:
None.
Violations relating to Environmental Permits:
None.
Environmental Liabilities:
None.
Environmental Litigation:
None.
CERCLA:
None.
Environmental reports, reviews and audits not provided under Section 5.13(a):
None.
SCHEDULE 5.14
TO
CREDIT AGREEMENT
ERISA Plans
- Atlantis Plastics, Inc. maintains a 401 (k) Plan for all Subsidiaries
through Wachovia Retirement Services. Wachovia is the administrator and
the Trustee.
SCHEDULE 5.16
TO
CREDIT AGREEMENT
Deposit and Disbursement Accounts
- Financial Institution - Account Name - Account # - Purpose
---------------------------- ------------------------------ ----------------- -------------------------------------
- Bank of America - Atlantis Plastic Films, Inc. - 00-90171942 - Master Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastic Films, Inc. - 0007-07363802(1) - Manual Checking Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of Oklahoma - Atlantis Plastic Films, Inc. - 810-00-5965(2) - Misc Operating Account
- ▇.▇. ▇▇▇ ▇▇▇▇
- ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- PNC Bank, National Assn - Atlantis Plastic Films, Inc. - 3-000-07-5102(2) - Misc Operating Account (In process
- PNC Plaza of closing. Will close within 30
- ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ days of the Closing Date.)
- ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastic Films, Inc. - ▇▇▇▇-▇▇-▇▇▇▇ - Misc Operating Account (in process
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ of closing. Will close within 30
- (Fontana Branch #0244) days of the Closing Date.)
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - ▇▇▇▇▇▇ Plastics, Inc. - 0032-62449012(1) - Operating Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
----------
(1) Zero Balance Accounts
(2) Account will either (a) maintain less than $20,000 balance or (b) will be
closed within 30 days of the Closing Date.
- Financial Institution - Account Name - Account # - Purpose
---------------------------- ------------------------------ ----------------- -------------------------------------
- Bank of America - Atlantis Plastics - 0032-62450978 - Henderson Lockbox Acct
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Injection Molding, Inc.
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics - 0032-62450960(1) - Master Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Injection Molding, Inc.
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics - 0032-99808453(1) - ▇▇▇▇▇▇▇▇▇ ▇▇ Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Injection Molding, Inc.
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics - 0032-99808420(1) - ▇▇▇▇▇▇▇ ▇▇ Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Injection Molding, Inc.
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics - 0032-99808438(1) - ▇▇▇▇▇▇ ▇▇ Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Injection Molding, Inc.
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics - 0032-99808446(1) - Ft. ▇▇▇▇▇ ▇▇ Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Injection Molding, Inc.
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics - 0032-7-503-5881 - Injection Lockbox Acct
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Injection Molding, Inc.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics Films, Inc. - 0032-9805913(1) - Films AP Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (in process of closing)
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Financial Institution - Account Name - Account # - Purpose
---------------------------- ------------------------------ ----------------- -------------------------------------
- Bank of America - Atlantis Plastics Films, Inc. - 0032-9840712(1) - Films AP Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (replacing 0032-9805913)
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of America - Atlantis Plastics Films, Inc. - 070-711-4381(1) - Films Lockbox Account
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
- ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
- Bank of Montreal - Atlantis Plastic Films, Inc. - 1037-891 - Canadian Operating Acct
- Markham and Ellesmere
- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
- ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇▇▇
- (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 5.17
TO
CREDIT AGREEMENT
Agreements and Other Documents
I SUPPLY AND PURCHASE AGREEMENTS
1. Strategic Alliance Agreement, effective as of January 1, 2004, by and
between Maytag Corporation and Atlantis Plastics Injection Molding.
2. Standard Contract of Sale, dated as of February 5, 2002, by and between
ExxonMobil Chemical Company and Atlantis Plastics, Inc.
3. Contract for Sale of Polymers, dated as of April 2, 2003, by and between
Atlantis Plastics, Inc. and Equistar Chemicals, LP, for the period January
1, 2003 to December 31, 2005.
4. Purchase Agreement, dated as of November 26, 2001, by and between PolyOne
Corporation and Atlantis Plastics (for purchase of compounds).
5. Purchase Agreement, dated as of August 8, 2001, by and between Sonoco
Products Company and Atlantis Plastics.
6. Sales Contract, effective as of January 1, 2003, by and between The Dow
Chemical Company and Atlantis Plastics, Inc., as amended by a letter
agreement, executed on June 17, 2002.
7. Supply Agreement, dated as of April 23, 2004, by and between Atlantis
Plastics, Inc. and Clopay Building Products Company, Inc.
8. Supply Agreement, dated as of January 1, 2005, by and between Whirlpool
Corporation and Atlantis Plastics, Inc.
9. Management Agreement, effective as of March 1, 2004, by and between CTS
Special Services, L.L.C., a Georgia limited liability company, Atlantis
Plastics, Inc., Atlantis Molded Plastics, Inc., and Atlantis Films, Inc.
(for Transportation Management Services).
II EQUIPMENT LEASES
See attached equipment lease summary. These leases are entered into
pursuant to the Master Lease Agreement, dated October 9, 2002, by and
between General Electric Capital Corporation and Atlantis Plastics
Injection Molding, Inc.
III LICENSES AND PERMITS
1. Seller's Permit issued by the California State Board of Equalization to
Atlantis Plastic Films, Inc. on December 15, 2000.
2. Business Certificate issued by the City of Fontana to Atlantis Plastics,
Inc., expiring on October 31, 2005.
3. Business Registration issued by the City of Fort ▇▇▇▇▇ Arkansas to
Atlantis Plastics Inc. on March 31, 2005.
4. Business License issued by the City of Henderson, Kentucky to Atlantis
Plastics, Inc., expiring on April 30, 2005.
5. State of Tennessee NPDES Permit for Storm Water Discharges Associated with
Industrial Activity, Tracking No. TNR054483, issued by the Tennessee
Department of Environment and Conservation, Division of Water Pollution
Control, effective February 1, 2002 through December 31, 200, for the
facility located in ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ County.
6. State of Tennessee NPDES Permit for Storm Water Discharges Associated with
Industrial Activity, Tracking No. TNR051349, issued by the Tennessee
Department of Environment and Conservation, Division of Water Pollution
Control, effective February 1, 2002 through December 31, 2006, for the
facility located in Jackson, Madison County.
7. General KPDES Permit for Storm Water Source Discharges, Permit No. KYR00,
issued by the Kentucky Department for Environmental Protection, effective
as of October 1, 2002, expiring on September 30, 2007.
8. General Industrial Storm Water Permit, Permit Tracking No. ARR00A734,
issued by the Arkansas Department of Environmental Quality, for the
facility located in Fort ▇▇▇▇▇, Arkansas.
IV INSTRUMENTS AND DOCUMENTS OF INDEBTEDNESS OR GUARANTEED INDEBTEDNESS
None.
V INSTRUMENTS AND AGREEMENTS EVIDENCING ISSUANCE OF EQUITY SECURITIES,
WARRANTS, RIGHTS OR OPTIONS TO PURCHASE EQUITY SECURITIES.
2001 Stock Award Plan
865,000 shares available for grant. No Options are outstanding.
SCHEDULE 5.18
TO
CREDIT AGREEMENT
Insurance
IRI and Arch Commercial 11/01/04 - Coverage - 1st $25,000,000 shared with
Property 11/01/05 IRI (West Port), 60/40, respectively
$25,000,000-$100,000,000 with Arch
Deductible -$100,000
CNA Insurance Boiler & 11/01/04 - Coverage - $100,000,000
Company Machinery 11/01/05 Deductible - $10,000
Chubb Insurance Commercial 3/01/04 - Coverage - $1,500,000
Company Crime 3/01/05 Deductible - $25,000
Chubb Insurance Commercial 3/01/04 - Coverage - $2,000,000
Company Fiduciary 3/01/05 Deductible - $1,000
Liberty Mutual Commercial 3/01/04 - Coverage - $1,000,000 per occurrence
Group General 3/01/05 $2,000,000 aggregate
Liability Deductible - $0
Liberty Mutual Commercial* 3/01/04 - Coverage - $1,000,000
Group Automobile 3/01/05 Deductible - $1,000 Deductible
Physical Damage $1,000 comprehensive or
collision
ACE USA Foreign 11/01/04 - Coverage - $1,000,000
Package 11/01/05 Deductible - $0
Liberty Mutual Group Umbrella 3/01/04 - Coverage - $50,000,000 (Liberty $15MM
And Fireman's Fund 3/01/05 Fireman's Fund $35MM)
Deductible - Underlying Limits
Liberty Mutual Group Workers 3/01/04 - Coverage - $2,500,000 aggregate (Statutory)
Compensation 3/01/05 Deductible - $250,000
XL Specialty Aviation 11/01/04 - Coverage - $10,000,000
11/01/05 Deductible - $0
Federal Insurance Executive and 11/01/04 - Coverage - $5,000,000 per claim
Company Entity 11/1/05
Securities
--------------------
* There are three separate commercial automobile policies: (1) Texas; (2)
Virginia; and (3) all other states. Each policy has the same term, coverage, and
deductible.
Schedule 2.1
Page 1
Federal Insurance Employment 11/1/04 - Coverage - $2,000,000 per claim
Practices 11/1/05
Attachment 3.6
page 2