EXHIBIT 10.28
EXECUTION VERSION
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$255,000,000
CREDIT AGREEMENT
DATED AS OF FEBRUARY 13, 2004,
AMONG
IONICS, INCORPORATED,
AS BORROWER,
THE SUBSIDIARY GUARANTORS PARTY HERETO,
AS SUBSIDIARY GUARANTORS,
THE LENDERS PARTY HERETO,
UBS SECURITIES LLC,
AS LEAD ARRANGER, SOLE BOOKMANAGER AND DOCUMENTATION AGENT,
FLEET SECURITIES, INC. AND BANK OF AMERICA, N.A.
AS SYNDICATION AGENTS,
WACHOVIA BANK, N.A. AND GENERAL ELECTRIC CAPITAL CORPORATION,
AS CO-DOCUMENTATION AGENTS,
UBS AG, STAMFORD BRANCH,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
UBS LOAN FINANCE LLC,
AS SWINGLINE LENDER
AND
HSBC BANK USA,
AS ISSUING BANK
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms................................................ 2
SECTION 1.02 Classification of Loans and Borrowings....................... 37
SECTION 1.03 Terms Generally.............................................. 37
SECTION 1.04 Accounting Terms; GAAP....................................... 37
SECTION 1.05 Resolution of Drafting Ambiguities........................... 37
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments.................................................. 38
SECTION 2.02 Loans........................................................ 38
SECTION 2.03 Borrowing Procedure.......................................... 39
SECTION 2.04 Evidence of Debt; Repayment of Loans......................... 40
SECTION 2.05 Fees......................................................... 41
SECTION 2.06 Interest on Loans............................................ 42
SECTION 2.07 Termination and Reduction of Commitments..................... 42
SECTION 2.08 Interest Elections........................................... 43
SECTION 2.09 Amortization of Term Borrowings.............................. 44
SECTION 2.10 Optional and Mandatory Prepayments of Loans.................. 44
SECTION 2.11 Alternate Rate of Interest................................... 47
SECTION 2.12 Increased Costs.............................................. 48
SECTION 2.13 Breakage Payments............................................ 49
SECTION 2.14 Payments Generally; Pro Rata Treatment; Sharing of Setoffs... 49
SECTION 2.15 Taxes........................................................ 51
SECTION 2.16 Mitigation Obligations; Replacement of Lenders............... 52
SECTION 2.17 Swingline Loans.............................................. 53
SECTION 2.18 Letters of Credit............................................ 54
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 Organization; Powers......................................... 60
SECTION 3.02 Authorization; Enforceability................................ 61
SECTION 3.03 No Conflicts................................................. 61
SECTION 3.04 Financial Statements......................................... 61
SECTION 3.05 Properties................................................... 62
SECTION 3.06 Intellectual Property........................................ 63
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SECTION 3.07 Equity Interests and Subsidiaries............................ 63
SECTION 3.08 Litigation; Compliance with Laws............................. 64
SECTION 3.09 Agreements................................................... 64
SECTION 3.10 Federal Reserve Regulations.................................. 65
SECTION 3.11 Investment Company Act; Public Utility Holding Company Act... 65
SECTION 3.12 Use of Proceeds.............................................. 65
SECTION 3.13 Taxes........................................................ 65
SECTION 3.14 No Material Misstatements.................................... 66
SECTION 3.15 Labor Matters................................................ 66
SECTION 3.16 Solvency..................................................... 66
SECTION 3.17 Employee Benefit Plans....................................... 66
SECTION 3.18 Environmental Matters........................................ 67
SECTION 3.19 Insurance.................................................... 68
SECTION 3.20 Security Documents........................................... 68
SECTION 3.21 Acquisition Documents; Representations and Warranties in
Acquisition Agreement........................................ 69
SECTION 3.22 Anti-Terrorism Law........................................... 70
ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 Conditions to Initial Credit Extension....................... 71
SECTION 4.02 Conditions to All Credit Extensions.......................... 76
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.01 Financial Statements, Reports, etc........................... 77
SECTION 5.02 Litigation and Other Notices................................. 79
SECTION 5.03 Existence; Businesses and Properties......................... 80
SECTION 5.04 Insurance.................................................... 80
SECTION 5.05 Obligations and Taxes........................................ 82
SECTION 5.06 Employee Benefits............................................ 82
SECTION 5.07 Maintaining Records; Access to Properties and Inspections;
Annual Meetings.............................................. 83
SECTION 5.08 Use of Proceeds.............................................. 83
SECTION 5.09 Compliance with Environmental Laws; Environmental Reports.... 83
SECTION 5.10 Interest Rate Protection..................................... 83
SECTION 5.11 Additional Collateral; Additional Guarantors................. 84
SECTION 5.12 Security Interests; Further Assurances....................... 86
SECTION 5.13 Information Regarding Collateral............................. 86
SECTION 5.14 Dissolution of Immaterial Subsidiaries....................... 87
SECTION 5.15 Letters of Credit to be Collateralized....................... 87
SECTION 5.16 Certain Post-Closing Matters................................. 87
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ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.01 Indebtedness................................................. 88
SECTION 6.02 Liens........................................................ 89
SECTION 6.03 Sale and Leaseback Transactions.............................. 92
SECTION 6.04 Investment, Loan and Advances................................ 92
SECTION 6.05 Mergers and Consolidations................................... 94
SECTION 6.06 Asset Sales.................................................. 95
SECTION 6.07 Acquisitions................................................. 95
SECTION 6.08 Dividends.................................................... 96
SECTION 6.09 Transactions with Affiliates................................. 96
SECTION 6.10 Financial Covenants.......................................... 97
SECTION 6.11 Prepayments of Other Indebtedness; Modifications of
Organizational Documents and Other Documents, etc............ 99
SECTION 6.12 Limitation on Certain Restrictions on Subsidiaries........... 99
SECTION 6.13 Limitation on Issuance of Capital Stock...................... 100
SECTION 6.14 Limitation on Creation of Subsidiaries....................... 100
SECTION 6.15 Business..................................................... 100
SECTION 6.16 Limitation on Accounting Changes............................. 100
SECTION 6.17 Fiscal Year.................................................. 100
SECTION 6.18 Lease Obligations............................................ 100
SECTION 6.19 No Further Negative Pledge................................... 100
SECTION 6.20 Anti-Terrorism Law; Anti-Money Laundering.................... 101
SECTION 6.21 Embargoed Person............................................. 101
SECTION 6.22 Immaterial Subsidiaries...................................... 101
ARTICLE VII
GUARANTEE
SECTION 7.01 The Guarantee................................................ 102
SECTION 7.02 Obligations Unconditional.................................... 102
SECTION 7.03 Reinstatement................................................ 103
SECTION 7.04 Subrogation; Rights of Reimbursement; Subordination.......... 103
SECTION 7.05 Remedies..................................................... 105
SECTION 7.06 Instrument for the Payment of Money.......................... 105
SECTION 7.07 Continuing Guarantee......................................... 105
SECTION 7.08 General Limitation on Guarantee Obligations.................. 105
SECTION 7.09 Release of Guarantors........................................ 106
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ARTICLE VIII
EVENTS OF DEFAULT
ARTICLE IX
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
SECTION 9.01 Collateral Account........................................... 109
SECTION 9.02 Proceeds of Destruction, Taking and Collateral
Dispositions................................................. 110
SECTION 9.03 Application of Proceeds...................................... 110
ARTICLE X
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 10.01 Appointment.................................................. 111
SECTION 10.02 Agent in its Individual Capacity............................. 111
SECTION 10.03 Exculpatory Provisions....................................... 111
SECTION 10.04 Reliance by Agent............................................ 112
SECTION 10.05 Delegation of Duties......................................... 112
SECTION 10.06 Successor Agent.............................................. 112
SECTION 10.07 Non-Reliance on Agent and Other Lenders...................... 112
SECTION 10.08 Name Agents.................................................. 113
SECTION 10.09 Indemnification.............................................. 113
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 Notices...................................................... 113
SECTION 11.02 Waivers; Amendment........................................... 114
SECTION 11.03 Expenses; Indemnity.......................................... 117
SECTION 11.04 Successors and Assigns....................................... 119
SECTION 11.05 Survival of Agreement........................................ 121
SECTION 11.06 Counterparts; Integration; Effectiveness..................... 122
SECTION 11.07 Severability................................................. 122
SECTION 11.08 Right of Setoff.............................................. 122
SECTION 11.09 Governing Law; Jurisdiction; Consent to Service of Process... 122
SECTION 11.10 Waiver of Jury Trial......................................... 123
SECTION 11.11 Headings..................................................... 123
SECTION 11.12 Confidentiality.............................................. 123
SECTION 11.13 Interest Rate Limitation..................................... 124
SECTION 11.14 Lender Addendum.............................................. 124
SECTION 11.15 Obligations Absolute......................................... 124
SECTION 11.16 Escrow Agreements............................................ 125
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ANNEXES
Annex I Applicable Margin
Annex II Amortization Table
SCHEDULES
Schedule 1.01(a) Excluded Project Subsidiaries
Schedule 1.01(b) Existing Non-Recourse Indebtedness
Schedule 1.01(c) Mortgaged Property
Schedule 1.01(d) Refinancing Indebtedness to Be Repaid
Schedule 1.01(e) Subsidiary Guarantors
Schedule 2.18(m) Existing Issuing Bank Letters of Credit
Schedule 3.03 Governmental Approvals; Compliance with Laws
Schedule 3.05(b) Real Property
Schedule 3.06(c) Violations or Proceedings
Schedule 3.07(a) Subsidiaries
Schedule 3.07(c) Corporate Organizational Chart
Schedule 3.07(d) Immaterial Subsidiaries
Schedule 3.09(c) Material Agreements
Schedule 3.18 Environmental Matters
Schedule 3.19 Insurance
Schedule 3.21 Acquisition Documents
Schedule 4.01(g) Local Counsel
Schedule 4.01(o)(vi) Landlord Access Agreements
Schedule 4.01(p)(iii) Title Insurance Amounts
Schedule 5.11(e) Mortgages to be Obtained after the Closing Date
Schedule 5.15 Letters of Credit to be Collateralized
Schedule 5.16 Certain Post Closing Items
Schedule 6.01(b) Existing Indebtedness
Schedule 6.02(c) Existing Liens
Schedule 6.04(b) Existing Investments
Schedule 6.06(c) Specified Assets Held for Sale
EXHIBITS
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Interest Election Request
Exhibit F Form of Joinder Agreement
Exhibit G Form of Landlord Access Agreement
Exhibit H Form of LC Request
Exhibit I Form of Lender Addendum
Exhibit J-1 Form of Mortgage
Exhibit J-2 Form of Leasehold Mortgage
Exhibit K-1 Form of Term Note
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Exhibit K-2 Form of Revolving Note
Exhibit K-3 Form of Swingline Note
Exhibit L-l Form of Perfection Certificate
Exhibit L-2 Form of Perfection Certificate Supplement
Exhibit M Form of Security Agreement
Exhibit N-1 Form of Opinion of Company Counsel
Exhibit N-2 Form of Opinion of Local Counsel
Exhibit O Form of Solvency Certificate
Exhibit P Form of Intercompany Note
Exhibit Q Form of Non-Bank Certificate
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CREDIT AGREEMENT
This CREDIT AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "AGREEMENT") dated as of February 13, 2004
among IONICS, INCORPORATED, a Massachusetts corporation ("BORROWER"), the
Subsidiary Guarantors (such term and each other capitalized term used but not
defined herein having the meaning given to it in Article I), the Lenders, UBS
SECURITIES LLC, as lead arranger (in such capacity, "ARRANGER"), sole
bookmanager and documentation agent (in such capacity, "DOCUMENTATION AGENT"),
FLEET SECURITIES, INC. and BANK OF AMERICA, N.A., as syndication agents (in such
capacity, the "SYNDICATION AGENTS"), WACHOVIA BANK, N.A. and GENERAL ELECTRIC
CAPITAL CORPORATION, as co-documentation agents (in such capacity, the
"CO-DOCUMENTATION AGENTS"), UBS LOAN FINANCE LLC, as swingline lender (in such
capacity, "SWINGLINE LENDER"), UBS AG, STAMFORD BRANCH, as administrative agent
(in such capacity, "ADMINISTRATIVE AGENT") for the Lenders and as collateral
agent (in such capacity, "COLLATERAL AGENT") for the Secured Parties, and HSBC
BANK USA, as issuing bank (in such capacity, "ISSUING BANK").
WITNESSETH:
WHEREAS, Borrower has entered into a purchase agreement, dated
as of November 18, 2003 (as amended, supplemented or otherwise modified from
time to time in accordance with the provisions hereof and thereof, the
"ACQUISITION AGREEMENT"), with the individuals and entities listed on Exhibit A
thereto (each a "SELLER" and, collectively, the "SELLERS") to acquire (the
"ACQUISITION") all of the issued and outstanding shares of capital stock or
other equity interests of Ecolochem, Inc., Ecolochem International, Inc.,
Ecolochem S.A.R.L. and Moson Holdings, LLC (together with their respective
subsidiaries, the "ACQUIRED BUSINESS").
WHEREAS, in order to finance a portion of the consideration
under the Acquisition Agreement, Borrower will (i) issue up to 4,905,660 shares
of Borrower's common stock (the "STOCK CONSIDERATION") and (ii) utilize cash on
hand of not less than $55.5 million, subject to increase by an amount not
greater than (x) $13.5 million if and to the extent that the Stock Consideration
is reduced in accordance with the Acquisition Agreement on the Closing Date and
(y) an additional $5 million if and to the extent that the amount Borrower is
required on the Closing Date to make payments under Section 1.05(b) of the
Acquisition Agreement exceeding $15.0 million (the "CASH PAYMENT" and, together
with the Stock Consideration, the "EQUITY FINANCING").
WHEREAS, Borrower has requested the Lenders to extend credit
in the form of (a) Term Loans on the Closing Date, in an aggregate principal
amount not in excess of $175 million, and (b) revolving extensions of credit at
any time and from time to time prior to the Revolving Maturity Date, in an
aggregate principal amount at any time outstanding not in excess of $80 million,
which shall consist of a $60 million sub-facility to be available solely for the
issuance of letters of credit and a $20 million sub-facility to be available
solely for the making of loans to be used for general working capital purposes
(including to make payments with respect to the Acquisition and to effect
Permitted Acquisitions), none of the proceeds of which will be drawn on the
Closing Date (except to the extent of replacement letters of credit in an amount
not to exceed $60 million and otherwise on terms reasonably satisfactory to the
Administrative Agent).
WHEREAS, Borrower has requested the Swingline Lender to make
Swingline Loans, at any time and from time to time prior to the Revolving
Maturity Date, in an aggregate principal amount at any time outstanding not in
excess of $7.5 million.
WHEREAS, Borrower has requested the Issuing Bank to issue
letters of credit, in an aggregate face amount at any time outstanding not in
excess of $60 million, to support payment obligations incurred in the ordinary
course of business by Borrower and its Subsidiaries.
WHEREAS, the proceeds of the Loans are to be used in
accordance with Section 3.12.
NOW, THEREFORE, the Lenders are willing to extend such credit
to Borrower and the Issuing Bank is willing to issue letters of credit for the
account of Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, is
used when such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"ABR BORROWING" shall mean a Borrowing comprised of ABR Loans.
"ABR LOAN" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR REVOLVING LOAN" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR TERM LOAN" shall mean any Term Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ACQUIRED BUSINESS" shall have the meaning assigned to such
term in the first recital hereto.
"ACQUISITION" shall have the meaning assigned to such term in
the first recital hereto.
"ACQUISITION AGREEMENT" shall have the meaning assigned to
such term in the first recital hereto.
"ACQUISITION CONSIDERATION" shall mean the purchase
consideration for any Permitted Acquisition and all other payments by Borrower
or any of its Subsidiaries in exchange for, or as part of, or in connection
with, any Permitted Acquisition, whether paid in cash or by exchange of Equity
Interests or of properties or otherwise and whether payable at or prior to the
consummation of such Permitted Acquisition or deferred for payment at any future
time, whether or not any such future payment is subject to the occurrence of any
contingency, and includes any and all payments representing the purchase price
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and any assumptions of Indebtedness, "earn-outs" and other agreements to make
any payment the amount of which is, or the terms of payment of which are, in any
respect subject to or contingent upon the revenues, income, cash flow or profits
(or the like) of any person or business; provided that any such future payment
that is subject to a contingency shall be considered Acquisition Consideration
only to the extent of the reserve, if any, required under GAAP at the time of
such sale to be established in respect thereof by Borrower or any of its
Subsidiaries.
"ACQUISITION DOCUMENTS" shall mean the collective reference to
the Acquisition Agreement and the other documents listed on Schedule 3.21.
"ADDITIONAL NON-RECOURSE INDEBTEDNESS" shall mean Indebtedness
that constitutes Non-Recourse Indebtedness of an Excluded Project Subsidiary
that is not a Subsidiary of Borrower as of the Closing Date (and any Permitted
Refinancing Indebtedness in respect thereof), which Indebtedness is incurred for
the sole purpose of financing the acquisition, development, construction,
operation, maintenance, repair or improvement of certain specified fixed or
capital assets of such Excluded Project Subsidiary, which fixed or capital
assets are not then and were at no time previously owned by a Loan Party;
provided that the Administrative Agent shall have been afforded a reasonable
opportunity to review all underlying documents relating to such Indebtedness
(including by way of engagement of local counsel in applicable foreign
jurisdictions) in order to confirm, and shall have confirmed, that such
Indebtedness satisfies each of the conditions set forth in the definition of
"Non-Recourse Indebtedness".
"ADJUSTED LIBOR RATE" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, (a) an interest rate per annum
(rounded upward, if necessary, to the next 1/100th of 1%) determined by the
Administrative Agent to be equal to the LIBOR Rate for such Eurodollar Borrowing
in effect for such Interest Period divided by (b) 1 minus the Statutory Reserves
(if any) for such Eurodollar Borrowing for such Interest Period.
"ADMINISTRATIVE AGENT" shall have the meaning assigned to such
term in the preamble hereto and includes each other person appointed as the
successor thereto pursuant to Article X.
"ADMINISTRATIVE AGENT FEES" shall have the meaning assigned to
such term in Section 2.05(b).
"ADMINISTRATIVE QUESTIONNAIRE" shall mean an Administrative
Questionnaire in the form of Exhibit A, or such other form as may be supplied
from time to time by the Administrative Agent.
"AFFILIATE" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified; provided, however, that, solely for purposes of Section 6.09,
the term "Affiliate" shall also include (i) any person that directly or
indirectly owns more than 10% of any class of Equity Interests of the person
specified or (ii) any person that is an executive officer or director of the
person specified.
"AGENTS" shall mean the Arranger, the Documentation Agent, the
Syndication Agents, the Co-Documentation Agents, the Administrative Agent and
the Collateral Agent; and "AGENT" shall mean any of them.
"AGGREGATE LC EXPOSURE" shall mean the aggregate face amount
of all undrawn letters of credit and letters of guaranty issued by, on behalf of
or for the benefit of Borrower or any of its
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Subsidiaries (whether issued under this Agreement or otherwise) plus the
aggregate drawn amount of such letters of credit and letters of guaranty that
have not yet ripened into reimbursement obligations.
"AGGREGATE REVOLVING LOAN COMMITMENTS" shall mean $20 million,
as the same may be reduced from time to time pursuant to Section 2.07.
"AGREEMENT" shall have the meaning assigned to such term in
the preamble hereto.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per
annum (rounded upward, if necessary, to the next 1/100th of 1%) equal to the
greater of (a) the Base Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 0.50%. If the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms of the definition thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of the
preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the Base
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Base Rate or the Federal Funds Effective Rate,
respectively.
"ANTI-TERRORISM LAWS" shall have the meaning assigned to such
term in Section 3.22.
"APPLICABLE MARGIN" shall mean, for any day, (a) with respect
to any Revolving Loan, the applicable percentage set forth in Annex I under the
appropriate caption, (b) with respect to any Term Loan that is an ABR Loan,
1.75% per annum and (c) with respect to any Term Loan that is a Eurodollar Loan,
2.75% per annum.
"ARRANGER" shall have the meaning assigned to such term in the
preamble hereto.
"ASSET SALE" shall mean (a) any conveyance, sale, lease,
sublease, assignment, transfer or other disposition (including by way of merger
or consolidation and including any Sale and Leaseback Transaction) of any asset
(excluding sales of inventory and dispositions of cash equivalents, in each
case, in the ordinary course of business) by Borrower or any of its Subsidiaries
and (b) any issuance or sale of any Equity Interests of any Subsidiary of
Borrower, in each case, to any person other than (i) Borrower, (ii) any
Subsidiary Guarantor or (iii) other than for purposes of Section 6.06, any other
Subsidiary of Borrower.
"ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, substantially in the form of Exhibit B, or such other form
as shall be approved by the Administrative Agent.
"ATTRIBUTABLE INDEBTEDNESS" shall mean, when used with respect
to any Sale and Leaseback Transaction, as at the time of determination, the
present value (discounted at a rate equivalent to Borrower's then-current
weighted average cost of funds for borrowed money as at the time of
determination, compounded on a semi-annual basis) of the total obligations of
the lessee for rental payments during the remaining term of each lease included
in any such Sale and Leaseback Transaction.
"AUTO-RENEWAL LETTER OF CREDIT" shall have the meaning
assigned to such term in Section 2.18(c).
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"BAILEE LETTER" shall have the meaning assigned thereto in the
Security Agreement.
"BASE RATE" shall mean, for any day, a rate per annum that is
equal to the corporate base rate of interest established by the Administrative
Agent from time to time; each change in the Base Rate shall be effective on the
date such change is effective. The corporate base rate is not necessarily the
lowest rate charged by the Administrative Agent to its customers.
"BOARD" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"BOARD OF DIRECTORS" shall mean, with respect to any person,
(i) in the case of any corporation, the board of directors of such person, (ii)
in the case of any limited liability company, the board of managers of such
person, (iii) in the case of any partnership, the Board of Directors of the
general partner of such person or (iv) the functional equivalent of the
foregoing.
"BORROWER" shall have the meaning assigned to such term in the
preamble hereto.
"BORROWING" shall mean (a) Loans of the same Class and Type,
made, converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) a Swingline
Loan.
"BORROWING REQUEST" shall mean a request by Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C, or such other form as shall be approved by the Administrative Agent.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or other day on which banks in New York City are authorized or required
by law to close; provided, however, that when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"CAPITAL EXPENDITURES" shall mean, for any period, without
duplication, the increase during that period in the gross property, plant or
equipment account in the consolidated balance sheet of Borrower and its
Subsidiaries, in accordance with GAAP, whether such increase is due to purchase
of properties for cash or financed by the incurrence of Indebtedness, but
excluding (i) expenditures made with Net Cash Proceeds of Asset Sales in
accordance with Section 2.10(c), (ii) expenditures made in connection with the
replacement, substitution or restoration of assets pursuant to Section 2.10(e)
and (iii) any portion of such increase attributable solely to acquisitions of
property, plant and equipment in Permitted Acquisitions.
"CAPITAL LEASE OBLIGATIONS" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CASH EQUIVALENTS" shall mean, as to any person, (a)
securities issued, or directly, unconditionally and fully guaranteed or insured,
by the United States or any agency or instrumentality thereof, the United
Kingdom, France, Italy, Spain, Australia or any other country approved by the
Administrative Agent (provided that the full faith and credit of the United
States or such other country is
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pledged in support thereof) having maturities of not more than one year from the
date of acquisition by such person; (b) time deposits and certificates of
deposit of any Lender or any commercial bank having, or which is the principal
banking subsidiary of a bank holding company organized under the laws of the
United States, any state thereof, the District of Columbia, the United Kingdom,
France, Italy, Spain, Australia or any other country approved by the
Administrative Agent having, capital and surplus aggregating in excess of $500
million and a rating of "A" (or such other similar equivalent rating) or higher
by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) with maturities of not more than
one year from the date of acquisition by such person; (c) repurchase obligations
with a term of not more than 30 days for underlying securities of the types
described in clause (a) above entered into with any bank meeting the
qualifications specified in clause (b) above, which repurchase obligations are
secured by a valid perfected security interest in the underlying securities; (d)
commercial paper issued by any person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P or at least P-I or the equivalent
thereof by ▇▇▇▇▇'▇, and in each case maturing not more than one year after the
date of acquisition by such person; (e) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (a) through (d) above; and (f) demand deposit accounts
maintained in the ordinary course of business.
"CASH INTEREST EXPENSE" shall mean, for any period,
Consolidated Interest Expense for such period, less the sum of (a) interest on
any debt paid by the increase in the principal amount of such debt including by
issuance of additional debt of such kind and (b) items described in clause (c)
or (g) of the definition of "Consolidated Interest Expense".
"CASUALTY EVENT" shall mean any loss of title or any loss of
or damage to or destruction of, or any condemnation or other taking (including
by any Governmental Authority) of, any property of Borrower or any of its
Subsidiaries. "Casualty Event" shall include but not be limited to any taking of
all or any part of any Real Property of any person or any part thereof, in or by
condemnation or other eminent domain proceedings pursuant to any law, or by
reason of the temporary requisition of the use or occupancy of all or any part
of any Real Property of any person or any part thereof by any Governmental
Authority, civil or military.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et
seq.
A "CHANGE IN CONTROL" shall be deemed to have occurred if
(other than as a result of the Transactions occurring on or before the Closing
Date):
(a) at any time a "change of control" or similar event
occurs under and as defined in any Material Indebtedness;
(b) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause such person or
group shall be deemed to have "beneficial ownership" of all securities
that such person or group has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly
or indirectly, of Voting Stock of Borrower representing more than 35%
of the voting power of the total outstanding Voting Stock of Borrower;
or
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(c) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board
of Directors of Borrower (together with any new directors whose
election to such Board of Directors or whose nomination for election
was approved by a vote of a majority of the members of the Board of
Directors of Borrower, which members comprising such majority are then
still in office and were either directors at the beginning of such
period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of Borrower.
"CHANGE IN LAW" shall mean (a) the adoption of any law,
treaty, order, rule or regulation after the date of this Agreement, (b) any
change in any law, treaty, order, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this
Agreement or (c) compliance by any Lender or Issuing Bank (or for purposes of
Section 2.12(b), by any lending office of such Lender or by such Lender's or
Issuing Bank's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CHARGES" shall have the meaning assigned to such term in
Section 11.13.
"CLASS," when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans, Term Loans or Swingline Loans and, when used in reference to
any Commitment, refers to whether such Commitment is a Revolving Commitment,
Term Loan Commitment or Swingline Commitment, in each case, under this Agreement
as originally in effect or pursuant to Section 11.02(e), of which such Loan,
Borrowing or Commitment shall be a part.
"CLOSING DATE" shall mean the date of the initial Credit
Extension hereunder.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"CO-DOCUMENTATION AGENTS" shall have the meaning assigned to
such term in the preamble hereto.
"COLLATERAL" shall mean, collectively, all of the Security
Agreement Collateral, the Mortgaged Property and all other property of whatever
kind and nature pledged as collateral under any Security Document.
"COLLATERAL ACCOUNT" shall mean a collateral account or
sub-account in the form of a deposit account established and maintained by the
Collateral Agent for the benefit of the Secured Parties, in accordance with the
provisions of Section 9.01.
"COLLATERAL AGENT" shall have the meaning assigned to such
term in the preamble hereto and includes each other person appointed as the
successor thereto pursuant to Article X.
"COMMERCIAL CREDIT SUPPORT OBLIGATIONS" shall mean, as to any
person, all obligations of such person for the reimbursement of any obligor in
respect of bid, performance or surety bonds obtained in the ordinary course of
business, including guarantees or obligations of such person with respect to
letters of credit supporting such bid, performance or surety obligations.
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"COMMERCIAL LETTER OF CREDIT" shall mean any letter of credit
or similar instrument issued for the purpose of providing credit support in
connection with the purchase of materials, goods or services by Borrower or any
of its Subsidiaries in the ordinary course of their businesses.
"COMMITMENT" shall mean, with respect to any Lender, such
Lender's Revolving Commitment, Term Loan Commitment or Swingline Commitment and
any Commitment to make Term Loans or Revolving Loans of a new Class extended by
such Lender as provided in Section 11.02(e).
"COMMITMENT FEE" shall have the meaning assigned to such term
in Section 2.05(a).
"COMPANIES" shall mean Borrower and its Subsidiaries; and
"COMPANY" shall mean any one of them.
"COMPLIANCE CERTIFICATE" shall mean a certificate of a
Financial Officer of Borrower substantially in the form of Exhibit D.
"CONFIDENTIAL INFORMATION MEMORANDUM" shall mean that certain
confidential information memorandum dated as of January 2004.
"CONSOLIDATED AMORTIZATION EXPENSE" shall mean, for any
period, the amortization expense of Borrower and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED CURRENT ASSETS" shall mean, as at any date of
determination, the total assets of Borrower and its Subsidiaries which may
properly be classified as current assets on a consolidated balance sheet of
Borrower and its Subsidiaries in accordance with GAAP.
"CONSOLIDATED CURRENT LIABILITIES" shall mean, as at any date
of determination, the total liabilities of Borrower and its Subsidiaries which
may properly be classified as current liabilities (other than the current
portion of any Loans) on a consolidated balance sheet of Borrower and its
Subsidiaries in accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" shall mean, for any
period, the depreciation expense of Borrower and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED EBITDA" shall mean, for any period, Consolidated
Net Income for such period, adjusted by (x) adding thereto, in each case only to
the extent (and in the same proportion) deducted in determining such
Consolidated Net Income (and with respect to the portion of Consolidated Net
Income attributable to any Subsidiary of Borrower only if a corresponding amount
would be permitted at the date of determination to be distributed to Borrower by
such Subsidiary without prior approval (that has not been obtained), pursuant to
the terms of its Organizational Documents and all agreements, instruments,
judgments, decrees, orders, statutes, rules, regulations and other restrictions
applicable to such Subsidiary or its equityholders):
(a) Consolidated Interest Expense for such period,
(b) Consolidated Amortization Expense for such period,
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(c) Consolidated Depreciation Expense for such period,
(d) Consolidated Tax Expense for such period,
(e) costs and expenses directly incurred in connection
with the Transactions (not to exceed $17.5 million),
(f) the aggregate amount of all other non-cash items
reducing Consolidated Net Income (excluding any non-cash charge that
results in an accrual of a reserve for cash charges in any future
period) for such period, and
(g) (i) the amount of non-recurring charges relating to
the implementation of Borrower's new information technology platform in
an aggregate amount not to exceed $5 million, (ii) for the fiscal
quarter ending December 31, 2003, the amount of non-recurring charges
(including, but not limited to, restructuring charges and charges
relating to plant or facility relocations) to the extent reducing
Consolidated Net Income in an aggregate amount not to exceed $15
million for such fiscal quarter and (iii) for the period commencing
January 1, 2004 and ending March 31, 2005, the amount of non-recurring
charges (including, but not limited to, restructuring charges and
charges relating to plant or facility relocations) to the extent
reducing Consolidated Net Income in an aggregate amount not to exceed
$15 million for such period, and
(y) subtracting therefrom the aggregate amount of all non-cash items increasing
Consolidated Net Income (other than the accrual of revenue or recording of
receivables in the ordinary course of business) for such period; provided that
for purposes of Borrower's fiscal quarter ending September 30, 2003,
Consolidated EBITDA of Borrower and its Subsidiaries shall be $16.6 million.
Other than for purposes of calculating Excess Cash Flow,
Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect to
the Acquisition, any Permitted Acquisition and any Asset Sales (other than any
dispositions in the ordinary course of business) consummated at any time on or
after the first day of the Test Period thereof as if the Acquisition and each
such Permitted Acquisition had been effected on the first day of such period and
as if each such Asset Sale had been consummated on the day prior to the first
day of such period.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" shall mean, for any
Test Period, the ratio of (a) Consolidated EBITDA for such Test Period to (b)
Consolidated Fixed Charges for such Test Period.
"CONSOLIDATED FIXED CHARGES" shall mean, for any period, the
sum, without duplication, of
(a) Consolidated Interest Expense for such period;
(b) the aggregate amount of Capital Expenditures for such
period;
(c) all cash payments in respect of income taxes made
during such period (net of any cash refund in respect of income taxes
actually received during such period);
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(d) the scheduled principal amount of all amortization
payments on all Indebtedness (including the principal component of all
Capital Lease Obligations) of Borrower and its Subsidiaries for such
period (as determined on the first day of the respective period); and
(e) the product of (i) all dividend payments made by
Borrower or any of its Subsidiaries (other than dividend payments to
Borrower or any of its Subsidiaries) whether in accordance with Section
6.08 or otherwise multiplied by (ii) a fraction, the numerator of which
is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of Borrower and
its Subsidiaries, expressed as a decimal.
"CONSOLIDATED INDEBTEDNESS" shall mean, as at any date of
determination, the aggregate amount of all Indebtedness and Aggregate LC
Exposure of Borrower and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP (except to the extent that GAAP would otherwise exclude
amounts constituting Aggregate LC Exposure from Consolidated Indebtedness).
"CONSOLIDATED INTEREST COVERAGE RATIO" shall mean, for any
Test Period, the ratio of (x) Consolidated EBITDA for such Test Period to (y)
Consolidated Interest Expense for such Test Period.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period,
the total consolidated interest expense of Borrower and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP plus,
without duplication:
(a) imputed interest on Capital Lease Obligations and
Attributable Indebtedness of Borrower and its Subsidiaries for such
period;
(b) commissions, discounts and other fees and charges
owed by Borrower or any of its Subsidiaries with respect to letters of
credit securing financial obligations, bankers' acceptance financing
and receivables financings for such period;
(c) amortization of debt issuance costs, debt discount or
premium and other financing fees and expenses incurred by Borrower or
any of its Subsidiaries for such period;
(d) cash contributions to any employee stock ownership
plan or similar trust made by Borrower or any of its Subsidiaries to
the extent such contributions are used by such plan or trust to pay
interest or fees to any person (other than Borrower or a Wholly Owned
Subsidiary) in connection with Indebtedness incurred by such plan or
trust for such period;
(e) all interest paid or payable with respect to
discontinued operations of Borrower or any of its Subsidiaries for such
period,
(f) the interest portion of any deferred payment
obligations of Borrower or any of its Subsidiaries for such period;
(g) all interest on any Indebtedness of Borrower or any
of its Subsidiaries of the type described in clause (f) or (j) of the
definition of "Indebtedness" for such period;
provided that (a) to the extent directly related to the Transactions and
incurred on or prior to the Closing Date, debt issuance costs, debt discount or
premium and other financing fees and expenses shall be excluded from the
calculation of Consolidated Interest Expense
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and (b) Consolidated Interest Expense shall be calculated after giving effect to
Hedging Agreements (including associated costs), but excluding unrealized gains
and losses with respect to Hedging Agreements.
Other than with respect to Borrower's fiscal year ending
December 31, 2004, Consolidated Interest Expense shall be calculated on a Pro
Forma Basis to give effect to any Indebtedness incurred, assumed or permanently
repaid or extinguished during the relevant Test Period in connection with any
Permitted Acquisitions and Asset Sales (other than any dispositions in the
ordinary course of business) as if such incurrence, assumption, repayment or
extinguishing had been effected on the first day of such period.
"CONSOLIDATED NET INCOME" shall mean, for any period, the
consolidated net income (or loss) of Borrower and its Subsidiaries determined on
a consolidated basis in accordance with GAAP; provided that there shall be
excluded from such net income (to the extent otherwise included therein),
without duplication:
(a) the net income (or loss) of any person (other than a
Subsidiary of Borrower) in which any person other than Borrower and its
Subsidiaries has an ownership interest, except to the extent that cash
in an amount equal to any such income has actually been received by
Borrower or (subject to clause (c) below) any of its Subsidiaries
during such period;
(b) the net income (or loss) of any Excluded Project
Subsidiary, except to the extent that cash in an amount equal to any
such income has actually been received by Borrower or (subject to
clause (c) below) any Subsidiary Guarantor during such period;
(c) the net income of any Subsidiary of Borrower during
such period to the extent that the declaration or payment of dividends
or similar distributions by such Subsidiary of that income is not
permitted by operation of the terms of its Organizational Documents or
any agreement, instrument, judgment, decree, order, statute, rule,
regulation or other restriction applicable to that Subsidiary during
such period, except that Borrower's equity in net loss of any such
Subsidiary for such period shall be included in determining
Consolidated Net Income;
(d) any gain (or loss), together with any related
provisions for taxes on any such gain (or the tax effect of any such
loss), realized during such period by Borrower or any of its
Subsidiaries upon any Asset Sale (other than any dispositions in the
ordinary course of business) by Borrower or any of its Subsidiaries;
(e) gains and losses due solely to fluctuations in
currency values and the related tax effects according to GAAP for such
period;
(f) earnings resulting from any reappraisal, revaluation
or write-up of assets;
(g) unrealized gains and losses with respect to Hedging
Obligations for such period; and
(h) any extraordinary gain (or extraordinary loss),
together with any related provision for taxes on any such gain (or the
tax effect of any such loss), recorded or recognized by Borrower or any
of its Subsidiaries during such period.
-11-
"CONSOLIDATED NET WORTH" shall mean, as of any date,
consolidated shareholders' equity or net worth of Borrower and its Subsidiaries,
determined in accordance with GAAP.
"CONSOLIDATED TAX EXPENSE" shall mean, for any period, the tax
expense of Borrower and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"CONTESTED COLLATERAL LIEN CONDITIONS" shall mean, with
respect to any Permitted Lien of the type described in clauses (a), (b), (f) and
(g) of Section 6.02, the following conditions:
(a) Borrower shall cause any proceeding instituted
contesting such Lien to stay the sale or forfeiture of any portion of
the Collateral on account of such Lien;
(b) at the option and at the request of the
Administrative Agent, to the extent such Lien is in an amount in excess
of $250,000, the appropriate Loan Party shall maintain cash reserves in
an amount sufficient to pay and discharge such Lien and the
Administrative Agent's reasonable estimate of all interest and
penalties related thereto; and
(c) such Lien shall in all respects be subject and
subordinate in priority to the Lien and security interest created and
evidenced by the Security Documents, except if and to the extent that
the law or regulation creating, permitting or authorizing such Lien
provides that such Lien is or must be superior to the Lien and security
interest created and evidenced by the Security Documents.
"CONTINGENT OBLIGATION" shall mean, as to any person, any
obligation, agreement, understanding or arrangement of such person guaranteeing
or intended to guarantee any Indebtedness, leases, dividends or other
obligations ("PRIMARY OBLIGATIONS") of any other person (the "PRIMARY OBLIGOR")
in any manner, whether directly or indirectly, including any obligation of such
person, whether or not contingent, (a) to purchase any such primary obligation
or any property constituting direct or indirect security therefor; (b) to
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 of the primary
obligor; (c) to 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) with respect
to bankers' acceptances, letters of credit and similar credit arrangements,
until a reimbursement obligation arises (which reimbursement obligation shall
constitute Indebtedness); or (e) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term "Contingent Obligation" shall not include endorsements of
instruments for deposit or collection in the ordinary course of business or any
product warranties. The amount of any Contingent Obligation shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if less,
the maximum amount of such primary obligation for which such person may be
liable, whether singly or jointly, pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
person is required to perform thereunder) as determined by such person in good
faith.
"CONTROL" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "CONTROLLING" and "CONTROLLED" shall have meanings
correlative thereto.
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"CONTROL AGREEMENT" shall have the meaning assigned to such
term in the Security Agreement.
"CREDIT EXTENSION" shall mean, as the context may require, (i)
the making of a Loan by a Lender or (ii) the issuance of any Letter of Credit,
or the amendment, extension or renewal of any existing Letter of Credit, by the
Issuing Bank.
"DEBT ISSUANCE" shall mean the incurrence by Borrower or any
of its Subsidiaries of any Indebtedness after the Closing Date (other than as
permitted by Section 6.01).
"DEBT SERVICE" shall mean, for any period, Cash Interest
Expense for such period plus scheduled principal amortization of all
Indebtedness for such period.
"DEFAULT" shall mean any event, occurrence or condition which
is, or upon notice, lapse of time or both would constitute, an Event of Default.
"DISQUALIFIED CAPITAL STOCK" shall mean any Equity Interest
which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, (a) matures (excluding any maturity as the result of an optional
redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the first anniversary of the
Final Maturity Date, (b) is convertible into or exchangeable (unless at the sole
option of the issuer thereof) for (i) debt securities or (ii) any Equity
Interests referred to in clause (a) above, in each case at any time on or prior
to the first anniversary of the Final Maturity Date, or (c) contains any
repurchase obligation which may come into effect prior to payment in full of all
Obligations.
"DIVIDEND" with respect to any person shall mean that such
person has declared or paid a dividend or returned any equity capital to the
holders of its Equity Interests or authorized or made any other distribution,
payment or delivery of property (other than Qualified Capital Stock of such
person) or cash to the holders of its Equity Interests as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for
consideration any of its Equity Interests outstanding (or any options or
warrants issued by such person with respect to its Equity Interests), or set
aside any funds for any of the foregoing purposes, or shall have permitted any
of its Subsidiaries to purchase or otherwise acquire for consideration any of
the Equity Interests of such person outstanding (or any options or warrants
issued by such person with respect to its Equity Interests). Without limiting
the foregoing, "Dividends" with respect to any person shall also include all
such payments made or required to be made by such person with respect to any
stock appreciation rights, plans, equity incentive or achievement plans or any
similar plans or setting aside of any funds for the foregoing purposes.
"DOCUMENTATION AGENT" shall have the meaning assigned to such
term in the preamble hereto.
"DOLLARS" or "$" shall mean lawful money of the United States.
"ECOLOCHEM INTERNATIONAL" shall mean Ecolochem International,
Inc., a Delaware corporation and wholly owned Subsidiary of Borrower.
"EMBARGOED PERSON" shall have the meaning assigned to such
term in Section 6.21.
-13-
"ENVIRONMENT" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, natural resources or as otherwise defined in any
Environmental Law.
"ENVIRONMENTAL CLAIM" shall mean any claim, notice, demand,
order, action, suit, proceeding or other communication alleging liability for
investigation, remediation, removal, cleanup, response, corrective action,
damages to natural resources, personal injury, property damage, fines, penalties
or other costs resulting from, related to or arising out of (i) the presence,
Release or threatened Release in or into the Environment of Hazardous Material
at any location or (ii) any violation of Environmental Law, and shall include
any claim seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from, related to or arising out of
the presence, Release or threatened Release of Hazardous Material or alleged
injury or threat of injury to the Environment.
"ENVIRONMENTAL LAW" shall mean any and all applicable
treaties, laws, statutes, ordinances, regulations, rules, decrees, orders,
judgments, consent orders, consent decrees or other binding requirements, and
the common law, relating to protection of public health or the Environment, the
Release or threatened Release of Hazardous Material, natural resources or
natural resource damages, or occupational safety or health relating to Hazardous
Materials, and any amendments thereof.
"ENVIRONMENTAL PERMIT" shall mean any permit, license,
approval, consent or other authorization required by or from a Governmental
Authority under Environmental Law.
"EQUIPMENT" shall have the meaning assigned to such term in
the Security Agreement.
"EQUITY FINANCING" shall have the meaning assigned to such
term in the second recital hereto.
"EQUITY INTEREST" shall mean, with respect to any person, any
and all shares, interests, participations or other equivalents, including
membership interests (however designated, whether voting or nonvoting), of
equity of such person, including, if such person is a partnership, partnership
interests (whether general or limited) and any other interest or participation
that confers on a person the right to receive a share of the profits and losses
of, or distributions of property of, such partnership, whether outstanding on
the date hereof or issued after the Closing Date, but excluding debt securities
convertible or exchangeable into such equity.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA AFFILIATE" shall mean, with respect to any person, any
trade or business (whether or not incorporated) that, together with such person,
is treated as a single employer under Section 414(b) or (c) of the Code, or
solely for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"ERISA EVENT" shall mean (a) any "reportable event," as
defined in Section 4043 of ERISA or the regulations issued thereunder, with
respect to a Plan (other than an event for which the 30-day notice period is
waived by regulation); (b) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived, the failure to make by its due
date a required installment under Section 412(m) of the Code with
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respect to any Plan or the failure to make any required contribution to a
Multiemployer Plan; (c) the filing pursuant to Section 412(d) of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by any Company or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by any Company or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan, or the occurrence of any event or condition which could reasonably be
expected to constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (f) the incurrence by any
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal from any Plan or Multiemployer Plan; (g) the receipt by any Company
or its ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; (h) the
making of any amendment to any Plan which could result in the imposition of a
lien or the posting of a bond or other security; (i) the occurrence of a
nonexempt prohibited transaction (within the meaning of Section 4975 of the Code
or Section 406 of ERISA) which could reasonably be expected to result in
liability to any Company; and (j) the receipt by any Company or any of its ERISA
Affiliates of any notice that the Internal Revenue Service will seek to
disqualify any Plan or employee benefit plan sponsored or contributed to by any
Company that is intended by such Company or any such ERISA Affiliate to be
qualified under Section 401(a) of the Code.
"ESCROW AGREEMENTS" shall mean the Purchase Price Escrow
Agreement and the 338 Escrow Agreement.
"ESCROWED AMOUNTS" shall mean all cash, property or other
assets subject to the Escrow Agreements.
"EURODOLLAR BORROWING" shall mean a Borrowing comprised of
Eurodollar Loans.
"EURODOLLAR LOAN" shall mean any Eurodollar Revolving Loan or
Eurodollar Term Loan.
"EURODOLLAR REVOLVING BORROWING" shall mean a Borrowing
comprised of Eurodollar Revolving Loans.
"EURODOLLAR REVOLVING LOAN" shall mean any Revolving Loan
bearing interest at a rate determined by reference to the Adjusted LIBOR Rate in
accordance with the provisions of Article II.
"EURODOLLAR TERM BORROWING" shall mean a Borrowing comprised
of Eurodollar Term Loans.
"EURODOLLAR TERM LOAN" shall mean any Term Loan bearing
interest at a rate determined by reference to the Adjusted LIBOR Rate in
accordance with the provisions of Article II.
"EVENT OF DEFAULT" shall have the meaning assigned to such
term in Article VIII.
"EXCESS AMOUNT" shall have the meaning assigned to such term
in Section 2.10(g)(ii).
"EXCESS CASH FLOW" shall mean, for any Excess Cash Flow
Period, Consolidated EBITDA for such Excess Cash Flow Period, minus, without
duplication:
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(a) Debt Service for such Excess Cash Flow Period;
(b) any voluntary prepayments of Term Loans and any
permanent voluntary reductions to the Revolving Commitments to the
extent that an equal amount of the Revolving Loans simultaneously is
repaid, in each case so long as such amounts are not already reflected
in Debt Service, during such Excess Cash Flow Period;
(c) Capital Expenditures during such Excess Cash Flow
Period (excluding Capital Expenditures made in such Excess Cash Flow
Period where a certificate in the form contemplated by the following
clause (d) was previously delivered) that are paid in cash;
(d) Capital Expenditures that Borrower or any of its
Subsidiaries shall, during such Excess Cash Flow Period, become
obligated to make but that are not made during such Excess Cash Flow
Period; provided that Borrower shall deliver a certificate to the
Administrative Agent not later than 90 days after the end of such
Excess Cash Flow Period, signed by a Responsible Officer of Borrower
and certifying that such Capital Expenditures will be made in the
following Excess Cash Flow Period;
(e) the aggregate amount of investments made in cash
during such period in compliance with Sections 6.04(e), (i), (j), (n),
(o) and (p);
(f) Taxes of Borrower and its Subsidiaries that were paid
in cash during such Excess Cash Flow Period or will be paid within six
months after the end of such Excess Cash Flow Period and for which
adequate reserves have been established in accordance with GAAP;
(g) an amount equal to any increase in Current Assets
minus Current Liabilities from the beginning to the end of such Excess
Cash Flow Period;
(h) losses excluded from the calculation of Consolidated
Net Income by operation of clause (c) or (g) of the definition thereof
that are paid in cash during such Excess Cash Flow Period; and
(i) to the extent added to determine Consolidated EBITDA,
all items that did not result from a cash payment to Borrower or any of
its Subsidiaries on a consolidated basis during such Excess Cash Flow
Period;
provided that any amount deducted pursuant of any of the foregoing clauses that
will be paid after the close of such Excess Cash Flow Period shall not be
deducted again in a subsequent Excess Cash Flow Period; plus, without
duplication:
(i) an amount equal to any decrease in Current Assets
minus Current Liabilities from the beginning to the end of such Excess
Cash Flow Period;
(ii) all proceeds received during such Excess Cash Flow
Period of any Indebtedness to the extent used to finance any Capital
Expenditure (other than Indebtedness under this Agreement to the extent
there is no corresponding deduction to Excess Cash Flow above in
respect of the use of such borrowings);
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(iii) to the extent any permitted Capital Expenditures
referred to in (d) above do not occur in the Excess Cash Flow Period
specified in the certificate of Borrower provided pursuant to (d)
above, such amounts of Capital Expenditures that were not so made in
the Excess Cash Flow Period specified in such certificate;
(iv) any return on or in respect of investments received
in cash during such period, which investments were made pursuant to
Sections 6.04(e), (i), (j), (n), (o) and (p);
(v) income or gain excluded from the calculation of
Consolidated Net Income by operation of clause (c) or (g) of the
definition thereof that is realized in cash during such Excess Cash
Flow Period (except to the extent such gain is subject to Section
2.10);
(vi) if deducted in the computation of Consolidated
EBITDA, interest income; and
(vii) to the extent subtracted in determining Consolidated
EBITDA, all items that did not result from a cash payment by Borrower
or any of its Subsidiaries on a consolidated basis during such Excess
Cash Flow Period.
"EXCESS CASH FLOW PERIOD" shall mean (i) the period taken as
one accounting period from April 1, 2004 and ending on December 31, 2004 and
(ii) each fiscal year of Borrower thereafter.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXCLUDED PROJECT SUBSIDIARY" shall mean, at any time, (a) any
Subsidiary of Borrower listed on Schedule 1.01(a), but only if and for so long
as such Subsidiary is an obligor with respect to any Existing Non-Recourse
Indebtedness, and (b) each other Subsidiary of Borrower that is formed for the
sole purpose of financing, owning, acquiring, developing, constructing,
operating or maintaining certain specified fixed or capital assets, including
domestic and foreign water purification and desalination facilities, but only if
and for so long as such Subsidiary is an obligor with respect to any Additional
Non-Recourse Indebtedness, and, in the case of (a) and (b) above, only if and to
the extent that the grant of a security interest in the property or assets of
such Subsidiary or the pledge of the Equity Interests of such Subsidiary in
favor of the Collateral Agent shall constitute or result in a breach,
termination or default under the agreement or instrument governing the
applicable Non-Recourse Indebtedness; provided that, notwithstanding the
foregoing, at no time shall any Subsidiary with EBITDA in excess of 5% of
Consolidated EBITDA of Borrower and its Subsidiaries be an Excluded Project
Subsidiary.
"EXCLUDED TAXES" shall mean, with respect to the
Administrative Agent, any Lender, the Issuing Bank or any other recipient of any
payment to be made by or on account of any obligation of Borrower hereunder, (a)
income or franchise taxes imposed on (or measured by) its net income (or excise,
gross receipts or net worth tax imposed in lieu of or as part of net income tax)
by the United States or by any State, territory or possession thereof, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any taxes described in clause (ii) of
the definition of "Taxes" and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by Borrower under Section 2.16), any withholding
tax that is imposed on amounts payable to such Foreign Lender at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or is attributable to such Foreign Lender's failure to comply with
Section 2.15(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from Borrower with respect to such
withholding tax pursuant to
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Section 2.15(a) (it being understood and agreed, for the avoidance of doubt,
that any withholding tax imposed on a Foreign Lender as a result of a Change in
Law or regulation or interpretation thereof occurring after the time such
Foreign Lender became a party to this Agreement shall not be an Excluded Tax).
"EXECUTIVE ORDER" shall have the meaning assigned to such term
in Section 3.22.
"EXECUTIVE ORDERS" shall have the meaning assigned to such
term in Section 6.21.
"EXISTING LIEN" shall have the meaning assigned to such term
in Section 6.02(c).
"EXISTING ISSUING BANK LETTERS OF CREDIT" shall have the
meaning assigned to such term in Section 2.18(m).
"EXISTING NON-RECOURSE INDEBTEDNESS" shall mean any
Non-Recourse Indebtedness listed on Schedule 1.01(b) and outstanding as of the
Closing Date (and any Permitted Refinancing Indebtedness in respect thereof).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System of the United States arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for the day for such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"FEE LETTER" shall mean the confidential Bank Facilities Fee
Letter, dated November 18, 2003, among Borrower, UBS Loan Finance LLC, UBS
Securities LLC, Fleet National Bank, Fleet Securities, Inc., Bank of America,
N.A., and Banc of America Securities LLC.
"FEES" shall mean the Commitment Fees, the Administrative
Agent Fees, the LC Participation Fees and the Fronting Fees.
"FINAL MATURITY DATE" shall mean the latest of the Revolving
Maturity Date and the Term Loan Maturity Date.
"FINANCIAL OFFICER" of any person shall mean the chief
financial officer, principal accounting officer, treasurer or controller of such
person.
"FIRREA" shall mean the Federal Institutions Reform, Recovery
and Enforcement Act of 1989.
"FOREIGN LENDER" shall mean any Lender that is not, for United
States federal income tax purposes, (i) a citizen or resident of the United
States, (ii) a corporation or entity treated as a corporation created or
organized in or under the laws of the United States, or any political
subdivision thereof, (iii) an estate whose income is subject to U.S. federal
income taxation regardless of its source or (iv) a trust if a court within the
United States is able to exercise primary supervision over the administration of
such trust and one or more United States persons have the authority to control
all substantial decisions of such trust, or if a valid election is in place to
treat the trust as a United States person.
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"FOREIGN PLAN" shall mean any employee benefit plan, program,
policy, arrangement or agreement maintained or contributed to by any Company
with respect to employees employed outside the United States.
"FOREIGN SUBSIDIARY" shall mean a Subsidiary that is organized
under the laws of a jurisdiction other than the United States or any state
thereof or the District of Columbia.
"FRONTING FEE" shall have the meaning assigned to such term in
Section 2.05(c).
"GAAP" shall mean generally accepted accounting principles in
the United States applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local
or foreign court, central bank or governmental agency, authority,
instrumentality or regulatory body or any subdivision thereof.
"GOVERNMENTAL REAL PROPERTY DISCLOSURE REQUIREMENTS" shall
mean any Requirement of Law of any Governmental Authority requiring notification
of the buyer, lessee, mortgagee, assignee or other transferee of any Real
Property, facility, establishment or business, or notification, registration or
filing to or with any Governmental Authority, in connection with the sale,
lease, mortgage, assignment or other transfer (including any transfer of
control) of any Real Property, facility, establishment or business, of the
actual or threatened presence or Release in or into the Environment, or the use,
disposal or handling of Hazardous Material on, at, under or near the Real
Property, facility, establishment or business to be sold, leased, mortgaged,
assigned or transferred.
"GUARANTEED OBLIGATIONS" shall have the meaning assigned to
such term in Section 7.01.
"GUARANTEES" shall mean the guarantees issued pursuant to
Article VII by the Subsidiary Guarantors.
"HAZARDOUS MATERIALS" shall mean the following: hazardous
substances; hazardous wastes; polychlorinated biphenyls ("PCBS") or any
substance or compound containing PCBs; asbestos or any asbestos-containing
materials in any form or condition; radon or any other radioactive materials
including any source, special nuclear or by-product material; petroleum, crude
oil or any fraction thereof; and any other pollutant or contaminant or
chemicals, wastes, materials, compounds, constituents or substances, subject to
regulation, or which can give rise to liability under, any Environmental Laws.
"HEDGING AGREEMENT" shall mean any swap, cap, collar, forward
purchase or similar agreements or arrangements dealing with interest rates,
currency exchange rates or commodity prices, either generally or under specific
contingencies.
"HEDGING OBLIGATIONS" shall mean obligations under or with
respect to Hedging Agreements.
"IMMATERIAL SUBSIDIARIES" shall have the meaning assigned to
such term in Section 3.07(d).
"INDEBTEDNESS" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or advances; (b) all
obligations of such person evidenced by bonds,
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debentures, notes or similar instruments; (c) all obligations of such person
upon which interest charges are customarily paid or accrued; (d) all obligations
of such person under conditional sale or other title retention agreements
relating to property purchased by such person; (e) all obligations of such
person issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business on normal trade terms and not overdue by more than
90 days and excluding any amount constituting purchase price adjustments under
Section 1.04 of the Acquisition Agreement or escrow adjustments under Section
1.05(f) of the Acquisition Agreement); (f) all Indebtedness of others secured by
any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, but limited to the fair market
value of such property; (g) all Capital Lease Obligations, Purchase Money
Obligations and synthetic lease obligations of such person; (h) all Hedging
Obligations to the extent required to be reflected on a balance sheet of such
person; (i) all Attributable Indebtedness of such person; (j) all obligations of
such person for the reimbursement of any obligor in respect of letters of
credit, letters of guaranty, bankers' acceptances, bid, performance or surety
bonds and similar credit transactions (including all Commercial Credit Support
Obligations of such person); and (k) all Contingent Obligations of such person
in respect of Indebtedness or obligations of others of the kinds referred to in
clauses (a) through (i) above. The Indebtedness of any person shall include the
Indebtedness of any other entity (including any partnership in which such person
is a general partner) to the extent such person is liable therefor as a result
of such person's ownership interest in or other relationship with such entity,
except (other than in the case of general partner liability) to the extent that
terms of such Indebtedness expressly provide that such person is not liable
therefor.
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded
Taxes.
"INDEMNITEE" shall have the meaning assigned to such term in
Section 11.03(b).
"INFORMATION" shall have the meaning assigned to such term in
Section 11.12.
"INSURANCE POLICIES" shall mean the insurance policies and
coverages required to be maintained by each Loan Party pursuant to Section 5.04
and all renewals and extensions thereof.
"INSURANCE REQUIREMENTS" shall mean, collectively, all
provisions of the Insurance Policies, all requirements of the issuer of any of
the Insurance Policies and all orders, rules, regulations and any other
requirements of the National Board of Fire Underwriters (or any other body
exercising similar functions) binding upon each Loan Party or any use or
condition thereof.
"INTELLECTUAL PROPERTY" shall have the meaning assigned to
such term in the Security Agreement.
"INTERCOMPANY NOTE" shall mean a promissory note,
substantially in the form of Exhibit P.
"INTEREST ELECTION REQUEST" shall mean a request by Borrower
to convert or continue a Revolving Borrowing or Term Borrowing in accordance
with Section 2.08(b), substantially in the form of Exhibit E.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR
Loan (including Swingline Loans), the last Business Day of each March, June,
September and December, (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such
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Loan is a part and, in the case of a Eurodollar Loan with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period, (c) with respect to any Revolving Loan or
Swingline Loan, the Revolving Maturity Date or such earlier date on which the
Revolving Commitments are terminated and (d) with respect to any Term Loan, the
Term Loan Maturity Date.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as Borrower may elect; provided that (a) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing; provided, however, that an Interest Period shall be limited to the
extent required under Section 2.03(e).
"INVESTMENTS" shall have the meaning assigned to such term in
Section 6.04.
"IONICS VENTURES UK" shall mean Ionics Ventures Limited, a
company organized under the laws of England and Wales.
"ISSUING BANK" shall mean, as the context may require, (a)
HSBC Bank USA, with respect to Letters of Credit issued by it; (b) any other
Lender that may become an Issuing Bank pursuant to Sections 2.18(j) and (k) with
respect to Letters of Credit issued by such Lender; or (c) collectively, all of
the foregoing.
"JOINDER AGREEMENT" shall mean a joinder agreement,
substantially in the form of Exhibit F.
"LANDLORD ACCESS AGREEMENT" shall mean a Landlord Access
Agreement, substantially in the form of Exhibit G, or such other form as may
reasonably be acceptable to the Administrative Agent.
"LC COMMITMENT" shall mean the commitment of the Issuing Bank
to issue Letters of Credit pursuant to Section 2.18. The amount of the LC
Commitment shall initially be $60 million and shall be reduced in accordance
with Section 2.07, but in no event shall exceed the Revolving Commitments.
"LC DISBURSEMENT" shall mean a payment or disbursement made by
the Issuing Bank pursuant to a Letter of Credit.
"LC EXPOSURE" shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate drawn amount of outstanding Letters of Credit at such time
that have not yet ripened into Reimbursement Obligations plus (c) the aggregate
principal amount of all Reimbursement Obligations outstanding at such time. The
LC Exposure of any
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Revolving Lender at any time shall mean its Pro Rata Percentage of the aggregate
LC Exposure at such time.
"LC PARTICIPATION FEE" shall have the meaning assigned to such
term in Section 2.05(c).
"LC REQUEST" shall mean a request by Borrower in accordance
with the terms of Section 2.18(b) and substantially in the form of Exhibit H, or
such other form as shall be approved by the Administrative Agent.
"LC SUB-ACCOUNT" shall have the meaning assigned to such term
in Section 9.01(d).
"LEASES" shall mean any and all leases, subleases, tenancies,
options, concession agreements, rental agreements, occupancy agreements,
franchise agreements, access agreements and any other agreements (including all
amendments, extensions, replacements, renewals, modifications and/or guarantees
thereof), whether or not of record and whether now in existence or hereafter
entered into, affecting the use or occupancy of all or any portion of any Real
Property.
"LENDER ADDENDUM" shall mean with respect to any Lender on the
Closing Date, a lender addendum in the form of Exhibit I, to be executed and
delivered by such Lender on the Closing Date as provided in Section 11.14.
"LENDER AFFILIATE" shall mean with respect to any Lender that
is a fund that invests in bank loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such advisor.
"LENDERS" shall mean (a) the financial institutions that have
become a party hereto pursuant to a Lender Addendum and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance, other than, in each case, any such financial institution that has
ceased to be a party hereto pursuant to an Assignment and Acceptance. Unless the
context clearly indicates otherwise, the term "Lenders" shall include the
Swingline Lender.
"LETTER OF CREDIT" shall mean any (i) Standby Letter of Credit
and (ii) Commercial Letter of Credit, in each case, issued or to be issued by an
Issuing Bank for the account of Borrower pursuant to Section 2.18.
"LETTER OF CREDIT EXPIRATION DATE" shall mean the date which
is fifteen days prior to the Revolving Maturity Date.
"LIBOR RATE" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period therefor, the rate per annum determined by the
Administrative Agent to be the arithmetic mean (rounded to the nearest 1/100th
of 1%) of the offered rates for deposits in dollars with a term comparable to
such Interest Period that appears on the Telerate British Bankers Assoc.
Interest Settlement Rates Page (as defined below) at approximately 11:00 a.m.,
London, England time, on the second full Business Day preceding the first day of
such Interest Period; provided, however, that (i) if no comparable term for an
Interest Period is available, the LIBOR Rate shall be determined using the
weighted average of the offered rates for the two terms most nearly
corresponding to such Interest Period and (ii) if there shall at any time no
longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page,
"LIBOR Rate" shall mean, with respect to each day during each Interest Period
pertaining to Eurodollar Borrowings comprising part of the same Borrowing, the
rate per annum equal to the rate at which the Administrative
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Agent is offered deposits in dollars at approximately 11:00 a.m., London,
England time, two Business Days prior to the first day of such Interest Period
in the London interbank market for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable to
its portion of the amount of such Eurodollar Borrowing to be outstanding during
such Interest Period. "TELERATE BRITISH BANKERS ASSOC. INTEREST SETTLEMENT RATES
PAGE" shall mean the display designated as Page 3750 on the Telerate System
Incorporated Service (or such other page as may replace such page on such
service for the purpose of displaying the rates at which dollar deposits are
offered by leading banks in the London interbank deposit market).
"LIEN" shall mean, with respect to any property, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, claim, charge, assignment,
hypothecation, security interest or encumbrance of any kind or any filing of any
financing statement under the UCC or any other similar notice of Lien under any
similar notice or recording statute of any Governmental Authority, including any
easement, right-of-way or other encumbrance on title to Real Property, in each
of the foregoing cases whether voluntary or imposed by law, and any agreement to
give any of the foregoing; (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such property; and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" shall mean this Agreement, each Letter of
Credit, the Notes (if any), the Security Documents, each Hedging Obligation
relating to the Loans entered into with any counterparty that was an Agent or a
Lender or an Affiliate of an Agent or a Lender at the time such Hedging
Obligation was entered into and, solely for purposes of paragraph (e) of Article
VIII hereof, the Fee Letter.
"LOAN PARTIES" shall mean Borrower and each Subsidiary
Guarantor.
"LOANS" shall mean, as the context may require, a Revolving
Loan, a Term Loan or a Swingline Loan (and shall include any Replacement Term
Loans and any Loans contemplated by Section 11.02(e).
"MARGIN STOCK" shall have the meaning assigned to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse
effect on the business, property, results of operations, prospects or condition,
financial or otherwise, or material agreements of Borrower and its Subsidiaries,
taken as a whole; (b) material impairment of the ability of the Loan Parties to
fully and timely perform any of their obligations under any Loan Document; (c)
material impairment of the rights of or benefits or remedies available to the
Lenders or the Collateral Agent under any Loan Document; or (d) a material
adverse effect on the Collateral or the Liens in favor of the Collateral Agent
(for its benefit and for the benefit of the other Secured Parties) on the
Collateral or the priority of such Liens.
"MATERIAL INDEBTEDNESS" shall mean any Indebtedness (other
than the Loans, Letters of Credit and, solely with respect to the applicable
Excluded Project Subsidiary, Non-Recourse Indebtedness) or Hedging Obligations
of Borrower or any of its Subsidiaries in an aggregate outstanding principal
amount exceeding $5 million. For purposes of determining Material Indebtedness,
the "principal amount" in respect of any Hedging Obligations of any Loan Party
at any time shall be the
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maximum aggregate amount (giving effect to any netting
agreements) that such Loan Party would be required to pay if the related Hedging
Agreement were terminated at such time.
"MOODY'S" shall mean ▇▇▇▇▇'▇ Investors Service Inc.
"MORTGAGE" shall mean an agreement, including, but not limited
to, a mortgage, deed of trust or any other document, creating and evidencing a
Lien on a Mortgaged Property, which (i) in the case of Real Property owned in
fee, shall be substantially in the form of Exhibit J-1 or other form reasonably
satisfactory to the Collateral Agent and (ii) in the case of leased Real
Property, shall be substantially in the form of Exhibit J-2 or other form
reasonably satisfactory to the Collateral Agent, in each case, with such
schedules and including such provisions as shall be necessary to conform such
document to applicable local or foreign law or as shall be customary under
applicable local or foreign law.
"MORTGAGED PROPERTY" shall mean (a) each Real Property
identified on Schedule 1.01(c) hereto and (b) each Real Property, if any, which
shall be subject to a Mortgage delivered after the Closing Date pursuant to
Section 5.11(c).
"MULTIEMPLOYER PLAN" shall mean a multiemployer plan within
the meaning of Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any
Company or any ERISA Affiliate is then making or accruing an obligation to make
contributions; (b) to which any Company or any ERISA Affiliate has within the
preceding five plan years made contributions; or (c) with respect to which any
Company could incur liability.
"NET CASH PROCEEDS" shall mean:
(a) with respect to any Asset Sale (other than any
issuance or sale of Equity Interests), the cash proceeds received by
Borrower or any of its Subsidiaries (including cash proceeds
subsequently received (as and when received by Borrower or any of its
Subsidiaries) in respect of non-cash consideration initially received)
net of (i) selling expenses (including reasonable brokers' fees or
commissions, legal, accounting and other professional and transactional
fees, transfer and similar taxes and Borrower's good faith estimate of
income taxes paid or payable in connection with such sale); (ii)
amounts provided as a reserve, in accordance with GAAP, against (x) any
liabilities under any indemnification obligations associated with such
Asset Sale or (y) any other liabilities retained by Borrower or any of
its Subsidiaries associated with the properties sold in such Asset Sale
(provided that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash
Proceeds); (iii) Borrower's good faith estimate of payments required to
be made with respect to unassumed liabilities relating to the
properties sold within 90 days of such Asset Sale (provided that, to
the extent such cash proceeds are not used to make payments in respect
of such unassumed liabilities within 90 days of such Asset Sale, such
cash proceeds shall constitute Net Cash Proceeds); and (iv) the
principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness for borrowed money which is secured by a
Lien on the properties sold in such Asset Sale (so long as such Lien
was permitted to encumber such properties under the Loan Documents at
the time of such sale) and which is repaid with such proceeds (other
than any such Indebtedness assumed by the purchaser of such
properties);
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(b) with respect to any Debt Issuance or any issuance or
sale of Equity Interests in any Subsidiary of Borrower, the cash
proceeds thereof, net of customary fees, commissions, costs and other
expenses incurred in connection therewith; and
(c) with respect to any Casualty Event, the cash
insurance proceeds, condemnation awards and other compensation received
in respect thereof, net of all reasonable costs and expenses incurred
in connection with the collection of such proceeds, awards or other
compensation in respect of such Casualty Event.
"NON-GUARANTOR SUBSIDIARY" shall mean each Subsidiary of
Borrower that is not a Subsidiary Guarantor.
"NON-RECOURSE INDEBTEDNESS" shall mean Indebtedness for
borrowed money, the proceeds of which were or will be used solely to finance the
acquisition, development, construction, operation, maintenance, repair or
improvement of fixed or capital assets of an Excluded Project Subsidiary
(including domestic and foreign water purification and desalination facilities)
and the obligations of which are secured solely by such fixed or capital assets
and certain related assets as permitted in clause (e) below; provided that (a)
such Indebtedness is without recourse to Borrower or any Subsidiary of Borrower
(other than the applicable Excluded Project Subsidiary and any applicable
Non-Recourse Subsidiary) or to any property or assets of Borrower or any other
Subsidiary of Borrower (other than the applicable Excluded Project Subsidiary
and any applicable Non-Recourse Subsidiary), (b) neither Borrower nor any other
Subsidiary of Borrower (other than the applicable Excluded Project Subsidiary
and any applicable Non-Recourse Subsidiary) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness) or is directly or indirectly liable as a guarantor or otherwise in
respect of such Indebtedness or in respect of the business or operations of the
applicable Excluded Project Subsidiary or any of its subsidiaries (other than
Permitted Non-Recourse Credit Support), (c) neither Borrower nor any other
Subsidiary of Borrower (or any of their respective Affiliates) is or would be
deemed (under applicable law) to be the lender of such Indebtedness, (d) no
default with respect to such Indebtedness (including any rights that the holders
of such Indebtedness may have to take enforcement action against a Subsidiary of
Borrower that is not a Loan Party) would permit any holder of any other
Indebtedness of Borrower or any other Loan Party (other than Indebtedness
incurred pursuant to Section 6.01(a)) upon notice, lapse of time or both to
declare a default on such other Indebtedness or cause the acceleration of such
other Indebtedness, (e) such Indebtedness shall be secured solely by the
property and assets of the applicable Excluded Project Subsidiary and any
applicable Non-Recourse Subsidiary and/or the Equity Interests in the applicable
Excluded Project Subsidiary and any applicable Non-Recourse Subsidiary (and
shall be secured by no other property or assets of Borrower or any other
Subsidiary of Borrower) and (f) in the case of any Additional Non-Recourse
Indebtedness, the lenders in respect thereof shall have been notified in writing
(with a copy to the Administrative Agent) of the substance of the limitation set
forth in clause (e) above; provided further that the limitations set forth in
clauses (a) and (b) above shall not include (x) agreements of Borrower or any
Subsidiary of Borrower to provide corporate or management services or operation
and maintenance services to the applicable Excluded Project Subsidiary or any
applicable Non-Recourse Subsidiary, (y) obligations of Borrower or any other
Subsidiary of Borrower to make capital contributions to the applicable Excluded
Project Subsidiary or any applicable Non-Recourse Subsidiary or (z) agreements
of Borrower or any Subsidiary in respect of Commercial Credit Support
Obligations in respect of or for the benefit of the applicable Excluded Project
Subsidiary or any applicable Non-Recourse Subsidiary, in each case, to the
extent otherwise permitted hereunder.
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"NON-RECOURSE SUBSIDIARY" shall mean (a) as it relates to any
Existing Non-Recourse Indebtedness, any Subsidiary of Borrower that is also the
direct parent or a direct or indirect Subsidiary of the Excluded Project
Subsidiary that incurred or issued such Existing Non-Recourse Indebtedness
(other than any such Existing Non-Recourse Indebtedness consisting solely of a
guarantee of other Existing Non-Recourse Indebtedness) and (b) as it relates to
any Additional Non-Recourse Indebtedness, any Subsidiary of Borrower that is
also the direct parent or a direct or indirect Subsidiary of the Excluded
Project Subsidiary that incurred or issued such Additional Non-Recourse
Indebtedness (other than any such Additional Non-Recourse Indebtedness
consisting solely of a guarantee of other Additional Non-Recourse Indebtedness),
but, in the case of this clause (b), only if such Subsidiary was not a
Subsidiary of Borrower as of the Closing Date.
"NOTES" shall mean any notes evidencing the Term Loans,
Revolving Loans or Swingline Loans issued pursuant to this Agreement, if any,
substantially in the form of Exhibit K-1, K-2 or K-3.
"OBLIGATIONS" shall mean (a) obligations of Borrower and the
other Loan Parties from time to time arising under or in respect of the due and
punctual payment of (i) the principal of and premium, if any, and interest
(including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (ii) each payment required to be made by Borrower and the other Loan
Parties under this Agreement in respect of any Letter of Credit, when and as
due, including payments in respect of Reimbursement Obligations, interest
thereon and obligations to provide cash collateral and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of Borrower and the other Loan Parties under this
Agreement and the other Loan Documents, (b) the due and punctual performance of
all covenants, agreements, obligations and liabilities of Borrower and the other
Loan Parties under or pursuant to this Agreement and the other Loan Documents,
(c) the due and punctual payment and performance of all obligations of Borrower
and the other Loan Parties under each Hedging Agreement relating to the Loans
entered into with any counterparty that was an Agent or a Lender or an Affiliate
of an Agent or a Lender at the time such Hedging Agreement was entered into and
(d) the due and punctual payment and performance of all obligations in respect
of overdrafts and related liabilities owed to any Lender, any Affiliate of a
Lender, the Administrative Agent or the Collateral Agent arising from treasury,
depositary and cash management services or in connection with any automated
clearinghouse transfer of funds.
"OFAC" shall have the meaning assigned to such term in Section
3.22.
"OFFICERS' CERTIFICATE" shall mean a certificate executed by
the chairman of the Board of Directors (if an officer), the chief executive
officer or the president and one of the Financial Officers, each in his or her
official (and not individual) capacity of Borrower.
"ORGANIZATIONAL DOCUMENTS" shall mean, with respect to any
person, (i) in the case of any corporation, the certificate of incorporation and
by-laws (or similar documents) of such person, (ii) in the case of any limited
liability company, the certificate of formation and operating agreement (or
similar documents) of such person, (iii) in the case of any limited partnership,
the certificate of formation and limited partnership agreement (or similar
documents) of such person, (iv) in the case of any general partnership, the
partnership agreement (or similar document) of such person and (v) in any other
case, the functional equivalent of the foregoing.
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"OTHER LIST" shall have the meaning assigned to such term in
Section 6.21.
"OTHER TAXES" shall mean any and all present or future stamp
or documentary taxes or any other excise (other than excise taxes imposed in
lieu of or as part of net income taxes) or property taxes, charges or similar
levies (including interest, fines, penalties and additions to tax) arising from
any payment made or required to be made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PARTICIPANT" shall have the meaning assigned to such term in
Section 11.04(e).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"PERFECTION CERTIFICATE" shall mean a certificate in the form
of Exhibit L-l or any other form approved by the Collateral Agent, as the same
shall be supplemented from time to time by a Perfection Certificate Supplement
or otherwise.
"PERFECTION CERTIFICATE SUPPLEMENT" shall mean a certificate
supplement in the form of Exhibit L-2 or any other form approved by the
Collateral Agent.
"PERMITTED ACQUISITION" shall mean any transaction or series
of related transactions for the direct or indirect (a) acquisition of all or
substantially all of the property of any person, or of any business or division
of any person; (b) acquisition of in excess of 50% of the Equity Interests of
any person, and otherwise causing such person to become a Subsidiary of such
person; or (c) merger or consolidation or any other combination with any person,
if each of the following conditions is met:
(i) no Default then exists or would result therefrom;
(ii) after giving effect to such transaction on a Pro
Forma Basis, (A) Borrower shall be in compliance with all covenants set
forth in Section 6.10 as of the most recent Test Period (assuming, for
purposes of Section 6.10, that such transaction, and all other
Permitted Acquisitions consummated since the first day of the relevant
Test Period ending on or prior to the date of such transaction, had
occurred on the first day of such relevant Test Period), and (B) unless
expressly approved by the Administrative Agent, the person or business
to be acquired shall have generated positive cash flow for the Test
Period most recently ended prior to the date of consummation of such
acquisition;
(iii) no Company shall, in connection with any such
transaction, assume or remain liable with respect to any Indebtedness
or other liability (including any material tax or ERISA liability) of
the related seller or the business, person or properties acquired,
except (A) to the extent permitted under Section 6.01 and (B)
obligations not constituting Indebtedness incurred in the ordinary
course of business and necessary or desirable to the continued
operation of the underlying properties, and any other such liabilities
or obligations not permitted to be assumed or otherwise supported by
any Company hereunder shall be paid in full or released as to the
business, persons or properties being so acquired on or before the
consummation of such acquisition;
(iv) the person or business to be acquired shall be, or
shall be engaged in, a business of the type that Borrower and the
Subsidiaries are permitted to be engaged in under Section 6.15
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and the property acquired in connection with any such transaction shall
be made subject to the Lien of the Security Documents in a manner
reasonably satisfactory to the Collateral Agent and shall be free and
clear of any Liens, other than (with respect to such property that does
not consist of Equity Interests in any Subsidiary Guarantor) Permitted
Liens;
(v) the Board of Directors of the person to be acquired
shall not have indicated publicly its opposition to the consummation of
such acquisition unless such opposition has been publicly withdrawn;
(vi) all transactions in connection therewith shall be
consummated in accordance with all applicable laws of all applicable
Governmental Authorities;
(vii) with respect to any transaction involving Acquisition
Consideration of an amount equal to or greater than $15 million (except
to the extent that such Acquisition Consideration consists solely of
the capital stock of Borrower or any of its Subsidiaries and, after
giving effect to such transaction on a Pro Forma Basis the Total Funded
Debt Leverage Ratio of Borrower and its Subsidiaries is less than or
equal to 2.00 to 1.00 for the most recently ended Test Period), unless
the Administrative Agent shall otherwise agree, at least 5 Business
Days prior to the date of consummation of the proposed transaction
Borrower shall have provided the Administrative Agent and the Lenders
with (A) audited financial statements for the last three fiscal years
of the person or business to be acquired and unaudited financial
statements thereof for the most recent interim period which are
available, (B) reasonably detailed projections for the succeeding five
years pertaining to the person or business to be acquired and updated
projections for Borrower after giving effect to such transaction, (C) a
reasonably detailed description of all material information relating
thereto and copies of all material documentation pertaining to such
transaction, and (D) all such other information and data relating to
such transaction or the person or business to be acquired as may be
reasonably requested by the Administrative Agent or the Required
Lenders;
(viii) at least 5 Business Days prior to the date of
consummation of the proposed transaction, Borrower shall have delivered
to the Agents and the Lenders an Officers' Certificate certifying that
(A) such transaction complies with this definition (which shall have
attached thereto reasonably detailed backup data and calculations
showing such compliance), and (B) such transaction could not reasonably
be expected to result in a Material Adverse Effect; and
(ix) the Acquisition Consideration for such acquisition
shall not exceed $15 million, and the aggregate amount of the
Acquisition Consideration for all Permitted Acquisitions since the
Closing Date shall not exceed $40 million (or, on and after the date on
which the Total Funded Debt Leverage Ratio is less than or equal to
1.75 to 1.00, $60 million) and any Equity Interests constituting all or
a portion of such Acquisition Consideration shall not have a cash
dividend requirement on or prior to the Final Maturing Date.
"PERMITTED COLLATERAL LIENS" means (i) Contested Liens (as
defined in the Security Agreement) and (ii) the Liens described in clauses (a),
(b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o) and (q) of
the definition of "Permitted Liens".
"PERMITTED LIENS" shall have the meaning assigned to such term
in Section 6.02.
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"PERMITTED NON-RECOURSE CREDIT SUPPORT" shall mean, as it
relates to any Non-Recourse Indebtedness, (a) any credit support or liability
consisting of reimbursement obligations in respect of Letters of Credit issued
under, and subject to the terms of, Section 2.18 to support obligations of the
applicable Subsidiary of Borrower that is an obligor with respect to such
Non-Recourse Indebtedness and (b) any investments in the applicable Subsidiary
of Borrower under such Non-Recourse Indebtedness permitted in accordance with
Section 6.04(b).
"PERMITTED REFINANCING INDEBTEDNESS" shall mean Indebtedness
issued or incurred (including by means of the extension or renewal of existing
Indebtedness) to refinance, refund, extend, renew or replace existing
Indebtedness (such existing Indebtedness being referred to below as the
"REFINANCED INDEBTEDNESS"); provided that (a) the principal amount of any such
Permitted Refinancing Indebtedness shall not be greater than the principal
amount of the applicable refinanced indebtedness plus the amount of any premiums
or penalties and accrued and unpaid interest paid thereon and reasonable fees
and expenses, in each case associated with such refinancing, refunding,
extension, renewal or replacement, (b) any such Permitted Refinancing
Indebtedness shall have a final maturity that is no sooner, and a weighted
average life to maturity that is no shorter, than the applicable refinanced
indebtedness, (c) if the applicable refinanced indebtedness or any guarantees
thereof are subordinated to rights of the Secured Parties under the Loan
Documents, any such Permitted Refinancing Indebtedness and any guarantees
thereof shall remain subordinated to the rights of the Secured Parties under the
Loan Documents on terms no less favorable to the Secured Parties, (d) the
obligors in respect of such refinanced indebtedness immediately prior to such
refinancing, refunding, extending, renewing or replacing and any additional
person (other than a Loan Party) shall be the only obligors in respect of any
such Permitted Refinancing Indebtedness, (e) any such Permitted Refinancing
Indebtedness shall contain covenants and events of default and be benefited by
guarantees, if any, which, taken as a whole, are determined in good faith by a
Financial Officer of Borrower to be no less favorable to Borrower, the
applicable Subsidiary or the Lenders in any material respect than the covenants
and events of default or guarantees, if any, in respect of the applicable
refinanced indebtedness and (f) if the applicable refinanced indebtedness is
Non-Recourse Indebtedness, any such Permitted Refinancing Indebtedness shall be
Non-Recourse Indebtedness.
"PERSON" shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision thereof, in
any case, whether acting in a personal, fiduciary or other capacity.
"PLAN" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA which is maintained or
contributed to by any Company or its ERISA Affiliate or with respect to which
any Company could incur liability (including under Section 4069 of ERISA).
"PREFERRED STOCK" shall mean, with respect to any person, any
and all preferred or preference Equity Interests (however designated) of such
person whether now outstanding or issued after the Closing Date.
"PREFERRED STOCK ISSUANCE" shall mean the issuance or sale by
Borrower or any of its Subsidiaries of any Preferred Stock after the Closing
Date (other than as permitted by Section 6.01).
"PREMISES" shall have the meaning assigned thereto in the
applicable Mortgage.
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"PRO FORMA BASIS" shall mean on a basis in accordance with
GAAP and Regulation S-X and otherwise reasonably satisfactory to the
Administrative Agent.
"PROJECT SUBSIDIARY" shall mean, at any time, each Subsidiary
of Borrower that is formed for the sole purpose of financing, owning, acquiring,
developing, constructing, operating or maintaining certain specified fixed or
capital assets, including domestic and foreign water purification and
desalination facilities, but only for so long as such Subsidiary is engaged in
the financing, owning, acquiring, developing, constructing, operating or
maintaining of such fixed or capital assets.
"PRO RATA PERCENTAGE" of any Revolving Lender at any time
shall mean the percentage of the total Revolving Commitments of all Revolving
Lenders represented by such Lender's Revolving Commitment.
"PROPERTY" shall mean any right, title or interest in or to
property or assets of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible and including Equity Interests or other ownership
interests of any person and whether now in existence or owned or hereafter
entered into or acquired, including all Real Property.
"PURCHASE MONEY OBLIGATION" shall mean, for any person, the
obligations of such person in respect of Indebtedness (including Capital Lease
Obligations) incurred for the purpose of financing all or any part of the
purchase price of any property (including Equity Interests of any person) or the
cost of installation, construction or improvement of any property and any
refinancing thereof; provided, however, that (i) such Indebtedness is incurred
within 90 days after such acquisition of such property by such person and (ii)
the amount of such Indebtedness does not exceed 100% of the cost of such
acquisition, installation, construction or improvement, as the case may be.
"PURCHASE PRICE ESCROW AGREEMENT" shall mean that certain
escrow agreement to be entered into on the Closing Date in accordance with
Section 1.03(a)(vi) of the Acquisition Agreement, pursuant to which a portion of
the purchase price in respect of the Acquisition shall be deposited into escrow
to secure certain obligations of the Sellers under the Acquisition Agreement.
"QUALIFIED CAPITAL STOCK" of any person shall mean any Equity
Interests of such person that are not Disqualified Capital Stock.
"REAL PROPERTY" shall mean, collectively, all right, title and
interest (including any leasehold estate) in and to any and all parcels of or
interests in real property owned, leased or operated by any person, whether by
lease, license or other means, together with, in each case, all easements,
hereditaments and appurtenances relating thereto, all improvements and
appurtenant fixtures and equipment, all general intangibles and contract rights
and other property and rights incidental to the ownership, lease or operation
thereof.
"REFINANCED TERM LOANS" shall have the meaning assigned to
such term in Section 11.02(d).
"REFINANCING" shall mean the repayment in full and the
termination of any commitment to make extensions of credit under all of the
outstanding indebtedness of Borrower or any of its Subsidiaries listed on
Schedule 1.01(d).
"REGISTER" shall have the meaning assigned to such term in
Section 11.04(c).
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"REGULATION D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REGULATION S-X" shall mean Regulation S-X promulgated under
the Securities Act.
"REGULATION T" shall mean Regulation T of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REGULATION U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REGULATION X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"REIMBURSEMENT OBLIGATIONS" shall mean Borrower's obligations
under Section 2.18(e) to reimburse LC Disbursements.
"RELEASE" shall mean any spilling, leaking, seepage, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing, depositing, dispersing, emanating or migrating of any
Hazardous Material in, into, onto or through the Environment.
"RENEWED RIGHTS AGREEMENT" shall mean the Renewed Rights
Agreement, dated as of August 19, 1997 (as amended), between Ionics,
Incorporated and BankBoston, N.A., as rights agent.
"REPLACEMENT TERM LOANS" shall have the meaning assigned to
such term in Section 11.02(d).
"REQUIRED LENDERS" shall mean, at any time, Lenders having
Loans, LC Exposure and unused Revolving Commitments and Term Loan Commitments
representing more than 50% of the sum of all Loans outstanding, LC Exposure and
unused Revolving Commitments and Term Loan Commitments at such time.
"REQUIREMENTS OF LAW" shall mean, collectively, any and all
requirements of any Governmental Authority including any and all laws,
ordinances, rules, regulations or similar statutes or case law and including all
applicable environmental laws and regulations.
"RESPONSE" shall mean (a) "response" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to (i) clean up, remove, treat,
▇▇▇▇▇ or in any other way address any Hazardous Material in the environment;
(ii) prevent the Release or threat of Release, or minimize the further Release,
of any Hazardous Material; or (iii) perform studies and investigations in
connection with, or as a precondition to, clause (i) or (ii) above.
"RESPONSIBLE OFFICER" of any person shall mean any executive
officer or Financial Officer of such person and any other officer or similar
official thereof with responsibility for the administration of the obligations
of such person in respect of this Agreement.
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"REVOLVING AVAILABILITY PERIOD" shall mean the period from and
including the Closing Date to but excluding the earlier of (i) the Business Day
preceding the Revolving Maturity Date and (ii) the date of termination of all of
the Revolving Commitments.
"REVOLVING BORROWING" shall mean a Borrowing comprised of
Revolving Loans.
"REVOLVING COMMITMENT" shall mean, with respect to each
Lender, the commitment, if any, of such Lender to make revolving extensions of
credit hereunder up to the amount set forth on Schedule I to the Lender Addendum
executed and delivered by such Lender or by an amendment to this Agreement
pursuant to Section 11.02(e), or in the Assignment and Acceptance pursuant to
which such Lender assumed its Revolving Commitment, as applicable, as the same
may be (a) reduced from time to time pursuant to Section 2.07 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 11.04. The aggregate amount of the Lenders' Revolving
Commitments on the Closing Date is $80 million, $60 million of which shall be
available solely for the issuance of Letters of Credit hereunder and the
remaining $20 million of which shall be available solely for the making of
Revolving Loans.
"REVOLVING EXPOSURE" shall mean, with respect to any Lender at
any time, the aggregate principal amount at such time of all outstanding
Revolving Loans of such Lender, plus the aggregate amount at such time of such
Lender's LC Exposure, plus the aggregate amount at such time of such Lender's
Swingline Exposure.
"REVOLVING LENDER" shall mean a Lender with a Revolving
Commitment.
"REVOLVING LOAN" shall mean a Loan made by the Lenders to
Borrower pursuant to Section 2.01(b). Each Revolving Loan shall either be an ABR
Revolving Loan or a Eurodollar Revolving Loan.
"REVOLVING LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment, if any, of such Lender to make Revolving Loans under and
as a part of such Lender's Revolving Commitment, which amount shall not exceed
such Lender's Pro Rata Percentage of the Aggregate Revolving Loan Commitments.
"REVOLVING MATURITY DATE" shall mean the date which is five
years after the Closing Date or, if such date is not a Business Day, the first
Business Day thereafter.
"S&P" shall mean Standard & Poor's Rating Service.
"SALE AND LEASEBACK TRANSACTION" has the meaning assigned to
such term in Section 6.03.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT" shall mean the United States
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and all rules and regulations promulgated thereunder.
"SDN LIST" shall have the meaning assigned to such term in
Section 6.21.
"SECURED PARTIES" shall mean, collectively, the Administrative
Agent, the Collateral Agent, each other Agent, the Lenders, the Issuing Bank and
each party to a Hedging Agreement relating to the Loans if at the date of
entering into such Hedging Agreement such person was an Agent or a Lender or an
Affiliate of an Agent or a
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Lender and such person executes and delivers to the Administrative Agent a
letter agreement in form and substance reasonably acceptable to the
Administrative Agent pursuant to which such person (i) appoints the Collateral
Agent as its agent under the applicable Loan Documents and (ii) agrees to be
bound by the provisions of Sections 11.03 and 11.09.
"SECURITIES ACT" shall mean the Securities Act of 1933.
"SECURITY AGREEMENT" shall mean a Security Agreement
substantially in the form of Exhibit M among the Loan Parties and Collateral
Agent for the benefit of the Secured Parties.
"SECURITIES COLLATERAL" shall have the meaning assigned to
such term in the Security Agreement.
"SECURITY AGREEMENT COLLATERAL" shall mean all property
pledged or granted as collateral pursuant to the Security Agreement on the
Closing Date or thereafter pursuant to Section 5.11.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the
Mortgages, each account control agreement and each other security document or
pledge agreement delivered in accordance with applicable local or foreign law to
grant a valid, perfected security interest in any property as collateral for the
Obligations, and all UCC or other financing statements or instruments of
perfection required by this Agreement, the Security Agreement, any Mortgage or
any other such security document or pledge agreement to be filed with respect to
the security interests in property and fixtures created pursuant to the Security
Agreement or any Mortgage and any other document or instrument utilized to
pledge as collateral for the Obligations any property.
"SELLER" and "SELLERS" shall have the meaning assigned to such
term in the first recital hereto.
"STANDBY LETTER OF CREDIT" shall mean any standby letter of
credit or similar instrument issued for the purpose of supporting (a) workers'
compensation liabilities of Borrower or any of its Subsidiaries, (b) the
obligations of third-party insurers of Borrower or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third-party insurers
to obtain such letters of credit, (c) performance, payment, deposit or surety
obligations of Borrower or any of its Subsidiaries if required by law or
governmental rule or regulation or in accordance with custom and practice in the
industry or (d) Indebtedness of Borrower or any of its Subsidiaries permitted to
be incurred under Section 6.01.
"STATUTORY RESERVES" shall mean for any Interest Period for
any Eurodollar Borrowing, the average maximum rate at which reserves (including
any marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the United
States Federal Reserve System in New York City with deposits exceeding one
billion dollars against "Eurodollar liabilities" (as such term is used in
Regulation D). Eurodollar Borrowings shall be deemed to constitute Eurodollar
liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exceptions or offsets which may be available from time to
time to any Lender under Regulation D.
"SUBORDINATED INDEBTEDNESS" shall mean Indebtedness of
Borrower or any Guarantor that is by its terms subordinated in right of payment
to the Obligations in a manner reasonably satisfactory to the Administrative
Agent.
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"SUBSIDIARY" shall mean, with respect to any person (the
"PARENT") at any date, (i) any person the accounts of which would be
consolidated with those of the parent in the parent's consolidated financial
statements if such financial statements were prepared in accordance with GAAP as
of such date, (ii) any other corporation, limited liability company, association
or other business entity of which securities or other ownership interests
representing more than 50% of the voting power of all Equity Interests entitled
(without regard to the occurrence of any contingency) to vote in the election of
the Board of Directors thereof are, as of such date, owned, controlled or held
by the parent and/or one or more subsidiaries of the parent, (iii) any
partnership (a) the sole general partner or the managing general partner of
which is the parent and/or one or more subsidiaries of the parent or (b) the
only general partners of which are the parent and/or one or more subsidiaries of
the parent and (iv) any other person that is otherwise Controlled by the parent
and/or one or more subsidiaries of the parent. Unless the context requires
otherwise, "Subsidiary" refers to a Subsidiary of Borrower.
"SUBSIDIARY GUARANTOR" shall mean each Subsidiary listed on
Schedule 1.01(e), and each other Subsidiary that is or becomes a party to this
Agreement pursuant to Section 5.11.
"SUCCESSFUL SYNDICATION" shall mean a "successful
syndication", under and as determined in accordance with the Fee Letter.
"SUPERMAJORITY LENDERS" shall mean at any time, Lenders having
Loans, LC Exposure and unused Revolving Commitments and Term Loan Commitments
representing at least 66 2/3% of the sum of all Loans outstanding, LC Exposure
and unused Revolving Commitments and Term Loan Commitments at such time.
"SURVEY" shall mean a survey of any Mortgaged Property (and
all improvements thereon) which is (a) (i) prepared by a surveyor or engineer
licensed to perform surveys in the state where such Mortgaged Property is
located, (ii) dated (or redated) not earlier than six months prior to the date
of delivery thereof unless there shall have occurred within six months prior to
such date of delivery any exterior construction on the site of such Mortgaged
Property, in which event such survey shall be dated (or redated) after the
completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than 20 days prior to such
date of delivery, (iii) certified by the surveyor (in a manner reasonably
acceptable to the Administrative Agent) to the Administrative Agent, the
Collateral Agent and the Title Company, (iv) complying in all respects with the
minimum detail requirements of the American Land Title Association as such
requirements are in effect on the date of preparation of such survey, (v)
containing such Table A matters as may be reasonably required by the Collateral
Agent and (vi) sufficient for the Title Company to remove all standard survey
exceptions from the title insurance policy (or commitment) relating to such
Mortgaged Property and issue the endorsements of the type required by Section
4.01(p)(iii) or (b) otherwise reasonably acceptable to the Collateral Agent.
"SWINGLINE COMMITMENT" shall mean the commitment of the
Swingline Lender to make loans pursuant to Section 2.17, as the same may be
reduced from time to time pursuant to Section 2.07 or Section 2.17. The amount
of the Swingline Commitment shall initially be $7.5 million, but in no event
shall exceed the Revolving Commitment.
"SWINGLINE EXPOSURE" shall mean at any time the aggregate
principal amount at such time of all outstanding Swingline Loans. The Swingline
Exposure of any Revolving Lender at any time shall equal its Pro Rata Percentage
of the aggregate Swingline Exposure at such time.
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"SWINGLINE LENDER" shall have the meaning assigned to such
term in the preamble hereto.
"SWINGLINE LOAN" shall mean any loan made by the Swingline
Lender pursuant to Section 2.17.
"SYNDICATION AGENTS" shall have the meaning assigned to such
term in the preamble hereto.
"TAX RETURN" shall mean all returns, statements, filings,
attachments and other documents or certifications required to be filed in
respect of Taxes.
"TAXES" shall mean (i) any and all present or future taxes,
duties, levies, imposts, assessments, deductions, withholdings or other similar
charges imposed by any Governmental Authority, whether computed on a separate,
consolidated, unitary, combined or other basis and any and all liabilities
(including interest, fines, penalties or additions to tax) with respect to the
foregoing, and (ii) any transferee, successor, joint and several, contractual or
other liability (including liability pursuant to Treasury Regulation Section
1.1502-6 (or any similar provision of state, local or non-U.S. law)) in respect
of any item described in clause (i).
"TERM BORROWING" shall mean a Borrowing comprised of Term
Loans.
"TERM LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment, if any, of such Lender to make a Term Loan hereunder on
the Closing Date in the amount set forth on Schedule I to the Lender Addendum
executed and delivered by such Lender. The aggregate amount of the Lenders' Term
Loan Commitments is $175 million.
"TERM LOAN LENDER" shall mean a Lender with a Term Loan
Commitment or an outstanding Term Loan.
"TERM LOAN MATURITY DATE" shall mean the date which is seven
years after the Closing Date or, if such date is not a Business Day, the first
Business Day thereafter.
"TERM LOAN REPAYMENT DATE" shall have the meaning assigned to
such term in Section 2.09(a).
"TERM LOANS" shall mean the term loans made by the Lenders to
Borrower pursuant to Section 2.01(a) or by an amendment to this Agreement
pursuant to Section 11.02(e). Each Term Loan shall be either an ABR Term Loan or
a Eurodollar Term Loan.
"TEST PERIOD" shall mean, at any time, the four consecutive
fiscal quarters of Borrower then last ended (in each case taken as one
accounting period).
"TITLE COMPANY" shall mean LandAmerica Financial Group and the
following operating divisions thereof: Commonwealth Land Title Insurance
Company, Lawyers Title Insurance Company, Transnational Title Insurance Company
or any other title insurance company as shall be retained by Borrower and
reasonably acceptable to the Administrative Agent.
"TITLE POLICY" shall have the meaning assigned to such term in
Section 4.01(p)(iii).
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"TOTAL FUNDED DEBT LEVERAGE RATIO" shall mean, at any date of
determination, the ratio of the aggregate amount of all Indebtedness of Borrower
and its Subsidiaries (as determined on a consolidated basis in accordance with
GAAP) on such date to Consolidated EBITDA for the Test Period then most recently
ended.
"TOTAL LEVERAGE RATIO" shall mean, at any date of
determination, the ratio of Consolidated Indebtedness (exclusive of Non-Recourse
Indebtedness) on such date to Consolidated EBITDA for the Test Period then most
recently ended.
"TRANSACTION DOCUMENTS" shall mean the Acquisition Documents,
the Loan Documents and the other documents relating to the Transactions.
"TRANSACTIONS" shall mean, collectively, the transactions to
occur on or prior to the Closing Date pursuant to the Transaction Documents,
including (a) the consummation of the Acquisition; (b) the execution, delivery
and performance of the Loan Documents and the initial borrowings hereunder; (c)
the Equity Financing; (d) the Refinancing and (e) the payment of all fees and
expenses to be paid on or prior to the Closing Date and owing in connection with
the foregoing.
"TRANSFERRED GUARANTOR" shall have the meaning assigned to
such term in Section 7.09.
"TYPE," when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBOR Rate or the
Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in any applicable state or jurisdiction.
"UK SUBSIDIARY REORGANIZATION" shall mean a transaction in
which Ecolochem International, in connection with the Transactions, transfers
all or substantially all of its assets to Ionics Ventures UK (or a wholly owned
Subsidiary of Ionics Ventures UK formed for such purpose) for consideration
consisting of a note receivable in an amount equal to approximately $52 million
and common stock of Ionics Ventures UK (or such wholly owned Subsidiary) and
certain other transactions intended to facilitate the foregoing; provided that
(i) such transactions shall be consummated on or before ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇)
Borrower shall have received an opinion of a nationally recognized accounting
firm or law firm to the effect that none of the Loan Parties should recognize a
material amount of taxable income for United States federal income tax purposes
solely as a result of such transactions, (iii) after giving effect to such
transactions, any Indebtedness arising in connection with such transaction shall
be subordinated to the Secured Obligations in accordance with the terms and
conditions of the Intercompany Note and Section 7.04(d) and (iv) such
transactions shall be on terms and conditions reasonably satisfactory to the
Administrative Agent.
"UNITED STATES" shall mean the United States of America.
"VOTING STOCK" shall mean, with respect to any person, any
class or classes of Equity Interests pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect at least a
majority of the Board of Directors of such person.
"WHOLLY OWNED SUBSIDIARY" shall mean, as to any person, (a)
any corporation 100% of whose capital stock (other than directors' qualifying
shares) is at the time owned by such person and/or
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one or more Wholly Owned Subsidiaries of such person and (b) any partnership,
association, joint venture, limited liability company or other entity in which
such person and/or one or more Wholly Owned Subsidiaries of such person have a
100% equity interest at such time.
"WITHDRAWAL LIABILITY" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"338 ESCROW AGREEMENT" shall mean that certain escrow
agreement to be entered into on the Closing Date in accordance with Section
1.05(f) of the Acquisition Agreement, pursuant to which Borrower shall deposit
certain funds into escrow to secure its obligations to the Sellers under Section
1.05 of the Acquisition Agreement.
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS.
For purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Revolving Borrowing," "Borrowing
of Term Loans") or by Type (e.g., a "Eurodollar Borrowing") or by Class and Type
(e.g., a "Eurodollar Revolving Borrowing").
SECTION 1.03 TERMS GENERALLY. The definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall." Unless the context requires otherwise (a) any
definition of or reference to any Loan Document, agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any person shall be construed to
include such person's successors and assigns, (c) the words "herein," "hereof"
and "hereunder," and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof and
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, unless otherwise indicated.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as
otherwise expressly provided herein, all financial statements to be delivered
pursuant to this Agreement shall be prepared in accordance with GAAP as in
effect from time to time and all terms of an accounting or financial nature
shall be construed and interpreted in accordance with GAAP, as in effect on the
date hereof unless otherwise agreed to by Borrower and the Required Lenders.
SECTION 1.05 RESOLUTION OF DRAFTING AMBIGUITIES. Each
Loan Party acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of the Loan Documents to which it is
a party, that it and its counsel reviewed and participated in the preparation
and negotiation hereof and thereof and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be employed in the interpretation hereof or thereof.
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ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly:
(a) (i) to make a Term Loan to Borrower on the Closing
Date in the principal amount not to exceed its Term Loan Commitment;
and
(b) to make Revolving Loans to Borrower, at any time and
from time to time after the Closing Date until the earlier of the
Revolving Maturity Date and the termination of the entire amount of the
Revolving Commitment of such Lender in accordance with the terms
hereof, in an aggregate principal amount at any time outstanding that
will not result in (a) such Lender's Revolving Exposure exceeding such
Lender's Revolving Commitment or (b) such Lender's outstanding
Revolving Loans and Swingline Exposure exceeding such Lender's
Revolving Loan Commitment.
Amounts paid or prepaid in respect of Term Loans may not be
reborrowed. Within the limits set forth in clause (b) above and subject to the
terms, conditions and limitations set forth herein, Borrower may borrow, pay or
prepay and reborrow Revolving Loans.
SECTION 2.02 LOANS. (a) Each Loan (other than
Swingline Loans) shall be made as part of a Borrowing consisting of Loans made
by the Lenders ratably in accordance with their applicable Commitments; provided
that the failure of any Lender to make any Loan shall not in itself relieve any
other Lender of its obligation to lend hereunder (it being understood, however,
that no Lender shall be responsible for the failure of any other Lender to make
any Loan required to be made by such other Lender). Except for Loans deemed made
pursuant to Section 2.18(e)(ii), Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $1 million and
not less than $2 million or (ii) if less, equal to the remaining available
balance of the applicable Commitments.
(b) Subject to Sections 2.11 and 2.12, each Borrowing
shall be comprised entirely of ABR Loans or entirely of Eurodollar Loans as
Borrower may request pursuant to Section 2.03. Each Lender may at its option
make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate
of such Lender to make such Eurodollar Loan; provided that any exercise of such
option shall not affect the obligation of Borrower to repay such Eurodollar Loan
in accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time; provided that Borrower shall not be
entitled to request any Borrowing that, if made, would result in more than five
Eurodollar Borrowings outstanding hereunder at any one time. For purposes of the
foregoing, Borrowings having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section
2.18(e)(ii), each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds to such
account in New York City as the Administrative Agent may designate not later
than 11:00 a.m., New York City time, and the Administrative Agent shall promptly
credit the amounts so received to an account maintained by the Administrative
Agent and then distributed as directed by Borrower in the applicable Borrowing
Request or, if a Borrowing shall not occur on such
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date because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above, and the Administrative Agent may, in
reliance upon such assumption, make available to Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available, then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, each of such Lender and Borrower
severally agrees to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to Borrower until the date such amount is repaid
to the Administrative Agent at (i) in the case of Borrower, the interest rate
applicable at the time to the Loans comprising such Borrowing and (ii) in the
case of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation. If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount (exclusive of any interest paid
thereon by the applicable Lender in accordance with the immediately preceding
sentence) shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement, and Borrower's obligation to repay the
Administrative Agent such corresponding amount pursuant to this Section 2.02(d)
shall cease.
(e) Notwithstanding any other provision of this
Agreement, Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date or Term Loan Maturity Date, as
applicable.
SECTION 2.03 BORROWING PROCEDURE. To request a
Revolving Borrowing or Term Borrowing, Borrower shall deliver, by hand delivery
or telecopy, a duly completed and executed Borrowing Request to the
Administrative Agent (i) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 9:00
a.m., New York City time, on the date of the proposed Borrowing. Each Borrowing
Request shall be irrevocable and shall specify the following information in
compliance with Section 2.02:
(a) whether the requested Borrowing is to be a Borrowing
of Revolving Loans or Term Loans;
(b) the aggregate amount of the requested Borrowing;
(c) the date of such Borrowing, which shall be a Business
Day;
(d) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(e) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period"; provided
that until the date on which the Administrative Agent shall have
notified Borrower that a Successful Syndication has been achieved, the
Interest Period shall be seven days;
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(f) the location and number of Borrower's account to
which funds are to be disbursed, which shall comply with the
requirements of Section 2.02(c); and
(g) that the conditions set forth in Sections 4.02(b)-(d)
have been satisfied as of the date of the notice.
If no election as to the Type of Borrowing is specified, then
the requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Revolving Borrowing, then
Borrower shall be deemed to have selected an Interest Period of one month's
duration (subject to the proviso in clause (e) above). Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04 EVIDENCE OF DEBT; REPAYMENT OF LOANS.
(a) Borrower hereby unconditionally promises to pay (i) to the Administrative
Agent for the account of each Term Loan Lender, the principal amount of each
Term Loan of such Term Loan Lender as provided in Section 2.09, (ii) to the
Administrative Agent for the account of each Revolving Lender, the then unpaid
principal amount of each Revolving Loan of such Revolving Lender on the
Revolving Maturity Date and (iii) to the Swingline Lender, the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving Maturity
Date and the first date after such Swingline Loan is made that is the 15th or
last day of a calendar month and is at least two Business Days after such
Swingline Loan is made; provided that on each date that a Revolving Borrowing is
made, Borrower shall repay all Swingline Loans that were outstanding on the date
such Borrowing was requested.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of
Borrower to such Lender resulting from each Loan made by such Lender
from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in
which it will record (i) the amount of each Loan made hereunder, the
Type and Class thereof and the Interest Period applicable thereto; (ii)
the amount of any principal or interest due and payable or to become
due and payable from Borrower to each Lender hereunder; and (iii) the
amount of any sum received by the Administrative Agent hereunder for
the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant
to paragraphs (b) and (c) above shall be prima facie evidence of the
existence and amounts of the obligations therein recorded; provided
that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligations of Borrower to repay the Loans in accordance with their
terms.
(e) Any Lender by written notice to Borrower (with a copy
to the Administrative Agent) may request that Loans of any Class made
by it be evidenced by a promissory note. In such event, Borrower shall
prepare, execute and deliver to such Lender a promissory note payable
to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) in the form of Exhibit K-I, K-2 or
K-3, as the case may be. Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including
after assignment pursuant to Section 11.04) be represented by one or
more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
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SECTION 2.05 FEES.
(a) Commitment Fee. Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (a
"COMMITMENT FEE") equal to 0.50% per annum on the average daily unused amount of
each Commitment of such Lender during the period from and including the date
hereof to but excluding the date on which such Commitment terminates. Accrued
Commitment Fees shall be payable in arrears (A) on the last Business Day of
March, June, September and December of each year, commencing on the first such
date to occur after the date hereof, and (B) on the date on which such
Commitment terminates. Commitment Fees shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
Commitment Fees with respect to Revolving Commitments, a Revolving Commitment of
a Lender shall be deemed to be used to the extent of the outstanding Revolving
Loans and LC Exposure of such Lender (and the Swingline Exposure of such Lender
shall be disregarded for such purpose).
(b) Administrative Agent Fees. Borrower agrees to pay to
the Administrative Agent, for its own account, the administrative fees set forth
in the Fee Letter or such other fees payable in the amounts and at the times
separately agreed upon between Borrower and the Administrative Agent (the
"ADMINISTRATIVE AGENT FEES").
(c) LC and Fronting Fees. Borrower agrees to pay (i) to
the Administrative Agent for the account of each Revolving Lender a
participation fee ("LC PARTICIPATION FEE") with respect to its participations in
Letters of Credit, which shall accrue at a rate equal to the Applicable Margin
(together with any additional interest that may then be applicable pursuant to
Section 2.06(c)) from time to time used to determine the interest rate on
Eurodollar Revolving Loans pursuant to Section 2.06 on the average daily amount
of such Lender's LC Exposure (excluding any portion thereof attributable to
Reimbursement Obligations) during the period from and including the Closing Date
to but excluding the later of the date on which such Lender's Revolving
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee ("FRONTING FEE"), which
shall accrue at the rate of 0.125% per annum on the average daily amount of the
LC Exposure (excluding any portion thereof attributable to Reimbursement
Obligations) during the period from and including the Closing Date to but
excluding the later of the date of termination of the Revolving Commitments and
the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's customary fees with respect to the administration, negotiation, issuance,
amendment, renewal or extension of any Letter of Credit or processing of
drawings thereunder. Accrued LC Participation Fees and Fronting Fees shall be
payable in arrears (i) on the last Business Day of March, June, September and
December of each year, commencing on the first such date to occur after the
Closing Date, and (ii) on the date on which the Revolving Commitments terminate.
Any such fees accruing after the date on which the Revolving Commitments
terminate shall be payable on demand. Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after demand
therefor. All LC Participation Fees and Fronting Fees shall be computed on the
basis of a year of 360 days and shall be payable for the actual number of days
elapsed (including the first day but excluding the last day).
(d) All Fees shall be paid on the dates due, in
immediately available funds in dollars, to the Administrative Agent for
distribution, if and as appropriate, among the Lenders, except that Borrower
shall pay the Fronting Fees directly to the Issuing Bank. Once paid, none of the
Fees shall be refundable under any circumstances.
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SECTION 2.06 INTEREST ON LOANS. (a) Subject to the
provisions of Section 2.06(c), the Loans comprising each ABR Borrowing,
including each Swingline Loan, shall bear interest at a rate per annum equal to
the Alternate Base Rate plus the Applicable Margin in effect from time to time.
(b) Subject to the provisions of Section 2.06(c), the
Loans comprising each Eurodollar Borrowing shall bear interest at a rate per
annum equal to the Adjusted LIBOR Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin in effect from time to time.
(c) Notwithstanding the foregoing, during a Default, all
Obligations shall, to the extent permitted by applicable law, bear interest,
after as well as before judgment, at a per annum rate equal to (i) in the case
of principal of or interest on any Loan, 2% plus the rate applicable to such
Loan at such time as provided in the preceding paragraphs of this Section 2.06
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR
Revolving Loans as provided in Section 2.06(a).
(d) Accrued interest on each Loan shall be payable in
arrears on each Interest Payment Date for such Loan; provided that (i) interest
accrued pursuant to Section 2.06(c) shall be payable on demand, (ii) in the
event of any repayment or prepayment of any Loan (other than a prepayment of an
ABR Revolving Loan or a Swingline Loan), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis
of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate shall be computed on the basis of a year of 365 days (or 366
days in a leap year), and in each case shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). The
applicable Alternate Base Rate or Adjusted LIBOR Rate shall be determined by the
Administrative Agent in accordance with the provisions of this Agreement and
such determination shall be conclusive absent manifest error.
SECTION 2.07 TERMINATION AND REDUCTION OF COMMITMENTS.
(a) The Term Loan Commitments shall automatically terminate at 5:00 p.m., New
York City time, on the Closing Date. The Revolving Commitments, the Swingline
Commitment and the LC Commitment shall automatically terminate on the Revolving
Maturity Date. Notwithstanding the foregoing, all the Commitments shall
automatically terminate at 5:00 p.m., New York City time, on March 31, 2004, if
the initial Credit Extension shall not have occurred by such time.
(b) At its option, Borrower may at any time terminate, or
from time to time permanently reduce, the Commitments of any Class; provided
that (i) each reduction of the Commitments of any Class shall be in an amount
that is an integral multiple of $1 million and not less than $5 million, (ii)
the Revolving Commitments shall not be terminated or reduced if, after giving
effect to any concurrent prepayment of the Revolving Loans in accordance with
Section 2.10, the aggregate amount of Revolving Exposures would exceed the
aggregate amount of Revolving Commitments and (iii) any reduction of the
Revolving Commitments shall reduce the Aggregate Revolving Loan Commitments and
the LC Commitment on a pro rata basis.
(c) Borrower shall notify the Administrative Agent in
writing of any election to terminate or reduce the Commitments under Section
2.07(b) at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the
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contents thereof. Each notice delivered by Borrower pursuant to this Section
shall be irrevocable. Any termination or reduction of the Commitments of any
Class shall be permanent. Each reduction of the Commitments of any Class shall
be made ratably among the Lenders in accordance with their respective
Commitments of such Class.
SECTION 2.08 INTEREST ELECTIONS. (a) Each Revolving
Borrowing and Term Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, Borrower may elect to convert such Borrowing to a different Type or
to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect
Interest Periods therefor, all as provided in this Section. Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. Notwithstanding anything to
the contrary, Borrower shall not be entitled to request any conversion or
continuation that, if made, would result in more than five Eurodollar Borrowings
outstanding hereunder at any one time. This Section shall not apply to Swingline
Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section,
Borrower shall deliver, by hand delivery or telecopy, a duly completed and
executed Interest Election Request to the Administrative Agent not later than
the time that a Borrowing Request would be required under Section 2.03 if
Borrower were requesting a Revolving Borrowing or Term Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each Interest Election Request shall be irrevocable.
(c) Each Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, or if outstanding Borrowings are being
combined, allocation to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to
such election, which shall be a period contemplated by the definition
of the term "Interest Period"; provided that until the date on which
the Administrative Agent shall have notified Borrower that a Successful
Syndication has been achieved, the Interest Period shall be seven days.
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then Borrower shall be deemed to have selected
an Interest Period of one month's duration (subject to the proviso in clause
(iv) above).
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(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the
details thereof and of such Lender's portion of each resulting
Borrowing.
(e) If an Interest Election Request with respect to a
Eurodollar Borrowing is not timely delivered prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is
repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any
contrary provision hereof, if an Event of Default has occurred and is
continuing, the Administrative Agent or the Required Lenders may
require, by notice to Borrower, that (i) no outstanding Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.
SECTION 2.09 AMORTIZATION OF TERM BORROWINGS. (a)
Borrower shall pay to the Administrative Agent, for the account of the Lenders,
on the dates set forth on Annex II, or if any such date is not a Business Day,
on the immediately preceding Business Day (each such date, a "TERM LOAN
REPAYMENT DATE"), a principal amount of the Term Loans equal to the amount set
forth on Annex II for such date (as adjusted from time to time pursuant to
Section 2.10(g)), together in each case with accrued and unpaid interest on the
principal amount to be paid to but excluding the date of such payment.
(b) To the extent not previously paid, Term Loans shall
be due and payable on the Term Loan Maturity Date.
SECTION 2.10 OPTIONAL AND MANDATORY PREPAYMENTS OF LOANS.
(a) Optional Prepayments. Borrower shall have the right
at any time and from time to time to prepay any Borrowing, in whole or in part,
subject to the requirements of this Section 2.10; provided that each partial
prepayment shall be in an amount that is an integral multiple of $1 million and
not less than $5 million.
(b) Mandatory Revolving Loan Prepayments. (i) In the
event of the termination of all the Revolving Commitments, Borrower shall, on
the date of such termination, repay or prepay all outstanding Revolving
Borrowings and all outstanding Swingline Loans and replace all outstanding
Letters of Credit or cash collateralize all outstanding Letter of Credit in
accordance with the procedures set forth in Section 2.18(i).
(ii) In the event of any partial reduction of the
Revolving Commitments, then (x) at or prior to the effective date of such
reduction, the Administrative Agent shall notify Borrower and the Revolving
Lenders of the sum of the Revolving Exposures after giving effect thereto and
(y) if the sum of the Revolving Exposures would exceed the aggregate amount of
Revolving Commitments after giving effect to such reduction, then Borrower
shall, on the date of such reduction, first, repay or prepay Swingline Loans,
second, repay or prepay Revolving Borrowings and third, replace outstanding
Letters of Credit or cash collateralize outstanding Letters of Credit in
accordance with the procedures set forth in Section 2.18(i), in an aggregate
amount sufficient to eliminate such excess.
(iii) In the event that the sum of all Lenders' Revolving
Exposures exceeds the Revolving Commitments then in effect, Borrower shall,
without notice or demand, immediately first, repay or prepay Revolving
Borrowings, and second, replace outstanding Letters of Credit or cash
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collateralize outstanding Letters of Credit in accordance with the procedures
set forth in Section 2.18(i), in an aggregate amount sufficient to eliminate
such excess.
(iv) In the event that the aggregate amount of outstanding
Revolving Loans and Swingline Loans exceeds the Aggregate Revolving Loan
Commitments, Borrower shall, without notice or demand, immediately repay or
prepay Revolving Loans and/or Swingline Loans in an aggregate amount sufficient
to eliminate such excess.
(v) In the event that the aggregate LC Exposure exceeds
the LC Commitment then in effect, Borrower shall, without notice or demand,
immediately replace outstanding Letters of Credit or cash collateralize
outstanding Letters of Credit in accordance with the procedures set forth in
Section 2.18(i), in an aggregate amount sufficient to eliminate such excess.
(c) Mandatory Asset Sale Prepayments. Not later than one
Business Day following the receipt of any Net Cash Proceeds of any Asset Sale by
Borrower or any of its Subsidiaries, Borrower shall apply an amount equal to
100% of such Net Cash Proceeds to make prepayments in accordance with Sections
2.10(g) and (h); provided that:
(i) so long as no Default shall then exist or would arise
therefrom, no such prepayment shall be required under this Section
2.10(c) with respect to (A) any Asset Sale permitted by Section
6.06(a), (B) the disposition of property which constitutes a Casualty
Event, or (C) Asset Sales for fair market value resulting in no more
than $100,000 in Net Cash Proceeds per Asset Sale (or series of related
Asset Sales) and less than $3 million in Net Cash Proceeds in any
fiscal year; provided that clause (C) shall not apply in the case of
any Asset Sale described in clause (b) of the definition thereof or,
with respect to Net Cash Proceeds in an amount not to exceed $15
million in the aggregate, Section 6.06(c); and
(ii) so long as no Default shall then exist or would arise
therefrom, the Net Cash Proceeds in an aggregate amount not to exceed
$25 million in any fiscal year in respect of any Asset Sales permitted
under Section 6.06(c) (to the extent not excluded from the prepayment
requirement pursuant to paragraph (c)(i) above) and any other Asset
Sales shall not be required to be so applied on such date to the extent
that (A) Borrower shall have delivered an Officers' Certificate to the
Administrative Agent on or prior to such date stating that such Net
Cash Proceeds are expected to be reinvested in fixed or capital assets
within 365 days following the date of such Asset Sale (which Officers'
Certificate shall set forth the estimates of the proceeds to be so
expended); and (B) all Net Cash Proceeds in respect of all Asset Sales
(other than those referred to in clause (C) of Section 2.10(c)(i)) in
excess of $3 million in the aggregate at any time shall be held in the
Collateral Account and released therefrom only in accordance with the
provisions of Article IX; provided that if all or any portion of such
Net Cash Proceeds is not so reinvested within such 365-day period, such
unused portion shall be applied on the last day of such period as a
mandatory prepayment as provided in this Section 2.10(c); and provided,
further, that if the property subject to such Asset Sale constituted
Collateral, then all property purchased with the Net Cash Proceeds
thereof pursuant to this subsection shall be made subject to the Lien
of the applicable Security Documents in favor of the Collateral Agent,
for its benefit and for the benefit of the other Secured Parties in
accordance with Sections 5.11 and 5.12.
(d) Mandatory Debt or Preferred Stock Issuance
Prepayment. Not later than one Business Day following the receipt of any Net
Cash Proceeds of any Debt Issuance or Preferred Stock
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Issuance by Borrower or any of its Subsidiaries, Borrower shall make prepayments
in accordance with Sections 2.10(g) and (h) in an aggregate principal amount
equal to 100% of such Net Cash Proceeds.
(e) Casualty Events. Not later than one Business Day
following the receipt of any Net Cash Proceeds from a Casualty Event by Borrower
or any of its Subsidiaries, Borrower shall apply an amount equal to 100% of such
Net Cash Proceeds to make prepayments in accordance with Sections 2.10(g) and
(h); provided that:
(i) so long as no Default shall then exist or arise
therefrom, such proceeds shall not be required to be so applied on such
date to the extent that Borrower shall have delivered an Officers'
Certificate to the Administrative Agent on or prior to such date
stating that such proceeds are expected to be used to repair, replace
or restore any property in respect of which such Net Cash Proceeds were
paid, no later than 365 days following the date of receipt of such
proceeds; provided that if the property subject to such Casualty Event
constituted Collateral under the Security Documents, then all property
purchased with the Net Cash Proceeds thereof pursuant to this
subsection shall be made subject to the Lien of the applicable Security
Documents in favor of the Collateral Agent, for its benefit and for the
benefit of the other Secured Parties in accordance with Sections 5.11
and 5.12;
(ii) all Net Cash Proceeds in respect of all Casualty
Events in excess of $3 million in the aggregate shall be held in the
Collateral Account and released therefrom only in accordance with the
provisions of Article IX; and
(iii) if any portion of such Net Cash Proceeds shall not be
so applied within such 365-day period, such unused portion shall be
applied on the last day of such period as a mandatory prepayment as
provided in this Section 2.10(e).
(f) Mandatory Excess Cash Flow Prepayment. No later than
the earlier of (i) 90 days after the end of each Excess Cash Flow
Period and (ii) the date on which the financial statements with respect
to such fiscal year in which such Excess Cash Flow Period occurs are
delivered pursuant to Section 5.01(a), Borrower shall make prepayments
in accordance with Sections 2.10(g) and (h) in an aggregate principal
amount equal to 50% of Excess Cash Flow for such Excess Cash Flow
Period unless the Total Funded Debt Leverage Ratio for the Test Period
ending on the last day of such Excess Cash Flow Period is equal to or
less than 2.50 to 1.00, in which case no such prepayment shall be
required.
(g) Application of Prepayments. (i) Prior to any optional
or mandatory prepayment hereunder, Borrower shall select the Borrowing
or Borrowings to be prepaid and shall specify such selection in the
notice of such prepayment pursuant to Section 2.10(h), subject to the
provisions of this Section 2.10(g). Any prepayments of Loans required
or made pursuant to Section 2.10 (a), (c), (d), (e) or (f) shall be
applied to reduce scheduled amortization payments required under
Section 2.09(a), on a pro rata basis among such amortization payments
as are remaining to be made on each remaining Term Loan Repayment Date.
After application of mandatory prepayments described above in this
Section 2.10(g) and to the extent there are mandatory prepayment
amounts remaining after such application in respect of any prepayment
required pursuant to Section 2.10(c) or (f), the Revolving Commitments
shall be permanently reduced ratably among the Revolving Lenders in
accordance with their applicable Revolving Commitments in an aggregate
amount equal to such excess, and Borrower shall comply with Section
2.10(b).
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(ii) Amounts to be applied pursuant to this Section 2.10
to the prepayment of Term Loans and Revolving Loans shall be applied, as
applicable, first to reduce outstanding ABR Term Loans and ABR Revolving Loans,
respectively. Any amounts remaining after each such application shall be applied
to prepay Eurodollar Term Loans or Eurodollar Revolving Loans, as applicable.
Notwithstanding the foregoing, if the amount of any prepayment of Loans required
under this Section 2.10 shall be in excess of the amount of the ABR Loans at the
time outstanding (an "EXCESS AMOUNT"), only the portion of the amount of such
prepayment as is equal to the amount of such outstanding ABR Loans shall be
immediately prepaid and, at the election of Borrower, the balance of such
required prepayment shall be either (A) deposited in the Collateral Account and
applied to the prepayment of Eurodollar Loans on the last day of the then
next-expiring Interest Period for Eurodollar Loans; provided that (i) interest
in respect of such Excess Amount shall continue to accrue thereon at the rate
provided hereunder for the Loans which such Excess Amount is intended to repay
until such Excess Amount shall have been used in full to repay such Loans and
(ii) at any time while an Event of Default has occurred and is continuing, the
Administrative Agent may, and upon written direction from the Required Lenders
shall, apply any or all proceeds then on deposit in the Collateral Account to
the payment of such Loans in an amount equal to such Excess Amount or (B)
prepaid immediately, together with any amounts owing to the Lenders under
Section 2.13.
(h) Notice of Prepayment. Borrower shall notify the
Administrative Agent (and, in the case of prepayment of a Swingline Loan, the
Swingline Lender) by written notice of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, three Business Days before the date of prepayment, (ii) in the case
of prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one Business Day before the date of prepayment and (iii) in the case of
prepayment of a Swingline Loan, not later than 11:00 a.m., New York City time,
on the date of prepayment. Each such notice shall be irrevocable. Each such
notice shall specify the prepayment date, the principal amount of each Borrowing
or portion thereof to be prepaid and, in the case of a mandatory prepayment, a
reasonably detailed calculation of the amount of such prepayment. Promptly
following receipt of any such notice (other than a notice relating solely to
Swingline Loans), the Administrative Agent shall advise the Lenders of the
contents thereof. Such notice to the Lenders may be by electronic communication.
Each partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of a Credit Extension of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to
the Loans included in the prepaid Borrowing and otherwise in accordance with
this Section 2.10. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.06.
SECTION 2.11 ALTERNATE RATE OF INTEREST. If prior to
the commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent reasonably determines (which
determination shall be final and conclusive absent manifest error) that
adequate and reasonable means do not exist for ascertaining the
Adjusted LIBOR Rate for such Interest Period; or
(b) the Administrative Agent is advised in writing by the
Required Lenders that the Adjusted LIBOR Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such
Interest Period;
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then the Administrative Agent shall give written notice thereof to Borrower and
the Lenders as promptly as practicable thereafter and, until the Administrative
Agent notifies Borrower and the Lenders that the circumstances giving rise to
such notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
SECTION 2.12 INCREASED COSTS. (a) If any Change in
Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against property of, deposits
with or for the account of, or credit extended by, any Lender (except
any such reserve requirement reflected in the Adjusted LIBOR Rate) or
the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the
London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender, the
Issuing Bank or such Lender's or the Issuing Bank's holding company, if any, of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise), then Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank, as the case may
be, for such additional costs incurred or reduction suffered, it being
understood that this Section 2.12 shall not apply to Taxes.
(b) If any Lender or the Issuing Bank reasonably
determines in good faith (which determination shall be final and conclusive
absent manifest error) that any Change in Law regarding capital requirements has
or would have the effect of reducing the rate of return on such Lender's or the
Issuing Bank's capital or on the capital of such Lender's or the Issuing Bank's
holding company, if any, as a consequence of this Agreement or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the Issuing Bank, to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change in Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from time
to time Borrower will pay to such Lender or the Issuing Bank, as the case may
be, upon delivery of a certificate of such Lender or Issuing Bank in accordance
with paragraph (c) below, such additional amount or amounts as will compensate
such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth in reasonable detail the amount or amounts necessary to compensate such
Lender or the Issuing Bank or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section 2.12 shall be delivered to
Borrower (with a copy to the Administrative Agent) and shall be conclusive and
binding absent manifest error. Borrower shall pay such Lender or the Issuing
Bank, as the case may be, the amount shown as due on any such certificate within
5 days after receipt thereof.
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(d) Failure or delay on the part of any Lender or the
Issuing Bank to demand compensation pursuant to this Section 2.12 shall not
constitute a waiver of such Lender's or the Issuing Bank's right to demand such
compensation; provided that Borrower shall not be required to compensate a
Lender or the Issuing Bank pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender or the
Issuing Bank, as the case may be, notifies Borrower of the Change in Law giving
rise to such increased costs or reductions and of such Lender's or the Issuing
Bank's intention to claim compensation therefor; provided, further, that, if the
Change in Law giving rise to such increased costs or reductions is retroactive,
then the 180-day period referred to above shall be extended back to the date of
effectiveness of the Change in Law so long as Borrower receives notice thereof
on or before the date that is 180 days after the enactment of such Change in
Law.
SECTION 2.13 BREAKAGE PAYMENTS. In the event of (a)
the payment or prepayment, whether optional or mandatory, of any principal of
any Eurodollar Loan earlier than the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion of
any Eurodollar Loan earlier than the last day of the Interest Period applicable
thereto, (c) the failure to borrow, convert, continue or prepay any Revolving
Loan or Term Loan on the date specified in any notice delivered pursuant hereto
or (d) the assignment of any Eurodollar Loan earlier than the last day of the
Interest Period applicable thereto as a result of a request by Borrower pursuant
to Section 2.16, then, in any such event, Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of (i) the
amount of interest which would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBOR Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the Interest
Period for such Loan), over (ii) the amount of interest which would accrue on
such principal amount for such period at the interest rate which such Lender
would bid were it to bid, at the commencement of such period, for dollar
deposits of a comparable amount and period from other banks in the Eurodollar
market. A certificate of any Lender setting forth in reasonable detail any
amount or amounts that such Lender is entitled to receive pursuant to this
Section 2.13 shall be delivered to Borrower (with a copy to the Administrative
Agent) and shall be conclusive and binding absent manifest error. Borrower shall
pay such Lender the amount shown as due on any such certificate within 5 days
after receipt thereof.
SECTION 2.14 PAYMENTS GENERALLY; PRO RATA TREATMENT;
SHARING OF SETOFFS. (a) Borrower shall make each payment required to be made by
it hereunder or under any other Loan Document (whether of principal, interest,
fees or Reimbursement Obligations, or of amounts payable under Section 2.12,
2.13 or 2.15, or otherwise) on or before the time expressly required hereunder
or under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 2:00 p.m., New York City time), on the date when
due, in immediately available funds, without setoff, deduction or counterclaim,
other than deductions for Taxes that are Excluded Taxes. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made to the
Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.12, 2.13, 2.15 and 11.03 shall be made directly to the persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other person to the
appropriate recipient promptly following receipt
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thereof. If any payment under any Loan Document shall be due on a day that is
not a Business Day, unless specified otherwise, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in dollars,
except as expressly specified otherwise.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
Reimbursement Obligations, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, towards
payment of principal and Reimbursement Obligations then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal
and Reimbursement Obligations then due to such parties.
(c) If any Lender shall, by exercising any right of
setoff or counterclaim or otherwise (including by exercise of its rights under
Section 9.1(a)(viii) of the Security Agreement), obtain payment in respect of
any principal of or interest on any of its Revolving Loans, Term Loans or
participations in LC Disbursements or Swingline Loans resulting in such Lender
receiving payment of a greater proportion of the aggregate amount of its
Revolving Loans, Term Loans and participations in LC Disbursements and Swingline
Loans and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Revolving Loans, Term Loans, LC
Disbursements and Swingline Loans of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements and Swingline Loans; provided that (i) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations
in LC Disbursements to any assignee or participant, other than to Borrower or
any of its Subsidiaries or Affiliates (as to which the provisions of this
paragraph shall apply). Each Loan Party consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Loan Party rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such Loan
Party in the amount of such participation. If under applicable bankruptcy,
insolvency or any similar law any Secured Party receives a secured claim in lieu
of a setoff or counterclaim to which this Section 2.14(c) applies, such Secured
Party shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights to which the Secured Party
is entitled under this Section 2.14(c) to share in the benefits of the recovery
of such secured claim.
(d) Unless the Administrative Agent shall have received
notice from Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that Borrower will
not make such payment, the Administrative Agent may assume that Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the Lenders the amount due. In such event, if
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith
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on demand the amount so distributed to such Lender with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required
to be made by it pursuant to Section 2.02(c), 2.14(d), 2.17(d), 2.18(d), 2.18(e)
or 11.03(d), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.15 TAXES. (a) Any and all payments by or
on account of any obligation of Borrower hereunder or under any other Loan
Document shall be made without setoff, counterclaim or other defense and free
and clear of and without deduction or withholding for any and all Indemnified
Taxes; provided that if any Indemnified Taxes are required to be deducted or
withheld from such payments, then (i) the sum payable by Borrower shall be
increased as necessary so that after all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 2.15) the Administrative Agent, any Lender or the Issuing
Bank, as the case may be, receives an amount equal to the sum it would have
received had no such deductions or withholdings been made, (ii) Borrower shall
make, or cause to be made, such deductions or withholdings and (iii) Borrower
shall pay, or cause to be paid, the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Borrower shall indemnify the Administrative Agent,
each Lender and the Issuing Bank, within 10 Business Days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or Other
Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.15) and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to Borrower
by a Lender or the Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent
manifest error.
(d) As soon as practicable after any payment of
Indemnified Taxes or Other Taxes pursuant to Section 2.15(a) or (b) above, and
in any event within 30 days of any such payment being due, Borrower shall
deliver, or cause to be delivered, to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to Borrower (with a copy
to the Administrative Agent), at the time or times prescribed by applicable law,
such
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properly completed and executed documentation prescribed by applicable law and
reasonably requested (in writing) by Borrower or the Administrative Agent as
will permit such payments to be made without withholding or at a reduced rate.
In addition, each Foreign Lender shall (i) furnish on or before it becomes a
party to this Agreement either (a) two accurate and complete originally executed
U.S. Internal Revenue Service Form W-8BEN (or successor form) or (b) an accurate
and complete U.S. Internal Revenue Service Form W-8ECI (or successor form),
certifying, in either case, to such Foreign Lender's legal entitlement to an
exemption or reduction from U.S. federal withholding tax with respect to all
interest payments hereunder, and (ii) provide a new Form W-8BEN (or successor
form) or Form W-8ECI (or successor form) upon the expiration or obsolescence of
any previously delivered form to reconfirm any complete exemption from, or any
entitlement to a reduction in, U.S. federal withholding tax with respect to any
interest payment hereunder; provided that any Foreign Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and is relying on
the so-called "portfolio interest exemption" shall also furnish a "Non-Bank
Certificate" in the form of Exhibit Q together with a Form W-8BEN.
Notwithstanding any other provision of this paragraph, a Foreign Lender shall
not be required to deliver any form pursuant to this paragraph that such Foreign
Lender is not legally able to deliver.
(f) If the Administrative Agent or a Lender (or an
assignee) determines in its reasonable discretion that it has received a refund
of any Indemnified Taxes or Other Taxes as to which it has been indemnified by
Borrower or with respect to which Borrower has paid additional amounts pursuant
to this Section 2.15, so long as there is no Default, it shall pay over such
refund to Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by Borrower under this Section 2.15 with respect to the
Indemnified Taxes or the Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender (or assignee)
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, however, that Borrower, upon
the request of the Administrative Agent or such Lender (or assignee), agrees to
repay the amount paid over to Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative
Agent or such Lender (or assignee) within a reasonable time (not to exceed 20
days) after receipt of written notice that the Administrative Agent or such
Lender (or assignee) is required to repay such refund to such Governmental
Authority. Nothing contained in this Section 2.15(f) shall require the
Administrative Agent or any Lender (or assignee) to make available its tax
returns or any other information which it deems confidential to Borrower or any
other person. Notwithstanding anything to the contrary, in no event will any
Lender be required to pay any amount to Borrower the payment of which would
place such Lender in a less favorable net after-tax position than such Lender
would have been in if Indemnified Taxes or Other Taxes had never been imposed.
SECTION 2.16 MITIGATION OBLIGATIONS; REPLACEMENT OF
LENDERS.
(a) Mitigation of Obligations. If any Lender requests
compensation under Section 2.12, or if Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the reasonable judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.12 or 2.15, as the case may be, in the future and (ii)
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection
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with any such designation or assignment. A certificate setting forth such costs
and expenses in reasonable detail submitted by such Lender to the Administrative
Agent shall be conclusive absent manifest error.
(b) Replacement of Lenders. If any Lender requests
compensation under Section 2.12, or if Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account of
any Lender pursuant to Section 2.15, or if any Lender defaults in its obligation
to fund Loans hereunder, then Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 11.04), all of its interests, rights and
obligations under this Agreement to an assignee selected by Borrower that shall
assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) Borrower shall have received the
prior written consent of the Administrative Agent (and, if a Revolving
Commitment is being assigned, the Issuing Bank and Swingline Lender), which
consents shall not unreasonably be withheld, (ii) such Lender shall have
received payment of an amount equal to the outstanding principal of its Loans
and participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder (assuming
for this purpose that the Loans of such Lender were being prepaid) from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or Borrower (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.12
or payments required to be made pursuant to Section 2.15, such assignment will
result in a material reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
Borrower to require such assignment and delegation cease to apply.
SECTION 2.17 SWINGLINE LOANS.
(a) Swingline Commitment. Subject to the terms and
conditions set forth herein, the Swingline Lender agrees to make Swingline Loans
to Borrower from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (i)
the aggregate principal amount of outstanding Swingline Loans exceeding $7.5
million or (ii) the sum of the total Revolving Exposures exceeding the total
outstanding Revolving Commitments; provided that the Swingline Lender shall not
be required to make a Swingline Loan to refinance an outstanding Swingline Loan.
Within the foregoing limits and subject to the terms and conditions set forth
herein, Borrower may borrow, repay and reborrow Swingline Loans.
(b) Swingline Loans. To request a Swingline Loan,
Borrower shall deliver, by hand delivery or telecopy, a duly completed and
executed Borrowing Request to the Administrative Agent and the Swingline Lender,
not later than 2:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and the amount of the requested Swingline Loan.
Each Swingline Loan shall be an ABR Loan. The Swingline Lender shall make each
Swingline Loan available to Borrower by means of a credit to an account
maintained by the Administrative Agent for Borrower and then distributed as
directed by Borrower in the applicable Borrowing Request (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.18(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan. Borrower shall
not request a Swingline Loan if at the time of or immediately after giving
effect to the Extension of Credit contemplated by such request a Default has
occurred and is continuing or would result therefrom. Swingline Loans shall be
made in minimum amounts of $1 million and integral multiples of $500,000 above
such amount.
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(c) Prepayment. Borrower shall have the right at any time
and from time to time to repay any Swingline Loan, in whole or in part, upon
giving written notice to the Swingline Lender and the Administrative Agent
before 12:00 (noon), New York City time, on the proposed date of repayment.
(d) Participations. The Swingline Lender may at any time
in its discretion by written notice given to the Administrative Agent (provided
such notice requirement shall not apply if the Swingline Lender and the
Administrative Agent are the same entity) not later than 11:00 A.M., New York
City time, on the next succeeding Business Day following such notice require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans then outstanding. Such notice shall specify the
aggregate amount of Swingline Loans in which Revolving Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Revolving Lender, specifying in such notice such Lender's Pro
Rata Percentage of such Swingline Loan or Loans. Each Revolving Lender hereby
absolutely and unconditionally agrees, upon receipt of notice as provided above,
to pay to the Administrative Agent, for the account of the Swingline Lender,
such Lender's Pro Rata Percentage of such Swingline Loan or Loans. Each
Revolving Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever (so long as such
payment shall not cause such Lender's Revolving Exposure to exceed such Lender's
Revolving Commitment). Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in Section 2.02(c) with respect to Loans made by such
Lender (and Section 2.02 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify Borrower of any
participations in any Swingline Loan acquired by the Revolving Lenders pursuant
to this paragraph, and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from Borrower (or another party on
behalf of Borrower) in respect of a Swingline Loan after receipt by the
Swingline Lender of the proceeds of a sale of participations therein shall be
promptly remitted to the Administrative Agent. Any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Revolving Lenders that shall have made their payments pursuant to this
paragraph, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve Borrower of any
default in the payment thereof.
SECTION 2.18 LETTERS OF CREDIT
(a) General. Subject to the terms and conditions set
forth herein, Borrower may request the Issuing Bank, and the Issuing Bank
agrees, to issue Letters of Credit for Borrower's own account or the account of
a Subsidiary in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Revolving
Availability Period (provided that Borrower shall be a co-applicant, and be
jointly and severally liable, with respect to each Letter of Credit issued for
the account of a Subsidiary). The Issuing Bank shall have no obligation to
issue, and Borrower shall not request the issuance of, any Letter of Credit at
any time if after giving effect to such issuance, the LC Exposure would exceed
the LC Commitment or the total Revolving Exposure would exceed the total
Revolving Commitments. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or
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other agreement submitted by Borrower to, or entered into by Borrower with, the
Issuing Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.
(b) Request for Issuance, Amendment, Renewal, Extension;
Certain Conditions. To request the issuance of a Letter of Credit or the
amendment, renewal or extension of an outstanding Letter of Credit, Borrower
shall hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) an LC Request
to the Issuing Bank and the Administrative Agent not later than 11:00 a.m. on
the third Business Day preceding the requested date of issuance, amendment,
renewal or extension (or such later date and time as is acceptable to the
Issuing Bank).
A request for an initial issuance of a Letter of Credit shall
specify in form and detail reasonably satisfactory to the Issuing Bank:
(i) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day);
(ii) the amount thereof;
(iii) the expiry date thereof (which shall not be later
than the close of business on the Letter of Credit Expiration Date);
(iv) the name and address of the beneficiary thereof;
(v) whether the Letter of Credit is to be issued for its
own account or for the account of one of its Subsidiaries (provided
that Borrower shall be a co-applicant, and therefore jointly and
severally liable, with respect to each Letter of Credit issued for the
account of a Subsidiary);
(vi) the documents to be presented by such beneficiary in
connection with any drawing thereunder;
(vii) the full text of any certificate to be presented by
such beneficiary in connection with any drawing thereunder; and
(viii) such other matters as the Issuing Bank may require.
A request for an amendment, renewal or extension of any
outstanding Letter of Credit shall specify in form and detail reasonably
satisfactory to the Issuing Bank:
(i) the Letter of Credit to be amended, renewed or
extended;
(ii) the proposed date of amendment, renewal or extension
thereof (which shall be a Business Day);
(iii) the proposed expiry date thereof (which shall not be
later than the close of business on the Letter of Credit Expiration
Date);
(iv) the nature of the proposed amendment, renewal or
extension; and
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(v) such other matters as the Issuing Bank may require.
If requested by the Issuing Bank, Borrower also shall submit a
letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued,
amended, renewed or extended only if (and, upon issuance, amendment, renewal or
extension of each Letter of Credit, Borrower shall be deemed to represent and
warrant that), after giving effect to such issuance, amendment, renewal or
extension, (i) the LC Exposure shall not exceed the LC Commitment, (ii) the
total Revolving Exposures shall not exceed the total Revolving Commitments and
(iii) the conditions set forth in Article IV in respect of such issuance,
amendment, renewal or extension shall have been satisfied. Unless the Issuing
Bank shall agree otherwise, no Letter of Credit shall be in an initial amount
less than $100,000, in the case of a Commercial Letter of Credit, or $500,000,
in the case of a Standby Letter of Credit.
(c) Expiration Date. Each Letter of Credit shall expire
at or prior to the close of business on the earlier of (i) in the case of a
Standby Letter of Credit, (x) the date which is one year after the date of the
issuance of such Standby Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) or such later date
as may be agreed by the Issuing Bank and (y) the Letter of Credit Expiration
Date and (ii) in the case of a Commercial Letter of Credit, (x) the date that is
180 days after the date of issuance of such Commercial Letter of Credit (or, in
the case of any renewal or extension thereof, 180 days after such renewal or
extension) and (y) the Letter of Credit Expiration Date. If Borrower so
requests, the Issuing Bank may, in its reasonable discretion, agree to issue a
Letter of Credit that has automatic renewal provisions (each, an "AUTO-RENEWAL
LETTER OF CREDIT"); provided that any such Auto-Renewal Letter of Credit must
permit the Issuing Bank to prevent any such renewal at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by the Issuing Bank, Borrower shall
not be required to make a specific request to the Issuing Bank for any such
renewal. Once an Auto-Renewal Letter of Credit has been issued, the Revolving
Lenders shall be deemed to have authorized (but may not require) the Issuing
Bank to permit the renewal of such Letter of Credit at any time to an expiry
date not later than the earlier of (i) one year from the date of such renewal
and (ii) the Letter of Credit Expiration Date; provided that the Issuing Bank
shall not permit any such renewal if (x) the Issuing Bank has determined that it
would have no obligation at such time to issue such Letter of Credit in its
renewed form under the terms hereof (by reason of the provisions of Section
2.18(l) or otherwise), or (y) it has received notice on or before the day that
is two Business Days before the date which has been agreed upon pursuant to the
proviso of the first sentence of this paragraph, (1) from the Administrative
Agent that any Revolving Lender directly affected thereby has elected not to
permit such renewal or (2) from the Administrative Agent, any Lender or Borrower
that one or more of the applicable conditions specified in Section 4.02 are not
then satisfied.
(d) Participations. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby irrevocably grants to each Revolving Lender, and each
Revolving Lender hereby acquires from the Issuing Bank, a participation in such
Letter of Credit equal to such Revolving Lender's Pro Rata Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Revolving Lender's Pro Rata Percentage of
each LC Disbursement made by the Issuing Bank and not reimbursed by Borrower on
the date due as provided in Section 2.18(e), or of any reimbursement payment
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required to be refunded to Borrower for any reason. Each Revolving Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Reimbursement. (i) If the Issuing Bank shall make any
LC Disbursement in respect of a Letter of Credit, Borrower shall reimburse such
LC Disbursement by paying to the Issuing Bank an amount equal to such LC
Disbursement not later than 2:00 p.m., New York City time, on the date that such
LC Disbursement is made if Borrower shall have received notice of such LC
Disbursement prior to 11:00 a.m., New York City time, on such date, or, if such
notice has not been received by Borrower prior to such time on such date, then
not later than 2:00 p.m., New York City time, on the Business Day immediately
following the day that Borrower receives such notice; provided that Borrower
may, subject to the conditions to borrowing set forth herein, request in
accordance with Section 2.03 that such payment be financed with ABR Revolving
Loans in an equivalent amount and, to the extent so financed, Borrower's
obligation to make such payment shall be discharged and replaced by the
resulting ABR Revolving Loans.
(ii) If Borrower fails to make such payment when due, the
Issuing Bank shall notify the Administrative Agent and the Administrative Agent
shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from Borrower in respect thereof and such Revolving Lender's
Pro Rata Percentage thereof. Each Revolving Lender shall pay by wire transfer of
immediately available funds to the Administrative Agent not later than 2:00
p.m., New York City time, on such date (or, if such Revolving Lender shall have
received such notice later than 12:00 noon, New York City time, on any day, not
later than 11:00 a.m., New York City time, on the immediately following Business
Day), an amount equal to such Revolving Lender's Pro Rata Percentage of the
unreimbursed LC Disbursement in the same manner as provided in Section 2.02(c)
with respect to Revolving Loans made by such Revolving Lender, and the
Administrative Agent will promptly pay to the Issuing Bank the amounts so
received by it from the Revolving Lenders. The Administrative Agent will
promptly pay to the Issuing Bank any amounts received by it from Borrower
pursuant to the above paragraph prior to the time that any Revolving Lender
makes any payment pursuant to the preceding sentence and any such amounts
received by the Administrative Agent from Borrower thereafter will be promptly
remitted by the Administrative Agent to the Revolving Lenders that shall have
made such payments and to the Issuing Bank, as appropriate.
(iii) If any Revolving Lender shall not have made its Pro
Rata Percentage of such LC Disbursement available to the Administrative Agent as
provided above, each of such Revolving Lender and Borrower severally agrees to
pay interest on such amount, for each day from and including the date such
amount is required to be paid in accordance with the foregoing to but excluding
the date such amount is paid, to the Administrative Agent for the account of the
Issuing Bank at (i) in the case of Borrower, the rate per annum set forth in
Section 2.18(h) and (ii) in the case of such Lender, at a rate determined by the
Administrative Agent in accordance with banking industry rules or practices on
interbank compensation.
(f) Obligations Absolute. The Reimbursement Obligation of
Borrower as provided in Section 2.18(e) shall be absolute, unconditional and
irrevocable, and shall be paid and performed strictly in accordance with the
terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any
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term or provision therein; (ii) any draft or other document presented under a
Letter of Credit being proved to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; (iii) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that fails to comply with the terms of
such Letter of Credit; (iv) any other event or circumstance whatsoever, whether
or not similar to any of the foregoing, that might, but for the provisions of
this Section 2.18, constitute a legal or equitable discharge of, or provide a
right of setoff against, the obligations of Borrower hereunder; (v) the fact
that a Default shall have occurred and be continuing; or (vi) any material
adverse change in the business, property, results of operations, prospects or
condition, financial or otherwise, of Borrower and its Subsidiaries. None of the
Agents, the Lenders, the Issuing Bank or any of their Affiliates shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by Borrower
to the extent permitted by applicable law) suffered by Borrower that are caused
by the Issuing Bank's failure to exercise care when determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Bank shall
promptly give written notice to the Administrative Agent and Borrower of such
demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder; provided that any failure to give or delay in giving
such notice shall not relieve Borrower of its Reimbursement Obligation to the
Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement
(other than with respect to the timing of such Reimbursement Obligation set
forth in Section 2.18(e)).
(h) Interim Interest. If the Issuing Bank shall make any
LC Disbursement, then, unless Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest payable on demand, for each day from and including the date such
LC Disbursement is made to but excluding the date that Borrower reimburses such
LC Disbursement, at the rate per annum determined pursuant to Section 2.06(c).
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to Section 2.18(e) to reimburse the Issuing Bank
shall be for the account of such Lender to the extent of such payment.
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(i) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that Borrower receives notice from
the Administrative Agent or the Required Lenders (or, if the maturity of the
Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, Borrower shall deposit in the LC
Sub-Account, in the name of the Collateral Agent and for the benefit of the
Revolving Lenders, an amount in cash equal to the LC Exposure as of such date
plus any accrued and unpaid interest thereon; provided that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to
Borrower described in paragraph (g) or (h) of Article VIII. Funds in the LC
Sub-Account shall be applied by the Collateral Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of outstanding
Reimbursement Obligations or, if the maturity of the Loans has been accelerated
(but subject to the consent of Revolving Lenders with LC Exposure representing
greater than 50% of the total LC Exposure), be applied to satisfy other
Obligations of Borrower under this Agreement. If Borrower is required to provide
an amount of cash collateral hereunder as a result of the occurrence of an Event
of Default, such amount plus any accrued interest or realized profits with
respect to such amounts (to the extent not applied as aforesaid) shall be
returned to Borrower within three Business Days after all Events of Default have
been cured or waived.
(j) Additional Issuing Banks. Borrower may, at any time
and from time to time, designate one or more additional Revolving Lenders to act
as an issuing bank under the terms of this Agreement, with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld), the
Issuing Bank and such Revolving Lender(s). Any Lender designated as an issuing
bank pursuant to this paragraph (j) shall be deemed (in addition to being a
Revolving Lender) to be the Issuing Bank with respect to Letters of Credit
issued or to be issued by such Revolving Lender, and all references herein and
in the other Loan Documents to the term "Issuing Bank" shall, with respect to
such Letters of Credit, be deemed to refer to such Revolving Lender in its
capacity as Issuing Bank, as the context shall require.
(k) Resignation or Removal of the Issuing Bank. The
Issuing Bank may resign as Issuing Bank hereunder at any time upon at least 30
days' prior notice to the Lenders, the Administrative Agent and Borrower. The
Issuing Bank may be replaced at any time by written agreement among Borrower,
each Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank or any such additional Issuing Bank. At the time any such
resignation or replacement shall become effective, Borrower shall pay all unpaid
fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.05(c). From and after the effective date of any such resignation or
replacement or addition, as applicable, (i) the successor or additional Issuing
Bank shall have all the rights and obligations of the Issuing Bank under this
Agreement with respect to Letters of Credit to be issued by it thereafter and
(ii) references herein to the term "Issuing Bank" shall be deemed to refer to
such successor or such addition or to any previous Issuing Bank, or to such
successor or such addition and all previous Issuing Banks, as the context shall
require. After the resignation or replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such resignation or replacement, but
shall not be required to issue additional Letters of Credit. If at any time
there is more than one Issuing Bank hereunder, Borrower may, in its discretion,
select which Issuing Bank is to issue any particular Letter of Credit.
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(l) Other. The Issuing Bank shall be under no obligation
to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit, or any
law applicable to the Issuing Bank or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Bank shall prohibit, or request that the
Issuing Bank refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the Issuing
Bank with respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the Issuing Bank is not otherwise
compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing Bank
in good ▇▇▇▇▇ ▇▇▇▇▇ material to it; or
(ii) the issuance of such Letter of Credit would violate
one or more policies of the Issuing Bank.
The Issuing Bank shall be under no obligation to amend any
Letter of Credit if (A) the Issuing Bank would have no obligation at such time
to issue such Letter of Credit in its amended form under the terms hereof, or
(B) the beneficiary of such Letter of Credit does not accept the proposed
amendment to such Letter of Credit.
(m) Existing Issuing Bank Letters of Credit. Set forth on
Schedule 2.18(m) is a description of certain letters of credit (together with
the outstanding balances thereof as of the Closing Date) that were previously
issued by the Issuing Bank for Borrower's account or for the account of a
Subsidiary (collectively, the "EXISTING ISSUING BANK LETTERS OF CREDIT"). On and
after the Closing Date and upon the fulfillment of each of the conditions set
forth in Section 4.01, each such Existing Issuing Bank Letter of Credit shall be
deemed and treated for all purposes hereof (including, without limitation, the
calculation of applicable fees under Section 2.05(c) and the calculation of LC
Exposure) as a "Letter of Credit" hereunder, any participation interest of any
Lender existing on or prior to the Closing Date in each such Existing Issuing
Bank Letter of Credit shall, without further action, be deemed to have been
extinguished in full and the Issuing Bank, without further action, shall be
deemed to have issued each such Existing Issuing Bank Letter of Credit as
provided in this Section 2.18.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Administrative
Agent, the Collateral Agent, the Issuing Bank and each of the Lenders (with
references to the Companies being references thereto after giving effect to the
Transactions unless otherwise expressly stated) that:
SECTION 3.01 ORGANIZATION; POWERS. Each Company (a)
is duly organized and validly existing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to carry on its business
as now conducted and to own and lease its property and (c) is qualified and in
good standing (to the extent such concept is applicable in the applicable
jurisdiction) to do business in every jurisdiction where such qualification is
required, except in such jurisdictions where the failure to so qualify or be in
good standing, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. There is no existing default
under any Organizational Document of
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each Company or any event which, with the giving of notice or passage of time or
both, would constitute a default by any party thereunder. Copies of the
Organizational Documents of each Company previously delivered to the
Administrative Agent are true and complete and have not been amended or modified
since the date of such delivery.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The
Transactions to be entered into by each Loan Party are within such Loan Party's
powers and have been duly authorized by all necessary action on the part of such
Loan Party. This Agreement has been duly executed and delivered by each Loan
Party and constitutes, and each other Loan Document to which any Loan Party is
to be a party, when executed and delivered by such Loan Party, will constitute,
a legal, valid and binding obligation of such Loan Party, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3.03 NO CONFLICTS. Except as set forth on
Schedule 3.03, the Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except (i) such as have been obtained or made and are in full force and effect,
(ii) filings necessary to perfect Liens created by the Loan Documents and (iii)
consents, approvals, registrations, filings, permits or actions the failure of
which to obtain or perform could not reasonably be expected to result in a
Material Adverse Effect, (b) will not violate the Organizational Documents of
any Company or any judgment, decree or order of any Governmental Authority, (c)
will not violate or result in a default or require any consent or approval under
any indenture, agreement, Organizational Document or other instrument binding
upon any Company or its property, or give rise to a right thereunder to require
any payment to be made by any Company, except for violations, defaults or the
creation of such rights that could not reasonably be expected to result in a
Material Adverse Effect, and (d) will not result in the creation or imposition
of any Lien on any property of any Company, except Liens created by the Loan
Documents and Permitted Liens.
SECTION 3.04 FINANCIAL STATEMENTS. (a) Borrower has
heretofore furnished to the Lenders the consolidated balance sheets and related
statements of income, stockholders' equity and cash flows of Borrower and the
Acquired Business (i) as of and for the fiscal years ended December 31 in each
of 2000, 2001 and 2002 in respect of Borrower, audited by and accompanied by the
unqualified opinion of PricewaterhouseCoopers LLP, independent public
accountants, and for the fiscal years ended September 30 in each of 2001, 2002
and 2003 in respect of the Acquired Business, audited by and accompanied by the
unqualified opinion of KPMG, LLP, independent public accountants, and (y) as of
and for the nine-month period ended September 30, 2003 in respect of Borrower
and for the three-month period ended December 31, 2003 in respect of the
Acquired Business and for the comparable period of the preceding fiscal year, in
each case in respect of Borrower's financial statements, certified by the chief
financial officer of Borrower. Such financial statements and all financial
statements delivered pursuant to Sections 5.01(a), (b) and (c) have been
prepared in accordance with GAAP consistently applied and present fairly and
accurately in all material respects the financial condition and results of
operations and cash flows of Borrower and the Acquired Business as of the dates
and for the periods to which they relate. Except as set forth in such financial
statements, there are no liabilities of any Company of any kind, whether
accrued, contingent, absolute, determined, determinable or otherwise, which
could reasonably be expected to result in a Material Adverse Effect, and there
is no existing condition, situation or set of circumstances which could
reasonably be expected to result in such a liability, other than liabilities
under the Loan Documents.
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(b) Borrower has heretofore delivered to the Lenders
Borrower's unaudited pro forma consolidated balance sheet and statements of
income and cash flows, pro forma EBITDA, for the four-quarter period ending
September 30, 2003, in each case after giving effect to the Transactions as if
they had occurred on such date in the case of the balance sheet and as of the
beginning of all periods presented in the case of the statements of income and
cash flows. Such pro forma financial statements have been prepared in good faith
by the Loan Parties, based on the assumptions stated therein (which assumptions
are believed by the Loan Parties on the date hereof to be reasonable), are based
on the best information available to the Loan Parties as of the date of delivery
thereof, accurately reflect all adjustments required to be made to give effect
to the Transactions, in accordance with Regulation S-X, and present fairly in
all material respects the pro forma consolidated financial position and results
of operations of Borrower and the Acquired Business as of such date and for such
periods, assuming that the Transactions had occurred at such dates.
Since September 30, 2003, there has been no event, change,
circumstance or occurrence that, individually or in the aggregate, has had or
could reasonably be expected to result in a Material Adverse Effect or indicates
a material worsening in respect of the business, property, results of
operations, prospects or condition (financial or otherwise) of Borrower and its
Subsidiaries, taken as a whole, or the Acquired Business and its Subsidiaries,
taken as a whole.
SECTION 3.05 PROPERTIES. (a) Each Company has good
and marketable title to, or valid leasehold interests in, all its property
material to its business, free and clear of all Liens except for Permitted
Collateral Liens. The property of the Companies, taken as a whole, (i) is in
good operating order, condition and repair (ordinary wear and tear excepted),
except to the extent that the failure to be in such condition could not
reasonably be expected to result in a Material Adverse Effect, and (ii)
constitutes all the property which is required for the business and operations
of the Companies as presently conducted.
(b) Schedule 3.05(b) contains a true and complete list of
each interest in Real Property owned, leased or subleased by any Company as of
the date hereof and (i) if owned by any Company as of the date hereof, describes
the type of interest therein held by such Company and (ii) if leased, subleased
or otherwise occupied or utilized by any Company, as lessee, sublessee,
franchisee or licensee, as of the date hereof, describes the type of interest
therein held by such Company and whether such lease, sublease or other
instrument requires the consent of the landlord thereunder or other parties
thereto to the Transactions.
(c) No Company has received any notice of, nor has any
knowledge of, the occurrence or pendency or contemplation of any Casualty Event
affecting all or any portion of its Real Property that has or could reasonably
be expected to have a Material Adverse Effect.
(d) Each Company owns or has rights to use all of the
Collateral and all rights with respect to any of the foregoing used in,
necessary for or material to each Company's business as currently conducted. The
use by each Company of such Collateral and all such rights with respect to the
foregoing do not infringe on, misappropriate or violate the rights of any person
other than such infringement, misappropriation or violation which could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect. No claim has been made and remains outstanding that any
Company's use of any Collateral does or may violate the rights of any third
party that could, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
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(e) The Equipment of each Company is in good repair,
working order and condition, reasonable wear and tear excepted. Each Company
shall cause the Equipment to be maintained and preserved in good repair, working
order and condition, reasonable wear and tear excepted, and shall as quickly as
commercially practicable make or cause to be made all repairs, replacements and
other improvements which are necessary or appropriate in the conduct of each
Company's business.
SECTION 3.06 INTELLECTUAL PROPERTY.
(a) Ownership/No Claims. Each Loan Party owns, or is
licensed to use, all Intellectual Property necessary for or useful in the
conduct of its business as currently conducted, except for those the failure of
which to own or license, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect. Except as set forth on
Schedule 3.06(a), no material claim has been asserted and is pending by any
person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does any
Loan Party know of any valid basis for any such claim. The use of such
Intellectual Property by each Loan Party does not infringe the rights of any
person, except for such claims and infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) Registrations. Except pursuant to licenses and other
user agreements entered into by each Loan Party in the ordinary course of
business that are listed in Schedules 13(a) and 13(b) to the Perfection
Certificate, on and as of the date hereof (i) each Loan Party owns and possesses
the right to use, and has done nothing to authorize or enable any other person
to use, any Copyright, Patent or Trademark (as such terms are defined in the
Security Agreement) listed in Schedules 13(a) and 13(b) to the Perfection
Certificate or any other Intellectual Property used or useful in the conduct of
its business as presently conducted and (ii) all registrations listed in
Schedules 13(a) and 13(b) to the Perfection Certificate are valid and in full
force and effect.
(c) No Violations or Proceedings. To each Loan Party's
knowledge, on and as of the date hereof, except as set forth on Schedule
3.06(c), (i) there is no material violation by others of any right of such Loan
Party with respect to any Copyright, Patent or Trademark listed in Schedules
13(a) and 13(b) to the Perfection Certificate or any other Intellectual Property
pledged by it under the name of such Loan Party, (ii) such Loan Party is not
infringing upon, misappropriating or violating any Copyright, Patent, Trademark
or other Intellectual Property of any person other than such infringement,
misappropriation or violation that, individually or in the aggregate, could not
reasonably be expected to materially adversely affect the value or utility of
the Intellectual Property or any portion thereof material to the use and
operation of the Collateral, and (iii) no proceedings have been instituted or
are pending against such Loan Party or threatened, and no claim against such
Loan Party has been received by such Loan Party, alleging any such violation,
except as may be set forth in Schedule 3.06(c).
SECTION 3.07 EQUITY INTERESTS AND SUBSIDIARIES. (a)
Schedule 3.07(a) sets forth a list of (i) all the Subsidiaries of Borrower
(other than immaterial or inactive Subsidiaries designated in paragraph (d)
below) and their jurisdiction of organization as of the Closing Date and (ii)
the number of each class of its Equity Interests authorized, and the number
outstanding, on the Closing Date and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the Closing Date. All Equity Interests of each Company are duly and
validly issued and are fully paid and non-assessable, and, other than the Equity
Interests of Borrower or as set forth on Schedule 3.07(a), are owned by
Borrower, directly or indirectly through Wholly Owned Subsidiaries. Each Loan
Party is the record and beneficial owner of, and has good and marketable title
to, the Equity Interests pledged by it under the Security Agreement, free of any
and all Liens, rights or claims of other
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persons, except the security interest created by the Security Agreement, and
there are no outstanding warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale of, any
such Equity Interests.
(b) No consent of any person including any other general
or limited partner, any other member of a limited liability company, any other
shareholder or any other trust beneficiary is necessary or reasonably desirable
(from the perspective of a secured party) in connection with the creation,
perfection or first priority status of the security interest of the Collateral
Agent in any Equity Interests pledged to the Collateral Agent for the benefit of
the Secured Parties under the Security Agreement or other Security Documents or
the exercise by the Collateral Agent of the voting or other rights provided for
in the Security Agreement or other Security Documents or the exercise of
remedies in respect thereof.
(c) An accurate organization chart, showing the ownership
structure of Borrower and each Subsidiary on the Closing Date, and after giving
effect to the Transactions, is set forth on Schedule 3.07(c).
(d) Schedule 3.07(d) sets forth a list of (i) all
immaterial or inactive Subsidiaries of Borrower (collectively, the "IMMATERIAL
SUBSIDIARIES") and their jurisdiction of organization as of the Closing Date and
(ii) the number of each class of its Equity Interests authorized, and the number
outstanding, on the Closing Date and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights at the Closing Date. None of the Immaterial Subsidiaries has any assets
with a fair market value exceeding $100,000 in the aggregate or any ongoing
business operations or other activities and each will be dissolved by Borrower
or an applicable Subsidiary Guarantor as provided in Section 5.14.
SECTION 3.08 LITIGATION; COMPLIANCE WITH LAWS. (a)
Except as set forth in Schedule 3.08(a), there are no actions, suits or
proceedings at law or in equity by or before any Governmental Authority or in
any arbitration or other alternative dispute resolution proceeding now pending
or, to the knowledge of any Company, threatened against or affecting any Company
or any business, property or rights of any Company (i) that involve any Loan
Document or any of the Transactions or (ii) as to which there is a reasonable
likelihood of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
(b) Except for matters covered by Section 3.18, no
Company or any of its property is in violation of, nor will the continued
operation of its property as currently conducted violate, any Requirements of
Law (including any zoning or building ordinance, code or approval or any
building permits) or any restrictions of record or agreements affecting any
Company's Real Property or is in default with respect to any judgment, writ,
injunction, decree, rule or order of any Governmental Authority, where such
violation or default, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.09 AGREEMENTS. (a) No Company is a party
to (and there are no assets of any Company that are subject to) any agreement or
instrument or subject to any corporate or other constitutional restriction that
has resulted or could reasonably be expected to result in a Material Adverse
Effect.
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(b) No Company is in default in any manner under any
provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other agreement or instrument to which it is a party or by
which it or any of its property is or may be bound, where such default could
reasonably be expected to result in a Material Adverse Effect, and no condition
exists which, with the giving of notice or the lapse of time or both, would
constitute such a default.
(c) Schedule 3.09(c) accurately and completely lists all
material agreements (other than leases of Real Property set forth on Schedule
3.05(b)) to which any Company is a party which are in effect on the date hereof
in connection with the operation of the business conducted thereby and Borrower
has delivered to the Administrative Agent complete and correct copies of all
such material agreements, including any amendments, supplements or modifications
with respect thereto, and all such agreements are in full force and effect.
SECTION 3.10 FEDERAL RESERVE REGULATIONS. (a) No
Company is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of
Credit will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose that entails a violation of, or that
is inconsistent with, the provisions of the regulations of the Board, including
Regulation T, U or X. The pledge of the Securities Collateral pursuant to the
Security Agreement does not violate such regulations.
SECTION 3.11 INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT. No Company is (a) an "investment company" or a company
"controlled" by an "investment company," as defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, or (b) a "holding
company," an "affiliate" of a "holding company" or a "subsidiary company" of a
"holding company," as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935, as amended.
SECTION 3.12 USE OF PROCEEDS. Borrower will use the
proceeds of (a) the Term Loans to effect the Acquisition and the Refinancing and
pay related fees and expenses and (b) the revolving extensions of credit after
the Closing Date for general corporate purposes (including to make payments with
respect to the Acquisition and to effect Permitted Acquisitions), it being
understood that no Revolving Loans shall be made on the Closing Date (except to
the extent of replacement letters of credit in an amount not to exceed $60
million and otherwise on terms reasonably satisfactory to the Administrative
Agent).
SECTION 3.13 TAXES. Each Company has (a) timely
filed or caused to be timely filed all federal Tax Returns and all material
state, local and foreign Tax Returns or materials required to have been filed by
it and all such Tax Returns are true and correct in all material respects except
where the failure to so file or cause to be so filed, or the failure of such Tax
Returns to be true and correct, would not result in a Material Adverse Effect
and (b) duly and timely paid or caused to be duly and timely paid all Taxes
(whether or not shown on any Tax Return) due and payable by it and all
assessments received by it, except (i) Taxes that are being contested in good
faith by appropriate proceedings and for which such Company has set aside on its
books adequate reserves in accordance with GAAP or (ii) where the failure to so
pay or cause to be so paid would not result in a Material Adverse Effect. Each
Company has made adequate provision in accordance with GAAP for all Taxes not
yet due and payable. Each Company is unaware of any proposed or pending tax
assessments, deficiencies or audits that could be
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reasonably expected to, individually or in the aggregate, result in a Material
Adverse Effect. To the knowledge of Borrower, except for the Transactions, no
Company has ever been a party to any understanding or arrangement constituting a
"tax shelter" within the meaning of Section 6111(c), Section 6111(d) or Section
6662(d)(2)(C)(iii) of the Code, or has ever "participated" in a "reportable
transaction" within the meaning of Treasury Regulation Section 1.6011-4, except
as could not be reasonably expected to, individually or in the aggregate, result
in a Material Adverse Effect.
SECTION 3.14 NO MATERIAL MISSTATEMENTS. No information,
report, financial statement, certificate, Borrowing Request, LC Request, exhibit
or schedule furnished by or on behalf of any Company to the Administrative Agent
or any Lender in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto (including the Confidential
Information Memorandum), taken as a whole, contained or contains any material
misstatement of fact or omitted or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were or are made, not misleading as of the date such information is dated or
certified; provided that to the extent any such information, report, financial
statement, exhibit or schedule was based upon or constitutes a forecast or
projection, each Company represents only that it acted in good faith and
utilized reasonable assumptions and due care in the preparation of such
information, report, financial statement, exhibit or schedule.
SECTION 3.15 LABOR MATTERS. As of the Closing Date,
there are no strikes, lockouts or slowdowns against any Company pending or, to
the knowledge of any Company, threatened and after the Closing Date, there are
no strikes, lockouts or slowdowns against any Company pending or, to the
knowledge of any Company, threatened which could reasonably be expected to
result in a Material Adverse Effect. The hours worked by and payments made to
employees of any Company have not been in violation of the Fair Labor Standards
Act or any other applicable federal, state, local or foreign law dealing with
such matters in any manner which could reasonably be expected to result in a
Material Adverse Effect. All payments due from any Company, or for which any
claim may be made against any Company, on account of wages and employee health
and welfare insurance and other benefits, have been paid or accrued as a
liability on the books of such Company except where the failure to do so could
not reasonably be expected to result in a Material Adverse Effect. The
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which any Company is bound.
SECTION 3.16 SOLVENCY. Immediately after the
consummation of the Transactions to occur on the Closing Date and immediately
following the making of each Loan and after giving effect to the application of
the proceeds of each Loan, (a) the fair value of the assets of each Loan Party
(individually and on a consolidated basis with its Subsidiaries) will exceed its
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the assets of each Loan Party (individually and on a
consolidated basis with its Subsidiaries) will be greater than the amount that
will be required to pay the probable liability of its liabilities as such
liabilities become due and payable; (c) each Loan Party (individually and on a
consolidated basis with its Subsidiaries) will be able to pay its debts and
liabilities as such debts and liabilities become due and payable; and (d) each
Loan Party (individually and on a consolidated basis with its Subsidiaries) will
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 3.17 EMPLOYEE BENEFIT PLANS. (a) Each Company and
its ERISA Affiliates is in compliance in all material respects with the
applicable provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is
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reasonably expected to occur that, when taken together with all other such ERISA
Events, could reasonably be expected to result in material liability of any
Company or any of its ERISA Affiliates or the imposition of a Lien on any of the
property of any Company. The present value of all accumulated benefit
obligations of all underfunded Plans (based on the actuarial assumptions and
methods utilized under Section 4001(A)(18) of ERISA) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more
than $6.5 million the fair market value of the property of all such underfunded
Plans. Using actuarial assumptions and computation methods consistent with
subpart I of subtitle E of Title IV of ERISA, the aggregate liabilities of each
Company or its ERISA Affiliates to all Multiemployer Plans in the event of a
complete withdrawal therefrom, as of the close of the most recent fiscal year of
each such Multiemployer Plan, could not reasonably be expected to result in a
Material Adverse Effect.
(b) To the extent applicable, each Foreign Plan has been
maintained in substantial compliance with its terms and with the requirements of
any and all applicable laws, statutes, rules, regulations and orders and has
been maintained, where required, in good standing with applicable regulatory
authorities. No Company has incurred any material obligation in connection with
the termination of or withdrawal from any Foreign Plan. The present value of the
accrued benefit liabilities (whether or not vested) under each Foreign Plan
which is funded, determined as of the end of the most recently ended fiscal year
of the respective Company on the basis of actuarial assumptions, each of which
is reasonable, did not exceed the current value of the property of such Foreign
Plan, and for each Foreign Plan which is not funded, the obligations of such
Foreign Plan are properly accrued.
SECTION 3.18 ENVIRONMENTAL MATTERS. (a) Except as
set forth in Schedule 3.18 and except as, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect:
(i) The Companies and their businesses, operations and
Real Property are and in the last six years have been in compliance
with, and the Companies have no liability under, Environmental Law;
(ii) The Companies have obtained all Environmental Permits
required for the conduct of their businesses and operations, and the
ownership, operation and use of their property, under Environmental
Law, and all such Environmental Permits are valid and in good standing
and are not subject to any appeal or other administrative or judicial
proceeding pursuant to which such Environmental Permits may be subject
to modification, termination or recission;
(iii) There has been no Release or threatened Release of
Hazardous Materials on, at, under or from any Real Property or facility
presently or formerly owned, leased, occupied or operated by the
Companies or their predecessors in interest that could result in
liability by the Companies under Environmental Law;
(iv) There is no Environmental Claim pending or, to the
knowledge of the Companies, threatened against the Companies, or
relating to the Real Property currently or formerly owned, leased,
occupied or operated by the Companies or relating to the operations of
the Companies, and, to the knowledge of the Companies, there are no
actions, activities, circumstances, conditions, events or incidents
that could form the basis of such an Environmental Claim;
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(v) No person with an indemnity or contribution
obligation to the Companies relating to compliance with or liability
under Environmental Law is in default with respect to such obligation;
(vi) None of the assets of the Company are required to be
upgraded or modified in order to remain in compliance with
Environmental Laws; and
(vii) No Company is obligated to perform any action or
otherwise incur any expense under Environmental Law pursuant to any
order, decree, judgment or agreement by which it is bound or has
assumed by contract or agreement, and no Company is conducting or
financing any Response pursuant to any Environmental Law with respect
to any Real Property or any other location.
(b) Except as set forth in Schedule 3.18:
(i) No Real Property or facility owned, operated,
occupied or leased by the Companies and, to the knowledge of the
Companies, no Real Property or facility formerly owned, operated,
occupied or leased by the Companies or any of their predecessors in
interest is (i) listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA or (ii) listed on the
Comprehensive Environmental Response, Compensation and Liability
Information System promulgated pursuant to CERCLA or (iii) included on
any similar list maintained by any Governmental Authority including any
such list relating to petroleum;
(ii) No Lien has been recorded or, to the knowledge of any
Company, threatened under any Environmental Law with respect to any
Real Property or property of the Companies;
(iii) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
will not require any notification, registration, filing, reporting,
disclosure, investigation, remediation or cleanup pursuant to any
Governmental Real Property Disclosure Requirements or any other
Environmental Law; and
(iv) The Companies have made available to the Lenders all
material records and files in the possession, custody or control of, or
otherwise reasonably available to, the Companies concerning compliance
with or liability under Environmental Law, including those concerning
the existence of Hazardous Materials at Real Property or facilities
currently or formerly owned, operated, leased, occupied or used by the
Companies.
SECTION 3.19 INSURANCE. Schedule 3.19 sets forth a
true, complete and correct description of all insurance maintained by each
Company as of the Closing Date. All insurance maintained by the Companies is in
full force and effect, all premiums have been duly paid, no Company has received
notice of violation or cancellation thereof, each Mortgaged Property, and the
use, occupancy and operation thereof, comply in all material respects with all
Insurance Requirements, and there exists no default under any Insurance
Requirement. Each Company has insurance in such amounts and covering such risks
and liabilities as are customary for companies of a similar size engaged in
similar businesses in similar locations.
SECTION 3.20 SECURITY DOCUMENTS. (a) The Security
Documents are effective to create in favor of the Collateral Agent for the
benefit of the Secured Parties, legal, valid and enforceable Liens on, and
security interests in, the Security Agreement Collateral and, when (i) financing
statements
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and other filings in appropriate form are filed in the offices specified on
Schedule 6 to the Perfection Certificate and (ii) upon the taking of possession
or control by the Collateral Agent of the Security Agreement Collateral with
respect to which a security interest may be perfected only by possession or
control (which possession or control shall be given to the Collateral Agent to
the extent possession or control by the Collateral Agent is required by each
Security Agreement), the Liens created by the Security Documents shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the grantors thereunder in the Security Agreement Collateral
(other than (A) the Intellectual Property Collateral (as defined in the Security
Agreement) and (B) such Security Agreement Collateral in which a security
interest cannot be perfected under the UCC as in effect at the relevant time in
the relevant jurisdiction), in each case subject to no Liens other than
Permitted Collateral Liens.
(b) When the Security Agreement or a short form thereof
is filed in the United States Patent and Trademark Office and the United States
Copyright Office, the Liens created by such Security Agreement shall constitute
fully perfected Liens on, and security interests in, all right, title and
interest of the grantors thereunder in the Intellectual Property Collateral (as
defined in such Security Agreement), in each case subject to no Liens other than
Permitted Collateral Liens.
(c) Each Mortgage is effective to create, in favor of the
Collateral Agent, for its benefit and the benefit of the Secured Parties,
subject only to Permitted Collateral Liens or other Liens acceptable to the
Collateral Agent, legal, valid and enforceable first priority Liens on, and
security interests in, all of the Loan Parties' right, title and interest in and
to the Mortgaged Properties thereunder and the proceeds thereof, and when the
Mortgages are recorded in the offices specified on Schedule 1.01(c) and upon the
filing of the financing statements relating to fixtures in the offices specified
on Schedule 1.01(c) (if Schedule 1.01(c) indicates that such filing is
necessary) (or, in the case of any Mortgage executed and delivered after the
date thereof in accordance with the provisions of Sections 5.11 and 5.12, when
such Mortgage is recorded in the offices specified in the local counsel opinion
delivered with respect thereto in accordance with the provisions of Sections
5.11 and 5.12 and upon the filing of the financing statements relating to
fixtures in the offices specified in the local counsel opinion delivered with
respect thereto, to the extent that such local counsel opinion indicates that
such filings are necessary to perfect liens in fixtures), such Security
Documents shall constitute fully perfected Liens on, and security interests in,
all right, title and interest of the Loan Parties in the Mortgaged Properties
and the proceeds thereof, in each case prior and superior in right to any other
person, other than Liens permitted by this Section 3.20(c).
(d) Each Security Document delivered pursuant to Sections
5.11 and 5.12 will, upon execution and delivery thereof, be effective to create
in favor of the Collateral Agent, for the benefit of the Secured Parties, legal,
valid and enforceable Liens on, and security interests in, all of the Loan
Parties' right, title and interest in and to the Collateral thereunder, and when
all appropriate filings or recordings are made in the offices identified in
Schedule 6 to the Perfection Certificate and as may otherwise be required under
applicable law, such Security Document will constitute fully perfected Liens on,
and security interests in, all right, title and interest of the Loan Parties in
such Collateral, to the extent perfection can be obtained by filing UCC
financing statements, other than with respect to Intellectual Property, in which
a security interest may be perfected by filing, recording or registering a
security agreement, financing statement or analogous document in the United
States Patent and Trademark Office or the United States Copyright Office or
equivalent foreign office, as applicable, in each case subject to no Liens other
than the applicable Permitted Collateral Liens.
SECTION 3.21 ACQUISITION DOCUMENTS; REPRESENTATIONS
AND WARRANTIES IN ACQUISITION AGREEMENT. (a) Schedule 3.21 lists (i) each
exhibit, schedule, annex or other attachment to
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the Acquisition Agreement and (ii) each agreement, certificate, instrument,
letter or other document contemplated by the Acquisition Agreement or any item
referred to in clause (i) to be entered into, executed or delivered or to become
effective in connection with the Acquisition or otherwise entered into, executed
or delivered in connection with the Acquisition. The Lenders have been furnished
true and complete copies of each Acquisition Document to the extent executed and
delivered on or prior to the Closing Date.
(b) All representations and warranties of each Company
set forth in the Acquisition Agreement were true and correct in all material
respects as of the time such representations and warranties were made and shall
be true and correct in all material respects as of the Closing Date as if such
representations and warranties were made on and as of such date, unless stated
to relate to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of such earlier
date.
SECTION 3.22 ANTI-TERRORISM LAW. (a) No Loan Party
and, to the knowledge of the Loan Parties, none of its Affiliates is in
violation of any laws relating to terrorism or money laundering ("ANTI-TERRORISM
LAWS"), including Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001 (the "EXECUTIVE ORDER"), and the Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56.
(b) No Loan Party, and to the knowledge of the Loan
Parties, no Affiliate or broker or other agent of any Loan Party acting or
benefiting in any capacity in connection with the Loans is any of the following:
(i) a person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;
(ii) a person owned or controlled by, or acting for or on
behalf of, any person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order;
(iii) a person with which any Lender is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law;
(iv) a person that commits, threatens or conspires to
commit or supports "terrorism" as defined in the Executive Order; or
(v) a person that is named as a "specially designated
national and blocked person" on the most current list published by the
U.S. Treasury Department Office of Foreign Assets Control ("OFAC") at
its official website or any replacement website or other replacement
official publication of such list.
(c) No Loan Party and, to the knowledge of the Loan
Parties, no broker or other agent of any Loan Party acting in any capacity in
connection with the Loans (i) conducts any business or engages in making or
receiving any contribution of funds, goods or services to or for the benefit of
any person described in paragraph (b) above, (ii) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order, or (iii) engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law.
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ARTICLE IV
CONDITIONS TO CREDIT EXTENSIONS
SECTION 4.01 CONDITIONS TO INITIAL CREDIT EXTENSION.
The obligation of each Lender and, if applicable, each Issuing Bank to fund the
initial Credit Extension requested to be made by it shall be subject to the
prior or concurrent satisfaction of each of the conditions precedent set forth
in this Section 4.01.
(a) Loan Documents. All legal matters incident to this
Agreement, the Credit Extensions hereunder and the other Loan Documents
shall be reasonably satisfactory to the Lenders, to the Issuing Bank
and to the Administrative Agent and there shall have been delivered to
the Administrative Agent an executed counterpart of each of the Loan
Documents and the Perfection Certificate.
(b) Corporate Documents. The Administrative Agent shall
have received:
(i) a certificate of the secretary or assistant
secretary of each Loan Party dated the Closing Date,
certifying (A) that attached thereto is a true and complete
copy of each Organizational Document of such Loan Party
certified (to the extent applicable) as of a recent date by
the Secretary of State of the state of its organization, (B)
that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such
Loan Party authorizing the execution, delivery and performance
of the Loan Documents to which such person is a party and, in
the case of Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and
are in full force and effect and (C) as to the incumbency and
specimen signature of each officer executing any Loan Document
or any other document delivered in connection herewith on
behalf of such Loan Party (together with a certificate of
another officer as to the incumbency and specimen signature of
the secretary or assistant secretary executing the certificate
in this clause (i));
(ii) a certificate as to the good standing of
each Loan Party (in so-called "long-form" if available) as of
a recent date, from such Secretary of State; and
(iii) such other documents as the Lenders, the
Issuing Bank or the Administrative Agent may reasonably have
requested on or prior to the Closing Date.
(c) Officers' Certificate. The Administrative Agent shall
have received a certificate, dated the Closing Date and signed by the
chief executive officer and the chief financial officer of Borrower,
confirming compliance with the conditions precedent set forth in this
Section 4.01 and Sections 4.02(b), (c) and (d).
(d) Financings and Other Transactions, Etc. (i) The
Lenders shall have reviewed, and be reasonably satisfied with, the
final terms and conditions of the Acquisition Documents (other than the
Acquisition Agreement) and each of the other Transaction Documents and
the Acquisition and the other Transactions shall have been consummated
or shall be consummated simultaneously on the Closing Date, in each
case in all material respects in accordance with the terms hereof and
of the other Transaction Documents (as so reviewed and approved by the
Lenders), without waiver or amendment of any such terms that has not
been previously approved
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by the Administrative Agent unless and to the extent that any such
waiver or amendment could not reasonably be deemed to be materially
adverse to the interests of the Lenders.
(ii) The Equity Financing shall have been consummated. The
terms of the Stock Consideration shall not require any payments or
other distributions of cash or property in respect thereof, or any
purchases, redemptions or other acquisitions thereof for cash or
property, in each case prior to the payment in full of all obligations
under the Loan Documents, except as permitted by the Loan Documents.
(iii) The Lenders shall have reviewed, and be reasonably
satisfied with, the ownership, corporate, legal, tax, management and
capital structure of Borrower and its Subsidiaries (after giving effect
to the Transactions) and any securities issued, and any indemnities,
employment and other arrangements entered into, in connection with the
Transactions and shall be reasonably satisfied with the amount and
terms of all outstanding letters of credit and Non-Recourse
Indebtedness of Borrower and its Subsidiaries and the Acquired Business
and their respective affiliates (including the existence and scope of
any security interests or Liens securing such Non-Recourse Indebtedness
and the non-recourse nature thereof).
(iv) The Refinancing shall have been consummated in full
to the reasonable satisfaction of the Lenders with all liens in favor
of the existing lenders being unconditionally released; the
Administrative Agent shall have received a "pay-off" letter in form and
substance reasonably satisfactory to the Administrative Agent with
respect to all debt being refinanced in the Refinancing; and the
Administrative Agent shall have received from any person holding any
Lien securing any such debt such UCC termination statements, mortgage
releases, releases of assignments of leases and rents, releases of
security interests in Intellectual Property and other instruments, in
each case in proper form for recording, as the Administrative Agent
shall have reasonably requested to release and terminate of record the
Liens securing such debt.
(e) Financial Statements, Pro Forma Balance Sheet;
Projections. The Lenders shall have received and shall be satisfied
with the form and substance of the financial statements described in
Section 3.04.
(f) Indebtedness and Minority Interests. After giving
effect to the Transactions and the other transactions contemplated
hereby, no Company shall have outstanding any Indebtedness or preferred
stock other than (i) the Loans and Credit Extensions hereunder, (ii)
the Indebtedness listed on Schedule 6.01(b) and (iii) Indebtedness owed
to Borrower or any Guarantor.
(g) Opinions of Counsel. The Administrative Agent shall
have received, on behalf of itself, the other Agents, the Arranger, the
Lenders and the Issuing Bank, a favorable written opinion of (i) ▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, special counsel for the Loan Parties,
substantially to the effect set forth in Exhibit N-I, (ii) each local
counsel listed on Schedule 4.01(g), substantially to the effect set
forth in Exhibit N-2, in each case (A) dated the Closing Date, (B)
addressed to the Agents, the Issuing Bank and the Lenders and (C)
covering such matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request, and
(iii) a copy of each legal opinion delivered under the other
Transaction Documents, accompanied by reliance letters from the party
delivering such opinion authorizing the Agents, Lenders and the Issuing
Bank to rely thereon as if such opinion were addressed to them.
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(h) Solvency Certificate. The Administrative Agent shall
have received a solvency certificate in the form of Exhibit O, dated
the Closing Date and signed by the chief financial officer of Borrower,
which solvency certificate shall, among other things, confirm that
Borrower will have not less than $20 million of availability in the
form of Revolving Loans for the making of loans to be used for general
working capital purposes after giving effect to the Transactions.
(i) Closing Date Leverage Ratio. The Total Funded Debt
Leverage Ratio, on a Pro Forma Basis after giving effect to the
Transactions, on and as of the Closing Date for the four-quarter period
ending September 30, 2003 shall not be greater than 3.3 to 1.00, it
being agreed that pro forma Consolidated EBITDA for such period shall
be $58.7 million unless there shall have been a restatement or other
adjustment to any of Borrower's financial statements during the period
from November 18, 2003 through the Closing Date, in which case the pro
forma Consolidated EBITDA shall be adjusted in a manner consistent with
such restatement or adjustment, as reasonably determined by the
Arranger.
(j) Requirements of Law. The Lenders shall be satisfied
that the Borrower, its Subsidiaries (including the Acquired Business)
and the Transactions shall be in full compliance with all material
Requirements of Law, including Regulations T, U and X of the Board, and
shall have received satisfactory evidence of such compliance reasonably
requested by them.
(k) Consents. The Lenders shall be satisfied that all
requisite Governmental Authorities and third parties shall have
approved or consented to the Transactions, and there shall be no
governmental or judicial action, actual or threatened, that has or
would have, singly or in the aggregate, a reasonable likelihood of
restraining, preventing or imposing burdensome conditions on the
Transactions or the other transactions contemplated hereby.
(l) Litigation. There shall be no litigation, public or
private, or administrative proceedings, governmental investigation or
other legal or regulatory developments, actual or threatened, that,
singly or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or could materially and adversely affect the
ability of Borrower and the Subsidiaries to fully and timely perform
their respective obligations under the Transaction Documents, or the
ability of the parties to consummate the financings contemplated hereby
or the other Transactions.
(m) Sources and Uses. The sources and uses of the Loans
shall be as set forth in Section 3.12 and, after giving effect to the
Transactions, the Borrower shall have not less than $20 million of
availability in the form of Revolving Loans for general working capital
purposes.
(n) Fees. The Arranger and Administrative Agent shall
have received all Fees and other amounts due and payable on or prior to
the Closing Date, including, to the extent invoiced, reimbursement or
payment of all reasonable out-of-pocket expenses (including the legal
fees and expenses of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel to the
Agents, and the reasonable fees and expenses of any local counsel,
appraisers, consultants and other advisors) required to be reimbursed
or paid by Borrower hereunder or under any other Loan Document. The
fees and expenses of the Transactions shall not exceed $17.5 million.
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(o) Personal Property and Fixture Requirements. The
Collateral Agent shall have received:
(i) all certificates, agreements or instruments
representing or evidencing the Securities Collateral
accompanied by instruments of transfer and stock powers
undated and endorsed, by an effective endorsement, in blank;
(ii) the Intercompany Note executed by and among
Borrower and each of its Subsidiaries, accompanied by
instruments of transfer undated and endorsed, by an effective
endorsement, in blank;
(iii) all other certificates, agreements,
including control agreements, or instruments necessary to
perfect the Collateral Agent's security interest in all
Chattel Paper, all Instruments, all Deposit Accounts and all
Investment Property of each Loan Party (as each such term is
defined in the Security Agreement and to the extent required
by the Security Agreement);
(iv) UCC financing statements in appropriate form
for filing under the UCC, intellectual property documents in
appropriate form for filing with the United States Patent and
Trademark Office and United States Copyright Office or
equivalent foreign office and such other documents under
applicable Requirements of Law in each jurisdiction as may be
necessary or appropriate or, in the opinion of the Collateral
Agent, desirable to perfect the Liens created, or purported to
be created, by the Security Documents and, with respect to all
UCC financing statements required to be filed pursuant to the
Loan Documents, evidence reasonably satisfactory to the
Administrative Agent that Borrower has retained, at its sole
cost and expense, a service provider acceptable to the
Administrative Agent for the tracking of all such financing
statements and notification to the Administrative Agent, of,
among other things, the upcoming lapse or expiration thereof;
(v) certified copies of UCC, United States
Patent and Trademark Office and United States Copyright
Office, tax and judgment lien searches, bankruptcy and pending
lawsuit searches or equivalent reports or searches, each of a
recent date listing all effective financing statements, lien
notices or comparable documents that name any Loan Party as
debtor and that are filed in those state and county
jurisdictions in which any property of any Loan Party is
located and the state and county jurisdictions in which any
Loan Party is organized or maintains its principal place of
business and such other searches that the Collateral Agent
deems necessary or appropriate, none of which encumber the
Collateral covered or intended to be covered by the Security
Documents (other than Permitted Collateral Liens or any other
Liens reasonably acceptable to the Collateral Agent);
(vi) with respect to each location set forth on
Schedule 4.01(o)(vi), a Landlord Access Agreement or Bailee
Letter, as applicable; provided that no such Landlord Access
Agreement or Bailee Letter shall be required with respect to
any Real Property that could not be obtained after the Loan
Party that is the lessee or owner of the inventory stored with
the applicable landlord or bailee thereof shall have used all
commercially reasonable efforts to do so; and
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(vii) evidence acceptable to the Collateral Agent
of payment or arrangements for payment by the Loan Parties of
all applicable recording taxes, fees, charges, costs and
expenses required for the recording of the Security Documents.
(p) Real Property Requirements. The Collateral Agent
shall have received (other than with respect to each Real Property set
forth on Schedule 5.11(e)):
(i) a Mortgage encumbering each Mortgaged
Property in favor of the Collateral Agent, for the benefit of
the Secured Parties, duly executed and acknowledged by each
Loan Party that is the owner of or holder of any interest in
such Mortgaged Property, and otherwise in form for recording
in the recording office of each applicable political
subdivision where each such Mortgaged Property is situated,
together with such certificates, affidavits, questionnaires or
returns as shall be required in connection with the recording
or filing thereof to create and perfect a lien under
applicable law, and such financing statements and any other
instruments necessary to grant a mortgage lien under the laws
of any applicable jurisdiction, all of which shall be in form
and substance reasonably satisfactory to the Collateral Agent;
(ii) with respect to each Mortgaged Property,
such consents, approvals, amendments, supplements, estoppels,
tenant subordination agreements or other instruments as
necessary to consummate the Transactions or as shall
reasonably be deemed necessary by the Collateral Agent in
order for the owner or holder of the fee or leasehold interest
constituting such Mortgaged Property to grant the Lien
contemplated by the Mortgage with respect to such Mortgaged
Property;
(iii) with respect to each Mortgage for Real
Property located in the United States of America, a policy (or
irrevocable commitment to issue a policy) of title insurance
insuring (or irrevocably committing to insure) the Lien of
such Mortgage as a valid first mortgage Lien on the Mortgaged
Property and fixtures described therein in the amount equal to
not less than 100% of the fair market value of such Mortgaged
Property (to the extent a tie-in endorsement is available with
respect to such Mortgaged Property and 115% in all other
cases) and fixtures as reasonably determined by the Collateral
Agent, which fair market value is set forth on Schedule
4.01(p)(iii), which policy (or commitment) (each, a "TITLE
POLICY") shall (A) be issued by the Title Company, (B) to the
extent necessary, include such co-insurance and/or reinsurance
arrangements (with provisions for direct access, if necessary)
as shall be reasonably acceptable to the Collateral Agent, (C)
contain a "tie-in" or "cluster" endorsement, if available
under applicable law (i.e., policies which insure against
losses regardless of location or allocated value of the
insured property up to a stated maximum coverage amount), (D)
have been supplemented by such endorsements as shall be
reasonably requested by the Collateral Agent (including
endorsements on matters relating to usury, first loss, last
dollar, zoning, contiguity, revolving credit, doing business,
non-imputation, public road access, survey, variable rate,
environmental lien and so-called comprehensive coverage over
covenants and restrictions; provided, however, that in the
event a zoning endorsement is not available or is not
available at commercially reasonable rates, the Collateral
Agent shall have received a zoning report in form and
substance reasonably acceptable to the Collateral Agent from
The Planning and Zoning Resource Corporation with respect to
such Mortgaged Property), and (E) contain no exceptions to
title other
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than Permitted Collateral Liens and such other exceptions
reasonably acceptable to the Collateral Agent;
(iv) with respect to each Mortgaged Property
located in the United States of America, such affidavits,
certificates, information (including financial data) and
instruments of indemnification (including a so-called "gap"
indemnification) as shall be required to induce the Title
Company to issue the Title Policy/ies (or commitment) and
endorsements contemplated above;
(v) evidence reasonably acceptable to the
Collateral Agent of payment by Borrower of all Title Policy
premiums, search and examination charges, and related charges,
mortgage recording taxes, fees, charges, costs and expenses
required for the recording of the Mortgages, the filing of the
fixture filings, if applicable, and issuance of the Title
Policies referred to above;
(vi) with respect to each Real Property or
Mortgaged Property, copies of all Leases in which Borrower or
any Subsidiary holds the lessor's interest or other agreements
relating to possessory interests, if any. To the extent any of
the foregoing affect any Mortgaged Property, such agreement
shall be subordinate to the Lien of the Mortgage to be
recorded against such Mortgaged Property, either expressly by
its terms or pursuant to a subordination, non-disturbance and
attornment agreement in form and substance reasonably
acceptable to the Collateral Agent, and shall otherwise be
reasonably acceptable to the Collateral Agent;
(vii) with respect to each Mortgaged Property,
each Company shall have made all notifications, registrations
and filings, to the extent required by, and in accordance
with, all Governmental Real Property Disclosure Requirements
applicable to such Mortgaged Property; and
(viii) Surveys with respect to each Mortgaged
Property.
(q) Insurance. The Administrative Agent shall have
received a copy of, or a certificate as to coverage under, the
insurance policies required by Section 5.04 and the applicable
provisions of the Security Documents, each of which shall be endorsed
or otherwise amended to include a "standard" or "New York" lender's
loss payable or mortgagee endorsement (as applicable) and shall name
the Collateral Agent, on behalf of the Secured Parties, as additional
insured, in form and substance reasonably satisfactory to the
Administrative Agent.
SECTION 4.02 CONDITIONS TO ALL CREDIT EXTENSIONS.
The obligation of each Lender and each Issuing Bank to make any Credit Extension
(including the initial Credit Extension) shall be subject to, and to the
satisfaction of, each of the conditions precedent set forth below.
(a) Notice. The Administrative Agent shall have received
a Borrowing Request as required by Section 2.03 (or such notice shall
have been deemed given in accordance with Section 2.03) if Loans are
being requested or, in the case of the issuance, amendment, extension
or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the
issuance, amendment, extension or renewal of such Letter of Credit as
required by Section 2.18(b) or, in the case of the Borrowing of a
Swingline Loan, the
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Swingline Lender and the Administrative Agent shall have received a
Borrowing Request as required by Section 2.17(b).
(b) No Default. Borrower and each other Loan Party shall
be in compliance in all material respects with all the terms and
provisions set forth herein and in each other Loan Document on its part
to be observed or performed, and, at the time of and immediately after
giving effect to such Credit Extension and the application of the
proceeds thereof, no Default shall have occurred and be continuing on
such date.
(c) Representations and Warranties. Each of the
representations and warranties made by any Loan Party set forth in
Article III hereof or in any other Loan Document shall be true and
correct in all material respects (except that any representation and
warranty that is qualified as to "materiality" or "Material Adverse
Effect" shall be true and correct in all respects) on and as of the
date of such Credit Extension with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.
(d) No Legal Bar. No order, judgment or decree of any
Governmental Authority shall purport to restrain any Lender from making
any Loans to be made by it. No injunction or other restraining order
shall have been issued shall be pending or noticed with respect to any
action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result
of, the transactions contemplated by this Agreement or the making of
Loans hereunder.
Each of the delivery of a Borrowing Request or notice
requesting the issuance, amendment, extension or renewal of a Letter of Credit
and the acceptance by Borrower of the proceeds of such Credit Extension shall
constitute a representation and warranty by Borrower and each other Loan Party
that on the date of such Credit Extension (both immediately before and after
giving effect to such Credit Extension and the application of the proceeds
thereof) the conditions contained in this Section 4.02 have been satisfied.
Borrower shall provide such information (including calculations in reasonable
detail of the covenants in Section 6.10) as the Administrative Agent may
reasonably request to confirm that the conditions in this Section 4.02 have been
satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each
Lender that so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document shall
have been paid in full and all Letters of Credit have been canceled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, each Loan Party will,
and will cause each of its Subsidiaries to:
SECTION 5.01 FINANCIAL STATEMENTS, REPORTS, ETC.
Furnish to the Administrative Agent and each Lender:
(a) Annual Reports. As soon as available and in any event
within 90 days after the end of each fiscal year (but no later than the
date on which Borrower is required to file a Form
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10-K under the Exchange Act), (i) the consolidated balance sheet of
Borrower as of the end of such fiscal year and related consolidated
statements of income, cash flows and stockholders' equity for such
fiscal year, in comparative form with such financial statements as of
the end of, and for, the preceding fiscal year, and notes thereto, all
prepared in accordance with Regulation S-X under the Securities Act and
accompanied by an opinion of PricewaterhouseCoopers LLP or other
independent public accountants of recognized national standing
reasonably satisfactory to the Administrative Agent (which opinion
shall not be qualified as to scope or contain any going concern or
other qualification), stating that such financial statements fairly
present, in all material respects, the consolidated financial
condition, results of operations and cash flows of Borrower as of the
dates and for the periods specified in accordance with GAAP
consistently applied and (ii) a management's discussion and analysis of
the financial condition and results of operations for such fiscal year,
as compared to the previous fiscal year;
(b) Quarterly Reports. As soon as available and in any
event within 45 days after the end of each of the first three fiscal
quarters of each fiscal year (but no later than the date on which
Borrower is required to file a Form 10-Q under the Exchange Act), (i)
the consolidated balance sheet of Borrower as of the end of such fiscal
quarter and related consolidated statements of income and cash flows
for such fiscal quarter and for the then elapsed portion of the fiscal
year, in comparative form with the consolidated statements of income
and cash flows for the comparable periods in the previous fiscal year,
and notes thereto, all prepared in accordance with Regulation S-X under
the Securities Act and accompanied by a certificate of a Financial
Officer stating that such financial statements fairly present, in all
material respects, the consolidated financial condition, results of
operations and cash flows of Borrower as of the date and for the
periods specified in accordance with GAAP consistently applied, and on
a basis consistent with audited financial statements referred to in
clause (a) of this Section 5.01, subject to normal year-end audit
adjustments and (ii) a management's discussion and analysis of the
financial condition and results of operations for such fiscal quarter
and the then elapsed portion of the fiscal year, as compared to the
comparable periods in the previous fiscal year;
(c) Financial Officer's Certificate. (i) Concurrently
with any delivery of financial statements under Section 5.01(a) or (b)
above, a Compliance Certificate certifying that no Default has occurred
or, if such a Default has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with
respect thereto; (ii) concurrently with any delivery of financial
statements under Section 5.01 (a) or (b) above, a Compliance
Certificate setting forth computations in reasonable detail
satisfactory to the Administrative Agent demonstrating compliance with
the covenants contained in Sections 6.07(f) and 6.10 and, in the case
of Section 5.01(a) above, setting forth Borrower's calculation of
Excess Cash Flow; and (iii) in the case of Section 5.01(a) above, a
report of the accounting firm opining on or certifying such financial
statements stating that in the course of its regular audit of the
financial statements of Borrower and its Subsidiaries, which audit was
conducted in accordance with GAAP, such accounting firm obtained no
knowledge that any Default has occurred under Section 6.07(f) or 6.10
or, if in the opinion of such accounting firm such a Default has
occurred, specifying the nature and extent thereof;
(d) Financial Officer's Certificate Regarding Collateral.
Concurrently with any delivery of financial statements under Section
5.01(a) above, a certificate of a Financial Officer setting forth the
information required pursuant to the Perfection Certificate Supplement
or
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confirming that there has been no change in such information since the
date of the Perfection Certificate or latest Perfection Certificate
Supplement;
(e) Public Reports. Promptly after the same become
publicly available, copies of all periodic and other reports, proxy
statements and other materials filed by any Company with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national
securities exchange, or distributed to holders of its Indebtedness
pursuant to the terms of the documentation governing such Indebtedness
(or any trustee, agent or other representative therefor), as the case
may be;
(f) Management Letters. Promptly after the receipt
thereof by any Company, a copy of any "management letter" and other
significant correspondence received by any such person from its
certified public accountants and the management's responses thereto;
(g) Budgets. No later than 60 days (or, in the case of
the fiscal year ending 2003, 120 days) after the first day of each
fiscal year of Borrower, a budget in form reasonably satisfactory to
the Administrative Agent (including budgeted statements of income for
each of Borrower's business segments) prepared by Borrower for (i) each
fiscal quarter of such fiscal year prepared in detail and (ii) each of
the four years immediately following such fiscal year prepared in
summary form, in each case, of Borrower and its Subsidiaries, with
appropriate presentation and discussion of the principal assumptions
upon which such budgets are based, accompanied by the statement of a
Financial Officer of Borrower to the effect that the budget of Borrower
is a reasonable estimate for the period covered thereby;
(h) Organization. Within 30 days after the close of each
fiscal year of Borrower, Borrower shall deliver an accurate
organization chart as required by Section 3.07(c), or confirm that
there are no changes to Schedule 3.07(c);
(i) Organizational Documents. Promptly provide copies of
any Organizational Documents that have been amended or modified in
accordance with the terms hereof and deliver a copy of any notice of
default given or received by any Company under any Organizational
Document within 15 days after such Company gives or receives such
notice; and
(j) Other Information. Promptly, from time to time, such
other information regarding the operations, business affairs and
financial condition of any Company, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably
request.
SECTION 5.02 LITIGATION AND OTHER NOTICES. Furnish to the
Administrative Agent and each Lender written notice of the following promptly
(and, in any event, within three Business Days after any Company becomes aware
(or reasonably should become aware) of the occurrence thereof):
(a) any Default, specifying the nature and extent thereof
and the corrective action (if any) taken or proposed to be taken with
respect thereto;
(b) the filing or commencement of, or any threat or
notice of intention of any person to file or commence, any action,
suit, litigation or proceeding, whether at law or in equity by or
before any Governmental Authority, (i) against any Company or any
Affiliate thereof that could
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reasonably be expected to result in a Material Adverse Effect or (ii)
with respect to any Loan Document;
(c) any development that has resulted in, or could
reasonably be expected to result in a Material Adverse Effect;
(d) the occurrence of a Casualty Event; and
(e) (i) the incurrence of any material Lien (other than
Permitted Collateral Liens) on, or claim asserted against any of the
Collateral or (ii) the occurrence of any other event which could
materially affect the value of the Collateral.
SECTION 5.03 EXISTENCE; BUSINESSES AND PROPERTIES.
(a) Do or cause to be done all things necessary to preserve, renew and maintain
in full force and effect its legal existence, except as otherwise expressly
permitted under Section 6.05 or Section 6.06 or, in the case of any Subsidiary,
where the failure to perform such obligations, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
(b) Do or cause to be done all things reasonably
necessary to obtain, preserve, renew, extend and keep in full force and effect
the rights, licenses, permits, privileges, franchises, authorizations, patents,
trade secrets, copyrights, trademarks and trade names material to the conduct of
its business; maintain and operate such business in substantially the manner in
which it is presently conducted and operated (after giving effect to the
Acquisition); comply with all applicable Requirements of Law (including any and
all zoning, building, Environmental Law, ordinance, code or approval or any
building permits or any restrictions of record or agreements affecting the Real
Property) and decrees and orders of any Governmental Authority, whether now in
effect or hereafter enacted, except where the failure to comply, individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect; pay and perform its obligations under all Leases and Transaction
Documents; and at all times maintain, preserve and protect all property material
to the conduct of such business and keep such property in good repair, working
order and condition (other than wear and tear occurring in the ordinary course
of business) and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times; provided that nothing in this Section 5.03(b)
shall prevent (i) sales of property, consolidations or mergers by or involving
any Company in accordance with Section 6.05 or Section 6.06; (ii) the withdrawal
by any Company of its qualification as a foreign corporation in any jurisdiction
where such withdrawal, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect; or (iii) the abandonment by any
Company of any rights, franchises, licenses, trademarks, trade names, copyrights
or patents that such person reasonably determines are not useful to its business
or no longer commercially desirable.
SECTION 5.04 INSURANCE. (a) Keep its insurable
property adequately insured at all times by financially sound and reputable
insurers; maintain such other insurance, to such extent and against such risks
as is customary with companies in the same or similar businesses operating in
the same or similar locations, including insurance with respect to Mortgaged
Properties and other properties material to the business of the Companies
against such casualties and contingencies and of such types and in such amounts
with such deductibles as is customary in the case of similar businesses
operating in the same or similar locations, including (i) physical hazard
insurance on an "all risk" basis, (ii) commercial general liability against
claims for bodily injury, death or property damage covering any and all
insurable
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claims, (iii) explosion insurance in respect of any boilers, machinery or
similar apparatus constituting Collateral, (iv) business interruption insurance,
(v) worker's compensation insurance and such other insurance as may be required
by any Requirement of Law and (vi) such other insurance against risks as the
Administrative Agent may from time to time require (such policies to be in such
form and amounts and having such coverage as may be reasonably satisfactory to
the Administrative Agent and the Collateral Agent); provided that with respect
to physical hazard insurance, neither the Collateral Agent nor the applicable
Company shall agree to the adjustment of any claim thereunder without the
consent of the other (such consent not to be unreasonably withheld or delayed);
provided, further, that no consent of any Company shall be required during an
Event of Default.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Collateral Agent of written notice thereof, (ii) name the Collateral Agent as
mortgagee (in the case of property insurance) or additional insured on behalf of
the Secured Parties (in the case of liability insurance) or loss payee (in the
case of property insurance), as applicable, (iii) if reasonably requested by the
Collateral Agent and available to Borrower on commercially reasonable terms,
include a breach of warranty clause, (iv) contain a waiver of subrogation in
favor of the Collateral Agent and (v) be reasonably satisfactory in all other
respects to the Collateral Agent.
(c) Notify the Administrative Agent and the Collateral
Agent immediately whenever any separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section 5.04 is taken out by any Company; and promptly deliver to the
Administrative Agent and the Collateral Agent a duplicate original copy of such
policy or policies.
(d) With respect to each Mortgaged Property, obtain flood
insurance in such total amount as the Administrative Agent or the Required
Lenders may from time to time require, if at any time the area in which any
improvements located on any Mortgaged Property is designated a "flood hazard
area" in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency (or any successor agency), and otherwise comply with the
National Flood Insurance Program as set forth in the Flood Disaster Protection
Act of 1973, as amended from time to time.
(e) Deliver to the Administrative Agent or the Collateral
Agent a report of a reputable insurance broker with respect to such insurance
and such supplemental reports with respect thereto as the Administrative Agent
or the Collateral Agent may from time to time reasonably request.
(f) No Loan Party that is an owner of Mortgaged Property
shall take any action that is reasonably likely to be the basis for termination,
revocation or denial of any insurance coverage required to be maintained under
such Loan Party's respective Mortgage or that could be the basis for a defense
to any claim under any Insurance Policy maintained in respect of the Premises,
and each Loan Party shall otherwise comply in all material respects with all
Insurance Requirements in respect of each Premises; provided, however, that each
Loan Party may, at its own expense and after written notice to the
Administrative Agent, (i) contest the applicability or enforceability of any
such Insurance Requirements by appropriate legal proceedings, the prosecution of
which does not constitute a basis for cancellation or revocation of any
insurance coverage required under this Section 5.04 or (ii) cause the Insurance
Policy containing any such Insurance Requirement to be replaced by a new policy
complying with the provisions of this Section 5.04.
(g) Unless Borrower provides evidence of the insurance
coverage required hereunder, Administrative Agent or Collateral Agent may
purchase insurance at the expense of the
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applicable Subsidiary to protect the Secured Parties' interest in the Mortgaged
Property located in Missouri. This insurance may, but need not protect the
interest of such Subsidiary Guarantor. The coverage that Administrative Agent or
Collateral Agent purchases may not pay any claim that such Subsidiary Guarantor
makes or claim that is made against such Subsidiary Guarantor in connection with
such Mortgaged Property. The applicable Subsidiary Guarantor may later cancel
any insurance purchased by Administrative Agent or Collateral Agent, but only
after providing evidence that such Subsidiary Guarantor has obtained insurance
as required by this Credit Agreement. If Administrative Agent or Collateral
Agent purchases insurance for such Mortgaged Property, the applicable Subsidiary
Guarantor will be responsible for the costs of that insurance, including the
insurance premium interest and any other charges Administrative Agent or
Collateral Agent may impose 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 Indebtedness. The costs of the
insurance may be more than the cost of insurance the applicable Subsidiary
Guarantor may be able to obtain on its own.
SECTION 5.05 OBLIGATIONS AND TAXES. (a) Pay its
Indebtedness and other obligations promptly and in accordance with their terms
and pay and discharge promptly when due all Taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, services, materials and supplies or otherwise that,
if unpaid, might give rise to a Lien other than a Permitted Lien upon such
properties or any part thereof; provided that such payment and discharge shall
not be required with respect to any such Tax, assessment, charge, levy or claim
so long as (i) the validity or amount thereof shall be contested in good faith
by appropriate proceedings timely instituted and diligently conducted and the
applicable Company shall have set aside on its books adequate reserves or other
appropriate provisions with respect thereto in accordance with GAAP, (ii) such
contest operates to suspend collection of the contested obligation, Tax,
assessment or charge and enforcement of a Lien other than a Permitted Lien and
(iii) in the case of Collateral, the applicable Company shall have otherwise
complied with the Contested Collateral Lien Conditions.
(b) Timely and correctly file all material Tax Returns
required to be filed by it.
SECTION 5.06 EMPLOYEE BENEFITS. (a) Comply in all
material respects with the applicable provisions of ERISA and the Code and (b)
furnish to the Administrative Agent (x) as soon as possible after, and in any
event within 5 days after any Responsible Officer of any Company or any ERISA
Affiliate of any Company knows or has reason to know that, any ERISA Event has
occurred that, alone or together with any other ERISA Event could reasonably be
expected to result in liability of the Companies or any of their ERISA
Affiliates in an aggregate amount exceeding $500,000 or the imposition of a
Lien, a statement of a Financial Officer of Borrower setting forth details as to
such ERISA Event and the action, if any, that the Companies propose to take with
respect thereto, and (y) upon 10 days of becoming available to any Company,
copies of (i) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by any Company or any ERISA Affiliate with the Internal
Revenue Service with respect to each Plan; (ii) the most recent actuarial
valuation report for each Plan; (iii) all notices received by any Company or any
ERISA Affiliate from a Multiemployer Plan sponsor or any governmental agency
concerning an ERISA Event; (iv) all non-routine correspondence with any
government agency with respect to any Plan or employee benefit plan sponsored or
contributed to by any Company; and (v) such other documents or governmental
reports or filings relating to any Plan (or employee benefit plan sponsored or
contributed to by any Company) as the Administrative Agent shall reasonably
request.
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SECTION 5.07 MAINTAINING RECORDS; ACCESS TO PROPERTIES
AND INSPECTIONS; ANNUAL MEETINGS. (a) Keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
Requirements of Law are made of all dealings and transactions in relation to its
business and activities. Each Company will permit any representatives designated
by the Administrative Agent or any Lender to visit and inspect the financial
records and the property of such Company at reasonable times and as often as
reasonably requested and to make extracts from and copies of such financial
records, and permit any representatives designated by the Administrative Agent
or any Lender to discuss the affairs, finances, accounts and condition of any
Company with the officers and employees thereof and advisors therefor (including
independent accountants).
(b) Within 120 days after the close of each fiscal year,
at the request of the Administrative Agent or Required Lenders, hold a meeting
(at a mutually agreeable location and time or, at the option of the
Administrative Agent, by conference call) with all Lenders who choose to attend
such meeting at which meeting shall be reviewed the financial results of the
previous fiscal year and the financial condition of the Companies and the
budgets presented for the current fiscal year of the Companies.
SECTION 5.08 USE OF PROCEEDS. Use the proceeds of
the Loans and request the issuance of Letters of Credit only for the purposes
set forth in Section 3.12.
SECTION 5.09 COMPLIANCE WITH ENVIRONMENTAL LAWS;
ENVIRONMENTAL REPORTS. (a) Comply, and use all reasonable efforts to cause all
lessees and other persons occupying Real Property owned or leased by any Company
to comply, in all material respects with all Environmental Laws and
Environmental Permits applicable to its operations and Real Property; obtain and
renew all material Environmental Permits applicable to its operations and Real
Property; and conduct all Responses required by, and in accordance with,
Environmental Laws; provided that no Company shall be required to undertake any
Response to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being maintained
with respect to such circumstances in accordance with GAAP.
(b) If a Default caused by reason of a breach of Section
3.18 or Section 5.09(a) shall have occurred and be continuing for more than 20
days without the Companies commencing activities reasonably likely to cure such
Default, at the written request of the Administrative Agent or the Required
Lenders through the Administrative Agent, Borrower shall provide to the Lenders
within 45 days after such request, at the expense of Borrower, an environmental
assessment report regarding the matters which are the subject of such Default,
including, where appropriate, any soil and/or groundwater sampling, prepared by
an environmental consulting firm, and in form and substance, reasonably
acceptable to the Administrative Agent and indicating the presence or absence of
Hazardous Materials and the estimated cost of any compliance or Response to
address them.
(c) Each Loan Party that is an owner of Mortgaged
Property shall not, and shall take all reasonable efforts necessary to ensure
that no other person shall, use, store, generate, handle or Release any
Hazardous Material at, in, on, under or upon any Mortgaged Property except in
full compliance with applicable Environmental Law and in a manner that is not
likely to result in the assertion of any material Environmental Claims against
any Company or related to any Mortgaged Property.
SECTION 5.10 INTEREST RATE PROTECTION. No later than
the 30th day after the Closing Date, Borrower shall enter into, and throughout
the term of this Agreement maintain, Hedging Agreements with terms and
conditions reasonably acceptable to the Administrative Agent that result in at
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least 50% of the aggregate principal amount of Borrower's Consolidated
Indebtedness (exclusive of Revolving Loans in an aggregate amount not to exceed
$20 million and the face amount of all undrawn Letters of Credit) being
effectively subject to a fixed or maximum interest rate reasonably acceptable to
the Administrative Agent.
SECTION 5.11 ADDITIONAL COLLATERAL; ADDITIONAL
GUARANTORS. (a) Subject to this Section 5.11, with respect to any property
acquired after the Closing Date by any Loan Party that is intended to be subject
to the Lien created by any of the Security Documents but is not so subject (but,
in any event, excluding any Equity Interest of a Foreign Subsidiary not required
to be pledged pursuant to the last sentence of Section 5.11(b) and excluding any
property that is the subject of any Existing Non-Recourse Indebtedness or any
Additional Non-Recourse Indebtedness permitted under Section 6.01 and excluding
any Real Property, for which separate provision is made in clause (c) of this
Section 5.11), promptly (and in any event within 30 days after the acquisition
thereof) (i) execute and deliver to the Administrative Agent and the Collateral
Agent such amendments or supplements to the relevant Security Documents or such
other documents as the Administrative Agent or the Collateral Agent shall deem
necessary or advisable to grant to the Collateral Agent, for its benefit and for
the benefit of the other Secured Parties, a Lien on such property subject to no
Liens other than Permitted Collateral Liens, and (ii) take all actions necessary
to cause such Lien to be duly perfected to the extent required by such Security
Document in accordance with all applicable Requirements of Law, including the
filing of financing statements in such jurisdictions as may be reasonably
requested by the Administrative Agent and causing the lien of the Collateral
Agent to be noted on any certificate of title covering any Collateral. Borrower
shall otherwise take such actions and execute and/or deliver to the Collateral
Agent such documents as the Administrative Agent or the Collateral Agent shall
require to confirm the validity, perfection and priority of the Lien of the
Security Documents against such after-acquired property.
(b) With respect to any person that is or becomes a
Subsidiary after the Closing Date (other than an Excluded Project Subsidiary),
promptly (and in any event within 30 days after such person becomes a
Subsidiary) (i) deliver to the Collateral Agent the certificates, if any,
representing all of the Equity Interests of such Subsidiary, together with
undated stock powers or other appropriate instruments of transfer executed and
delivered in blank by a duly authorized officer of the holder(s) of such Equity
Interests, and all intercompany notes owing from such Subsidiary to any Loan
Party together with instruments of transfer executed and delivered in blank by a
duly authorized officer of such Loan Party, (ii) cause such new Subsidiary (A)
to execute a Joinder Agreement or such comparable documentation to become a
Subsidiary Guarantor and a joinder agreement to the applicable Security
Agreement, substantially in the form annexed thereto or, in the case of a
Foreign Subsidiary, execute a security agreement compatible with the laws of
such Foreign Subsidiary's jurisdiction in form and substance reasonably
satisfactory to the Administrative Agent, (B) to take all actions necessary or
advisable in the opinion of the Administrative Agent or the Collateral Agent to
cause the Lien created by the applicable Security Agreement to be duly perfected
to the extent required by such agreement in accordance with all applicable
Requirements of Law, including the filing of financing statements in such
jurisdictions as may be reasonably requested by the Administrative Agent or the
Collateral Agent and (C) in the event any Subsidiary is a partnership or limited
liability company, causing such partnership or limited liability company to
elect to have its partnership or limited liability company interests treated as
securities governed by Article 8 of the Uniform Commercial Code and (iii) comply
with the applicable provisions of clause (c) of this Section 5.11 with respect
to (A) each Real Property owned in fee by such Subsidiary that, together with
any improvements thereon, individually has a fair market value of at least
$500,000 and (B) unless the Collateral Agent otherwise consents, each leased
Real Property of such Subsidiary which lease individually has a fair market
value of at least $500,000. Notwithstanding the foregoing, no
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Foreign Subsidiary shall be required to take the actions specified in clause
(i)-(iii) of this Section 5.11(b), to the extent that doing so would constitute
an investment of earnings in United States property under Section 956 (or a
successor provision) of the Code, which investment would or could reasonably be
expected to trigger a material increase in the taxable income of a United States
shareholder of such Subsidiary pursuant to Section 951 (or a successor
provision) of the Code, as reasonably determined by Borrower and the
Administrative Agent; provided that this exception shall not apply to (A) Voting
Stock of any Subsidiary which is a first-tier controlled foreign corporation (as
defined in Section 957(a) of the Code) representing up to 65% of the total
voting power of all outstanding Voting Stock of such Subsidiary and (B) any
portion of the Equity Interests not constituting Voting Stock of any such
Subsidiary, except that any such Equity Interests constituting "stock entitled
to vote" within the meaning of Treasury Regulation Section 1.956-2(c)(2) shall
be treated as Voting Stock for purposes of this Section 5.11(b).
(c) Promptly grant to the Collateral Agent, within 60
days of the acquisition thereof, a security interest in and Mortgage on (i) each
Real Property owned in fee by such Loan Party as is acquired by such Loan Party
after the Closing Date and that, together with any improvements thereon,
individually has a fair market value of at least $500,000, and (ii) unless the
Collateral Agent otherwise consents, each leased Real Property of such Loan
Party which lease individually has a fair market value of at least $500,000, in
each case, as additional security for the Obligations (unless the subject
property is already mortgaged to a third party to the extent permitted by
Section 6.02 or is the subject of any Existing Non-Recourse Indebtedness or any
Additional Non-Recourse Indebtedness permitted under Section 6.01). Such
Mortgages shall be granted pursuant to documentation reasonably satisfactory in
form and substance to the Administrative Agent and the Collateral Agent and
shall constitute valid and enforceable perfected Liens subject only to Permitted
Collateral Liens or other Liens acceptable to the Collateral Agent. The
Mortgages or instruments related thereto shall be duly recorded or filed in such
manner and in such places as are required by law to establish, perfect, preserve
and protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. Such Loan Party shall otherwise take
such actions and execute and/or deliver to the Collateral Agent such documents
as the Administrative Agent or the Collateral Agent shall require to confirm the
validity, perfection and priority of the Lien of any existing Mortgage or new
Mortgage against such after-acquired Real Property (including a Title Policy, a
Survey and local counsel opinion (in form and substance reasonably satisfactory
to the Administrative Agent and the Collateral Agent) in respect of such
Mortgage).
(d) Promptly grant to the Collateral Agent a security
interest in and Mortgage on each Real Property listed on Schedule 6.06(c), if
and to the extent that any such Real Property has not been sold pursuant to
Section 6.06(c) on or before December 31, 2004. Such Mortgages shall be granted
pursuant to documentation reasonably satisfactory in form and substance to the
Administrative Agent and the Collateral Agent and shall constitute valid and
enforceable perfected Liens subject only to Permitted Collateral Liens or other
Liens reasonably acceptable to the Collateral Agent. The Mortgages or
instruments related thereto shall be duly recorded or filed in such manner and
in such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. The applicable Loan Party shall take
such actions and execute and/or deliver to the Collateral Agent such documents
as the Administrative Agent or the Collateral Agent shall reasonably require to
confirm the validity, perfection and priority of the Lien of the Mortgage
against any such Real Property (including a Title Policy, a Survey and local
counsel opinion (in form and
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substance reasonably satisfactory to the Administrative Agent and the Collateral
Agent) in respect of such Mortgage).
(e) Within 90 days after the Closing Date, grant to the
Collateral Agent a security interest in and Mortgage on each Real Property
listed on Schedule 5.11(e). Such Mortgages shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent and the Collateral Agent and shall constitute valid and
enforceable perfected Liens subject only to Permitted Collateral Liens or other
Liens reasonably acceptable to the Collateral Agent. The Mortgages or
instruments related thereto shall be duly recorded or filed in such manner and
in such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Mortgages and all taxes, fees and other charges payable in
connection therewith shall be paid in full. The applicable Loan Party shall take
such actions and execute and/or deliver to the Collateral Agent such documents
as the Administrative Agent or the Collateral Agent shall reasonably require to
confirm the validity, perfection and priority of the Lien of the Mortgage
against any such Real Property (including a Title Policy, a Survey and local
counsel opinion (in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent) in respect of such Mortgage).
SECTION 5.12 SECURITY INTERESTS; FURTHER ASSURANCES.
Promptly, upon the reasonable request of the Administrative Agent, the
Collateral Agent or any Lender, at Borrower's expense, execute, acknowledge and
deliver, or cause the execution, acknowledgment and delivery of, and thereafter
register, file or record, or cause to be registered, filed or recorded, in an
appropriate governmental office, any document or instrument supplemental to or
confirmatory of the Security Documents or otherwise deemed by the Administrative
Agent or the Collateral Agent reasonably necessary or desirable for the
continued validity, perfection and priority of the Liens on the Collateral
covered thereby subject to no other Liens except as permitted by the applicable
Security Document, or obtain any consents or waivers as may be necessary or
appropriate in connection therewith and shall take such other action as may be
reasonably requested by the Administrative Agent or the Collateral Agent.
Deliver or cause to be delivered to the Administrative Agent and the Collateral
Agent from time to time such other documentation, consents, authorizations,
approvals and orders in form and substance reasonably satisfactory to the
Administrative Agent and the Collateral Agent as the Administrative Agent and
the Collateral Agent shall reasonably deem necessary to perfect or maintain the
Liens on the Collateral pursuant to the Security Documents. Upon the exercise by
the Administrative Agent, the Collateral Agent or any Lender of any power,
right, privilege or remedy pursuant to any Loan Document which requires any
consent, approval, registration, qualification or authorization of any
Governmental Authority execute and deliver all applications, certifications,
instruments and other documents and papers that the Administrative Agent, the
Collateral Agent or such Lender may require. If the Administrative Agent, the
Collateral Agent or the Required Lenders determine that they are required by law
or regulation to have appraisals prepared in respect of the Real Property of any
Loan Party constituting Collateral, Borrower shall provide to the Administrative
Agent appraisals that satisfy the applicable requirements of the Real Estate
Appraisal Reform Amendments of FIRREA and are otherwise in form and substance
reasonably satisfactory to the Administrative Agent and the Collateral Agent.
SECTION 5.13 INFORMATION REGARDING COLLATERAL. (a)
Not effect any change (i) in any Loan Party's legal name, (ii) in the location
of any Loan Party's chief executive office, (iii) in any Loan Party's identity
or organizational structure, (iv) in any Loan Party's Federal Taxpayer
Identification Number or organizational identification number, if any, or (v) in
any Loan Party's jurisdiction of organization (in each case, including by
merging with or into any other entity,
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reorganizing, dissolving, liquidating, reorganizing or organizing in any other
jurisdiction), until (A) it shall have given the Collateral Agent and the
Administrative Agent not less than 30 days' prior written notice (in the form of
an Officers' Certificate), or such lesser notice period agreed to by the
Collateral Agent, clearly describing such change and providing such other
information in connection therewith as the Collateral Agent or the
Administrative Agent may reasonably request and (B) it shall have taken all
action reasonably satisfactory to the Collateral Agent to maintain the
perfection and priority of the security interest of the Collateral Agent for the
benefit of the Secured Parties in the Collateral, if applicable. Each Loan Party
agrees to promptly provide the Collateral Agent with certified Organizational
Documents reflecting any of the changes described in the preceding sentences.
Each Loan Party also agrees to promptly notify the Collateral Agent of any
change in the location of any office in which it maintains books or records
relating to Collateral owned by it or any office or facility at which Collateral
is located (including the establishment of any such new office or facility),
other than changes in the location of such Collateral to a Mortgaged Property or
a leased property subject to a Landlord Access Agreement.
(b) Concurrently with the delivery of financial
statements pursuant to Section 5.01(a), deliver to the Administrative Agent and
the Collateral Agent a Perfection Certificate Supplement and a certificate of a
Financial Officer and the chief legal officer of Borrower certifying that all
UCC financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Collateral
have been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction necessary to protect and perfect the security
interests and Liens under the Security Documents for a period of not less than
18 months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period).
SECTION 5.14 DISSOLUTION OF IMMATERIAL SUBSIDIARIES.
Unless such Immaterial Subsidiary shall have previously executed a Joinder
Agreement or such comparable documentation to become a Subsidiary Guarantor and
a joinder agreement to the applicable Security Agreement, substantially in the
form annexed thereto, and taken all other actions necessary or advisable in the
opinion of the Administrative Agent or the Collateral Agent to become a
Subsidiary Guarantor, on or before June 30, 2004, Borrower or the applicable
Subsidiary Guarantor shall dissolve in accordance with applicable law (and
thereafter cease any and all operations in respect of) each Immaterial
Subsidiary and shall provide satisfactory evidence thereof to the Administrative
Agent and the Collateral Agent.
SECTION 5.15 LETTERS OF CREDIT TO BE COLLATERALIZED.
On or before March 31, 2004, Borrower shall have replaced or supported each
letter of credit set forth on Schedule 5.15 with a corresponding Letter of
Credit issued pursuant to the terms of Section 2.18 on terms and conditions
reasonably satisfactory to the Administrative Agent and the Issuing Bank.
SECTION 5.16 CERTAIN POST-CLOSING MATTERS.
Notwithstanding anything to the contrary set forth herein or in any other Loan
Document, Borrower shall not be required to deliver on the Closing Date those
items set forth on Schedule 5.16; provided that, as promptly as practicable
thereafter, and in any event on or before the date specified therein, Borrower
shall be required to deliver or cause to be delivered to the Collateral Agent
all such items in a manner reasonably acceptable to the Collateral Agent.
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ARTICLE VI
NEGATIVE COVENANTS
Each Loan Party warrants, covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on each Loan,
all Fees and all other expenses or amounts payable under any Loan Document have
been paid in full and all Letters of Credit have been canceled or have expired
and all amounts drawn thereunder have been reimbursed in full, unless the
Required Lenders shall otherwise consent in writing, no Loan Party will, nor
will it cause or permit any of its Subsidiaries to:
SECTION 6.01 INDEBTEDNESS. Incur, create, assume or
permit to exist, directly or indirectly, any Indebtedness, except
(a) Indebtedness incurred under this Agreement and the
other Loan Documents;
(b) (i) Indebtedness outstanding on the Closing Date and
listed on Schedule 6.01(b), and (ii) any Permitted Refinancing
Indebtedness in respect thereof;
(c) Indebtedness under Hedging Obligations that are
designed to protect against fluctuations in interest rates, foreign
currency exchange rates or commodity prices, in each case not entered
into for speculative purposes; provided that if such Hedging
Obligations relate to interest rates, (a) such Hedging Obligations
relate to payment obligations on Indebtedness otherwise permitted to be
incurred by the Loan Documents and (b) the notional principal amount of
such Hedging Obligations at the time incurred does not exceed the
principal amount of the Indebtedness to which such Hedging Obligations
relate;
(d) unsecured Indebtedness permitted by Section 6.04(f)
so long as such Indebtedness is subordinated to the Secured Obligations
in accordance with the terms and conditions of the Intercompany Note
and Section 7.04(d);
(e) Indebtedness in respect of Purchase Money Obligations
and Capital Lease Obligations, and refinancings or renewals thereof, in
an aggregate amount not to exceed $10 million at any time outstanding;
(f) Indebtedness incurred by Foreign Subsidiaries in an
aggregate amount not to exceed $5 million at any time outstanding;
(g) unsecured Indebtedness of any Subsidiary in an
aggregate amount for all Subsidiaries not to exceed $10 million, but
only to the extent such Indebtedness was outstanding at the time such
Subsidiary was acquired pursuant to a Permitted Acquisition;
(h) Additional Non-Recourse Indebtedness; provided that
(i) at the time of such incurrence, both before and after giving effect
thereto, no Event of Default or Default shall have occurred and be
continuing and (ii) any equity contribution obligation (contingent or
otherwise), Commercial Credit Support Obligation or other investment
made or required to be made by Borrower or any Subsidiary Guarantor in
respect of or for the benefit of the Excluded Project Subsidiary that
has issued or incurred such Additional Non-Recourse Indebtedness (or
any related
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Non-Recourse Subsidiary) shall be otherwise permitted under this
Section 6.01 and/or Section 6.04, as applicable;
(i) unsecured Indebtedness (i) that does not mature, and
is not subject to mandatory repurchase, redemption or amortization
(other than pursuant to customary asset sale or change of control
provisions requiring redemption or repurchase only if and to the extent
permitted by this Agreement) prior to the date that is six months after
the Term Loan Maturity Date, (ii) that is not exchangeable or
convertible into Indebtedness of Borrower (other than other
Indebtedness permitted by this clause) or any Subsidiary or any
preferred stock or other Equity Interest and (iii) solely to the extent
the Net Cash Proceeds thereof are used to refinance Term Loans or
refinance and permanently reduce commitments in respect of Revolving
Loans or Letters of Credit;
(j) unsecured Indebtedness in respect of Commercial
Credit Support Obligations (other than for an obligation for money
borrowed); provided that any such Commercial Credit Support Obligations
that are in respect of or for the benefit of Non-Guarantor Subsidiaries
shall be in an aggregate amount not to exceed $25 million at any time
outstanding for all such Commercial Credit Support Obligations;
(k) Contingent Obligations of any Loan Party in respect
of Indebtedness otherwise permitted under this Section 6.01;
(l) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within five Business
Days of incurrence;
(m) Indebtedness arising in connection with endorsement
of instruments for deposit in the ordinary course of business;
(n) Indebtedness of the Acquired Business outstanding as
of the Closing Date and assumed by Borrower in connection with the
Acquisition in an aggregate amount not to exceed $5 million; provided
that such indebtedness shall be repaid or prepaid and all obligations
of Borrower and each Subsidiary thereunder terminated on or prior to
the date that is 5 Business Days after the Closing Date; and
(o) other unsecured Indebtedness of any Company in an
aggregate amount for all Companies not to exceed $15 million at any
time outstanding.
SECTION 6.02 LIENS. Create, incur, assume or permit
to exist, directly or indirectly, any Lien on any property now owned or
hereafter acquired by it or on any income or revenues or rights in respect of
any thereof, except the following (collectively, the "PERMITTED LIENS"):
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or delinquent and Liens for
taxes, assessments or governmental charges or levies, which (i) are
being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings)
have the effect of preventing the forfeiture or sale of the property
subject to any such Lien, or (ii) in the case of any such charge or
claim which has or
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may become a Lien against any of the Collateral, such Lien and the
contest thereof shall satisfy the Contested Collateral Lien Conditions;
(b) Liens in respect of property of any Company imposed
by law, which were incurred in the ordinary course of business and do
not secure Indebtedness for borrowed money, such as carriers',
warehousemen's, materialmen's, landlords', workmen's, suppliers',
repairmen's and mechanics' Liens and other similar Liens arising in the
ordinary course of business, and (i) which do not in the aggregate
materially detract from the value of the property of the Companies,
taken as a whole, and do not materially impair the use thereof in the
operation of the business of the Companies, taken as a whole, (ii)
which, if they secure obligations that are then due and unpaid, are
being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP, which
proceedings (or orders entered in connection with such proceedings)
have the effect of preventing the forfeiture or sale of the property
subject to any such Lien, and (iii) in the case of any such Lien which
has or may become a Lien against any of the Collateral, such Lien and
the contest thereof shall satisfy the Contested Collateral Lien
Conditions;
(c) any Lien in existence on the Closing Date and set
forth on Schedule 6.02(c); provided that such Liens (i) shall secure
only those obligations which they secure as of the Closing Date and
refinancings, refundings, extensions, renewals and replacements
thereof, in each case, that are otherwise permitted under Section 6.01
and (ii) shall not encumber any property other than the property
subject thereto on the Closing Date (any such Lien, an "EXISTING
LIEN");
(d) Liens in respect of assets of (and Equity Interests
in) an Excluded Project Subsidiary that is either not a Loan Party as
of the Closing Date or becomes a Subsidiary after the Closing Date, but
only to the extent that such Liens secure Additional Non-Recourse
Indebtedness that is permitted by Section 6.01(h);
(e) easements, rights-of-way, restrictions (including
zoning restrictions), covenants, licenses, encroachments, protrusions
and other similar charges or encumbrances, and minor title deficiencies
on or with respect to any Real Property, in each case whether now or
hereafter in existence, not (i) securing Indebtedness, (ii)
individually or in the aggregate materially impairing the value or
marketability of such Real Property or (iii) individually or in the
aggregate materially interfering with the ordinary conduct of the
business of the Companies at such Real Property;
(f) Liens arising out of judgments, attachments or awards
not resulting in a Default and in respect of which such Company shall
in good faith be prosecuting an appeal or proceedings for review in
respect of which there shall be secured a subsisting stay of execution
pending such appeal or proceedings and, in the case of any such Lien
which has or may become a Lien against any of the Collateral, such Lien
and the contest thereof shall satisfy the Contested Collateral Lien
Conditions;
(g) Liens (other than any Lien imposed by ERISA) (x)
imposed by law or deposits made in connection therewith in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security legislation,
(y) incurred in the ordinary course of business to secure the
performance of tenders, statutory obligations (other than excise
taxes), surety, stay, customs and appeal bonds, statutory bonds, bids,
leases, government contracts, trade contracts, performance and return
of money bonds and other similar
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obligations (exclusive of obligations for the payment of borrowed
money) or (z) arising by virtue of deposits made in the ordinary course
of business to secure liability for premiums to insurance carriers;
provided that (i) with respect to clauses (x), (y) and (z) of this
paragraph (g), such Liens are for amounts not yet due and payable or
delinquent or, to the extent such amounts are so due and payable, such
amounts are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with
GAAP, which proceedings for orders entered in connection with such
proceedings have the effect of preventing the forfeiture or sale of the
property subject to any such Lien, (ii) to the extent such Liens are
not imposed by law, such Liens shall in no event encumber any property
other than cash and Cash Equivalents, (iii) in the case of any such
Lien against any of the Collateral, such Lien and the contest thereof
shall satisfy the Contested Collateral Lien Conditions and (iv) the
aggregate amount of deposits at any time pursuant to clause (y) and
clause (z) of this paragraph (g) shall not exceed $250,000 in the
aggregate;
(h) Leases of the properties of any Company, in each case
entered into in the ordinary course of such Company's business so long
as such Leases are subordinate in all respects to the Liens granted and
evidenced by the Security Documents and do not, individually or in the
aggregate, (i) interfere in any material respect with the ordinary
conduct of the business of any Company or (ii) materially impair the
use (for its intended purposes) or the value of the property subject
thereto;
(i) Liens on property that is the subject of and are
incurred in connection with conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into
by any Company in the ordinary course of business in accordance with
the past practices of such Company;
(j) Liens securing Indebtedness incurred pursuant to
Section 6.01(e); provided that any such Liens attach only to the
property being financed pursuant to such Indebtedness and do not
encumber any other property of any Company;
(k) bankers' Liens, rights of setoff and other similar
Liens existing solely with respect to cash and Cash Equivalents on
deposit in one or more accounts maintained by any Company, in each case
granted in the ordinary course of business in favor of the bank or
banks with which such accounts are maintained, securing amounts owing
to such bank with respect to cash management and operating account
arrangements, including those involving pooled accounts and netting
arrangements; provided that, unless such Liens are non-consensual and
arise by operation of law, in no case shall any such Liens secure
(either directly or indirectly) the repayment of any Indebtedness;
(l) Liens on property of a person existing at the time
such person is acquired or merged with or into or consolidated with any
Company to the extent permitted hereunder (and not created in
anticipation or contemplation thereof); provided that such Liens do not
extend to property not subject to such Liens at the time of acquisition
(other than improvements thereon) and are not more favorable to the
lienholders than such existing Lien;
(m) Liens granted pursuant to the Security Documents to
secure the Obligations;
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(n) licenses of Intellectual Property granted by any
Company in the ordinary course of business and not interfering in any
material respect with the ordinary conduct of business of the
Companies;
(o) the filing of UCC financing statements solely as a
precautionary measure in connection with operating leases;
(p) Liens securing Indebtedness incurred pursuant to
Section 6.01(f); provided that (i) such Liens do not extend to, or
encumber, property which constitutes Collateral and (ii) such Liens
extend only to the property (or Equity Interests) of the Foreign
Subsidiary incurring such Indebtedness; and
(q) Liens incurred in the ordinary course of business of
any Company with respect to obligations that do not in the aggregate
exceed $3 million at any time outstanding, so long as such Liens, to
the extent covering any Collateral, are junior to the Liens granted
pursuant to the Security Documents;
provided, however, that no consensual Liens shall be permitted to exist,
directly or indirectly, on any Securities Collateral, other than Liens granted
pursuant to the Security Documents.
SECTION 6.03 SALE AND LEASEBACK TRANSACTIONS. Enter
into any arrangement, directly or indirectly, with any person whereby any
Company shall sell or transfer any property, real or personal, used or useful in
its business, whether now owned or hereafter acquired, and thereafter rent or
lease such property or other property which it intends to use for substantially
the same purpose or purposes as the property being sold or transferred (a "SALE
AND LEASEBACK TRANSACTION") unless (i) the sale of such property is permitted by
Section 6.06, (ii) any Capital Lease Obligations and/or Liens arising in
connection with its use of such property are permitted by Section 6.01 and 6.02,
respectively, and (iii) it enters into such additional Security Documents and
other instruments as shall be required by the Collateral Agent.
SECTION 6.04 INVESTMENT, LOAN AND ADVANCES. Directly
or indirectly, lend or commit to lend money or credit (by way of guarantee or
otherwise) or make or commit to make advances to any person, or purchase or
acquire or commit to purchase or acquire any stock, bonds, notes, debentures or
other obligations or securities of, or any other interest in, or make any
capital contribution to, any other person, or guarantee the obligation of any
other person or purchase or own a futures contract or otherwise become liable
for the purchase or sale of currency or other commodities at a future date in
the nature of a futures contract (all of the foregoing, collectively,
"INVESTMENTS"), except that the following shall be permitted:
(a) the Companies may consummate the Transactions (and
all transactions directly related thereto that are contemplated to
occur after the Closing Date) in accordance with the provisions of the
Transaction Documents;
(b) Investments outstanding on the Closing Date and
identified on Schedule 6.04(b);
(c) the Companies may (i) acquire and hold accounts
receivables owing to any of them if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary terms, (ii) invest in, acquire and hold cash and Cash
Equivalents (provided that any such amounts constituting Cash
Equivalents that are held in any account that is
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not then subject to a Control Agreement in favor of the Collateral
Agent for the benefit of the Secured Parties shall not exceed $5
million in the aggregate at any time outstanding), (iii) endorse
negotiable instruments held for collection in the ordinary course of
business or (iv) make lease, utility and other similar deposits in the
ordinary course of business;
(d) Hedging Obligations incurred pursuant to Section
6.01(c) and Contingent Obligations permitted to be incurred under
Section 6.01;
(e) loans and advances to directors, employees and
officers of Borrower or the Subsidiaries for bona fide business
purposes and to purchase Equity Interests of Borrower, in an aggregate
amount not to exceed $2 million at any time outstanding; provided that
no loans in violation of Section 402 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
shall be permitted hereunder;
(f) Investments (i) by Borrower in any Subsidiary
Guarantor, (ii) by any Company in Borrower or any Subsidiary Guarantor,
(iii) by a Subsidiary Guarantor in another Subsidiary Guarantor and
(iv) by a Non-Guarantor Subsidiary in any other Non-Guarantor
Subsidiary; provided that any such Investment in the form of a loan or
advance shall be evidenced by the Intercompany Note and, in the case of
a loan or advance by a Loan Party, pledged by such Loan Party as
Collateral pursuant to the Security Documents;
(g) Investments in securities of trade creditors or
customers in the ordinary course of business and consistent with such
Company's past practices that are received in settlement of bona fide
disputes or pursuant to any plan of reorganization or liquidation or
similar arrangement upon the bankruptcy or insolvency of such trade
creditors or customers;
(h) Investments made by Borrower or any Subsidiary as a
result of consideration received in connection with an Asset Sale made
in compliance with Section 6.06, but only to the extent permitted by
Section 2.10(c);
(i) Investments consisting of Permitted Acquisitions;
(j) in addition to any amounts permitted under Section
6.04(i), (i) up to $70 million in the aggregate for all such
Investments (as determined without regard to any write-downs or
write-offs of such Investments), which shall be in the form of cash on
hand and designated for such purpose as of the Closing Date or cash
available from operations (in either case, not from the issuance or
incurrence of any Indebtedness), consisting of Investments in Project
Subsidiaries (so long as the amount of the obligations in respect of
any such Investment consisting of a guarantee is expressly limited to a
stated amount) and (ii) at such times as the Total Funded Debt Leverage
Ratio is less than or equal to 1.75 to 1.00 for the most recently ended
Test Period (on a Pro Forma Basis after giving effect to such
Investment), an additional amount not to exceed $20 million in the
aggregate for all such Investments (as determined without regard to any
write-downs or write-offs of such Investments), which shall be in the
form of cash on hand and designated for such purpose as of the Closing
Date or cash available from operations (in either case, not from the
issuance or incurrence of any Indebtedness), consisting of Investments
in Project Subsidiaries (so long as the amount of the obligations in
respect of any such Investment consisting of a guarantee is expressly
limited to a stated amount); provided that, in each case, (A) any
Equity Interests in any such Project Subsidiary (other than an Excluded
Project Subsidiary and, in the case of a Foreign Subsidiary, subject to
the limitations referred to in Section 5.11(b)) held by a Loan Party
shall be pledged pursuant to the Security Documents, (B) at the time of
such investment, both
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before and after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing (including with respect to
Section 6.15) and (C) after giving effect to such investment, Borrower
shall have cash on hand (including in the form of amounts available
hereunder to be drawn as Revolving Loans) of not less than $20 million.
(k) extensions of trade credit relating to Borrower's
consumer water products business that are made in the ordinary course
of business and consistent with Borrower's past business practices in
an aggregate amount at any time outstanding not to exceed $40 million
at any time outstanding;
(l) extensions of trade credit to Foreign Subsidiaries
that are made in the ordinary course of business and consistent with
Borrower's past business practices on terms and conditions at least as
favorable to Borrower or the applicable Subsidiary Guarantor as would
reasonably be obtained by Borrower or such Subsidiary Guarantor at that
time in a comparable arm's-length transaction with a person other than
an Affiliate (and, in any event, for a period not in excess of 120
days) in an aggregate amount not to exceed $20 million at any time
outstanding;
(m) any issuance of Letters of Credit hereunder in
accordance with the terms hereof;
(n) Investments (including joint ventures and minority
interests) in any person (other than a Subsidiary of Borrower) in which
any person other than Borrower or its Subsidiaries has an ownership
interest in an aggregate amount not to exceed $10 million at any time
outstanding;
(o) Investments in the form of Equity Interests in
Foreign Subsidiaries of Borrower in an aggregate amount not to exceed
$5 million at any time outstanding; and
(p) other investments in an aggregate amount not to
exceed $10 million at any time outstanding.
SECTION 6.05 MERGERS AND CONSOLIDATIONS. Wind up, liquidate
or dissolve its affairs or enter into any transaction of merger or consolidation
(or agree to do any of the foregoing at any future time), except that the
following shall be permitted:
(a) the Transactions (and all transactions directly
related thereto that are contemplated to occur after the Closing Date)
as contemplated by the Transaction Documents;
(b) Assets Sales in compliance with Section 6.06;
(c) acquisitions in compliance with Section 6.07;
(d) any Company may merge or consolidate with or into
Borrower or any Subsidiary Guarantor (as long as Borrower or a
Subsidiary Guarantor is the surviving person in such merger or
consolidation and, if the surviving person is a Subsidiary Guarantor it
remains a Wholly Owned Subsidiary of Borrower); provided that the Lien
on and security interest in such property granted or to be granted in
favor of the Collateral Agent under the Security Documents shall be
maintained or created in accordance with the provisions of Section 5.11
or Section 5.12, as applicable; and
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(e) any Subsidiary may dissolve, liquidate or wind up its
affairs at any time; provided that such dissolution, liquidation or
winding up, as applicable, could not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.06 ASSET SALES. Effect any Asset Sale, or agree to
effect any Asset Sale, except that the following shall be permitted:
(a) disposition of used, worn out, obsolete or surplus
assets by any Company in the ordinary course of business and the
abandonment or other disposition of Intellectual Property that is, in
the reasonable judgment of Borrower, no longer economically practicable
to maintain or useful in the conduct of the business of the Companies
taken as a whole;
(b) Asset Sales the aggregate consideration received in
respect of which pursuant to this clause (b) shall not exceed $30
million in the aggregate over the term of this Agreement and, shall not
exceed $10 million with respect to any single Asset Sale;
(c) Asset Sales consisting of assets sold on or prior to
December 31, 2004 and identified on Schedule 6.06(c); provided that the
aggregate consideration received in respect of such Asset Sales shall
not exceed $30 million;
(d) leases of real or personal property in the ordinary
course of business and in accordance with the applicable Security
Documents;
(e) the Transactions (and all transactions directly
related thereto that are contemplated to occur after the Closing Date)
as contemplated by the Transaction Documents;
(f) mergers and consolidations in compliance with Section
6.05;
(g) Asset Sales constituting assets of Ecolochem
International made in accordance with the UK Subsidiary Reorganization;
provided that the fair market value of such tangible assets shall not
exceed $20 million in the aggregate; and
(h) Investments in compliance with Section 6.04.
To the extent the Required Lenders waive the provisions of this Section 6.06
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 6.06, such Collateral (unless sold to a Company (other
than clause (g) hereof)) shall be sold free and clear of the Liens created by
the Security Documents, and the Agents shall take all actions they deem
appropriate in order to effect the foregoing.
SECTION 6.07 ACQUISITIONS. Purchase or otherwise acquire (in
one or a series of related transactions) any part of the property (whether
tangible or intangible) of any person (or agree to do any of the foregoing at
any future time), except that the following shall be permitted:
(a) Capital Expenditures by Borrower and the Subsidiaries
shall be permitted to the extent permitted by Section 6.10(d);
(b) purchases and other acquisitions of inventory,
materials, equipment and intangible property in the ordinary course of
business;
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(c) Investments in compliance with Section 6.04 (other
than clause (i) thereof);
(d) leases of real or personal property in the ordinary
course of business and in accordance with the applicable Security
Documents;
(e) the Transactions (and all transactions directly
related thereto that are contemplated to occur after the Closing Date)
as contemplated by the Transaction Documents;
(f) Permitted Acquisitions; and
(g) mergers and consolidations in compliance with Section
6.05;
provided that the Lien on and security interest in such property granted or to
be granted in favor of the Collateral Agent under the Security Documents shall
be maintained or created in accordance with the provisions of Section 5.11 or
Section 5.12, as applicable.
SECTION 6.08 DIVIDENDS. Authorize, declare or pay, directly
or indirectly, any Dividends with respect to any Company, except that the
following shall be permitted:
(a) Dividends by any Company to Borrower or any
Subsidiary Guarantor that is a Wholly Owned Subsidiary of Borrower;
(b) payments by Borrower to repurchase or redeem
Qualified Capital Stock of Borrower held by officers, directors or
employees or former officers, directors or employees (or their
transferees, estates or beneficiaries under their estates) of any
Company, upon their death, disability, retirement, severance or
termination of employment or service; provided that the aggregate cash
consideration paid for all such redemptions and payments shall not
exceed, in any fiscal year $2 million;
(c) other Dividends by any Company in an aggregate amount
not to exceed $2 million; and
(d) payments by Borrower to repurchase or redeem rights
under and in accordance with the terms and conditions of the Renewed
Rights Agreement in an aggregate amount not to exceed $500,000 for all
such payments.
SECTION 6.09 TRANSACTIONS WITH AFFILIATES. Enter into,
directly or indirectly, any transaction or series of related transactions,
whether or not in the ordinary course of business, with any Affiliate of any
Company (other than between or among Borrower and one or more Subsidiary
Guarantors), other than on terms and conditions at least as favorable to such
Company as would reasonably be obtained by such Company at that time in a
comparable arm's-length transaction with a person other than an Affiliate,
except that the following shall be permitted:
(a) Dividends permitted by Section 6.08;
(b) Investments permitted by Sections 6.04(e), (f), (j),
(l), (m), and (o);
(c) Asset Sales permitted by Section 6.06(g);
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(d) reasonable and customary director, officer and
employee compensation (including bonuses) and other benefits (including
retirement, health, stock option and other benefit plans) and
indemnification arrangements, in each case approved by the Board of
Directors or a duly authorized committee thereof;
(e) transactions with customers, clients, suppliers,
joint venture partners or purchasers or sellers of goods and services,
in each case in the ordinary course of business and otherwise not
prohibited by the Loan Documents;
(f) the existence of, and the performance by any Loan
Party of its obligations under the terms of, the Acquisition Documents,
any limited liability company, limited partnership or other
Organizational Document or securityholders agreement (including any
registration rights agreement or purchase agreement related thereto) to
which it is a party on the Closing Date and which has been disclosed to
the Lenders as of the Closing Date, and similar agreements that it may
enter into thereafter; provided, however, that the existence of, or the
performance by any Loan Party of obligations under, any amendment to
any such existing agreement or any such similar agreement entered into
after the Closing Date shall only be permitted by this Section 6.09(f)
to the extent not more adverse to the interest of the Lenders in any
material respect, when taken as a whole, than any of
such documents and agreements as in effect on the Closing Date;
(g) sales of Qualified Capital Stock to Affiliates of
Borrower not otherwise prohibited by the Loan Documents and the
granting of registration and other customary rights in connection
therewith;
(h) any transaction with an Affiliate where the only
consideration paid by any Loan Party is Qualified Capital Stock; and
(i) the Transactions (and all transactions directly
related thereto that are contemplated to occur after the Closing Date)
as contemplated by the Transaction Documents.
SECTION 6.10 FINANCIAL COVENANTS.
(a) Maximum Total Leverage Ratio. Permit the Total
Leverage Ratio, at any date during any period set forth in the table below, to
exceed the ratio set forth opposite such period in the table below:
TEST PERIOD LEVERAGE RATIO
----------------------------------------------- --------------
June 30, 2004 -- December 31, 2004 4.00 to 1.0
January 1, 2005 -- March 31, 2005 3.75 to 1.0
April 1, 2005 -- September 30, 2005 3.50 to 1.0
October 1, 2005 -- December 31, 2005 3.25 to 1.0
January 1, 2006 and thereafter 3.00 to 1.0
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(b) Minimum Interest Coverage Ratio. Permit the
Consolidated Interest Coverage Ratio, for any Test Period ending during any
period set forth in the table below, to be less than the ratio set forth
opposite such period in the table below:
INTEREST
TEST PERIOD COVERAGE RATIO
---------------------------- --------------
June 30, 2004 and thereafter 3.00 to 1.0
(c) Minimum Fixed Charge Coverage Ratio. Permit the
Consolidated Fixed Charge Coverage Ratio, for any Test Period ending during any
period in the table set forth below to be less than the ratio set forth opposite
such period in the table below:
FIXED CHARGE
TEST PERIOD COVERAGE RATIO
------------------------------------------- --------------
June 30, 2004 - December 31, 2005 1.00 to 1.0
January 1, 2006 - December 31, 2006 1.05 to 1.0
January 1, 2007 and thereafter 1.10 to 1.0
(d) Limitation on Capital Expenditures. Permit the
aggregate amount of Capital Expenditures made during any fiscal year for the
applicable period set forth below to exceed the amount set forth opposite such
period below:
PERIOD AMOUNT (IN MILLIONS)
------------------------------------------- -------------------
Closing Date - December 31, 2004 $ 40 million
January 1, 2005 and thereafter $ 42 million
provided, however, that (x) if the aggregate amount of Capital
Expenditures made in any fiscal year shall be less than the maximum amount of
Capital Expenditures permitted under this Section 6.10(d) for such fiscal year
(before giving effect to any carryover), then an amount of such shortfall not
exceeding 50% of such maximum amount may be added to the amount of Capital
Expenditures permitted under this Section 6.10(d) for the immediately succeeding
(but not any other) fiscal year, (y) in determining whether any amount is
available for carryover, the amount expended in any fiscal year shall first be
deemed to be from the amount allocated to such fiscal year (before giving effect
to any carryover) and (z) if on or after January 1, 2006, the Total Funded Debt
Leverage Ratio is less than or equal to 1.75 to 1.00 for the most recently ended
Test Period, then the amount specified for the applicable period above shall be
increased by an amount equal to $8 million.
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\
SECTION 6.11 PREPAYMENTS OF OTHER INDEBTEDNESS; MODIFICATIONS
OF ORGANIZATIONAL DOCUMENTS AND OTHER DOCUMENTS, ETC. Directly or indirectly:
(a) make (or give any notice in respect thereof) any
voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result
of any asset sale, change of control or similar event of, any
Indebtedness outstanding under any Subordinated Indebtedness, except as
otherwise permitted by this Agreement (including, without limitation,
any such payment or repayment in respect of Indebtedness permitted
under Section 6.01(n));
(b) amend or modify, or permit the amendment or
modification of, any provision of any Transaction Document in any
manner that is adverse in any material respect to the interests of the
Lenders; or
(c) terminate, amend, modify (including, except as
otherwise agreed by the Collateral Agent, electing to treat any Pledge
Interests (as defined in the Security Agreement) as a "security" under
Section 8-103 of the UCC) or change any of its Organizational Documents
(including by the filing or modification of any certificate of
designation) or any agreement to which it is a party with respect to
its Equity Interests (including any stockholders' agreement), or enter
into any new agreement with respect to its Equity Interests, other than
any such amendments, modifications or changes or such new agreements
which are not adverse in any material respect to the interests of the
Lenders; provided that Borrower may issue such Equity Interests, so
long as such issuance is not prohibited by Section 6.13 or any other
provision of this Agreement, and may amend its Organizational Documents
to authorize any such Equity Interests.
SECTION 6.12 LIMITATION ON CERTAIN RESTRICTIONS ON
SUBSIDIARIES. Directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by Borrower or
any Subsidiary, or pay any Indebtedness owed to Borrower or a Subsidiary, (b)
make loans or advances to Borrower or any Subsidiary or (c) transfer any of its
properties to Borrower or any Subsidiary, except for such encumbrances or
restrictions existing under or by reason of (i) applicable law; (ii) this
Agreement and the other Loan Documents; (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of a
Subsidiary; (iv) customary provisions restricting assignment of any agreement
entered into by a Subsidiary in the ordinary course of business (provided that
Borrower shall have used commercially efforts to avoid any such restrictions);
(v) any holder of a Lien permitted by Section 6.02 restricting the transfer of
the property subject thereto (provided that Borrower shall have used
commercially efforts to avoid any such restrictions); (vi) customary
restrictions and conditions contained in any agreement relating to the sale of
any property permitted under Section 6.06 pending the consummation of such sale;
(vii) any agreement in effect at the time such Subsidiary becomes a Subsidiary
of Borrower in accordance with the terms and conditions of the Loan Documents,
so long as such agreement was not entered into in connection with or in
contemplation of such person becoming a Subsidiary of Borrower; (viii) in the
case of any joint venture which is not a Loan Party in respect of any matters
referred to in clauses (b) and (c) above, restrictions in such person's
Organizational Documents or pursuant to any joint venture agreement or
stockholders agreements solely to the extent of the Equity Interests of or
property held in the subject joint venture or other entity; or (ix) any
encumbrances or restrictions imposed by any amendments or refinancings that are
otherwise permitted by the Loan Documents of the contracts, instruments or
obligations referred to in clause (vii) above; provided that
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such amendments or refinancings are no more materially restrictive with respect
to such encumbrances and restrictions than those prior to such amendment or
refinancing.
SECTION 6.13 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a)
With respect to Borrower, issue any Equity Interest that is not Qualified
Capital Stock (other than any Equity Interests issued under and in accordance
with the Renewed Rights Agreement).
(b) With respect to any Subsidiary, issue any Equity
Interest (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, any Equity Interest,
except (i) for stock splits, stock dividends and additional issuances of Equity
Interests which do not decrease the percentage ownership of Borrower or any
Subsidiaries in any class of the Equity Interest of such Subsidiary; (ii)
Subsidiaries of Borrower formed after the Closing Date in accordance with
Section 6.14 may issue Equity Interests to Borrower or the Subsidiary of
Borrower which is to own such Equity Interests and (iii) stock consideration
paid by Ionics Ventures UK (or its direct wholly owned Subsidiary) to Ecolochem
International in connection with the UK Subsidiary Reorganization. All Equity
Interests issued in accordance with this Section 6.13(b) shall, to the extent
required by Sections 5.11 and 5.12 or any Security Agreement, be delivered to
the Collateral Agent for pledge pursuant to the applicable Security Agreement.
SECTION 6.14 LIMITATION ON CREATION OF SUBSIDIARIES.
Establish, create or acquire any additional Subsidiaries without the prior
written consent of the Required Lenders; provided that, without such consent,
Borrower may (i) establish or create one or more Wholly Owned Subsidiaries of
Borrower, (ii) establish, create or acquire one or more Subsidiaries in
connection with an Investment made pursuant to Section 6.04(f) or (j) or (iii)
acquire one or more Subsidiaries in connection with a Permitted Acquisition, so
long as, in each case, Section 5.11(b) shall be complied with.
SECTION 6.15 BUSINESS. Engage (directly or indirectly) in any
business other than those businesses in which Borrower and its Subsidiaries are
engaged on the Closing Date (after giving effect to the Acquisition) as
described in the Confidential Information Memorandum (or, in the good faith
judgment of the Board of Directors, which are substantially related thereto or
are reasonable extensions thereof).
SECTION 6.16 LIMITATION ON ACCOUNTING CHANGES. Make or permit
any change in accounting policies or reporting practices without the consent of
the Required Lenders, which consent shall not be unreasonably withheld, except
changes that are required by GAAP.
SECTION 6.17 FISCAL YEAR. Change its fiscal year-end to a
date other than December 31.
SECTION 6.18 LEASE OBLIGATIONS. Create, incur, assume or
suffer to exist any obligations as lessee for the rental or hire of real or
personal property of any kind under leases or agreements to lease having an
original term of one year or more that would cause the direct and contingent
liabilities of Borrower and its Subsidiaries, on a consolidated basis, in
respect of all such obligations to exceed $10 million payable in any period of
12 consecutive months.
SECTION 6.19 NO FURTHER NEGATIVE PLEDGE. Enter into any
agreement, instrument, deed or lease which prohibits or limits the ability of
any Loan Party to create, incur, assume or suffer to exist any Lien upon any of
their respective properties or revenues, whether now owned or hereafter
acquired, or which requires the grant of any security for an obligation if
security is granted for
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another obligation, except the following: (i) this Agreement and the other Loan
Documents; (ii) covenants in documents creating Liens permitted by Section 6.02
prohibiting further Liens on the properties encumbered thereby; (iii) any other
agreement that does not restrict in any manner (directly or indirectly) Liens
created pursuant to the Loan Documents on any Collateral securing the
Obligations and does not require the direct or indirect granting of any Lien
securing any Indebtedness or other obligation by virtue of the granting of Liens
on or pledge of property of any Loan Party to secure the Obligations; and (iv)
any prohibition or limitation that (a) exists pursuant to applicable law, (b)
consists of customary restrictions and conditions contained in any agreement
relating to the sale of any property permitted under Section 6.06 pending the
consummation of such sale, (c) restricts subletting or assignment of any lease
governing a leasehold interest of Borrower or a Subsidiary, (d) exists in any
agreement in effect at the time such Subsidiary becomes a Subsidiary of Borrower
in accordance with the terms and conditions of the Loan Documents, so long as
such agreement was not entered into in contemplation of such person becoming a
Subsidiary, (e) restricts the assignment, pledge or creation of any Lien upon
license or other rights under license agreements or (f) is imposed by any
amendments or refinancings that are otherwise permitted by the Loan Documents of
the contracts, instruments or obligations referred to in clause (iv)(d);
provided that such amendments and refinancings are no more materially
restrictive with respect to such prohibitions and limitations than those prior
to such amendment or refinancing.
SECTION 6.20 ANTI-TERRORISM LAW; ANTI-MONEY LAUNDERING. (a)
Directly or indirectly, (i) knowingly conduct any business or engage in making
or receiving any contribution of funds, goods or services to or for the benefit
of any Person described in Section 3.22, (ii) knowingly deal in, or otherwise
engage in any transaction relating to, any property or interests in property
blocked pursuant to the Executive Order or any other Anti-Terrorism Law, or
(iii) knowingly engage in or conspire to engage in any transaction that evades
or avoids, or has the purpose of evading or avoiding, or attempts to violate,
any of the prohibitions set forth in any Anti-Terrorism Law (and the Loan
Parties shall deliver to the Lenders any certification or other evidence
requested from time to time by any Lender in its reasonable discretion,
confirming the Loan Parties' compliance with this Section 6.20).
(b) Cause or permit any of the funds of such Loan Party
that are used to repay the Loans to be derived from any unlawful activity with
the result that the making of the Loans would be in violation of law.
SECTION 6.21 EMBARGOED PERSON. Cause or permit (a) any of the
funds or properties of the Loan Parties that are used to repay the Loans to
constitute property of, or be beneficially owned directly or indirectly by, any
Person subject to sanctions or trade restrictions under United States law
("EMBARGOED PERSON" or "EMBARGOED PERSONS") that is identified on (1) the "List
of Specially Designated Nationals and Blocked Persons" (the "SDN LIST")
maintained by OFAC and/or on any other similar list ("Other list") maintained by
OFAC pursuant to any authorizing statute including, but not limited to, the
International Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive
Order or regulation promulgated thereunder, with the result that the investment
in the Loan Parties (whether directly or indirectly) is prohibited by law, or
the Loans made by the Lenders would be in violation of law, or (2) the Executive
Order, any related enabling legislation or any other similar Executive Orders
(collectively, "EXECUTIVE ORDERS"), or (b) any Embargoed Person to have any
direct or indirect interest, of any nature whatsoever in the Loan Parties, with
the result that the investment in the Loan Parties (whether directly or
indirectly) is prohibited by law or the Loans are in violation of law.
SECTION 6.22 IMMATERIAL SUBSIDIARIES. Unless such Immaterial
Subsidiary shall have previously executed a Joinder Agreement or such comparable
documentation to become a
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Subsidiary Guarantor and a joinder agreement to the applicable Security
Agreement, substantially in the form annexed thereto, and taken all other
actions necessary or advisable in the opinion of the Administrative Agent or the
Collateral Agent to become a Subsidiary Guarantor, no Immaterial Subsidiary will
have any assets with a fair market value in excess of $100,000 in the aggregate
or any ongoing business operations or other activities.
ARTICLE VII
GUARANTEE
SECTION 7.01 THE GUARANTEE. The Subsidiary Guarantors hereby,
jointly and severally guarantee, each as a primary obligor and not merely as a
surety, to each Secured Party and their respective successors and assigns, the
prompt payment in full when due (whether at stated maturity, by required
prepayment, declaration, demand, by acceleration or otherwise) of the principal
of and interest (including any interest, fees, costs or charges that would
accrue but for the provisions of the Title 11 of the United States Code after
any bankruptcy or insolvency petition under Title 11 of the United States Code)
on the Loans made by the Lenders to, and the Notes held by each Lender of,
Borrower, and the prompt payment and performance of all other Obligations from
time to time owing to the Secured Parties by any Loan Party under any Loan
Document in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the "GUARANTEED OBLIGATIONS"). The
Subsidiary Guarantors hereby jointly and severally agree that if Borrower or
other Guarantor(s) shall fail to pay and perform in full when due (whether at
stated maturity, by acceleration or otherwise) any of the Guaranteed
Obligations, the Subsidiary Guarantors will promptly pay the same in cash and/or
perform the same, as the case may be, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any of
the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
SECTION 7.02 OBLIGATIONS UNCONDITIONAL. The obligations of
the Subsidiary Guarantors under Section 7.01 shall constitute a guaranty of
payment and to the fullest extent permitted by applicable law, are absolute,
irrevocable and unconditional, joint and several, irrespective of the value,
genuineness, validity, regularity or enforceability of the Guaranteed
Obligations of Borrower under this Agreement, the Notes, if any, or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or Guarantor (except for payment in full or release by the Collateral
Agent in accordance with the terms of the applicable Loan Documents). Without
limiting the generality of the foregoing, it is agreed that the occurrence of
any one or more of the following shall not alter or impair the liability of the
Subsidiary Guarantors hereunder which shall remain absolute, irrevocable and
unconditional under any and all circumstances as described above:
(i) at any time or from time to time, without notice to
the Subsidiary Guarantors, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be extended, or
such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Agreement or the Notes, if any, or any other agreement or
instrument referred to herein or therein shall be done or omitted;
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(iii) the maturity of any of the Guaranteed Obligations
shall be accelerated, or any of the Guaranteed Obligations shall be
amended in any respect, or any right under the Loan Documents or any
other agreement or instrument referred to herein or therein shall be
amended or waived in any respect or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(iv) any Lien or security interest granted to, or in favor
of, Issuing Bank or any Lender or Agent as security for any of the
Guaranteed Obligations shall fail to be perfected; or
(v) the release of any other Guarantor pursuant to
Section 7.09.
Each Subsidiary Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest and all notices whatsoever, and any
requirement that any Secured Party exhaust any right, power or remedy or proceed
against Borrower under this Agreement or the Notes, if any, or any other
agreement or instrument referred to herein or therein, or against any other
person under any other guarantee of, or security for, any of the Guaranteed
Obligations. Each Subsidiary Guarantor waives any and all notice of the
creation, renewal, extension, waiver, termination or accrual of any of the
Guaranteed Obligations and notice of or proof of reliance by any Secured Party
upon this Guarantee or acceptance of this Guarantee, and the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred in reliance upon this Guarantee, and all dealings between
Borrower and the Secured Parties shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee. This Guarantee shall be
construed as a continuing, absolute, irrevocable and unconditional guarantee of
payment without regard to any right of offset with respect to the Guaranteed
Obligations at any time or from time to time held by Secured Parties, and the
obligations and liabilities of the Subsidiary Guarantors hereunder shall not be
conditioned or contingent upon the pursuit by the Secured Parties or any other
person at any time of any right or remedy against Borrower or against any other
person which may be or become liable in respect of all or any part of the
Guaranteed Obligations or against any collateral security or guarantee therefor
or right of offset with respect thereto. This Guarantee shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon the Subsidiary Guarantors and the successors and assigns thereof, and
shall inure to the benefit of the Lenders, and their respective successors and
assigns, notwithstanding that from time to time during the term of this
Agreement there may be no Guaranteed Obligations outstanding. To the extent
permitted by applicable law, each Subsidiary Guarantor hereby expressly waives
any and all suretyship defenses to which it might otherwise be entitled.
SECTION 7.03 REINSTATEMENT. The obligations of the Subsidiary
Guarantors under this Article VII shall be automatically reinstated if and to
the extent that for any reason any payment by or on behalf of Borrower or other
Loan Party in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise.
SECTION 7.04 SUBROGATION; RIGHTS OF REIMBURSEMENT;
SUBORDINATION Each Subsidiary Guarantor hereby agrees that until the
indefeasible payment and satisfaction in full in cash of all Guaranteed
Obligations and the expiration and termination of the Commitments of the Lenders
under this Agreement it shall waive any claim and shall not exercise any right
or remedy, direct or indirect, arising by reason of any performance by it of its
guarantee in Section 7.01, whether by subrogation or otherwise, against Borrower
or any other Guarantor of any of the Guaranteed Obligations or any security for
any of the Guaranteed Obligations.
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(b) If any payment is made by a Subsidiary Guarantor or
from its property, such Subsidiary Guarantor shall be entitled, subject to and
upon payment in full of the Obligations, (i) to demand and enforce reimbursement
for the full amount of such payment from Borrower and (ii) to demand and enforce
contribution in respect of such payment from each other Subsidiary Guarantor
that has not paid its fair share of such payment, as necessary to ensure that
(after giving effect to any enforcement of reimbursement rights provided hereby)
each Subsidiary Guarantor pays its fair share of the unreimbursed portion of
such payment. For this purpose, the "fair share" of each Subsidiary Guarantor as
to any unreimbursed payment shall be determined based on an equitable
apportionment of such unreimbursed payment among all Subsidiary Guarantors based
on the relative value of their assets and any other equitable considerations
deemed appropriate by a court of competent jurisdiction.
(c) If and whenever (after payment in full of the
Obligations and delivery of notification thereof to the Collateral Agent) any
right of reimbursement or contribution becomes enforceable by any Subsidiary
Guarantor against any other Subsidiary Guarantor under Section 7.04(b), such
Subsidiary Guarantor shall be entitled, subject to and upon payment in full of
the Obligations, to be subrogated (equally and ratably with all other Subsidiary
Guarantors entitled to reimbursement or contribution from any other Subsidiary
Guarantor as set forth in this Section 7.04) to any security interest that may
then be held by the Collateral Agent upon any Collateral granted to it under the
Security Documents. Such right of subrogation shall be enforceable solely
against the Subsidiary Guarantors, and not against the Collateral Agent or any
other Secured Party, and neither the Collateral Agent nor any other Secured
Party shall have any duty whatsoever to warrant, ensure or protect any such
right of subrogation or to obtain, perfect, maintain, hold, enforce or retain
any Collateral for any purpose related to any such right of subrogation. If
subrogation is demanded by any Subsidiary Guarantor, then (after payment in full
in cash of the Obligations, the termination of all Commitments and the discharge
or cash collateralization (at 100% of the aggregate undrawn amount) of all
outstanding Letters of Credit) the Collateral Agent shall deliver to the
Subsidiary Guarantors making such demand, or to a representative of such
Subsidiary Guarantors or of the Subsidiary Guarantors generally, an instrument
reasonably satisfactory to the Collateral Agent transferring, on a quitclaim
basis without any recourse, representation, warranty or obligation whatsoever,
whatever security interest the Collateral Agent then may hold in whatever
Collateral may then exist that was not previously released or disposed of by the
Collateral Agent (provided that such Subsidiary Guarantors shall prepare and
deliver the initial draft of such instrument to the Collateral Agent).
(d) Any Indebtedness of any Subsidiary Guarantor
permitted pursuant to Section 6.01(d) and all rights and claims arising under
this Section 7.04 or based upon or relating to any other right of reimbursement,
indemnification, contribution or subrogation that may at any time arise or exist
in favor of any Subsidiary Guarantor as to any payment on account of the
Obligations made by it or received or collected from its property shall be fully
subordinated in all respects to the prior payment in full in cash of all of the
Obligations, the termination of all Commitments and the discharge or cash
collateralization (at 100% of the aggregate undrawn amount) of all outstanding
Letters of Credit and, with respect to any indebtedness permitted pursuant to
Section 6.01(d), otherwise in the manner set forth in the Intercompany Note
evidencing such Indebtedness. Until payment in full in cash of the Obligations,
the termination of all Commitments and the discharge or cash collateralization
(at 100% of the aggregate undrawn amount) of all outstanding Letters of Credit,
no Subsidiary Guarantor shall demand or receive any collateral security or, upon
and during the continuance of any Default or Event of Default, any payment or
distribution whatsoever (whether in cash, property or securities or otherwise)
on account of any such right or claim. If any such payment or distribution is
made or becomes available to any Subsidiary Guarantor in any bankruptcy case or
receivership, insolvency or liquidation proceeding, such payment or
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distribution shall be delivered by the person making such payment or
distribution directly to the Collateral Agent, for application to the payment of
the Obligations. If any such payment or distribution is received by any
Subsidiary Guarantor, it shall be held by such Subsidiary Guarantor in trust, as
trustee of an express trust for the benefit of the Secured Parties, and shall
forthwith be transferred and delivered by such Subsidiary Guarantor to the
Collateral Agent, in the exact form received and, if necessary, duly endorsed.
(e) The obligations of the Subsidiary Guarantors under
the Loan Documents, including their liability for the Obligations and the
enforceability of the security interests granted thereby, are not contingent
upon the validity, legality, enforceability, collectibility or sufficiency of
any right of reimbursement, contribution or subrogation arising under this
Section 7.04. The invalidity, insufficiency, unenforceability or
uncollectibility of any such right shall not in any respect diminish, affect or
impair any such obligation or any other claim, interest, right or remedy at any
time held by the Collateral Agent or any other Secured Party against any
Subsidiary Guarantor or its property. The Secured Parties make no
representations or warranties in respect of any such right and shall have no
duty to assure, protect, enforce or ensure any such right or otherwise relating
to any such right.
(f) Each Subsidiary Guarantor reserves any and all other
rights of reimbursement, contribution or subrogation at any time available to it
as against any other Subsidiary Guarantor, but (i) the exercise and enforcement
of such rights shall be subject to Section 7.04(d) and (ii) neither the
Collateral Agent nor any other Secured Party shall at any time have any duty or
liability whatsoever in respect of any such right, except as provided in Section
7.04(c).
SECTION 7.05 REMEDIES. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of Borrower under this Agreement and the Notes, if any, may be
declared to be forthwith due and payable as provided in Article VIII (and shall
be deemed to have become automatically due and payable in the circumstances
provided in said Article VIII) for purposes of Section 7.01, notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against Borrower and
that, in the event of such declaration (or such obligations being deemed to have
become automatically due and payable), such obligations (whether or not due and
payable by Borrower) shall forthwith become due and payable by the Subsidiary
Guarantors for purposes of Section 7.01.
SECTION 7.06 INSTRUMENT FOR THE PAYMENT OF MONEY. Each
Subsidiary Guarantor hereby acknowledges that the guarantee in this Article VII
constitutes an instrument for the payment of money, and consents and agrees that
any Lender or Agent, at its sole option, in the event of a dispute by such
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring a motion-action under New York CPLR Section 3213.
SECTION 7.07 CONTINUING GUARANTEE. The guarantee in this
Article VII is a continuing guarantee of payment, and shall apply to all
Guaranteed Obligations whenever arising.
SECTION 7.08 GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In
any action or proceeding involving any state corporate limited partnership or
limited liability company law, or any applicable state, federal or foreign
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 7.01
would otherwise be held or determined to be void, voidable, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 7.01, then, notwithstanding any
other
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provision to the contrary, the amount of such liability shall, without any
further action by such Guarantor, any Loan Party or any other person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
SECTION 7.09 RELEASE OF GUARANTORS. If, in compliance with
the terms and provisions of the Loan Documents, all or substantially all of the
Equity Interests or property of any Subsidiary Guarantor are sold or otherwise
transferred (a "TRANSFERRED GUARANTOR") to a person or persons, none of which is
Borrower or a Subsidiary, such Transferred Guarantor shall, upon the
consummation of such sale or transfer, be released from its obligations under
this Agreement (including under Section 11.03 hereof) and its obligations to
pledge and grant any Collateral owned by it pursuant to any Security Document
and, in the case of a sale of all or substantially all of the Equity Interests
of the Transferred Guarantor, the pledge of such Equity Interests to the
Collateral Agent pursuant to the Security Documents shall be released, and the
Collateral Agent shall take such actions as are necessary to effect each release
described in this Section 7.09 in accordance with the relevant provisions of the
Security Documents.
ARTICLE VIII
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of the following events ("EVENTS
OF DEFAULT"):
(a) default shall be made in the payment of any principal
of any Loan or any Reimbursement Obligation when and as the same shall
become due and payable, whether at the due date thereof (including a
Term Loan Repayment Date) or at a date fixed for prepayment (whether
voluntary or mandatory) thereof or by acceleration thereof or
otherwise;
(b) default shall be made in the payment of any interest
on any Loan or any Fee or any other amount (other than an amount
referred to in paragraph (a) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made in
or in connection with any Loan Document or the borrowings or issuances
of Letters of Credit hereunder, or any representation, warranty,
statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with or
pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or
furnished;
(d) default shall be made in the due observance or
performance by any Company of any covenant, condition or agreement
contained in Section 5.02, 5.03 or 5.08 or in Article VI;
(e) default shall be made in the due observance or
performance by any Company of any covenant, condition or agreement
contained in any Loan Document (other than those specified in
paragraphs (a), (b) or (d) immediately above) and such default shall
continue unremedied or shall not be waived for a period of 30 days
after written notice thereof from the Administrative Agent or any
Lender to Borrower;
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(f) any Company (other than an Excluded Project
Subsidiary) shall (i) fail to pay any principal or interest, regardless
of amount, due in respect of any Indebtedness (other than the
Obligations), when and as the same shall become due and payable beyond
any applicable grace period, or (ii) fail to observe or perform any
other term, covenant, condition or agreement contained in any agreement
or instrument evidencing or governing any such Indebtedness if the
effect of any failure referred to in this clause (ii) is to cause, or
to permit the holder or holders of such Indebtedness or a trustee or
other representative on its or their behalf (with or without the giving
of notice, the lapse of time or both) to cause, such Indebtedness to
become due prior to its stated maturity or become subject to a
mandatory offer purchase by the obligor; provided that it shall not
constitute an Event of Default pursuant to this paragraph (f) unless
the aggregate amount of all such Indebtedness referred to in clauses
(i) and (ii) exceeds $5 million at any one time (provided that, in the
case of Hedging Obligations, the notional amount thereof shall be
counted for this purpose);
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of any Company (other than
an Excluded Project Subsidiary), or of a substantial part of the
property of any Company (other than an Excluded Project Subsidiary),
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law; (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for any Company (other than an Excluded Project Subsidiary) or
for a substantial part of the property of any Company (other than an
Excluded Project Subsidiary); or (iii) the winding-up or liquidation of
any Company (other than an Excluded Project Subsidiary); and such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) any Company shall (i) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, or any
other federal, state or foreign bankruptcy, insolvency, receivership or
similar law; (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or the filing of any
petition described in clause (g) above; (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Company or for a substantial
part of the property of any Company; (iv) file an answer admitting the
material allegations of a petition filed against it in any such
proceeding; (v) make a general assignment for the benefit of creditors;
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due; (vii) take any action for the purpose
of effecting any of the foregoing; or (viii) except as permitted by
Section 6.05(e), wind up or liquidate;
(i) one or more judgments, orders or decrees for the
payment of money in an aggregate amount in excess of $5 million shall
be rendered against any Company or any combination thereof and the same
shall remain undischarged, unvacated or unbonded for a period of 30
consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to
levy upon properties of any Company to enforce any such judgment;
(j) one or more ERISA Events or noncompliance with
respect to Foreign Plans shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events and noncompliance with respect to Foreign Plans that have
occurred, could
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reasonably be expected to result in liability of any Company and its
ERISA Affiliates in an aggregate amount exceeding $1 million, or the
imposition of a Lien on any properties of a Company;
(k) any security interest and Lien purported to be
created by any Security Document shall cease to be in full force and
effect, or shall cease to give the Collateral Agent, for the benefit of
the Secured Parties, the Liens, rights, powers and privileges purported
to be created and granted under such Security Documents (including a
perfected first priority security interest in and Lien on, all of the
Collateral thereunder (except as otherwise expressly provided in such
Security Document)) in favor of the Collateral Agent, or shall be
asserted by Borrower or any other Loan Party not to be, a valid,
perfected, first priority (except as otherwise expressly provided in
this Agreement or such Security Document) security interest in or Lien
on the Collateral covered thereby;
(l) any Loan Document or any material provisions thereof
shall at any time and for any reason be declared by a court of
competent jurisdiction to be null and void, or a proceeding shall be
commenced by any Loan Party or any other person, or by any Governmental
Authority, seeking to establish the invalidity or unenforceability
thereof (exclusive of questions of interpretation of any provision
thereof), or any Loan Party shall repudiate or deny any portion of its
liability or obligation for the Obligations;
(m) there shall have occurred a Change in Control;
(n) any Loan Party shall be prohibited or otherwise
restrained from conducting the business theretofore conducted by it in
any manner that has or could reasonably be expected to result in a
Material Adverse Effect by virtue of any determination, ruling,
decision, decree or order of any court or Governmental Authority of
competent jurisdiction;
(o) the Acquisition shall not have occurred on the
Closing Date in accordance with the terms and conditions of the
Acquisition Agreement; or
(p) if Borrower or any Subsidiary Guarantor shall give to
any Lender, Collateral Agent or Administrative Agent any notice, under
the provisions of Section 443.055 of the Revised Statutes of Missouri,
concerning future advances;
then, and in every such event (other than an event with respect to Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to Borrower, take either or both of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments and (ii) declare the Loans and Reimbursement Obligations then
outstanding to be forthwith due and payable in whole or in part, whereupon the
principal of the Loans and Reimbursement Obligations so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued Fees and
all other liabilities of Borrower accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by Borrower and the Subsidiary Guarantors, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event,
with respect to Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans and
Reimbursement Obligations then outstanding, together with accrued interest
thereon and any unpaid accrued Fees and all other liabilities of Borrower
accrued hereunder and under any other Loan
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Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by Borrower and the Subsidiary Guarantors, anything contained
herein or in any other Loan Document to the contrary notwithstanding.
ARTICLE IX
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS
SECTION 9.01 COLLATERAL ACCOUNT. (a) The Collateral Agent is
hereby authorized to establish and maintain at its office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in the name of the Collateral Agent and
pursuant to a Control Agreement, a restricted deposit account designated
"Ionics, Incorporated Collateral Account." Each Loan Party shall deposit into
the Collateral Account from time to time (i) the cash proceeds of any of the
Collateral (including pursuant to any disposition thereof) to the extent
contemplated herein or in any other Loan Document, (ii) the cash proceeds of any
Casualty Event with respect to Collateral, to the extent contemplated herein or
in any other Loan Document, and (iii) any cash such Loan Party is required to
pledge as additional collateral security hereunder pursuant to the Loan
Documents.
(b) The balance from time to time in the Collateral
Account shall constitute part of the Collateral and shall not constitute payment
of the Obligations until applied as hereinafter provided. So long as no Event of
Default has occurred and is continuing or will result therefrom, the Collateral
Agent shall within two Business Days of receiving a request of the applicable
Loan Party for release of cash proceeds (i) from the Collateral Account
constituting Net Cash Proceeds relating to any Casualty Event or Asset Sale,
remit such cash proceeds on deposit in the Collateral Account to or upon the
order of such Loan Party, so long as such Loan Party has satisfied the
conditions relating thereto set forth in Section 9.02 and (ii) with respect to
the LC Sub-Account, remit such Net Cash Proceeds on deposit in the LC
Sub-Account to or upon the order of such Loan Party (x) at such time as all
Letters of Credit shall have been terminated and all of the liabilities in
respect of the Letters of Credit have been paid in full or (y) otherwise in
accordance with Section 2.18(i). At any time following the occurrence and during
the continuance of an Event of Default, the Collateral Agent may (and, if
instructed by the Required Lenders as specified herein, shall) in its (or their)
discretion apply or cause to be applied (subject to collection) the balance from
time to time outstanding to the credit of the Collateral Account to the payment
of the Obligations in the manner specified in Section 9.03 hereof subject,
however, in the case of amounts deposited in the LC Sub-Account, to the
provisions of Sections 2.18(i) and 9.03. The Loan Parties shall have no right to
withdraw, transfer or otherwise receive any funds deposited in the Collateral
Account except to the extent specifically provided herein.
(c) Amounts on deposit in the Collateral Account shall be
invested and reinvested from time to time in Cash Equivalents as the applicable
Loan Party (or, after the occurrence and during the continuance of an Event of
Default, the Collateral Agent) shall determine by written instruction to the
Collateral Agent, or if no such instructions are given, then as the Collateral
Agent, in its sole discretion, shall determine, which Cash Equivalents shall be
held in the name and be under the control of the Collateral Agent (or any
sub-agent); provided that at any time after the occurrence and during the
continuance of an Event of Default, the Collateral Agent may (and, if instructed
by the Required Lenders as specified herein, shall) in its (or their) discretion
at any time and from time to time elect to liquidate any such Cash Equivalents
and to apply or cause to be applied the proceeds thereof to the payment of the
Obligations in the manner specified in Section 9.03 hereof subject, however, in
the case of amounts deposited in the LC Sub-Account, to the provisions of
Section 2.18(i).
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(d) Amounts deposited into the Collateral Account as
cover for liabilities in respect of Letters of Credit under any provision of
this Agreement requiring such cover shall be held by the Administrative Agent in
a separate sub-account designated as the "LC Sub-Account" (the "LC SUB-ACCOUNT")
and, subject to Section 2.18(i), all amounts held in the LC Sub-Account shall
constitute collateral security first for the liabilities in respect of Letters
of Credit outstanding from time to time and second for the other Obligations
hereunder until such time as all Letters of Credit shall have been terminated
and all of the liabilities in respect of Letters of Credit have been paid in
full or otherwise in accordance with Section 2.18(i).
SECTION 9.02 PROCEEDS OF DESTRUCTION, TAKING AND COLLATERAL
DISPOSITIONS. So long as no Event of Default shall have occurred and be
continuing, in the event the applicable Loan Party elects to reinvest Net Cash
Proceeds in respect of any Asset Sale or Casualty Event in accordance with the
provisions of Sections 2.10(c) and 2.10(e) as applicable, the Collateral Agent
shall receive at least 10 days' prior notice of each request for payment and
shall not release any part of such Net Cash Proceeds, until the applicable Loan
Party has furnished to the Collateral Agent (i) an Officers' Certificate setting
forth: (A) a brief description of the reinvestment to be made, (B) the dollar
amount of the expenditures to be made, or costs incurred by such Loan Party in
connection with such reinvestment and (C) evidence that the properties acquired
in connection with such reinvestment have a fair market value at least equal to
the amount of such Net Cash Proceeds requested to be released from the
Collateral Account and (ii) all security agreements and Mortgages and other
items required by the provisions of Sections 5.11 and 5.12 to, among other
things, subject such reinvestment properties to the Lien of the Security
Documents in favor of the Collateral Agent, for its benefit and for the benefit
of the other Secured Parties.
SECTION 9.03 APPLICATION OF PROCEEDS. The proceeds received
by the Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise by
the Collateral Agent of its remedies shall be applied, in full or in part,
together with any other sums then held by the Collateral Agent pursuant to this
Agreement, promptly by the Collateral Agent as follows:
(a) First, to the payment of all reasonable costs and
expenses, fees, commissions and taxes of such sale, collection or other
realization, including compensation to the Collateral Agent and its
agents and counsel, and all expenses, liabilities and advances made or
incurred by the Collateral Agent in connection therewith and all
amounts for which the Collateral Agent is entitled to indemnification
pursuant to the provisions of any Loan Document, together with interest
on each such amount at the highest rate then in effect under this
Agreement from and after the date such amount is due, owing or unpaid
until paid in full;
(b) Second, to the payment of all other reasonable costs
and expenses of such sale, collection or other realization including
compensation to the other Secured Parties and their agents and counsel
and all costs, liabilities and advances made or incurred by the other
Secured Parties in connection therewith, together with interest on each
such amount at the highest rate then in effect under this Agreement
from and after the date such amount is due, owing or unpaid until paid
in full;
(c) Third, without duplication of amounts applied
pursuant to clauses (a) and (b) above, to the indefeasible payment in
full in cash, pro rata, of interest and other amounts constituting
Obligations (other than principal and Reimbursement Obligations) in
each case equally and ratably in accordance with the respective amounts
thereof then due and owing;
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(d) Fourth, to the indefeasible payment in full in cash,
pro rata, of the principal amount of the Obligations (including
Reimbursement Obligations); and
(e) Fifth, the balance, if any, to the person lawfully
entitled thereto (including the applicable Loan Party or its successors
or assigns) or as a court of competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in
full the items described in clauses (a) through (e) of this Section 9.03, the
Loan Parties shall remain liable, jointly and severally, for any deficiency.
ARTICLE X
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 10.01 APPOINTMENT. Each Lender hereby irrevocably
designates and appoints each of the Administrative Agent and the Collateral
Agent as an agent of such Lender under this Agreement and the other Loan
Documents. Each Lender irrevocably authorizes each Agent, in such capacity,
through its agents or employees, to take such actions on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to such Agent by the
terms of this Agreement and the other Loan Documents, together with such actions
and powers as are reasonably incidental thereto.
SECTION 10.02 AGENT IN ITS INDIVIDUAL CAPACITY. Each person
serving as an Agent hereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not an Agent, and such person and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent hereunder.
SECTION 10.03 EXCULPATORY PROVISIONS. No Agent shall have any
duties or obligations except those expressly set forth in the Loan Documents.
Without limiting the generality of the foregoing, (a) no Agent shall be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) no Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that such Agent
is required to exercise in writing by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 11.02), and (c) except as expressly set forth in the Loan
Documents, no Agent shall have any duty to disclose or shall be liable for the
failure to disclose, any information relating to Borrower or any of its
Subsidiaries that is communicated to or obtained by the bank serving as such
Agent or any of its Affiliates in any capacity. No Agent shall be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 11.02) or in the
absence of its own gross negligence or willful misconduct. No Agent shall be
deemed to have knowledge of any Default unless and until written notice thereof
is given to such Agent by Borrower or a Lender, and no Agent shall be
responsible for or have any duty to ascertain or inquire into (i) any statement,
warranty or representation made in or in connection with any Loan Document, (ii)
the contents of any certificate, report or other document delivered thereunder
or in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any
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other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article IV or elsewhere in any Loan Document.
SECTION 10.04 RELIANCE BY AGENT. Each Agent shall be entitled
to rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
believed by it to be genuine and to have been signed or sent by a proper person.
Each Agent also may rely upon any statement made to it orally and believed by it
to be made by a proper person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for
Borrower), independent accountants and other advisors selected by it, 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 advisors.
SECTION 10.05 DELEGATION OF DUTIES. Each Agent may perform
any and all its duties and exercise its rights and powers by or through any one
or more sub-agents appointed by such Agent. Each Agent and any such sub-agent
may perform any and all of its duties and exercise its rights and powers through
their respective Affiliates. The exculpatory provisions of the preceding
Sections shall apply to any such sub-agent and to the Affiliates of each Agent
and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Agent.
SECTION 10.06 SUCCESSOR AGENT. Each Agent may resign as such
at any time upon at least 30 days' prior notice to the Lenders, the Issuing Bank
and Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with Borrower, to appoint a successor Agent from among
the Lenders. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Agent, which
successor shall be a commercial banking institution organized under the laws of
the United States (or any State thereof) or a United States branch or agency of
a commercial banking institution, in each case, having combined capital and
surplus of at least $250 million; provided that if such retiring Agent is unable
to find a commercial banking institution which is willing to accept such
appointment and which meets the qualifications set forth above, the retiring
Agent's resignation shall nevertheless thereupon become effective, and the
Lenders shall assume and perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor Agent.
Upon the acceptance of its appointment as an Agent hereunder
by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by Borrower to a successor Agent shall be the same as those payable to
its predecessor unless otherwise agreed between Borrower and such successor.
After an Agent's resignation hereunder, the provisions of this Article X and
Section 11.03 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Affiliates in respect of any actions taken
or omitted to be taken by any of them while it was acting as Agent.
SECTION 10.07 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each
Lender acknowledges that it has, independently and without reliance upon any
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender 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
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action under or based upon this Agreement, any other Loan Document or related
agreement or any document furnished hereunder or thereunder.
SECTION 10.08 NAME AGENTS. The parties hereto acknowledge
that the Documentation Agent, the Co-Documentation Agents and the Syndication
Agents hold such titles in name only, and that such titles confer no additional
rights or obligations relative to those conferred on any Lender hereunder.
SECTION 10.09 INDEMNIFICATION. The Lenders severally agree to
indemnify each Agent in its capacity as such (to the extent not reimbursed by
Borrower or the Subsidiary Guarantors and without limiting the obligation of
Borrower or the Subsidiary Guarantors to do so), ratably according to their
respective outstanding Loans and Commitments in effect on the date on which
indemnification is sought under this Section 10.09 (or, if indemnification is
sought after the date upon which all Commitments shall have terminated and the
Loans and Reimbursement Obligations shall have been paid in full, ratably in
accordance with such outstanding Loans and Commitments as in effect immediately
prior to such date), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (whether before or
after the payment of the Loans and Reimbursement Obligations) be imposed on,
incurred by or asserted against such Agent in any way relating to or arising out
of, the Commitments, this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 NOTICES. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to any Loan Party, to Borrower at:
Ionics, Incorporated
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇;
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(b) if to the Administrative Agent or the Collateral
Agent, to it at:
UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vladimira Holeckova
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇;
(c) if to a Lender, to it at its address (or telecopy
number) set forth on the applicable Lender Addendum or in the Assignment and
Acceptance pursuant to which such Lender shall have become a party hereto; and
(d) if to the Swingline Lender, to it at:(d)
UBS Loan Finance LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vladimira Holeckova
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or by certified or registered mail, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this Section 11.01 or
in accordance with the latest unrevoked direction from such party given in
accordance with this Section 11.01, and failure to deliver courtesy copies of
notices and other communications shall in no event affect the validity or
effectiveness of such notices and other communications.
SECTION 11.02 WAIVERS; AMENDMENT. (a) No failure or delay by
any Agent, the Issuing Bank or any Lender in exercising any right or power
hereunder or under any other Loan Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of each Agent, the Issuing Bank and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of any Loan Document or consent to any departure by any Loan Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether any Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time.
(b) Except as provided in paragraphs (c) and (d) below,
neither this Agreement nor any other Loan Document nor any provision hereof or
thereof may be waived, amended, supplemented or modified except, in the case of
this Agreement, pursuant to an agreement or agreements in writing entered into
by Borrower and the Required Lenders or, in the case of any other Loan Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent, the Collateral Agent (in the
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case of any Security Document) and the Loan Party or Loan Parties that are
parties thereto, in each case with the written consent of the Required Lenders;
provided that no such agreement shall:
(i) increase the Commitment of any Lender without the
written consent of such Lender;
(ii) reduce the principal amount of any Loan or LC
Disbursement or reduce the rate of interest thereon, or reduce any Fees
payable hereunder, without the written consent of each Lender affected
thereby;
(iii) postpone or extend the maturity of any Loan, or any
scheduled date of payment of or the installment otherwise due on the
principal amount of any Term Loan under Section 2.09, or the required
date of payment of any Reimbursement Obligation, or any date for the
payment of any interest or fees payable hereunder, or reduce the amount
of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment or postpone the scheduled date of
expiration of any Letter of Credit beyond the Revolving Maturity Date,
without the written consent of each Lender affected thereby;
(iv) change Section 2.14(b) or (c) in a manner that would
alter the pro rata sharing of payments or setoffs required thereby,
without the written consent of each Lender affected thereby;
(v) change the percentage set forth in the definition of
"Required Lenders" or any other provision of any Loan Document
(including this Section) specifying the number or percentage of Lenders
(or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder,
without the written consent of each Lender (or each Lender of such
Class, as the case may be);
(vi) release any Guarantor from its Guarantee (except as
expressly provided in Article VII), or limit its liability in respect
of such Guarantee, without the written consent of each Lender;
(vii) release all or a substantial portion of the
Collateral from the Liens of the Security Documents or alter the
relative priorities of the Obligations entitled to the Liens of the
Security Documents (except in connection with securing additional
Obligations equally and ratably with the other Obligations), in each
case without the written consent of each Lender;
(viii) change any provisions of any Loan Document in a
manner that by its terms materially adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class
differently than those holding Loans of any other Class, without the
written consent of Lenders holding a majority in interest of the
outstanding Loans and unused Commitments of each affected Class; or
(ix) without the consent of the Required Lenders and Term
Loan Lenders holding more than 50% of the principal amount of the
outstanding Term Loans, change the order of application of prepayments
among Term Loans and Revolving Commitments under Section 2.10(g) or
change the application of prepayments of Term Loans set forth in
Section 2.10(g) to the remaining scheduled amortization payments to be
made thereon under Section 2.09.
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provided, further, that (1) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Collateral Agent,
the Issuing Bank or the Swingline Lender without the prior written consent of
the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case
may be, (2) any waiver, amendment or modification of this Agreement that by its
terms affects the rights or duties under this Agreement of the Revolving Lenders
(but not the Term Loan Lenders) or the Term Loan Lenders (but not the Revolving
Lenders) may be effected by an agreement or agreements in writing entered into
by Borrower and the requisite percentage in interest of the affected Class of
Lenders that would be required to consent thereto under this Section if such
Class of Lenders were the only Class of Lenders hereunder at the time, and (3)
any waiver, amendment or modification prior to the achievement of a Successful
Syndication may not be effected without the written consent of the Arranger.
(c) If, in connection with any proposed change, waiver,
discharge or termination of the provisions of this Agreement as contemplated by
Section 11.02(b) (other than clause (iii) of such Section), the consent of the
Supermajority Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then Borrower shall have the
right to replace all, but not less than all, of such non-consenting Lender or
Lenders (so long as all non-consenting Lenders are so replaced) with one or more
persons pursuant to Section 2.16 so long as at the time of such replacement each
such new Lender consents to the proposed change, waiver, discharge or
termination; provided, however, that Borrower shall not have the right to
replace a Lender solely as a result of the exercise of such Lender's rights (and
the withholding of any required consent by such Lender) pursuant to clause (iii)
of Section 11.02(b).
(d) In addition, notwithstanding the foregoing, this
Agreement may be amended with the written consent of the Administrative Agent,
the Collateral Agent, Borrower and the Lenders providing the relevant
Replacement Term Loans (as defined below) to permit the refinancing of all
outstanding Term Loans ("REFINANCED TERM LOANS") with a replacement term loan
tranche hereunder which shall constitute Term Loans hereunder ("REPLACEMENT TERM
LOANS"); provided that (i) the aggregate principal amount of Replacement Term
Loans shall not exceed the aggregate principal amount of Refinanced Term Loans,
(ii) the Applicable Margin for Replacement Term Loans shall not be higher than
the Applicable Margin for Refinanced Term Loans, (iii) the weighted average life
to maturity of Replacement Term Loans shall not be shorter than the weighted
average life to maturity of Refinanced Term Loans at the time of such
refinancing and (iv) all other terms applicable to Replacement Term Loans shall
be substantially identical to, or less favorable to the Lenders providing
Replacement Term Loans than, those applicable to Refinanced Term Loans, except
to the extent necessary to provide for covenants and other terms applicable to
any period after the Final Maturity Date in effect immediately prior to such
refinancing.
(e) Notwithstanding anything in paragraph (b) of this
Section to the contrary, this Agreement and the other Loan Documents may be
amended at any time and from time to time to increase the aggregate Revolving
Commitments or to establish one or more Classes of Term Loans and/or Revolving
Commitments by an agreement in writing entered into by Borrower, the
Administrative Agent, the Collateral Agent and each person (including any
Lender) that shall agree to provide such Commitment or make a Term Loan of any
Class so established (and each such person that shall not already be a Lender
shall, at the time such agreement becomes effective, become a Lender with the
same effect as if it had originally been a Lender under this Agreement with the
Commitment and/or Term Loans set forth in such agreement); provided that the
aggregate outstanding principal amount of the new Term Loans and the new
Commitments of all Classes shall at no time, without the consent of the Required
Lenders, exceed $50 million and, at the time of such amendment and immediately
after giving effect thereto, no Default
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shall have occurred and be continuing and Borrower shall be in compliance (on a
Pro Forma Basis) with each of the covenants set forth in Section 6.10. Any such
agreement shall amend the provisions of this Agreement and the other Loan
Documents to set forth the terms of each Class of Term Loans or Commitments
established thereby (including the amount and final maturity thereof (which
shall not be earlier than the Revolving Maturity Date), any provisions relating
to the amortization or mandatory prepayment thereof, the interest to accrue and
be payable thereon and any fees to be payable in respect thereof) and to effect
such other changes (including changes to the provisions of this Section, Section
2.14 and the definition of "Required Lenders") as Borrower and the
Administrative Agent shall deem necessary or advisable in connection with the
establishment of any such Class; provided that no such agreement shall (i)
effect any change described in any of clauses (i)-(ix) of paragraph (b) of this
Section without the consent of each person required to consent to such change
under such clause (it being agreed, however, that any increase in the Revolving
Commitment or establishment of any Class of Term Loans will not, of itself, be
deemed to effect any of the changes described in clauses (vi) through (viii) and
clause (1) of such paragraph (b)), (ii) amend Article V, VI or VIII to establish
any affirmative or negative covenant, Event of Default or remedy that by its
terms benefits one or more Classes, but not all Classes, of Loans or Borrowings
without the prior written consent of Lenders holding a majority in interest of
the Loans and Commitments of each Class not so benefited (it being agreed that
no provision requiring Borrower to prepay Term Loans of one or more Classes
pursuant to Sections 2.10(c) through (g) shall be deemed to violate this clause)
or (iii) change any other provision of this Agreement or any other Loan Document
that creates rights in favor of Lenders holding Loans or Commitments of any
existing Class, other than as necessary or advisable in the judgment of the
Administrative Agent to cause such provision to take into account, or to make
the benefits of such provision available to, Lenders holding Term Loans of such
new Class or such new Commitments. The Loans, Commitments and Borrowings of any
Class established pursuant to this paragraph shall constitute Loans, Commitments
and Borrowings under, and shall be entitled to all the benefits afforded by,
this Agreement and the other Loan Documents, and shall, without limiting the
foregoing, benefit equally and ratably from the Guarantees and security
interests created by the Security Documents. The Loans Parties shall take any
actions reasonably required by the Administrative Agent to ensure and/or
demonstrate that the Lien and security interests granted by the Security
Documents continue to be perfected under the UCC or otherwise after the
establishment of any such Class of Term Loans or any such new Commitments. For
the purpose of providing that the respective amounts of Revolving Loans held by
the Revolving Lenders are held by them on a pro rata basis according to their
respective Revolving Loan Commitments, upon the effectiveness of any increase in
the Revolving Commitments occasioned by an amendment made pursuant to this
Section 11.02(e), (i) all outstanding Revolving Loans shall be converted into a
single Revolving Loan that is a Eurodollar Revolving Loan (with an interest
period to be selected by Borrower), and upon such conversion Borrower shall pay
any amounts owing pursuant to Section 2.13, if any, (ii) any new Revolving
Borrowings on such date shall also be part of such single Revolving Loan and
(iii) each Revolving Lender (including each new Revolving Lender) shall hold a
portion of such single Revolving Loan equal to its Pro Rata Percentage thereof
and any fundings on such date shall be made in such a manner so as to achieve
the foregoing.
SECTION 11.03 EXPENSES; INDEMNITY. (a) The Loan Parties
agree, jointly and severally, to pay, promptly upon demand:
(i) all reasonable out-of-pocket costs and expenses
incurred by the Arranger, the Administrative Agent, the Collateral
Agent, the Swingline Lender and the Issuing Bank, including the
reasonable fees, charges and disbursements of Advisors for the
Arranger, the Administrative Agent, the Collateral Agent, the Swingline
Lender and the Issuing Bank, in
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connection with the syndication of the Loans and Commitments, the
preparation, execution and delivery of the Loan Documents, the
administration of the Loans and Commitments, the perfection and
maintenance of the Liens securing the Collateral and any actual or
proposed amendment, supplement or waiver of any of the Loan Documents
(whether or not the transactions contemplated hereby or thereby shall
be consummated);
(ii) all costs and expenses incurred by the Administrative
Agent or the Collateral Agent, including the fees, charges and
disbursements of Advisors for the Administrative Agent and the
Collateral Agent, in connection with any action, suit or other
proceeding affecting the Collateral or any part thereof, in which
action, suit or proceeding the Administrative Agent or the Collateral
Agent is made a party or participates or in which the right to use the
Collateral or any part thereof is threatened, or in which it becomes
necessary in the judgment of the Administrative Agent or the Collateral
Agent to defend or uphold the Liens granted by the Security Documents
(including any action, suit or proceeding to establish or uphold the
compliance of the Collateral with any Requirements of Law);
(iii) all costs and expenses incurred by the Arranger, the
Administrative Agent, the Collateral Agent, the Swingline Lender, the
Issuing Bank or any Lender, including the fees, charges and
disbursements of Advisors for the Arranger, the Administrative Agent,
the Collateral Agent, the Swingline Lender, the Issuing Bank or any
Lender, incurred in connection with the enforcement or protection of
its rights under the Loan Documents, including its rights under this
Section 11.03(a), or in connection with the Loans made or Letters of
Credit issued hereunder and the collection of the Obligations,
including all such costs and expenses incurred during any workout,
restructuring or negotiations in respect of the Obligations; and
(iv) all documentary and similar taxes and charges in
respect of the Loan Documents.
For purposes of this Section 11.03(a), "ADVISORS" shall mean legal counsel
(including local counsel), auditors, accountants, consultants, appraisers or
other advisors; provided that (x) in the case of clause (i), the engagement of
any Advisors other than legal counsel (including local counsel) shall be subject
to approval by Borrower (which approval shall not be unreasonably withheld) and
(y) in the case of clause (iii), the engagement of any Advisors other than one
firm of legal counsel by any Lender shall be subject to approval by the
Administrative Agent.
(b) The Loan Parties agree, jointly and severally, to
indemnify the Agents, each Lender, the Issuing Bank and the Swingline Lender,
each Affiliate of any of the foregoing persons and each of their respective
partners, controlling persons, directors, officers, trustees, employees and
agents (each such person being called an "INDEMNITEE") against, and to hold each
Indemnitee harmless from, all reasonable out-of-pocket costs and any and all
losses, claims, damages, liabilities, penalties, judgments, suits and related
expenses, including reasonable counsel fees, charges and disbursements, incurred
by or asserted against any Indemnitee arising out of, in any way connected with,
or as a result of (i) the execution, delivery, performance, administration or
enforcement of the Loan Documents, (ii) any actual or proposed use of the
proceeds of the Loans or issuance of Letters of Credit, (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, or (iv) any actual or alleged
presence or Release or threatened Release of Hazardous Materials, on, at, under
or from any property owned, leased or operated by any Company at any time, or
any Environmental Claim related in any way to any Company; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses
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are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee.
(c) The provisions of this Section 11.03 shall remain
operative and in full force and effect regardless of the expiration of the term
of this Agreement, the consummation of the transactions contemplated hereby, the
repayment of the Loans and Reimbursement Obligations, the release of all or any
portion of the Collateral, the expiration of the Commitments, the expiration of
any Letter of Credit, the invalidity or unenforceability of any term or
provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Agents, the Issuing Bank or any Lender. All amounts
due under this Section 11.03 shall be payable on written demand therefor
accompanied by reasonable documentation with respect to any reimbursement,
indemnification or other amount requested.
(d) To the extent that Borrower fails to promptly pay any
amount required to be paid by it to the Agents, the Issuing Bank or the
Swingline Lender under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Agents, the Issuing Bank or the Swingline Lender,
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 any of the Agents, the Issuing Bank or the Swingline Lender
in its capacity as such. For purposes hereof, a Lender's "pro rata share" shall
be determined based upon its share of the sum of the total Revolving Exposure,
outstanding Term Loans and unused Commitments at the time.
SECTION 11.04 SUCCESSORS AND ASSIGNS. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby (including
any Affiliate of the Issuing Bank that issues any Letter of Credit), except that
neither Borrower nor any Subsidiary Guarantor may assign or otherwise transfer
any of their respective rights or obligations hereunder without the prior
written consent of the Administrative Agent, the Collateral Agent, the Issuing
Bank, the Swingline Lender and each Lender (and any attempted assignment or
transfer by Borrower without such consent shall be null and void). Nothing in
this Agreement, express or implied, shall be construed to confer upon any person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit) and, to the extent expressly contemplated hereby, the other
Indemnitees) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender shall have the right at any time to assign
to one or more banks, insurance companies, investment companies or funds or
other institutions (other than Borrower or any Affiliate or Subsidiary thereof)
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans at the time owing to it);
provided that (i) except in the case of an assignment to a Lender, an Affiliate
of a Lender or a Lender Affiliate, the Administrative Agent and, after the
achievement of a Successful Syndication, Borrower (and, in the case of an
assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC Exposure or Swingline Exposure, the Issuing
Bank and the Swingline Lender) must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed), (ii)
except in the case of an assignment to a Lender, an Affiliate of a Lender or a
Lender Affiliate, any assignment made in connection with the syndication of the
Commitment and Loans by the Arranger or an assignment of the entire remaining
amount of the assigning Lender's Commitment or Loans, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than $1.0
million unless each of Borrower and the Administrative
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Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, except that this clause (iii) shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one Class of Commitments
or Loans, (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 (provided that assignments by any Lender to
multiple Affiliates as part of a single assignment shall be subject to only one
such processing and recordation fee), and (v) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and provided, further, that any consent of Borrower otherwise
required under this paragraph shall not be required if a Default has occurred
and is continuing. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement (provided that
any liability of Borrower to such assignee under Section 2.12, 2.13 or 2.15
shall be limited to the amount, if any, that would have been payable thereunder
by Borrower in the absence of such assignment, except to the extent any such
amounts are attributable to a Change in Law occurring after the date of such
assignment), and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.12, 2.13, 2.15 and 11.03).
(c) The Administrative Agent, acting for this purpose as
an agent of Borrower, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "REGISTER"). The entries in the Register
shall be conclusive in the absence of manifest error, and Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by Borrower, the
Issuing Bank, the Collateral Agent, the Swingline Lender and any Lender (with
respect to its own interest only), at any reasonable time and from time to time
upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender shall have the right at any time, without
the consent of Borrower, the Administrative Agent, the Issuing Bank or the
Swingline Lender to sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) Borrower,
the Administrative Agent, the Issuing Bank and the other Lenders shall continue
to deal solely and
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directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in clause (i), (ii) or (iii) of the first proviso to Section 11.02(b)
that affects such Participant. Subject to paragraph (f) of this Section,
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.12, 2.13 and 2.15 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.08 as though it were a Lender; provided that such
Participant agrees in writing to be subject to Section 2.14(c) as though it were
a Lender. Each Lender shall, acting for this purpose as an agent of Borrower,
maintain at one of its offices a register for the recordation of the names and
addresses of its Participants, and the amount and terms of its participations;
provided that no Lender shall be required to disclose or share the information
contained in such register with Borrower or any other party, except as required
by applicable law.
(f) A Participant shall not be entitled to receive any
greater payment under Section 2.12, 2.13 or 2.15 than the applicable Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with the prior written consent of Borrower (which consent shall not be
unreasonably withheld or delayed). A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.15 unless
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of Borrower, to comply with Sections 2.15(e)
and (f) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto. In the case of any Lender that is a fund that invests in bank
loans, such Lender may, without the consent of Borrower or the Administrative
Agent, collaterally assign or pledge all or any portion of its rights under this
Agreement, including the Loans and Notes or any other instrument evidencing its
rights as a Lender under this Agreement, to any holder of, trustee for, or any
other representative of holders of, obligations owed or securities issued, by
such fund, as security for such obligations or securities.
SECTION 11.05 SURVIVAL OF AGREEMENT. All covenants,
agreements, representations and warranties made by the Loan Parties in the Loan
Documents and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of the Loan Documents and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that the
Agents, the Issuing Bank or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid or any Letter of Credit
is outstanding and so long as the Commitments have not expired or terminated.
The provisions of
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Sections 2.12, 2.14, 2.15 and 11.03 and Article X shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the payment of the
Reimbursement Obligations, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any provision
hereof.
SECTION 11.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and the Fee Letter constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.
SECTION 11.07 SEVERABILITY. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 11.08 RIGHT OF SETOFF. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the account
of Borrower against any and all of the obligations of Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 11.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
(b) Each Loan Party hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
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provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
may otherwise have to bring any action or proceeding relating to this Agreement
or any other Loan Document against any Loan Party or its properties in the
courts of any jurisdiction.
(c) Each Loan Party hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in any action or proceeding arising out of or relating to any
Loan Document the manner provided for notices in Section 11.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by applicable law.
SECTION 11.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 11.11 HEADINGS. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 11.12 CONFIDENTIALITY. Each of the Administrative
Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates' and Lender Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential pursuant to the terms hereof), (b) to the extent
requested by any regulatory authority, (c) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section 11.12, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to Borrower and its
obligations or (iii) any rating agency for the purpose of obtaining a credit
rating applicable to any Loan or Loan Party, (g) with the consent of Borrower or
(h) to the extent
-123-
such Information (i) is publicly available at the time of disclosure or becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent, the Issuing Bank or any Lender on
a nonconfidential basis from a source other than Borrower or any Subsidiary. For
the purposes of this Section, "INFORMATION" means (i) all financial information
received from Borrower or any Subsidiary and (ii) all other information received
from Borrower or any Subsidiary relating to Borrower or any Subsidiary or its
business that is clearly identified at the time of delivery as confidential,
other than any such information that is available to the Administrative Agent,
the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
Borrower or any Subsidiary. Any person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such person has exercised the same degree of
care to maintain the confidentiality of such Information as such person would
accord to its own confidential information.
SECTION 11.13 INTEREST RATE LIMITATION. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively, the "CHARGES"), shall
exceed the maximum lawful rate (the "MAXIMUM RATE") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 11.14 LENDER ADDENDUM. Each Lender to become a party
to this Agreement on the date hereof shall do so by delivering to the
Administrative Agent a Lender Addendum duly executed by such Lender, Borrower
and the Administrative Agent.
SECTION 11.15 OBLIGATIONS ABSOLUTE. To the fullest extent
permitted by applicable law, all obligations of the Loan Parties hereunder shall
be absolute and unconditional irrespective of:
(a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any
Loan Party;
(b) any lack of validity or enforceability of any Loan
Document or any other agreement or instrument relating thereto against
any Loan Party;
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from any
Loan Document or any other agreement or instrument relating thereto;
(d) any exchange, release or non-perfection of any other
Collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Obligations;
(e) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect hereof or any
Loan Document; or
-124-
(f) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, the Loan Parties.
SECTION 11.16 ESCROW AGREEMENTS. The parties hereto
acknowledge that in connection with the Acquisition, the Sellers and Borrower
are entering into the Escrow Agreements. Notwithstanding anything to the
contrary contained in this Agreement, nothing herein shall limit, restrict or
prohibit (i) the entering into of the Escrow Agreements, (ii) the payment of any
of the Escrowed Amounts in accordance with the terms of the Acquisition
Agreement and the Escrow Agreements or (iii) compliance by Borrower with the
terms of the Escrow Agreements.
[Signature Pages Follow]
-125-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
IONICS, INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President and Chief
Financial Officer
SUBSIDIARY GUARANTORS:
AQUA DESIGN, INC.
FIDELITY PUREWATER, INC.
FIDELITY WATER SYSTEMS, INC.
IONICS KOREA, INC.
IONICS LIFE SCIENCES, INC.
IONICS SECURITIES CORPORATION
IONICS ULTRAPURE WATER CORPORATION
RESOURCES CONSERVATION CO. INTERNATIONAL
SEPARATION TECHNOLOGY, INC.
▇▇▇▇▇▇▇ INSTRUMENTS, INC.
ECOLOCHEM, INC.
ECOLOCHEM HOLDINGS, INC.
ECOLOCHEM INTERNATIONAL, INC.
ECOLOCHEM JV HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Secretary
ECOLOCHEM SERVICES - MEXICO, LLC
MOSON HOLDINGS, L.L.C.
By: Ionics, Incorporated, as Managing Member
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President, General Counsel
and Clerk
[Signature Page for Ionics Credit Agreement]
UBS SECURITIES LLC, as Sole Bookmanager, Lead
Arranger and Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Title: Director
[Signature Page for Ionics Credit Agreement]
FLEET SECURITIES, INC., as Syndication Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. Megan
Title: Managing Director
[Signature Page for Ionics Credit Agreement]
BANK OF AMERICA, N.A., as Syndication Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
[Signature Page for Ionics Credit Agreement]
WACHOVIA BANK, N.A., as Co-Documentation
Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
[Signature Page for Ionics Credit Agreement]
GENERAL ELECTRIC CAPITAL CORPORATION, as
Co-Documentation Agent
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Title: Duly Authorized Signatory
[Signature Page for Ionics Credit Agreement]
UBS AG, STAMFORD BRANCH, as Administrative
Agent and Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director Banking
Products Services, US
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Associate Director Banking
Products Services, US
[Signature Page for Ionics Credit Agreement]
UBS LOAN FINANCE LLC, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. Saint
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. Saint
Title: Associate Director Banking
Products Services, US
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Associate Director Banking
Products Services, US
[Signature Page for Ionics Credit Agreement]
HSBC BANK USA, as Issuing Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
[Signature Page for Ionics Credit Agreement]
BANK OF AMERICA, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
[Signature Page for Ionics Credit Agreement]
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as a Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
[Signature Page for Ionics Credit Agreement]
FLEET NATIONAL BANK, as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
[Signature Page for Ionics Credit Agreement]
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇
Title: Duly Authorized Signatory
[Signature Page for Ionics Credit Agreement]
HSBC BANK USA, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
[Signature Page for Ionics Credit Agreement]
SOVEREIGN BANK, as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
[Signature Page for Ionics Credit Agreement]
WACHOVIA BANK, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
[Signature Page for Ionics Credit Agreement]
ANNEX I
APPLICABLE MARGIN (REVOLVING LOANS)
REVOLVING LOANS
TOTAL FUNDED DEBT --------------------------------
LEVERAGE RATIO EURODOLLAR ABR
-------------- ---------- -------------
LEVEL I 2.50% 1.50%
> or = 2.25:1.00
LEVEL II 2.25% 1.25%
< 2.25:1.00 BUT
> or = 2.00:1.00
LEVEL III 2.00% 1.00%
< 2.00:1.00 BUT
> or = 1.75:1.00
LEVEL IV 1.75% 0.75%
< 1.75:1.00
Each change in the Applicable Margin resulting from a change
in the Total Funded Debt Leverage Ratio shall be effective with respect to all
Revolving Loans and Letters of Credit outstanding on and after the date of
delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(c),
respectively, indicating such change until the date immediately preceding the
next date of delivery of such financial statements and certificates indicating
another such change. Notwithstanding the foregoing, the Total Funded Debt
Leverage Ratio shall be deemed to be in Level I (i) from the Closing Date to the
date of delivery to the Administrative Agent of the financial statements and
certificates required by Section 5.01(a) or (b) and Section 5.01(c),
respectively, for the fiscal period ended at least six months after the Closing
Date, (ii) at any time during which Borrower has failed to deliver the financial
statements and certificates required by Section 5.01(a) or (b) and Section
5.01(c), respectively, and (iii) at any time during the existence of an Event of
Default.
ANNEX II
AMORTIZATION TABLE
DATE TERM LOAN AMOUNT
---- ----------------
June 30, 2004 $ 437,500
September 30, 2004 $ 437,500
December 31, 2004 $ 437,500
March 31, 2005 $ 437,500
June 30, 2005 $ 437,500
September 30, 2005 $ 437,500
December 31, 2005 $ 437,500
March 31, 2006 $ 437,500
June 30, 2006 $ 437,500
September 30, 2006 $ 437,500
December 31, 2006 $ 437,500
March 31, 2007 $ 437,500
June 30, 2007 $ 437,500
September 30, 2007 $ 437,500
December 31, 2007 $ 437,500
March 31, 2008 $ 437,500
June 30, 2008 $ 437,500
September 30, 2008 $ 437,500
December 31, 2008 $ 437,500
March 31, 2009 $ 437,500
June 30, 2009 $ 437,500
September 30, 2009 $ 437,500
December 31, 2009 $ 437,500
March 31, 2010 $ 437,500
June 30, 2010 $41,125,000
September 30, 2010 $41,125,000
December 31, 2010 $41,125,000
February 13, 2011 $41,125,000
EXHIBIT A
[Form of]
ADMINISTRATIVE QUESTIONNAIRE
ADMINISTRATIVE QUESTIONNAIRE--IONICS, INCORPORATED
LENDING INSTITUTION:___________________________________________________________
Name for Signature Pages:_______________________________________________________
Will sign Credit Agreement: [ ]
Will come via Assignment: [ ] Number of Days
post-closing:__________
Name for Signature Blocks:______________________________________________________
Name for Publicity: ______________________________________________________
Address: ______________________________________________________
Main Telephone: _______________________
Telex No./Answer back: _______________________
________________________________________________________________________________
________________________________________________________________________________
CONTACT-Credit Name: _________________________________________________
Address: _________________________________________________
Telephone: _________________________________________________
Fax: _________________________________________________
CONTACT-Operations Name: _________________________________________________
Address: _________________________________________________
Telephone: _________________________________________________
Fax: _________________________________________________
________________________________________________________________________________
PAYMENT INSTRUCTIONS
________________________________________________________________________________
Bank Name: __________________________________________________________
ABA/Routing No.: __________________________________________________________
Account Name: __________________________________________________________
Account No.: __________________________________________________________
For further credit: __________________________________________________________
Account No.: __________________________________________________________
Attention: __________________________________________________________
Reference: __________________________________________________________
________________________________________________________________________________
UBS AG, STAMFORD BRANCH, ADMINISTRATIVE DETAILS
________________________________________________________________________________
UBS AG, Stamford Branch Account Administrator Secondary Contact
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: [ ] Attn: [ ]
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Tel: [ ] Tel: [ ]
Main Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: [ ] Fax: [ ]
Wire Instructions: The Agent's wire instructions will be
disclosed at the time of closing.
EXHIBIT B
[Form of]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of February 13, 2004
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT") among Ionics, Incorporated, a Massachusetts
corporation ("BORROWER"), the Subsidiary Guarantors (such term and each other
capitalized term used but not defined herein having the meaning given it in
Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead
arranger, sole bookmanager and documentation agent, FLEET SECURITIES, INC. and
BANK OF AMERICA, N.A., as syndication agents, WACHOVIA BANK, N.A. and GENERAL
ELECTRIC CAPITAL CORPORATION, as co-documentation agents, UBS LOAN FINANCE LLC,
as swingline lender, HSBC BANK USA, as issuing bank and UBS AG, STAMFORD BRANCH,
as administrative agent for the Lenders and collateral agent for the Secured
Parties.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse,
from the Assignor, effective as of the Closing Date of Assignment set forth
below (but not prior to the registration of the information contained herein in
the Register pursuant to Section 11.04(c) of the Credit Agreement), the
interests set forth below (the "ASSIGNED INTEREST") in the Assignor's rights and
obligations under the Credit Agreement and the other Loan Documents, including,
without limitation, the Swingline Commitment, Revolving Commitment and the Term
Loans, Swingline Loans, Revolving Loans and participations held by the Assignor
in Letters of Credit which are outstanding on the Closing Date of Assignment.
From and after the Closing Date of Assignment (i) the Assignee shall be a party
to and be bound by the provisions of the Credit Agreement and, to the extent of
the interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the Loan Documents and (ii) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.
2. The Assignor (i) warrants that it is the legal and beneficial
owner of the interest being assigned hereby free and clear of any adverse claim
and that its Commitment, and the outstanding balances of its Revolving Loans,
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance; (ii) except as set forth in
(i) above, the Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Loan Document or any other instrument or document furnished
pursuant thereto, or the financial condition of Borrower or any Subsidiary or
the performance or observance by Borrower or any Subsidiary of any of its
obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Administrative Agent,
the Collateral Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Administrative Agent and the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers and discretion under the Credit Agreement, the other Loan Documents or
any other
instrument or document furnished pursuant hereto or thereto as are delegated to
the Administrative Agent and the Collateral Agent, respectively, by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Credit Agreement and will perform
in accordance with its terms all the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender.
4. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, the
forms specified in Section 2.15(e) of the Credit Agreement, duly completed and
executed by such Assignee; (ii) if the Assignee is not already a Lender under
the Credit Agreement, an Administrative Questionnaire in the form of Exhibit A
to the Credit Agreement; and (iii) a processing and recordation fee of $3,500.
5. This Assignment and Acceptance shall be construed in
accordance with and governed by the law of the State of New York without regard
to conflicts of law principles that would require the application of the laws of
another jurisdiction.
6. Date of Assignment:
7. Legal Name of Assignor:
8. Legal Name of Assignee:
9. Assignee's Address for Notices:
10. Closing Date of Assignment (may not be fewer than 5 Business
Days after the Date of Assignment unless the Administrative Agent shall
otherwise agree):
11. Percentage Assigned of Applicable Loan/Commitment:
Percentage Assigned of
Applicable Loan/Commitment
(set forth, to at least 8 decimals,
as a percentage of the Loan and
Principal Amount the aggregate Commitments of
Loan/Commitment Assigned all Lenders thereunder)
--------------- ---------------- ----------------------------------
Term Loans $ %
Revolving Loans $ %
Letters of Credit $ %
Swingline Loans $ %
[Signature Page Follows]
The terms set forth above are hereby agreed to:
[ ],
as Assignor
By:
----------------------------------------
Name:
Title:
[ ],
as Assignee
By:
----------------------------------------
Name:
Title:
Accepted:
IONICS, INCORPORATED*
By:___________________________________
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Administrative Agent
By:___________________________________
Name:
Title:
By:___________________________________
Name:
Title:
HSBC BANK USA,
as Issuing Bank
By:___________________________________
Name:
Title:
----------------------
* To be included only to the extent Borrower consent is required under Section
11.04(b) of the Credit Agreement.
EXHIBIT C
[Form of]
BORROWING REQUEST
UBS AG, Stamford Branch,
as Administrative Agent for
the Lenders referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Re: Ionics, Incorporated
[Date]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of February
13, 2004 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT") among Ionics, Incorporated, a
Massachusetts corporation ("BORROWER"), the Subsidiary Guarantors (such term and
each other capitalized term used but not defined herein having the meaning given
it in Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as
lead arranger, sole bookmanager and documentation agent, FLEET SECURITIES, INC.
and BANK OF AMERICA, N.A., as syndication agents, Wachovia Bank, N.A. and
general electric capital corporation, as co-documentation agents, UBS LOAN
FINANCE LLC, as swingline lender, UBS AG, STAMFORD BRANCH, as administrative
agent for the Lenders and collateral agent for the Secured Parties, and HSBC
BANK USA, as issuing bank. Borrower hereby gives you notice pursuant to Section
2.03 of the Credit Agreement that it requests a Borrowing under the Credit
Agreement, and in that connection sets forth below the terms on which such
Borrowing is requested to be made:
(A) Class of Borrowing [Revolving Borrowing]
[Term Borrowing]
[Swingline Loan]
(B) Principal amount of
Borrowing (1) ___________________________
(C) Date of Borrowing
(which is a Business Day) ___________________________
-------------
(1) ABR and Eurodollar Loans must be in an amount that is at least
$[5,000,000] and an integral multiple of $[1,000,000] or equal to the
remaining available balance of the applicable Commitments.
(D) Type of Borrowing [ABR] [Eurodollar] (2)
(E) Interest Period and the last day thereof (3) _______________________
(F) Funds are requested to be disbursed to Borrower's account with UBS AG,
Stamford Branch (Account No. ).
Borrower hereby represents and warrants that the conditions to
lending specified in Sections 4.02(b) and (c) and, to Borrower's knowledge,
Section 4.02(d) of the Credit Agreement are satisfied as of the date hereof.
[Signature Page Follows]
------------------
(2) Shall be ABR for Swingline Loans.
(3) Shall be subject to the definition of "INTEREST PERIOD" in the Credit
Agreement.
IONICS, INCORPORATED
By:_______________________________
Name:
Title: [Responsible Officer]
EXHIBIT D
[Form of]
COMPLIANCE CERTIFICATE
I, [ ], the [Financial Officer] of Ionics, Incorporated (in
such capacity and not in my individual capacity), hereby certify that, with
respect to that certain Credit Agreement dated as of February 13, 2004 (as it
may be amended, modified, extended or restated from time to time, the "CREDIT
AGREEMENT"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among Ionics, Incorporated, a Massachusetts corporation, as
borrower (the "BORROWER"), the Subsidiary Guarantors party thereto, the Lenders
party thereto, UBS Securities LLC, as Lead Arranger, Sole Bookmanager and
Documentation Agent, Fleet Securities, Inc. and Bank of America, N.A., as
Syndication Agents, Wachovia Bank, N.A. and General Electric Capital
Corporation, as Co-Documentation Agents, UBS AG, Stamford Branch, as
Administrative Agent and Collateral Agent, UBS Loan Finance LLC, as Swingline
Lender, and HSBC Bank USA, as Issuing Bank:
a. [Attached hereto as Schedule 1 are calculations(1)
demonstrating compliance by Borrower and the Subsidiary Guarantors with
Sections 6.07(f) and 6.10 of the Credit Agreement. Borrower and the
Subsidiary Guarantors are in compliance with such Sections as of the
date hereof.] [Attached hereto as Schedule 2 are detailed calculations
setting forth Borrower's Excess Cash Flow.](2) [Attached hereto as
Schedule 3 is the report of [accounting firm.]](3)
b. The Borrower was in compliance with each of the covenants set
forth in Section 6.10 of the Credit Agreement at all applicable times
during and since [ ].
c. No Default has occurred under the Credit Agreement which has
not been previously disclosed, in writing, to the Administrative Agent
pursuant to a Compliance Certificate.(4)
--------------------------------
(1) To accompany annual and quarterly financial statements only. Which
calculations shall be in reasonable detail satisfactory to the
Administrative Agent and shall include, among other things, an
explanation of the methodology used in such calculations and a
breakdown of the components of such calculations.
(2) To accompany annual financial statements only.
(3) To accompany annual financial statements only. The report must opine or
certify that, with respect to its regular audit of such financial
statements, which audit was conducted in accordance with GAAP, the
accounting firm obtained no knowledge that any Default has occurred or,
if in the opinion of such accounting firm such a Default has occurred,
specifying the nature and extent thereof.
(4) If a Default shall have occurred, an explanation specifying the nature
and extent of such Default shall be provided on a separate page
together with an explanation of the corrective action taken or proposed
to be taken with respect thereto (include, as applicable, information
regarding actions, if any, taken since prior certificate).
Dated this [ ] day of [ ], 20[ ].
IONICS, INCORPORATED
By:______________________________
Name:
Title: [Financial Officer]
SCHEDULE 1
Financial Covenants
For purposes of calculating the financial covenants described
below, Consolidated EBITDA is defined as follows:
Consolidated Net Income for the four quarter period ended
[ ], 20[ ] ______
Plus (in each case only to the extent (and in the same
proportion) deducted in determining such Consolidated
Net Income): ______
(a) Consolidated Interest Expense for such period ______
(b) Consolidated Amortization Expense for such period ______
(c) Consolidated Depreciation Expense for such period ______
(d) Consolidated Tax Expense for such period ______
(e) costs and expenses directly incurred in connection
with the Transactions (not to exceed $17.5 million) ______
(f) the aggregate amount of all other non-cash items
reducing Consolidated Net Income (excluding any
non-cash charge that results in accrual of a
reserve for cash charges in any future period) for
such period ______
(g) (i) the amount of non-recurring charges relating
to the implementation of Borrower's new
information technology platform in an aggregate
amount not to exceed $5 million, (ii) for the
fiscal quarter ending December 31, 2003, the
amount of non-recurring charges (including, but
not limited to, restructuring charges and charges
relating to plant or facility relocations) to the
extent reducing Consolidated Net Income in an
aggregate amount not to exceed $15 million for
such fiscal quarter and (iii) for the period
commencing January 1, 2004 and ending March 31,
2005, the amount of non-recurring charges
(including, but not limited to, restructuring
charges and charges relating to plant or facility
relocations) to the extent reducing Consolidated
Net Income in an aggregate amount not to exceed
$15 million for such period ______
Minus:
the aggregate amount of all non-cash items increasing
Consolidated Net Income (other than the accrual of
revenue or recording of receivables in the ordinary
course of business) for such period
______________________
Consolidated EBITDA
______________________
6.10(a) Maximum Total Leverage Ratio
Total Leverage Ratio: Consolidated Indebtedness to
Consolidated EBITDA
Consolidated Indebtedness (exclusive of Non-Recourse
Indebtedness) for the four quarter period ended
[ ], 20[ ] ___________
Consolidated EBITDA
___________
Consolidated Indebtedness to Consolidated
EBITDA [ ]:1.00
Covenant Requirement(5) No more than
[ ]:1.00
--------------------
(5)Refer to Section 6.10(a).
6.10(b) Minimum Interest Coverage Ratio
Consolidated Interest Coverage Ratio: Consolidated
EBITDA to Consolidated Interest Expense
Consolidated EBITDA _______________
Consolidated Interest Expense calculation:
total consolidated interest expense under
GAAP _______________
Plus:
(a) imputed interest on Capital Lease
Obligations and Attributable
Indebtedness of Borrower and its
Subsidiaries for such period _______________
(b) commissions, discounts and other fees
and charges owed by Borrower or any of
its Subsidiaries with respect to
letters of credit securing financial
obligations, bankers' acceptance
financing and receivables financings
for such period _______________
(c) amortization of debt issuance costs,
debt discount or premium and other
financing fees and expenses incurred by
Borrower or any of its Subsidiaries for
such period _______________
(d) cash contributions to any employee
stock ownership plan or similar trust
made by Borrower or any of its
Subsidiaries to the extent such
contributions are used by such plan or
trust to pay interest or fees to any
person (other than Borrower or a Wholly
Owned Subsidiary) in connection with
Indebtedness incurred by such plan or
trust for such period _______________
(e) all interest paid or payable with
respect to discontinued operations of
Borrower or any of its Subsidiaries for
such period _______________
(f) the interest portion of any deferred
payment obligations of Borrower or any
of its Subsidiaries for such period _______________
(g) all interest for such period on (i) any
Indebtedness of others secured by any
Lien on property owned or acquired by
Borrower or any of its Subsidiaries,
whether or not the obligations secured
thereby have
been assumed, but limited to the fair
market value of such property or (ii)
any obligations of Borrower or any of
its Subsidiaries for the reimbursement
of any obligor in respect of letters of
credit, letters of guaranty, bankers'
acceptances, bid, performance or surety
bonds and similar credit transactions
(including all Commercial Credit
Support Obligations of such person) _______________
Consolidated Interest Expense
_______________
Consolidated EBITDA to Consolidated Interest
Expense [ ]:1.00
Covenant Requirement (6) Greater than
or equal to
[ ]:1.00
------------------
(6) Refer to Section 6.10(b).
6.10(c) Minimum Fixed Charge Coverage Ratio
Consolidated Fixed Charge Coverage Ratio: Consolidated EBITDA to
Consolidated Fixed Charges
Consolidated EBITDA for the four quarter period ended
[ ], 20[ ]. _______________
Consolidated Fixed Charges calculation:
(a) Consolidated Interest Expense (as
calculated above)
Plus:
(b) the aggregate amount of Capital
Expenditures for such period _______________
(c) all cash payments in respect of income
taxes made during such period (net of
any cash refund in respect of income
taxes actually received during such
period) _______________
(d) the scheduled principal amount of all
amortization payments on all
Indebtedness (including the principal
component of all Capital Lease
Obligations) of Borrower and its
Subsidiaries for such period (as
determined on the first day of the
respective period) _______________
(e) the product of (i) all dividend
payments made by Borrower or any of its
Subsidiaries (other than dividend
payments to Borrower or any of its
Subsidiaries) whether in accordance
with Section 6.08 of the Credit
Agreement or otherwise multiplied by
(ii) a fraction, the numerator of which
is one and the denominator of which is
one minus the then current combined
federal, state and local statutory tax
rate of Borrower and its Subsidiaries,
expressed as a decimal _______________
Consolidated Fixed Charges
Consolidated EBITDA to Consolidated Fixed
Charges [ ]:1.00
Covenant Requirement(7) Greater than
or equal to
[ ]:1.00
-----------------
(7) Refer to Section 6.10(c).
6.10(d) Limitation on Capital Expenditures
Maximum Capital Expenditures
Capital Expenditures ________________
Covenant Requirement(8) No more than [ ]
-----------------
(8) Refer to Section 6.10(d).
[SCHEDULE 2
Excess Cash Flow calculation:
Consolidated EBITDA for such Excess Cash Flow Period(9) _______________
Minus:
(a) Debt Service for such Excess Cash Flow
Period
(b) any voluntary prepayments of Term Loans
and any permanent voluntary reductions
to the Revolving Commitments to the
extent that an equal amount of the
Revolving Loans simultaneously is
repaid, in each case so long as such
amounts are not already reflected in
Debt Service, during such Excess Cash
Flow Period _______________
(c) Capital Expenditures during such Excess
Cash Flow Period (excluding Capital
Expenditures made in such Excess Cash
Flow Period where a certificate in the
form contemplated by the following
clause (d) was previously delivered)
that are paid in cash _______________
(d) Capital Expenditures that Borrower or
any of its Subsidiaries shall, during
such Excess Cash Flow Period, become
obligated to make but that are not made
during such Excess Cash Flow Period;
provided that Borrower shall deliver a
certificate to the Administrative Agent
not later than 90 days after the end of
such Excess Cash Flow Period, signed by
a Responsible Officer of Borrower and
certifying that such Capital
Expenditures will be made in the
following Excess Cash Flow Period _______________
(e) the aggregate amount of investments
made in cash during such period in
compliance with Sections 6.04(e), (j),
(m), and (n) of the Credit Agreement _______________
-----------------------
(9)Excees Cash Flow Period is (i) the period taken as one accounting period from
April 1, 2004 and ending on December 31, 2004 and (ii) each fiscal year of
Borrower thereafter.
(f) Taxes of Borrower and its Subsidiaries
that were paid in cash during such
Excess Cash Flow Period or will be paid
within six months after the end of such
Excess Cash Flow Period and for which
adequate reserves have been established
in accordance with GAAP _______________
(g) an amount equal to any increase in
Current Assets minus Current
Liabilities from the beginning to the
end of such Excess Cash Flow Period _______________
(h) losses excluded from the calculation of
Consolidated Net Income attributable to
(i) the net income of a Subsidiary of
Borrower during such period to the
extent that the declaration or payment
of dividends or similar distributions
by such Subsidiary of that income is
not permitted by operation of the terms
of its Organizational Documents or any
agreement, instrument, judgment,
decree, order, statute, rule,
regulation or other restriction
applicable to that Subsidiary during
such period or (ii) unrealized gains
and losses with respect to Hedging
Obligations for such period that are
paid in cash during such Excess Cash
Flow Period _______________
(i) to the extent added to determine
Consolidated EBITDA, all items that did
not result from a cash payment to
Borrower or any of its Subsidiaries on
a consolidated basis during such Excess
Cash Flow Period(10) _______________
Plus:
(i) an amount equal to any decrease in
Current Assets minus Current
Liabilities from the beginning to the
end of such Excess Cash Flow Period _______________
---------------------
(10) Exclusive of any amount deducted pursuant of any of the foregoing clauses
that was paid after the close of the preceding Excess Cash Flow Period and
already deducted for such preceding Excess Cash Flow Period.
(ii) all proceeds received during such
Excess Cash Flow Period of any
Indebtedness to the extent used to
finance any Capital Expenditure (other
than Indebtedness under this Agreement
to the extent there is no corresponding
deduction to Excess Cash Flow above in
respect of the use of such borrowings) _______________
(iii) to the extent any permitted Capital
Expenditures referred to in (d) above
do not occur in the Excess Cash Flow
Period specified in the certificate of
Borrower provided pursuant to (d)
above, such amounts of Capital
Expenditures that were not so made in
the Excess Cash Flow Period specified
in such certificate _______________
(iv) any return on or in respect of
investments received in cash during
such period, which investments were
made pursuant to Sections 6.04(j), (m),
and (n) of the Credit Agreement _______________
(v) income or gain excluded from the
calculation of Consolidated Net Income
attributable to (i) the net income of a
Subsidiary of Borrower during such
period to the extent that the
declaration or payment of dividends or
similar distributions by such
Subsidiary of that income is not
permitted by operation of the terms of
its Organizational Documents or any
agreement, instrument, judgment,
decree, order, statute, rule,
regulation or other restriction
applicable to that Subsidiary during
such period or (ii) unrealized gains
and losses with respect to Hedging
Obligations for such period that is
realized in cash during such Excess
Cash Flow Period (except to the extent
such gain is subject to Section 2.10 of
the Credit Agreement) _______________
(vi) if deducted in the computation of
Consolidated EBITDA, interest income _______________
(vii) to the extent subtracted in
determining Consolidated EBITDA, all
items that did not result from a cash
payment by Borrower or any of its
Subsidiaries on a consolidated basis
during such Excess Cash Flow Period _______________
Excess Cash Flow ______________]
[SCHEDULE 3]
[see attached]
EXHIBIT E
[Form of]
INTEREST ELECTION REQUEST
UBS AG, Stamford Branch,
as Administrative Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
[Date]
Re: Ionics, Incorporated
Ladies and Gentlemen:
This Interest Election Request is delivered to you pursuant to
Section 2.08 of the Credit Agreement dated as of February 13, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT") among Ionics, Incorporated, a Massachusetts corporation
("BORROWER"), the Subsidiary Guarantors (such term and each other capitalized
term used but not defined herein having the meaning given it in Article I of the
Credit Agreement), the Lenders, UBS SECURITIES LLC, as lead arranger, sole
bookmanager and documentation agent, FLEET SECURITIES, INC. and BANK OF AMERICA,
N.A., as syndication agents, WACHOVIA BANK, N.A. and GENERAL ELECTRIC CAPITAL
CORPORATION, as co-documentation agents, UBS LOAN FINANCE LLC, as swingline
lender, HSBC BANK USA, as issuing bank and UBS AG, STAMFORD BRANCH, as
administrative agent for the Lenders and collateral agent for the Secured
Parties.
Borrower hereby requests that on [__________](1) (the
"INTEREST ELECTION DATE"),
1. $[__________] of the presently outstanding principal amount of
the Loans originally made on [__________],
2. and all presently being maintained as [ABR Loans] [Eurodollar
Loans],
3. be [converted into] [continued as],
----------------------
(1) Shall be a Business Day that is (a) the date hereof in the case of a
conversion into ABR Loans to the extent this Interest Election Request
is delivered to the Administrative Agent prior to 9:00 a.m., New York
City time on the date hereof, otherwise the Business Day following the
date of delivery hereof and (b) three Business Days following the date
hereof in the case of a conversion into/continuation of Eurodollar
Loans to the extent this Interest Election Request is delivered to the
Administrative Agent prior to 11:00 a.m. New York City time on the date
hereof, otherwise the fourth Business Day following the date of
delivery hereof.
4. [Eurodollar Loans having an Interest Period of
[one/two/three/six[/nine] months] [ABR Loans].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the proposed Interest Election
Date, both before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) the foregoing [conversion] [continuation] complies with the
terms and conditions of the Credit Agreement (including, without
limitation, Section 2.08 of the Credit Agreement);
(b) no Default has occurred and is continuing, or would result
from such proposed [conversion] [continuation].
[Signature Page Follows]
Borrower has caused this Interest Election Request to be
executed and delivered by its duly authorized officer as of the date first
written above.
IONICS, INCORPORATED
By:_____________________________
Name:
Title:
EXHIBIT F
[Form of]
JOINDER AGREEMENT
Reference is made to the Credit Agreement dated as of February
13, 2004 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT") among Ionics, Incorporated, a
Massachusetts corporation ("BORROWER"), the Subsidiary Guarantors (such term and
each other capitalized term used but not defined herein having the meaning given
it in Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as
lead arranger, sole bookmanager and documentation agent, FLEET SECURITIES, INC.
and BANK OF AMERICA, N.A., as syndication agents, WACHOVIA BANK, N.A. and
GENERAL ELECTRIC CAPITAL CORPORATION, as co-documentation agents, UBS LOAN
FINANCE LLC, as swingline lender, HSBC BANK USA, as issuing bank and UBS AG,
STAMFORD BRANCH, as administrative agent for the Lenders and collateral agent
for the Secured Parties.
W I T N E S S E T H:
WHEREAS, the Subsidiary Guarantors have entered into the
Credit Agreement and the Security Agreement in order to induce the Lenders to
make the Loans and the Issuing Bank to issue Letters of Credit to or for the
benefit of Borrower;
WHEREAS, pursuant to Section 5.11(b) of the Credit Agreement
and Section 3.5 of the Security Agreement, each Subsidiary (other than any
applicable Foreign Subsidiary or Non-Guarantor Subsidiary) that was not in
existence on the date of the Credit Agreement is required to become a Subsidiary
Guarantor under the Credit Agreement and a Guarantor and Pledgor under the
Security Agreement by executing a Joinder Agreement. The undersigned Subsidiary
(the "NEW GUARANTOR") is executing this joinder agreement ("JOINDER AGREEMENT")
to the Credit Agreement in order to induce the Lenders to make additional
Revolving Loans and the Issuing Bank to issue Letters of Credit and as
consideration for the Loans previously made and Letters of Credit previously
issued.
NOW, THEREFORE, the Administrative Agent, Collateral Agent and
the New Guarantor hereby agree as follows:
A. GUARANTEE. In accordance with Section 5.11(b) of the Credit
Agreement and 3.5 of the Security Agreement, the New Guarantor
by its signature below becomes a Subsidiary Guarantor under
the Credit Agreement and a Guarantor and Pledgor under the
Security Agreement with the same force and effect as if
originally named therein as a Subsidiary Guarantor and a
Guarantor and Pledgor, respectively.
B. REPRESENTATIONS AND WARRANTIES. The New Guarantor hereby (a)
agrees to all the terms and provisions of the Credit Agreement
and the Security Agreement applicable to it as a Subsidiary
Guarantor and a Guarantor and Pledgor, respectively,
thereunder and (b) represents and warrants that the
representations and warranties made by it as a Subsidiary
Guarantor and a Guarantor and Pledgor, respectively,
thereunder are true and correct in all material respects
(except that any representation and warranty that is qualified
as to "materiality" or "Material Adverse Effect" shall be true
and correct in all respects) on and as of the date hereof.
Each reference to a Subsidiary Guarantor in the Credit
Agreement shall be deemed to include the New Guarantor. The
New Guarantor hereby attaches supplements to each of the
schedules to the Credit Agreement and the Security Agreement
applicable to it.
C. SEVERABILITY. Any provision of this Joinder Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
D. COUNTERPARTS. This Joinder Agreement may be executed in
counterparts, each of which shall constitute an original.
Delivery of an executed signature page to this Joinder
Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart of this Joinder
Agreement.
E. NO WAIVER. Except as expressly supplemented hereby, the Credit
Agreement and the Security Agreement shall remain in full
force and effect.
F. NOTICES. All notices, requests and demands to or upon the New
Guarantor, any Agent or any Lender shall be governed by the
terms of Section 11.01 of the Credit Agreement.
G. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD REQUIRE THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
[Signature Pages Follow]
IN WITNESS WHEREOF, the undersigned have caused this Joinder
Agreement to be duly executed and delivered by their duly authorized officers as
of the day and year first above written.
[NEW GUARANTOR]
By:_________________________________
Name:
Title:
Address for Notices:
UBS AG, STAMFORD BRANCH, as
Administrative Agent and Collateral
Agent
By:__________________________________
Name:
Title:
By:__________________________________
Name:
Title:
[Note: Schedules to be attached.]
EXHIBIT G
LANDLORD ACCESS AGREEMENT
THIS LANDLORD ACCESS AGREEMENT (the "AGREEMENT") is made and
entered into as of [ ], by and between [ ], having an office at [ ]("LANDLORD")
and UBS AG, STAMFORD BRANCH, as collateral agent for the benefit of the Secured
Parties (as defined in the Credit Agreement (as hereinafter defined)), having an
office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (in such
capacity, "COLLATERAL AGENT").
R E C I T A L S :
A. Landlord is the record title holder and owner of the
real property described in Schedule A attached hereto (the "REAL PROPERTY").
B. Landlord has leased all or a portion of the Real
Property (the "LEASED PREMISES") to [ ], a [ ] [ ] ("LESSEE" [or "BORROWER"])
pursuant to a certain lease agreement or agreements described in Schedule B
attached hereto (collectively, and as amended, amended and restated,
supplemented or otherwise modified from time to time, the "LEASE").
C. [Lessee, Ionics, Incorporated, a Massachusetts
corporation ("BORROWER")](1) [Borrower] and the Collateral Agent, among others,
have entered into a credit agreement, dated as of February 13, 2004, (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"; capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement),
pursuant to which the Lenders have agreed to make certain loans to Borrower
(collectively, the "LOANS").
D. [Lessee is a subsidiary of Borrower.](2)
E. [Lessee has, pursuant to the Credit Agreement,
guaranteed the obligations of the Borrower under the Credit Agreement and the
other documents evidencing and securing the Loans (collectively, the "LOAN
DOCUMENTS").](3)
F. As security for the payment and performance of
Lessee's Obligations under the Credit Agreement and the other Loan Documents,
Collateral Agent (for the benefit of the Secured
-----------------
(1) Include if Borrower is not the Lessee.
(2) Include if Borrower is not the Lessee.
(3) Include if Borrower is not the Lessee.
-2-
Parties) has or will acquire a security interest in and lien upon all of
Lessee's personal property, inventory, accounts, goods, machinery, equipment,
furniture and fixtures (together with all additions, substitutions, replacements
and improvements to, and proceeds of, the foregoing, collectively, the "PERSONAL
PROPERTY").
G. Collateral Agent has requested that Landlord execute
this Agreement as a condition precedent to the making of the Loans under the
Credit Agreement and Landlord is willing to so execute this Agreement.
A G R E E M E N T :
NOW, THEREFORE, for and in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord hereby represents, warrants and agrees in favor of
Collateral Agent, as follows:
1. Landlord certifies that (i) Landlord is the landlord
under the Lease described in Schedule B attached hereto, (ii) the Lease is in
full force and effect and has not been amended, modified or supplemented except
as set forth in Schedule B hereto and (iii) Landlord has sent no notice of
default to Lessee under the Lease respecting a default which has not been cured
by Lessee.
2. Landlord hereby covenants to the granting of a
security interest in that portion of the Personal Property located on or about
the Real Property and agrees that the Personal Property is and will remain
personal property and not fixtures even though it may be affixed to or placed on
the Leased Premises. Landlord further agrees that Collateral Agent has the right
to remove the Personal Property from the Leased Premises at any time in
accordance with the terms of the Loan Documents; provided that Collateral Agent
shall repair any damage arising from such removal. Landlord further agrees that
it will not hinder Collateral Agent's actions in removing Personal Property from
the Leased Premises or Collateral Agent's actions in otherwise enforcing its
security interest in the Personal Property. Collateral Agent shall not be liable
for any diminution in value of the Leased Premises caused by the absence of
Personal Property actually removed or by the need to replace the Personal
Property after such removal. Landlord acknowledges that Collateral Agent shall
have no obligation to remove the Personal Property from the Leased Premises.
3. Landlord acknowledges and agrees that Lessee's
granting of a security interest in the Personal Property in favor of the
Collateral Agent (for the benefit of the Secured Parties) shall not constitute a
default under the Lease nor permit Landlord to terminate the Lease or re-enter
or repossess the Leased Premises or otherwise be the basis for the exercise of
any remedy by Landlord and Landlord hereby expressly consents to the granting of
such security interest and agrees that such security interest shall be superior
to any lien of the Landlord (statutory or otherwise) in the Personal Property.
4. The terms and provisions of this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of
Landlord (including, without limitation, any successor owner of the Real
Property) and Collateral Agent. Landlord will disclose the terms and conditions
of this Agreement to any purchaser or successor to Landlord's interest in the
Leased Premises.
-3-
5. All notices to any party hereto under this Agreement
shall be in writing and sent to such party at its respective address set forth
above (or at such other address as shall be designated by such party in a
written notice to the other party complying as to delivery with the terms of
this Section 5) by certified mail, postage prepaid, return receipt requested or
by overnight delivery service.
6. The provisions of this Agreement shall continue in
effect until Landlord shall have received Collateral Agent's written
certification that the Loans have been paid in full and all of Borrower's other
Obligations under the Credit Agreement and the other Loan Documents have been
satisfied.
7. THE INTERPRETATION, VALIDITY AND ENFORCEMENT OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
8. Landlord agrees to execute, acknowledge and deliver
such further instruments as Collateral Agent may request to allow for the proper
recording of this Agreement (including, without limitation, a revised landlord's
access agreement in form and substance sufficient for recording) or to otherwise
accomplish the purposes of this Agreement.
IN WITNESS WHEREOF, Landlord and Collateral Agent have caused
this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
[_________________],
as Landlord
By:__________________________________
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By:__________________________________
Name:
Title:
ACCEPTED AND AGREED:
[______________],
as Lessee
By:_______________________________________
Name:
Title:
Schedule A
Description of Real Property
Schedule B
Description of Lease
Location/
Property
Lessor Lessee Dated Modification Address
------ ------ ----- ------------ -------
EXHIBIT H
[Form of]
LC REQUEST [AMENDMENT]
Dated [date]
UBS AG, Stamford Branch, as Administrative Agent under the Credit Agreement (as
amended, amended and restated, modified or supplemented from time to time, the
"CREDIT AGREEMENT"), dated as of February 13, 2004, among Ionics, Incorporated,
as Borrower, the Subsidiary Guarantors, the Lenders from time to time party
thereto, UBS Securities LLC, as Lead Arranger, Sole Bookmanager and
Documentation Agent, Fleet Securities, Inc. and Bank of America, N.A., as
Syndication Agents, Wachovia Bank, N.A. and General Electric Capital
Corporation, as Co-Documentation Agents, UBS AG, Stamford Branch, as
Administrative Agent and Collateral Agent, UBS Loan Finance LLC, as Swingline
Lender, and HSBC Bank USA, as Issuing Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
[Name and Address of Issuing Bank
if different from Administrative Agent]
Ladies and Gentlemen:
We hereby request that [name of proposed Issuing Bank], as
Issuing Bank under the Credit Agreement, [issue] [amend] [renew] [extend] [a]
[an existing] [Standby] [Commercial] Letter of Credit for the account of the
undersigned(1) on [date](2) (the "Date of [Issuance] [Amendment] [Renewal]
[Extension]") in the aggregate stated amount of $[____]. [Such Letter of Credit
was originally issued on [date].] The requested Letter of Credit [shall be] [is]
denominated in [Dollars] [Alternate Currency].
For purposes of this LC Request, unless otherwise defined
herein, all capitalized terms used herein which are defined in the Credit
Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit [will be]
[is] [Insert name and address of beneficiary], and such Letter of Credit [will
be] [is] in support of [(3)] and [will have]
-----------------
(1) Note that if the LC Request is for the account of a Subsidiary,
Borrower shall be a co-applicant, and be jointly and severally liable,
with respect to each Letter of Credit issued for the account or in
favor of any Subsidiary.
(2) Date of Issuance [Amendment] [Renewal] [Extension] which shall be at
least three Business Days after the date of this LC Request, if this LC
Request is delivered to the Issuing Bank by 11:00 a.m., New York City
time (or such shorter period as is acceptable to the Issuing Bank).
(3) Insert description of the obligation to which it relates in the case of
Standby Letters of Credit and a description of the commercial
transaction which is being supported in the case of Commercial Letters
of Credit.
[has] a stated expiration date of [date](4). [Describe the nature of the
amendment, renewal or extension.]
We hereby certify that:
(1) Each of Borrower and each other Loan Party is in compliance in
all material respects with all the terms and provisions set forth in
each Loan Document on its part to be observed or performed, and, as of
today and at the time of and immediately after giving effect to the
[issuance] [amendment] [renewal] [extension] of the Letter of Credit
requested herein, no Default has or will have occurred and be
continuing.
(2) Each of the representations and warranties made by any Loan
Party set forth in any Loan Document are true and correct in all
material respects (except that any representation and warranty that is
qualified as to "materiality" or "Material Adverse Effect" is true and
correct in all respects) on and as of today's date and with the same
effect as though made on and as of today's date, except to the extent
such representations and warranties expressly relate to an earlier
date.
(3) To our knowledge, no order, judgment or decree of any
Governmental Authority purports to restrain any Lender from taking any
actions to be made hereunder or from making any Loans to be made by it.
No injunction or other restraining order has been issued, is pending or
noticed with respect to any action, suit or proceeding seeking to
enjoin or otherwise prevent the consummation of, or to recover any
damages or obtain relief as a result of, the transactions contemplated
by this LC Request, the Credit Agreement or the making of Loans
thereunder.
(4) After giving effect to the request herein, the LC Exposure
will not exceed the LC Commitment and the total Revolving Exposures
will not exceed the total Revolving Commitments.
Copies of all relevant documentation with respect to the
supported transaction are attached hereto.
--------------------
(4) Insert last date upon which drafts may be presented which may not be
later than (i) in the case of a Standby Letter of Credit, (x) the date
which is one year after the date of the issuance of such Standby Letter
of Credit (or, in the case of any renewal or extension thereof, one
year after such renewal or extension) or such later date as may be
agreed by the Issuing Bank and (y) the Letter of Credit Expiration Date
and (ii) in the case of a Commercial Letter of Credit, (x) the date
that is 180 days after the date of issuance of such Commercial Letter
of Credit (or, in the case of any renewal or extension thereof, 180
days after such renewal or extension) and (y) the Letter of Credit
Expiration Date.
[ ]
By:__________________________________
Name:
Title:
EXHIBIT I
[Form of]
LENDER ADDENDUM
Reference is made to the Credit Agreement dated as of February
[ ], 2004 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT") among Ionics, Incorporated, a
Massachusetts corporation ("BORROWER"), the Subsidiary Guarantors (such term and
each other capitalized term used but not defined herein having the meaning given
it in Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC, as
lead arranger, sole bookmanager and documentation agent, FLEET SECURITIES, INC.
and BANC OF AMERICA SECURITIES LLC, as syndication agents, WACHOVIA BANK, N.A.
and GENERAL ELECTRIC CAPITAL CORPORATION, as co-documentation agents, UBS LOAN
FINANCE LLC, as swingline lender, HSBC BANK USA, as issuing bank and UBS AG,
STAMFORD BRANCH, as administrative agent for the Lenders and collateral agent
for the Secured Parties.
Upon execution and delivery of this Lender Addendum by the
parties hereto as provided in Section 11.14 of the Credit Agreement, the
undersigned hereby becomes a Lender thereunder having the Commitment set forth
in Schedule 1 hereto, effective as of the Closing Date.
THIS LENDER ADDENDUM SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
This Lender Addendum may be executed by one or more of the
parties hereto on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page hereof by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Lender
Addendum to be duly executed and delivered by their proper and duly authorized
officers as of this day of [ ], 200[ ].
_________________________________,(1)
as a Lender
[Please type legal name of Lender above]
By:______________________________________
Name:
Title:
[If second signature is necessary:]
By:__________________________________
Name:
Title:
----------------
(1) Use this form of signature page if there is a syndicate of lenders to
avoid having to keep track of correct legal names.
Accepted and agreed:
IONICS, INCORPORATED
By:____________________________
Name:
Title:
UBS AG, STAMFORD BRANCH, as
Administrative Agent
By:__________________________
Name:
Title:
By:__________________________
Name:
Title:
SCHEDULE 1
COMMITMENTS AND NOTICE ADDRESS
1. NAME OF LENDER: _______________________
NOTICE ADDRESS: _______________________
_______________________
_______________________
ATTENTION: _______________________
TELEPHONE: _______________________
FACSIMILE: _______________________
2. COMMITMENT: _______________________
EXHIBIT J-1
[The aggregate maximum principal amount of indebtedness that may be secured
hereby is $[ ].](1)
================================================================================
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BY
[ ],
as Mortgagor,
TO
UBS AG, STAMFORD BRANCH,
as Collateral Agent,
Mortgagee
-------------------------
Dated as of [ ], 2004
Relating to Premises in:
[ ]
================================================================================
This instrument prepared by and, after recording,
please return to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------
---------------
(1) TO BE INCLUDED ONLY IN MORTGAGE RECORDING TAX STATES.
TABLE OF CONTENTS
Page
----
PREAMBLE...................................................................................................... 1
RECITALS...................................................................................................... 1
AGREEMENT..................................................................................................... 2
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions............................................................................. 2
SECTION 1.2. Interpretation.......................................................................... 7
SECTION 1.3. Resolution of Drafting Ambiguities...................................................... 7
ARTICLE II.
GRANTS AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Mortgaged Property............................................................. 8
SECTION 2.2. Assignment of Leases and Rents.......................................................... 9
SECTION 2.3. Secured Obligations..................................................................... 9
SECTION 2.4. Future Advances......................................................................... 9
SECTION 2.5. No Release.............................................................................. 9
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF MORTGAGOR
SECTION 3.1. Authority and Validity.................................................................. 10
SECTION 3.2. Warranty of Title....................................................................... 10
SECTION 3.3. Condition of Mortgaged Property......................................................... 10
SECTION 3.4. Leases.................................................................................. 12
SECTION 3.5. Charges................................................................................. 12
SECTION 3.6. Benefit to the Mortgagor................................................................ 12
ARTICLE IV.
CERTAIN COVENANTS OF MORTGAGOR
SECTION 4.1. Payment................................................................................. 12
SECTION 4.2. Preservation of Existence............................................................... 12
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Page
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SECTION 4.3. Title................................................................................... 12
SECTION 4.4. Maintenance and Use of Mortgaged Property; Alterations.................................. 13
SECTION 4.5. Notices Regarding Certain Defaults...................................................... 14
SECTION 4.6. Access to Mortgaged Property, Books and Records; Other Information...................... 14
SECTION 4.7. Limitation on Liens; Transfer Restrictions.............................................. 14
SECTION 4.8. Estoppel Certificates................................................................... 14
SECTION 4.9. Insurance............................................................................... 14
ARTICLE V.
LEASES
SECTION 5.1. Mortgagor's Affirmative Covenants with Respect to Leases................................ 14
SECTION 5.2. Mortgagor's Negative Covenants with Respect to Leases................................... 15
ARTICLE VI.
CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1. Present Assignment; License to the Mortgagor............................................ 16
SECTION 6.2. Collection of Rents by the Mortgagee.................................................... 16
SECTION 6.3. No Release.............................................................................. 16
SECTION 6.4. Irrevocable Interest.................................................................... 17
SECTION 6.5. Amendment to Leases..................................................................... 17
ARTICLE VII.
TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1. Payment of Charges...................................................................... 17
SECTION 7.2. Escrow of Taxes......................................................................... 17
SECTION 7.3. Certain Statutory Liens................................................................. 17
SECTION 7.4. Stamp and Other Taxes................................................................... 18
SECTION 7.5. Certain Tax Law Changes................................................................. 18
SECTION 7.6. Proceeds of Tax Claim................................................................... 18
ARTICLE VIII.
CONTESTING OF PAYMENTS
SECTION 8.1. Contesting of Taxes and Certain Statutory Liens......................................... 18
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Page
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ARTICLE IX.
DESTRUCTION, CONDEMNATION AND RESTORATION
SECTION 9.1. Destruction, Condemnation and Restoration............................................... 19
SECTION 9.2. Condemnation............................................................................ 19
SECTION 9.3. Restoration............................................................................. 19
ARTICLE X.
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default....................................................................... 19
SECTION 10.2. Remedies in Case of an Event of Default................................................. 20
SECTION 10.3. Sale of Mortgaged Property if Event of Default Occurs; Proceeds of Sale................. 20
SECTION 10.4. Additional Remedies in Case of an Event of Default...................................... 22
SECTION 10.5. Legal Proceedings After an Event of Default............................................. 22
SECTION 10.6. Remedies Not Exclusive.................................................................. 23
ARTICLE XI.
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 11.1. Security Agreement...................................................................... 24
SECTION 11.2. Fixture Filing.......................................................................... 24
ARTICLE XII.
FURTHER ASSURANCES
SECTION 12.1. Recording Documentation To Assure Security.............................................. 25
SECTION 12.2. Further Acts............................................................................ 25
SECTION 12.3. Additional Security..................................................................... 26
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Covenants To Run with the Land.......................................................... 26
SECTION 13.2. No Merger............................................................................... 26
SECTION 13.3. Concerning Mortgagee.................................................................... 26
SECTION 13.4. Mortgagee May Perform; Mortgagee Appointed Attorney-in-Fact............................. 27
SECTION 13.5. Continuing Security Interest; Assignment................................................ 28
SECTION 13.6. Termination; Release.................................................................... 28
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Page
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SECTION 13.7. Modification in Writing................................................................. 28
SECTION 13.8. Notices................................................................................. 29
SECTION 13.9. GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF JURY TRIAL................................. 29
SECTION 13.10. Severability of Provisions.............................................................. 29
SECTION 13.11. Limitation on Interest Payable.......................................................... 29
SECTION 13.12. Business Days........................................................................... 30
SECTION 13.13. Relationship............................................................................ 30
SECTION 13.14. Waiver of Stay.......................................................................... 30
SECTION 13.15. No Credit for Payment of Taxes or Impositions........................................... 31
SECTION 13.16. No Claims Against the Mortgagee......................................................... 31
SECTION 13.17. Obligations Absolute.................................................................... 31
SECTION 13.18. Mortgagee's Right To Sever Indebtedness................................................. 32
SECTION 13.19. Last Dollars Secured.................................................................... 33
SIGNATURE
ACKNOWLEDGMENTS
SCHEDULE A Legal Description
SCHEDULE B Prior Liens
-iv-
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING (the "Mortgage"), dated as of [ ], 2004, made by [ ], a
[state type and jurisdiction of entity] having an office at [ ], as mortgagor,
assignor and debtor (in such capacities and together with any successors in such
capacities, the "Mortgagor"), in favor of UBS AG, STAMFORD BRANCH, a Swiss
banking corporation having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, in its capacity as collateral agent for Secured Parties (as
hereinafter defined), as mortgagee, assignee and secured party (in such
capacities and together with any successors in such capacities, the
"Mortgagee").
R E C I T A L S :
A. Pursuant to that certain credit agreement, dated as
of February 13, 2004 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Ionics,
Incorporated, as borrower (the "Borrower"), [the Mortgagor and] the [other]
Subsidiary Guarantors (such term and each other capitalized term used and not
defined herein having the meaning given to it in Article I), the Lenders, UBS
Securities LLC, as Lead Arranger, Sole Bookmanager and Documentation Agent, UBS
AG, Stamford Branch, as Administrative Agent and Collateral Agent, UBS Loan
Finance LLC, as Swingline Lender, Fleet Securities, Inc. and Bank of America,
N.A., as Syndication Agents, Wachovia Bank, N.A. and General Electric Capital
Corporation, as Co-Documentation Agents, and HSBC Bank USA, as Issuing Bank, the
Lenders have agreed to make to or for the account of the Borrower certain Loans
and issue certain Letters of Credit.
B. It is contemplated that the Borrower or one or more
of the Subsidiary Guarantors may pursuant to the provisions of the Credit
Agreement enter into one or more agreements with one or more of the Lenders or
their respective Affiliates with respect to the Loans ("Hedging Agreements")
designed to alter the risks arising from the fluctuations in interest rates,
currency values or commodity prices with respect to the Loans under the Credit
Agreement (all obligations of the Borrower or the Subsidiary Guarantors now
existing or hereafter arising under such Hedging Agreements, collectively, the
"Hedging Obligations").
[C. The Borrower owns, directly or through its
Subsidiaries, all of the issued and outstanding shares of the Mortgagor.]
[D. The Mortgagor has, pursuant to Article VII of the
Credit Agreement, among other things, guaranteed (the "Guarantee") the
obligations of the Borrower under the Credit Agreement and the other Loan
Documents.]
[E. The Mortgagor will receive substantial benefits from
the execution, delivery and performance of the Loan Documents and is, therefore,
willing to enter into this Mortgage.]
F. The Mortgagor is or will be the legal and/or
beneficial owner of the Mortgaged Property.
G. It is a condition to the obligations of the Lenders
to make the Loans under the Credit Agreement and issue the Letters of Credit
that the Mortgagor execute and deliver the applicable Loan Documents, including
this Mortgage.
H. This Mortgage is given by the Mortgagor in favor of
the Mortgagee for its benefit and the benefit of the other Secured Parties to
secure the payment and performance of all of the Secured Obligations.
A G R E E M E N T :
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Mortgagor hereby covenants and agrees with the
Mortgagee as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions. (a) Capitalized terms used but not
otherwise defined herein that are defined in the Credit Agreement shall have the
meanings given to them in the Credit Agreement, including the following:
"Administrative Agent"; "Affiliate"; "Agent"; "Business Day";
"Commitment"; "Environmental Law"; "Event of Default"; "GAAP";
"Hazardous Materials"; "Letter of Credit"; "Lenders"; "Lien"; "Loan
Documents"; "Loan Parties"; "Loans"; "Net Cash Proceeds"; "Notes";
"Officers' Certificate"; "person"; "Secured Parties"; "Security
Agreement"; "Security Documents"; "Subsidiary" and "Subsidiary
Guarantors".
(b) The following terms in this Mortgage shall have the
following meanings:
"Allocated Indebtedness" shall have the meaning assigned to
such term in Section 13.18(i) hereof.
"Allocation Notice" shall have the meaning assigned to such
term in Section 13.18(i) hereof.
"Alterations" shall mean any and all alterations,
installations, improvements, additions, modifications or changes of a structural
nature.
-2-
"Charges" shall mean any and all real estate, property and
other taxes, assessments and special assessments, levies, fees, all water and
sewer rents and charges and all other governmental charges imposed upon or
assessed against, and all claims (including, without limitation, claims for
landlords', carriers', mechanics', workmens', repairmens', laborers',
materialmens', suppliers' and warehousemens' Liens and other claims arising by
operation of law) against all or any portion of the Mortgaged Property.
"Collateral" shall have the meaning assigned to such term in
Section 13.18(i) hereof.
"Contested Liens" shall mean, collectively, any Liens incurred
in respect of any Charges to the extent that the amounts owing in respect
thereof are not yet delinquent or are being contested and otherwise comply with
the provisions of Section 8.1 hereof; provided, however, that such Liens shall
in all respects be subject and subordinate in priority to the Liens and security
interests created and evidenced by this Mortgage, except if and to the extent
that the law or regulation creating, permitting or authorizing such Lien
provides that such Lien(s) must be superior to the Liens and security interests
created and evidenced hereby..
"Contracts" shall mean, collectively, any and all right, title
and interest of the Mortgagor in and to any and all contracts and other general
intangibles relating to the Mortgaged Property and all reserves, deferred
payments, deposits, refunds and claims of every kind, nature or character
relating thereto.
"Credit Agreement" shall have the meaning assigned to such
term in Recital A hereof.
"Default Rate" shall mean the rate of interest payable during
a default pursuant to the provisions of Section 2.06 of the Credit Agreement.
"Destruction" shall mean any and all damage to, or loss or
destruction of, the Premises or any part thereof.
"Fixtures" shall mean all machinery, apparatus, equipment,
fittings, fixtures, improvements and articles of personal property of every
kind, description and nature whatsoever now or hereafter attached or affixed to
the Land or any other Improvement used in connection with the use and enjoyment
of the Land or any other Improvement or the maintenance or preservation thereof,
which by the nature of their location thereon or attachment thereto are fixtures
under the UCC or any other applicable law including, without limitation, all
utility systems, fire sprinkler and security systems, drainage facilities,
lighting facilities, all water, sanitary and storm sewer, drainage, electricity,
steam, gas, telephone and other utility equipment and facilities, pipes,
fittings and other items of every kind and description now or hereafter attached
to or located on the Land which by the nature of their location thereon or
attachment thereto are real property under applicable law, HVAC equipment,
boilers, electronic data processing, telecommunications or computer equipment,
refrigeration, electronic monitoring, water or lighting systems, power,
sanitation, waste removal, elevators, maintenance or other systems or equipment.
-3-
"Governmental Authority" shall mean any Federal, state, local,
foreign or other governmental, quasi-governmental or administrative (including
self-regulatory) body, instrumentality, department, agency, authority, board,
bureau, commission, office of any nature whatsoever or other subdivision
thereof, or any court, tribunal, administrative hearing body, arbitration panel
or other similar dispute-resolving body, whether now or hereafter in existence,
or any officer or official thereof, having jurisdiction over the Mortgagor or
the Mortgaged Property or any portion thereof.
"Improvements" shall mean all buildings, structures and other
improvements of every kind or description and any and all Alterations now or
hereafter located, attached or erected on the Land, including, without
limitation, (i) all Fixtures, (ii) all attachments, railroad tracks,
foundations, sidewalks, drives, roads, curbs, streets, ways, alleys, passages,
passageways, sewer rights, parking areas, driveways, fences and walls and (iii)
all materials now or hereafter located on the Land intended for the
construction, reconstruction, repair, replacement, alteration, addition or
improvement of or to such buildings, Fixtures, structures and improvements, all
of which materials shall be deemed to be part of the Improvements immediately
upon delivery thereof on the Land and to be part of the Improvements immediately
upon their incorporation therein.
"Insurance Policies" means the insurance policies and
coverages required to be maintained by the Mortgagor with respect to the
Mortgaged Property pursuant to the Credit Agreement.
"Land" shall mean the land described in Schedule A annexed to
this Mortgage, together with all of the Mortgagor's reversionary rights in and
to any and all easements, rights-of-way, strips and gores of land, waters, water
courses, water rights, mineral, gas and oil rights and all power, air, light and
other rights, estates, titles, interests, privileges, liberties, servitudes,
licenses, tenements, hereditaments and appurtenances whatsoever, in any way
belonging, relating or appertaining thereto, or any part thereof, or which
hereafter shall in any way belong, relate or be appurtenant thereto.
"Landlord" shall mean any landlord, lessor, franchisor,
licensor or grantor, as applicable.
"Leases" shall mean, collectively, any and all interests of
the Mortgagor, as Landlord, in all leases and subleases of space, tenancies,
franchise agreements, licenses, occupancy or concession agreements now existing
or hereafter entered into, whether or not of record, relating in any manner to
the Premises and any and all amendments, modifications, supplements,
replacements, extensions and renewals of any thereof, whether now in effect or
hereafter coming into effect.
"Mortgage" shall have the meaning assigned to such term in the
Preamble hereof.
"Mortgaged Property" shall have the meaning assigned to such
term in Section 2.1 hereof.
-4-
"Mortgagee" shall have the meaning assigned to such term in
the Preamble hereof.
"Mortgagor" shall have the meaning assigned to such term in
the Preamble hereof.
"Mortgagor's Interest" shall have the meaning assigned to such
term in Section 2.2 hereof.
"Permit" shall mean any and all permits, certificates,
approvals, authorizations, consents, licenses, variances, franchises or other
instruments, however characterized, of any Governmental Authority (or any person
acting on behalf of a Governmental Authority) now or hereafter acquired or held,
together with all amendments, modifications, extensions, renewals and
replacements of any thereof issued or in any way furnished in connection with
the Mortgaged Property including, without limitation, building permits,
certificates of occupancy, environmental certificates, industrial permits or
licenses and certificates of operation.
"Permitted Collateral Liens" shall mean the Liens described in
clause (iii) of the definition of "Permitted Collateral Liens" contained in the
Credit Agreement.
"Premises" shall mean, collectively, the Land and the
Improvements.
"Prior Liens" shall mean, collectively, the Liens identified
in Schedule B annexed to this Mortgage.
"Proceeds" shall mean, collectively, any and all cash proceeds
and noncash proceeds and shall include all (i) proceeds of the conversion,
voluntary or involuntary, of any of the Mortgaged Property or any portion
thereof into cash or liquidated claims, (ii) proceeds of any insurance,
indemnity, warranty, guaranty or claim payable to the Mortgagee or to the
Mortgagor from time to time with respect to any of the Mortgaged Property, (iii)
payments (in any form whatsoever) made or due and payable to the Mortgagor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any portion of the Mortgaged Property by any
Governmental Authority (or any person acting on behalf of a Governmental
Authority), (iv) products of the Mortgaged Property and (v) other amounts from
time to time paid or payable under or in connection with any of the Mortgaged
Property including, without limitation, refunds of real estate taxes and
assessments, including interest thereon.
"Property Material Adverse Effect" shall mean, as of any date
of determination and whether individually or in the aggregate, (a) any event,
circumstance, occurrence or condition which has caused or resulted in (or would
reasonably be expected to cause or result in) a material adverse effect on the
business or operations of the Mortgagor as presently conducted at the Mortgaged
Property; (b) any event, circumstance, occurrence or condition which has caused
or resulted in (or would reasonably be expected to cause or result in) a
material adverse effect on the value or utility of the Mortgaged Property; or
(c) any event, circumstance, occurrence or condition which has caused or
resulted in (or would reasonably be expected to
-5-
cause or result in) a material adverse effect on the legality, priority or
enforceability of the Lien created by this Mortgage or the rights and remedies
of the Mortgagee hereunder.
"Prudent Operator" shall mean a prudent operator of property
similar in use and configuration to the Premises and located in the locality
where the Premises are located.
"Records" shall mean, collectively, any and all right, title
and interest of the Mortgagor in and to any and all drawings, plans,
specifications, file materials, operating and maintenance records, catalogues,
tenant lists, correspondence, advertising materials, operating manuals,
warranties, guarantees, appraisals, studies and data relating to the Mortgaged
Property or the construction of any Alteration or the maintenance of any Permit.
"Rents" shall mean, collectively, any and all rents,
additional rents, royalties, cash, guaranties, letters of credit, bonds,
sureties or securities deposited under any Lease to secure performance of the
Tenant's obligations thereunder, revenues, earnings, profits and income, advance
rental payments, payments incident to assignment, sublease or surrender of a
Lease, claims for forfeited deposits and claims for damages, now due or
hereafter to become due, with respect to any Lease, any indemnification against,
or reimbursement for, sums paid and costs and expenses incurred by the Mortgagor
under any Lease or otherwise, and any award in the event of the bankruptcy of
any Tenant under or guarantor of a Lease.
"Requirements of Law" shall mean, collectively, any and all
requirements of any Governmental Authority including, without limitation, any
and all orders, decrees, determinations, laws, treaties, ordinances, rules,
regulations or similar statutes or case law.
"Restoration" shall mean the repair, replacement or
restoration of all or any portion of the Premises after a Destruction or Taking.
"Secured Obligations" shall mean all obligations (whether or
not constituting future advances, obligatory or otherwise) of the Mortgagor and
any and all of the other Loan Parties from time to time arising under or in
respect hereof or of the Credit Agreement, the Notes, the Letters of Credit, the
other Loan Documents (including, without limitation, the obligations to pay
principal, interest and all other charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Mortgage, the Credit Agreement, the
Notes, the Letters of Credit, the other Loan Documents, in each case whether (i)
such obligations are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, reduced to judgment or not, liquidated or unliquidated,
disputed or undisputed, legal or equitable, due or to become due whether at
stated maturity, by acceleration or otherwise, (ii) arising in the regular
course of business or otherwise, (iii) for payment or performance, (iv)
discharged, stayed or otherwise affected by any bankruptcy, insolvency,
reorganization or similar proceeding with respect to any Loan Party or any other
person and/or (v) now existing or hereafter arising (including, without
limitation, interest and other obligations arising or accruing after the
commencement of any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Loan Party or any other person, or which would have arisen
or accrued but for the commencement of such proceeding, even if such obligation
or the claim therefor is not enforceable or allowable in such proceeding).
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"Taking" shall mean any taking of the Mortgaged Property or
any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any law, general or special, or by reason of the temporary
requisition of the use or occupancy of the Mortgaged Property or any part
thereof, by any Governmental Authority, civil or military.
"Tax Escrow Fund" shall have the meaning assigned to such term
in Section 7.2 hereof.
"Tenant" shall mean any tenant, lessee, sublessee, franchisee,
licensee, grantee or obligee, as applicable.
"UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the jurisdiction in which the Premises are located; provided,
however, that if by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the security interest in any item or
portion of the Mortgaged Property is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the jurisdiction in which the Premises
are located, "UCC" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
SECTION 1.2. Interpretation. In this Mortgage, unless
otherwise specified, (i) singular words include the plural and plural words
include the singular, (ii) words importing any gender include the other gender,
(iii) references to any person include such person's successors and assigns and
in the case of an individual, the word "successors" includes such person's
heirs, devisees, legatees, executors, administrators and personal
representatives, (iv) references to any statute or other law include all
applicable rules, regulations and orders adopted or made thereunder and all
statutes or other laws amending, consolidating or replacing the statute or law
referred to, (v) the words "consent," "approve" and "agree," and derivations
thereof or words of similar import, mean the prior written consent, approval or
agreement of the person in question, (vi) the words "include" and "including,"
and words of similar import, shall be deemed to be followed by the words
"without limitation," (vii) the words "hereto," "herein," "hereof" and
"hereunder," and words of similar import, refer to this Mortgage in its
entirety, (viii) references to Articles, Sections, Schedules, Exhibits,
subsections, paragraphs and clauses are to the Articles, Sections, Schedules,
Exhibits, subsections, paragraphs and clauses hereof, (ix) the Schedules and
Exhibits to this Mortgage, in each case as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the
provisions hereof, are incorporated herein by reference, (x) the titles and
headings of Articles, Sections, Schedules, Exhibits, subsections, paragraphs and
clauses are inserted as a matter of convenience only and shall not affect the
constructions of any provision hereof and (xi) all obligations of the Mortgagor
hereunder shall be satisfied by the Mortgagor at the Mortgagor's sole cost and
expense.
SECTION 1.3. Resolution of Drafting Ambiguities. The Mortgagor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be
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resolved against the drafting party (i.e., Mortgagee) shall not be employed in
the interpretation hereof.
ARTICLE II.
GRANTS AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Mortgaged Property. The Mortgagor hereby
grants, mortgages, bargains, sells, assigns, transfers and conveys to the
Mortgagee, and hereby grants to the Mortgagee, a security interest in and upon
all of the Mortgagor's estate, right, title and interest in, to and under the
following property, whether now owned or held or hereafter acquired from time to
time (collectively, the "Mortgaged Property"):
(i) Land;
(ii) Improvements;
(iii) Leases;
(iv) Rents;
(v) Permits;
(vi) Contracts;
(vii) Records; and
(viii) Proceeds;
Notwithstanding the foregoing provisions of this Section 2.1,
Mortgaged Property shall not include a grant of any of the Mortgagor's right,
title or interest in (i) any Contract to which the Mortgagor is a party or any
of its rights or interests thereunder to the extent, but only to the extent,
that such a grant would, under the terms of such Contract, result in a breach or
termination of the terms of, or constitute a default under or termination of
such Contract and (ii) any Permit to the extent, but only to the extent that,
such grant shall constitute or result in abandonment, invalidation or rendering
unenforceable any right, title or interest of the Mortgagor therein; provided,
however, that at such time as any Contract or Permit described in clauses (i)
and (ii) of this sentence is no longer subject to such restriction, such
applicable Contract or Permit shall (without any act or delivery by any person)
constitute Mortgaged Property hereunder.
TO HAVE AND TO HOLD the Mortgaged Property, together with all estate, right,
title and interest of the Mortgagor and anyone claiming by, through or under the
Mortgagor in and to the Mortgaged Property and all rights and appurtenances
relating thereto, unto the Mortgagee, its successors and assigns, for the
purpose of securing the payment and performance in full of all the Secured
Obligations.
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SECTION 2.2. Assignment of Leases and Rents. As additional
security for the payment and performance in full of all the Secured Obligations
and subject to the provisions of Article VI hereof, the Mortgagor absolutely,
presently, unconditionally and irrevocably assigns, transfers and sets over to
the Mortgagee, and grants to the Mortgagee, all of the Mortgagor's estate,
right, title, interest, claim and demand, as Landlord, under any and all of the
Leases including, without limitation, the following (such assigned rights, the
"Mortgagor's Interest"):
(i) the immediate and continuing right to receive and
collect Rents payable by the Tenants pursuant to the Leases;
(ii) all claims, rights, powers, privileges and remedies
of the Mortgagor, whether provided for in the Leases or arising by
statute or at law or in equity or otherwise, consequent on any failure
on the part of the Tenants to perform or comply with any term of the
Leases;
(iii) all rights to take all actions upon the happening of
a default under the Leases as shall be permitted by the Leases or by
law including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(iv) the full power and authority, in the name of the
Mortgagor or otherwise, to enforce, collect, receive and receipt for
any and all of the foregoing and to take all other actions whatsoever
which the Mortgagor, as Landlord, is or may be entitled to take under
the Leases.
SECTION 2.3. Secured Obligations. This Mortgage secures, and
the Mortgaged Property is collateral security for, the payment and performance
in full when due of the Secured Obligations.
SECTION 2.4. Future Advances. This Mortgage shall secure
future advances whenever hereafter made. The maximum aggregate amount of all
advances of principal under the Credit Agreement (which advances are obligatory
to the extent the conditions set forth in the Credit Agreement relating thereto
are satisfied) that may be outstanding hereunder at any time is $[ ], plus
interest thereon, collection costs, sums advanced for the payment of taxes,
assessments, maintenance and repair charges, insurance premiums and any other
costs incurred to protect the security encumbered hereby or the lien hereof,
expenses incurred by the Mortgagee by reason of any default by the Mortgagor
under the terms hereof, together with all other sums secured hereby.
SECTION 2.5. No Release. Nothing set forth in this Mortgage
shall relieve the Mortgagor from the performance of any term, covenant,
condition or agreement on the Mortgagor's part to be performed or observed under
or in respect of any of the Mortgaged Property or from any liability to any
person under or in respect of any of the Mortgaged Property or shall impose any
obligation on the Mortgagee or any other Secured Party to perform or observe any
such term, covenant, condition or agreement on the Mortgagor's part to be so
performed or observed or shall impose any liability on the Mortgagee or any
other Secured Party for any act or omission on the part of the Mortgagor
relating thereto or for any breach of any
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representation or warranty on the part of the Mortgagor contained in this
Mortgage or any other Loan Document, or under or in respect of the Mortgaged
Property or made in connection herewith or therewith. The obligations of the
Mortgagor contained in this Section 2.5 shall survive the termination hereof and
the discharge of the Mortgagor's other obligations under this Mortgage and the
other Loan Documents.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF MORTGAGOR
SECTION 3.1. Authority and Validity. The Mortgagor represents
and warrants that each of the representations, warranties, covenants, negative
covenants and other agreements of the Mortgager (as a Loan Party) under and as
contained in the Credit Agreement are hereby incorporated herein in their
entirety by this reference.
SECTION 3.2. Warranty of Title. The Mortgagor represents and
warrants that:
(i) it has good and marketable fee simple title to the
Premises and the Landlord's interest and estate under or in respect of
the Leases and good title to the interest it purports to own or hold in
and to each of the Permits, the Contracts and the Records, in each case
subject to no Liens, except for Prior Liens and Liens in favor of the
Mortgagee pursuant to the Security Documents;
(ii) it has good title to the interest it purports to own
or hold in and to all rights and appurtenances to or that constitute a
portion of the Mortgaged Property;
(iii) it is in compliance in all material respects with
each term, condition and provision of any obligation of the Mortgagor
which is secured by the Mortgaged Property or the noncompliance with
which may result in the imposition of a Lien on the Mortgaged Property;
and
(iv) upon recordation in the official records in the
county (or other applicable jurisdiction) in which the Premises are
located this Mortgage will create and constitute a valid and
enforceable first priority Lien on the Mortgaged Property in favor of
the Collateral Agent for the benefit of the Secured Parties, and, to
the extent any of the Mortgaged Property shall consist of Fixtures, a
first priority security interest in the Fixtures, which first priority
Lien and first priority security interest are subject only to Prior
Liens.
SECTION 3.3. Condition of Mortgaged Property. The Mortgagor
represents and warrants that:
(i) there has been issued and there remains in full force
and effect subject to no revocation, suspension, forfeiture or
modification, each and every material Permit necessary for the present
use, operation and occupancy of the Premises by the Mortgagor
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and the conduct of its business and all required zoning, building code,
land use, environmental and other similar Permits;
(ii) the Premises and the present use and occupancy
thereof comply with all applicable zoning ordinances, building codes,
land use laws, setback or other development and use requirements of
Governmental Authorities and with all private restrictions and
agreements affecting the Mortgaged Property whether or not recorded;
(iii) the Premises are served by all utilities (including,
without limitation, public water and sewer systems) reasonably
necessary for the present and contemplated use thereof, and all utility
services are provided by public utilities and the Premises have
accepted or are equipped to accept such utility services and the
Mortgagor has not received notice of termination of such utility
service;
(iv) the Mortgagor has access to the Premises from one or
more fully dedicated public roads and, to the extent applicable, public
or private rail or waterway, sufficient to allow the Mortgagor to
conduct its business at the Premises in accordance with sound
commercial practices and the Mortgagor has not received notice of
termination of such access;
(v) the Mortgagor has not received notice of any Taking
or the commencement or pendency of any action or proceeding therefor;
(vi) there has not occurred any Destruction of the
Premises or any portion thereof as a result of any fire or other
casualty which has not previously been repaired or replaced;
(vii) there are no disputes regarding boundary lines,
location, encroachments or possession of any portions of the Mortgaged
Property and no state of facts exists which could give rise to any such
claim;
(viii) all liquid and solid waste disposal, septic and sewer
systems located on the Premises are in a good and safe condition and
repair and in compliance with all Requirements of Law;
(ix) no portion of the buildings or structures
constituting the Improvements is located in an area identified by the
Federal Emergency Management Agency or any successor thereto as an area
having special flood hazards pursuant to the Flood Insurance Acts or,
if any portion of the buildings or structures constituting the
Improvements is located within such area, the Mortgagor has obtained
the flood insurance prescribed in Section 5.04 of the Credit Agreement
hereof;
(x) the Premises are assessed for real estate tax
purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not constituting a portion of
such lot or lots, and no other land or improvement is assessed and
taxed together with the Premises or any portion thereof; and
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(xi) there are no options or rights of first refusal to
purchase or acquire all or any portion of the Mortgaged Property.
SECTION 3.4. Leases. The Mortgagor represents and warrants
that there are no Leases affecting the Premises as of the date hereof;
SECTION 3.5. Charges. The Mortgagor represents and warrants
that all Charges imposed upon or assessed against the Mortgaged Property have
been paid and discharged except to the extent such Charges constitute a Prior
Lien.
SECTION 3.6. Benefit to the Mortgagor. The Mortgagor
represents and warrants that it will receive substantial benefit as a result of
the execution, delivery, and performance of the Loan Documents.](2)
ARTICLE IV.
CERTAIN COVENANTS OF MORTGAGOR
SECTION 4.1. Payment. The Mortgagor shall pay as and when the
same shall become due, whether at its stated maturity, by acceleration or
otherwise, each and every amount payable by the Mortgagor under the Loan
Documents.
SECTION 4.2. Preservation of Existence. The Mortgagor shall
preserve and maintain in full force and effect its qualification to transact
business and good standing in the state in which the Mortgaged Property is
located.
SECTION 4.3. Title. The Mortgagor shall
(i) (A) keep in effect all rights and appurtenances to or
that constitute a part of the Mortgaged Property and (B) protect,
preserve and defend its interest in the Mortgaged Property and title
thereto;
(ii) (A) comply with each of the terms, conditions and
provisions of any obligation of the Mortgagor which is secured by the
Mortgaged Property or the noncompliance with which may result in the
imposition of a Lien on the Mortgaged Property, subject to Sections
6.02 (a), (b) and (e) of the Credit Agreement, (B) forever warrant and
defend to the Mortgagee the Lien and security interests created and
evidenced hereby and the validity and priority hereof in any action or
proceeding against the claims of any and all persons whomsoever
affecting or purporting to affect the Mortgaged Property or any of the
rights of the Mortgagee hereunder and (C) maintain a
--------------
(2) Delete Section 3.9 if the Mortgagor is the Borrower.
-12-
valid and enforceable first priority Lien on the Mortgaged Property
and, to the extent any of the Mortgaged Property shall consist of
Fixtures, a first priority security interest in the Mortgaged Property,
which first priority Lien and security interest shall be subject only
to Permitted Collateral Liens and all Prior Liens; and
(iii) immediately upon obtaining knowledge of the pendency
of any proceedings for the eviction of the Mortgagor from the Mortgaged
Property or any part thereof by paramount title or otherwise
questioning the Mortgagor's right, title and interest in, to and under
the Mortgaged Property as warranted in this Mortgage, or of any
condition that could give rise to any such proceedings, notify the
Mortgagee thereof. The Mortgagee may participate in such proceedings
and the Mortgagor will deliver or cause to be delivered to the
Mortgagee all instruments requested by the Mortgagee to permit such
participation. In any such proceedings, the Mortgagee may be
represented by counsel satisfactory to the Mortgagee at the expense of
the Mortgagor. If, upon the resolution of such proceedings, the
Mortgagor shall suffer a loss of the Mortgaged Property or any part
thereof or interest therein and title insurance proceeds shall be
payable in connection therewith, such proceeds are hereby assigned to
and shall be paid to the Mortgagee to be applied as Net Cash Proceeds
to the payment of the Secured Obligations or otherwise in accordance
with the provisions of Section 2.10 of the Credit Agreement.
SECTION 4.4. Maintenance and Use of Mortgaged Property;
Alterations.
(i) Maintenance. The Mortgagor shall cause the
representations and warranties set forth in Section 3.3 hereof to continue to be
true in each and every respect except where the failure so to be true would not
result in a Property Material Adverse Effect.
(ii) Maintenance of Premises. The Mortgagor shall not
commit or suffer any waste on the Premises. The Mortgagor shall, at all times,
comply with the terms of Section 5.03 of the Credit Agreement with respect to
the maintenance and repair of the Premises (Mortgagor acknowledges that the
Mortgaged Property is material to the conduct of its business). The Mortgagor
shall not remove, demolish or alter the design or structural character of any
Improvement now or hereafter erected upon all or any portion of the Premises, or
permit any such removal, demolition or alteration, without the prior written
consent of the Mortgagee, unless such removal, demolition or alteration
maintains or increases the current value of the Mortgaged Property and in the
reasonable judgment of Mortgagor, a Prudent Operator would undertake such
removal, demolition or alteration in order to improve the conduct of its
business.
(iii) Permits. The Mortgagor shall maintain, or cause to be
maintained, in full force and effect all Permits contemplated by Section 3.3(i)
hereof. Unless and to the extent contested by the Mortgagor in accordance with
the provisions of Article VIII hereof, the Mortgagor shall comply in all
material respects with all requirements set forth in the Permits and all
Requirements of Law applicable to all or any portion of the Mortgaged Property
or the condition, use or occupancy of all or any portion thereof or any recorded
deed of restriction, declaration, covenant running with the land or otherwise,
now or hereafter in force.
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(iv) Zoning. The Mortgagor shall not initiate, join in or
consent to any change in the zoning or any other permitted use classification of
the Premises without the prior written consent of the Mortgagee.
SECTION 4.5. Notices Regarding Certain Defaults. The Mortgagor
shall, promptly upon receipt of any written notice regarding (i) any default by
the Mortgagor relating to the Mortgaged Property or any portion thereof or (ii)
the failure to discharge any of the Mortgagor's obligations with respect to the
Mortgaged Property or any portion thereof described herein, furnish a copy of
such notice to the Mortgagee.
SECTION 4.6. Access to Mortgaged Property, Books and Records;
Other Information. Upon request to the Mortgagor, the Mortgagee, its agents,
accountants and attorneys shall have full and free access to visit and inspect,
the Mortgaged Property in accordance with Section 5.07 of the Credit Agreement
SECTION 4.7. Limitation on Liens; Transfer Restrictions.
Except for the Prior Liens, the Permitted Collateral Liens and the Lien of this
Mortgage, the Mortgagor may not, without the prior written consent of the
Mortgagee, further mortgage, encumber, hypothecate, sell, convey or assign all
or any part of the Mortgaged Property or suffer or allow any of the foregoing to
occur by operation of law or otherwise.
SECTION 4.8. Estoppel Certificates. The Mortgagor shall, from
time to time, upon ten (10) days' prior written request of the Mortgagee,
execute, acknowledge and deliver to the Mortgagee an Officers' Certificate
stating that this Mortgage, the Credit Agreement and the other Credit Documents
are unmodified and in full force and effect (or, if there have been
modifications, that this Mortgage, the Credit Agreement or such other Credit
Document, as applicable, is in full force and effect as modified and setting
forth such modifications) and stating the date to which principal and interest
have been paid on the Loans.
SECTION 4.9. Insurance . The Mortgagor shall obtain and keep
in full force and effect the Insurance Policies required by the Credit Agreement
pursuant to the terms thereof.
ARTICLE V.
LEASES
SECTION 5.1. Mortgagor's Affirmative Covenants with Respect to
Leases. With respect to each Lease that is hereinafter entered into by
Mortgagor, the Mortgagor shall:
(i) observe and perform in all material respects all the
obligations imposed upon the Landlord under such Lease;
(ii) promptly send copies to the Mortgagee of all notices
of default which the Mortgagor shall send or receive thereunder; and
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(iii) enforce all of the material terms, covenants and
conditions contained in such Lease upon the part of the Tenant
thereunder to be observed or performed.
SECTION 5.2. Mortgagor's Negative Covenants with Respect to
Leases. With respect to each Lease that is hereinafter entered into by
Mortgagor, the Mortgagor shall not, without the prior written consent of the
Mortgagee:
(i) receive or collect, or permit the receipt or
collection of, any Rent under such Lease more than one (1) month in
advance of the respective period in respect of which such Rent is to
accrue, except:
(A) in connection with the execution and
delivery of such Lease (or of any amendment
to such Lease), Rent thereunder may be
collected and received in advance in an
amount not in excess of one (1) month's
Rent;
(B) the amount held by Landlord as a reasonable
security deposit thereunder; and
(C) any amount received and collected for
escalation and other charges in accordance
with the terms of such Lease;
(ii) assign, transfer or hypothecate (other than to the
Mortgagee hereunder) any Rent under such Lease whether then due or to
accrue in the future or the interest of the Mortgagor as Landlord under
such Lease;
(iii) enter into any amendment or modification of such
Lease if the same would not comply with Section 6.02(h) of the Credit
Agreement;
(iv) terminate (whether by exercising any contractual
right of the Mortgagor to recapture leased space or otherwise) or
permit the termination of such Lease or accept surrender of all or any
portion of the space demised under such Lease prior to the end of the
term thereof or accept assignment of such Lease to the Mortgagor unless
the same would not cause a Property Material Adverse Effect or;
(v) waive, excuse, condone or in any manner discharge or
release any Tenants of or from the obligations of such Tenants under
their respective Leases or guarantors of Tenants from obligations under
any guarantees of the Leases except as the same would be done by a
Prudent Operator with due regard for the security afforded the
Mortgagee thereby Mortgagor unless the same would not cause a Property
Material Adverse Effect.
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ARTICLE VI.
CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1. Present Assignment; License to the Mortgagor.
Section 2.2 of this Mortgage constitutes a present, absolute, effective,
irrevocable and complete assignment by Mortgagor to Mortgagee of the Leases and
Rents and the right, subject to applicable law, to collect all sums payable to
Mortgagor thereunder and apply the same as Mortgagee may, in its sole
discretion, determine to be appropriate (including the payment of reasonable
costs and expenses in connection with the maintenance, operation, improvement,
insurance, taxes and upkeep of the Mortgaged Property), which is not conditioned
upon Mortgagee being in possession of the Premises. The Mortgagee hereby grants
to the Mortgagor, however, a license to collect and apply the Rents and to
enforce the obligations of Tenants under the Leases. Immediately upon the
occurrence of and during the continuance of any Event of Default, the license
granted in the immediately preceding sentence shall cease and terminate, with or
without any notice, action or proceeding or the intervention of a receiver
appointed by a court.
SECTION 6.2. Collection of Rents by the Mortgagee.
(i) Any Rents receivable by the Mortgagee hereunder,
after payment of all proper costs and expenses as Mortgagee may, in its sole
discretion, determine to be appropriate (including the payment of reasonable
costs and expenses in connection with the maintenance, operation, improvement,
insurance, taxes and upkeep of the Mortgaged Property), shall be applied in
accordance with the provisions of Section 10.2 of this Mortgage. The Mortgagee
shall be accountable to the Mortgagor only for Rents actually received by the
Mortgagee. The collection of such Rents and the application thereof shall not
cure or waive any Event of Default or waive, modify or affect notice of Event of
Default or invalidate any act done pursuant to such notice.
(ii) The Mortgagor hereby irrevocably authorizes and
directs Tenant under each Lease to rely upon and comply with any and all notices
or demands from the Mortgagee for payment of Rents to the Mortgagee and the
Mortgagor shall have no claim against Tenant for Rents paid by Tenant to the
Mortgagee pursuant to such notice or demand.
SECTION 6.3. No Release. Neither this Mortgage nor any action
or inaction on the part of the Mortgagee shall release Tenant under any Lease,
any guarantor of any Lease or the Mortgagor from any of their respective
obligations under such Leases or constitute an assumption of any such obligation
on the part of the Mortgagee. No action or failure to act on the part of the
Mortgagor shall adversely affect or limit the rights of the Mortgagee under this
Mortgage or, through this Mortgage, under such Leases. Nothing contained herein
shall operate or be construed to (i) obligate the Mortgagee to perform any of
the terms, covenants or conditions contained in any Lease or otherwise to impose
any obligation upon the Mortgagee with respect to such Lease (including, without
limitation, any obligation arising out of any covenant of quiet enjoyment
contained in such Lease in the event that Tenant under such Lease shall have
been joined as a party defendant in any action by which the estate of such
Tenant shall
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be terminated) or (ii) place upon the Mortgagee any responsibility
for the operation, control, care, management or repair of the Premises.
SECTION 6.4. Irrevocable Interest. All rights, powers and
privileges of the Mortgagee herein set forth are coupled with an interest and
are irrevocable, subject to the terms and conditions hereof, and the Mortgagor
shall not take any action under the Leases or otherwise which is inconsistent
with this Mortgage or any of the terms hereof and any such action inconsistent
herewith or therewith shall be void.
SECTION 6.5. Amendment to Leases. Each Lease, including,
without limitation, all amendments, modifications, supplements, replacements,
extensions and renewals thereof, shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the parties hereto.
ARTICLE VII.
TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1. Payment of Charges. Unless and to the extent
contested by the Mortgagor in accordance with the provisions of the Credit
Agreement hereof, the Mortgagor shall pay and discharge, or cause to be paid and
discharged, from time to time prior to same becoming delinquent, all Charges.
The Mortgagor shall, upon the Mortgagee's request, deliver to the Mortgagee
receipts evidencing the payment of all such Charges.
SECTION 7.2. Escrow of Taxes. From and after the occurrence of
an Event of Default, at the option and upon the request of the Mortgagee, the
Mortgagor shall deposit with the Mortgagee in an account maintained by the
Mortgagee (the "Tax Escrow Fund"), on the first day of each month, an amount
estimated by the Mortgagee to be equal to one-twelfth of the annual real
property taxes and other annual Charges required to be discharged by the
Mortgagor under Section 7.1 hereof. Such amounts shall be held by the Mortgagee
without interest to the Mortgagor and applied to the payment of the obligations
in respect of which such amounts were deposited, in such priority as the
Mortgagee shall determine, on or before the respective dates on which such
obligations or any part thereof would become delinquent. Nothing contained in
this Article VII shall (i) affect any right or remedy of the Mortgagee under any
provision hereof or of any statute or rule of law to pay any such amount as
provided above from its own funds and to add the amount so paid, together with
interest at the default rate during such time that any amount remains
outstanding, to the Secured Obligations or (ii) relieve the Mortgagor of its
obligations to make or provide for the payment of the annual real property taxes
and other annual Charges required to be discharged by the Mortgagor under
Section 7.1 hereof.
SECTION 7.3. Certain Statutory Liens. Unless and to the extent
contested by the Mortgagor in accordance with the provisions of Section 6.02 (a)
and (b) of the Credit Agreement, the Mortgagor shall timely pay, or cause to be
paid, all lawful claims and demands of mechanics, materialmen, laborers,
government agencies administering worker's compensation
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insurance, old age pensions and social security benefits and all other claims,
judgments, demands or amounts of any nature which, if unpaid, might result in,
or permit the creation of, a Lien on the Mortgaged Property or any part thereof,
or which might result in forfeiture of all or any part of the Mortgaged
Property.
SECTION 7.4. Stamp and Other Taxes. Unless and to the extent
contested by the Mortgagor in accordance with the provisions of Article VIII
hereof, the Mortgagor shall pay any United States documentary stamp taxes, with
interest and fines and penalties, and any mortgage recording taxes, with
interest and fines and penalties, that may hereafter be levied, imposed or
assessed under or upon or by reason hereof or the Secured Obligations or any
instrument or transaction affecting or relating to either thereof and in default
thereof the Mortgagee may advance the same and the amount so advanced shall be
payable by the Mortgagor to the Mortgagee in accordance with the provisions of
Section 11.03 of the Credit Agreement hereof.
SECTION 7.5. Certain Tax Law Changes. In the event of the
passage after the date hereof of any law deducting from the value of real
property, for the purpose of taxation, amounts in respect of any Lien thereon or
changing in any way the laws for the taxation of mortgages or debts secured by
mortgages for state or local purposes or the manner of the collection of any
Charges, and imposing any Charges, either directly or indirectly, on this
Mortgage or any other Loan Document, the Mortgagor shall promptly pay to the
Mortgagee such amount or amounts as may be necessary from time to time to pay
any such Charges.
SECTION 7.6. Proceeds of Tax Claim. In the event that the
proceeds of any tax claim are paid after the Mortgagee has exercised its right
to foreclose the Lien hereof, such proceeds shall be paid to the Mortgagee to
satisfy any deficiency remaining after such foreclosure. The Mortgagee shall
retain its interest in the proceeds of any tax claim during any redemption
period. The amount of any such proceeds in excess of any deficiency claim of the
Mortgagee shall in a reasonably prompt manner be released to the Mortgagor.
ARTICLE VIII.
CONTESTING OF PAYMENTS
SECTION 8.1. Contesting of Taxes and Certain Statutory Liens.
The Mortgagor may at its own expense contest in good faith by appropriate
proceedings the validity, amount or applicability of any Charges as provided in
Section 6.02 (a), (b) and (f) of the Credit Agreement.
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ARTICLE IX.
DESTRUCTION, CONDEMNATION AND RESTORATION
SECTION 9.1. Destruction, Condemnation and Restoration. If
there shall occur any Destruction, the Mortgagor shall promptly send to the
Mortgagee a written notice setting forth the nature and extent of such
Destruction. The proceeds of any insurance payable in respect of such
Destruction are hereby assigned and shall be paid to the Mortgagee. All Net
Insurance such proceeds shall constitute Net Cash Proceeds under the Credit
Agreement and shall be applied in accordance with the provisions of Section 2.10
of the Credit Agreement.
SECTION 9.2. Condemnation. If there shall occur any Taking or
the commencement of any proceeding therefor, the Mortgagor shall immediately
notify the Mortgagee upon receiving notice of such Taking or commencement of
proceedings therefor. The Mortgagee may, at its option, participate in any
proceedings or negotiations which might result in any Taking, and the Mortgagor
shall deliver or cause to be delivered to the Mortgagee all instruments
requested by it to permit such participation. The Mortgagee may be represented
by counsel satisfactory to it at the expense of the Mortgagor in connection with
any such participation. The Mortgagor shall pay all reasonable fees, costs and
expenses incurred by the Mortgagee in connection with any Taking and in seeking
and obtaining any award or payment on account thereof. Any proceeds, award or
payment in respect of any Taking are herby assigned and shall be paid to the
Mortgagee. The Mortgagor shall take all steps necessary to notify the condemning
authority of such assignment. All such proceeds shall constitute Net Cash
Proceeds under the Credit Agreement and shall be applied in accordance with the
provisions of Section 2.10 of the Credit Agreement.
SECTION 9.3. Restoration. In the event the Mortgagor is
permitted or required to perform any Restoration in accordance with the
provisions of Section 2.10 of the Credit Agreement, the proceeds of any award
payable in respect of a Destruction or a Taking shall constitute Net Cash
Proceeds and the Mortgagee shall release such Proceeds to the Mortgagor in
compliance with the applicable provisions of Section 2.10 of the Credit
Agreement, and the Mortgagor shall complete the restoration in accordance with
provisions of Section 2.10 of the Credit Agreement. In the event there shall be
any surplus after the application of such proceeds to the Restoration of the
Improvements, such surplus should be applied as Net Cash Proceeds in accordance
with Section 2.10 (e)(iii) of the Credit Agreement.
ARTICLE X.
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default. It shall be an Event of
Default hereunder if there shall have occurred and be continuing an Event of
Default under the Credit Agreement.
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SECTION 10.2. Remedies in Case of an Event of Default. If any
Event of Default shall have occurred and be continuing, the Mortgagee may at its
option, in addition to any other action permitted under this Mortgage or the
Credit Agreement or by law, statute or in equity, take one or more of the
following actions to the greatest extent permitted by local law:
(i) by written notice to the Mortgagor, declare the
entire unpaid amount of the Secured Obligations to be due and payable
immediately;
(ii) personally, or by its agents or attorneys, (A) enter
into and upon and take possession of all or any part of the Premises
together with the books, records and accounts of the Mortgagor relating
thereto and, exclude the Mortgagor, its agents and servants wholly
therefrom, (B) use, operate, manage and control the Premises and
conduct the business thereof, (C) maintain and restore the Premises,
(D) make all necessary or proper repairs, renewals and replacements and
such useful Alterations thereto and thereon as the Mortgagee may deem
advisable, (E) manage, lease and operate the Premises and carry on the
business thereof and exercise all rights and powers of the Mortgagor
with respect thereto either in the name of the Mortgagor or otherwise
or (F) collect and receive all Rents. The Mortgagee shall be under no
liability for or by reason of any such taking of possession, entry,
removal or holding, operation or management except that any amounts so
received by the Mortgagee shall be applied in accordance with the
provisions of Section 9.03 of the Credit Agreement.
(iii) with or without entry, personally or by its agents or
attorneys, (A) sell the Mortgaged Property and all estate, right, title
and interest, claim and demand therein at one or more sales in one or
more parcels, in accordance with the provisions of Section 10.3 or (B)
institute and prosecute proceedings for the complete or partial
foreclosure of the Lien and security interests created and evidenced
hereby; or
(iv) take such steps to protect and enforce its rights
whether by action, suit or proceeding at law or in equity for the
specific performance of any covenant, condition or agreement in the
Credit Agreement and the other Loan Documents, or in aid of the
execution of any power granted in this Mortgage, or for any foreclosure
hereunder, or for the enforcement of any other appropriate legal or
equitable remedy or otherwise as the Mortgagee shall elect.
SECTION 10.3. Sale of Mortgaged Property if Event of Default
Occurs; Proceeds of Sale.
(i) If any Event of Default shall have occurred and be
continuing, the Mortgagee may institute an action to foreclose this Mortgage or
take such other action as may be permitted and available to the Mortgagee at law
or in equity for the enforcement of the Credit Agreement and realization on the
Mortgaged Property and proceeds thereon through power of sale (if then available
under applicable law) or to final judgment and execution thereof for the Secured
Obligations, and in furtherance thereof the Mortgagee may sell the Mortgaged
Property at one or more sales, as an entirety or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or
permitted by law or statute or in equity. The
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Mortgagee may execute and deliver to the purchaser at such sale a conveyance of
the Mortgaged Property in fee simple and an assignment or conveyance of all the
Mortgagor's Interest in the Leases and the Mortgaged Property, each of which
conveyances and assignments shall contain recitals as to the Event of Default
upon which the execution of the power of sale herein granted depends, and the
Mortgagor hereby constitutes and appoints the Mortgagee the true and lawful
attorney in fact of the Mortgagor to make any such recitals, sale, assignment
and conveyance, and all of the acts of the Mortgagee as such attorney in fact
are hereby ratified and confirmed. The Mortgagor agrees that such recitals shall
be binding and conclusive upon the Mortgagor and that any assignment or
conveyance to be made by the Mortgagee shall divest the Mortgagor of all right,
title, interest, equity and right of redemption, including any statutory
redemption, in and to the Mortgaged Property. The power and agency hereby
granted are coupled with an interest and are irrevocable by death or
dissolution, or otherwise, and are in addition to any and all other remedies
which the Mortgagee may have hereunder, at law or in equity. So long as the
Secured Obligations, or any part thereof, remain unpaid, the Mortgagor agrees
that possession of the Mortgaged Property by the Mortgagor, or any person
claiming under the Mortgagor, shall be as tenant, and, in case of a sale under
power or upon foreclosure as provided in this Mortgage, the Mortgagor and any
person in possession under the Mortgagor, as to whose interest such sale was not
made subject, shall, at the option of the purchaser at such sale, then become
and be tenants holding over, and shall forthwith deliver possession to such
purchaser, or be summarily dispossessed in accordance with the laws applicable
to tenants holding over. In case of any sale under this Mortgage by virtue of
the exercise of the powers herein granted, or pursuant to any order in any
judicial proceeding or otherwise, the Mortgaged Property may be sold as an
entirety or in separate parcels in such manner or order as the Mortgagee in its
sole discretion may elect. One or more exercises of powers herein granted shall
not extinguish or exhaust such powers, until the entire Mortgaged Property is
sold or all amounts secured hereby are paid in full.
(ii) In the event of any sale made under or by virtue of
this Article X, the entire principal of, and interest in respect of the Secured
Obligations, if not previously due and payable, shall, at the option of the
Mortgagee, immediately become due and payable, anything in this Mortgage to the
contrary notwithstanding.
(iii) The proceeds of any sale made under or by virtue of
this Article X, together with any other sums which then may be held by the
Mortgagee under this Mortgage, whether under the provisions of this Article X or
otherwise, shall be applied in accordance with the provisions of Section 9.03 of
the Credit Agreement.
(iv) The Mortgagee (on behalf of any Secured Party or on
its own behalf) or any Lender or any of their respective Affiliates may bid for
and acquire the Mortgaged Property or any part thereof at any sale made under or
by virtue of this Article X and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting against the purchase price the
unpaid amounts (whether or not then due) owing to the Mortgagee, or such Lender
in respect of the Secured Obligations, after deducting from the sales price the
expense of the sale and the reasonable costs of the action or proceedings and
any other sums that the Mortgagee or such Lender is authorized to deduct under
this Mortgage.
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(v) The Mortgagee may adjourn from time to time any sale
by it to be made under or by virtue hereof by announcement at the time and place
appointed for such sale or for such adjourned sale or sales, and, the Mortgagee,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(vi) If the Premises is comprised of more than one parcel
of land, the Mortgagee may take any of the actions authorized by this Section
10.3 in respect of any or a number of individual parcels.
SECTION 10.4. Additional Remedies in Case of an Event of
Default.
(i) The Mortgagee shall be entitled to recover judgment
as aforesaid either before, after or during the pendency of any proceedings for
the enforcement of the provisions hereof, and the right of the Mortgagee to
recover such judgment shall not be affected by any entry or sale hereunder, or
by the exercise of any other right, power or remedy for the enforcement of the
provisions hereof, or the foreclosure of, or absolute conveyance pursuant to,
this Mortgage. In case of proceedings against the Mortgagor in insolvency or
bankruptcy or any proceedings for its reorganization or involving the
liquidation of its assets, the Mortgagee shall be entitled to prove the whole
amount of principal and interest and other payments, charges and costs due in
respect of the Secured Obligations to the full amount thereof without deducting
therefrom any proceeds obtained from the sale of the whole or any part of the
Mortgaged Property; provided, however, that in no case shall the Mortgagee
receive a greater amount than the aggregate of such principal, interest and such
other payments, charges and costs (with interest at the default rate) from the
proceeds of the sale of the Mortgaged Property and the distribution from the
estate of the Mortgagor.
(ii) Any recovery of any judgment by the Mortgagee and any
levy of any execution under any judgment upon the Mortgaged Property shall not
affect in any manner or to any extent the Lien and security interests created
and evidenced hereby upon the Mortgaged Property or any part thereof, or any
conveyances, powers, rights and remedies of the Mortgagee hereunder, but such
conveyances, powers, rights and remedies shall continue unimpaired as before.
(iii) Any monies collected by the Mortgagee under this
Section 10.4 shall be applied in accordance with the provisions of Section
10.3(iii).
SECTION 10.5. Legal Proceedings After an Event of Default.
(i) After the occurrence of any Event of Default and
immediately upon the commencement of any action, suit or legal proceedings to
obtain judgment for the Secured Obligations or any part thereof, or of any
proceedings to foreclose the Lien and security interest created and evidenced
hereby or otherwise enforce the provisions hereof or of any other proceedings in
aid of the enforcement hereof, the Mortgagor shall enter its voluntary
appearance in such action, suit or proceeding.
(ii) Upon the occurrence and during the continuance of an
Event of Default, the Mortgagee shall be entitled forthwith as a matter of
right, concurrently or independently of
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any other right or remedy hereunder either before or after declaring the Secured
Obligations or any part thereof to be due and payable, to the appointment of a
receiver without giving notice to any party and without regard to the adequacy
or inadequacy of any security for the Secured Obligations or the solvency or
insolvency of any person or entity then legally or equitably liable for the
Secured Obligations or any portion thereof. The Mortgagor hereby consents to the
appointment of such receiver. Notwithstanding the appointment of any receiver,
the Mortgagee shall be entitled as pledgee to the possession and control of any
cash, deposits or instruments at the time held by or payable or deliverable
under the terms of the Credit Agreement to the Mortgagee.
(iii) The Mortgagor shall not (A) at any time insist upon,
or plead, or in any manner whatsoever claim or take any benefit or advantage of
any stay or extension or moratorium law, any exemption from execution or sale of
the Mortgaged Property or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance
hereof, (B) claim, take or insist on any benefit or advantage of any law now or
hereafter in force providing for the valuation or appraisal of the Mortgaged
Property, or any part thereof, prior to any sale or sales of the Mortgaged
Property which may be made pursuant to this Mortgage, or pursuant to any decree,
judgment or order of any court of competent jurisdiction or (C) after any such
sale or sales, claim or exercise any right under any statute heretofore or
hereafter enacted to redeem the property so sold or any part thereof. To the
extent permitted by applicable law, the Mortgagor hereby expressly (A) waives
all benefit or advantage of any such law or laws, including, without limitation,
any statute of limitations applicable to this Mortgage, (B) waives any and all
rights to trial by jury in any action or proceeding related to the enforcement
hereof, (C) waives any objection which it may now or hereafter have to the
laying of venue of any action, suit or proceeding brought in connection with
this Mortgage and further waives and agrees not to plead that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum and (D) covenants not to hinder, delay or impede the execution of any
power granted or delegated to the Mortgagee by this Mortgage but to suffer and
permit the execution of every such power as though no such law or laws had been
made or enacted. The Mortgagee shall not be liable for any incorrect or improper
payment made pursuant to this Article X in the absence of gross negligence or
willful misconduct.
SECTION 10.6. Remedies Not Exclusive. No remedy conferred upon
or reserved to the Mortgagee by this Mortgage is intended to be exclusive of any
other remedy or remedies, and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Mortgage or now or
hereafter existing at law or in equity. Any delay or omission of the Mortgagee
to exercise any right or power accruing on any Event of Default shall not impair
any such right or power and shall not be construed to be a waiver of or
acquiescence in any such Event of Default. Every power and remedy given by this
Mortgage may be exercised from time to time concurrently or independently, when
and as often as may be deemed expedient by the Mortgagee in such order and
manner as the Mortgagee, in its sole discretion, may elect. If the Mortgagee
accepts any monies required to be paid by the Mortgagor under this Mortgage
after the same become due, such acceptance shall not constitute a waiver of the
right either to require prompt payment, when due, of all other sums secured by
this Mortgage or to declare an Event of Default with regard to subsequent
defaults. If the Mortgagee accepts
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any monies required to be paid by the Mortgagor under this Mortgage in an amount
less than the sum then due, such acceptance shall be deemed an acceptance on
account only and on the condition that it shall not constitute a waiver of the
obligation of the Mortgagor to pay the entire sum then due, and the Mortgagor's
failure to pay the entire sum then due shall be and continue to be a default
hereunder notwithstanding acceptance of such amount on account.
ARTICLE XI.
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 11.1. Security Agreement. To the extent that the
Mortgaged Property includes personal property or items of personal property
which are or are to become fixtures under applicable law, this Mortgage shall
also be construed as a security agreement under the UCC; and, upon and during
the continuance of an Event of Default, the Mortgagee shall be entitled with
respect to such personal property to exercise all remedies hereunder, all
remedies available under the UCC with respect to fixtures and all other remedies
available under applicable law. Without limiting the foregoing, such personal
property may, at the Mortgagee's option, (i) be sold hereunder together with any
sale of any portion of the Mortgaged Property or otherwise, (ii) be sold
pursuant to the UCC, or (iii) be dealt with by the Mortgagee in any other manner
permitted under applicable law. The Mortgagee may require the Mortgagor to
assemble such personal property and make it available to the Mortgagee at a
place to be designated by the Mortgagee. The Mortgagor acknowledges and agrees
that a disposition of the personal property in accordance with the Mortgagee's
rights and remedies in respect to the Mortgaged Property as heretofore provided
is a commercially reasonable disposition thereof; provided, however, that the
Mortgagee shall give the Mortgagor not less than ten (10) days' prior notice of
the time and place of any intended disposition.
SECTION 11.2. Fixture Filing. To the extent that the Mortgaged
Property includes items of personal property which are or are to become fixtures
under applicable law, and to the extent permitted under applicable law, the
filing hereof in the real estate records of the county in which such Mortgaged
Property is located shall also operate from the time of filing as a fixture
filing with respect to such Mortgaged Property, and the following information is
applicable for the purpose of such fixture filing, to wit:
NAME AND ADDRESS OF THE DEBTOR: NAME AND ADDRESS OF THE SECURED
PARTY:
The Mortgagor having the address The Mortgagee having the address
described in the Preamble hereof. described in the Preamble hereof.
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THIS FINANCING STATEMENT COVERS THE FOLLOWING TYPES OR ITEMS OF
PROPERTY:
The Mortgaged Property.
This instrument covers goods or items of personal property which are or
are to become fixtures upon the property.
The name of the record owner of the Property on which such fixtures are or are
to be located is the Mortgagor.
In addition, Mortgagor authorizes the Mortgagee to file appropriate financing
and continuation statements under the UCC in effect in the jurisdiction in which
the Mortgaged Property is located as may be required by law in order to
establish, preserve and protect the liens and security interests intended to be
granted to the Mortgagee pursuant to this Mortgage in the Mortgaged Property.
ARTICLE XII.
FURTHER ASSURANCES
SECTION 12.1. Recording Documentation To Assure Security. The
Mortgagor shall, forthwith after the execution and delivery hereof and
thereafter, from time to time, cause this Mortgage and any financing statement,
continuation statement or similar instrument relating to any thereof or to any
property intended to be subject to the Lien hereof to be filed, registered and
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect the validity and
priority thereof or the Lien hereof purported to be created upon the Mortgaged
Property and the interest and rights of the Mortgagee therein. The Mortgagor
shall pay or cause to be paid all taxes and fees incident to such filing,
registration and recording, and all expenses incident to the preparation,
execution and acknowledgment thereof, and of any instrument of further
assurance, and all Federal or state stamp taxes or other taxes, duties and
charges arising out of or in connection with the execution and delivery of such
instruments.
SECTION 12.2. Further Acts. The Mortgagor shall, at the sole
cost and expense of the Mortgagor, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers, financing statements, continuation statements,
instruments and assurances as the Mortgagee shall from time to time request,
which may be necessary in the judgment of the Mortgagee from time to time to
assure, perfect, convey, assign, mortgage, transfer and confirm unto the
Mortgagee, the property and rights hereby conveyed or assigned or which the
Mortgagor may be or may hereafter become bound to convey or assign to the
Mortgagee or for carrying out the intention or facilitating the performance of
the terms hereof or the filing, registering or recording hereof. Without
limiting the generality of the foregoing, in the event that the Mortgagee
desires to exercise any remedies, consensual rights or attorney-in-fact powers
set forth in this Mortgage and determines it necessary to obtain any approvals
or consents of any Governmental Authority
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or any other person therefor, then, upon the reasonable request of the
Mortgagee, the Mortgagor agrees to use its best efforts to assist and aid the
Mortgagee to obtain as soon as practicable any necessary approvals or consents
for the exercise of any such remedies, rights and powers. In the event the
Mortgagor shall fail after demand to execute any instrument or take any action
required to be executed or taken by the Mortgagor under this Section 12.2, the
Mortgagee may execute or take the same as the attorney-in-fact for the
Mortgagor, such power of attorney being coupled with an interest and is
irrevocable.
SECTION 12.3. Additional Security. Without notice to or
consent of the Mortgagor and without impairment of the Lien and rights created
by this Mortgage, the Mortgagee may accept (but the Mortgagor shall not be
obligated to furnish) from the Mortgagor or from any other person, additional
security for the Secured Obligations. Neither the giving hereof nor the
acceptance of any such additional security shall prevent the Mortgagee from
resorting, first, to such additional security, and, second, to the security
created by this Mortgage without affecting the Mortgagee's Lien and rights under
this Mortgage.
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Covenants To Run with the Land. All of the
grants, covenants, terms, provisions and conditions in this Mortgage shall run
with the Land and shall apply to, and bind the successors and assigns of, the
Mortgagor. If there shall be more than one mortgagor with respect to the
Mortgaged Property, the covenants and warranties hereof shall be joint and
several.
SECTION 13.2. No Merger. The rights and estate created by this
Mortgage shall not, under any circumstances, be held to have merged into any
other estate or interest now owned or hereafter acquired by the Mortgagee unless
the Mortgagee shall have consented to such merger in writing.
SECTION 13.3. Concerning Mortgagee.
(i) The Mortgagee has been appointed as Collateral Agent
pursuant to the Credit Agreement. The actions of the Mortgagee hereunder are
subject to the provisions of the Credit Agreement. The Mortgagee shall have the
right hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including,
without limitation, the release or substitution of the Mortgaged Property), in
accordance with this Mortgage and the Credit Agreement. The Mortgagee may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith. The Mortgagee may resign and a successor Mortgagee may be
appointed in the manner provided in the Credit Agreement. Upon the acceptance of
any appointment as the Mortgagee by a successor Mortgagee, that successor
Mortgagee shall thereupon succeed to and become vested with all the
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rights, powers, privileges and duties of the retiring Mortgagee under this
Mortgage, and the retiring Mortgagee shall thereupon be discharged from its
duties and obligations under this Mortgage. After any retiring Mortgagee's
resignation, the provisions hereof shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Mortgage while it was the
Mortgagee.
(ii) The Mortgagee shall be deemed to have exercised
reasonable care in the custody and preservation of the Mortgaged Property in its
possession if such Mortgaged Property is accorded treatment substantially
equivalent to that which the Mortgagee, in its individual capacity, accords its
own property consisting of similar instruments or interests, it being understood
that neither the Mortgagee nor any of the Secured Parties shall have
responsibility for taking any necessary steps to preserve rights against any
person with respect to any Mortgaged Property.
(iii) The Mortgagee shall be entitled to rely upon any
written notice, statement, certificate, order or other document or any telephone
message believed by it 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 Mortgage and its duties hereunder, upon advice of counsel selected by it.
(iv) With respect to any of its rights and obligations as
a Lender, the Mortgagee shall have and may exercise the same rights and powers
hereunder. The term "Lenders," "Lender" or any similar terms shall, unless the
context clearly otherwise indicates, include the Mortgagee in its individual
capacity as a Lender. The Mortgagee may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with the
Mortgagor or any Affiliate of the Mortgagor to the same extent as if the
Mortgagee were not acting as Collateral Agent.
(v) If any portion of the Mortgaged Property also
constitutes collateral granted to the Mortgagee under any other deed of trust,
mortgage, security agreement, pledge or instrument of any type, in the event of
any conflict between the provisions hereof and the provisions of such other deed
of trust, mortgage, security agreement, pledge or instrument of any type in
respect of such collateral, the Mortgagee, in its sole discretion, shall select
which provision or provisions shall control.
SECTION 13.4. Mortgagee May Perform; Mortgagee Appointed
Attorney-in-Fact. If the Mortgagor shall fail to perform any covenants contained
in this Mortgage (including, without limitation, the Mortgagor's covenants to
(i) pay the premiums in respect of all required insurance policies hereunder or
under the Credit Agreement, (ii) pay Charges, (iii) make repairs, (iv) discharge
Liens or (v) pay or perform any obligations of the Mortgagor under any Mortgaged
Property) or if any warranty on the part of the Mortgagor contained herein shall
be breached, the Mortgagee may (but shall not be obligated to), after notice to
Mortgagor, do the same or cause it to be done or remedy any such breach, and may
expend funds for such purpose; provided, however, that the Mortgagee shall in no
event be bound to inquire into the validity of any tax, lien, imposition or
other obligation which the Mortgagor fails to pay or perform as and when
required hereby and which the Mortgagor does not contest in accordance with the
provisions of Article VIII hereof. Any and all amounts so expended by the
Mortgagee shall be
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paid by the Mortgagor in accordance with the provisions of Section 11.03 of the
Credit Agreement. Neither the provisions of this Section 13.4 nor any action
taken by the Mortgagee pursuant to the provisions of this Section 13.4 shall
prevent any such failure to observe any covenant contained in this Mortgage nor
any breach of warranty from constituting an Event of Default. The Mortgagor
hereby appoints the Mortgagee its attorney-in-fact, with full authority in the
place and stead of the Mortgagor and in the name of the Mortgagor, or otherwise,
from time to time in the Mortgagee's discretion to take any action and to
execute any instrument consistent with the terms hereof and the other Loan
Documents which the Mortgagee may deem necessary or advisable to accomplish the
purposes hereof. The foregoing grant of authority is a power of attorney coupled
with an interest and such appointment shall be irrevocable for the term hereof.
The Mortgagor hereby ratifies all that such attorney shall lawfully do or cause
to be done by virtue hereof.
SECTION 13.5. Continuing Security Interest; Assignment. This
Mortgage shall create a continuing Lien on and security interest in the
Mortgaged Property and shall (i) be binding upon the Mortgagor, its successors
and assigns and (ii) inure, together with the rights and remedies of the
Mortgagee hereunder, to the benefit of the Mortgagee for the benefit of the
Secured Parties and each of their respective successors, transferees and
assigns. No other persons (including, without limitation, any other creditor of
any Loan Party) shall have any interest herein or any right or benefit with
respect hereto. Without limiting the generality of the foregoing clause (ii),
any Lender may assign or otherwise transfer any indebtedness held by it secured
by this Mortgage to any other person, and such other person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender,
herein or otherwise, subject, however, to the provisions of the Credit
Agreement.
SECTION 13.6. Termination; Release. When all the Secured
Obligations have been paid in full and the Commitments of the Lenders to make
any Loan or to issue any Letter of Credit under the Credit Agreement shall have
expired or been sooner terminated, this Mortgage shall terminate. Upon
termination hereof or any release of the Mortgaged Property or any portion
thereof in accordance with the provisions of the Credit Agreement, the Mortgagee
shall, upon the request and at the sole cost and expense of the Mortgagor,
forthwith assign, transfer and deliver to the Mortgagor, against receipt and
without recourse to or warranty by the Mortgagee, such of the Mortgaged Property
to be released (in the case of a release) as may be in possession of the
Mortgagee and as shall not have been sold or otherwise applied pursuant to the
terms hereof, and, with respect to any other Mortgaged Property, proper
documents and instruments (including UCC-3 termination statements or releases)
acknowledging the termination hereof or the release of such Mortgaged Property,
as the case may be.
SECTION 13.7. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by the Mortgagor therefrom, shall be effective
unless the same shall be done in accordance with the terms of the Credit
Agreement and unless in writing and signed by the Mortgagee. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by the Mortgagor from the
terms of any provision hereof shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Mortgage or any other
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Loan Document, no notice to or demand on the Mortgagor in any case shall entitle
the Mortgagor to any other or further notice or demand in similar or other
circumstances.
SECTION 13.8. Notices. Unless otherwise provided herein or in
the Credit Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Credit Agreement, if to the Mortgagor or the Mortgagee, addressed
to it at the address set forth in the Credit Agreement, or in each case at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 13.8.
SECTION 13.9. GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF
JURY TRIAL. THIS MORTGAGE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PREMISES ARE
LOCATED, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR ITEM OR TYPE OF MORTGAGED PROPERTY ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. MORTGAGOR AGREES
THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS SET FORTH IN THE CREDIT
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE MORTGAGEE SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO. IF ANY AGENT APPOINTED BY MORTGAGOR REFUSES TO ACCEPT
SERVICE, MORTGAGOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE
SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF MORTGAGEE TO BRING
PROCEEDINGS AGAINST MORTGAGOR IN THE COURTS OF ANY OTHER JURISDICTION. THE
MORTGAGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS MORTGAGE OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 13.10. Severability of Provisions. Any provision
hereof which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 13.11. Limitation on Interest Payable. It is the
intention of the parties to conform strictly to the usury laws, whether state or
Federal, that are applicable to the transaction of which this Mortgage is a
part. All agreements between the Mortgagor and the Mortgagee whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever shall the amount paid or
agreed to be paid by the Mortgagor for the use, forbearance or detention of the
money to be loaned under the Credit Agreement or any other Loan Document, or for
the payment or performance of
-29-
any covenant or obligation contained herein or in the Credit Agreement or any
other Loan Document, exceed the maximum amount permissible under applicable
Federal or state usury laws. If under any circumstances whatsoever fulfillment
of any such provision, at the time performance of such provision shall be due,
shall involve exceeding the limit of validity prescribed by law, then the
obligation to be fulfilled shall be reduced to the limit of such validity. If
under any circumstances the Mortgagor shall have paid an amount deemed interest
by applicable law, which would exceed the highest lawful rate, such amount that
would be excessive interest under applicable usury laws shall be applied to the
reduction of the principal amount owing in respect of the Secured Obligations
and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal and any other amounts due hereunder, the excess
shall be refunded to the Mortgagor. All sums paid or agreed to be paid for the
use, forbearance or detention of the principal under any extension of credit by
the Mortgagee shall, to the extent permitted by applicable law, and to the
extent necessary to preclude exceeding the limit of validity prescribed by law,
be amortized, prorated, allocated and spread from the date hereof until payment
in full of the Secured Obligations so that the actual rate of interest on
account of such principal amounts is uniform throughout the term hereof.
SECTION 13.12. Business Days. In the event any time period or
any date provided in this Mortgage ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
SECTION 13.13. Relationship. The relationship of the Mortgagee
to the Mortgagor hereunder is strictly and solely that of lender and borrower
and mortgagor and mortgagee and nothing contained in the Credit Agreement, this
Mortgage or any other document or instrument now existing and delivered in
connection therewith or otherwise in connection with the Secured Obligations is
intended to create, or shall in any event or under any circumstance be construed
as creating a partnership, joint venture, tenancy-in-common, joint tenancy or
other relationship of any nature whatsoever between the Mortgagee and the
Mortgagor other than as lender and borrower and mortgagor and mortgagee.
SECTION 13.14. Waiver of Stay.
(i) The Mortgagor agrees that in the event that the
Mortgagor or any property or assets of the Mortgagor shall hereafter become the
subject of a voluntary or involuntary proceeding under the Bankruptcy Code or
the Mortgagor shall otherwise be a party to any Federal or state bankruptcy,
insolvency, moratorium or similar proceeding to which the provisions relating to
the automatic stay under Section 362 of the Bankruptcy Code or any similar
provision in any such law is applicable, then, in any such case, whether or not
the Mortgagee has commenced foreclosure proceedings under this Mortgage, the
Mortgagee shall be entitled to relief from any such automatic stay as it relates
to the exercise of any of the rights and remedies (including, without
limitation, any foreclosure proceedings) available to the Mortgagee as provided
in this Mortgage or in any other Security Document.
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(ii) The Mortgagee shall have the right to petition or
move any court having jurisdiction over any proceeding described in Section
13.14 hereof for the purposes provided therein, and the Mortgagor agrees (i) not
to oppose any such petition or motion and (ii) at the Mortgagor's sole cost and
expense, to assist and cooperate with the Mortgagee, as may be requested by the
Mortgagee from time to time, in obtaining any relief requested by the Mortgagee,
including, without limitation, by filing any such petitions, supplemental
petitions, requests for relief, documents, instruments or other items from time
to time requested by the Mortgagee or any such court.
SECTION 13.15. No Credit for Payment of Taxes or Impositions.
The Mortgagor shall not be entitled to any credit against the principal,
premium, if any, or interest payable under the Credit Agreement, and the
Mortgagor shall not be entitled to any credit against any other sums which may
become payable under the terms thereof or hereof, by reason of the payment of
any Charge on the Mortgaged Property or any part thereof.
SECTION 13.16. No Claims Against the Mortgagee. Nothing
contained in this Mortgage shall constitute any consent or request by the
Mortgagee, express or implied, for the performance of any labor or services or
the furnishing of any materials or other property in respect of the Premises or
any part thereof, nor as giving the Mortgagor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the Mortgagee in respect thereof or any claim
that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien hereof.
SECTION 13.17. Obligations Absolute. All obligations of the
Mortgagor hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the
Mortgagor or any other Obligor;
(ii) any lack of validity or enforceability of the Credit
Agreement, any Letter of Credit, any other Loan Document, or any other
agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
the Credit Agreement, any Letter of Credit, any other Loan Document, or
any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
Collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
-31-
(v) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect hereof or any
other Loan Document except as specifically set forth in a waiver
granted pursuant to the provisions of Section 13.17 hereof; or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, the Mortgagor.
SECTION 13.18. Mortgagee's Right To Sever Indebtedness.
(i) The Mortgagor acknowledges that (A) the Mortgaged
Property does not constitute the sole source of security for the payment and
performance of the Secured Obligations and that the Secured Obligations are also
secured by property of the Mortgagor and its Affiliates in other jurisdictions
(all such property, collectively, the "Collateral"), (B) the number of such
jurisdictions and the nature of the transaction of which this instrument is a
part are such that it would have been impracticable for the parties to allocate
to each item of Collateral a specific loan amount and to execute in respect of
such item a separate credit agreement and (C) the Mortgagor intends that the
Mortgagee have the same rights with respect to the Mortgaged Property, in
foreclosure or otherwise, that the Mortgagee would have had if each item of
Collateral had been secured, mortgaged or pledged pursuant to a separate credit
agreement, mortgage or security instrument. In furtherance of such intent, the
Mortgagor agrees that the Mortgagee may at any time by notice (an "Allocation
Notice") to the Mortgagor allocate a portion (the "Allocated Indebtedness") of
the Secured Obligations to the Mortgaged Property and sever from the remaining
Secured Obligations the Allocated Indebtedness. From and after the giving of an
Allocation Notice with respect to the Mortgaged Property, the Secured
Obligations hereunder shall be limited to the extent set forth in the Allocation
Notice and (as so limited) shall, for all purposes, be construed as a separate
loan obligation of the Mortgagor unrelated to the other transactions
contemplated by the Credit Agreement, any other Loan Document or any document
related to any thereof. To the extent that the proceeds on any foreclosure of
the Mortgaged Property shall exceed the Allocated Indebtedness, such proceeds
shall belong to the Mortgagor and shall not be available hereunder to satisfy
any Secured Obligations of the Mortgagor other than the Allocated Indebtedness.
In any action or proceeding to foreclose the Lien hereof or in connection with
any power of sale, foreclosure or other remedy exercised under this Mortgage
commenced after the giving by the Mortgagee of an Allocation Notice, the
Allocation Notice shall be conclusive proof of the limits of the Secured
Obligations hereby secured, and the Mortgagor may introduce, by way of defense
or counterclaim, evidence thereof in any such action or proceeding.
Notwithstanding any provision of this Section 13.18, the proceeds received by
the Mortgagee pursuant to this Mortgage shall be applied by the Mortgagee in
accordance with the provisions of Section 10.3(iii) hereof.
(ii) The Mortgagor hereby waives to the greatest extent
permitted under law the right to a discharge of any of the Secured Obligations
under any statute or rule of law now or hereafter in effect which provides that
foreclosure of the Lien hereof or other remedy exercised under this Mortgage
constitutes the exclusive means for satisfaction of the Secured Obligations or
which makes unavailable a deficiency judgment or any subsequent remedy because
the Mortgagee elected to proceed with a power of sale foreclosure or such other
remedy or because of any failure by the Mortgagee to comply with laws that
prescribe conditions to the entitlement
-32-
to a deficiency judgment. In the event that, notwithstanding the foregoing
waiver, any court shall for any reason hold that the Mortgagee is not entitled
to a deficiency judgment, the Mortgagor shall not (A) introduce in any other
jurisdiction such judgment as a defense to enforcement against the Mortgagor of
any remedy in the Credit Agreement or any other Loan Document or (B) seek to
have such judgment recognized or entered in any other jurisdiction, and any such
judgment shall in all events be limited in application only to the state or
jurisdiction where rendered.
(iii) In the event any instrument in addition to the
Allocation Notice is necessary to effectuate the provisions of this Section
13.18, including, without limitation, any amendment to this Mortgage, any
substitute promissory note or affidavit or certificate of any kind, the
Mortgagee may execute, deliver or record such instrument as the attorney-in-fact
of the Mortgagor. Such power of attorney is coupled with an interest and is
irrevocable.
(iv) Notwithstanding anything set forth herein to the
contrary, the provisions of this Section 14.20 shall be effective only to the
maximum extent permitted by law.
SECTION 13.19. Last Dollars Secured. This Mortgage secures
only a portion of the Indebtedness owing or which may become owing by the
Mortgagor. The parties agree that any payments or repayments of such
Indebtedness by the Mortgagor shall be deemed to be applied first to the portion
of the Indebtedness that is not secured hereby, it being the parties' intent
that the portion of the Indebtedness last remaining unpaid shall be secured
thereby.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to
be duly executed and delivered under seal the day and year first above written.
[ ]
By: ______________________________
Name:
Title:
[local counsel to confirm signature requirements
S-1
ACKNOWLEDGMENT
State of _________________ )
) ss.:
County of ________________ )
[Local counsel to provide appropriate acknowledgment]
Schedule A - Legal Description
[to come from title policy]
Schedule B
Each of the liens and other encumbrances excepted as being prior to the Lien
hereof as set forth in Schedule B to the marked [Pro Forma Policy] issued by
[Title Insurance Company], dated as of the date hereof and delivered to
Collateral Agent on the date hereof, bearing [Title Insurance Company] reference
number [Title Number] relating to the real property described in Schedule A
attached hereto.
EXHIBIT J-1
[The aggregate maximum principal amount of indebtedness that may be secured
hereby is $[ ].](1)
================================================================================
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BY
[ ],
as Grantor,
TO
[ ]
as Trustee
for the benefit of
UBS AG, STAMFORD BRANCH,
as Collateral Agent,
Beneficiary
----------------------
Dated as of February __, 2004
Relating to Premises in:
[ ]
================================================================================
This instrument prepared by and, after recording,
please return to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------
----------------
(1) TO BE INCLUDED ONLY IN RECORDING TAX STATES.
TABLE OF CONTENTS
Page
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PREAMBLE...................................................................................................... 1
RECITALS...................................................................................................... 1
AGREEMENT..................................................................................................... 2
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions............................................................................. 2
SECTION 1.2. Interpretation.......................................................................... 7
SECTION 1.3. Resolution of Drafting Ambiguities...................................................... 8
ARTICLE II.
GRANTS AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Trust Property................................................................. 8
SECTION 2.2. Assignment of Leases and Rents.......................................................... 9
SECTION 2.3. Secured Obligations..................................................................... 9
SECTION 2.4. Future Advances......................................................................... 9
SECTION 2.5. No Release.............................................................................. 9
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF GRANTOR
SECTION 3.1. Authority and Validity.................................................................. 10
SECTION 3.2. Warranty of Title....................................................................... 10
SECTION 3.3. Condition of Trust Property............................................................. 10
SECTION 3.4. Leases.................................................................................. 12
SECTION 3.5. Charges................................................................................. 12
SECTION 3.6. Benefit to the Grantor.................................................................. 12
ARTICLE IV.
CERTAIN COVENANTS OF GRANTOR
SECTION 4.1. Payment................................................................................. 12
SECTION 4.2. Preservation of Existence............................................................... 12
-i-
Page
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SECTION 4.3. Title................................................................................... 12
SECTION 4.4. Maintenance and Use of Trust Property; Alterations...................................... 13
SECTION 4.5. Notices Regarding Certain Defaults...................................................... 14
SECTION 4.6. Access to Trust Property, Books and Records; Other Information.......................... 14
SECTION 4.7. Limitation on Liens; Transfer Restrictions.............................................. 14
SECTION 4.8. Estoppel Certificates................................................................... 14
SECTION 4.9. Insurance............................................................................... 14
ARTICLE V.
LEASES
SECTION 5.1. Grantor's Affirmative Covenants with Respect to Leases.................................. 14
SECTION 5.2. Grantor's Negative Covenants with Respect to Leases..................................... 15
ARTICLE VI.
CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1. Present Assignment; License to the Grantor.............................................. 16
SECTION 6.2. Collection of Rents by the Beneficiary.................................................. 16
SECTION 6.3. No Release.............................................................................. 16
SECTION 6.4. Irrevocable Interest.................................................................... 17
SECTION 6.5. Amendment to Leases..................................................................... 17
ARTICLE VII.
TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1. Payment of Charges...................................................................... 17
SECTION 7.2. Escrow of Taxes......................................................................... 17
SECTION 7.3. Certain Statutory Liens................................................................. 17
SECTION 7.4. Stamp and Other Taxes................................................................... 18
SECTION 7.5. Certain Tax Law Changes................................................................. 18
SECTION 7.6. Proceeds of Tax Claim................................................................... 18
ARTICLE VIII.
CONTESTING OF PAYMENTS
SECTION 8.1. Contesting of Taxes and Certain Statutory Liens......................................... 18
-ii-
Page
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ARTICLE IX.
DESTRUCTION, CONDEMNATION AND RESTORATION
SECTION 9.1. Destruction, Condemnation and Restoration............................................... 18
SECTION 9.2. Condemnation............................................................................ 19
SECTION 9.3. Restoration............................................................................. 19
ARTICLE X.
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default....................................................................... 19
SECTION 10.2. Performance of Defaulted Acts........................................................... 19
SECTION 10.3. Rights and Remedies In Case of Event of Default......................................... 20
SECTION 10.4. Foreclosure by Power of Sale............................................................ 20
SECTION 10.5. Rescission of Notice of Default......................................................... 21
SECTION 10.6. Appointment of Receiver................................................................. 22
SECTION 10.7. Notice to Grantor....................................................................... 22
SECTION 10.8. Expenses and Application of Proceeds.................................................... 22
SECTION 10.9. Rights of Receiver or Beneficiary in Possession......................................... 23
SECTION 10.10. Attorneys' Fees; Expenses............................................................... 23
SECTION 10.11. Rights Cumulative....................................................................... 23
ARTICLE XI.
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 11.1. Security Agreement...................................................................... 24
SECTION 11.2. Fixture Filing.......................................................................... 24
ARTICLE XII.
FURTHER ASSURANCES
SECTION 12.1. Recording Documentation To Assure Security.............................................. 25
SECTION 12.2. Further Acts............................................................................ 25
SECTION 12.3. Additional Security..................................................................... 26
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Covenants To Run with the Land.......................................................... 26
SECTION 13.2. No Merger............................................................................... 26
SECTION 13.3. Concerning Beneficiary.................................................................. 26
-iii-
Page
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SECTION 13.4. Beneficiary May Perform; Beneficiary Appointed Attorney-in-Fact......................... 27
SECTION 13.5. Continuing Security Interest; Assignment................................................ 28
SECTION 13.6. Termination; Release.................................................................... 28
SECTION 13.7. Modification in Writing................................................................. 28
SECTION 13.8. Notices................................................................................. 29
SECTION 13.9. GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF JURY TRIAL................................. 29
SECTION 13.10. Severability of Provisions.............................................................. 29
SECTION 13.11. Limitation on Interest Payable.......................................................... 29
SECTION 13.12. Business Days........................................................................... 30
SECTION 13.13. Relationship............................................................................ 30
SECTION 13.14. Waiver of Stay.......................................................................... 30
SECTION 13.15. No Credit for Payment of Taxes or Impositions........................................... 31
SECTION 13.16. No Claims Against the Beneficiary....................................................... 31
SECTION 13.17. Obligations Absolute.................................................................... 31
SECTION 13.18. Beneficiary's Right To Sever Indebtedness............................................... 31
SECTION 13.19. Last Dollars Secured.................................................................... 33
SIGNATURE
ACKNOWLEDGMENTS
SCHEDULE A Legal Description
SCHEDULE B Prior Liens
-iv-
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (the "Deed of Trust"), dated as of February __,
2004, made by [ ], a [state type and jurisdiction of entity] having an office at
[ ], as grantor, assignor and debtor (in such capacities and together with any
successors in such capacities, the "Grantor"), to [ ], a [ ], having an office
at [ ], as trustee (in such capacity and together with any successor in such
capacity, the "Trustee") for the benefit of UBS AG, STAMFORD BRANCH, a Swiss
banking corporation having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, in its capacity as collateral agent for Secured Parties (as
hereinafter defined), as beneficiary, assignee and secured party (in such
capacities and together with any successors in such capacities, the
"Beneficiary").
R E C I T A L S :
A. Pursuant to that certain credit agreement, dated as
of February 13, 2004 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Ionics,
Incorporated, as borrower (the "Borrower"), [the Grantor and] the [other]
Subsidiary Guarantors (such term and each other capitalized term used and not
defined herein having the meaning given to it in Article I), the Lenders, UBS
Securities LLC, as Lead Arranger, Sole Bookmanager and Documentation Agent, UBS
AG, Stamford Branch, as Administrative Agent and Collateral Agent, UBS Loan
Finance LLC, as Swingline Lender, Fleet Securities, Inc. and Bank of America,
N.A., as Syndication Agents, Wachovia Bank, N.A. and General Electric Capital
Corporation, as Co-Documentation Agents, and HSBC Bank USA, as Issuing Bank, the
Lenders have agreed to make to or for the account of the Borrower certain Loans
and issue certain Letters of Credit.
B. It is contemplated that the Borrower or one or more
of the Subsidiary Guarantors may pursuant to the provisions of the Credit
Agreement enter into one or more agreements with one or more of the Lenders or
their respective Affiliates with respect to the Loans ("Hedging Agreements")
designed to alter the risks arising from the fluctuations in interest rates,
currency values or commodity prices with respect to the Loans under the Credit
Agreement (all obligations of the Borrower or the Subsidiary Guarantors now
existing or hereafter arising under such Hedging Agreements, collectively, the
"Hedging Obligations").
[C. The Borrower owns, directly or through its
Subsidiaries, all of the issued and outstanding shares of the Grantor.]
[D. The Grantor has, pursuant to Article VII of the
Credit Agreement, among other things, guaranteed (the "Guarantee") the
obligations of the Borrower under the Credit Agreement and the other Loan
Documents.]
[E. The Grantor will receive substantial benefits from
the execution, delivery and performance of the Loan Documents and is, therefore,
willing to enter into this Deed of Trust.]
F. The Grantor is or will be the legal and/or beneficial
owner of the Trust Property.
G. It is a condition to the obligations of the Lenders
to make the Loans under the Credit Agreement and issue the Letters of Credit
that the Grantor execute and deliver the applicable Loan Documents, including
this Deed of Trust.
H. This Deed of Trust is given by the Grantor in favor
of the Beneficiary for its benefit and the benefit of the other Secured Parties
to secure the payment and performance of all of the Secured Obligations.
A G R E E M E N T :
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Grantor hereby covenants and agrees with the
Beneficiary as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions. (a) Capitalized terms used but not
otherwise defined herein that are defined in the Credit Agreement shall have the
meanings given to them in the Credit Agreement, including the following:
"Administrative Agent"; "Affiliate"; "Agent"; "Business Day";
"Commitment"; "Environmental Law"; "Event of Default"; "GAAP";
"Hazardous Materials"; "Letter of Credit"; "Lenders"; "Lien"; "Loan
Documents"; "Loan Parties"; "Loans"; "Net Cash Proceeds"; "Notes";
"Officers' Certificate"; "person"; "Secured Parties"; "Security
Agreement"; "Security Documents"; "Subsidiary" and "Subsidiary
Guarantors".
(b) The following terms in this Deed of Trust shall have
the following meanings:
"Allocated Indebtedness" shall have the meaning assigned to
such term in Section 13.18(i) hereof.
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"Allocation Notice" shall have the meaning assigned to such
term in Section 13.18(i) hereof.
"Alterations" shall mean any and all alterations,
installations, improvements, additions, modifications or changes of a structural
nature.
"Beneficiary" shall have the meaning assigned to such term in
the Preamble hereof.
"Charges" shall mean any and all real estate, property and
other taxes, assessments and special assessments, levies, fees, all water and
sewer rents and charges and all other governmental charges imposed upon or
assessed against, and all claims (including, without limitation, claims for
landlords', carriers', mechanics', workmens', repairmens', laborers',
materialmens', suppliers' and warehousemens' Liens and other claims arising by
operation of law) against all or any portion of the Trust Property.
"Collateral" shall have the meaning assigned to such term in
Section 13.18(i) hereof.
"Contested Liens" shall mean, collectively, any Liens incurred
in respect of any Charges to the extent that the amounts owing in respect
thereof are not yet delinquent or are being contested and otherwise comply with
the provisions of Section 8.1 hereof; provided, however, that such Liens shall
in all respects be subject and subordinate in priority to the Liens and security
interests created and evidenced by this Deed of Trust, except if and to the
extent that the law or regulation creating, permitting or authorizing such Lien
provides that such Lien(s) must be superior to the Liens and security interests
created and evidenced hereby.
"Contracts" shall mean, collectively, any and all right, title
and interest of the Grantor in and to any and all contracts and other general
intangibles relating to the Trust Property and all reserves, deferred payments,
deposits, refunds and claims of every kind, nature or character relating
thereto.
"Credit Agreement" shall have the meaning assigned to such
term in Recital A hereof.
"Deed of Trust" shall have the meaning assigned to such term
in the Preamble hereof.
"Default Rate" shall mean the rate of interest payable during
a default pursuant to the provisions of Section 2.06 of the Credit Agreement.
"Destruction" shall mean any and all damage to, or loss or
destruction of, the Premises or any part thereof.
"Fixtures" shall mean all machinery, apparatus, equipment,
fittings, fixtures, improvements and articles of personal property of every
kind, description and nature whatsoever now or hereafter attached or affixed to
the Land or any other Improvement used in connection
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with the use and enjoyment of the Land or any other Improvement or the
maintenance or preservation thereof, which by the nature of their location
thereon or attachment thereto are fixtures under the UCC or any other applicable
law including, without limitation, all utility systems, fire sprinkler and
security systems, drainage facilities, lighting facilities, all water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone and other utility
equipment and facilities, pipes, fittings and other items of every kind and
description now or hereafter attached to or located on the Land which by the
nature of their location thereon or attachment thereto are real property under
applicable law, HVAC equipment, boilers, electronic data processing,
telecommunications or computer equipment, refrigeration, electronic monitoring,
water or lighting systems, power, sanitation, waste removal, elevators,
maintenance or other systems or equipment.
"Governmental Authority" shall mean any Federal, state, local,
foreign or other governmental, quasi-governmental or administrative (including
self-regulatory) body, instrumentality, department, agency, authority, board,
bureau, commission, office of any nature whatsoever or other subdivision
thereof, or any court, tribunal, administrative hearing body, arbitration panel
or other similar dispute-resolving body, whether now or hereafter in existence,
or any officer or official thereof, having jurisdiction over the Grantor or the
Trust Property or any portion thereof.
"Grantor" shall have the meaning assigned to such term in the
Preamble hereof.
"Grantor's Interest" shall have the meaning assigned to such
term in Section 2.2 hereof.
"Improvements" shall mean all buildings, structures and other
improvements of every kind or description and any and all Alterations now or
hereafter located, attached or erected on the Land, including, without
limitation, (i) all Fixtures, (ii) all attachments, railroad tracks,
foundations, sidewalks, drives, roads, curbs, streets, ways, alleys, passages,
passageways, sewer rights, parking areas, driveways, fences and walls and (iii)
all materials now or hereafter located on the Land intended for the
construction, reconstruction, repair, replacement, alteration, addition or
improvement of or to such buildings, Fixtures, structures and improvements, all
of which materials shall be deemed to be part of the Improvements immediately
upon delivery thereof on the Land and to be part of the Improvements immediately
upon their incorporation therein.
"Insurance Policies" means the insurance policies and
coverages required to be maintained by the Grantor with respect to the Trust
Property pursuant to the Credit Agreement.
"Land" shall mean the land described in Schedule A annexed to
this Deed of Trust, together with all of the Grantor's reversionary rights in
and to any and all easements, rights-of-way, strips and gores of land, waters,
water courses, water rights, mineral, gas and oil rights and all power, air,
light and other rights, estates, titles, interests, privileges, liberties,
servitudes, licenses, tenements, hereditaments and appurtenances whatsoever, in
any way belonging, relating or appertaining thereto, or any part thereof, or
which hereafter shall in any way belong, relate or be appurtenant thereto.
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"Landlord" shall mean any landlord, lessor, franchisor,
licensor or grantor, as applicable.
"Leases" shall mean, collectively, any and all interests of
the Grantor, as Landlord, in all leases and subleases of space, tenancies,
franchise agreements, licenses, occupancy or concession agreements now existing
or hereafter entered into, whether or not of record, relating in any manner to
the Premises and any and all amendments, modifications, supplements,
replacements, extensions and renewals of any thereof, whether now in effect or
hereafter coming into effect.
"Permit" shall mean any and all permits, certificates,
approvals, authorizations, consents, licenses, variances, franchises or other
instruments, however characterized, of any Governmental Authority (or any person
acting on behalf of a Governmental Authority) now or hereafter acquired or held,
together with all amendments, modifications, extensions, renewals and
replacements of any thereof issued or in any way furnished in connection with
the Trust Property including, without limitation, building permits, certificates
of occupancy, environmental certificates, industrial permits or licenses and
certificates of operation.
"Permitted Collateral Liens" shall mean the Liens described in
clause (iii) of the definition of "Permitted Collateral Liens" contained in the
Credit Agreement.
"Premises" shall mean, collectively, the Land and the
Improvements.
"Prior Liens" shall mean, collectively, the Liens identified
in Schedule B annexed to this Deed of Trust.
"Proceeds" shall mean, collectively, any and all cash proceeds
and noncash proceeds and shall include all (i) proceeds of the conversion,
voluntary or involuntary, of any of the Trust Property or any portion thereof
into cash or liquidated claims, (ii) proceeds of any insurance, indemnity,
warranty, guaranty or claim payable to the Beneficiary or to the Grantor from
time to time with respect to any of the Trust Property, (iii) payments (in any
form whatsoever) made or due and payable to the Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any portion of the Trust Property by any Governmental
Authority (or any person acting on behalf of a Governmental Authority), (iv)
products of the Trust Property and (v) other amounts from time to time paid or
payable under or in connection with any of the Trust Property including, without
limitation, refunds of real estate taxes and assessments, including interest
thereon.
"Property Material Adverse Effect" shall mean, as of any date
of determination and whether individually or in the aggregate, (a) any event,
circumstance, occurrence or condition which has caused or resulted in (or would
reasonably be expected to cause or result in) a material adverse effect on the
business or operations of the Grantor as presently conducted at the Trust
Property; (b) any event, circumstance, occurrence or condition which has caused
or resulted in (or would reasonably be expected to cause or result in) a
material adverse effect on the value or utility of the Trust Property; or (c)
any event, circumstance, occurrence or condition which has caused or resulted in
(or would reasonably be expected to cause or result in) a material
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adverse effect on the legality, priority or enforceability of the Lien created
by this Deed of Trust or the rights and remedies of the Beneficiary hereunder.
"Prudent Operator" shall mean a prudent operator of property
similar in use and configuration to the Premises and located in the locality
where the Premises are located.
"Records" shall mean, collectively, any and all right, title
and interest of the Grantor in and to any and all drawings, plans,
specifications, file materials, operating and maintenance records, catalogues,
tenant lists, correspondence, advertising materials, operating manuals,
warranties, guarantees, appraisals, studies and data relating to the Trust
Property or the construction of any Alteration or the maintenance of any Permit.
"Rents" shall mean, collectively, any and all rents,
additional rents, royalties, cash, guaranties, letters of credit, bonds,
sureties or securities deposited under any Lease to secure performance of the
Tenant's obligations thereunder, revenues, earnings, profits and income, advance
rental payments, payments incident to assignment, sublease or surrender of a
Lease, claims for forfeited deposits and claims for damages, now due or
hereafter to become due, with respect to any Lease, any indemnification against,
or reimbursement for, sums paid and costs and expenses incurred by the Grantor
under any Lease or otherwise, and any award in the event of the bankruptcy of
any Tenant under or guarantor of a Lease.
"Requirements of Law" shall mean, collectively, any and all
requirements of any Governmental Authority including, without limitation, any
and all orders, decrees, determinations, laws, treaties, ordinances, rules,
regulations or similar statutes or case law.
"Restoration" shall mean the repair, replacement or
restoration of all or any portion of the Premises after a Destruction or Taking.
"Secured Obligations" shall mean all obligations (whether or
not constituting future advances, obligatory or otherwise) of the Grantor and
any and all of the other Loan Parties from time to time arising under or in
respect hereof or of the Credit Agreement, the Notes, the Letters of Credit, the
other Loan Documents (including, without limitation, the obligations to pay
principal, interest and all other charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Deed of Trust, the Credit
Agreement, the Notes, the Letters of Credit, the other Loan Documents, in each
case whether (i) such obligations are direct or indirect, secured or unsecured,
joint or several, absolute or contingent, reduced to judgment or not, liquidated
or unliquidated, disputed or undisputed, legal or equitable, due or to become
due whether at stated maturity, by acceleration or otherwise, (ii) arising in
the regular course of business or otherwise, (iii) for payment or performance,
(iv) discharged, stayed or otherwise affected by any bankruptcy, insolvency,
reorganization or similar proceeding with respect to any Loan Party or any other
person and/or (v) now existing or hereafter arising (including, without
limitation, interest and other obligations arising or accruing after the
commencement of any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Loan Party or any other person, or which would have arisen
or accrued but for the commencement of such proceeding, even if such obligation
or the claim therefor is not enforceable or allowable in such proceeding).
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"Taking" shall mean any taking of the Trust Property or any
part thereof, in or by condemnation or other eminent domain proceedings pursuant
to any law, general or special, or by reason of the temporary requisition of the
use or occupancy of the Trust Property or any part thereof, by any Governmental
Authority, civil or military.
"Tax Escrow Fund" shall have the meaning assigned to such term
in Section 7.2 hereof.
"Tenant" shall mean any tenant, lessee, sublessee, franchisee,
licensee, grantee or obligee, as applicable.
"Trust Property" shall have the meaning assigned to such term
in Section 2.1 hereof.
"Trustee" shall have the meaning assigned to such term in the
Preamble hereof.
"UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the jurisdiction in which the Premises are located; provided,
however, that if by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the security interest in any item or
portion of the Trust Property is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the jurisdiction in which the Premises are
located, "UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.
SECTION 1.2. Interpretation. In this Deed of Trust, unless
otherwise specified, (i) singular words include the plural and plural words
include the singular, (ii) words importing any gender include the other gender,
(iii) references to any person include such person's successors and assigns and
in the case of an individual, the word "successors" includes such person's
heirs, devisees, legatees, executors, administrators and personal
representatives, (iv) references to any statute or other law include all
applicable rules, regulations and orders adopted or made thereunder and all
statutes or other laws amending, consolidating or replacing the statute or law
referred to, (v) the words "consent," "approve" and "agree," and derivations
thereof or words of similar import, mean the prior written consent, approval or
agreement of the person in question, (vi) the words "include" and "including,"
and words of similar import, shall be deemed to be followed by the words
"without limitation," (vii) the words "hereto," "herein," "hereof" and
"hereunder," and words of similar import, refer to this Deed of Trust in its
entirety, (viii) references to Articles, Sections, Schedules, Exhibits,
subsections, paragraphs and clauses are to the Articles, Sections, Schedules,
Exhibits, subsections, paragraphs and clauses hereof, (ix) the Schedules and
Exhibits to this Deed of Trust, in each case as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the
provisions hereof, are incorporated herein by reference, (x) the titles and
headings of Articles, Sections, Schedules, Exhibits, subsections, paragraphs and
clauses are inserted as a matter of convenience only and shall not affect the
constructions of any provision hereof and (xi) all obligations of the Grantor
hereunder shall be satisfied by the Grantor at the Grantor's sole cost and
expense.
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SECTION 1.3. Resolution of Drafting Ambiguities. The Grantor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., Beneficiary) shall not be employed in the interpretation
hereof.
ARTICLE II.
GRANTS AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Trust Property. The Grantor hereby
grants, mortgages, bargains, sells, assigns, transfers and conveys to the
Beneficiary, and hereby grants to the Beneficiary, a security interest in and
upon all of the Grantor's estate, right, title and interest in, to and under the
following property, whether now owned or held or hereafter acquired from time to
time (collectively, the "Trust Property"):
(i) Land;
(ii) Improvements;
(iii) Leases;
(iv) Rents;
(v) Permits;
(vi) Contracts;
(vii) Records; and
(viii) Proceeds;
Notwithstanding the foregoing provisions of this Section 2.1,
Trust Property shall not include a grant of any of the Grantor's right, title or
interest in (i) any Contract to which the Grantor is a party or any of its
rights or interests thereunder to the extent, but only to the extent, that such
a grant would, under the terms of such Contract, result in a breach or
termination of the terms of, or constitute a default under or termination of
such Contract and (ii) any Permit to the extent, but only to the extent that,
such grant shall constitute or result in abandonment, invalidation or rendering
unenforceable any right, title or interest of the Grantor therein; provided,
however, that at such time as any Contract or Permit described in clauses (i)
and (ii) of this sentence is no longer subject to such restriction, such
applicable Contract or Permit shall (without any act or delivery by any person)
constitute Trust Property hereunder.
TO HAVE AND TO HOLD the Trust Property, together with all estate, right, title
and interest of the Grantor and anyone claiming by, through or under the Grantor
in and to the Trust Property
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and all rights and appurtenances relating thereto, unto and to the use and
benefit of Trustee, IN TRUST WITH POWER OF SALE, and Grantor does hereby bind
itself and its successors and assigns, to WARRANT AND DEFEND title to the Trust
Property forever, for the purpose of securing the payment and performance in
full of all the Secured Obligations.
SECTION 2.2. Assignment of Leases and Rents. As additional
security for the payment and performance in full of all the Secured Obligations
and subject to the provisions of Article VI hereof, the Grantor absolutely,
presently, unconditionally and irrevocably assigns, transfers and sets over to
the Beneficiary, and grants to the Beneficiary, all of the Grantor's estate,
right, title, interest, claim and demand, as Landlord, under any and all of the
Leases including, without limitation, the following (such assigned rights, the
"Grantor's Interest"):
(i) the immediate and continuing right to receive and
collect Rents payable by the Tenants pursuant to the Leases;
(ii) all claims, rights, powers, privileges and remedies
of the Grantor, whether provided for in the Leases or arising by
statute or at law or in equity or otherwise, consequent on any failure
on the part of the Tenants to perform or comply with any term of the
Leases;
(iii) all rights to take all actions upon the happening of
a default under the Leases as shall be permitted by the Leases or by
law including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(iv) the full power and authority, in the name of the
Grantor or otherwise, to enforce, collect, receive and receipt for any
and all of the foregoing and to take all other actions whatsoever which
the Grantor, as Landlord, is or may be entitled to take under the
Leases.
SECTION 2.3. Secured Obligations. This Deed of Trust secures,
and the Trust Property is collateral security for, the payment and performance
in full when due of the Secured Obligations.
SECTION 2.4. Future Advances. This Deed of Trust shall secure
future advances whenever hereafter made. The maximum aggregate amount of all
advances of principal under the Credit Agreement (which advances are obligatory
to the extent the conditions set forth in the Credit Agreement relating thereto
are satisfied) that may be outstanding hereunder at any time is $[ ], plus
interest thereon, collection costs, sums advanced for the payment of taxes,
assessments, maintenance and repair charges, insurance premiums and any other
costs incurred to protect the security encumbered hereby or the lien hereof,
expenses incurred by the Beneficiary by reason of any default by the Grantor
under the terms hereof, together with all other sums secured hereby.
SECTION 2.5. No Release. Nothing set forth in this Deed of
Trust shall relieve the Grantor from the performance of any term, covenant,
condition or agreement on the Grantor's part to be performed or observed under
or in respect of any of the Trust Property or
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from any liability to any person under or in respect of any of the Trust
Property or shall impose any obligation on the Beneficiary or any other Secured
Party to perform or observe any such term, covenant, condition or agreement on
the Grantor's part to be so performed or observed or shall impose any liability
on the Beneficiary or any other Secured Party for any act or omission on the
part of the Grantor relating thereto or for any breach of any representation or
warranty on the part of the Grantor contained in this Deed of Trust or any other
Loan Document, or under or in respect of the Trust Property or made in
connection herewith or therewith. The obligations of the Grantor contained in
this Section 2.5 shall survive the termination hereof and the discharge of the
Grantor's other obligations under this Deed of Trust and the other Loan
Documents.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF GRANTOR
SECTION 3.1. Authority and Validity. The Grantor represents
and warrants that each of the representations, warranties, covenants, negative
covenants and other agreements of the Grantor (as a Loan Party) under and as
contained in the Credit Agreement are hereby incorporated herein in their
entirety by this reference.
SECTION 3.2. Warranty of Title. The Grantor represents and
warrants that:
(i) it has good and marketable fee simple title to the
Premises and the Landlord's interest and estate under or in respect of
the Leases and good title to the interest it purports to own or hold in
and to each of the Permits, the Contracts and the Records, in each case
subject to no Liens, except for Prior Liens and Liens in favor of the
Beneficiary pursuant to the Security Documents;
(ii) it has good title to the interest it purports to own
or hold in and to all rights and appurtenances to or that constitute a
portion of the Trust Property;
(iii) it is in compliance in all material respects with
each term, condition and provision of any obligation of the Grantor
which is secured by the Trust Property or the noncompliance with which
may result in the imposition of a Lien on the Trust Property; and
(iv) upon recordation in the official records in the
county (or other applicable jurisdiction) in which the Premises are
located this Deed of Trust will create and constitute a valid and
enforceable first priority Lien on the Trust Property in favor of the
Collateral Agent for the benefit of the Secured Parties, and, to the
extent any of the Trust Property shall consist of Fixtures, a first
priority security interest in the Fixtures, which first priority Lien
and first priority security interest are subject only to Prior Liens.
SECTION 3.3. Condition of Trust Property. The Grantor
represents and warrants that:
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(i) there has been issued and there remains in full force
and effect subject to no revocation, suspension, forfeiture or
modification, each and every material Permit necessary for the present
use, operation and occupancy of the Premises by the Grantor and the
conduct of its business and all required zoning, building code, land
use, environmental and other similar Permits;
(ii) the Premises and the present use and occupancy
thereof comply with all applicable zoning ordinances, building codes,
land use laws, setback or other development and use requirements of
Governmental Authorities and with all private restrictions and
agreements affecting the Trust Property whether or not recorded;
(iii) the Premises are served by all utilities (including,
without limitation, public water and sewer systems) reasonably
necessary for the present and contemplated use thereof, and all utility
services are provided by public utilities and the Premises have
accepted or are equipped to accept such utility services and the
Grantor has not received notice of termination of such utility service;
(iv) the Grantor has access to the Premises from one or
more fully dedicated public roads and, to the extent applicable, public
or private rail or waterway, sufficient to allow the Grantor to conduct
its business at the Premises in accordance with sound commercial
practices and the Grantor has not received notice of termination of
such access;
(v) the Grantor has not received notice of any Taking or
the commencement or pendency of any action or proceeding therefor;
(vi) there has not occurred any Destruction of the
Premises or any portion thereof as a result of any fire or other
casualty which has not previously been repaired or replaced;
(vii) there are no disputes regarding boundary lines,
location, encroachments or possession of any portions of the Trust
Property and no state of facts exists which could give rise to any such
claim;
(viii) all liquid and solid waste disposal, septic and sewer
systems located on the Premises are in a good and safe condition and
repair and in compliance with all Requirements of Law;
(ix) no portion of the buildings or structures
constituting the Improvements is located in an area identified by the
Federal Emergency Management Agency or any successor thereto as an area
having special flood hazards pursuant to the Flood Insurance Acts or,
if any portion of the buildings or structures constituting the
Improvements is located within such area, the Grantor has obtained the
flood insurance prescribed in Section 5.04 of the Credit Agreement
hereof;
(x) the Premises are assessed for real estate tax
purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not
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constituting a portion of such lot or lots, and no other land or
improvement is assessed and taxed together with the Premises or any
portion thereof; and
(xi) there are no options or rights of first refusal to
purchase or acquire all or any portion of the Trust Property.
SECTION 3.4. Leases. The Grantor represents and warrants that
there are no Leases affecting the Premises as of the date hereof. [NOTE: THIS
SECTION 3.4 WILL BE MODIFIED AS APPROPRIATE FOR THE MISSOURI PROPERTY SUBJECT TO
AN AFFILIATE LEASE (EXCEPT CLAUSE (xii), WHICH WILL BE DELETED.]
SECTION 3.5. Charges. The Grantor represents and warrants that
all Charges imposed upon or assessed against the Trust Property have been paid
and discharged except to the extent such Charges constitute a Prior Lien.
SECTION 3.6. Benefit to the Grantor. The Grantor represents
and warrants that it will receive substantial benefit as a result of the
execution, delivery, and performance of the Loan Documents.]2
ARTICLE IV.
CERTAIN COVENANTS OF GRANTOR
SECTION 4.1. Payment. The Grantor shall pay as and when the
same shall become due, whether at its stated maturity, by acceleration or
otherwise, each and every amount payable by the Grantor under the Loan
Documents.
SECTION 4.2. Preservation of Existence. The Grantor shall
preserve and maintain in full force and effect its qualification to transact
business and good standing in the state in which the Trust Property is located.
SECTION 4.3. Title. The Grantor shall
(i) (A) keep in effect all rights and appurtenances to or
that constitute a part of the Trust Property and (B) protect, preserve
and defend its interest in the Trust Property and title thereto;
(ii) (A) comply with each of the terms, conditions and
provisions of any obligation of the Grantor which is secured by the
Trust Property or the noncompliance with which may result in the
imposition of a Lien on the Trust Property, subject to Sections
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(2) Delete Section 3.9 if the Grantor is the Borrower.
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6.02 (a), (b) and (e) of the Credit Agreement, (B) forever warrant and
defend to the Trustee and the Beneficiary the Lien and security
interests created and evidenced hereby and the validity and priority
hereof in any action or proceeding against the claims of any and all
persons whomsoever affecting or purporting to affect the Trust Property
or any of the rights of the Trustee or the Beneficiary hereunder and
(C) maintain a valid and enforceable first priority Lien on the Trust
Property and, to the extent any of the Trust Property shall consist of
Fixtures, a first priority security interest in the Trust Property,
which first priority Lien and security interest shall be subject only
to Permitted Collateral Liens and all Prior Liens; and
(iii) immediately upon obtaining knowledge of the pendency
of any proceedings for the eviction of the Grantor from the Trust
Property or any part thereof by paramount title or otherwise
questioning the Grantor's right, title and interest in, to and under
the Trust Property as warranted in this Deed of Trust, or of any
condition that could give rise to any such proceedings, notify the
Beneficiary thereof. The Beneficiary may participate in such
proceedings and the Grantor will deliver or cause to be delivered to
the Beneficiary all instruments requested by the Beneficiary to permit
such participation. In any such proceedings, the Beneficiary may be
represented by counsel satisfactory to the Beneficiary at the expense
of the Grantor. If, upon the resolution of such proceedings, the
Grantor shall suffer a loss of the Trust Property or any part thereof
or interest therein and title insurance proceeds shall be payable in
connection therewith, such proceeds are hereby assigned to and shall be
paid to the Beneficiary to be applied as Net Cash Proceeds to the
payment of the Secured Obligations or otherwise in accordance with the
provisions of Section 2.10 of the Credit Agreement.
SECTION 4.4. Maintenance and Use of Trust Property;
Alterations.
(i) Maintenance. The Grantor shall cause the
representations and warranties set forth in Section 3.3 hereof to continue to be
true in each and every respect except where the failure so to be true would not
result in a Property Material Adverse Effect.
(ii) Maintenance of Premises. The Grantor shall not commit
or suffer any waste on the Premises. The Grantor shall, at all times, comply
with the terms of Section 5.03 of the Credit Agreement with respect to the
maintenance and repair of the Premises (Grantor acknowledges that the Trust
Property is material to the conduct of its business). The Grantor shall not
remove, demolish or alter the design or structural character of any Improvement
now or hereafter erected upon all or any portion of the Premises, or permit any
such removal, demolition or alteration, without the prior written consent of the
Beneficiary, unless such removal, demolition or alteration maintains or
increases the current value of the Trust Property and in the reasonable judgment
of Grantor, a Prudent Operator would undertake such removal, demolition or
alteration in order to improve the conduct of its business.
(iii) Permits. The Grantor shall maintain, or cause to be
maintained, in full force and effect all Permits contemplated by Section 3.3(i)
hereof. Unless and to the extent contested by the Grantor in accordance with the
provisions of Article VIII hereof, the Grantor shall comply in all material
respects with all requirements set forth in the Permits and all Require-
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ments of Law applicable to all or any portion of the Trust Property or the
condition, use or occupancy of all or any portion thereof or any recorded deed
of restriction, declaration, covenant running with the land or otherwise, now or
hereafter in force.
(iv) Zoning. The Grantor shall not initiate, join in or
consent to any change in the zoning or any other permitted use classification of
the Premises without the prior written consent of the Beneficiary.
SECTION 4.5. Notices Regarding Certain Defaults. The Grantor
shall, promptly upon receipt of any written notice regarding (i) any default by
the Grantor relating to the Trust Property or any portion thereof or (ii) the
failure to discharge any of the Grantor's obligations with respect to the Trust
Property or any portion thereof described herein, furnish a copy of such notice
to the Beneficiary.
SECTION 4.6. Access to Trust Property, Books and Records;
Other Information. Upon request to the Grantor, the Beneficiary, its agents,
accountants and attorneys shall have full and free access to visit and inspect,
the Trust Property in accordance with Section 5.07 of the Credit Agreement
SECTION 4.7. Limitation on Liens; Transfer Restrictions.
Except for the Prior Liens, the Permitted Collateral Liens and the Lien of this
Deed of Trust, the Grantor may not, without the prior written consent of the
Beneficiary, further mortgage, encumber, hypothecate, sell, convey or assign all
or any part of the Trust Property or suffer or allow any of the foregoing to
occur by operation of law or otherwise.
SECTION 4.8. Estoppel Certificates. The Grantor shall, from
time to time, upon ten (10) days' prior written request of the Beneficiary,
execute, acknowledge and deliver to the Beneficiary an Officers' Certificate
stating that this Deed of Trust, the Credit Agreement and the other Credit
Documents are unmodified and in full force and effect (or, if there have been
modifications, that this Deed of Trust, the Credit Agreement or such other
Credit Document, as applicable, is in full force and effect as modified and
setting forth such modifications) and stating the date to which principal and
interest have been paid on the Loans.
SECTION 4.9. Insurance. The Grantor shall obtain and keep in
full force and effect the Insurance Policies required by the Credit Agreement
pursuant to the terms thereof.
ARTICLE V.
LEASES
SECTION 5.1. Grantor's Affirmative Covenants with Respect to
Leases. With respect to each Lease that is hereinafter entered into by the
Grantor, the Grantor shall:
(i) observe and perform in all material respects all the
obligations imposed upon the Landlord under such Lease;
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(ii) promptly send copies to the Beneficiary of all
notices of default which the Grantor shall send or receive thereunder;
and
(iii) enforce all of the material terms, covenants and
conditions contained in such Lease upon the part of the Tenant
thereunder to be observed or performed.
[NOTE: THIS SECTION 5.1 AND SECTION 5.2 BELOW WILL BE MODIFIED AS
APPROPRIATE FOR THE MISSOURI PROPERTY SUBJECT TO AN AFFILIATE LEASE.]
SECTION 5.2. Grantor's Negative Covenants with Respect to
Leases. With respect to each Lease that is hereinafter entered into by the
Grantor, the Grantor shall not, without the prior written consent of the
Beneficiary:
(i) receive or collect, or permit the receipt or
collection of, any Rent under such Lease more than one (1) month in
advance of the respective period in respect of which such Rent is to
accrue, except:
(A) in connection with the execution and
delivery of such Lease (or of any amendment
to such Lease), Rent thereunder may be
collected and received in advance in an
amount not in excess of one (1) month's
Rent;
(B) the amount held by Landlord as a reasonable
security deposit thereunder; and
(C) any amount received and collected for
escalation and other charges in accordance
with the terms of such Lease;
(ii) assign, transfer or hypothecate (other than to the
Beneficiary hereunder) any Rent under such Lease whether then due or to
accrue in the future or the interest of the Grantor as Landlord under
such Lease;
(iii) enter into any amendment or modification of such
Lease if the same would not comply with Section 6.02(h) of the Credit
Agreement;
(iv) terminate (whether by exercising any contractual
right of the Grantor to recapture leased space or otherwise) or permit
the termination of such Lease or accept surrender of all or any portion
of the space demised under such Lease prior to the end of the term
thereof or accept assignment of such Lease to the Grantor unless the
same would not cause a Property Material Adverse Effect or;
(v) waive, excuse, condone or in any manner discharge or
release any Tenants of or from the obligations of such Tenants under
their respective Leases or guarantors of Tenants from obligations under
any guarantees of the Leases except as the same would be done by a
Prudent Operator with due regard for the security afforded the
Beneficiary thereby Grantor unless the same would not cause a Property
Material Adverse Effect.
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ARTICLE VI.
CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1. Present Assignment; License to the Grantor.
Section 2.2 of this Deed of Trust constitutes a present, absolute, effective,
irrevocable and complete assignment by Grantor to Beneficiary of the Leases and
Rents and the right, subject to applicable law, to collect all sums payable to
Grantor thereunder and apply the same as Beneficiary may, in its sole
discretion, determine to be appropriate (including the payment of reasonable
costs and expenses in connection with the maintenance, operation, improvement,
insurance, taxes and upkeep of the Trust Property), which is not conditioned
upon Beneficiary being in possession of the Premises. The Beneficiary hereby
grants to the Grantor, however, a license to collect and apply the Rents and to
enforce the obligations of Tenants under the Leases. Immediately upon the
occurrence of and during the continuance of any Event of Default, the license
granted in the immediately preceding sentence shall cease and terminate, with or
without any notice, action or proceeding or the intervention of a receiver
appointed by a court.
SECTION 6.2. Collection of Rents by the Beneficiary.
(i) Any Rents receivable by the Beneficiary hereunder,
after payment of all proper costs and expenses as Beneficiary may, in its sole
discretion, determine to be appropriate (including the payment of reasonable
costs and expenses in connection with the maintenance, operation, improvement,
insurance, taxes and upkeep of the Trust Property), shall be applied in
accordance with the provisions of Section 10.2 of this Deed of Trust. The
Beneficiary shall be accountable to the Grantor only for Rents actually received
by the Beneficiary. The collection of such Rents and the application thereof
shall not cure or waive any Event of Default or waive, modify or affect notice
of Event of Default or invalidate any act done pursuant to such notice.
(ii) The Grantor hereby irrevocably authorizes and directs
Tenant under each Lease to rely upon and comply with any and all notices or
demands from the Beneficiary for payment of Rents to the Beneficiary and the
Grantor shall have no claim against Tenant for Rents paid by Tenant to the
Beneficiary pursuant to such notice or demand.
SECTION 6.3. No Release. Neither this Deed of Trust nor any
action or inaction on the part of the Beneficiary shall release Tenant under any
Lease, any guarantor of any Lease or the Grantor from any of their respective
obligations under such Leases or constitute an assumption of any such obligation
on the part of the Beneficiary. No action or failure to act on the part of the
Grantor shall adversely affect or limit the rights of the Beneficiary under this
Deed of Trust or, through this Deed of Trust, under such Leases. Nothing
contained herein shall operate or be construed to (i) obligate the Beneficiary
to perform any of the terms, covenants or conditions contained in any Lease or
otherwise to impose any obligation upon the Beneficiary with respect to such
Lease (including, without limitation, any obligation arising out of any covenant
of quiet enjoyment contained in such Lease in the event that Tenant under such
Lease shall have been joined as a party defendant in any action by which the
estate of such Tenant shall be terminated)
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or (ii) place upon the Beneficiary any responsibility for the operation,
control, care, management or repair of the Premises.
SECTION 6.4. Irrevocable Interest. All rights, powers and
privileges of the Beneficiary herein set forth are coupled with an interest and
are irrevocable, subject to the terms and conditions hereof, and the Grantor
shall not take any action under the Leases or otherwise which is inconsistent
with this Deed of Trust or any of the terms hereof and any such action
inconsistent herewith or therewith shall be void.
SECTION 6.5. Amendment to Leases. Each Lease, including,
without limitation, all amendments, modifications, supplements, replacements,
extensions and renewals thereof, shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the parties hereto.
ARTICLE VII.
TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1. Payment of Charges. Unless and to the extent
contested by the Grantor in accordance with the provisions of the Credit
Agreement hereof, the Grantor shall pay and discharge, or cause to be paid and
discharged, from time to time prior to same becoming delinquent, all Charges.
The Grantor shall, upon the Beneficiary's request, deliver to the Beneficiary
receipts evidencing the payment of all such Charges.
SECTION 7.2. Escrow of Taxes. From and after the occurrence of
an Event of Default, at the option and upon the request of the Beneficiary, the
Grantor shall deposit with the Beneficiary in an account maintained by the
Beneficiary (the "Tax Escrow Fund"), on the first day of each month, an amount
estimated by the Beneficiary to be equal to one-twelfth of the annual real
property taxes and other annual Charges required to be discharged by the Grantor
under Section 7.1 hereof. Such amounts shall be held by the Beneficiary without
interest to the Grantor and applied to the payment of the obligations in respect
of which such amounts were deposited, in such priority as the Beneficiary shall
determine, on or before the respective dates on which such obligations or any
part thereof would become delinquent. Nothing contained in this Article VII
shall (i) affect any right or remedy of the Beneficiary under any provision
hereof or of any statute or rule of law to pay any such amount as provided above
from its own funds and to add the amount so paid, together with interest at the
default rate during such time that any amount remains outstanding, to the
Secured Obligations or (ii) relieve the Grantor of its obligations to make or
provide for the payment of the annual real property taxes and other annual
Charges required to be discharged by the Grantor under Section 7.1 hereof.
SECTION 7.3. Certain Statutory Liens. Unless and to the extent
contested by the Grantor in accordance with the provisions of Section 6.02 (a)
and (b) of the Credit Agreement, the Grantor shall timely pay, or cause to be
paid, all lawful claims and demands of mechanics, materialmen, laborers,
government agencies administering worker's compensation
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insurance, old age pensions and social security benefits and all other claims,
judgments, demands or amounts of any nature which, if unpaid, might result in,
or permit the creation of, a Lien on the Trust Property or any part thereof, or
which might result in forfeiture of all or any part of the Trust Property.
SECTION 7.4. Stamp and Other Taxes. Unless and to the extent
contested by the Grantor in accordance with the provisions of Article VIII
hereof, the Grantor shall pay any United States documentary stamp taxes, with
interest and fines and penalties, and any mortgage recording taxes, with
interest and fines and penalties, that may hereafter be levied, imposed or
assessed under or upon or by reason hereof or the Secured Obligations or any
instrument or transaction affecting or relating to either thereof and in default
thereof the Beneficiary may advance the same and the amount so advanced shall be
payable by the Grantor to the Beneficiary in accordance with the provisions of
Section 11.03 of the Credit Agreement hereof.
SECTION 7.5. Certain Tax Law Changes. In the event of the
passage after the date hereof of any law deducting from the value of real
property, for the purpose of taxation, amounts in respect of any Lien thereon or
changing in any way the laws for the taxation of mortgages or debts secured by
mortgages for state or local purposes or the manner of the collection of any
Charges, and imposing any Charges, either directly or indirectly, on this Deed
of Trust or any other Loan Document, the Grantor shall promptly pay to the
Beneficiary such amount or amounts as may be necessary from time to time to pay
any such Charges.
SECTION 7.6. Proceeds of Tax Claim. In the event that the
proceeds of any tax claim are paid after the Beneficiary has exercised its right
to foreclose the Lien hereof, such proceeds shall be paid to the Beneficiary to
satisfy any deficiency remaining after such foreclosure. The Beneficiary shall
retain its interest in the proceeds of any tax claim during any redemption
period. The amount of any such proceeds in excess of any deficiency claim of the
Beneficiary shall in a reasonably prompt manner be released to the Grantor.
ARTICLE VIII.
CONTESTING OF PAYMENTS
SECTION 8.1. Contesting of Taxes and Certain Statutory Liens.
The Grantor may at its own expense contest in good faith by appropriate
proceedings the validity, amount or applicability of any Charges as provided in
Section 6.02 (a), (b) and (f) of the Credit Agreement.
ARTICLE IX.
DESTRUCTION, CONDEMNATION AND RESTORATION
SECTION 9.1. Destruction, Condemnation and Restoration. If
there shall occur any Destruction, the Grantor shall promptly send to the
Beneficiary a written notice setting
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forth the nature and extent of such Destruction. The proceeds of any insurance
payable in respect of such Destruction are hereby assigned and shall be paid to
the Beneficiary. All Net Insurance such proceeds shall constitute Net Cash
Proceeds under the Credit Agreement and shall be applied in accordance with the
provisions of Section 2.10 of the Credit Agreement.
SECTION 9.2. Condemnation. If there shall occur any Taking or
the commencement of any proceeding therefor, the Grantor shall immediately
notify the Beneficiary upon receiving notice of such Taking or commencement of
proceedings therefor. The Beneficiary may, at its option, participate in any
proceedings or negotiations which might result in any Taking, and the Grantor
shall deliver or cause to be delivered to the Beneficiary all instruments
requested by it to permit such participation. The Beneficiary may be represented
by counsel satisfactory to it at the expense of the Grantor in connection with
any such participation. The Grantor shall pay all reasonable fees, costs and
expenses incurred by the Beneficiary in connection with any Taking and in
seeking and obtaining any award or payment on account thereof. Any proceeds,
award or payment in respect of any Taking are herby assigned and shall be paid
to the Beneficiary. The Grantor shall take all steps necessary to notify the
condemning authority of such assignment. All such proceeds shall constitute Net
Cash Proceeds under the Credit Agreement and shall be applied in accordance with
the provisions of Section 2.10 of the Credit Agreement.
SECTION 9.3. Restoration. In the event the Grantor is
permitted or required to perform any Restoration in accordance with the
provisions of Section 2.10 of the Credit Agreement, the proceeds of any award
payable in respect of a Destruction or a Taking shall constitute Net Cash
Proceeds and the Beneficiary shall release such Proceeds to the Grantor in
compliance with the applicable provisions of Section 2.10 of the Credit
Agreement, and the Grantor shall complete the restoration in accordance with
provisions of Section 2.10 of the Credit Agreement. In the event there shall be
any surplus after the application of such proceeds to the Restoration of the
Improvements, such surplus should be applied as Net Cash Proceeds in accordance
with Section 2.10 (e)(iii) of the Credit Agreement.
ARTICLE X.
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default. It shall be an Event of
Default hereunder if there shall have occurred and be continuing an Event of
Default under the Credit Agreement.
SECTION 10.2. Performance of Defaulted Acts. From and after
the occurrence and during the continuance of an Event of Default, Beneficiary
may, but need not, make any payment or perform any act herein required of
Grantor or required in order for there to be compliance with the terms herein or
any other Loan Document, in any form and manner deemed expedient or desirable,
including, without limitation, making full or partial payments for principal or
interest on prior encumbrances (if any), service, utility or maintenance
charges, or insurance premium, curing the default of the landlord under a Lease,
and purchasing, discharging,
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compromising or settling any tax lien or other prior lien or title or claim
thereof, or redeeming from any tax sale or forfeiture affecting the Trust
Property or contesting any tax assessment. All moneys paid for any of the
purposes herein authorized and all expenses paid or incurred in connection
therewith, including reasonable attorneys' fees, shall be so much additional
Secured Obligations, shall accrue interest at the Default Rate, and together
with such interest, shall become immediately due and payable without notice.
Inaction of Beneficiary shall never be considered as a waiver of any right
accruing to any of them hereunder or under any of the other Loan Documents on
account of any default on the part of Grantor. Beneficiary making any payment
hereby authorized relating to taxes, assessments, insurance premiums, or service
or utility charges, may do so according to any ▇▇▇▇, statement or estimate
procured from the appropriate public office or entity, without inquiry into the
accuracy of such ▇▇▇▇, statement or estimate or into the validity of any tax,
assessment, sale, forfeiture, tax lien, title, claim premium or charge thereof.
SECTION 10.3. Rights and Remedies In Case of Event of Default.
Upon the occurrence and during the continuance of any Event of Default, Trustee
or Beneficiary may exercise any one or more of the following rights and
remedies:
(i) Beneficiary may declare the entire Secured
Obligations immediately due and payable, including any prepayment penalty which
Grantor would be required to pay, without any presentment, demand, protest or
notice of any kind.
(ii) Trustee shall have the right to foreclose by exercise
of the power of sale contained herein, and Beneficiary shall have the right to
foreclose by judicial foreclosure, in either case, in accordance with applicable
law.
(iii) If this Deed of Trust is foreclosed by judicial
procedure, Beneficiary will be entitled to seek, in accordance with and to the
extent permitted by applicable law, a judgment which will provide that if the
foreclosure sale proceeds are insufficient to satisfy the judgment, execution
may issue for any amount by which the unpaid balance of the Secured Obligations
secured by this Deed of Trust exceeds the net sale proceeds payable to
Beneficiary.
(iv) Beneficiary shall have the right, without notice to
Grantor to the extent permitted by applicable law, to take possession of the
Trust Property, terminate Grantor's license to collect the Rents, and collect
the Rents, including amounts past due and unpaid, and apply the net proceeds,
over and above Beneficiary's costs, against the Secured Obligations. In
furtherance of this right, Beneficiary may require any Tenant or other use to
make payments of Rents directly to Beneficiary. If the Rents are collected by
Beneficiary, then Grantor irrevocably designates Beneficiary as Grantor's
attorney in fact to endorse instruments received in payment thereof in the name
of Grantor and to negotiate the same and collect the proceeds. Payments by
Tenants or other users to Beneficiary in response to Beneficiary's demand shall
satisfy the obligation for which the payments are made, whether or not any
proper grounds for the demand existed. Beneficiary may exercise its rights under
this sub-section either in person, by agent or through a receiver.
SECTION 10.4. Foreclosure by Power of Sale. Should Beneficiary
elect to foreclose by exercise of the power of sale contained herein,
Beneficiary shall notify Trustee and
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shall, if required, deposit with Trustee the original or a certified copy of
this Deed of Trust and such other documents, receipts and evidences of
expenditures made and secured hereby as Trustee may require
(i) Upon receipt of such notice from Beneficiary, Trustee
shall cause to be recorded and delivered to Grantor such notice of default as
may then be required by law. At the direction of Beneficiary, Trustee shall,
without demand on Grantor, after lapse of such time as may then be required by
law and after recordation of such notice of default and after notice of sale has
been given as required by law, sell the Trust Property at the time and place of
sale fixed by it in said notice of sale, either as a whole or in separate lots
or parcels or items as Trustee shall deem expedient, and in such order as it may
determine, at public auction to the highest bidder for cash in lawful money of
the United States payable at the time of sale. Trustee shall deliver to the
purchaser or purchasers at such sale appropriate transfer documents conveying
the property so sold, but without any covenant or warranty, express or implied.
The recitals in such transfer documents of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including, without
limitation, Grantor, Trustee or Beneficiary, may purchase at such sale, and
Beneficiary shall be entitled for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Trust Property
sold at any such public sale, to use and apply any of the Secured Obligations as
a credit on account of the purchase price payable by Beneficiary at such sale.
Grantor hereby covenants to warrant and defend the title of such purchaser or
purchasers against every person or party whomsoever claiming or to claim the
same or any part thereof, by, through or under Grantor, subject, however, to the
Permitted Collateral Liens.
(ii) After deducting all reasonable and customary costs,
fees and expenses of Trustee and of this Deed of Trust, including, without
limitation, costs of evidence of title and reasonable attorneys' fees of Trustee
or Beneficiary in connection with a sale as provided in Section 10.4(i) above,
Trustee shall apply the proceeds of such sale: (i) to the payment of all sums
expended under the terms hereof not then repaid, with accrued interest at the
Default Rate; (ii) to the payment of all other sums then secured hereby; and
(iii) the remainder, if any, to the person or persons legally entitled thereto.
(iii) Subject to applicable law, Trustee may postpone the
sale of all or any portion of the Trust Property by public announcement at the
time and place of the scheduled sale, and from time to time thereafter may
postpone such sale by public announcement at the time fixed by the preceding
postponement or subsequent notice of sale, and without further notice may make
such sale at the time fixed by the last postponement, or may, in its discretion,
give a new notice of sale.
(iv) To the fullest extent allowed by law, Grantor hereby
expressly waives any right which it may have to direct the order in which any of
the Trust Property shall be sold in the event of any sale or sales pursuant to
this Deed of Trust.
SECTION 10.5. Rescission of Notice of Default. Beneficiary may
from time to time rescind any notice of default or notice of sale before any
Trustee's sale as provided above, by executing and delivering to Trustee a
written notice of such rescission, which such notice,
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when recorded, shall constitute a cancellation of any prior declaration of
default and demand for sale. The exercise by Beneficiary of such right of
rescission shall not constitute a waiver of any breach or Event of Default then
existing or subsequently occurring, or impair the right of Beneficiary to
execute and deliver to Trustee, as above provided, other declarations or notices
of default to satisfy the Secured Obligations, nor otherwise affect any
provision, covenant or condition of any of the Loan Documents or any of the
rights, Secured Obligations or remedies of Trustee or Beneficiary hereunder or
thereunder.
SECTION 10.6. Appointment of Receiver. If an Event of Default
hereunder shall have occurred and be continuing, Beneficiary, as a matter of
right and without notice to Grantor or to anyone claiming under Grantor, and
without regard to the then value of the Trust Property or the interest of
Grantor therein, shall have the right to apply to any court having jurisdiction
to appoint a receiver or receivers of the Trust Property, or any portion
thereof, and Grantor hereby irrevocably consents to such appointment and waives
notice of any application therefor. Any such receiver or receivers shall have
the usual powers and duties of receivers in like or similar cases and all the
powers and duties of Beneficiary in case of entry as provided in Section 4.03(e)
above, and shall continue as such and exercise all such powers until the date of
confirmation of the sale of the Trust Property, unless such receivership is
sooner terminated.
SECTION 10.7. Notice to Grantor. Grantor requests that a copy
of any notice of default and of any notice of sale hereunder be mailed to it at
its address hereinbefore set forth. Reasonable notice shall mean notice given at
least ten (10) Business Days before the time of the sale or disposition by
certified or registered mail.
SECTION 10.8. Expenses and Application of Proceeds. The costs
and expenses of any Trustee's sale or other foreclosure proceedings shall
include all reasonable expenditures and expenses that may be paid or incurred by
or on behalf of Beneficiary or Trustee for court costs, attorneys' fees,
appraisers' fees, environmental audit fees, outlays for documentary and expert
evidence, stenographers' charges, publication costs, and costs of procuring
abstracts of title, title searches and examinations, title insurance policies
and similar data and assurances with respect to the title as Beneficiary or
Trustee may deem necessary or desirable, either to pursue such sale or civil
action or to evidence to bidders at any sale that may be had the true condition
of the title of, or the value of, the Trust Property. All reasonable
expenditures and expenses of the nature in this Section mentioned and such
expenses and fees as may be incurred in the protection of the Trust Property and
the maintenance of this Deed of Trust, the other Loan Documents or the Trust
Property, including probate, appellate and bankruptcy proceedings, or in
preparations for the commencement or defense of any action or proceeding or
threatened action or proceeding, shall be immediately due and payable by
Grantor, with interest thereon at the rate set forth in the Loan Documents
applicable to a period when a default exists thereunder, shall be secured hereby
and shall be due and payable on demand. The proceeds of any sale of the Trust
Property by Trustee or through other foreclosure proceedings shall be
distributed and applied in the following order of priority: first, on account of
all costs and expenses incident to Trustee's sale or foreclosure proceedings,
including all such items as are mentioned in this Section; second, to all other
items that may under the terms hereof constitute Secured Obligations in
accordance with the Credit Agreement; and third, any excess to Grantor.
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SECTION 10.9. Rights of Receiver or Beneficiary in Possession.
Upon taking possession of all or any part of the Trust Property following the
occurrence and during the continuance of an Event of Default and in accordance
with applicable law, a receiver or trustee may:
(a) Use, operate, manage, control and conduct business on
the Trust Property and make expenditures for all maintenance and
improvements as in its judgment are proper;
(b) Collect the Rents from the Trust Property and apply
such sums to the expenses of use, operation and management;
(c) At Beneficiary's option, complete any construction in
progress on the Trust Property, and in that connection pay bills,
borrow funds, employ contractors and make any changes in plans or
specifications as Beneficiary deems appropriate.
If the revenues produced by the Trust Property are
insufficient to pay expenses, the receiver may borrow from Beneficiary (if
Beneficiary, in its sole discretion, agrees to lend) or otherwise, or
Beneficiary may borrow or advance, such sums as Beneficiary may deem necessary
for the purposes stated in this Section. The amounts borrowed or advanced shall
bear interest from the date of expenditure until repaid, at the Default Rate.
Such sums shall become a part of the Secured Obligations and shall be payable by
Grantor on demand.
SECTION 10.10. Attorneys' Fees; Expenses. Grantor agrees to
reimburse Beneficiary for all reasonable costs, expenses, and attorneys' fees
that Beneficiary incurs in connection with the realization or enforcement of any
obligation or remedy contained in the Credit Agreement, this Deed of Trust or
any other Loan Document, with or without litigation, including, without
limitation, any reasonable costs, expenses and fees incurred: (a) in any
foreclosure, trustee's sale or deed in lieu of foreclosure or trustee's sale;
(b) on appeal; (c) in any petition for review; (d) in any arbitration or
mediation; (e) in any action contesting or seeking to restrain, enjoin, stay or
postpone the exercise of any remedy in which Beneficiary prevails; (f) in any
bankruptcy, probate, receivership or other proceeding involving Grantor; and (g)
in connection with all negotiations, documentation, and other actions relating
to any work-out, compromise, settlement or satisfaction of the Secured
Obligations or settlement of any debt secured by this Deed of Trust or which is
evidenced by the Credit Agreement or any other Loan Document. All such costs,
expenses and fees shall be due and payable upon demand, shall bear interest from
the date incurred through the date of collection at the Default Rate.
SECTION 10.11. Rights Cumulative. No remedy or right of
Beneficiary shall be exclusive of, but each such remedy or right shall be in
addition to, every other remedy or right now or hereafter existing at law or in
equity. No delay in the exercise or omission to exercise of any remedy or right
accruing on any default shall impair any such remedy or right or be construed to
be a waiver of any such default or an acquiescence therein, nor shall it affect
any subsequent default of the same or a different nature. Every such remedy or
right may be exercised concurrently or independently, and when and as often as
may be deemed expedient by Beneficiary. Grantor agrees that without affecting
the liability of any person for payment of the Secured Obligations or affecting
the Lien of this Deed of Trust upon the Trust Property or any part
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thereof, Beneficiary, pursuant to the terms of the Credit Agreement and the
other Loan Documents, may at any time and from time to time, on request of
Grantor, without notice to any person liable for payment of any Secured
Obligations, extend the time or agree to alter the terms of payment of such
indebtedness. Acceptance by Beneficiary of any payment in an amount less than
the amount then due on the Secured Obligations shall be deemed an acceptance on
account only, and the failure to pay the entire amount then due shall continue
to be an Event of Default. At any time thereafter and until the entire amount
then due on the debt has been paid, Beneficiary and the Lenders shall be
entitled to exercise all rights conferred upon them in this Deed of Trust, at
law or in equity, upon the occurrence of an Event of Default.
ARTICLE XI.
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 11.1. Security Agreement. To the extent that the Trust
Property includes personal property or items of personal property which are or
are to become fixtures under applicable law, this Deed of Trust shall also be
construed as a security agreement under the UCC; and, upon and during the
continuance of an Event of Default, the Beneficiary shall be entitled with
respect to such personal property to exercise all remedies hereunder, all
remedies available under the UCC with respect to fixtures and all other remedies
available under applicable law. Without limiting the foregoing, such personal
property may, at the Beneficiary's option, (i) be sold hereunder together with
any sale of any portion of the Trust Property or otherwise, (ii) be sold
pursuant to the UCC, or (iii) be dealt with by the Beneficiary in any other
manner permitted under applicable law. The Beneficiary may require the Grantor
to assemble such personal property and make it available to the Beneficiary at a
place to be designated by the Beneficiary. The Grantor acknowledges and agrees
that a disposition of the personal property in accordance with the Beneficiary's
rights and remedies in respect to the Trust Property as heretofore provided is a
commercially reasonable disposition thereof; provided, however, that the
Beneficiary shall give the Grantor not less than ten (10) days' prior notice of
the time and place of any intended disposition.
SECTION 11.2. Fixture Filing. To the extent that the Trust
Property includes items of personal property which are or are to become fixtures
under applicable law, and to the extent permitted under applicable law, the
filing hereof in the real estate records of the county in which such Trust
Property is located shall also operate from the time of filing as a fixture
filing with respect to such Trust Property, and the following information is
applicable for the purpose of such fixture filing, to wit:
NAME AND ADDRESS OF THE DEBTOR: NAME AND ADDRESS OF THE SECURED PARTY:
The Grantor having the address The Beneficiary having the address
described in the Preamble hereof. described in the Preamble hereof.
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THIS FINANCING STATEMENT COVERS THE FOLLOWING TYPES OR ITEMS OF
PROPERTY:
The Trust Property.
This instrument covers goods or items of personal property which are or
are to become fixtures upon the property.
The name of the record owner of the Property on which such fixtures are
or are to be located is the Grantor.
In addition, Grantor authorizes the Beneficiary to file appropriate financing
and continuation statements under the UCC in effect in the jurisdiction in which
the Trust Property is located as may be required by law in order to establish,
preserve and protect the liens and security interests intended to be granted to
the Beneficiary pursuant to this Deed of Trust in the Trust Property.
ARTICLE XII.
FURTHER ASSURANCES
SECTION 12.1. Recording Documentation To Assure Security. The
Grantor shall, forthwith after the execution and delivery hereof and thereafter,
from time to time, cause this Deed of Trust and any financing statement,
continuation statement or similar instrument relating to any thereof or to any
property intended to be subject to the Lien hereof to be filed, registered and
recorded in such manner and in such places as may be required by any present or
future law in order to publish notice of and fully to protect the validity and
priority thereof or the Lien hereof purported to be created upon the Trust
Property and the interest and rights of the Trustee and Beneficiary therein. The
Grantor shall pay or cause to be paid all taxes and fees incident to such
filing, registration and recording, and all expenses incident to the
preparation, execution and acknowledgment thereof, and of any instrument of
further assurance, and all Federal or state stamp taxes or other taxes, duties
and charges arising out of or in connection with the execution and delivery of
such instruments.
SECTION 12.2. Further Acts. The Grantor shall, at the sole
cost and expense of the Grantor, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers, financing statements, continuation statements,
instruments and assurances as the Trustee or the Beneficiary shall from time to
time request, which may be necessary in the judgment of the Trustee or the
Beneficiary from time to time to assure, perfect, convey, assign, mortgage,
transfer and confirm unto the Trustee and Beneficiary, the property and rights
hereby conveyed or assigned or which the Grantor may be or may hereafter become
bound to convey or assign to the Trustee or the Beneficiary or for carrying out
the intention or facilitating the performance of the terms hereof or the filing,
registering or recording hereof. Without limiting the generality of the
foregoing, in the event that the Beneficiary desires to exercise any remedies,
consensual rights or attorney-in-fact powers set forth in this Deed of Trust and
determines it necessary to obtain any approvals or consents of any Governmental
Authority or any other person therefor, then, upon the reasonable request of
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the Beneficiary, the Grantor agrees to use its best efforts to assist and aid
the Beneficiary to obtain as soon as practicable any necessary approvals or
consents for the exercise of any such remedies, rights and powers. In the event
the Grantor shall fail after demand to execute any instrument or take any action
required to be executed or taken by the Grantor under this Section 12.2, the
Beneficiary may execute or take the same as the attorney-in-fact for the
Grantor, such power of attorney being coupled with an interest and is
irrevocable.
SECTION 12.3. Additional Security. Without notice to or
consent of the Grantor and without impairment of the Lien and rights created by
this Deed of Trust, the Beneficiary may accept (but the Grantor shall not be
obligated to furnish) from the Grantor or from any other person, additional
security for the Secured Obligations. Neither the giving hereof nor the
acceptance of any such additional security shall prevent the Beneficiary from
resorting, first, to such additional security, and, second, to the security
created by this Deed of Trust without affecting the Beneficiary's Lien and
rights under this Deed of Trust.
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Covenants To Run with the Land. All of the
grants, covenants, terms, provisions and conditions in this Deed of Trust shall
run with the Land and shall apply to, and bind the successors and assigns of,
the Grantor. If there shall be more than one Grantor with respect to the Trust
Property, the covenants and warranties hereof shall be joint and several.
SECTION 13.2. No Merger. The rights and estate created by this
Deed of Trust shall not, under any circumstances, be held to have merged into
any other estate or interest now owned or hereafter acquired by the Beneficiary
unless the Beneficiary shall have consented to such merger in writing.
SECTION 13.3. Concerning Beneficiary.
(i) The Beneficiary has been appointed as Collateral
Agent pursuant to the Credit Agreement. The actions of the Beneficiary hereunder
are subject to the provisions of the Credit Agreement. The Beneficiary shall
have the right hereunder to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking action
(including, without limitation, the release or substitution of the Trust
Property), in accordance with this Deed of Trust and the Credit Agreement. The
Beneficiary may employ agents and attorneys-in-fact in connection herewith and
shall not be liable for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Beneficiary may resign and a
successor Beneficiary may be appointed in the manner provided in the Credit
Agreement. Upon the acceptance of any appointment as the Beneficiary by a
successor Beneficiary, that successor Beneficiary shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Beneficiary under this Deed of Trust, and the retiring Beneficiary shall
thereupon be discharged from its duties and obligations under this Deed of
Trust.
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After any retiring Beneficiary's resignation, the provisions hereof shall inure
to its benefit as to any actions taken or omitted to be taken by it under this
Deed of Trust while it was the Beneficiary.
(ii) The Beneficiary shall be deemed to have exercised
reasonable care in the custody and preservation of the Trust Property in its
possession if such Trust Property is accorded treatment substantially equivalent
to that which the Beneficiary, in its individual capacity, accords its own
property consisting of similar instruments or interests, it being understood
that neither the Beneficiary nor any of the Secured Parties shall have
responsibility for taking any necessary steps to preserve rights against any
person with respect to any Trust Property.
(iii) The Beneficiary shall be entitled to rely upon any
written notice, statement, certificate, order or other document or any telephone
message believed by it 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 Deed of Trust and its duties hereunder, upon advice of counsel selected by
it.
(iv) With respect to any of its rights and obligations as
a Lender, the Beneficiary shall have and may exercise the same rights and powers
hereunder. The term "Lenders," "Lender" or any similar terms shall, unless the
context clearly otherwise indicates, include the Beneficiary in its individual
capacity as a Lender. The Beneficiary may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Grantor or any Affiliate of the Grantor to the same extent as if the Beneficiary
were not acting as Collateral Agent.
(v) If any portion of the Trust Property also constitutes
collateral granted to the Beneficiary under any other deed of trust, mortgage,
security agreement, pledge or instrument of any type, in the event of any
conflict between the provisions hereof and the provisions of such other deed of
trust, mortgage, security agreement, pledge or instrument of any type in respect
of such collateral, the Beneficiary, in its sole discretion, shall select which
provision or provisions shall control.
SECTION 13.4. Beneficiary May Perform; Beneficiary Appointed
Attorney-in-Fact. If the Grantor shall fail to perform any covenants contained
in this Deed of Trust (including, without limitation, the Grantor's covenants to
(i) pay the premiums in respect of all required insurance policies hereunder or
under the Credit Agreement, (ii) pay Charges, (iii) make repairs, (iv) discharge
Liens or (v) pay or perform any obligations of the Grantor under any Trust
Property) or if any warranty on the part of the Grantor contained herein shall
be breached, the Beneficiary may (but shall not be obligated to), after notice
to Grantor, do the same or cause it to be done or remedy any such breach, and
may expend funds for such purpose; provided, however, that the Beneficiary shall
in no event be bound to inquire into the validity of any tax, lien, imposition
or other obligation which the Grantor fails to pay or perform as and when
required hereby and which the Grantor does not contest in accordance with the
provisions of Article VIII hereof. Any and all amounts so expended by the
Beneficiary shall be paid by the Grantor in accordance with the provisions of
Section 11.03 of the Credit Agreement. Neither the provisions of this Section
13.4 nor any action taken by the Beneficiary pursuant to the provisions of this
Section 13.4 shall prevent any such failure to observe any covenant contained in
this Deed of Trust nor any
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breach of warranty from constituting an Event of Default. The Grantor hereby
appoints the Beneficiary its attorney-in-fact, with full authority in the place
and stead of the Grantor and in the name of the Grantor, or otherwise, from time
to time in the Beneficiary's discretion to take any action and to execute any
instrument consistent with the terms hereof and the other Loan Documents which
the Beneficiary may deem necessary or advisable to accomplish the purposes
hereof. The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof. The
Grantor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof.
SECTION 13.5. Continuing Security Interest; Assignment. This
Deed of Trust shall create a continuing Lien on and security interest in the
Trust Property and shall (i) be binding upon the Grantor, its successors and
assigns and (ii) inure, together with the rights and remedies of the Trustee and
Beneficiary hereunder, to the benefit of the Beneficiary for the benefit of the
Secured Parties and each of their respective successors, transferees and
assigns. No other persons (including, without limitation, any other creditor of
any Loan Party) shall have any interest herein or any right or benefit with
respect hereto. Without limiting the generality of the foregoing clause (ii),
any Lender may assign or otherwise transfer any indebtedness held by it secured
by this Deed of Trust to any other person, and such other person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender,
herein or otherwise, subject, however, to the provisions of the Credit
Agreement.
SECTION 13.6. Termination; Release. When all the Secured
Obligations have been paid in full and the Commitments of the Lenders to make
any Loan or to issue any Letter of Credit under the Credit Agreement shall have
expired or been sooner terminated, this Deed of Trust shall terminate. Upon
termination hereof or any release of the Trust Property or any portion thereof
in accordance with the provisions of the Credit Agreement, the Beneficiary
shall, upon the request and at the sole cost and expense of the Grantor,
forthwith assign, transfer and deliver to the Grantor, against receipt and
without recourse to or warranty by the Beneficiary, such of the Trust Property
to be released (in the case of a release) as may be in possession of the
Beneficiary and as shall not have been sold or otherwise applied pursuant to the
terms hereof, and, with respect to any other Trust Property, proper documents
and instruments (including UCC-3 termination statements or releases)
acknowledging the termination hereof or the release of such Trust Property, as
the case may be.
SECTION 13.7. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by the Grantor therefrom, shall be effective unless
the same shall be done in accordance with the terms of the Credit Agreement and
unless in writing and signed by the Beneficiary. Any amendment, modification or
supplement of or to any provision hereof, any waiver of any provision hereof and
any consent to any departure by the Grantor from the terms of any provision
hereof shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Deed of Trust or any other Loan Document, no notice to or demand on the
Grantor in any case shall entitle the Grantor to any other or further notice or
demand in similar or other circumstances.
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SECTION 13.8. Notices. Unless otherwise provided herein or in
the Credit Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Credit Agreement, if to the Grantor or the Beneficiary, addressed
to it at the address set forth in the Credit Agreement, or in each case at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 13.8.
SECTION 13.9. GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF
JURY TRIAL. THIS DEED OF TRUST SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PREMISES ARE
LOCATED, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR ITEM OR TYPE OF TRUST PROPERTY ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. GRANTOR AGREES
THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS SET FORTH IN THE CREDIT
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE BENEFICIARY SHALL HAVE BEEN
NOTIFIED PURSUANT THERETO. IF ANY AGENT APPOINTED BY GRANTOR REFUSES TO ACCEPT
SERVICE, GRANTOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE
SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF BENEFICIARY TO BRING
PROCEEDINGS AGAINST GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION. THE GRANTOR
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS DEED OF TRUST OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 13.10. Severability of Provisions. Any provision
hereof which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 13.11. Limitation on Interest Payable. It is the
intention of the parties to conform strictly to the usury laws, whether state or
Federal, that are applicable to the transaction of which this Deed of Trust is a
part. All agreements between the Grantor and the Beneficiary whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever shall the amount paid or
agreed to be paid by the Grantor for the use, forbearance or detention of the
money to be loaned under the Credit Agreement or any other Loan Document, or for
the payment or performance of any covenant or obligation contained herein or in
the Credit Agreement or any other Loan Document, exceed the maximum amount
permissible under applicable Federal or state usury laws. If under any
circumstances whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then the
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obligation to be fulfilled shall be reduced to the limit of such validity. If
under any circumstances the Grantor shall have paid an amount deemed interest by
applicable law, which would exceed the highest lawful rate, such amount that
would be excessive interest under applicable usury laws shall be applied to the
reduction of the principal amount owing in respect of the Secured Obligations
and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal and any other amounts due hereunder, the excess
shall be refunded to the Grantor. All sums paid or agreed to be paid for the
use, forbearance or detention of the principal under any extension of credit by
the Beneficiary shall, to the extent permitted by applicable law, and to the
extent necessary to preclude exceeding the limit of validity prescribed by law,
be amortized, prorated, allocated and spread from the date hereof until payment
in full of the Secured Obligations so that the actual rate of interest on
account of such principal amounts is uniform throughout the term hereof.
SECTION 13.12. Business Days. In the event any time period or
any date provided in this Deed of Trust ends or falls on a day other than a
Business Day, then such time period shall be deemed to end and such date shall
be deemed to fall on the next succeeding Business Day, and performance herein
may be made on such Business Day, with the same force and effect as if made on
such other day.
SECTION 13.13. Relationship. The relationship of the
Beneficiary to the Grantor hereunder is strictly and solely that of lender and
borrower and grantor and beneficiary and nothing contained in the Credit
Agreement, this Deed of Trust or any other document or instrument now existing
and delivered in connection therewith or otherwise in connection with the
Secured Obligations is intended to create, or shall in any event or under any
circumstance be construed as creating a partnership, joint venture,
tenancy-in-common, joint tenancy or other relationship of any nature whatsoever
between the Beneficiary and the Grantor other than as lender and borrower and
grantor and beneficiary.
SECTION 13.14. Waiver of Stay.
(i) The Grantor agrees that in the event that the Grantor
or any property or assets of the Grantor shall hereafter become the subject of a
voluntary or involuntary proceeding under the Bankruptcy Code or the Grantor
shall otherwise be a party to any Federal or state bankruptcy, insolvency,
moratorium or similar proceeding to which the provisions relating to the
automatic stay under Section 362 of the Bankruptcy Code or any similar provision
in any such law is applicable, then, in any such case, whether or not the
Beneficiary has commenced foreclosure proceedings under this Deed of Trust, the
Beneficiary shall be entitled to relief from any such automatic stay as it
relates to the exercise of any of the rights and remedies (including, without
limitation, any foreclosure proceedings) available to the Beneficiary as
provided in this Deed of Trust or in any other Security Document.
(ii) The Beneficiary shall have the right to petition or
move any court having jurisdiction over any proceeding described in Section
13.14 hereof for the purposes provided therein, and the Grantor agrees (i) not
to oppose any such petition or motion and (ii) at the Grantor's sole cost and
expense, to assist and cooperate with the Beneficiary, as may be requested by
the Beneficiary from time to time, in obtaining any relief requested by the
Beneficiary, including,
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without limitation, by filing any such petitions, supplemental petitions,
requests for relief, documents, instruments or other items from time to time
requested by the Beneficiary or any such court.
SECTION 13.15. No Credit for Payment of Taxes or Impositions.
The Grantor shall not be entitled to any credit against the principal, premium,
if any, or interest payable under the Credit Agreement, and the Grantor shall
not be entitled to any credit against any other sums which may become payable
under the terms thereof or hereof, by reason of the payment of any Charge on the
Trust Property or any part thereof.
SECTION 13.16. No Claims Against the Beneficiary. Nothing
contained in this Deed of Trust shall constitute any consent or request by the
Beneficiary, express or implied, for the performance of any labor or services or
the furnishing of any materials or other property in respect of the Premises or
any part thereof, nor as giving the Grantor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the Beneficiary in respect thereof or any claim
that any Lien based on the performance of such labor or services or the
furnishing of any such materials or other property is prior to the Lien hereof.
SECTION 13.17. Obligations Absolute. All obligations of the
Grantor hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the
Grantor or any other Obligor;
(ii) any lack of validity or enforceability of the Credit
Agreement, any Letter of Credit, any other Loan Document, or any other
agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
the Credit Agreement, any Letter of Credit, any other Loan Document, or
any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
Collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
(v) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect hereof or any
other Loan Document except as specifically set forth in a waiver
granted pursuant to the provisions of Section 13.17 hereof; or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, the Grantor.
SECTION 13.18. Beneficiary's Right To Sever Indebtedness.
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(i) The Grantor acknowledges that (A) the Trust Property
does not constitute the sole source of security for the payment and performance
of the Secured Obligations and that the Secured Obligations are also secured by
property of the Grantor and its Affiliates in other jurisdictions (all such
property, collectively, the "Collateral"), (B) the number of such jurisdictions
and the nature of the transaction of which this instrument is a part are such
that it would have been impracticable for the parties to allocate to each item
of Collateral a specific loan amount and to execute in respect of such item a
separate credit agreement and (C) the Grantor intends that the Beneficiary have
the same rights with respect to the Trust Property, in foreclosure or otherwise,
that the Beneficiary would have had if each item of Collateral had been secured,
mortgaged or pledged pursuant to a separate credit agreement, deed of trust or
security instrument. In furtherance of such intent, the Grantor agrees that the
Beneficiary may at any time by notice (an "Allocation Notice") to the Grantor
allocate a portion (the "Allocated Indebtedness") of the Secured Obligations to
the Trust Property and sever from the remaining Secured Obligations the
Allocated Indebtedness. From and after the giving of an Allocation Notice with
respect to the Trust Property, the Secured Obligations hereunder shall be
limited to the extent set forth in the Allocation Notice and (as so limited)
shall, for all purposes, be construed as a separate loan obligation of the
Grantor unrelated to the other transactions contemplated by the Credit
Agreement, any other Loan Document or any document related to any thereof. To
the extent that the proceeds on any foreclosure of the Trust Property shall
exceed the Allocated Indebtedness, such proceeds shall belong to the Grantor and
shall not be available hereunder to satisfy any Secured Obligations of the
Grantor other than the Allocated Indebtedness. In any action or proceeding to
foreclose the Lien hereof or in connection with any power of sale, foreclosure
or other remedy exercised under this Deed of Trust commenced after the giving by
the Beneficiary of an Allocation Notice, the Allocation Notice shall be
conclusive proof of the limits of the Secured Obligations hereby secured, and
the Grantor may introduce, by way of defense or counterclaim, evidence thereof
in any such action or proceeding. Notwithstanding any provision of this Section
13.18, the proceeds received by the Beneficiary pursuant to this Deed of Trust
shall be applied by the Beneficiary in accordance with the provisions of Section
10.3(iii) hereof.
(ii) The Grantor hereby waives to the greatest extent
permitted under law the right to a discharge of any of the Secured Obligations
under any statute or rule of law now or hereafter in effect which provides that
foreclosure of the Lien hereof or other remedy exercised under this Deed of
Trust constitutes the exclusive means for satisfaction of the Secured
Obligations or which makes unavailable a deficiency judgment or any subsequent
remedy because the Beneficiary elected to proceed with a power of sale
foreclosure or such other remedy or because of any failure by the Beneficiary to
comply with laws that prescribe conditions to the entitlement to a deficiency
judgment. In the event that, notwithstanding the foregoing waiver, any court
shall for any reason hold that the Beneficiary is not entitled to a deficiency
judgment, the Grantor shall not (A) introduce in any other jurisdiction such
judgment as a defense to enforcement against the Grantor of any remedy in the
Credit Agreement or any other Loan Document or (B) seek to have such judgment
recognized or entered in any other jurisdiction, and any such judgment shall in
all events be limited in application only to the state or jurisdiction where
rendered.
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(iii) In the event any instrument in addition to the
Allocation Notice is necessary to effectuate the provisions of this Section
13.18, including, without limitation, any amendment to this Deed of Trust, any
substitute promissory note or affidavit or certificate of any kind, the
Beneficiary may execute, deliver or record such instrument as the
attorney-in-fact of the Grantor. Such power of attorney is coupled with an
interest and is irrevocable.
(iv) Notwithstanding anything set forth herein to the
contrary, the provisions of this Section 14.20 shall be effective only to the
maximum extent permitted by law.
SECTION 13.19. Last Dollars Secured. This Deed of Trust
secures only a portion of the Indebtedness owing or which may become owing by
the Grantor. The parties agree that any payments or repayments of such
Indebtedness by the Grantor shall be deemed to be applied first to the portion
of the Indebtedness that is not secured hereby, it being the parties' intent
that the portion of the Indebtedness last remaining unpaid shall be secured
thereby.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Grantor has caused this Deed of Trust
to be duly executed and delivered under seal the day and year first above
written.
[ ]
By: _________________________
Name:
Title:
[local counsel to confirm signature requirements
S-1
ACKNOWLEDGMENT
State of _________________ )
) ss.:
County of ________________ )
[Local counsel to provide appropriate acknowledgment]
Schedule A - Legal Description
[to come from title policy]
Schedule B
Each of the liens and other encumbrances excepted as being prior to the Lien
hereof as set forth in Schedule B to the marked [Pro Forma Policy] issued by
[Title Insurance Company], dated as of the date hereof and delivered to
Collateral Agent on the date hereof, bearing [Title Insurance Company] reference
number [Title Number] relating to the real property described in Schedule A
attached hereto.
EXHIBIT J-2
[The aggregate maximum principal amount of indebtedness that may be secured
hereby is $[ ].](1)
================================================================================
LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND
RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BY
[ ],
as Mortgagor,
TO
UBS AG, STAMFORD BRANCH,
as Collateral Agent,
Mortgagee
------------------------
Dated as of [ ], 2004
Relating to Premises in:
[ ]
================================================================================
This instrument prepared by and, after recording,
please return to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-------------------
------------------------
(1) TO BE INCLUDED ONLY IN MORTGAGE RECORDING TAX STATES.
TABLE OF CONTENTS
Page
----
PREAMBLE............................................................................................. 1
RECITALS............................................................................................. 1
AGREEMENT............................................................................................ 2
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions.................................................................... 2
SECTION 1.2. Interpretation................................................................. 7
SECTION 1.3. Resolution of Drafting Ambiguities............................................. 7
ARTICLE II.
GRANTS AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Mortgaged Property.................................................... 8
SECTION 2.2. Assignment of Leases and Rents................................................. 9
SECTION 2.3. Secured Obligations............................................................ 9
SECTION 2.4. Future Advances................................................................ 9
SECTION 2.5. No Release..................................................................... 9
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF MORTGAGOR
SECTION 3.1. Authority and Validity......................................................... 10
SECTION 3.2. Warranty of Title.............................................................. 10
SECTION 3.3. Condition of Mortgaged Property................................................ 10
SECTION 3.4. Leases......................................................................... 12
SECTION 3.5. Charges........................................................................ 12
SECTION 3.6. Benefit to the Mortgagor....................................................... 12
SECTION 3.7. Mortgaged Lease................................................................ 12
SECTION 3.8. Treatment of Mortgaged Lease in Bankruptcy..................................... 14
SECTION 3.9. Rejection of Mortgaged Lease by Landlord....................................... 15
SECTION 3.10. Assignment of Claims to Mortgagee.............................................. 15
SECTION 3.11. New Lease Issued to Mortgagee.................................................. 16
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ARTICLE IV.
CERTAIN COVENANTS OF MORTGAGOR
SECTION 4.1. Payment........................................................................ 16
SECTION 4.2. Preservation of Existence...................................................... 16
SECTION 4.3. Title.......................................................................... 16
SECTION 4.4. Maintenance and Use of Mortgaged Property; Alterations......................... 17
SECTION 4.5. Notices Regarding Certain Defaults............................................. 17
SECTION 4.6. Access to Mortgaged Property, Books and Records; Other Information............. 17
SECTION 4.7. Limitation on Liens; Transfer Restrictions..................................... 18
SECTION 4.8. Estoppel Certificates.......................................................... 18
SECTION 4.9. Insurance...................................................................... 18
ARTICLE V.
OCCUPANCY LEASES
SECTION 5.1. Mortgagor's Affirmative Covenants with Respect to Leases....................... 18
SECTION 5.2. Mortgagor's Negative Covenants with Respect to Leases.......................... 18
ARTICLE VI.
CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1. Present Assignment; License to the Mortgagor................................... 19
SECTION 6.2. Collection of Rents by the Mortgagee........................................... 20
SECTION 6.3. No Release..................................................................... 20
SECTION 6.4. Irrevocable Interest........................................................... 20
SECTION 6.5. Amendment to Leases............................................................ 20
ARTICLE VII.
TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1. Payment of Charges............................................................. 21
SECTION 7.2. Escrow of Taxes................................................................ 21
SECTION 7.3. Certain Statutory Liens........................................................ 21
SECTION 7.4. Stamp and Other Taxes.......................................................... 21
SECTION 7.5. Certain Tax Law Changes........................................................ 22
SECTION 7.6. Proceeds of Tax Claim.......................................................... 22
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ARTICLE VIII.
CONTESTING OF PAYMENTS
SECTION 8.1. Contesting of Taxes and Certain Statutory Liens................................ 22
ARTICLE IX.
DESTRUCTION, CONDEMNATION AND RESTORATION
SECTION 9.1. Destruction, Condemnation and Restoration...................................... 22
SECTION 9.2. Condemnation................................................................... 22
SECTION 9.3. Restoration.................................................................... 23
ARTICLE X.
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default.............................................................. 23
SECTION 10.2. Remedies in Case of an Event of Default........................................ 23
SECTION 10.3. Sale of Mortgaged Property if Event of Default Occurs; Proceeds of Sale........ 24
SECTION 10.4. Additional Remedies in Case of an Event of Default............................. 25
SECTION 10.5. Legal Proceedings After an Event of Default.................................... 26
SECTION 10.6. Remedies Not Exclusive......................................................... 27
ARTICLE XI.
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 11.1. Security Agreement............................................................. 27
SECTION 11.2. Fixture Filing................................................................. 28
ARTICLE XII.
FURTHER ASSURANCES
SECTION 12.1. Recording Documentation To Assure Security..................................... 28
SECTION 12.2. Further Acts................................................................... 29
SECTION 12.3. Additional Security............................................................ 29
ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Covenants To Run with the Land................................................. 30
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SECTION 13.2. No Merger...................................................................... 30
SECTION 13.3. Concerning Mortgagee........................................................... 30
SECTION 13.4. Mortgagee May Perform; Mortgagee Appointed Attorney-in-Fact.................... 31
SECTION 13.5. Continuing Security Interest; Assignment....................................... 31
SECTION 13.6. Termination; Release........................................................... 32
SECTION 13.7. Modification in Writing........................................................ 32
SECTION 13.8. Notices........................................................................ 32
SECTION 13.9. GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF JURY TRIAL........................ 32
SECTION 13.10. Severability of Provisions..................................................... 33
SECTION 13.11. Limitation on Interest Payable................................................. 33
SECTION 13.12. Business Days.................................................................. 33
SECTION 13.13. Relationship................................................................... 34
SECTION 13.14. Waiver of Stay................................................................. 34
SECTION 13.15. No Credit for Payment of Taxes or Impositions.................................. 34
SECTION 13.16. No Claims Against the Mortgagee................................................ 34
SECTION 13.17. Obligations Absolute........................................................... 35
SECTION 13.18. Mortgagee's Right To Sever Indebtedness........................................ 35
SECTION 13.19. Last Dollars Secured........................................................... 36
SIGNATURE
ACKNOWLEDGMENTS
SCHEDULE A Legal Description
SCHEDULE B Prior Liens
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LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING
LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (the "Mortgage"), dated as of [ ], 2004, made
by [ ], a [state type and jurisdiction of entity] having an office at [ ],
as mortgagor, assignor and debtor (in such capacities and together with any
successors in such capacities, the "Mortgagor"), in favor of UBS AG, STAMFORD
BRANCH, a Swiss banking corporation having an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, in its capacity as collateral agent for
Secured Parties (as hereinafter defined), as mortgagee, assignee and secured
party (in such capacities and together with any successors in such capacities,
the "Mortgagee").
R E C I T A L S :
A. Pursuant to that certain credit agreement, dated as
of February 13, 2004 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Ionics,
Incorporated, as borrower (the "Borrower"), [the Mortgagor and] the [other]
Subsidiary Guarantors (such term and each other capitalized term used and not
defined herein having the meaning given to it in Article I), the Lenders, UBS
Securities LLC, as Lead Arranger, Sole Bookmanager and Documentation Agent, UBS
AG, Stamford Branch, as Administrative Agent and Collateral Agent, UBS Loan
Finance LLC, as Swingline Lender, Fleet Securities, Inc. and Banc of America,
N.A., as Syndication Agents, Wachovia Bank, N.A. and General Electric Capital
Corporation, as Co-Documentation Agents, and HSBC Bank USA, as Issuing Bank, the
Lenders have agreed to make to or for the account of the Borrower certain Loans
and issue certain Letters of Credit.
B. It is contemplated that the Borrower or one or more
of the Subsidiary Guarantors may pursuant to the provisions of the Credit
Agreement enter into one or more agreements with one or more of the Lenders or
their respective Affiliates with respect to the Loans ("Hedging Agreements")
designed to alter the risks arising from the fluctuations in interest rates,
currency values or commodity prices with respect to the Loans under the Credit
Agreement (all obligations of the Borrower or the Subsidiary Guarantors now
existing or hereafter arising under such Hedging Agreements, collectively, the
"Hedging Obligations").
[C. The Borrower owns, directly or through its
Subsidiaries, all of the issued and outstanding shares of the Mortgagor.]
[D. The Mortgagor has, pursuant to Article VII of the
Credit Agreement, among other things, guaranteed (the "Guarantee") the
obligations of the Borrower under the Credit Agreement and the other Loan
Documents.]
[E. The Mortgagor will receive substantial benefits from
the execution, delivery and performance of the Loan Documents and is, therefore,
willing to enter into this Mortgage.]
F. Mortgagor is the owner and holder of the tenant's
interest under that certain [Lease dated as of ____________] (as amended,
restated, renewed or extended from time to time in accordance with the
provisions of this Leasehold Mortgage, the "Mortgaged Lease"), between [ ], as
landlord, and Mortgagor, as tenant, which affects the Premises (hereinafter
defined). A memorandum of lease relating to the Mortgaged Lease was recorded on
________ at Book ____, Page ____, in the real property records of [______
County, ______].
G. It is a condition to the obligations of the Lenders
to make the Loans under the Credit Agreement and issue the Letters of Credit
that the Mortgagor execute and deliver the applicable Loan Documents, including
this Mortgage.
H. This Mortgage is given by the Mortgagor in favor of
the Mortgagee for its benefit and the benefit of the other Secured Parties to
secure the payment and performance of all of the Secured Obligations.
A G R E E M E N T :
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Mortgagor hereby covenants and agrees with the
Mortgagee as follows:
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions. (a) Capitalized terms used but not
otherwise defined herein that are defined in the Credit Agreement shall have the
meanings given to them in the Credit Agreement, including the following:
"Administrative Agent"; "Affiliate"; "Agent"; "Business Day";
"Commitment"; "Environmental Law"; "Event of Default"; "GAAP";
"Hazardous Materials"; "Letter of Credit"; "Lenders"; "Lien"; "Loan
Documents"; "Loan Parties"; "Loans"; "Net Cash Proceeds"; "Notes";
"Officers' Certificate"; "person"; "Secured Parties"; "Security
Agreement"; "Security Documents"; "Subsidiary" and "Subsidiary
Guarantors".
(b) The following terms in this Mortgage shall have the
following meanings:
"Allocated Indebtedness" shall have the meaning assigned to
such term in Section 13.18(i) hereof.
"Allocation Notice" shall have the meaning assigned to such
term in Section 13.18(i) hereof.
"Alterations" shall mean any and all alterations,
installations, improvements, additions, modifications or changes of a structural
nature.
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"Charges" shall mean any and all real estate, property and
other taxes, assessments and special assessments, levies, fees, all water and
sewer rents and charges and all other governmental charges imposed upon or
assessed against, and all claims (including, without limitation, claims for
landlords', carriers', mechanics', workmens', repairmens', laborers',
materialmens', suppliers' and warehousemens' Liens and other claims arising by
operation of law) against, all or any portion of the Mortgaged Property.
"Collateral" shall have the meaning assigned to such term in
Section 13.18(i) hereof.
"Contested Liens" shall mean, collectively, any Liens incurred
in respect of any Charges to the extent that the amounts owing in respect
thereof are not yet delinquent or are being contested and otherwise comply with
the provisions of Section 8.1 hereof; provided, however, that such Liens shall
in all respects be subject and subordinate in priority to the Liens and security
interests created and evidenced by this Mortgage, except if and to the extent
that the law or regulation creating, permitting or authorizing such Lien
provides that such Lien(s) must be superior to the Liens and security interests
created and evidenced hereby..
"Contracts" shall mean, collectively, any and all right, title
and interest of the Mortgagor in and to any and all contracts and other general
intangibles relating to the Mortgaged Property and all reserves, deferred
payments, deposits, refunds and claims of every kind, nature or character
relating thereto.
"Credit Agreement" shall have the meaning assigned to such
term in Recital A hereof.
"Default Rate" shall mean the rate of interest payable during
a default pursuant to the provisions of Section 2.06 of the Credit Agreement.
"Destruction" shall mean any and all damage to, or loss or
destruction of, the Premises or any part thereof.
"Fixtures" shall mean all machinery, apparatus, equipment,
fittings, fixtures, improvements and articles of personal property of every
kind, description and nature whatsoever now or hereafter attached or affixed to
the Land or any other Improvement used in connection with the use and enjoyment
of the Land or any other Improvement or the maintenance or preservation thereof,
which by the nature of their location thereon or attachment thereto are fixtures
under the UCC or any other applicable law including, without limitation, all
utility systems, fire sprinkler and security systems, drainage facilities,
lighting facilities, all water, sanitary and storm sewer, drainage, electricity,
steam, gas, telephone and other utility equipment and facilities, pipes,
fittings and other items of every kind and description now or hereafter attached
to or located on the Land which by the nature of their location thereon or
attachment thereto are real property under applicable law, HVAC equipment,
boilers, electronic data processing, telecommunications or computer equipment,
refrigeration, electronic monitoring, water or lighting systems, power,
sanitation, waste removal, elevators, maintenance or other systems or equipment.
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"Governmental Authority" shall mean any Federal, state, local,
foreign or other governmental, quasi-governmental or administrative (including
self-regulatory) body, instrumentality, department, agency, authority, board,
bureau, commission, office of any nature whatsoever or other subdivision
thereof, or any court, tribunal, administrative hearing body, arbitration panel
or other similar dispute-resolving body, whether now or hereafter in existence,
or any officer or official thereof, having jurisdiction over the Mortgagor or
the Mortgaged Property or any portion thereof.
"Improvements" shall mean all buildings, structures and other
improvements of every kind or description and any and all Alterations now or
hereafter located, attached or erected on the Land, including, without
limitation, (i) all Fixtures, (ii) all attachments, railroad tracks,
foundations, sidewalks, drives, roads, curbs, streets, ways, alleys, passages,
passageways, sewer rights, parking areas, driveways, fences and walls and (iii)
all materials now or hereafter located on the Land intended for the
construction, reconstruction, repair, replacement, alteration, addition or
improvement of or to such buildings, Fixtures, structures and improvements, all
of which materials shall be deemed to be part of the Improvements immediately
upon delivery thereof on the Land and to be part of the Improvements immediately
upon their incorporation therein.
"Insurance Policies" means the insurance policies and
coverages required to be maintained by the Mortgagor with respect to the
Mortgaged Property pursuant to the Credit Agreement.
"Land" shall mean the land described in Schedule A annexed to
this Mortgage.
"Landlord" shall mean any landlord, lessor, sublessor,
franchisor, licensor or grantor, as applicable, together with their successors
and assigns.
"Leases" shall mean, collectively, any and all interests of
the Mortgagor, as Landlord, in all subleases of space, tenancies, franchise
agreements, licenses, occupancy or concession agreements now existing or
hereafter entered into, whether or not of record, relating in any manner to the
Premises and any and all amendments, modifications, supplements, replacements,
extensions and renewals of any thereof, whether now in effect or hereafter
coming into effect.
"Mortgage" shall have the meaning assigned to such term in the
Preamble hereof.
"Mortgaged Lease" shall have the meaning assigned to such term
in Recital F hereof.
"Mortgaged Property" shall have the meaning assigned to such
term in Section 2.1 hereof.
"Mortgaged Property" shall have the meaning assigned to such
term in Section 2.1 hereof.
"Mortgagee" shall have the meaning assigned to such term in
the Preamble hereof.
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"Mortgagor" shall have the meaning assigned to such term in
the Preamble hereof.
"Mortgagor's Interest" shall have the meaning assigned to such
term in Section 2.2 hereof.
"Permit" shall mean any and all permits, certificates,
approvals, authorizations, consents, licenses, variances, franchises or other
instruments, however characterized, of any Governmental Authority (or any person
acting on behalf of a Governmental Authority) now or hereafter acquired or held,
together with all amendments, modifications, extensions, renewals and
replacements of any thereof issued or in any way furnished in connection with
the Mortgaged Property including, without limitation, building permits,
certificates of occupancy, environmental certificates, industrial permits or
licenses and certificates of operation.
"Permitted Collateral Liens" shall mean the Liens described in
clause (iii) of the definition of "Permitted Collateral Liens" contained in the
Credit Agreement.
"Premises" shall mean, collectively, the Mortgagor's leasehold
interest in the Land and the Improvements, together with all of the Mortgagor's
reversionary rights in and to any and all easements, rights-of-way, strips and
gores of land, waters, water courses, water rights, mineral, gas and oil rights
and all power, air, light and other rights, estates, titles, interests,
privileges, liberties, servitudes, licenses, tenements, hereditaments and
appurtenances whatsoever, in any way belonging, relating or appertaining
thereto, or any part thereof, or which hereafter shall in any way belong, relate
or be appurtenant thereto.
"Prior Liens" shall mean, collectively, the Liens identified
in Schedule B annexed to this Mortgage.
"Proceeds" shall mean, collectively, any and all cash proceeds
and noncash proceeds and shall include all (i) proceeds of the conversion,
voluntary or involuntary, of any of the Mortgaged Property or any portion
thereof into cash or liquidated claims, (ii) proceeds of any insurance,
indemnity, warranty, guaranty or claim payable to the Mortgagee or to the
Mortgagor from time to time with respect to any of the Mortgaged Property, (iii)
payments (in any form whatsoever) made or due and payable to the Mortgagor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any portion of the Mortgaged Property by any
Governmental Authority (or any person acting on behalf of a Governmental
Authority), (iv) products of the Mortgaged Property and (v) other amounts from
time to time paid or payable under or in connection with any of the Mortgaged
Property including, without limitation, refunds of real estate taxes and
assessments, including interest thereon.
"Property Material Adverse Effect" shall mean, as of any date
of determination and whether individually or in the aggregate, (a) any event,
circumstance, occurrence or condition which has caused or resulted in (or would
reasonably be expected to cause or result in) a material adverse effect on the
business or operations of the Mortgagor as presently conducted at the Mortgaged
Property; (b) any event, circumstance, occurrence or condition which has caused
or resulted in (or would reasonably be expected to cause or result in) a
material adverse effect on
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the value or utility of the Mortgaged Property; or (c) any event, circumstance,
occurrence or condition which has caused or resulted in (or would reasonably be
expected to cause or result in) a material adverse effect on the legality,
priority or enforceability of the Lien created by this Mortgage or the rights
and remedies of the Mortgagee hereunder.
"Prudent Operator" shall mean a prudent operator of property
similar in use and configuration to the Premises and located in the locality
where the Premises are located.
"Records" shall mean, collectively, any and all right, title
and interest of the Mortgagor in and to any and all drawings, plans,
specifications, file materials, operating and maintenance records, catalogues,
tenant lists, correspondence, advertising materials, operating manuals,
warranties, guarantees, appraisals, studies and data relating to the Mortgaged
Property or the construction of any Alteration or the maintenance of any Permit.
"Rents" shall mean, collectively, any and all rents,
additional rents, royalties, cash, guaranties, letters of credit, bonds,
sureties or securities deposited under any Lease to secure performance of the
Tenant's obligations thereunder, revenues, earnings, profits and income, advance
rental payments, payments incident to assignment, sublease or surrender of a
Lease, claims for forfeited deposits and claims for damages, now due or
hereafter to become due, with respect to any Lease, any indemnification against,
or reimbursement for, sums paid and costs and expenses incurred by the Mortgagor
under any Lease or otherwise, and any award in the event of the bankruptcy of
any Tenant under or guarantor of a Lease.
"Requirements of Law" shall mean, collectively, any and all
requirements of any Governmental Authority including, without limitation, any
and all orders, decrees, determinations, laws, treaties, ordinances, rules,
regulations or similar statutes or case law.
"Restoration" shall mean the repair, replacement or
restoration of all or any portion of the Premises after a Destruction or Taking.
"Secured Obligations" shall mean all obligations (whether or
not constituting future advances, obligatory or otherwise) of the Mortgagor and
any and all of the other Loan Parties from time to time arising under or in
respect hereof or of the Credit Agreement, the Notes, the Letters of Credit, the
other Loan Documents (including, without limitation, the obligations to pay
principal, interest and all other charges, fees, expenses, commissions,
reimbursements, premiums, indemnities and other payments related to or in
respect of the obligations contained in this Mortgage, the Credit Agreement, the
Notes, the Letters of Credit, the other Loan Documents, in each case whether (i)
such obligations are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, reduced to judgment or not, liquidated or unliquidated,
disputed or undisputed, legal or equitable, due or to become due whether at
stated maturity, by acceleration or otherwise, (ii) arising in the regular
course of business or otherwise, (iii) for payment or performance, (iv)
discharged, stayed or otherwise affected by any bankruptcy, insolvency,
reorganization or similar proceeding with respect to any Loan Party or any other
person and/or (v) now existing or hereafter arising (including, without
limitation, interest and other obligations arising or accruing after the
commencement of any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Loan Party or any other person, or which would
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have arisen or accrued but for the commencement of such proceeding, even if such
obligation or the claim therefor is not enforceable or allowable in such
proceeding).
"Taking" shall mean any taking of the Mortgaged Property or
any part thereof, in or by condemnation or other eminent domain proceedings
pursuant to any law, general or special, or by reason of the temporary
requisition of the use or occupancy of the Mortgaged Property or any part
thereof, by any Governmental Authority, civil or military.
"Tax Escrow Fund" shall have the meaning assigned to such term
in Section 7.2 hereof.
"Tenant" shall mean any tenant, lessee, sublessee, franchisee,
licensee, grantee or obligee, as applicable.
"UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the jurisdiction in which the Premises are located; provided,
however, that if by reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the security interest in any item or
portion of the Mortgaged Property is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the jurisdiction in which the Premises
are located, "UCC" shall mean the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.
SECTION 1.2. Interpretation. In this Mortgage, unless
otherwise specified, (i) singular words include the plural and plural words
include the singular, (ii) words importing any gender include the other gender,
(iii) references to any person include such person's successors and assigns and
in the case of an individual, the word "successors" includes such person's
heirs, devisees, legatees, executors, administrators and personal
representatives, (iv) references to any statute or other law include all
applicable rules, regulations and orders adopted or made thereunder and all
statutes or other laws amending, consolidating or replacing the statute or law
referred to, (v) the words "consent," "approve" and "agree," and derivations
thereof or words of similar import, mean the prior written consent, approval or
agreement of the Person in question, (vi) the words "include" and "including,"
and words of similar import, shall be deemed to be followed by the words
"without limitation," (vii) the words "hereto," "herein," "hereof" and
"hereunder," and words of similar import, refer to this Mortgage in its
entirety, (viii) references to Articles, Sections, Schedules, Exhibits,
subsections, paragraphs and clauses are to the Articles, Sections, Schedules,
Exhibits, subsections, paragraphs and clauses hereof, (ix) the Schedules and
Exhibits to this Mortgage, in each case as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the
provisions hereof, are incorporated herein by reference, (x) the titles and
headings of Articles, Sections, Schedules, Exhibits, subsections, paragraphs and
clauses are inserted as a matter of convenience only and shall not affect the
constructions of any provision hereof and (xi) all obligations of the Mortgagor
hereunder shall be satisfied by the Mortgagor at the Mortgagor's sole cost and
expense.
SECTION 1.3. Resolution of Drafting Ambiguities. The Mortgagor
acknowledges and agrees that it was represented by counsel in connection with
the execution and deliv-
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ery hereof, that it and its counsel reviewed and participated in the preparation
and negotiation hereof and that any rule of construction to the effect that
ambiguities are to be resolved against the drafting party (i.e., Mortgagee)
shall not be employed in the interpretation hereof.
ARTICLE II.
GRANTS AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Mortgaged Property. The Mortgagor hereby
grants, mortgages, bargains, sells, assigns, transfers and conveys to the
Mortgagee, and hereby grants to the Mortgagee, a security interest in and upon
all of the Mortgagor's estate, right, title and interest in, to and under the
following property, whether now owned or held or hereafter acquired from time to
time (collectively, the "Mortgaged Property"):
(i) Mortgaged Lease;
(ii) Premises;
(iii) Leases;
(iv) Rents;
(v) Permits;
(vi) Contracts;
(vii) Records; and
(viii) Proceeds;
Notwithstanding the foregoing provisions of this Section 2.1,
Mortgaged Property shall not include a grant of any of the Mortgagor's right,
title or interest in (i) any Contract to which the Mortgagor is a party or any
of its rights or interests thereunder to the extent, but only to the extent,
that such a grant would, under the terms of such Contract, result in a breach or
termination of the terms of, or constitute a default under or termination of
such Contract and (ii) any Permit to the extent, but only to the extent that,
such grant shall constitute or result in abandonment, invalidation or rendering
unenforceable any right, title or interest of the Mortgagor therein; provided,
however, that at such time as any Contract or Permit described in clauses (i)
and (ii) of this sentence is no longer subject to such restriction, such
applicable Contract or Permit shall (without any act or delivery by any person)
constitute Mortgaged Property hereunder.
TO HAVE AND TO HOLD the Mortgaged Property, together with all estate, right,
title and interest of the Mortgagor and anyone claiming by, through or under the
Mortgagor in and to the Mortgaged Property and all rights and appurtenances
relating thereto, unto the Mortgagee, its
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successors and assigns, for the purpose of securing the payment and performance
in full of all the Secured Obligations.
SECTION 2.2. Assignment of Leases and Rents. As additional
security for the payment and performance in full of all the Secured Obligations
and subject to the provisions of Article VI hereof, the Mortgagor absolutely,
presently, unconditionally and irrevocably assigns, transfers and sets over to
the Mortgagee, and grants to the Mortgagee, all of the Mortgagor's estate,
right, title, interest, claim and demand, as Landlord, under any and all of the
Leases including, without limitation, the following (such assigned rights, the
"Mortgagor's Interest"):
(i) the immediate and continuing right to receive and
collect Rents payable by the Tenants pursuant to the Leases;
(ii) all claims, rights, powers, privileges and remedies
of the Mortgagor, whether provided for in the Leases or arising by
statute or at law or in equity or otherwise, consequent on any failure
on the part of the Tenants to perform or comply with any term of the
Leases;
(iii) all rights to take all actions upon the happening of
a default under the Leases as shall be permitted by the Leases or by
law including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(iv) the full power and authority, in the name of the
Mortgagor or otherwise, to enforce, collect, receive and receipt for
any and all of the foregoing and to take all other actions whatsoever
which the Mortgagor, as Landlord, is or may be entitled to take under
the Leases.
SECTION 2.3. Secured Obligations. This Mortgage secures, and
the Mortgaged Property is collateral security for, the payment and performance
in full when due of the Secured Obligations.
SECTION 2.4. Future Advances. This Mortgage shall secure
future advances whenever hereafter made. The maximum aggregate amount of all
advances of principal under the Credit Agreement (which advances are obligatory
to the extent the conditions set forth in the Credit Agreement relating thereto
are satisfied) that may be outstanding hereunder at any time is $[ ], plus
interest thereon, collection costs, sums advanced for the payment of taxes,
assessments, maintenance and repair charges, insurance premiums and any other
costs incurred to protect the security encumbered hereby or the lien hereof,
expenses incurred by the Mortgagee by reason of any default by the Mortgagor
under the terms hereof, together with all other sums secured hereby.
SECTION 2.5. No Release. Nothing set forth in this Mortgage
shall relieve the Mortgagor from the performance of any term, covenant,
condition or agreement on the Mortgagor's part to be performed or observed under
or in respect of any of the Mortgaged Property or from any liability to any
Person under or in respect of any of the Mortgaged Property or shall impose any
obligation on the Mortgagee or any other Secured Party to perform or observe any
-9-
such term, covenant, condition or agreement on the Mortgagor's part to be so
performed or observed or shall impose any liability on the Mortgagee or any
other Secured Party for any act or omission on the part of the Mortgagor
relating thereto or for any breach of any representation or warranty on the part
of the Mortgagor contained in this Mortgage or any other Loan Document, or under
or in respect of the Mortgaged Property or made in connection herewith or
therewith. The obligations of the Mortgagor contained in this Section 2.5 shall
survive the termination hereof and the discharge of the Mortgagor's other
obligations under this Mortgage and the other Loan Documents.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF MORTGAGOR
SECTION 3.1. Authority and Validity. The Mortgagor represents
and warrants that each of the representations, warranties, covenants, negative
covenants and other agreements of the Mortgager (as a Loan Party) under and as
contained in the Credit Agreement are hereby incorporated herein in their
entirety by this reference.
SECTION 3.2. Warranty of Title. The Mortgagor represents and
warrants that:
(i) it has a good and marketable title to the leasehold
estate created by the Mortgaged Lease and the Landlord's interest and
estate under or in respect of the Leases and good title to the interest
it purports to own or hold in and to each of the Permits, the Contracts
and the Records, in each case subject to no Liens, except for Prior
Liens and Liens in favor of the Mortgagee pursuant to the Security
Documents;
(ii) it has good title to the interest it purports to own
or hold in and to all rights and appurtenances to or that constitute a
portion of the Mortgaged Property;
(iii) it is in compliance in all material respects with
each term, condition and provision of any obligation of the Mortgagor
which is secured by the Mortgaged Property or the noncompliance with
which may result in the imposition of a Lien on the Mortgaged Property;
and
(iv) upon recordation in the official records in the
county (or other applicable jurisdiction) in which the Premises are
located this Mortgage will create and constitute a valid and
enforceable first priority Lien on the Mortgaged Property in favor of
the Collateral Agent for the benefit of the Secured Parties, and, to
the extent any of the Mortgaged Property shall consist of Fixtures, a
first priority security interest in the Fixtures, which first priority
Lien and first priority security interest are subject only to Prior
Liens.
SECTION 3.3. Condition of Mortgaged Property. The Mortgagor
represents and warrants that:
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(i) there has been issued and there remains in full force
and effect subject to no revocation, suspension, forfeiture or
modification, each and every material Permit necessary for the present
use, operation and occupancy of the Premises by the Mortgagor and the
conduct of its business and all required zoning, building code, land
use, environmental and other similar Permits;
(ii) the Premises and the present use and occupancy
thereof comply with all applicable zoning ordinances, building codes,
land use laws, setback or other development and use requirements of
Governmental Authorities and with all private restrictions and
agreements affecting the Mortgaged Property whether or not recorded;
(iii) the Premises are served by all utilities (including,
without limitation, public water and sewer systems) reasonably
necessary for the present and contemplated use thereof, and all utility
services are provided by public utilities and the Premises have
accepted or are equipped to accept such utility services and the
Mortgagor has not received notice of termination of such utility
service;
(iv) the Mortgagor has access to the Premises from one or
more fully dedicated public roads and, to the extent applicable, public
or private rail or waterway, sufficient to allow the Mortgagor to
conduct its business at the Premises in accordance with sound
commercial practices and the Mortgagor has not received notice of
termination of such access;
(v) the Mortgagor has not received notice of any Taking
or the commencement or pendency of any action or proceeding therefor;
(vi) there has not occurred any Destruction of the
Premises or any portion thereof as a result of any fire or other
casualty which has not previously been repaired or replaced;
(vii) there are no disputes regarding boundary lines,
location, encroachments or possession of any portions of the Mortgaged
Property and no state of facts exists which could give rise to any such
claim;
(viii) all liquid and solid waste disposal, septic and sewer
systems located on the Premises are in a good and safe condition and
repair and in compliance with all Requirements of Law;
(ix) no portion of the buildings or structures
constituting the Improvements is located in an area identified by the
Federal Emergency Management Agency or any successor thereto as an area
having special flood hazards pursuant to the Flood Insurance Acts or,
if any portion of the buildings or structures constituting the
Improvements is located within such area, the Mortgagor has obtained
the flood insurance prescribed in Section 5.04 of the Credit Agreement
hereof;
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(x) the Premises are assessed for real estate tax
purposes as one or more wholly independent tax lot or lots, separate
from any adjoining land or improvements not constituting a portion of
such lot or lots, and no other land or improvement is assessed and
taxed together with the Premises or any portion thereof; and
(xi) there are no options or rights of first refusal to
purchase or acquire all or any portion of the Mortgaged Property.
SECTION 3.4. Leases. The Mortgagor represents and warrants
that there are no Leases affecting the Premises as of the date hereof.
SECTION 3.5. Charges. The Mortgagor represents and warrants
that all Charges imposed upon or assessed against the Mortgaged Property have
been paid and discharged except to the extent such Charges constitute a Prior
Lien.
SECTION 3.6. Benefit to the Mortgagor. The Mortgagor
represents and warrants that it will receive substantial benefit as a result of
the execution, delivery, and performance of the Loan Documents.](2)
SECTION 3.7. Mortgaged Lease. Mortgagor represents, warrants
and covenants the following with respect to the Mortgaged Lease:
(a) (i) The Mortgaged Lease creates a valid and
subsisting leasehold interest in Mortgagor, superior and paramount to
all other Leases respecting the property which is demised to Mortgagor
under the Mortgaged Lease except for the Leases (if any) identified as
Prior Liens, (ii) the Mortgaged Lease is in full force and effect, and
except for any cure obligations necessary for the assumption of the
Mortgaged Lease pursuant to the United States Bankruptcy Code, to
Mortgagor's best knowledge no event has occurred that, with the giving
of notice or the passage of time or both, would constitute such a
default or would entitle Mortgagor or any party under the Mortgaged
Lease to cancel the same or otherwise avoid its obligations, (iii) the
Mortgaged Lease is not subject to any defenses, offsets or
counterclaims to the Mortgagor's best knowledge and there have been no
renewals or extensions of or supplements, modifications or amendments
to the Mortgaged Lease not previously disclosed to Mortgagee and (iv)
all rent, additional rent and other sums owed by Mortgagor under the
Mortgaged Lease through the date hereof have been paid.
(b) Except for this Mortgage or other assignments in
favor of Mortgagee and that certain mortgage issued by Mortgagor on the
date hereof in favor of Mortgagee, for the benefit of UBS AG, STAMFORD
BRANCH, as mortgagee, in connection with the execution and delivery of
the Credit Agreement, Mortgagor has not executed any as
------------------
(2) Delete Section 3.6 if the Mortgagor is the Borrower
-12-
signment or pledge of the Mortgaged Lease or of Mortgagor's right,
title and interest in the same, which now is in effect.
(c) This Mortgage conforms and complies with the terms of
the Mortgaged Lease, does not constitute a violation under the
Mortgaged Lease and is and at all times shall constitute a valid lien
(subject only to those matters permitted by this Mortgage) on
Mortgagor's interests in the Mortgaged Lease.
(d) Promptly after the date hereof, and again promptly
after execution of any amendment to this Mortgage, Mortgagor shall
notify Landlord of the execution and delivery of this Mortgage or
amendment, as the case may be.
(e) Mortgagor hereby irrevocably delegates to Mortgagee
the nonexclusive authority to exercise any or all of Mortgagor's
rights, including the right to give any and all notices to Landlord
under the Mortgaged Lease, whether or not Mortgagor has failed to
exercise such right. Nothing in the foregoing delegation of authority
shall be deemed to impose any obligation or duty upon Mortgagee.
Notwithstanding such delegation of authority, Mortgagee grants
Mortgagor a revocable exclusive license to exercise such authority
which license may only be revoked by Mortgagee upon the occurrence and
during the continuance of any Event of Default in accordance with the
Credit Agreement.
(f) Mortgagor shall promptly notify Mortgagee in writing
of any notice of default received by Mortgagor under the Mortgaged
Lease or sent by Mortgagor thereunder. If for any reason Mortgagor
cannot timely make any payment under the Mortgaged Lease or perform or
comply with any of its obligations under the Mortgaged Lease, Mortgagor
shall notify Mortgagee in sufficient time to enable Mortgagee (but
Mortgagee shall not be obligated) to timely make such payments and/or
to perform or comply with such other obligations. On receipt by
Mortgagee from Mortgagor pursuant to this subsection 3.7(f), or from
lessor under the Mortgaged Lease, of any such notice of default by, or
inability to make any payment by, Mortgagor thereunder, Mortgagee may
rely thereon and, after notice to Mortgagor, take such action as
Mortgagee deems necessary or desirable to cure such default.
(g) Mortgagor shall not surrender the leasehold estate
created by the Mortgaged Lease, or terminate or cancel the Mortgaged
Lease prior to its current expiration date, without the prior consent
of Mortgagee. Mortgagor shall not, without the prior written consent of
Mortgagee, amend, modify, surrender, impair, forfeit, cancel or
terminate, or permit the amendment, modification, surrender,
impairment, forfeiture, cancellation or termination of, the Mortgaged
Lease in whole or in part, whether or not a default shall have occurred
and shall be continuing under either thereof. Any such termination,
cancellation, modification, change, supplement, alteration, amendment
or extension without the prior written consent contemplated by this
subsection 3.7(g) shall be void and of no force or effect; provided,
however, that Mortgagor shall not have any obligation to renew the
Mortgaged Lease, exercise any right, if any, to renew the Mortgaged
Lease or exercise any purchase option, if any, under the Mortgaged
Lease.
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(h) No release or forbearance of any of Mortgagor's
obligations under the Mortgaged Lease, pursuant to the terms thereof,
by agreement, operation of law or otherwise, shall release Mortgagor
from any of Mortgagor's obligations under this Mortgage, including,
without limitation, the performance of all of the terms, provisions,
covenants, conditions and agreements contained in the Mortgaged Lease
to be performed by Mortgagor thereunder; provided, however, that should
the Mortgaged Lease expire in accordance with the terms thereof, this
Section 3.7(h) shall not apply.
(i) The leasehold estate of Mortgagor created by the
Mortgaged Lease and the estate of lessor under the Mortgaged Lease
shall each at all times remain separate and apart and retain their
separate identities, and no merger of the leasehold or easement estate
of Mortgagor with the estate of Lessor will result with respect to
Mortgagee or with respect to any purchaser acquiring the Mortgaged
Property at any sale on foreclosure of the Lien of this Mortgage
without the written consent of Mortgagee. In the event the Mortgagor
shall acquire a fee interest or other interest in the Mortgaged
Property, the Mortgagor shall execute, acknowledge and deliver all
instruments requested by the Mortgagee to confirm the Lien evidenced
hereby upon such fee estate or other interest
(j) Mortgagor covenants and agrees that the Mortgaged
Lease now is and shall at all times while the Secured Obligations
remain outstanding be subject in each and every respect to the terms,
conditions and Lien of this Mortgage to the extent of Mortgagor's
leasehold interest in the Mortgaged Lease. Mortgagor shall execute,
acknowledge and deliver any instruments requested by Mortgagee to
confirm the foregoing.
(k) Except as required by the Mortgaged Lease, Mortgagor
shall not subordinate, or consent to the subordination of, the
Mortgaged Lease to any mortgage or other lien encumbering Landlord's
estate in the Land.
(l) Mortgagor's obligations under this Mortgage are
independent of and in addition to Mortgagor's obligations under the
Mortgaged Lease. Nothing in this mortgage shall be construed to require
Mortgagor or Mortgagee to take or omit to take any action that would
cause a default under the Mortgaged Lease.
(m) Mortgagor shall promptly notify Mortgagee after
learning of the commencement of any bankruptcy, reorganization,
insolvency or similar proceeding affecting Landlord or the occurrence
of any event that could, with the passage of time, constitute such a
proceeding. Mortgagor shall also promptly forward to Mortgagee copies
of any documents, notices, summonses and other documents that Mortgagor
receives in connection with Landlord's bankruptcy or related
proceeding.
SECTION 3.8. Treatment of Mortgaged Lease in Bankruptcy. (a)
If Landlord under the Mortgage Lease rejects or disaffirms, or seeks or purports
to reject or disaffirm, the Mortgaged Lease pursuant to any Bankruptcy Law, then
Mortgagor shall not exercise the 365(h) Election except as otherwise provided in
this paragraph. To the extent permitted by law, Mortgagor shall not suffer or
permit the termination of any Mortgaged Lease by exercise of the 365(h) Election
or otherwise without Mortgagee's consent. Mortgagor acknowledges that be-
-14-
cause the Mortgaged Lease is a primary element of Mortgagee's security for the
Secured Obligations, it is not anticipated that Mortgagee would consent to
termination of the Mortgaged Lease. If Mortgagor makes any 365(h) Election in
violation of this Mortgage, then such 365(h) Election shall be void and of no
force or effect.
(b) Mortgagor hereby assigns to Mortgagee the 365(h)
Election with respect to the Mortgaged Lease until the Secured Obligations have
been satisfied in full. Mortgagor acknowledges and agrees that the foregoing
assignment of the 365(h) Election and related rights is one of the rights that
Mortgagee may use at any time to protect and preserve Mortgagee's other rights
and interests under this Mortgage. Mortgagor further acknowledges that exercise
of the 365(h) Election in favor of terminating the Mortgaged Lease would
constitute waste prohibited by this Mortgage.
(c) Mortgagor acknowledges that if the 365(h) Election is
exercised in favor of Mortgagor's remaining in possession under the Mortgaged
Lease, then Mortgagor's resulting occupancy rights, as adjusted by the effect of
Section 365 of the Bankruptcy Code, shall then be part of the Mortgaged Property
and shall be subject to the lien of this Mortgage.
SECTION 3.9. Rejection of Mortgaged Lease by Landlord. If
Landlord under the Mortgaged Lease rejects or disaffirms the Mortgaged Lease or
purports or seeks to disaffirm such Mortgaged Lease pursuant to any Bankruptcy
Law, then:
(a) Mortgagor shall remain in possession of the Premises
demised under the Mortgaged Lease and shall perform all acts necessary for
Mortgagor to remain in such possession for the unexpired term of such Mortgaged
Lease, whether the then existing terms and provisions of such Mortgaged Lease
require such acts or otherwise; and
(b) All the terms and provisions of this Mortgage and the
lien created by this Mortgage shall remain in full force and effect and shall
extend automatically to all of Mortgagor's rights and remedies arising at any
time under, or pursuant to, Section 365(h) of the Bankruptcy Code, including all
of Mortgagor's rights to remain in possession of the Land.
SECTION 3.10. Assignment of Claims to Mortgagee. Mortgagor,
immediately upon learning that Landlord has failed to perform the terms and
provisions under the Mortgaged Lease (including by reason of a rejection or
disaffirmance or purported rejection or disaffirmance of such Mortgaged Lease
pursuant to any Bankruptcy Law), shall notify Mortgagee of any such failure to
perform. Mortgagor unconditionally assigns, transfers, and sets over to
Mortgagee any and all Mortgaged Lease Damage Claims. This assignment constitutes
a present, irrevocable, and unconditional assignment of the Mortgaged Lease
Damage Claims, and shall continue in effect until the Secured Obligations have
been satisfied in full. Notwithstanding the foregoing, Mortgagee grants to
Mortgagor a revocable license to exercise any Mortgaged Lease Damage Claims
which license may only be revoked by Mortgagee upon the occurrence and during
the continuance of any Event of Default.
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SECTION 3.11. New Lease Issued to Mortgagee. If the Mortgaged
Lease is for any reason whatsoever terminated before the expiration of its term
and, pursuant to any provision of the Mortgaged Lease, Mortgagee or its designee
shall acquire from Landlord a new lease of the relevant leased premises, then
Mortgagor shall have no right, title or interest in or to such new lease or the
estate created thereby.
ARTICLE IV.
CERTAIN COVENANTS OF MORTGAGOR
SECTION 4.1. Payment. The Mortgagor shall pay as and when the
same shall become due, whether at its stated maturity, by acceleration or
otherwise, each and every amount payable by the Mortgagor under the Loan
Documents.
SECTION 4.2. Preservation of Existence. The Mortgagor shall
preserve and maintain in full force and effect its qualification to transact
business and good standing in the state in which the Mortgaged Property is
located.
SECTION 4.3. Title. The Mortgagor shall
(i) (A) keep in effect all rights and appurtenances to or
that constitute a part of the Mortgaged Property and (B) protect,
preserve and defend its interest in the Mortgaged Property and title
thereto;
(ii) (A) comply with each of the terms, conditions and
provisions of any obligation of the Mortgagor which is secured by the
Mortgaged Property or the noncompliance with which may result in the
imposition of a Lien on the Mortgaged Property, subject to Sections
6.02 (a), (b) and (e) of the Credit Agreement, (B) forever warrant and
defend to the Mortgagee the Lien and security interests created and
evidenced hereby and the validity and priority hereof in any action or
proceeding against the claims of any and all Persons whomsoever
affecting or purporting to affect the Mortgaged Property or any of the
rights of the Mortgagee hereunder and (C) maintain a valid and
enforceable first priority Lien on the Mortgaged Property and, to the
extent any of the Mortgaged Property shall consist of Fixtures, a first
priority security interest in the Mortgaged Property, which first
priority Lien and security interest shall be subject only to Permitted
Collateral Liens and all Prior Liens; and
(iii) immediately upon obtaining knowledge of the pendency
of any proceedings for the eviction of the Mortgagor from the Mortgaged
Property or any part thereof by paramount title or otherwise
questioning the Mortgagor's right, title and interest in, to and under
the Mortgaged Property as warranted in this Mortgage, or of any
condition that could give rise to any such proceedings, notify the
Mortgagee thereof. The Mortgagee may participate in such proceedings
and the Mortgagor will deliver or cause to be delivered to the
Mortgagee all instruments requested by the Mortgagee to permit such
partici-
-16-
pation. In any such proceedings, the Mortgagee may be represented by
counsel satisfactory to the Mortgagee at the expense of the Mortgagor.
If, upon the resolution of such proceedings, the Mortgagor shall suffer
a loss of the Mortgaged Property or any part thereof or interest
therein and title insurance proceeds shall be payable in connection
therewith, such proceeds are hereby assigned to and shall be paid to
the Mortgagee to be applied as Net Cash Proceeds to the payment of the
Secured Obligations or otherwise in accordance with the provisions of
Section 2.10 of the Credit Agreement.
SECTION 4.4. Maintenance and Use of Mortgaged Property;
Alterations.
(i) Maintenance. The Mortgagor shall cause the
representations and warranties set forth in Section 3.3 hereof to
continue to be true in each and every respect except where the failure
so to be true would not result in a Property Material Adverse Effect.
(ii) Maintenance of Premises. The Mortgagor shall not
commit or suffer any waste on the Premises. The Mortgagor shall, at all
times, comply with the terms of Section 5.03 of the Credit Agreement
with respect to the maintenance and repair of the Premises (Mortgagor
acknowledges that the Mortgaged Property is material to the conduct of
its business). The Mortgagor shall not remove, demolish or alter the
design or structural character of any Improvement now or hereafter
erected upon all or any portion of the Premises, or permit any such
removal, demolition or alteration, without the prior written consent of
the Mortgagee, unless such removal, demolition, or alteration maintains
or increases the current value of the Mortgaged Property and in the
reasonable judgment of Mortgagor, a Prudent Operator would undertake
such removal, demolition or alteration in order to improve the conduct
of its business.
(iii) Permits. The Mortgagor shall maintain, or cause to be
maintained, in full force and effect all Permits contemplated by
Section 3.3(i) hereof. Unless and to the extent contested by the
Mortgagor in accordance with the provisions of Article VIII hereof, the
Mortgagor shall comply in all material respects with all requirements
set forth in the Permits and all Requirements of Law applicable to all
or any portion of the Mortgaged Property or the condition, use or
occupancy of all or any portion thereof or any recorded deed of
restriction, declaration, covenant running with the land or otherwise,
now or hereafter in force.
(iv) Zoning. The Mortgagor shall not initiate, join in or
consent to any change in the zoning or any other permitted use
classification of the Premises without the prior written consent of the
Mortgagee.
SECTION 4.5. Notices Regarding Certain Defaults. The Mortgagor
shall, promptly upon receipt of any written notice regarding (i) any default by
the Mortgagor relating to the Mortgaged Property or any portion thereof or (ii)
the failure to discharge any of the Mortgagor's obligations with respect to the
Mortgaged Property or any portion thereof described herein, furnish a copy of
such notice to the Mortgagee.
SECTION 4.6. Access to Mortgaged Property, Books and Records;
Other Information. Upon request to the Mortgagor, the Mortgagee, its agents,
accountants and attorneys
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shall have full and free access to visit and inspect, the Mortgaged Property in
accordance with Section 5.07 of the Credit Agreement
SECTION 4.7. Limitation on Liens; Transfer Restrictions.
Except for the Prior Liens, the Permitted Collateral Liens and the Lien of this
Mortgage, the Mortgagor may not, without the prior written consent of the
Mortgagee, further mortgage, encumber, hypothecate, sell, convey or assign all
or any part of the Mortgaged Property or suffer or allow any of the foregoing to
occur by operation of law or otherwise.
SECTION 4.8. Estoppel Certificates. The Mortgagor shall, from
time to time, upon ten (10) days' prior written request of the Mortgagee,
execute, acknowledge and deliver to the Mortgagee an Officers' Certificate
stating that this Mortgage, the Credit Agreement and the other Credit Documents
are unmodified and in full force and effect (or, if there have been
modifications, that this Mortgage, the Credit Agreement or such other Credit
Document, as applicable, is in full force and effect as modified and setting
forth such modifications) and stating the date to which principal and interest
have been paid on the Loans.
SECTION 4.9. Insurance . The Mortgagor shall obtain and keep
in full force and effect the Insurance Policies required by the Credit Agreement
pursuant to the terms thereof.
ARTICLE V.
OCCUPANCY LEASES
SECTION 5.1. Mortgagor's Affirmative Covenants with Respect to
Leases. With respect to each Lease that is hereinafter entered into by
Mortgagor, the Mortgagor shall:
(i) observe and perform in all material respects all the
obligations imposed upon the Landlord under such Lease;
(ii) promptly send copies to the Mortgagee of all notices
of default which the Mortgagor shall send or receive thereunder; and
(iii) enforce all of the material terms, covenants and
conditions contained in such Lease upon the part of the Tenant
thereunder to be observed or performed.
SECTION 5.2. Mortgagor's Negative Covenants with Respect to
Leases. With respect to each Lease that is hereinafter entered into by
Mortgagor, the Mortgagor shall not, without the prior written consent of the
Mortgagee:
(i) receive or collect, or permit the receipt or
collection of, any Rent under such Lease more than one (1) month in
advance of the respective period in respect of which such Rent is to
accrue, except:
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(A) in connection with the execution and
delivery of such Lease (or of any amendment
to such Lease), Rent thereunder may be
collected and received in advance in an
amount not in excess of one (1) month's
Rent;
(B) the amount held by Landlord as a reasonable
security deposit thereunder; and
(C) any amount received and collected for
escalation and other charges in accordance
with the terms of such Lease;
(ii) assign, transfer or hypothecate (other than to the
Mortgagee hereunder) any Rent under such Lease whether then due or to
accrue in the future or the interest of the Mortgagor as Landlord under
such Lease;
(iii) enter into any amendment or modification of such
Lease if the same would not comply with Section 6.02(h) of the Credit
Agreement;
(iv) terminate (whether by exercising any contractual
right of the Mortgagor to recapture leased space or otherwise) or
permit the termination of such Lease or accept surrender of all or any
portion of the space demised under such Lease prior to the end of the
term thereof or accept assignment of such Lease to the Mortgagor unless
the same would not cause a Property Material Adverse Effect or;
(v) waive, excuse, condone or in any manner discharge or
release any Tenants of or from the obligations of such Tenants under
their respective Leases or guarantors of Tenants from obligations under
any guarantees of the Leases except as the same would be done by a
Prudent Operator with due regard for the security afforded the
Mortgagee thereby Mortgagor unless the same would not cause a Property
Material Adverse Effect.
ARTICLE VI.
CONCERNING ASSIGNMENT OF LEASES AND RENTS
SECTION 6.1. Present Assignment; License to the Mortgagor.
Section 2.2 of this Mortgage constitutes a present, absolute, effective,
irrevocable and complete assignment by Mortgagor to Mortgagee of the Leases and
Rents and the right, subject to applicable law, to collect all sums payable to
Mortgagor thereunder and apply the same as Mortgagee may, in its sole
discretion, determine to be appropriate (including the payment of reasonable
costs and expenses in connection with the maintenance, operation, improvement,
insurance, taxes and upkeep of the Mortgaged Property), which is not conditioned
upon Mortgagee being in possession of the Premises. The Mortgagee hereby grants
to the Mortgagor, however, a license to collect and apply the Rents and to
enforce the obligations of Tenants under the Leases. Immediately upon the
occurrence of and during the continuance of any Event of Default, the license
granted in the immedi-
-19-
ately preceding sentence shall cease and terminate, with or without any notice,
action or proceeding or the intervention of a receiver appointed by a court.
SECTION 6.2. Collection of Rents by the Mortgagee.
(i) Any Rents receivable by the Mortgagee hereunder,
after payment of all proper costs and expenses as Mortgagee may, in its sole
discretion, determine to be appropriate (including the payment of reasonable
costs and expenses in connection with the maintenance, operation, improvement,
insurance, taxes and upkeep of the Mortgaged Property), shall be applied in
accordance with the provisions of Section 10.2 of this Mortgage. The Mortgagee
shall be accountable to the Mortgagor only for Rents actually received by the
Mortgagee. The collection of such Rents and the application thereof shall not
cure or waive any Event of Default or waive, modify or affect notice of Event of
Default or invalidate any act done pursuant to such notice.
(ii) The Mortgagor hereby irrevocably authorizes and
directs Tenant under each Lease to rely upon and comply with any and all notices
or demands from the Mortgagee for payment of Rents to the Mortgagee and the
Mortgagor shall have no claim against Tenant for Rents paid by Tenant to the
Mortgagee pursuant to such notice or demand.
SECTION 6.3. No Release. Neither this Mortgage nor any action
or inaction on the part of the Mortgagee shall release Tenant under any Lease,
any guarantor of any Lease or the Mortgagor from any of their respective
obligations under such Leases or constitute an assumption of any such obligation
on the part of the Mortgagee. No action or failure to act on the part of the
Mortgagor shall adversely affect or limit the rights of the Mortgagee under this
Mortgage or, through this Mortgage, under such Leases. Nothing contained herein
shall operate or be construed to (i) obligate the Mortgagee to perform any of
the terms, covenants or conditions contained in any Lease or otherwise to impose
any obligation upon the Mortgagee with respect to such Lease (including, without
limitation, any obligation arising out of any covenant of quiet enjoyment
contained in such Lease in the event that Tenant under such Lease shall have
been joined as a party defendant in any action by which the estate of such
Tenant shall be terminated) or (ii) place upon the Mortgagee any responsibility
for the operation, control, care, management or repair of the Premises.
SECTION 6.4. Irrevocable Interest. All rights, powers and
privileges of the Mortgagee herein set forth are coupled with an interest and
are irrevocable, subject to the terms and conditions hereof, and the Mortgagor
shall not take any action under the Leases or otherwise which is inconsistent
with this Mortgage or any of the terms hereof and any such action inconsistent
herewith or therewith shall be void.
SECTION 6.5. Amendment to Leases. Each Lease, including,
without limitation, all amendments, modifications, supplements, replacements,
extensions and renewals thereof, shall continue to be subject to the provisions
hereof without the necessity of any further act by any of the parties hereto.
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ARTICLE VII.
TAXES AND CERTAIN STATUTORY LIENS
SECTION 7.1. Payment of Charges. Unless and to the extent
contested by the Mortgagor in accordance with the provisions of the Credit
Agreement hereof, the Mortgagor shall pay and discharge, or cause to be paid and
discharged, from time to time prior to same becoming delinquent, all Charges.
The Mortgagor shall, upon the Mortgagee's request, deliver to the Mortgagee
receipts evidencing the payment of all such Charges.
SECTION 7.2. Escrow of Taxes. From and after the occurrence of
an Event of Default, at the option and upon the request of the Mortgagee, the
Mortgagor shall deposit with the Mortgagee in an account maintained by the
Mortgagee (the "Tax Escrow Fund"), on the first day of each month, an amount
estimated by the Mortgagee to be equal to one-twelfth of the annual real
property taxes and other annual Charges required to be discharged by the
Mortgagor under Section 7.1 hereof, provided that Mortgagor is required to pay
any such Charges under the terms of the Mortgaged Lease and Mortgagor has not
theretofor deposited the same with the Landlord thereunder. Such amounts shall
be held by the Mortgagee without interest to the Mortgagor and applied to the
payment of the obligations in respect of which such amounts were deposited, in
such priority as the Mortgagee shall determine, on or before the respective
dates on which such obligations or any part thereof would become delinquent.
Nothing contained in this Article VII shall (i) affect any right or remedy of
the Mortgagee under any provision hereof or of any statute or rule of law to pay
any such amount as provided above from its own funds and to add the amount so
paid, together with interest at the default rate during such time that any
amount remains outstanding, to the Secured Obligations or (ii) relieve the
Mortgagor of its obligations (to the extent it has obligations under the
Mortgaged Lease or hereunder) to make or provide for the payment of the annual
real property taxes and other annual Charges required to be discharged by the
Mortgagor under Section 7.1 hereof, or (iii) require Mortgagor to deposit with
Mortgagee any amount contemplated in this Section 7.2 if and so long as deposits
in respect thereof are made by Mortgagor to Landlord under the Mortgaged Lease.
SECTION 7.3. Certain Statutory Liens. Unless and to the extent
contested by the Mortgagor in accordance with the provisions of Section 6.02 (a)
and (b) of the Credit Agreement, the Mortgagor shall timely pay, or cause to be
paid, all lawful claims and demands of mechanics, materialmen, laborers,
government agencies administering worker's compensation insurance, old age
pensions and social security benefits and all other claims, judgments, demands
or amounts of any nature which, if unpaid, might result in, or permit the
creation of, a Lien on the Mortgaged Property or any part thereof, or which
might result in forfeiture of all or any part of the Mortgaged Property.
SECTION 7.4. Stamp and Other Taxes. Unless and to the extent
contested by the Mortgagor in accordance with the provisions of Article VIII
hereof, the Mortgagor shall pay any United States documentary stamp taxes, with
interest and fines and penalties, and any mortgage recording taxes, with
interest and fines and penalties, that may hereafter be levied, imposed or
assessed under or upon or by reason hereof or the Secured Obligations or any
instrument or
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transaction affecting or relating to either thereof and in default thereof the
Mortgagee may advance the same and the amount so advanced shall be payable by
the Mortgagor to the Mortgagee in accordance with the provisions of Section
11.03 of the Credit Agreement hereof.
SECTION 7.5. Certain Tax Law Changes. In the event of the
passage after the date hereof of any law deducting from the value of real
property, for the purpose of taxation, amounts in respect of any Lien thereon or
changing in any way the laws for the taxation of mortgages or debts secured by
mortgages for state or local purposes or the manner of the collection of any
Charges, and imposing any Charges, either directly or indirectly, on this
Mortgage or any other Loan Document, the Mortgagor shall promptly pay to the
Mortgagee such amount or amounts as may be necessary from time to time to pay
any such Charges.
SECTION 7.6. Proceeds of Tax Claim. In the event that the
proceeds of any tax claim are paid after the Mortgagee has exercised its right
to foreclose the Lien hereof, such proceeds shall be paid to the Mortgagee to
satisfy any deficiency remaining after such foreclosure. The Mortgagee shall
retain its interest in the proceeds of any tax claim during any redemption
period. The amount of any such proceeds in excess of any deficiency claim of the
Mortgagee shall in a reasonably prompt manner be released to the Mortgagor.
ARTICLE VIII.
CONTESTING OF PAYMENTS
SECTION 8.1. Contesting of Taxes and Certain Statutory Liens.
The Mortgagor may at its own expense contest in good faith by appropriate
proceedings the validity, amount or applicability of any Charges as provided in
Section 6.02 (a), (b) and (e) of the Credit Agreement.
ARTICLE IX.
DESTRUCTION, CONDEMNATION AND RESTORATION
SECTION 9.1. Destruction, Condemnation and Restoration. If
there shall occur any Destruction, the Mortgagor shall promptly send to the
Mortgagee a written notice setting forth the nature and extent of such
Destruction. The proceeds of any insurance payable in respect of such
Destruction are hereby assigned and shall be paid to the Mortgagee. All Net
Insurance such proceeds shall constitute Net Cash Proceeds under the Credit
Agreement and shall be applied in accordance with the provisions of Section 2.10
of the Credit Agreement.
SECTION 9.2. Condemnation. If there shall occur any Taking or
the commencement of any proceeding therefore, the Mortgagor shall immediately
notify the Mortgagee upon receiving notice of such Taking or commencement of
proceedings therefor. The Mortgagee may, at its option, participate in any
proceedings or negotiations which might result in any
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Taking, and the Mortgagor shall deliver or cause to be delivered to the
Mortgagee all instruments requested by it to permit such participation. The
Mortgagee may be represented by counsel satisfactory to it at the expense of the
Mortgagor in connection with any such participation. The Mortgagor shall pay all
reasonable fees, costs and expenses incurred by the Mortgagee in connection with
any Taking and in seeking and obtaining any award or payment on account thereof.
Any proceeds, award or payment in respect of any Taking are herby assigned and
shall be paid to the Mortgagee. The Mortgagor shall take all steps necessary to
notify the condemning authority of such assignment. All such proceeds shall
constitute Net Cash Proceeds under the Credit Agreement and shall be applied in
accordance with the provisions of Section 2.10 of the Credit Agreement.
SECTION 9.3. Restoration. In the event the Mortgagor is
permitted or required to perform any Restoration in accordance with the
provisions of Section 2.10 of the Credit Agreement, the proceeds of any award
payable in respect of a Destruction or a Taking shall constitute Net Cash
Proceeds and the Mortgagee shall release such Proceeds to the Mortgagor in
compliance with the applicable provisions of Section 2.10 of the Credit
Agreement, and the Mortgagor shall complete the restoration in accordance with
provisions of Section 2.10 of the Credit Agreement. In the event there shall be
any surplus after the application of such proceeds to the Restoration of the
Improvements, such surplus should be applied as Net Cash Proceeds in accordance
with Section 2.10 (f)(iii) of the Credit Agreement.
ARTICLE X.
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. Events of Default. It shall be an Event of
Default hereunder if there shall have occurred and be continuing an Event of
Default under the Credit Agreement.
SECTION 10.2. Remedies in Case of an Event of Default. If any
Event of Default shall have occurred and be continuing, the Mortgagee may at its
option, in addition to any other action permitted under this Mortgage or the
Credit Agreement or by law, statute or in equity, take one or more of the
following actions to the greatest extent permitted by local law:
(i) by written notice to the Mortgagor, declare the
entire unpaid amount of the Secured Obligations to be due and payable
immediately;
(ii) personally, or by its agents or attorneys, (A) enter
into and upon and take possession of all or any part of the Premises
together with the books, records and accounts of the Mortgagor relating
thereto and, exclude the Mortgagor, its agents and servants wholly
therefrom, (B) use, operate, manage and control the Premises and
conduct the business thereof, (C) maintain and restore the Premises,
(D) make all necessary or proper repairs, renewals and replacements and
such useful Alterations thereto and thereon as the Mortgagee may deem
advisable, (E) manage, lease and operate the Premises and carry on the
business thereof and exercise all rights and powers of the Mortgagor
with re-
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spect thereto either in the name of the Mortgagor or otherwise or (F)
collect and receive all Rents. The Mortgagee shall be under no
liability for or by reason of any such taking of possession, entry,
removal or holding, operation or management except that any amounts so
received by the Mortgagee shall be applied in accordance with the
provisions of Section 9.03 of the Credit Agreement.
(iii) with or without entry, personally or by its agents or
attorneys, (A) sell the Mortgaged Property and all estate, right, title
and interest, claim and demand therein at one or more sales in one or
more parcels, in accordance with the provisions of Section 10.3 or (B)
institute and prosecute proceedings for the complete or partial
foreclosure of the Lien and security interests created and evidenced
hereby; or
(iv) take such steps to protect and enforce its rights
whether by action, suit or proceeding at law or in equity for the
specific performance of any covenant, condition or agreement in the
Credit Agreement and the other Loan Documents, or in aid of the
execution of any power granted in this Mortgage, or for any foreclosure
hereunder, or for the enforcement of any other appropriate legal or
equitable remedy or otherwise as the Mortgagee shall elect.
SECTION 10.3. Sale of Mortgaged Property if Event of Default
Occurs; Proceeds of Sale.
(i) If any Event of Default shall have occurred and be
continuing, the Mortgagee may institute an action to foreclose this Mortgage or
take such other action as may be permitted and available to the Mortgagee at law
or in equity for the enforcement of the Credit Agreement and realization on the
Mortgaged Property and proceeds thereon through power of sale (if then available
under applicable law) or to final judgment and execution thereof for the Secured
Obligations, and in furtherance thereof the Mortgagee may sell the Mortgaged
Property at one or more sales, as an entirety or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or
permitted by law or statute or in equity. The Mortgagee may execute and deliver
to the purchaser at such sale a conveyance of the Mortgaged Property in fee
simple and an assignment or conveyance of all the Mortgagor's Interest in the
Leases and the Mortgaged Property, each of which conveyances and assignments
shall contain recitals as to the Event of Default upon which the execution of
the power of sale herein granted depends, and the Mortgagor hereby constitutes
and appoints the Mortgagee the true and lawful attorney in fact of the Mortgagor
to make any such recitals, sale, assignment and conveyance, and all of the acts
of the Mortgagee as such attorney in fact are hereby ratified and confirmed. The
Mortgagor agrees that such recitals shall be binding and conclusive upon the
Mortgagor and that any assignment or conveyance to be made by the Mortgagee
shall divest the Mortgagor of all right, title, interest, equity and right of
redemption, including any statutory redemption, in and to the Mortgaged
Property. The power and agency hereby granted are coupled with an interest and
are irrevocable by death or dissolution, or otherwise, and are in addition to
any and all other remedies which the Mortgagee may have hereunder, at law or in
equity. So long as the Secured Obligations, or any part thereof, remain unpaid,
the Mortgagor agrees that possession of the Mortgaged Property by the Mortgagor,
or any person claiming under the Mortgagor, shall be as tenant, and, in case of
a sale under power or upon foreclosure as provided in this Mortgage, the
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Mortgagor and any person in possession under the Mortgagor, as to whose interest
such sale was not made subject, shall, at the option of the purchaser at such
sale, then become and be tenants holding over, and shall forthwith deliver
possession to such purchaser, or be summarily dispossessed in accordance with
the laws applicable to tenants holding over. In case of any sale under this
Mortgage by virtue of the exercise of the powers herein granted, or pursuant to
any order in any judicial proceeding or otherwise, the Mortgaged Property may be
sold as an entirety or in separate parcels in such manner or order as the
Mortgagee in its sole discretion may elect. One or more exercises of powers
herein granted shall not extinguish or exhaust such powers, until the entire
Mortgaged Property is sold or all amounts secured hereby are paid in full.
(ii) In the event of any sale made under or by virtue of
this Article X, the entire principal of, and interest in respect of the Secured
Obligations, if not previously due and payable, shall, at the option of the
Mortgagee, immediately become due and payable, anything in this Mortgage to the
contrary notwithstanding.
(iii) The proceeds of any sale made under or by virtue of
this Article X, together with any other sums which then may be held by the
Mortgagee under this Mortgage, whether under the provisions of this Article X or
otherwise, shall be applied in accordance with the provisions of Section 9.03 of
the Credit Agreement.
(iv) The Mortgagee (on behalf of any Secured Party or on
its own behalf) or any Lender or any of their respective Affiliates may bid for
and acquire the Mortgaged Property or any part thereof at any sale made under or
by virtue of this Article X and, in lieu of paying cash therefor, may make
settlement for the purchase price by crediting against the purchase price the
unpaid amounts (whether or not then due) owing to the Mortgagee, or such Lender
in respect of the Secured Obligations, after deducting from the sales price the
expense of the sale and the reasonable costs of the action or proceedings and
any other sums that the Mortgagee or such Lender is authorized to deduct under
this Mortgage.
(v) The Mortgagee may adjourn from time to time any sale
by it to be made under or by virtue hereof by announcement at the time and place
appointed for such sale or for such adjourned sale or sales, and, the Mortgagee,
without further notice or publication, may make such sale at the time and place
to which the same shall be so adjourned.
(vi) If the Premises is comprised of more than one parcel
of land, the Mortgagee may take any of the actions authorized by this Section
10.3 in respect of any or a number of individual parcels.
SECTION 10.4. Additional Remedies in Case of an Event of
Default.
(i) The Mortgagee shall be entitled to recover judgment
as aforesaid either before, after or during the pendency of any proceedings for
the enforcement of the provisions hereof, and the right of the Mortgagee to
recover such judgment shall not be affected by any entry or sale hereunder, or
by the exercise of any other right, power or remedy for the enforcement of the
provisions hereof, or the foreclosure of, or absolute conveyance pursuant to,
this Mortgage. In case of proceedings against the Mortgagor in insolvency or
bankruptcy or any proceed-
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ings for its reorganization or involving the liquidation of its assets, the
Mortgagee shall be entitled to prove the whole amount of principal and interest
and other payments, charges and costs due in respect of the Secured Obligations
to the full amount thereof without deducting therefrom any proceeds obtained
from the sale of the whole or any part of the Mortgaged Property; provided,
however, that in no case shall the Mortgagee receive a greater amount than the
aggregate of such principal, interest and such other payments, charges and costs
(with interest at the default rate) from the proceeds of the sale of the
Mortgaged Property and the distribution from the estate of the Mortgagor.
(ii) Any recovery of any judgment by the Mortgagee and any
levy of any execution under any judgment upon the Mortgaged Property shall not
affect in any manner or to any extent the Lien and security interests created
and evidenced hereby upon the Mortgaged Property or any part thereof, or any
conveyances, powers, rights and remedies of the Mortgagee hereunder, but such
conveyances, powers, rights and remedies shall continue unimpaired as before.
(iii) Any monies collected by the Mortgagee under this
Section 10.4 shall be applied in accordance with the provisions of Section
10.3(iii).
SECTION 10.5. Legal Proceedings After an Event of Default.
(i) After the occurrence of any Event of Default and
immediately upon the commencement of any action, suit or legal proceedings to
obtain judgment for the Secured Obligations or any part thereof, or of any
proceedings to foreclose the Lien and security interest created and evidenced
hereby or otherwise enforce the provisions hereof or of any other proceedings in
aid of the enforcement hereof, the Mortgagor shall enter its voluntary
appearance in such action, suit or proceeding.
(ii) Upon the occurrence and during the continuance of an
Event of Default, the Mortgagee shall be entitled forthwith as a matter of
right, concurrently or independently of any other right or remedy hereunder
either before or after declaring the Secured Obligations or any part thereof to
be due and payable, to the appointment of a receiver without giving notice to
any party and without regard to the adequacy or inadequacy of any security for
the Secured Obligations or the solvency or insolvency of any person or entity
then legally or equitably liable for the Secured Obligations or any portion
thereof. The Mortgagor hereby consents to the appointment of such receiver.
Notwithstanding the appointment of any receiver, the Mortgagee shall be entitled
as pledgee to the possession and control of any cash, deposits or instruments at
the time held by or payable or deliverable under the terms of the Credit
Agreement to the Mortgagee.
(iii) The Mortgagor shall not (A) at any time insist upon,
or plead, or in any manner whatsoever claim or take any benefit or advantage of
any stay or extension or moratorium law, any exemption from execution or sale of
the Mortgaged Property or any part thereof, wherever enacted, now or at any time
hereafter in force, which may affect the covenants and terms of performance
hereof, (B) claim, take or insist on any benefit or advantage of any law now or
hereafter in force providing for the valuation or appraisal of the Mortgaged
Property, or any part thereof, prior to any sale or sales of the Mortgaged
Property which may be made pursuant to this Mortgage, or pursuant to any decree,
judgment or order of any court of competent ju-
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risdiction or (C) after any such sale or sales, claim or exercise any right
under any statute heretofore or hereafter enacted to redeem the property so sold
or any part thereof. To the extent permitted by applicable law, the Mortgagor
hereby expressly (A) waives all benefit or advantage of any such law or laws,
including, without limitation, any statute of limitations applicable to this
Mortgage, (B) waives any and all rights to trial by jury in any action or
proceeding related to the enforcement hereof, (C) waives any objection which it
may now or hereafter have to the laying of venue of any action, suit or
proceeding brought in connection with this Mortgage and further waives and
agrees not to plead that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum and (D) covenants not to hinder,
delay or impede the execution of any power granted or delegated to the Mortgagee
by this Mortgage but to suffer and permit the execution of every such power as
though no such law or laws had been made or enacted. The Mortgagee shall not be
liable for any incorrect or improper payment made pursuant to this Article X in
the absence of gross negligence or willful misconduct.
SECTION 10.6. Remedies Not Exclusive. No remedy conferred upon
or reserved to the Mortgagee by this Mortgage is intended to be exclusive of any
other remedy or remedies, and each and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this Mortgage or now or
hereafter existing at law or in equity. Any delay or omission of the Mortgagee
to exercise any right or power accruing on any Event of Default shall not impair
any such right or power and shall not be construed to be a waiver of or
acquiescence in any such Event of Default. Every power and remedy given by this
Mortgage may be exercised from time to time concurrently or independently, when
and as often as may be deemed expedient by the Mortgagee in such order and
manner as the Mortgagee, in its sole discretion, may elect. If the Mortgagee
accepts any monies required to be paid by the Mortgagor under this Mortgage
after the same become due, such acceptance shall not constitute a waiver of the
right either to require prompt payment, when due, of all other sums secured by
this Mortgage or to declare an Event of Default with regard to subsequent
defaults. If the Mortgagee accepts any monies required to be paid by the
Mortgagor under this Mortgage in an amount less than the sum then due, such
acceptance shall be deemed an acceptance on account only and on the condition
that it shall not constitute a waiver of the obligation of the Mortgagor to pay
the entire sum then due, and the Mortgagor's failure to pay the entire sum then
due shall be and continue to be a default hereunder notwithstanding acceptance
of such amount on account.
ARTICLE XI.
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 11.1. Security Agreement. To the extent that the
Mortgaged Property includes personal property or items of personal property
which are or are to become fixtures under applicable law, this Mortgage shall
also be construed as a security agreement under the UCC; and, upon and during
the continuance of an Event of Default, the Mortgagee shall be entitled with
respect to such personal property to exercise all remedies hereunder, all
remedies available under the UCC with respect to fixtures and all other remedies
available under applicable law. Without limiting the foregoing, such personal
property may, at the Mortgagee's option,
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(i) be sold hereunder together with any sale of any portion of the Mortgaged
Property or otherwise, (ii) be sold pursuant to the UCC, or (iii) be dealt with
by the Mortgagee in any other manner permitted under applicable law. The
Mortgagee may require the Mortgagor to assemble such personal property and make
it available to the Mortgagee at a place to be designated by the Mortgagee. The
Mortgagor acknowledges and agrees that a disposition of the personal property in
accordance with the Mortgagee's rights and remedies in respect to the Mortgaged
Property as heretofore provided is a commercially reasonable disposition
thereof; provided, however, that the Mortgagee shall give the Mortgagor not less
than ten (10) days' prior notice of the time and place of any intended
disposition.
SECTION 11.2. Fixture Filing. To the extent that the Mortgaged
Property includes items of personal property which are or are to become fixtures
under applicable law, and to the extent permitted under applicable law, the
filing hereof in the real estate records of the county in which such Mortgaged
Property is located shall also operate from the time of filing as a fixture
filing with respect to such Mortgaged Property, and the following information is
applicable for the purpose of such fixture filing, to wit:
NAME AND ADDRESS OF THE DEBTOR: NAME AND ADDRESS OF THE SECURED PARTY:
The Mortgagor having the address
described in the Preamble hereof. The Mortgagee having the address de-
scribed in the Preamble hereof.
THIS FINANCING STATEMENT COVERS THE FOLLOWING TYPES OR ITEMS OF PROPERTY:
The Mortgaged Property.
This instrument covers goods or items of personal property which are or
are to become fixtures upon the property.
The name of the record owner of the Property on which such fixtures are or are
to be located is the Mortgagor.
In addition, Mortgagor authorizes the Mortgagee to file appropriate financing
and continuation statements under the UCC in effect in the jurisdiction in which
the Mortgaged Property is located as may be required by law in order to
establish, preserve and protect the liens and security interests intended to be
granted to the Mortgagee pursuant to this Mortgage in the Mortgaged Property.
ARTICLE XII.
FURTHER ASSURANCES
SECTION 12.1. Recording Documentation To Assure Security. The
Mortgagor shall, forthwith after the execution and delivery hereof and
thereafter, from time to time, cause
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this Mortgage and any financing statement, continuation statement or similar
instrument relating to any thereof or to any property intended to be subject to
the Lien hereof to be filed, registered and recorded in such manner and in such
places as may be required by any present or future law in order to publish
notice of and fully to protect the validity and priority thereof or the Lien
hereof purported to be created upon the Mortgaged Property and the interest and
rights of the Mortgagee therein. The Mortgagor shall pay or cause to be paid all
taxes and fees incident to such filing, registration and recording, and all
expenses incident to the preparation, execution and acknowledgment thereof, and
of any instrument of further assurance, and all Federal or state stamp taxes or
other taxes, duties and charges arising out of or in connection with the
execution and delivery of such instruments.
SECTION 12.2. Further Acts. The Mortgagor shall, at the sole
cost and expense of the Mortgagor, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignment, transfers, financing statements, continuation statements,
instruments and assurances as the Mortgagee shall from time to time request,
which may be necessary in the judgment of the Mortgagee from time to time to
assure, perfect, convey, assign, mortgage, transfer and confirm unto the
Mortgagee, the property and rights hereby conveyed or assigned or which the
Mortgagor may be or may hereafter become bound to convey or assign to the
Mortgagee or for carrying out the intention or facilitating the performance of
the terms hereof or the filing, registering or recording hereof. Without
limiting the generality of the foregoing, in the event that the Mortgagee
desires to exercise any remedies, consensual rights or attorney-in-fact powers
set forth in this Mortgage and determines it necessary to obtain any approvals
or consents of any Governmental Authority or any other Person therefor, then,
upon the reasonable request of the Mortgagee, the Mortgagor agrees to use its
best efforts to assist and aid the Mortgagee to obtain as soon as practicable
any necessary approvals or consents for the exercise of any such remedies,
rights and powers. In the event the Mortgagor shall fail after demand to execute
any instrument or take any action required to be executed or taken by the
Mortgagor under this Section 12.2, the Mortgagee may execute or take the same as
the attorney-in-fact for the Mortgagor, such power of attorney being coupled
with an interest and is irrevocable.
SECTION 12.3. Additional Security. Without notice to or
consent of the Mortgagor and without impairment of the Lien and rights created
by this Mortgage, the Mortgagee may accept (but the Mortgagor shall not be
obligated to furnish) from the Mortgagor or from any other Person, additional
security for the Secured Obligations. Neither the giving hereof nor the
acceptance of any such additional security shall prevent the Mortgagee from
resorting, first, to such additional security, and, second, to the security
created by this Mortgage without affecting the Mortgagee's Lien and rights under
this Mortgage.
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ARTICLE XIII.
MISCELLANEOUS
SECTION 13.1. Covenants To Run with the Land. All of the
grants, covenants, terms, provisions and conditions in this Mortgage shall run
with the Land and shall apply to, and bind the successors and assigns of, the
Mortgagor. If there shall be more than one mortgagor with respect to the
Mortgaged Property, the covenants and warranties hereof shall be joint and
several.
SECTION 13.2. No Merger. The rights and estate created by this
Mortgage shall not, under any circumstances, be held to have merged into any
other estate or interest now owned or hereafter acquired by the Mortgagee unless
the Mortgagee shall have consented to such merger in writing.
SECTION 13.3. Concerning Mortgagee.
(i) The Mortgagee has been appointed as Collateral Agent
pursuant to the Credit Agreement. The actions of the Mortgagee hereunder are
subject to the provisions of the Credit Agreement. The Mortgagee shall have the
right hereunder to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking action (including,
without limitation, the release or substitution of the Mortgaged Property), in
accordance with this Mortgage and the Credit Agreement. The Mortgagee may employ
agents and attorneys-in-fact in connection herewith and shall not be liable for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it in good faith. The Mortgagee may resign and a successor Mortgagee may be
appointed in the manner provided in the Credit Agreement. Upon the acceptance of
any appointment as the Mortgagee by a successor Mortgagee, that successor
Mortgagee shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Mortgagee under this Mortgage, and
the retiring Mortgagee shall thereupon be discharged from its duties and
obligations under this Mortgage. After any retiring Mortgagee's resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Mortgage while it was the Mortgagee.
(ii) The Mortgagee shall be deemed to have exercised
reasonable care in the custody and preservation of the Mortgaged Property in its
possession if such Mortgaged Property is accorded treatment substantially
equivalent to that which the Mortgagee, in its individual capacity, accords its
own property consisting of similar instruments or interests, it being understood
that neither the Mortgagee nor any of the Secured Parties shall have
responsibility for taking any necessary steps to preserve rights against any
Person with respect to any Mortgaged Property.
(iii) The Mortgagee shall be entitled to rely upon any
written notice, statement, certificate, order or other document or any telephone
message believed by it 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 Mortgage and its duties hereunder, upon advice of counsel selected by it.
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(iv) With respect to any of its rights and obligations as
a Lender, the Mortgagee shall have and may exercise the same rights and powers
hereunder. The term "Lenders," "Lender" or any similar terms shall, unless the
context clearly otherwise indicates, include the Mortgagee in its individual
capacity as a Lender. The Mortgagee may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with the
Mortgagor or any Affiliate of the Mortgagor to the same extent as if the
Mortgagee were not acting as Collateral Agent.
(v) If any portion of the Mortgaged Property also
constitutes collateral granted to the Mortgagee under any other deed of trust,
mortgage, security agreement, pledge or instrument of any type, in the event of
any conflict between the provisions hereof and the provisions of such other deed
of trust, mortgage, security agreement, pledge or instrument of any type in
respect of such collateral, the Mortgagee, in its sole discretion, shall select
which provision or provisions shall control.
SECTION 13.4. Mortgagee May Perform; Mortgagee Appointed
Attorney-in-Fact. If the Mortgagor shall fail to perform any covenants contained
in this Mortgage (including, without limitation, the Mortgagor's covenants to
(i) pay the premiums in respect of all required insurance policies hereunder or
under the Credit Agreement, (ii) pay Charges, (iii) make repairs, (iv) discharge
Liens or (v) pay or perform any obligations of the Mortgagor under any Mortgaged
Property) or if any warranty on the part of the Mortgagor contained herein shall
be breached, the Mortgagee may (but shall not be obligated to), after notice to
Mortgagor, do the same or cause it to be done or remedy any such breach, and may
expend funds for such purpose; provided, however, that the Mortgagee shall in no
event be bound to inquire into the validity of any tax, lien, imposition or
other obligation which the Mortgagor fails to pay or perform as and when
required hereby and which the Mortgagor does not contest in accordance with the
provisions of Article VIII hereof. Any and all amounts so expended by the
Mortgagee shall be paid by the Mortgagor in accordance with the provisions of
Section 11.03 of the Credit Agreement. Neither the provisions of this Section
13.4 nor any action taken by the Mortgagee pursuant to the provisions of this
Section 13.4 shall prevent any such failure to observe any covenant contained in
this Mortgage nor any breach of warranty from constituting an Event of Default.
The Mortgagor hereby appoints the Mortgagee its attorney-in-fact, with full
authority in the place and stead of the Mortgagor and in the name of the
Mortgagor, or otherwise, from time to time in the Mortgagee's discretion to take
any action and to execute any instrument consistent with the terms hereof and
the other Loan Documents which the Mortgagee may deem necessary or advisable to
accomplish the purposes hereof. The foregoing grant of authority is a power of
attorney coupled with an interest and such appointment shall be irrevocable for
the term hereof. The Mortgagor hereby ratifies all that such attorney shall
lawfully do or cause to be done by virtue hereof.
SECTION 13.5. Continuing Security Interest; Assignment. This
Mortgage shall create a continuing Lien on and security interest in the
Mortgaged Property and shall (i) be binding upon the Mortgagor, its successors
and assigns and (ii) inure, together with the rights and remedies of the
Mortgagee hereunder, to the benefit of the Mortgagee for the benefit of the
Secured Parties and each of their respective successors, transferees and
assigns. No other Persons (including, without limitation, any other creditor of
any Loan Party) shall have any interest herein or any right or benefit with
respect hereto. Without limiting the generality of the forego-
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ing clause (ii), any Lender may assign or otherwise transfer any indebtedness
held by it secured by this Mortgage to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Lender, herein or otherwise, subject, however, to the provisions of the
Credit Agreement.
SECTION 13.6. Termination; Release. When all the Secured
Obligations have been paid in full and the Commitments of the Lenders to make
any Loan or to issue any Letter of Credit under the Credit Agreement shall have
expired or been sooner terminated, this Mortgage shall terminate. Upon
termination hereof or any release of the Mortgaged Property or any portion
thereof in accordance with the provisions of the Credit Agreement, the Mortgagee
shall, upon the request and at the sole cost and expense of the Mortgagor,
forthwith assign, transfer and deliver to the Mortgagor, against receipt and
without recourse to or warranty by the Mortgagee, such of the Mortgaged Property
to be released (in the case of a release) as may be in possession of the
Mortgagee and as shall not have been sold or otherwise applied pursuant to the
terms hereof, and, with respect to any other Mortgaged Property, proper
documents and instruments (including UCC-3 termination statements or releases)
acknowledging the termination hereof or the release of such Mortgaged Property,
as the case may be.
SECTION 13.7. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by the Mortgagor therefrom, shall be effective
unless the same shall be done in accordance with the terms of the Credit
Agreement and unless in writing and signed by the Mortgagee. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by the Mortgagor from the
terms of any provision hereof shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Mortgage or any other Loan Document, no notice to
or demand on the Mortgagor in any case shall entitle the Mortgagor to any other
or further notice or demand in similar or other circumstances.
SECTION 13.8. Notices. Unless otherwise provided herein or in
the Credit Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Credit Agreement, if to the Mortgagor or the Mortgagee, addressed
to it at the address set forth in the Credit Agreement, or in each case at such
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 13.8.
SECTION 13.9. GOVERNING LAW; SERVICE OF PROCESS; WAIVER OF
JURY TRIAL. THIS MORTGAGE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH THE PREMISES ARE
LOCATED, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT TO THE EXTENT
THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR ITEM OR TYPE OF MORTGAGED PROPERTY ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. MORTGAGOR AGREES
THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL
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(OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO BORROWER AT ITS
ADDRESS SET FORTH IN THE CREDIT AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE
MORTGAGEE SHALL HAVE BEEN NOTIFIED PURSUANT THERETO. IF ANY AGENT APPOINTED BY
MORTGAGOR REFUSES TO ACCEPT SERVICE, MORTGAGOR HEREBY AGREES THAT SERVICE UPON
IT BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF MORTGAGEE TO BRING PROCEEDINGS AGAINST MORTGAGOR IN THE COURTS OF ANY
OTHER JURISDICTION. THE MORTGAGOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS MORTGAGE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 13.10. Severability of Provisions. Any provision
hereof which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 13.11. Limitation on Interest Payable. It is the
intention of the parties to conform strictly to the usury laws, whether state or
Federal, that are applicable to the transaction of which this Mortgage is a
part. All agreements between the Mortgagor and the Mortgagee whether now
existing or hereafter arising and whether oral or written, are hereby expressly
limited so that in no contingency or event whatsoever shall the amount paid or
agreed to be paid by the Mortgagor for the use, forbearance or detention of the
money to be loaned under the Credit Agreement or any other Loan Document, or for
the payment or performance of any covenant or obligation contained herein or in
the Credit Agreement or any other Loan Document, exceed the maximum amount
permissible under applicable Federal or state usury laws. If under any
circumstances whatsoever fulfillment of any such provision, at the time
performance of such provision shall be due, shall involve exceeding the limit of
validity prescribed by law, then the obligation to be fulfilled shall be reduced
to the limit of such validity. If under any circumstances the Mortgagor shall
have paid an amount deemed interest by applicable law, which would exceed the
highest lawful rate, such amount that would be excessive interest under
applicable usury laws shall be applied to the reduction of the principal amount
owing in respect of the Secured Obligations and not to the payment of interest,
or if such excessive interest exceeds the unpaid balance of principal and any
other amounts due hereunder, the excess shall be refunded to the Mortgagor. All
sums paid or agreed to be paid for the use, forbearance or detention of the
principal under any extension of credit by the Mortgagee shall, to the extent
permitted by applicable law, and to the extent necessary to preclude exceeding
the limit of validity prescribed by law, be amortized, prorated, allocated and
spread from the date hereof until payment in full of the Secured Obligations so
that the actual rate of interest on account of such principal amounts is uniform
throughout the term hereof.
SECTION 13.12. Business Days. In the event any time period or
any date provided in this Mortgage ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business
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Day, and performance herein may be made on such Business Day, with the same
force and effect as if made on such other day.
SECTION 13.13. Relationship. The relationship of the Mortgagee
to the Mortgagor hereunder is strictly and solely that of lender and borrower
and mortgagor and mortgagee and nothing contained in the Credit Agreement, this
Mortgage or any other document or instrument now existing and delivered in
connection therewith or otherwise in connection with the Secured Obligations is
intended to create, or shall in any event or under any circumstance be construed
as creating a partnership, joint venture, tenancy-in-common, joint tenancy or
other relationship of any nature whatsoever between the Mortgagee and the
Mortgagor other than as lender and borrower and mortgagor and mortgagee.
SECTION 13.14. Waiver of Stay.
(i) The Mortgagor agrees that in the event that the
Mortgagor or any property or assets of the Mortgagor shall hereafter become the
subject of a voluntary or involuntary proceeding under the Bankruptcy Code or
the Mortgagor shall otherwise be a party to any Federal or state bankruptcy,
insolvency, moratorium or similar proceeding to which the provisions relating to
the automatic stay under Section 362 of the Bankruptcy Code or any similar
provision in any such law is applicable, then, in any such case, whether or not
the Mortgagee has commenced foreclosure proceedings under this Mortgage, the
Mortgagee shall be entitled to relief from any such automatic stay as it relates
to the exercise of any of the rights and remedies (including, without
limitation, any foreclosure proceedings) available to the Mortgagee as provided
in this Mortgage or in any other Security Document.
(ii) The Mortgagee shall have the right to petition or
move any court having jurisdiction over any proceeding described in Section
13.14 hereof for the purposes provided therein, and the Mortgagor agrees (i) not
to oppose any such petition or motion and (ii) at the Mortgagor's sole cost and
expense, to assist and cooperate with the Mortgagee, as may be requested by the
Mortgagee from time to time, in obtaining any relief requested by the Mortgagee,
including, without limitation, by filing any such petitions, supplemental
petitions, requests for relief, documents, instruments or other items from time
to time requested by the Mortgagee or any such court.
SECTION 13.15. No Credit for Payment of Taxes or Impositions.
The Mortgagor shall not be entitled to any credit against the principal,
premium, if any, or interest payable under the Credit Agreement, and the
Mortgagor shall not be entitled to any credit against any other sums which may
become payable under the terms thereof or hereof, by reason of the payment of
any Charge on the Mortgaged Property or any part thereof.
SECTION 13.16. No Claims Against the Mortgagee. Nothing
contained in this Mortgage shall constitute any consent or request by the
Mortgagee, express or implied, for the performance of any labor or services or
the furnishing of any materials or other property in respect of the Premises or
any part thereof, nor as giving the Mortgagor any right, power or authority to
contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit
the making of any claim against the
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Mortgagee in respect thereof or any claim that any Lien based on the performance
of such labor or services or the furnishing of any such materials or other
property is prior to the Lien hereof.
SECTION 13.17. Obligations Absolute. All obligations of the
Mortgagor hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the
Mortgagor or any other Obligor;
(ii) any lack of validity or enforceability of the Credit
Agreement, any Letter of Credit, any other Loan Document, or any other
agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured Obligations, or
any other amendment or waiver of or any consent to any departure from
the Credit Agreement, any Letter of Credit, any other Loan Document, or
any other agreement or instrument relating thereto;
(iv) any exchange, release or non-perfection of any other
Collateral, or any release or amendment or waiver of or consent to any
departure from any guarantee, for all or any of the Secured
Obligations;
(v) any exercise or non-exercise, or any waiver of any
right, remedy, power or privilege under or in respect hereof or any
other Loan Document except as specifically set forth in a waiver
granted pursuant to the provisions of Section 13.17 hereof; or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, the Mortgagor.
SECTION 13.18. Mortgagee's Right To Sever Indebtedness.
(i) The Mortgagor acknowledges that (A) the Mortgaged
Property does not constitute the sole source of security for the payment and
performance of the Secured Obligations and that the Secured Obligations are also
secured by property of the Mortgagor and its Affiliates in other jurisdictions
(all such property, collectively, the "Collateral"), (B) the number of such
jurisdictions and the nature of the transaction of which this instrument is a
part are such that it would have been impracticable for the parties to allocate
to each item of Collateral a specific loan amount and to execute in respect of
such item a separate credit agreement and (C) the Mortgagor intends that the
Mortgagee have the same rights with respect to the Mortgaged Property, in
foreclosure or otherwise, that the Mortgagee would have had if each item of
Collateral had been secured, mortgaged or pledged pursuant to a separate credit
agreement, mortgage or security instrument. In furtherance of such intent, the
Mortgagor agrees that the Mortgagee may at any time by notice (an "Allocation
Notice") to the Mortgagor allocate a portion (the "Allocated Indebtedness") of
the Secured Obligations to the Mortgaged Property and sever from the remaining
Secured Obligations the Allocated Indebtedness. From and after the giving of an
Allocation Notice with respect to the Mortgaged Property, the Secured
Obligations hereunder shall be limited
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to the extent set forth in the Allocation Notice and (as so limited) shall, for
all purposes, be construed as a separate loan obligation of the Mortgagor
unrelated to the other transactions contemplated by the Credit Agreement, any
other Loan Document or any document related to any thereof. To the extent that
the proceeds on any foreclosure of the Mortgaged Property shall exceed the
Allocated Indebtedness, such proceeds shall belong to the Mortgagor and shall
not be available hereunder to satisfy any Secured Obligations of the Mortgagor
other than the Allocated Indebtedness. In any action or proceeding to foreclose
the Lien hereof or in connection with any power of sale, foreclosure or other
remedy exercised under this Mortgage commenced after the giving by the Mortgagee
of an Allocation Notice, the Allocation Notice shall be conclusive proof of the
limits of the Secured Obligations hereby secured, and the Mortgagor may
introduce, by way of defense or counterclaim, evidence thereof in any such
action or proceeding. Notwithstanding any provision of this Section 13.18, the
proceeds received by the Mortgagee pursuant to this Mortgage shall be applied by
the Mortgagee in accordance with the provisions of Section 10.3(iii) hereof.
(ii) The Mortgagor hereby waives to the greatest extent
permitted under law the right to a discharge of any of the Secured Obligations
under any statute or rule of law now or hereafter in effect which provides that
foreclosure of the Lien hereof or other remedy exercised under this Mortgage
constitutes the exclusive means for satisfaction of the Secured Obligations or
which makes unavailable a deficiency judgment or any subsequent remedy because
the Mortgagee elected to proceed with a power of sale foreclosure or such other
remedy or because of any failure by the Mortgagee to comply with laws that
prescribe conditions to the entitlement to a deficiency judgment. In the event
that, notwithstanding the foregoing waiver, any court shall for any reason hold
that the Mortgagee is not entitled to a deficiency judgment, the Mortgagor shall
not (A) introduce in any other jurisdiction such judgment as a defense to
enforcement against the Mortgagor of any remedy in the Credit Agreement or any
other Loan Document or (B) seek to have such judgment recognized or entered in
any other jurisdiction, and any such judgment shall in all events be limited in
application only to the state or jurisdiction where rendered.
(iii) In the event any instrument in addition to the
Allocation Notice is necessary to effectuate the provisions of this Section
13.18, including, without limitation, any amendment to this Mortgage, any
substitute promissory note or affidavit or certificate of any kind, the
Mortgagee may execute, deliver or record such instrument as the attorney-in-fact
of the Mortgagor. Such power of attorney is coupled with an interest and is
irrevocable.
(iv) Notwithstanding anything set forth herein to the
contrary, the provisions of this Section 14.20 shall be effective only to the
maximum extent permitted by law.
SECTION 13.19. Last Dollars Secured. This Mortgage secures
only a portion of the Indebtedness owing or which may become owing by the
Mortgagor. The parties agree that any payments or repayments of such
Indebtedness by the Mortgagor shall be deemed to be applied first to the portion
of the Indebtedness that is not secured hereby, it being the parties' intent
that the portion of the Indebtedness last remaining unpaid shall be secured
thereby.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Mortgagor has caused this Mortgage to
be duly executed and delivered under seal the day and year first above written.
[ ]
By:__________________________________________________
Name:
Title:
[local counsel to confirm signature requirements
S-1
ACKNOWLEDGMENT
State of _______________ )
) ss.:
County of _____________ )
[Local counsel to provide appropriate acknowledgment]
Schedule A - Legal Description
[to come from title policy]
Schedule B
Each of the liens and other encumbrances excepted as being prior to the Lien
hereof as set forth in Schedule B to the marked [Pro Forma Policy] issued by
[Title Insurance Company], dated as of the date hereof and delivered to
Collateral Agent on the date hereof, bearing [Title Insurance Company] reference
number [Title Number] relating to the real property described in Schedule A
attached hereto.
EXHIBIT K-1
[Form of]
TERM NOTE
$_______________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, Ionics, Incorporated, a
Massachusetts corporation ("BORROWER"), hereby promises to pay to the order of [
] (the "LENDER") on the Term Loan Maturity Date (as defined in the Credit
Agreement referred to below) in lawful money of the United States and in
immediately available funds, the principal amount of ____________ DOLLARS
($____________), or, if less, the aggregate unpaid principal amount of all Term
Loans of the Lender outstanding under the Credit Agreement referred to below,
which sum shall be due and payable in such amounts and on such dates as are set
forth in the Credit Agreement. Borrower further agrees to pay interest in like
money at such office specified in Section 2.14 of the Credit Agreement on the
unpaid principal amount hereof from time to time from the date hereof at the
rates, and on the dates, specified in Section 2.06 of the Credit Agreement.
The holder of this Note may endorse and attach a schedule to
reflect the date, Type and amount of each Term Loan of the Lender outstanding
under the Credit Agreement, the date and amount of each payment or prepayment of
principal hereof, and the date of each interest rate conversion or continuation
pursuant to Section 2.08 of the Credit Agreement and the principal amount
subject thereto; provided that the failure of the Lender to make any such
recordation (or any error in such recordation) shall not affect the obligations
of Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of February 13, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among Borrower, the Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC, as
lead arranger, sole bookmanager and documentation agent, FLEET SECURITIES, INC.
and BANK OF AMERICA, N.A., as syndication agents, WACHOVIA BANK, N.A. and
GENERAL ELECTRIC CAPITAL CORPORATION, as co-documentation agents, UBS LOAN
FINANCE LLC, as swingline lender, HSBC BANK USA, as issuing bank, and UBS AG,
STAMFORD BRANCH, as administrative agent for the Lenders and collateral agent
for the Secured Parties, is subject to the provisions thereof and is subject to
optional and mandatory prepayment in whole or in part as provided therein. Terms
used herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.
This Note is secured and guaranteed as provided in the Credit
Agreement and the Security Documents. Reference is hereby made to the Credit
Agreement and the Security Documents for a description of the properties and
assets in which a security interest has been granted, the nature and extent of
the security and guarantees, the terms and conditions upon which the security
interest and each guarantee was granted and the rights of the holder of this
Note in respect thereof.
Upon the occurrence and during the continuance of any one or
more of the Events of Default specified in the Credit Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided therein.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
TERMS OF THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE
REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
THIS NOTE IS ONE OF A SERIES OF TERM NOTES GIVEN TO EVIDENCE AN
AGGREGATE INDEBTEDNESS OF $255,000,000 IN A MULTISTATE LOAN
TRANSACTION. FLORIDA DOCUMENTARY EXCISE TAXES HAVE BEEN PAID ON THE
ALLOCABLE PORTION OF SUCH INDEBTEDNESS UPON THE RECORDING OF A FLORIDA
MORTGAGE GIVEN BY A GUARANTOR TO SECURE SUCH INDEBTEDNESS.
[Signature Page Follows]
IONICS, INCORPORATED,
as Borrower
By: ______________________________
Name:
Title:
EXHIBIT K-2
[Form of]
REVOLVING NOTE
$_________________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, Ionics, Incorporated, a
Massachusetts corporation ("BORROWER"), hereby promises to pay to the order of [
] (the "LENDER") on the Revolving Maturity Date (as defined in the Credit
Agreement referred to below), in lawful money of the United States and in
immediately available funds, the principal amount of the lesser of (a)
____________ DOLLARS ($____________) and (b) the aggregate unpaid principal
amount of all Revolving Loans of the Lender outstanding under the Credit
Agreement referred to below. Borrower further agrees to pay interest in like
money at such office specified in Section 2.14 of the Credit Agreement on the
unpaid principal amount hereof from time to time from the date hereof at the
rates, and on the dates, specified in Section 2.06 of the Credit Agreement.
The holder of this Note may endorse and attach a schedule to
reflect the date, Type and amount of each Revolving Loan of the Lender
outstanding under the Credit Agreement, the date and amount of each payment or
prepayment of principal hereof, and the date of each interest rate conversion or
continuation pursuant to Section 2.08 of the Credit Agreement and the principal
amount subject thereto; provided that the failure of the Lender to make any such
recordation (or any error in such recordation) shall not affect the obligations
of Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement dated as of February 13, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among Borrower, the Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC, as
lead arranger, sole bookmanager and documentation agent, FLEET SECURITIES, INC.
and BANK OF AMERICA, N.A., as syndication agents, WACHOVIA BANK and GENERAL
ELECTRIC CAPITAL CORPORATION, as co-documentation agents, UBS LOAN FINANCE LLC,
as swingline lender, HSBC BANK USA, as issuing bank, and UBS AG, STAMFORD
BRANCH, as administrative agent for the Lenders and collateral agent for the
Secured Parties, is subject to the provisions thereof and is subject to optional
and mandatory prepayment in whole or in part as provided therein. Terms used
herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.
This Note is secured and guaranteed as provided in the Credit
Agreement and the Security Documents. Reference is hereby made to the Credit
Agreement and the Security Documents for a description of the properties and
assets in which a security interest has been granted, the nature and extent of
the security and guarantees, the terms and conditions upon which the security
interest and each guarantee was granted and the rights of the holder of this
Note in respect thereof.
Upon the occurrence and during the continuance of any one or
more of the Events of Default specified in the Credit Agreement, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided therein.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
TERMS OF THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE
REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
THIS NOTE IS ONE OF A SERIES OF REVOLVING NOTES GIVEN TO EVIDENCE AN
AGGREGATE INDEBTEDNESS OF $255,000,000 IN A MULTISTATE LOAN
TRANSACTION. FLORIDA DOCUMENTARY EXCISE TAXES HAVE BEEN PAID ON THE
ALLOCABLE PORTION OF SUCH INDEBTEDNESS UPON THE RECORDING OF A FLORIDA
MORTGAGE GIVEN BY A GUARANTOR TO SECURE SUCH INDEBTEDNESS.
[Signature Page Follows]
IONICS, INCORPORATED,
as Borrower
By: _______________________________
Name:
Title:
EXHIBIT K-3
[Form of]
SWINGLINE NOTE
$____________ New York, New York
[Date]
FOR VALUE RECEIVED, the undersigned, Ionics, Incorporated, a
Massachusetts corporation ("BORROWER"), hereby promises to pay to the order of [
] (the "LENDER") on the Revolving Maturity Date (as defined in the Credit
Agreement referred to below), in lawful money of the United States and in
immediately available funds, the principal amount of the lesser of (a)
____________ ($____________) and (b) the aggregate unpaid principal amount of
all Swingline Loans made by Lender to the undersigned pursuant to Section 2.17
of the Credit Agreement referred to below. Borrower further agrees to pay
interest on the unpaid principal amount hereof in like money at such office
specified in Section 2.17(c) of the Credit Agreement from time to time from the
date hereof at the rates and on the dates specified in Section 2.06 of the
Credit Agreement.
The holder of this Note may endorse and attach a schedule to
reflect the date, the amount of each Swingline Loan and the date and amount of
each payment or prepayment of principal thereof; provided that the failure of
Lender to make such recordation (or any error in such recordation) shall not
affect the obligations of Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement, dated as of February 13, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among Borrower, the Subsidiary Guarantors, the Lenders, UBS SECURITIES LLC, as
lead arranger, sole bookmanager and documentation agent, FLEET SECURITIES, INC.
and BANK OF AMERICA SECURITIES, N.A., as syndication agents, WACHOVIA BANK, N.A.
and GENERAL ELECTRIC CAPITAL CORPORATION, as co-documentation agents, UBS LOAN
FINANCE LLC, as swingline lender, HSBC BANK USA, as issuing bank, and UBS AG,
STAMFORD BRANCH, as administrative agent for the Lenders and collateral agent
for the Secured Parties, is subject to the provisions thereof and is subject to
optional and mandatory prepayment in whole or in part as provided therein. Terms
used herein which are defined in the Credit Agreement shall have such defined
meanings unless otherwise defined herein or unless the context otherwise
requires.
This Note is secured and guaranteed as provided in the Credit
Agreement and the Security Documents. Reference is hereby made to the Credit
Agreement and the Security Documents for a description of the properties and
assets in which a security interest has been granted, the nature and extent of
the security and guarantees, the terms and conditions upon which the security
interest and each guarantee was granted and the rights of the holder of this
Note in respect thereof.
Upon the occurrence and during the continuance of any one or
more of the Events of Default specified in the Credit Agreement, all amounts
then remaining unpaid on this Note may become, or may be declared to be,
immediately due and payable as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE
TERMS OF THE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE
REGISTER MAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE
CREDIT AGREEMENT.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
THIS NOTE IS ONE OF A SERIES OF SWINGLINE NOTES GIVEN TO EVIDENCE AN
AGGREGATE INDEBTEDNESS OF $255,000,000 IN A MULTISTATE LOAN
TRANSACTION. FLORIDA DOCUMENTARY EXCISE TAXES HAVE BEEN PAID ON THE
ALLOCABLE PORTION OF SUCH INDEBTEDNESS UPON THE RECORDING OF A FLORIDA
MORTGAGE GIVEN BY A GUARANTOR TO SECURE SUCH INDEBTEDNESS.
[Signature Page Follows]
IONICS, INCORPORATED,
as Borrower
By: _______________________________
Name:
Title:
EXHIBIT L-1
PERFECTION CERTIFICATE
Reference is hereby made to (i) that certain Security Agreement dated
as of February 13, 2004 (the "Security Agreement"), between Ionics,
Incorporated, a Massachusetts corporation (the "Company"), the Guarantors party
thereto from time to time (collectively, the "Guarantors") and the Collateral
Agent (as hereinafter defined) and (ii) that certain Credit Agreement dated as
of February 13, 2004 (the "Credit Agreement") among the Company, the Guarantors,
certain other parties thereto and UBS AG, Stamford Branch, as Collateral Agent
(in such capacity, the "Collateral Agent"). Capitalized terms used but not
defined herein have the meanings assigned in the Credit Agreement.
The undersigned hereby certify to the Collateral Agent as follows:
1. Names. (a) The exact legal name of the Company and each
Subsidiary of the Company, as such name appears in its respective certificate of
incorporation or any other organizational document, is set forth in SCHEDULE
1(a). The Company and each Subsidiary is (i) the type of entity disclosed next
to its name in SCHEDULE 1(a) and (ii) a registered organization except to the
extent disclosed in SCHEDULE 1(a). Also set forth in SCHEDULE 1(a) is the
organizational identification number, if any, of the Company and each Subsidiary
of the Company that is a registered organization, the Federal Taxpayer
Identification Number of the Company and each domestic Subsidiary of the Company
and the state of formation of the Company and each domestic Subsidiary of the
Company.
(b) Set forth in SCHEDULE 1(b) hereto is any other corporate or
organizational names the Company and each Subsidiary the Company has had in the
past five years, together with the date of the relevant change.
(c) Set forth in SCHEDULE 1(c) is a list of all other names
(including trade names or similar appellations) used by the Company and each
Subsidiary of the Company, or any other business or organization to which the
Company and each Subsidiary of the Company became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise, at any time between January 1, 1999 and the date
hereof. Also set forth in SCHEDULE 1(c) is the information required by Section 1
of this certificate for any other business or organization to which the Company
and each Subsidiary of the Company became the successor by merger,
consolidation, acquisition, change in form, nature or jurisdiction of
organization or otherwise, at any time between January 1, 1999 and the date
hereof.
2. Current Locations. (a) The chief executive office of the
Company and each Subsidiary of the Company is located at the address set forth
in SCHEDULE 2(a) hereto.
(b) Set forth in SCHEDULE 2(b) are all locations where the Company
and each Subsidiary of the Company maintains any books or records relating to
any Collateral.
(c) Set forth in SCHEDULE 2(c) hereto are all the other places of
business of the Company and each Subsidiary of the Company.
(d) Set forth in SCHEDULE 2(d) hereto are all other locations
where the Company and each Subsidiary of the Company maintains any of the
Collateral consisting of inventory or equipment not identified above.
(e) Set forth in SCHEDULE 2(e) hereto are the names and addresses
of all persons or entities other than the Company and each Subsidiary of the
Company, such as lessees, consignees, ware-
housemen or purchasers of chattel paper, which have possession or are intended
to have possession of any of the Collateral consisting of instruments, chattel
paper, inventory or equipment.
3. Extraordinary Transactions. Except for those purchases,
acquisitions and other transactions described on SCHEDULE 3 attached hereto and
except as may be acquired in connection with the Acquisition, all of the
Collateral has been originated by the Company and each Subsidiary of the Company
in the ordinary course of business or consists of goods which have been acquired
by the Company or any Subsidiary of the Company in the ordinary course of
business from a person in the business of selling goods of that kind.
4. File Search Reports. Attached hereto as SCHEDULE 4(a) is a
true and accurate summary of file search reports from (A) the Uniform Commercial
Code filing offices (i) in each jurisdiction identified in Section 1(a) or
Section 2 with respect to each legal name set forth in Section 1 and (ii) in
each jurisdiction described in SCHEDULE 1(c) or SCHEDULE 3 relating to any of
the transactions described in SCHEDULE (1)(c) or SCHEDULE 3 with respect to each
legal name of the person or entity from which the Company or any domestic
Subsidiary of the Company purchased or otherwise acquired any of the Collateral
and (B) each filing officer in each real estate recording office identified on
SCHEDULE 7 with respect to real estate on which Collateral consisting of
fixtures is or is to be located. Attached hereto as SCHEDULE 4(b) is a true copy
of each financing statement, including judgment and tax liens, bankruptcy and
pending lawsuits or other filing identified in such file search reports.
5. UCC Filings. The financing statements (duly authorized by the
Company or the applicable domestic Subsidiary constituting the debtor therein),
including the indications of the Collateral, attached as SCHEDULE 5 relating to
the Security Agreement or the applicable Mortgage, are in the appropriate forms
for filing in the filing offices in the jurisdictions identified in SCHEDULE 6
hereof.
6. Schedule of Filings. Attached hereto as SCHEDULE 6 is a
schedule of (i) the appropriate filing offices for the financing statements
attached hereto as SCHEDULE 5 and (ii) the appropriate filing offices for the
filings described in SCHEDULE 13(e) and (iii) any other actions required to
create, preserve, protect and perfect the security interests in the Pledged
Collateral (as defined in the Security Agreement) granted to the Collateral
Agent pursuant to the Collateral Documents. No other filings or actions are
required to create, preserve, protect and perfect the security interests in the
Pledged Collateral granted to the Collateral Agent pursuant to the Collateral
Documents.
7. Real Property. Attached hereto as SCHEDULE 7 is a list of all
real property owned or leased by the Company and each Subsidiary of the Company.
8. Termination Statements. Attached hereto as SCHEDULE 8(a) are
the duly authorized termination statements in the appropriate form for filing in
each applicable jurisdiction identified in SCHEDULE 8(b) hereto with respect to
each Lien described therein.
9. No Change. The undersigned knows of no anticipated change in
any of the circumstances or with respect to any of the matters contemplated in
SECTIONS 1 through 8 and SECTION 10 through SECTION 16 of this Perfection
Certificate except as set forth on SCHEDULE 9 hereto.
10. Stock Ownership and other Equity Interests. Attached hereto as
SCHEDULE 10 is a true and correct list of all the issued and outstanding stock,
partnership interests, limited liability company membership interests or other
equity interest of the Company and each of the Company's Subsidiaries and the
record and beneficial owners of such stock, partnership interests, membership
interests or other
-2-
equity interests. Also set forth on SCHEDULE 10 is each equity investment of the
Company and each of the Company's Subsidiaries that represents 50% or less of
the equity of the entity in which such investment was made.
11. Instruments and Tangible Chattel Paper. Attached hereto as
SCHEDULE 11 is a true and correct list of all promissory notes, instruments
(other than checks to be deposited in the ordinary course of business), tangible
chattel paper, electronic chattel paper and other evidence of indebtedness held
by the Company and any of the Company's Subsidiaries as of December 31, 2003,
including all intercompany notes between the Company and any of the Company's
Subsidiaries.
12. Advances. Attached hereto as SCHEDULE 12 is (a) a true and
correct list of all advances made by the Company to any of the Company's
Subsidiaries or made by any Subsidiary of the Company to the Company or any
other Subsidiary of the Company as of February 13, 2004 (other than those
identified on SCHEDULE 12), which advances will be on and after the date hereof
evidenced by one or more intercompany notes pledged to the Collateral Agent
under the Security Agreement and (b) a true and correct list of all unpaid
intercompany transfers of goods sold and delivered by or to the Company or any
Subsidiary of the Company as of February 13, 2004.
13. Intellectual Property. (a) Attached hereto as SCHEDULE 13(a)
is a schedule setting forth all of the Company's and each of the Company's
Subsidiaries' Patents, Patent Licenses, Trademarks and Trademark Licenses (each
as defined in the Security Agreement), including the name of the registered
owner and the registration number of each Patent, Patent License, Trademark and
Trademark License owned the Company and each of the Company's Subsidiaries.
Attached hereto as SCHEDULE 13(b) is a schedule setting forth all of the
Company's and each of the Company's Subsidiaries' Copyrights and Copyright
Licenses (each as defined in the Security Agreement), including the name of the
registered owner and the registration number of each Copyright or Copyright
License owned by the Company or any of the Company's Subsidiaries
(b) Attached hereto as SCHEDULE 13(c) in proper form for filing
with the United States Patent and Trademark Office is a schedule setting forth
all of the Company's and each of the Company's Subsidiaries' Patents and
Trademarks registered with the United States Patent and Trademark Office,
including the name of the registered owner and the registration number Patent
and Trademark owned by the Company and each of the Company's Subsidiaries.
Attached hereto as SCHEDULE 13(d) in proper form for filing with the United
States Copyright Office (as defined in the Security Agreement) is a schedule
setting forth all of the Company's and each of the Company's Subsidiaries'
United States Copyrights, including the name of the registered owner and the
registration number of each Copyright owned by the Company or any of the
Company's Subsidiaries.
(c) Attached hereto as SCHEDULE 13(e) in proper form for filing
with the United States Patent and Trademark Office are the filings necessary to
preserve, protect and perfect the security interests in the Copyrights,
Trademarks and Patents set forth on SCHEDULE 13(c) and SCHEDULE 13(d), including
duly signed copies of each of the Patent Security Agreement, Trademark Security
Agreement and the Copyright Security Agreement, as applicable.
14. Commercial Tort Claims. Attached hereto as SCHEDULE 14 is a
true and correct list of all Commercial Tort Claims (as defined in the Security
Agreement) held by the Company or any of the Company's Subsidiaries, including a
brief description thereof.
-3-
15. Deposit Accounts, Securities Accounts and Commodity Accounts.
Attached hereto as SCHEDULE 15 is a true and complete list of all Deposit
Accounts, Securities Accounts and Commodity Accounts (each as defined in the
Security Agreement) maintained by the Company and each of the Company's
Subsidiaries, including the name of each institution where each such account is
held, the name of each such account and the name of each entity that holds each
account.
16. Letter-of-Credit Rights. Attached hereto as SCHEDULE 16 is a
true and correct list of all Letters of Credit issued in favor of the Company or
any of the Company's Subsidiaries, as beneficiary thereunder.
17. Motor Vehicles/Certificates of Title. Attached hereto as
SCHEDULE 17 is a true and correct list of all motor vehicles (covered by
certificates of title or ownership) valued at over $50,000 and owned by the
Company or any of the Company's Subsidiaries, and the owner and approximate
value of such motor vehicles.
[The Remainder of this Page has been intentionally left blank]
-4-
IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate
as of this ____ day of ________________, 2004.
IONICS, INCORPORATED
By: ______________________________
Name:
Title:
[EACH OF THE GUARANTORS]
By: ______________________________
Name:
Title:
SCHEDULE 1(a)
LEGAL NAMES, ETC.
REGISTERED ORGANIZATION FEDERAL TAXPAYER
LEGAL NAME TYPE OF ENTITY (YES/NO) ORGANIZATIONAL NUMBER(a) IDENTIFICATION NUMBER STATE OF FORMATION
---------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
---------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
---------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
---------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
---------------
(a) If none, so state.
-6-
SCHEDULE 1(b)
PRIOR ORGANIZATIONAL NAMES
COMPANY/SUBSIDIARY PRIOR NAME DATE OF CHANGE
-------------------------- ---------------------------- ------------------
-------------------------- ---------------------------- ------------------
-------------------------- ---------------------------- ------------------
-------------------------- ---------------------------- ------------------
-------------------------- ---------------------------- ------------------
-7-
SCHEDULE 1(C)
CHANGES IN CORPORATE IDENTITY; OTHER NAMES
LIST OF ALL OTHER NAMES
CORPORATE NAME OF DATE OF STATE OF USED DURING PAST FIVE
COMPANY/SUBSIDIARY ENTITY ACTION ACTION FORMATION YEARS
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
----------------------- --------------------- -------------- --------- ------------- -----------------------
[Add Information required by Section 1 to the extent required
by Section 1(c) of the Perfection Certificate]
-8-
SCHEDULE 2(a)
CHIEF EXECUTIVE OFFICES
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
-9-
SCHEDULE 2(b)
LOCATION OF BOOKS
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
-10-
SCHEDULE 2(c)
OTHER PLACES OF BUSINESS
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
-11-
SCHEDULE 2(d)
ADDITIONAL LOCATIONS OF EQUIPMENT AND INVENTORY
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
---------------------- ----------------------------------- ----------------- --------------------
-12-
SCHEDULE 2(e)
LOCATIONS OF COLLATERAL IN POSSESSION OF
PERSONS OTHER THAN COMPANY OR ANY SUBSIDIARY
NAME OF ENTITY IN
POSSESSION OF
COLLATERAL/CAPACITY OF ADDRESS/LOCATION OF
COMPANY/SUBSIDIARY SUCH ENTITY COLLATERAL COUNTY STATE
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
-13-
SCHEDULE (3)
TRANSACTIONS OTHER THAN IN THE ORDINARY COURSE OF BUSINESS
COMPANY/SUBSIDIARY DESCRIPTION OF TRANSACTION INCLUDING PARTIES THERETO DATE OF TRANSACTION
---------------------- ---------------------------------------------------- -------------------
---------------------- ---------------------------------------------------- -------------------
---------------------- ---------------------------------------------------- -------------------
---------------------- ---------------------------------------------------- -------------------
-14-
SCHEDULE 4(a)
FILE SEARCH REPORTS
COMPANY/SUBSIDIARY SEARCH REPORT DATED PREPARED BY JURISDICTION
---------------------- ----------------------- ------------------- --------------------
---------------------- ----------------------- ------------------- --------------------
---------------------- ----------------------- ------------------- --------------------
---------------------- ----------------------- ------------------- --------------------
SEE ATTACHED.
-15-
SCHEDULE 4(b)
COPIES OF REPORTED FINANCING STATEMENTS
SEE ATTACHED.
-16-
SCHEDULE 5
COPIES OF FINANCING STATEMENTS TO BE FILED
SEE ATTACHED.
-17-
SCHEDULE 6
FILINGS/FILING OFFICES
TYPE
OF APPLICABLE COLLATERAL
FILING(a) ENTITY DOCUMENT JURISDICTIONS
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
--------------------
(a) UCC-1 financing statement, fixture filing, mortgage, intellectual
property filing or other necessary filing.
-18-
SCHEDULE 7
REAL PROPERTY
OWNED OR LANDLORD/OWNER IF DESCRIPTION OF
ENTITY OF RECORD LOCATION ADDRESS LEASED LEASED LEASE DOCUMENTS
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
-19-
SCHEDULE 8(a)
ATTACHED HERETO IS A TRUE COPY OF EACH TERMINATION STATEMENT FILING DULY
ACKNOWLEDGED OR OTHERWISE IDENTIFIED BY THE FILING OFFICER.
-20-
SCHEDULE 8(b)
TERMINATION STATEMENT FILINGS
UCC-1 UCC-1
DEBTOR JURISDICTION SECURED PARTY TYPE OF COLLATERAL FILE DATE FILE NUMBER
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
-21-
SCHEDULE 9
CHANGES FROM CIRCUMSTANCES DESCRIBED IN PERFECTION CERTIFICATE
-22-
SCHEDULE 10
STOCK OWNERSHIP AND OTHER EQUITY INTERESTS
COMPANY/SUBSIDIARY: ______________
CURRENT LEGAL ENTITIES
OWNED RECORD OWNER CERTIFICATE NO. NO. SHARES/INTEREST PERCENT PLEDGED
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
-23-
SCHEDULE 11
INSTRUMENTS AND TANGIBLE CHATTEL PAPER
1. Promissory Notes:
ENTITY PRINCIPAL AMOUNT DATE OF ISSUANCE INTEREST RATE MATURITY DATE
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
2. Chattel Paper:
-24-
SCHEDULE 12
ADVANCES
DESCRIPTION AND DATE OF
DESCRIPTION AND DATE OF UNPAID INTERCOMPANY
ADVANCE FROM TO TRANSFER OF GOODS FROM TO
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
-25-
SCHEDULE 13(a)
PATENTS AND TRADEMARKS
PATENTS:
Registrations:
REGISTRATION
OWNER NUMBER COUNTRY DESCRIPTION
------------- ------------ ------------ -----------
Applications:
APPLICATION
OWNER NUMBER COUNTRY DESCRIPTION
------------- ------------ ------------ -----------
Licenses:
REGISTRATION/
APPLICATION
LICENSEE LICENSOR COUNTRY NUMBER DESCRIPTION
------------- ------------ ------------ ------------- --------------
TRADEMARKS:
Registrations:
REGISTRATION
OWNER NUMBER COUNTRY TRADEMARK
------------- ------------ ------------ -----------
Applications:
APPLICATION
OWNER NUMBER COUNTRY TRADEMARK
------------- ------------ ------------ -----------
Licenses:
-26-
REGISTRATION/
APPLICATION
LICENSEE LICENSOR COUNTRY NUMBER TRADEMARK
------------- ------------ ------------ ------------- ---------
-27-
SCHEDULE 15(b)
COPYRIGHTS
Registrations:
OWNER COUNTRY TITLE REGISTRATION NUMBER
------------- ------------ ------------ -------------------
Applications:
OWNER COUNTRY APPLICATION NUMBER
------------- ------------ ------------------
Licenses:
REGISTRATION/
APPLICATION
LICENSEE LICENSOR COUNTRY NUMBER DESCRIPTION
------------- ------------ ------------ ------------- -----------
-28-
SCHEDULE 13(c)
PATENTS AND TRADEMARKS
PATENTS:
Registrations:
REGISTRATION
OWNER NUMBER DESCRIPTION
------------- ------------ ------------
Applications:
APPLICATION
OWNER NUMBER DESCRIPTION
------------- ------------ ------------
TRADEMARKS:
Registrations:
REGISTRATION
OWNER NUMBER TRADEMARK
------------- ------------ ------------
Applications:
APPLICATION
OWNER NUMBER TRADEMARK
------------- ------------ ------------
-29-
SCHEDULE 13(d)
COPYRIGHTS
REGISTRATION
OWNER NUMBER TITLE
------------- ------------ ------------
-30-
SCHEDULE 15(e)
INTELLECTUAL PROPERTY FILINGS
-31-
SCHEDULE 14
COMMERCIAL TORT CLAIMS
-32-
SCHEDULE 15
DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS
BANK OR
OWNER TYPE OF ACCOUNT INTERMEDIARY ACCOUNT NUMBERS
------------- --------------- ------------ ---------------
-33-
SCHEDULE 16
LETTER OF CREDIT RIGHTS
-34-
SCHEDULE 17
MOTOR VEHICLES/CERTIFICATES OF TITLE
-35-
EXHIBIT L-2
PERFECTION CERTIFICATE SUPPLEMENT
This Perfection Certificate Supplement, dated as of [ ], 200[ ] is
delivered pursuant to Section 5.13(b) of that Certain Credit Agreement dated as
of February 13, 2004 (the "Credit Agreement") among Ionics, Incorporated ("the
Company"), the Guarantors, certain other parties thereto and UBS AG, Stamford
Branch, as Collateral Agent (in such capacity, the "Collateral Agent").
Capitalized terms used but not defined herein have the meanings assigned in the
Credit Agreement.
Each of the undersigned hereby certifies to the Collateral Agent and
each of the other Secured Parties that, as of the date hereof, there has been no
change in the information described in the Perfection Certificate delivered on
the Closing Date (as supplemented by any perfection certificate supplements
delivered prior to the date hereof, the "Prior Perfection Certificate"), other
than as follows:
1. Names. (a) Except as listed on Schedule 1(a) attached hereto
and made a part hereof, (x) Schedule 1(a) to the Prior Perfection Certificate
sets forth the exact legal name of the Company and each Subsidiary of the
Company, as such name appears in its respective certificate of incorporation or
any other organizational document; (y) the Company and each Subsidiary is (i)
the type of entity disclosed next to its name in Schedule 1(a) to the Prior
Perfection Certificate and (ii) a registered organization except to the extent
disclosed in Schedule 1(a) to the Prior Perfection Certificate; and (z) set
forth in Schedule 1(a) to the Prior Perfection Certificate is the organizational
identification number, if any, of the Company and each Subsidiary of the Company
that is a registered organization, the Federal Taxpayer Identification Number of
the Company and each domestic Subsidiary of the Company and the state of
formation of the Company and each domestic Subsidiary of the Company.
(b) Except as listed on Schedule 1(b) attached hereto and made a
part hereof, set forth in Schedule 1(b) of the Prior Perfection Certificate is
any other corporate or organizational names the Company and each Subsidiary the
Company has had in the past five years, together with the date of the relevant
change.
(c) Except as listed on Schedule 1(c) attached hereto and made a
part hereof, set forth in Schedule 1(c) of the Prior Perfection Certificate is
(i) a list of all other names (including trade names or similar appellations)
used by the Company and each Subsidiary of the Company, or any other business or
organization to which the Company and each Subsidiary of the Company became the
successor by merger, consolidation, acquisition, change in form, nature or
jurisdiction of organization or otherwise, at any time between January 1, 1999
and the date hereof and (ii) the information required by Section 1 of this
certificate for any other business or organization to which the Company and each
Subsidiary of the Company became the successor by merger, consolidation,
acquisition, change in form, nature or jurisdiction of organization or
otherwise, at any time between January 1, 1999 and the date hereof.
2. Current Locations. (a) Except as listed on Schedule 2(a)
attached hereto and made a part hereof, the chief executive office of the
Company and each Subsidiary of the Company is located at the address set forth
in Schedule 2(a) of the Prior Perfection Certificate.
(b) Except as listed on Schedule 2(b) attached hereto and made a
part hereof, set forth in Schedule 2(b) of the Prior Perfection Certificate are
all locations where the Company and each Subsidiary of the Company maintains any
books or records relating to any Collateral.
(c) Except as listed on Schedule 2(c) attached hereto and made a
part hereof, set forth in Schedule 2(c) of the Prior Perfection Certificate are
all the other places of business of the Company and each Subsidiary of the
Company.
(d) Except as listed on Schedule 2(d) attached hereto and made a
part hereof, set forth in Schedule 2(d) of the Prior Perfection Certificate are
all other locations where the Company and each Subsidiary of the Company
maintains any of the Collateral consisting of inventory or equipment not
identified above.
(e) Except as listed on Schedule 2(e) attached hereto and made a
part hereof, set forth in Schedule 2(e) of the Prior Perfection Certificate are
the names and addresses of all persons or entities other than the Company and
each Subsidiary of the Company, such as lessees, consignees, warehousemen or
purchasers of chattel paper, which have possession or are intended to have
possession of any of the Collateral consisting of instruments, chattel paper,
inventory or equipment.
3. Extraordinary Transactions. Except for those purchases,
acquisitions and other transactions described on Schedule 3 attached hereto and
on Schedule 3 to the Prior Perfection Certificate, all of the Collateral has
been originated by the Company and each Subsidiary of the Company in the
ordinary course of business or consists of goods which have been acquired by the
Company or any Subsidiary of the Company in the ordinary course of business from
a person in the business of selling goods of that kind.
4. File Search Reports. Except as listed on Schedule 4(a)
attached hereto and made a part hereof, set forth in Schedule 4(a) of the Prior
Perfection Certificate is a true and accurate summary of file search reports
from (A) the Uniform Commercial Code filing offices (i) in each jurisdiction
identified in Section 1(a) or Section 2 hereto and thereto with respect to each
legal name set forth in Section 1 and (ii) in each jurisdiction described in
Schedule 1(c) thereto or Schedule 3 hereto or thereto relating to any of the
transactions described in Schedule (1)(c) or Schedule 3 hereto or thereto with
respect to each legal name of the person or entity from which the Company or any
domestic Subsidiary of the Company purchased or otherwise acquired any of the
Collateral and (B) each filing officer in each real estate recording office
identified on Schedule 7 hereto or thereto with respect to real estate on which
Collateral consisting of fixtures is or is to be located. Except as listed on
Schedule 4(b) attached hereto and made a part hereof, attached to the Prior
Perfection Certificate as Schedule 4(b) is a true copy of each financing
statement, including judgment and tax liens, bankruptcy and pending lawsuits or
other filing identified in such file search reports.
5. UCC Filings. Except as set listed on Schedule 5 attached
hereto and made a part hereof, the financing statements (duly authorized by the
Company or the applicable domestic Subsidiary constituting the debtor therein),
including the indications of the Collateral, relating to the Security Agreement
or the applicable Mortgage, are set forth in Schedule 5 to the Prior Perfection
Certificate, and are in the appropriate forms for filing in the filing offices
in the jurisdictions identified in Schedule 6 thereto and hereto.
6. Schedule of Filings. Except as listed on Schedule 6 attached
hereto and made a part hereof, attached to the Prior Perfection Certificate as
Schedule 6 is a schedule of (i) the appropriate filing offices for the financing
statements attached thereto and hereto as Schedule 5, (ii) the appropriate
filing offices for the filings described in Schedule 13(e) thereto and hereto
and (iii) any other actions required to create, preserve, protect and perfect
the security interests in the Pledged Collateral (as defined in the Security
Agreement) granted to the Collateral Agent pursuant to the Collateral Documents.
No other filings
-2-
or actions are required to create, preserve, protect and perfect the security
interests in the Pledged Collateral granted to the Collateral Agent pursuant to
the Collateral Documents.
7. Real Property. Except as listed on Schedule 7 attached hereto
and made a part hereof, Schedule 7 to the Prior Perfection Certificate sets
forth a list of all real property owned or leased by the Company and each
Subsidiary of the Company.
8. Termination Statements. Except as listed on Schedule 8(a)
attached hereto and made a part hereof, Schedule 8(a) to the Prior Perfection
Certificate sets forth the duly authorized termination statements in the
appropriate form for filing in each applicable jurisdiction identified in
Schedule 8(b) hereto and thereto with respect to each Lien described therein.
9. No Change. The undersigned knows of no anticipated change in
any of the circumstances or with respect to any of the matters contemplated in
Sections 1 through 8 and Section 10 through Section 16 hereto except as set
forth on Schedule 9 attached hereto and made a part hereof.
10. Stock Ownership and other Equity Interests. Except as listed
on Schedule 10 attached hereto and made a part hereof, Schedule 10 to the Prior
Perfection Certificate (x) is a true and correct list of all the issued and
outstanding stock, partnership interests, limited liability company membership
interests or other equity interest of the Company and each of the Company's
Subsidiaries and the record and beneficial owners of such stock, partnership
interests, membership interests or other equity interests and (y) sets forth
each equity investment of the Company and each of the Company's Subsidiaries
that represents 50% or less of the equity of the entity in which such investment
was made.
11. Instruments and Tangible Chattel Paper. Except as listed on
Schedule 11 attached hereto and made a part hereof, Schedule 11 to the Prior
Perfection Certificate is a true and correct list of all promissory notes,
instruments (other than checks to be deposited in the ordinary course of
business), tangible chattel paper, electronic chattel paper and other evidence
of indebtedness held by the Company and any of the Company's Subsidiaries as of
______________, 2004, including all intercompany notes between the Company and
any of the Company's Subsidiaries.
12. Advances. Except as listed on Schedule 12 attached hereto and
made a part hereof, Schedule 12 to the Prior Perfection Certificate is (a) a
true and correct list of all advances made by the Company to any of the
Company's Subsidiaries or made by any Subsidiary of the Company to the Company
or any other Subsidiary of the Company as of ____________, 2004 (other than
those identified on Schedule 12 hereto or thereto), which advances will be on
and after the date hereof evidenced by one or more intercompany notes pledged to
the Collateral Agent under the Security Agreement and (b) a true and correct
list of all unpaid intercompany transfers of goods sold and delivered by or to
the Company or any Subsidiary of the Company as of __________________, 2004.
13. Intellectual Property. (a) Except as listed on Schedule 13(a)
attached hereto and made a part hereof, Schedule 13(a) to the Prior Perfection
Certificate is a schedule setting forth all of the Company's and each of the
Company's Subsidiaries' Patents, Patent Licenses, Trademarks and Trademark
Licenses (each as defined in the Security Agreement), including the name of the
registered owner and the registration number of each Patent, Patent License,
Trademark and Trademark License owned the Company and each of the Company's
Subsidiaries. Except as listed on Schedule 13(b) attached hereto and made a part
hereof, Schedule 13(b) to the Prior Perfection Certificate is a schedule setting
forth all of the Company's and each of the Company's Subsidiaries' Copyrights
and Copyright Licenses (each as defined
-3-
in the Security Agreement), including the name of the registered owner and the
registration number of each Copyright or Copyright License owned by the Company
or any of the Company's Subsidiaries
(b) Except as listed on Schedule 13(c) attached hereto and made a
part hereof, attached to the Prior Perfection Certificate as Schedule 13(c) in
proper form for filing with the United States Patent and Trademark Office is a
schedule setting forth all of the Company's and each of the Company's
Subsidiaries' Patents and Trademarks registered with the United States Patent
and Trademark Office, including the name of the registered owner and the
registration number Patent and Trademark owned by the Company and each of the
Company's Subsidiaries. Except as listed on Schedule 13(d) attached hereto and
made a part hereof, attached to the Prior Perfection Certificate as Schedule
13(d) in proper form for filing with the United States Copyright Office (as
defined in the Security Agreement) is a schedule setting forth all of the
Company's and each of the Company's Subsidiaries' United States Copyrights,
including the name of the registered owner and the registration number of each
Copyright owned by the Company or any of the Company's Subsidiaries.
(c) Except as listed on Schedule 13(e) attached hereto and made a
part hereof, attached to the Prior Perfection Certificate as Schedule 13(e) in
proper form for filing with the United States Patent and Trademark Office are
the filings necessary to preserve, protect and perfect the security interests in
the Copyrights, Trademarks and Patents set forth on Schedule 13(c) and Schedule
13(d) hereto and thereto, including duly signed copies of each of the Patent
Security Agreement, Trademark Security Agreement and the Copyright Security
Agreement, as applicable.
14. Commercial Tort Claims. Except as listed on Schedule 14
attached hereto and made a part hereof, attached to the Prior Perfection
Certificate as Schedule 14 is a true and correct list of all Commercial Tort
Claims (as defined in the Security Agreement) held by the Company or any of the
Company's Subsidiaries, including a brief description thereof.
15. Deposit Accounts, Securities Accounts and Commodity Accounts.
Except as listed on Schedule 15 attached hereto and made a part hereof, attached
to the Prior Perfection Certificate as Schedule 15 is a true and complete list
of all Deposit Accounts, Securities Accounts and Commodity Accounts (each as
defined in the Security Agreement) maintained by the Company and each of the
Company's Subsidiaries, including the name of each institution where each such
account is held, the name of each such account and the name of each entity that
holds each account.
16. Letter-of-Credit Rights. Except as listed on Schedule 16
attached hereto and made a part hereof, attached to the Prior Perfection
Certificate as Schedule 16 is a true and correct list of all Letters of Credit
issued in favor of the Company or any of the Company's Subsidiaries, as
beneficiary thereunder.
17. Motor Vehicles/Certificates of Title. Except as listed on
Schedule 17 attached hereto and made a part hereof, attached to the Prior
Perfection Certificate as Schedule 17 is a true and correct list of all motor
vehicles (covered by certificates of title or ownership) valued at over $50,000
and owned by the Company or any of the Company's Subsidiaries, and the owner and
approximate value of such motor vehicles.
[The Remainder of this Page has been intentionally left blank]
-4-
IN WITNESS WHEREOF, we have hereunto signed this Perfection Certificate
Supplement as of this ____ day of ________________, 200[ ].
IONICS, INCORPORATED
By: ______________________________
Name:
Title:
[EACH OF THE GUARANTORS]
By: ______________________________
Name:
Title:
SCHEDULE 1(a)
LEGAL NAMES, ETC.
REGISTERED ORGANIZATION FEDERAL TAXPAYER
LEGAL NAME TYPE OF ENTITY (YES/NO) ORGANIZATIONAL NUMBER(a) IDENTIFICATION NUMBER STATE OF FORMATION
-------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
-------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
-------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
-------------- ----------------- ----------------------- ------------------------ --------------------- ------------------
-------------
(a) If none, so state.
-6-
SCHEDULE 1(b)
PRIOR ORGANIZATIONAL NAMES
COMPANY/SUBSIDIARY PRIOR NAME DATE OF CHANGE
---------------------- ----------------------------------- --------------
---------------------- ----------------------------------- --------------
---------------------- ----------------------------------- --------------
---------------------- ----------------------------------- --------------
---------------------- ----------------------------------- --------------
-7-
SCHEDULE 1(c)
CHANGES IN CORPORATE IDENTITY; OTHER NAMES
LIST OF ALL OTHER NAMES
CORPORATE NAME OF DATE OF STATE OF USED DURING PAST FIVE
COMPANY/SUBSIDIARY ENTITY ACTION ACTION FORMATION YEARS
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
---------------------- ----------------------- ---------- ---------- ----------- -----------------------
[Add Information required by Section 1 to the extent required
by Section 1(c) of the Perfection Certificate Supplement]
-8-
SCHEDULE 2(a)
CHIEF EXECUTIVE OFFICES
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
-9-
SCHEDULE 2(b)
LOCATION OF BOOKS
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
-10-
SCHEDULE 2(c)
OTHER PLACES OF BUSINESS
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
-11-
SCHEDULE 2(d)
ADDITIONAL LOCATIONS OF EQUIPMENT AND INVENTORY
COMPANY/SUBSIDIARY ADDRESS COUNTY STATE
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
---------------------- ------------------------------------- ----------------- ----------------
-12-
SCHEDULE 2(e)
LOCATIONS OF COLLATERAL IN POSSESSION OF
PERSONS OTHER THAN COMPANY OR ANY SUBSIDIARY
NAME OF ENTITY IN
POSSESSION OF
COLLATERAL/CAPACITY OF ADDRESS/LOCATION OF
COMPANY/SUBSIDIARY SUCH ENTITY COLLATERAL COUNTY STATE
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
---------------------- ------------------------------ --------------------- ---------------- ------------
-13-
SCHEDULE (3)
TRANSACTIONS OTHER THAN IN THE ORDINARY COURSE OF BUSINESS
COMPANY/SUBSIDIARY DESCRIPTION OF TRANSACTION INCLUDING PARTIES THERETO DATE OF TRANSACTION
---------------------- ---------------------------------------------------- -------------------
---------------------- ---------------------------------------------------- -------------------
---------------------- ---------------------------------------------------- -------------------
---------------------- ---------------------------------------------------- -------------------
-14-
SCHEDULE 4(a)
FILE SEARCH REPORTS
COMPANY/SUBSIDIARY SEARCH REPORT DATED PREPARED BY JURISDICTION
---------------------- ----------------------- ------------------- --------------------
---------------------- ----------------------- ------------------- --------------------
---------------------- ----------------------- ------------------- --------------------
---------------------- ----------------------- ------------------- --------------------
SEE ATTACHED.
-15-
SCHEDULE 4(b)
COPIES OF REPORTED FINANCING STATEMENTS
SEE ATTACHED.
-16-
SCHEDULE 5
COPY OF FINANCING STATEMENTS TO BE FILED
SEE ATTACHED.
-17-
SCHEDULE 6
FILINGS/FILING OFFICES
TYPE
OF APPLICABLE COLLATERAL
FILING(a) ENTITY DOCUMENT JURISDICTIONS
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
---------------------- ----------------------- --------------------- ------------------
----------------------
(a) UCC-1 financing statement, fixture filing, mortgage, intellectual
property filing or other necessary filing.
-18-
SCHEDULE 7
REAL PROPERTY
OWNED OR LANDLORD/OWNER IF DESCRIPTION OF
ENTITY OF RECORD LOCATION ADDRESS LEASED LEASED LEASE DOCUMENTS
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
---------------------- ----------------------- ----------------- ----------------- ---------------
-19-
SCHEDULE 8(a)
ATTACHED HERETO IS A TRUE COPY OF EACH TERMINATION STATEMENT FILING DULY
ACKNOWLEDGED OR OTHERWISE IDENTIFIED BY THE FILING OFFICER.
-20-
SCHEDULE 8(b)
TERMINATION STATEMENT FILINGS
UCC-1 UCC-1
DEBTOR JURISDICTION SECURED PARTY TYPE OF COLLATERAL FILE DATE FILE NUMBER
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
---------------------- ------------------ ----------------- ---------------------- ------------- -----------
-21-
SCHEDULE 9
CHANGES FROM CIRCUMSTANCES DESCRIBED IN PERFECTION CERTIFICATE SUPPLEMENT
-22-
SCHEDULE 10
STOCK OWNERSHIP AND OTHER EQUITY INTERESTS
COMPANY/SUBSIDIARY: ______________
CURRENT LEGAL ENTITIES
OWNED RECORD OWNER CERTIFICATE NO. NO. SHARES/INTEREST PERCENT PLEDGED
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
-23-
SCHEDULE 11
INSTRUMENTS AND TANGIBLE CHATTEL PAPER
1. Promissory Notes:
ENTITY PRINCIPAL AMOUNT DATE OF ISSUANCE INTEREST RATE MATURITY DATE
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
---------------------- ------------------ ----------------- ---------------------- -----------------
2. Chattel Paper:
-24-
SCHEDULE 12
ADVANCES
DESCRIPTION AND DATE OF
DESCRIPTION AND DATE OF UNPAID INTERCOMPANY
ADVANCE FROM TO TRANSFER OF GOODS FROM TO
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
----------------------- ----------------- ----------- ----------------------- ----------------- -----------
-25-
SCHEDULE 13(a)
PATENTS AND TRADEMARKS
PATENTS:
Registrations:
REGISTRATION
OWNER NUMBER COUNTRY DESCRIPTION
----------- ------------ ------- -----------
Applications:
APPLICATION
OWNER NUMBER COUNTRY DESCRIPTION
----------- ------------ ------- -----------
Licenses:
REGISTRATION/
APPLICATION
LICENSEE LICENSOR COUNTRY NUMBER DESCRIPTION
----------- ------------ ------- ------------- -------------
TRADEMARKS:
Registrations:
REGISTRATION
OWNER NUMBER COUNTRY TRADEMARK
----------- ------------ ------- -----------
Applications:
APPLICATION
OWNER NUMBER COUNTRY TRADEMARK
----------- ------------ ------- -----------
Licenses:
REGISTRATION/
APPLICATION
LICENSEE LICENSOR COUNTRY NUMBER TRADEMARK
----------- ------------ ------- ------------- ---------
-26-
SCHEDULE 13(b)
COPYRIGHTS
Registrations:
OWNER COUNTRY TITLE REGISTRATION NUMBER
----------- ------------ ------- -------------------
Applications:
OWNER COUNTRY APPLICATION NUMBER
----------- ------------ ------------------
Licenses:
REGISTRATION/
APPLICATION
LICENSEE LICENSOR COUNTRY NUMBER DESCRIPTION
----------- ------------ ------- ------------- -----------
-27-
SCHEDULE 13(c)
PATENTS AND TRADEMARKS
PATENTS:
Registrations:
REGISTRATION
OWNER NUMBER DESCRIPTION
----------- ------------ -----------
Applications:
APPLICATION
OWNER NUMBER DESCRIPTION
----------- ------------ -----------
TRADEMARKS:
Registrations:
REGISTRATION
OWNER NUMBER TRADEMARK
----------- ------------ ---------
Applications:
APPLICATION
OWNER NUMBER TRADEMARK
----------- ------------ ---------
-28-
SCHEDULE 13(d)
COPYRIGHTS
REGISTRATION
OWNER NUMBER TITLE
----------- ------------ -------
-29-
SCHEDULE 13(e)
INTELLECTUAL PROPERTY FILINGS
-30-
SCHEDULE 14
COMMERCIAL TORT CLAIMS
-31-
SCHEDULE 15
DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITY ACCOUNTS
BANK OR
OWNER TYPE OF ACCOUNT INTERMEDIARY ACCOUNT NUMBERS
----------- --------------- ------------ ---------------
-32-
SCHEDULE 16
LETTER OF CREDIT RIGHTS
-33-
SCHEDULE 17
MOTOR VEHICLES/CERTIFICATES OF TITLE
-34-
EXHIBIT M
================================================================================
[Form of]
SECURITY AGREEMENT
By
IONICS, INCORPORATED,
as Borrower
and
THE GUARANTORS PARTY HERETO
and
UBS AG, STAMFORD BRANCH,
as Collateral Agent
----------------------
Dated as of February 13, 2004
================================================================================
TABLE OF CONTENTS
PAGE
----
PREAMBLE.............................................................. 1
RECITALS.............................................................. 1
AGREEMENT............................................................. 2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. DEFINITIONS.......................................... 2
SECTION 1.2. INTERPRETATION....................................... 11
SECTION 1.3. RESOLUTION OF DRAFTING AMBIGUITIES................... 11
SECTION 1.4. PERFECTION CERTIFICATE............................... 11
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. GRANT OF SECURITY INTEREST........................... 11
SECTION 2.2. FILINGS.............................................. 12
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. DELIVERY OF CERTIFICATED SECURITIES COLLATERAL....... 13
SECTION 3.2. PERFECTION OF UNCERTIFICATED SECURITIES COLLATERAL... 14
SECTION 3.3. FINANCING STATEMENTS AND OTHER FILINGS;
MAINTENANCE OF PERFECTED SECURITY INTEREST........ 14
SECTION 3.4. OTHER ACTIONS........................................ 15
SECTION 3.5. JOINDER OF ADDITIONAL GUARANTORS..................... 20
SECTION 3.6. SUPPLEMENTS; FURTHER ASSURANCES...................... 20
-i-
Page
----
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1. TITLE................................................ 21
SECTION 4.2. VALIDITY OF SECURITY INTEREST........................ 21
SECTION 4.3. DEFENSE OF CLAIMS; TRANSFERABILITY OF PLEDGED
COLLATERAL........................................ 21
SECTION 4.4. OTHER FINANCING STATEMENTS........................... 22
SECTION 4.5. CHIEF EXECUTIVE OFFICE; CHANGE OF NAME;
JURISDICTION OF ORGANIZATION...................... 22
SECTION 4.6. LOCATION OF INVENTORY AND EQUIPMENT.................. 22
SECTION 4.7. DUE AUTHORIZATION AND ISSUANCE....................... 23
SECTION 4.8. CONSENTS, ETC........................................ 23
SECTION 4.9. PLEDGED COLLATERAL................................... 23
SECTION 4.10. INSURANCE............................................ 23
SECTION 4.11. PAYMENT OF TAXES; COMPLIANCE WITH LAWS;
CONTESTING LIENS; CLAIMS.......................... 23
SECTION 4.12. ACCESS TO PLEDGED COLLATERAL, BOOKS AND
RECORDS; OTHER INFORMATION........................ 24
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. PLEDGE OF ADDITIONAL SECURITIES COLLATERAL........... 24
SECTION 5.2. VOTING RIGHTS; DISTRIBUTIONS; ETC.................... 25
SECTION 5.3. DEFAULTS, ETC........................................ 26
SECTION 5.4. CERTAIN AGREEMENTS OF PLEDGORS AS ISSUERS AND
HOLDERS OF EQUITY INTERESTS....................... 26
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. GRANT OF LICENSE..................................... 27
SECTION 6.2. PROTECTION OF COLLATERAL AGENT'S SECURITY............ 27
SECTION 6.3. AFTER-ACQUIRED PROPERTY.............................. 28
SECTION 6.4. LITIGATION........................................... 28
-ii-
Page
----
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. MAINTENANCE OF RECORDS............................... 29
SECTION 7.2. LEGEND............................................... 29
SECTION 7.3. MODIFICATION OF TERMS, ETC........................... 29
SECTION 7.4. COLLECTION........................................... 30
ARTICLE VIII
TRANSFERS
SECTION 8.1. TRANSFERS OF PLEDGED COLLATERAL...................... 30
ARTICLE IX
REMEDIES
SECTION 9.1. REMEDIES............................................. 30
SECTION 9.2. NOTICE OF SALE....................................... 32
SECTION 9.3. WAIVER OF NOTICE AND CLAIMS.......................... 32
SECTION 9.4. CERTAIN SALES OF PLEDGED COLLATERAL.................. 33
SECTION 9.5. NO WAIVER; CUMULATIVE REMEDIES....................... 34
SECTION 9.6. CERTAIN ADDITIONAL ACTIONS REGARDING
INTELLECTUAL PROPERTY............................. 35
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. PROCEEDS OF CASUALTY EVENTS AND COLLATERAL
DISPOSITIONS...................................... 35
SECTION 10.2. APPLICATION OF PROCEEDS.............................. 35
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. CONCERNING COLLATERAL AGENT.......................... 36
SECTION 11.2. COLLATERAL AGENT MAY PERFORM; COLLATERAL
AGENT APPOINTED ATTORNEY-IN-FACT.................. 37
-iii-
Page
----
SECTION 11.3. CONTINUING SECURITY INTEREST; ASSIGNMENT............. 37
SECTION 11.4. TERMINATION; RELEASE................................. 37
SECTION 11.5. MODIFICATION IN WRITING.............................. 38
SECTION 11.6. NOTICES.............................................. 38
SECTION 11.7. GOVERNING LAW, CONSENT TO JURISDICTION AND
SERVICE OF PROCESS; WAIVER OF JURY TRIAL.......... 38
SECTION 11.8. SEVERABILITY OF PROVISIONS........................... 38
SECTION 11.9. EXECUTION IN COUNTERPARTS............................ 38
SECTION 11.10. BUSINESS DAYS........................................ 39
SECTION 11.11. WAIVER OF STAY....................................... 39
SECTION 11.12. NO CREDIT FOR PAYMENT OF TAXES OR IMPOSITION......... 39
SECTION 11.13. NO CLAIMS AGAINST COLLATERAL AGENT................... 39
SECTION 11.14. NO RELEASE........................................... 40
SECTION 11.15. OBLIGATIONS ABSOLUTE................................. 40
SIGNATURES............................................................ S-1
Schedule 3.4(b) Deposit Accounts
Schedule 3.4(i) Third Party Agreements
EXHIBIT 1 Form of Issuer's Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 Form of Control Agreement Concerning Securities Accounts
EXHIBIT 5 Form of Control Agreement Concerning Deposit Accounts
EXHIBIT 6 Form of Copyright Security Agreement
EXHIBIT 7 Form of Patent Security Agreement
EXHIBIT 8 Form of Trademark Security Agreement
EXHIBIT 9 Form of Bailee's Letter
-iv-
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of February 13, 2004 (as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with the provisions hereof, the "Agreement") made by IONICS,
INCORPORATED, a Massachusetts corporation (the "Borrower") and THE GUARANTORS
LISTED ON THE SIGNATURE PAGES HERETO (the "Original Guarantors") OR FROM TIME TO
TIME PARTY HERETO BY EXECUTION OF A JOINDER AGREEMENT (the "Additional
Guarantors," and together with the Original Guarantors, the "Guarantors"), as
pledgors, assignors and debtors (the Borrower, together with the Guarantors, in
such capacities and together with any successors in such capacities, the
"Pledgors," and each, a "Pledgor"), in favor of UBS AG, STAMFORD BRANCH, in its
capacity as collateral agent pursuant to the Credit Agreement (as hereinafter
defined), as pledgee, assignee and secured party (in such capacities and
together with any successors in such capacities, the "Collateral Agent").
R E C I T A L S :
A. The Borrower, the Original Guarantors, the Collateral
Agent and the lending institutions listed therein (the "Lenders") have, in
connection with the execution and delivery of this Agreement, entered into that
certain credit agreement, dated as of February 13, 2004 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement").
B. Each Original Guarantor has, pursuant to the Credit
Agreement, unconditionally guaranteed the Obligations.
C. The Borrower and each Original Guarantor will receive
substantial benefits from the execution, delivery and performance of the
obligations under the Credit Agreement and the other Loan Documents and each is,
therefore, willing to enter into this Agreement.
D. Each Pledgor is or, as to Pledged Collateral (as
hereinafter defined) acquired by such Pledgor after the date hereof will be, the
legal and/or beneficial owner of the Pledged Collateral pledged by it hereunder.
E. This Agreement is given by each Pledgor in favor of
the Collateral Agent for the benefit of the Secured Parties (as hereinafter
defined) to secure the payment and performance of all of the Obligations (as
hereinafter defined).
F. It is a condition to the obligations of the Lenders
to make the Loans under the Credit Agreement and a condition to the Issuing Bank
issuing Letters of Credit under the Credit Agreement that each Pledgor execute
and deliver the applicable Loan Documents, including this Agreement.
-2-
A G R E E M E N T :
NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor and the Collateral Agent hereby agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions.
(a) Unless otherwise defined herein or in the Credit
Agreement, capitalized terms used herein that are defined in the UCC shall have
the meanings assigned to them in the UCC.
(b) Terms used but not otherwise defined herein that are
defined in the Credit Agreement shall have the meanings given to them in the
Credit Agreement. Sections 1.03 and 1.05 of the Credit Agreement shall apply
herein mutatis mutandis.
(c) The following terms shall have the following
meanings:
"Acquisition Document Rights" shall mean, with respect to each
Pledgor, collectively, all of such Pledgor's rights, title and interest in, to
and under the Acquisition Documents, including (i) all rights and remedies
relating to monetary damages, including indemnification rights and remedies, and
claims for damages or other relief pursuant to or in respect of the Acquisition
Documents, (ii) all rights and remedies relating to monetary damages, including
indemnification rights and remedies, and claims for monetary damages under or in
respect of the agreements, documents and instruments referred to in the
Acquisition Documents or related thereto and (iii) all proceeds, collections,
recoveries and rights of subrogation with respect to the foregoing.
"Additional Guarantors" shall have the meaning assigned to
such term in the Preamble hereof.
"Additional Pledged Interests" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional membership, partnership or other equity interests of whatever class
of any issuer of Initial Pledged Interests or any interest in any such issuer,
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of any such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other interests and any and all
interest of such Pledgor in the entries on the books of any financial
in-
-3-
termediary pertaining to such membership, partnership or other equity interests
from time to time acquired by such Pledgor in any manner and (ii) all
membership, partnership or other equity interests, as applicable, of each
limited liability company, partnership or other entity (other than a
corporation) hereafter acquired or formed by such Pledgor and all options,
warrants, rights, agreements, additional membership, partnership or other equity
interests of whatever class of such limited liability company, partnership or
other entity, together with all rights, privileges, authority and powers of such
Pledgor relating to such interests or under any Organizational Document of any
such issuer, and the certificates, instruments and agreements representing such
membership, partnership or other equity interests and any and all interest of
such Pledgor in the entries on the books of any financial intermediary
pertaining to such membership, partnership or other interests, from time to time
acquired by such Pledgor in any manner.
"Additional Pledged Shares" shall mean, collectively, with
respect to each Pledgor, (i) all options, warrants, rights, agreements,
additional shares of capital stock of whatever class of any issuer of the
Initial Pledged Shares or any other equity interest in any such issuer, together
with all rights, privileges, authority and powers of such Pledgor relating to
such interests issued by any such issuer under any Organizational Document of
any such issuer, and the certificates, instruments and agreements representing
such interests and any and all interest of such Pledgor in the entries on the
books of any financial intermediary pertaining to such interests, from time to
time acquired by such Pledgor in any manner and (ii) all the issued and
outstanding shares of capital stock of each corporation hereafter acquired or
formed by such Pledgor and all options, warrants, rights, agreements or
additional shares of capital stock of whatever class of such corporation,
together with all rights, privileges, authority and powers of such Pledgor
relating to such shares or under any Organizational Document of such
corporation, and the certificates, instruments and agreements representing such
shares and any and all interest of such Pledgor in the entries on the books of
any financial intermediary pertaining to such shares, from time to time acquired
by such Pledgor in any manner.
"Agreement" shall have the meaning assigned to such term in
the Preamble hereof.
"Bailee Letter" shall be an agreement in form substantially
similar to Exhibit 9 annexed hereto.
"Borrower" shall have the meaning assigned to such term in the
Preamble hereof.
"Claims" shall mean any and all property and other taxes,
assessments and special assessments, levies, fees and all governmental charges
imposed upon or assessed against, and landlords', carriers', mechanics',
workmen's, repairmen's, laborers', materialmen's, suppliers' and warehousemen's
Liens and other claims arising by operation of law against, all or any portion
of the Pledged Collateral.
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"Collateral Account" shall mean a collateral account or
sub-account established and maintained in accordance with the provisions of
Section 9.01 of the Credit Agreement and all property from time to time on
deposit in the Collateral Account.
"Collateral Agent" shall have the meaning assigned to such
term in the Preamble hereof.
"Commodity Account Control Agreement" shall mean a commodity
account control agreement in a form that is reasonably satisfactory to the
Collateral Agent.
"Contested Liens" shall mean, collectively, any Liens incurred
in respect of any Claims to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of Section 4.11 hereof; provided, however, that such Liens shall in
all respects be subject and subordinate in priority to the Lien and security
interest created by this Agreement, except if and to the extent that the law or
regulation creating, permitting or authorizing such Lien provides that such Lien
must be superior to the Lien and security interest created and evidenced hereby.
"Contracts" shall mean, collectively, with respect to each
Pledgor, all sale, service, performance, equipment or property lease contracts,
licenses, agreements and grants and all other contracts, agreements or grants
(in each case, whether written or oral, or third party or intercompany), between
such Pledgor and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"Control" shall mean (i) in the case of each Deposit Account,
"control," as such term is defined in Section 9-104 of the UCC, and (ii) in the
case of any Security Entitlement, "control," as such term is defined in Section
8-106 of the UCC and (iii) in the case of any Commodity Contract, "control," as
such term is defined in Section 9-106 of the UCC.
"Control Agreements" shall mean, collectively, each Deposit
Account Control Agreement, each Securities Account Control Agreement and each
Commodity Account Control Agreement.
"Copyrights" shall mean, collectively, all copyrights (whether
statutory or common law, whether established or registered in the United States
or any other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished) and all copyright
registrations and applications, together with any and all (i) rights and
privileges arising under applicable law with respect to the use of such
copyrights, (ii) renewals and extensions thereof and reversionary interests and
terminations rights with respect thereto, (iii) income, fees, royalties,
damages, claims and payments now or hereafter due and/or payable with respect
thereto, including damages and payments for past, present or future
infringements thereof, (iv) rights corresponding thereto throughout the world
and (v) rights to ▇▇▇ for past, present or future infringements thereof and
accountings with respect thereto.
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"Copyright Security Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 6.
"Credit Agreement" shall have the meaning assigned to such
term in Recital A hereof.
"Deposit Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 5 or such other form that is
reasonably satisfactory to the Collateral Agent.
"Deposit Accounts" shall mean, collectively, with respect to
each Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and
in any event shall include the LC Sub-Account and the Collateral Account and all
accounts and sub-accounts relating to any of the foregoing accounts and (ii) all
cash, funds, checks, notes and instruments from time to time on deposit in any
of the accounts or sub-accounts described in clause (i) of this definition.
"Distributions" shall mean, collectively, with respect to each
Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
"Excluded Property" shall mean:
(a) any lease, license, contract, property right or
agreement to which any Pledgor is a party, or any license, consent,
permit, variance, certification, authorization or approval of any
Governmental Authority (or any person acting on behalf of a
Governmental Authority) of which any Pledgor is the owner or
beneficiary, or any of its rights or interests thereunder, if and for
so long as the grant of such security interest shall constitute or
result in (i) the abandonment, invalidation or unenforceability of any
right, title or interest of any Pledgor therein or (ii) in a breach or
termination pursuant to the terms of, or a default under, any such
lease, license, contract, property right or agreement or such license,
consent, permit, variance, certification, authorization or approval
(other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant
jurisdiction or any other applicable law or principles of equity);
(b) Equipment owned by any Pledgor on the date hereof or
hereafter acquired that is subject to a Lien securing a Purchase Money
Obligation or Capital Lease Obligation permitted to be incurred
pursuant to the provisions of the Credit Agreement if the contract or
other agreement in which such Lien is granted (or the documentation
providing for such Purchase Money Obligation or Capital Lease
Obligation) validly prohibits the creation of any other Lien on such
Equipment;
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(c) any Investment Property or Pledged Securities
consisting of Equity Interests in any Foreign Subsidiary to the extent
that granting a security interest therein would constitute an
investment of earnings in United States property under Section 956 (or
a successor provision) of the Code, which investment would or could
reasonably be expected to trigger a material increase in the taxable
income of a United States shareholder of such Subsidiary pursuant to
Section 951 (or a successor provision) of the Code, as reasonably
determined by Borrower and the Collateral Agent; provided that this
exception shall not apply to (A) Voting Stock of any Subsidiary which
is a first-tier controlled foreign corporation (as defined in Section
957(a) of the Code) representing up to 65% of the total voting power of
all outstanding Voting Stock of such Subsidiary and (B) any portion of
the Equity Interests not constituting Voting Stock of any such
Subsidiary, except that any such Equity Interests constituting "stock
entitled to vote" within the meaning of Treasury Regulation Section
1.956-2(c)(2) shall be treated as Voting Stock for purposes of this
clause (c); and
(d) the Escrowed Amounts;
provided, however, that the foregoing shall cease to constitute Excluded
Property immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and, to the extent severable,
any portion of such lease, license, contract, property right, agreement,
Equipment, Investment Property or Pledged Securities that does not result in any
of the consequences specified in clause (a), (b) or (c) shall not constitute
Excluded Property including, without limitation, any Proceeds of such lease,
license, contract, property right, agreement, Equipment, Investment Property or
Pledged Securities.
"General Intangibles" shall mean, collectively, with respect
to each Pledgor, all "general intangibles," as such term is defined in the UCC,
of such Pledgor and, in any event, shall include (i) all of such Pledgor's
rights, title and interest in, to and under all insurance policies and
Contracts, (ii) all know-how and warranties relating to any of the Pledged
Collateral or the Mortgaged Property, (iii) any and all other rights, claims,
choses-in-action and causes of action of such Pledgor against any other person
and the benefits of any and all collateral or other security given by any other
person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or of, any of the Pledged Collateral or any of the
Mortgaged Property, (v) all lists, books, records, correspondence, ledgers,
printouts, files (whether in printed form or stored electronically), tapes and
other papers or materials containing information relating to any of the Pledged
Collateral or any of the Mortgaged Property, including all customer or tenant
lists, identification of suppliers, data, plans, blueprints, specifications,
designs, drawings, appraisals, recorded knowledge, surveys, studies, engineering
reports, test reports, manuals, standards, processing standards, performance
standards, catalogs, research data, computer and automatic machinery software
and programs and the like, field repair data, accounting information pertaining
to such Pledgor's operations or any of the Pledged Collateral or any of the
Mortgaged Property and all media in which or on which any of the information or
knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such in-
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formation, knowledge, records or data, (vi) all licenses, consents, permits,
variances, certifications, authorizations and approvals, however characterized,
of any Governmental Authority (or any person acting on behalf of a Governmental
Authority) now or hereafter acquired or held by such Pledgor pertaining to
operations now or hereafter conducted by such Pledgor or any of the Pledged
Collateral or any of the Mortgaged Property including building permits,
certificates of occupancy, environmental certificates, industrial permits or
licenses and certificates of operation and (vii) all rights to reserves,
deferred payments, deposits, refunds, indemnification of claims to the extent
the foregoing relate to any Pledged Collateral or Mortgaged Property and claims
for tax or other refunds against any Governmental Authority relating to any
Pledged Collateral or any of the Mortgaged Property.
"Goodwill" shall mean, collectively, with respect to each
Pledgor, the goodwill connected with such Pledgor's business including all
goodwill connected with the use of and symbolized by (i) any Trademark or
Trademark License in which such Pledgor has any interest and (ii) all product
lines of such Pledgor's business.
"Guarantors" shall have the meaning assigned to such term in
the Preamble hereof.
"Initial Pledged Interests" shall mean, with respect to each
Pledgor, all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in Schedule 10 annexed to
the Perfection Certificate, together with all rights, privileges, authority and
powers of such Pledgor in and to each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and agreements
representing such membership, partnership or other interests and any and all
interest of such Pledgor in the entries on the books of any financial
intermediary pertaining to such membership, partnership or other interests.
"Initial Pledged Shares" shall mean, collectively, with
respect to each Pledgor, the issued and outstanding shares of capital stock of
each issuer described in Schedule 10 annexed to the Perfection Certificate
together with all rights, privileges, authority and powers of such Pledgor
relating to such interests in each such issuer or under any Organizational
Document of each such issuer, and the certificates, instruments and agreements
representing such shares of capital stock and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
the Initial Pledged Shares.
"Instruments" shall mean, collectively, with respect to each
Pledgor, all "instruments," as such term is defined in Article 9, rather than
Article 3, of the UCC, and shall include all promissory notes, drafts, bills of
exchange or acceptances.
"Intellectual Property" shall mean, collectively, all patents,
patent applications, rights and interests in patents, trademarks, trade names,
service marks, names and likenesses, copyrights and rights under copyright,
technology, trade secrets, proprietary information, confi-
-8-
dential information, domain names, data, software, know-how and processes,
including, without limitation, all Patents, Trade Secrets, Trademarks,
Copyrights, Licenses and Goodwill.
"Intellectual Property Collateral" shall mean all Intellectual
Property that constitutes Pledged Collateral.
"Intercompany Notes" shall mean, with respect to each Pledgor,
all intercompany notes described in Schedule 11 annexed to the Perfection
Certificate and intercompany notes hereafter acquired by such Pledgor and all
certificates, instruments or agreements evidencing such intercompany notes, and
all assignments, amendments, restatements, supplements, extensions, renewals,
replacements or modifications thereof to the extent permitted pursuant to the
terms hereof.
"Investment Property" shall mean a security, whether
certificated or uncertificated, Security Entitlement, Securities Account,
Commodity Contract or Commodity Account.
"Joinder Agreement" shall mean an agreement substantially in
the form annexed hereto as Exhibit 3.
"Lenders" shall have the meaning assigned to such term in
Recital A hereof.
"Licenses" shall mean, collectively, all license and
distribution agreements with, and covenants not to ▇▇▇, any other party with
respect to any Patent, Trade Secret, Trademark or Copyright or any other patent,
trade secret, trademark or copyright, whether a Pledgor is a licensor or
licensee, distributor or distributee under any such license or distribution
agreement, together with any and all (i) renewals, extensions, supplements and
continuations thereof, (ii) income, fees, royalties, damages, claims and
payments now and hereafter due and/or payable thereunder and with respect
thereto including damages and payments for past, present or future infringements
or violations thereof, (iii) rights to ▇▇▇ for past, present and future
infringements or violations thereof and (iv) other rights to use, exploit or
practice any or all of the Patents, Trade Secrets, Trademarks or Copyrights or
any other patent, trade secret, trademark or copyright.
"Mortgaged Property" shall have the meaning assigned to such
term in the Mortgages.
"Original Guarantors" shall have the meaning assigned to such
term in the Preamble hereof.
"Patents" shall mean, collectively, all patents issued or
assigned to and all patent applications and registrations (whether established
or registered or recorded in the United States or any other country or any
political subdivision thereof), together with any and all (i) rights and
privileges arising under applicable law with respect to the use of any patents,
(ii) inventions and improvements described and claimed therein, (iii) reissues,
divisions, continuations, renewals, extensions and continuations-in-part
thereof, (iv) income, fees, royalties, damages, claims and
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payments now or hereafter due and/or payable thereunder and with respect thereto
including damages and payments for past, present or future infringements
thereof, (v) rights corresponding thereto throughout the world and (vi) rights
to ▇▇▇ for past, present or future infringements thereof.
"Patent Security Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 7.
"Perfection Certificate" shall mean that certain perfection
certificate dated February 13, 2004 executed and delivered by each Pledgor in
favor of the Collateral Agent for the benefit of the Secured Parties, and each
other Perfection Certificate (which shall be in form and substance reasonably
acceptable to the Collateral Agent) executed and delivered by the applicable
Guarantor in favor of the Collateral Agent for the benefit of the Secured
Parties contemporaneously with the execution and delivery of each Joinder
Agreement executed in accordance with Section 3.5 hereof, in each case, as the
same may be amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with the Credit Agreement or upon the request of
the Collateral Agent.
"Pledge Amendment" shall have the meaning assigned to such
term in Section 5.1 hereof.
"Pledged Collateral" shall have the meaning assigned to such
term in Section 2.1 hereof.
"Pledged Interests" shall mean, collectively, the Initial
Pledged Interests and the Additional Pledged Interests; provided, however, that
to the extent applicable, Pledged Interests shall not include any interest which
is not required to be pledged pursuant to Section 5.11(b) of the Credit
Agreement.
"Pledged Securities" shall mean, collectively, the Pledged
Interests, the Pledged Shares and the Successor Interests.
"Pledged Shares" shall mean, collectively, the Initial Pledged
Shares and the Additional Pledged Shares; provided, however, that Pledged Shares
shall not include any shares which are not required to be pledged pursuant to
Section 5.11(b) of the Credit Agreement.
"Pledgor" shall have the meaning assigned to such term in the
Preamble hereof.
"Secured Parties" shall mean, collectively, the Administrative
Agent, the Collateral Agent, each other Agent, the Lenders, the Issuing Bank and
each party to a Hedging Agreement relating to the Loans if at the date of
entering into such Hedging Agreement such person was an Agent or a Lender or an
Affiliate of an Agent or a Lender and such person executes and delivers to the
Administrative Agent a letter agreement in form and substance acceptable to the
Administrative Agent pursuant to which such person (i) appoints the Collateral
Agent as its agent
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under the applicable Loan Documents and (ii) agrees to be bound by the
provisions of Sections 9.03, 11.03 and 11.09 of the Credit Agreement.
"Securities Account Control Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 4 or such other form that is
reasonably satisfactory to the Collateral Agent.
"Securities Collateral" shall mean, collectively, the Pledged
Securities, the Intercompany Notes and the Distributions.
"Successor Interests" shall mean, collectively, with respect
to each Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any person listed in Schedule 1(a) annexed to the Perfection
Certificate is not the surviving entity; provided, however, that to the extent
applicable, Successor Interest shall not include any shares or interests which
are not required to be pledged pursuant to Section 5.11(b) of the Credit
Agreement.
"Trade Secrets" shall mean, collectively, with respect to each
Pledgor, all know-how, trade secrets, customer and supplier lists, proprietary
information, inventions, methods, procedures, formulae, descriptions,
compositions, technical data, drawings, specifications, name plates, catalogs,
confidential information and the right to limit the use or disclosure thereof by
any person, pricing and cost information, business and marketing plans and
proposals, consulting agreements, engineering contracts and such other assets
which relate to the goodwill connected with such Pledgor's business.
"Trademarks" shall mean, collectively, with respect to each
Pledgor, all trademarks (including service marks), slogans, logos, certification
marks, trade dress, uniform resource locations (URL's), domain names, corporate
names and trade names, whether registered or unregistered, owned by or assigned
and all registrations and applications for the foregoing (whether statutory or
common law and whether established or registered in the United States or any
other country or any political subdivision thereof), together with any and all
(i) rights and privileges arising under applicable law with respect to the use
of any trademarks, (ii) reinstatements, revivals, reissues, continuations,
extensions and renewals thereof and oppositions with respect thereto, (iii)
income, fees, royalties, damages and payments now and hereafter due and/or
payable thereunder and with respect thereto, including damages, claims and
payments for past, present or future infringements, misappropriation or dilution
thereof, (iv) rights corresponding thereto throughout the world and (v) rights
to ▇▇▇ for past, present and future infringements, misappropriation or dilution
thereof.
"Trademark Security Agreement" shall mean an agreement
substantially in the form annexed hereto as Exhibit 8.
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"UCC" shall mean the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided, however, that if by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of the Collateral Agent's and the Secured Parties' security interest in
any item or portion of the Pledged Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New York,
the term "UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in such other jurisdiction for purposes of the provisions hereof relating
to such attachment, perfection or priority and for purposes of definitions
relating to such provisions.
SECTION 1.2. Interpretation. The rules of interpretation
specified in the Credit Agreement (including Section 1.03 thereof) shall be
applicable to this Agreement.
SECTION 1.3. Resolution of Drafting Ambiguities. Each Pledgor
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Collateral Agent) shall not be employed in the
interpretation hereof.
SECTION 1.4. Perfection Certificate. The Collateral Agent and
each Secured Party agree that the Perfection Certificate and all descriptions of
Pledged Collateral, schedules, amendments and supplements thereto are and shall
at all times remain a part of this Agreement.
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1. Grant of Security Interest. As collateral
security for the payment and performance in full of all the Obligations, each
Pledgor hereby pledges and grants to the Collateral Agent for the benefit of the
Secured Parties, a lien on and security interest in and to all of the right,
title and interest of such Pledgor in, to and under the following property,
wherever located, whether now existing or hereafter arising or acquired from
time to time (collectively, the "Pledged Collateral"):
(i) all Accounts;
(ii) all Equipment, Goods, Inventory and Fixtures;
(iii) all Documents, Instruments and Chattel Paper;
(iv) all Letters of Credit and Letter-of-Credit Rights;
(v) all Securities Collateral;
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(vi) all Collateral Accounts;
(vii) all Investment Property;
(viii) all Intellectual Property;
(ix) the Commercial Tort Claims described on Schedule 14
to the Perfection Certificate;
(x) all General Intangibles;
(xi) all Deposit Accounts;
(xii) all Acquisition Documents and Acquisition Document
Rights;
(xiii) all Supporting Obligations;
(xiv) all books and records relating to the Pledged
Collateral; and
(xv) to the extent not covered by clauses (i) through
(xiv) of this sentence, all other personal property of such
Pledgor, whether tangible or intangible, and all Proceeds and
products of each of the foregoing and all accessions to,
substitutions and replacements for, and rents, profits and
products of, each of the foregoing, and any and all Proceeds
of any insurance, indemnity, warranty or guaranty payable to
such Pledgor from time to time with respect to any of the
foregoing.
Notwithstanding anything to the contrary contained in clauses
(i) through (xv) above, the security interest created by this Agreement shall
not extend to, and the term "Pledged Collateral" shall not include, any Excluded
Property and (i) the Pledgors shall from time to time at the reasonable request
of the Collateral Agent give written notice to the Collateral Agent identifying
in reasonable detail the Excluded Property and shall provide to the Collateral
Agent such other information regarding the Excluded Property as the Collateral
Agent may reasonably request and (ii) from and after the Closing Date, no
Pledgor shall permit to become effective in any document creating, governing or
providing for any contract, permit, lease or license, a provision that would
prohibit the creation of a Lien on such permit, lease or license in favor of the
Collateral Agent unless such Pledgor believes, in its reasonable judgment, that
such prohibition is usual and customary in transactions of such type.
SECTION 2.2. Filings. (a) Each Pledgor hereby irrevocably
authorizes the Collateral Agent at any time and from time to time to file in any
relevant jurisdiction any initial financing statements (including fixture
filings) and amendments thereto that contain the information required by Article
9 of the Uniform Commercial Code of each applicable jurisdiction for the filing
of any financing statement or amendment relating to the Pledged Collateral,
including
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(i) whether such Pledgor is an organization, the type of organization and any
organizational identification number issued to such Pledgor, (ii) any financing
or continuation statements or other documents without the signature of such
Pledgor where permitted by law, including the filing of a financing statement
describing the Pledged Collateral as "all assets in which the Pledgor now owns
or hereafter acquires rights" and (iii) in the case of a financing statement
filed as a fixture filing or covering Pledged Collateral constituting minerals
or the like to be extracted or timber to be cut, a sufficient description of the
real property to which such Pledged Collateral relates. Each Pledgor agrees to
provide all information described in the immediately preceding sentence to the
Collateral Agent promptly upon request.
(b) Each Pledgor hereby ratifies its authorization for
the Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto relating to the Pledged Collateral if filed
prior to the date hereof.
(c) Each Pledgor hereby further authorizes the Collateral
Agent to file filings with the United States Patent and Trademark Office or
United States Copyright Office (or any successor office or any similar office in
any other country), including this Agreement, the Copyright Security Agreement,
the Patent Security Agreement and the Trademark Security Agreement, or other
documents for the purpose of creating, perfecting, confirming, continuing,
enforcing, protecting or putting third parties on notice of the security
interest granted by such Pledgor hereunder, without the signature of such
Pledgor, and naming such Pledgor, as debtor, and the Collateral Agent, as
secured party.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1. Delivery of Certificated Securities Collateral.
Each Pledgor represents and warrants that all certificates, agreements or
instruments representing or evidencing the Securities Collateral in existence on
the date hereof have been delivered to the Collateral Agent in suitable form for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank and that the Collateral Agent has a perfected first priority
security interest therein. Each Pledgor hereby agrees that all certificates,
agreements or instruments representing or evidencing Securities Collateral
acquired by such Pledgor after the date hereof shall immediately upon receipt
thereof by such Pledgor be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto. All certificated Securities Collateral shall
be in suitable form for transfer by delivery or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Collateral Agent. The Collateral Agent
shall have the right, at any time upon the occurrence and during the continuance
of any Event of Default, to endorse, assign or otherwise transfer to or to
register in the name of the Collateral Agent or any of its nominees or endorse
for negotiation any or all of the Securities
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Collateral, without any indication that such Securities Collateral is subject to
the security interest hereunder. In addition, upon the occurrence and during the
continuance of an Event of Default, the Collateral Agent shall have the right at
any time to exchange certificates representing or evidencing Securities
Collateral for certificates of smaller or larger denominations.
SECTION 3.2. Perfection of Uncertificated Securities
Collateral. Each Pledgor represents and warrants that the Collateral Agent has a
perfected first priority security interest in all uncertificated Pledged
Securities pledged by it hereunder that are in existence on the date hereof.
Each Pledgor hereby agrees that if any of the Pledged Securities are at any time
not evidenced by certificates of ownership, then each applicable Pledgor shall,
to the extent permitted by applicable law (i) if necessary or desirable to
perfect a security interest in such Pledged Securities, cause such pledge to be
recorded on the equityholder register or the books of the issuer, cause the
issuer to execute and deliver to the Collateral Agent an acknowledgment of the
pledge of such Pledged Securities substantially in the form of Exhibit 1 annexed
hereto, execute any customary pledge forms or other documents necessary or
appropriate to complete the pledge and give the Collateral Agent the right to
transfer such Pledged Securities under the terms hereof and, upon the Collateral
Agent's request, provide to the Collateral Agent an opinion of counsel, in form
and substance reasonably satisfactory to the Collateral Agent, confirming such
pledge and perfection thereof and (ii) use its commercially reasonable efforts
to cause such Pledged Securities to become certificated and delivered to the
Collateral Agent in accordance with the provisions of Section 3.1.
SECTION 3.3. Financing Statements and Other Filings;
Maintenance of Perfected Security Interest. Each Pledgor represents and warrants
that all filings necessary to perfect the security interest granted by it to the
Collateral Agent in respect of the Pledged Collateral have been delivered to the
Collateral Agent in completed and, to the extent necessary or appropriate, duly
executed form for filing in each governmental, municipal or other office
specified in Schedule 6 annexed to the Perfection Certificate. Each Pledgor
agrees that at the sole cost and expense of the Pledgors, (i) such Pledgor will
maintain the security interest created by this Agreement in the Pledged
Collateral as a perfected first priority security interest and shall defend such
security interest against the claims and demands of all persons except Permitted
Collateral Liens, (ii) such Pledgor shall furnish to the Collateral Agent from
time to time statements and schedules further identifying and describing the
Pledged Collateral and such other reports in connection with the Pledged
Collateral as the Collateral Agent may reasonably request, all in reasonable
detail and (iii) at any time and from time to time, upon the written request of
the Collateral Agent, such Pledgor shall promptly and duly execute and deliver,
and file and have recorded, such further instruments and documents and take such
further action as the Collateral Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and the rights and
powers herein granted, including the filing of any financing statements,
continuation statements and other documents (including this Agreement) under the
Uniform Commercial Code (or other similar laws) in effect in any jurisdiction
with respect to the security interest created hereby and the execution and
delivery of Control Agreements, all in form reasonably satisfactory to the
Collateral Agent and in such offices (including the United
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States Patent and Trademark Office and the United States Copyright Office and
equivalent foreign offices) wherever required by law to perfect, continue and
maintain a valid, enforceable, first priority security interest in the Pledged
Collateral as provided herein and to preserve the other rights and interests
granted to the Collateral Agent hereunder, as against third parties, with
respect to the Pledged Collateral.
SECTION 3.4. Other Actions. In order to further insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Collateral Agent's security interest in the Pledged Collateral,
each Pledgor represents and warrants (as to itself) as follows and agrees, in
each case at such Pledgor's own expense, to take the following actions with
respect to the following Pledged Collateral:
(a) Instruments and Tangible Chattel Paper. (i) No
amounts payable under or in connection with any of the Pledged
Collateral are evidenced by any Instrument or Tangible Chattel Paper
other than such Instruments and Tangible Chattel Paper listed in
Schedule 11 annexed to the Perfection Certificate and (ii) each
Instrument and each item of Tangible Chattel Paper listed in Schedule
11 annexed to the Perfection Certificate has been properly endorsed,
assigned and delivered to the Collateral Agent, accompanied by
instruments of transfer or assignment duly executed in blank. If any
amount then payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Instrument or Tangible Chattel
Paper, and such amount, together with all amounts payable evidenced by
any Instrument or Tangible Chattel Paper not previously delivered to
the Collateral Agent exceeds $500,000 in the aggregate for all
Pledgors, the Pledgor acquiring such Instrument or Tangible Chattel
Paper shall forthwith endorse, assign and deliver the same to the
Collateral Agent, accompanied by such instruments of transfer or
assignment duly executed in blank as the Collateral Agent may from time
to time specify.
(b) Deposit Accounts. (i) Each Pledgor has neither opened
nor maintains any Deposit Accounts other than the accounts listed in
Schedule 15 annexed to the Perfection Certificate and (ii) the
Collateral Agent has a perfected first priority security interest in
each Deposit Account listed in Schedule 3.4(b) annexed hereto by
Control, other than those designated therein as "Not Subject to a
Control Agreement as of the Closing Date"; provided that the aggregate
amount on deposit in or credited to Deposit Accounts that are not
subject to a Control Agreement shall not exceed (A) prior to February
28, 2004, an amount equal to $500,000 in the aggregate for all such
Deposit Accounts at any time outstanding or (B) from and after February
28, 2004, an amount equal to $100,000 in the aggregate for all such
Deposit Accounts at any time outstanding. No Pledgor shall hereafter
establish or maintain any Deposit Account unless (1) the applicable
Pledgor shall have given the Collateral Agent 30 days' prior written
notice of its intention to establish such new Deposit Account with a
bank, (2) such bank shall be reasonably acceptable to the Collateral
Agent and (3) such bank and such Pledgor shall have duly executed and
delivered to the Collateral Agent a Deposit Account Control Agreement
with respect to such Deposit Account. Each Pledgor agrees that at the
time it establishes any additional De-
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posit Accounts it shall enter into a duly authorized, executed and
delivered Deposit Account Control Agreement with respect to such
Deposit Account. The Collateral Agent agrees with each Pledgor that the
Collateral Agent shall not give any instructions directing the
disposition of funds from time to time credited to any Deposit Account
or withhold any withdrawal rights from such Pledgor with respect to
funds from time to time credited to any Deposit Account unless an Event
of Default has occurred and is continuing. No Pledgor shall grant
Control of any Deposit Account to any person other than the Collateral
Agent.
(c) Investment Property. (i) Each Pledgor (1) has no
Securities Accounts or Commodity Accounts other than those listed in
Schedule 3.4(b) annexed hereto and the Collateral Agent has a perfected
first priority security interest in such Securities Accounts and
Commodity Accounts by Control, other than those designated therein as
"Not Subject to a Control Agreement as of the Closing Date"; provided
that the aggregate amount on deposit in or credited to such Securities
Accounts and Commodity Accounts that are not subject to a Control
Agreement shall not exceed (A) prior to February 28, 2004, an amount
equal to $500,000 in the aggregate for all such Deposit Accounts at any
time outstanding or (B) from and after February 28, 2004, an amount
equal to $100,000 in the aggregate for all such Securities Accounts and
Commodity Accounts at any time outstanding, (2) does not hold, own or
have any interest in any certificated securities or uncertificated
securities other than those constituting Pledged Securities or
securities that are expressly permitted to be excluded from the Pledged
Collateral pursuant to Section 5.11(b) of the Credit Agreement and
those maintained in Securities Accounts or Commodity Accounts listed in
Schedule 15 annexed to the Perfection Certificate and (3) as of the
date hereof, has entered into a duly authorized, executed and delivered
Securities Account Control Agreement or a Commodity Account Control
Agreement, except as contemplated by clause (1) above, with respect to
each Securities Account or Commodity Account listed in Schedule 15
annexed to the Perfection Certificate, as applicable.
(ii) If any Pledgor shall at any time hold or acquire any
certificated securities constituting Investment Property other than any
certificated securities that are expressly permitted to be excluded
from the Pledged Collateral pursuant to Section 5.11(b) of the Credit
Agreement, such Pledgor shall promptly (a) endorse, assign and deliver
the same to the Collateral Agent, accompanied by such instruments of
transfer or assignment duly executed in blank, all in form and
substance reasonably satisfactory to the Collateral Agent or (b)
deliver such securities into a Securities Account with respect to which
a Control Agreement is in effect in favor of the Collateral Agent. If
any securities now or hereafter acquired by any Pledgor constituting
Investment Property other than any securities that that are expressly
permitted to be excluded from the Pledged Collateral pursuant to
Section 5.11(b) of the Credit Agreement are uncertificated and are
issued to such Pledgor or its nominee directly by the issuer thereof,
such Pledgor shall promptly notify the Collateral Agent thereof and
pursuant to an agreement in form and substance reasonably satisfactory
to the Collateral Agent, either (a) cause the issuer to agree to comply
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with instructions from the Collateral Agent as to such securities,
without further consent of any Pledgor or such nominee, (b) cause a
Security Entitlement with respect to such uncertificated security to be
held in a Securities Account with respect to which the Collateral Agent
has Control or (c) arrange for the Collateral Agent to become the
registered owner of the securities. Pledgor shall not hereafter
establish or maintain any Securities Account or Commodity Account with
any Securities Intermediary or Commodity Intermediary unless (1) the
applicable Pledgor shall have given the Collateral Agent 30 days' prior
written notice of its intention to establish such new Securities
Account or Commodity Account with such Securities Intermediary or
Commodity Intermediary, (2) such Securities Intermediary or Commodity
Intermediary shall be reasonably acceptable to the Collateral Agent and
(3) such Securities Intermediary or Commodity Intermediary, as the case
may be, and such Pledgor shall have duly executed and delivered a
Control Agreement with respect to such Securities Account or Commodity
Account, as the case may be. Each Pledgor shall accept any cash and
Investment Property other than any that are expressly permitted to be
excluded from the Pledged Collateral pursuant to Section 5.11(b) of the
Credit Agreement in trust for the benefit of the Collateral Agent and
within one (1) Business Day of actual receipt thereof, deposit any cash
or such Investment Property and any new securities, instruments,
documents or other property by reason of ownership of such Investment
Property (other than payments of a kind described in Section 7.4
hereof) received by it into a Controlled Account. The Collateral Agent
agrees with each Pledgor that the Collateral Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of
uncertificated securities, Securities Intermediary or Commodity
Intermediary, and shall not withhold its consent to the exercise of any
withdrawal or dealing rights by such Pledgor, unless an Event of
Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights would occur. No Pledgor shall
grant control over any Investment Property to any person other than the
Collateral Agent.
(iii) As between the Collateral Agent and the Pledgors, the
Pledgors shall bear the investment risk with respect to the Investment
Property and Pledged Securities, and the risk of loss of, damage to, or
the destruction of the Investment Property and Pledged Securities,
whether in the possession of, or maintained as a security entitlement
or deposit by, or subject to the control of, the Collateral Agent, a
Securities Intermediary, Commodity Intermediary, any Pledgor or any
other person; provided, however, that nothing contained in this Section
3.4(c) shall release or relieve any Securities Intermediary or
Commodity Intermediary of its duties and obligations to the Pledgors or
any other person under any Control Agreement or under applicable law.
Each Pledgor shall promptly pay all Claims and fees of whatever kind or
nature with respect to the Investment Property and Pledged Securities
pledged by it under this Agreement. In the event any Pledgor shall fail
to make such payment contemplated in the immediately preceding
sentence, the Collateral Agent may do so for the account of such
Pledgor and the Pledgors shall promptly reimburse and indemnify the
Collateral Agent from all costs and expenses incurred by the
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Collateral Agent under this Section 3.4(c) in accordance with Section
11.03 of the Credit Agreement.
(d) Electronic Chattel Paper and Transferable Records. No
amount under or in connection with any of the Pledged Collateral is
evidenced by any Electronic Chattel Paper or any "transferable record"
(as that term is defined in Section 201 of the Federal Electronic
Signatures in Global and National Commerce Act, or in Section 16 of the
Uniform Electronic Transactions Act as in effect in any relevant
jurisdiction) other than such Electronic Chattel Paper and transferable
records listed in Schedule 11 annexed to the Perfection Certificate. If
any amount payable under or in connection with any of the Pledged
Collateral shall be evidenced by any Electronic Chattel Paper or any
transferable record, the Pledgor acquiring such Electronic Chattel
Paper or transferable record shall promptly notify the Collateral Agent
thereof and shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control under UCC
Section 9-105 of such Electronic Chattel Paper or control under Section
201 of the Federal Electronic Signatures in Global and National
Commerce Act or, as the case may be, Section 16 of the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of
such transferable record. The requirement in the preceding sentence
shall apply to the extent that such amount, together with all amounts
payable evidenced by Electronic Chattel Paper or any transferable
record in which the Collateral Agent has not been vested control within
the meaning of the statutes described in this sentence exceeds $500,000
in the aggregate for all Pledgors. The Collateral Agent agrees with
such Pledgor that the Collateral Agent will arrange, pursuant to
procedures satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent's loss of control,
for the Pledgor to make alterations to the Electronic Chattel Paper or
transferable record permitted under UCC Section 9-105 or, as the case
may be, Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or Section 16 of the Uniform Electronic
Transactions Act for a party in control to allow without loss of
control, unless an Event of Default has occurred and is continuing or
would occur after taking into account any action by such Pledgor with
respect to such Electronic Chattel Paper or transferable record.
(e) Letter-of-Credit Rights. If any Pledgor is at any
time a beneficiary under a Letter of Credit now or hereafter issued in
favor of such Pledgor, other than a Letter of Credit issued under and
pursuant to the Credit Agreement, such Pledgor shall promptly notify
the Collateral Agent thereof and such Pledgor shall, at the request of
the Collateral Agent, pursuant to an agreement in form and substance
reasonably satisfactory to the Collateral Agent, either (i) arrange for
the issuer and any confirmer of such Letter of Credit to consent to an
assignment to the Collateral Agent of the proceeds of any drawing under
the Letter of Credit or (ii) arrange for the Collateral Agent to become
the transferee beneficiary of such Letter of Credit, with the
Collateral Agent agreeing, in each case, that the proceeds of any
drawing under the Letter of Credit are to be applied as provided in the
Credit Agreement. The actions in the preceding sentence shall be taken
to the extent
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that the amount under such Letter of Credit, together with all amounts
under Letters of Credit for which the actions described above in clause
(i) and (ii) have not been taken, exceeds $500,000 in the aggregate for
all Pledgors.
(f) Commercial Tort Claims. As of the date hereof each
Pledgor hereby represents and warrants that it holds no Commercial Tort
Claims other than those listed in Schedule 14 annexed to the Perfection
Certificate. If any Pledgor shall at any time hold or acquire a
Commercial Tort Claim having a value together with all other Commercial
Tort Claims of all Pledgors in which the Collateral Agent does not have
a security interest in excess of $500,000 in the aggregate, such
Pledgor shall immediately notify the Collateral Agent in writing signed
by such Pledgor of the brief details thereof and grant to the
Collateral Agent in such writing a security interest therein and in the
Proceeds thereof, all upon the terms of this Agreement, with such
writing to be in form and substance reasonably satisfactory to the
Collateral Agent.
(g) Landlord's Access Agreements/Bailee Letters. Each
Pledgor shall use its commercially reasonable efforts to obtain as soon
as practicable after the date hereof with respect to each location set
forth in Schedule 4.01(o)(vi) annexed to the Credit Agreement, where
such Pledgor maintains Pledged Collateral, a Bailee Letter and/or
Landlord Access Agreement, as applicable, and use commercially
reasonable efforts to obtain a Bailee Letter, Landlord Access Agreement
and/or landlord's lien waiver, as applicable, from all bailees and
landlords, as applicable, who from time to time have possession of
Pledged Collateral in the ordinary course of such Pledgor's business
and if reasonably requested by the Collateral Agent; provided that the
foregoing shall not be required if the value of the Pledged Collateral
held by such bailee or landlord is less than $50,000, provided further
that the aggregate value of the Pledged Collateral held by all such
bailees and landlords who have not delivered a Bailee Letter and/or
Landlord Access Agreement, as applicable, is less than $500,000.
(h) Motor Vehicles. Upon the request of the Collateral
Agent, each Pledgor shall deliver to the Collateral Agent originals of
the certificates of title or ownership for the motor vehicles (and any
other Equipment covered by certificates of title or ownership) owned by
it with the Collateral Agent listed as lienholder therein. Such
requirement shall apply to the Pledgors if any such individual motor
vehicle (or any such other Equipment) is valued at over $50,000 and if
the aggregate value of all such motor vehicles (and such Equipment) as
to which any Pledgor has not delivered a Certificate of Title or
ownership is over $500,000.
(i) Third Party Agreements. Except as set forth on
Schedule 3.4(i) annexed hereto, neither the granting of the security
interests contemplated hereby nor the exercise of remedies in respect
thereof will constitute or result in the abandonment, invalidation or
unenforceability of any right, title or interest of any Pledgor under,
or constitute or result in a default, breach or termination pursuant to
the terms of, or otherwise permit the ter-
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mination of, any lease, contract, property right or agreement as to
which any Pledgor is party, owner or beneficiary and with respect which
such Pledgor receives or is entitled to receive aggregate gross
revenues in excess of $1,000,000 in any 12-month period (other than to
the extent that any such limitation or restriction would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions)) or provides that the
collateral assignment of or granting of a lien on such lease, contract,
property right or agreement is prohibited or would be null and void
without the consent of the applicable counterparty thereto. With
respect to any lease, contract, property right or agreement set forth
on Schedule 3.4(i) annexed hereto, Borrower and the applicable Pledgor
shall use their commercially reasonable efforts to obtain within 90
days of the Closing Date a letter agreement from the applicable
counterparty under such lease, contract, property right or agreement,
in form and substance reasonably satisfactory to the Collateral Agent,
acknowledging and agreeing to the granting of the security interest
contemplated hereby.
SECTION 3.5. Joinder of Additional Guarantors. The Pledgors
shall cause each Subsidiary of the Borrower which, from time to time, after the
date hereof shall be required to pledge any assets to the Collateral Agent for
the benefit of the Secured Parties pursuant to the provisions of the Credit
Agreement, (a) to execute and deliver to the Collateral Agent (i) a Joinder
Agreement substantially in the form of Exhibit 3 annexed hereto and (ii) a
Perfection Certificate, in each case, within thirty (30) Business Days of the
date on which such Subsidiary was acquired or created or (b) in the case of a
Subsidiary organized outside of the United States required to pledge any assets
to the Collateral Agent in accordance with the terms and conditions of the
Credit Agreement, to execute and deliver such documentation as the Collateral
Agent shall reasonably request and, in each case, upon such execution and
delivery, such Subsidiary shall constitute a "Guarantor" and a "Pledgor" for all
purposes hereunder with the same force and effect as if originally named as a
Guarantor and Pledgor herein. The execution and delivery of such Joinder
Agreement shall not require the consent of any Pledgor hereunder. The rights and
obligations of each Pledgor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor or Pledgor as a party to this
Agreement.
SECTION 3.6. Supplements; Further Assurances. Each Pledgor
shall take such further actions, and execute and deliver to the Collateral Agent
such additional assignments, agreements, supplements, powers and instruments, as
the Collateral Agent may in its reasonable judgment deem necessary or
appropriate, wherever required by law, in order to perfect, preserve and protect
the security interest in the Pledged Collateral as provided herein and the
rights and interests granted to the Collateral Agent hereunder, to carry into
effect the purposes hereof or better to assure and confirm unto the Collateral
Agent the Pledged Collateral or permit the Collateral Agent to exercise and
enforce its rights, powers and remedies hereunder with respect to any Pledged
Collateral. Without limiting the generality of the foregoing, each Pledgor shall
make, execute, endorse, acknowledge, file or re-file and/or deliver to the
Collateral Agent from time to time upon reasonable request such lists,
descriptions and designations of the Pledged Collateral, copies of warehouse
receipts, receipts in the nature of warehouse receipts, bills of lad-
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ing, documents of title, vouchers, invoices, schedules, confirmatory
assignments, supplements, additional security agreements, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments as the Collateral Agent shall reasonably
request. If an Event of Default has occurred and is continuing, the Collateral
Agent may institute and maintain, in its own name or in the name of any Pledgor,
such suits and proceedings as the Collateral Agent may be advised by counsel
shall be necessary or expedient to prevent any impairment of the security
interest in or the perfection thereof in the Pledged Collateral. All of the
foregoing shall be at the sole cost and expense of the Pledgors.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1. Title. Except for the security interest granted
to the Collateral Agent for the ratable benefit of the Secured Parties pursuant
to this Agreement, such Pledgor owns and, as to Pledged Collateral acquired by
it from time to time after the date hereof, will own the rights in each item of
Pledged Collateral pledged by it hereunder free and clear of any and all Liens
or claims of others other than Permitted Collateral Liens. In addition, no Liens
or claims exist on the Securities Collateral, other than as permitted by Section
6.02 of the Credit Agreement. Such Pledgor has not filed, nor authorized any
third party to file a financing statement or other public notice with respect to
all or any part of the Pledged Collateral on file or of record in any public
office, except such as have been filed in favor of the Collateral Agent pursuant
to this Agreement or as are permitted by the Credit Agreement or financing
statements or public notices relating to the termination statements listed on
Schedule 8 to the Perfection Certificate. No person other than the Collateral
Agent has control or possession of all or any part of the Pledged Collateral,
except as permitted by the Credit Agreement.
SECTION 4.2. Validity of Security Interest. The security
interest in and Lien on the Pledged Collateral granted to the Collateral Agent
for the benefit of the Secured Parties hereunder constitutes (a) a legal and
valid security interest in all the Pledged Collateral securing the payment and
performance of the Obligations, and (b) subject to the filings and other actions
described in Schedule 6 annexed to the Perfection Certificate, a perfected
security interest in all the Pledged Collateral. The security interest and Lien
granted to the Collateral Agent for the benefit of the Secured Parties pursuant
to this Agreement in and on the Pledged Collateral will at all times constitute
a perfected, continuing security interest therein, subject only to Permitted
Collateral Liens.
SECTION 4.3. Defense of Claims; Transferability of Pledged
Collateral. Each Pledgor shall, at its own cost and expense, defend title to the
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Collateral Agent and
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the priority thereof against all claims and demands of all persons, at its own
cost and expense, at any time claiming any interest therein adverse to the
Collateral Agent or any other Secured Party other than Permitted Collateral
Liens (other than Contested Liens). There is no agreement, and no Pledgor shall
enter into any agreement or take any other action, that would restrict the
transferability of any of the Pledged Collateral or otherwise not permit, impair
or conflict with such Pledgors' obligations or the rights of the Collateral
Agent hereunder or under any other Loan Document.
SECTION 4.4. Other Financing Statements. It has not filed, nor
authorized any third party to file (nor will there be any) valid or effective
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Pledged Collateral other than financing statements and other
statements and instruments relating to Permitted Liens. So long as any of the
Obligations remain unpaid, no Pledgor shall execute, authorize or permit to be
filed in any public office any financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) relating to any
Pledged Collateral, except financing statements and other statements and
instruments filed or to be filed in respect of and covering the security
interests granted by such Pledgor to the holder of the Permitted Collateral
Liens.
SECTION 4.5. Chief Executive Office; Change of Name;
Jurisdiction of Organization. (a) It shall comply with the provisions of Section
5.13(a) of the Credit Agreement.
(b) The Collateral Agent may rely on opinions of counsel
as to whether any or all UCC financing statements of the Pledgors need to be
amended as a result of any of the changes described in Section 5.13(a) of the
Credit Agreement. If any Pledgor fails to provide information to the Collateral
Agent about such changes on a timely basis, the Collateral Agent shall not be
liable or responsible to any party for any failure to maintain a perfected
security interest in such Pledgor's property constituting Pledged Collateral,
for which the Collateral Agent needed to have information relating to such
changes. The Collateral Agent shall have no duty to inquire about such changes
if any Pledgor does not inform the Collateral Agent of such changes, the parties
acknowledging and agreeing that it would not be feasible or practical for the
Collateral Agent to search for information on such changes if such information
is not provided by any Pledgor.
SECTION 4.6. Location of Inventory and Equipment. It shall not
move any Equipment or Inventory to any location other than one that is listed in
the relevant Schedules to the Perfection Certificate until (i) it shall have
given the Collateral Agent not less than 30 days' prior written notice (in the
form of an Officers' Certificate) of its intention so to do, clearly describing
such new location within the continental United States and providing such other
information in connection therewith as the Collateral Agent may request and (ii)
with respect to such new location, such Pledgor shall have taken all action
reasonably satisfactory to the Collateral Agent to maintain the perfection and
priority of the security interest of the Collateral Agent for
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the benefit of the Secured Parties in the Pledged Collateral intended to be
granted hereby, including using commercially reasonable efforts to obtain
waivers of landlord's or warehousemen's and/or bailee's liens with respect to
such new location, if applicable, and if requested by the Collateral Agent. Such
Pledgor agrees to provide the Collateral Agent with prompt notice following the
movement of any Equipment or Inventory to any location other than one that is
listed in the relevant Schedules to the Perfection Certificate.
SECTION 4.7. Due Authorization and Issuance. All of the
Initial Pledged Shares have been, and to the extent any Pledged Shares are
hereafter issued, such Pledged Shares will be, upon such issuance, duly
authorized, validly issued and fully paid and non-assessable. All of the Initial
Pledged Interests have been fully paid for, and there is no amount or other
obligation owing by any Pledgor to any issuer of the Initial Pledged Interests
in exchange for or in connection with the issuance of the Initial Pledged
Interests or any Pledgor's status as a partner or a member of any issuer of the
Initial Pledged Interests.
SECTION 4.8. Consents, etc. In the event that the Collateral
Agent desires to exercise any remedies, voting or consensual rights or
attorney-in-fact powers set forth in this Agreement and determines it necessary
to obtain any approvals or consents of any Governmental Authority or any other
person therefor, then, upon the reasonable request of the Collateral Agent, such
Pledgor agrees to use its best efforts to assist and aid the Collateral Agent to
obtain as soon as practicable any necessary approvals or consents for the
exercise of any such remedies, rights and powers.
SECTION 4.9. Pledged Collateral. All information set forth
herein, including the schedules annexed hereto, and all information contained in
any documents, schedules and lists heretofore delivered to any Secured Party,
including the Perfection Certificate and the schedules thereto, in connection
with this Agreement, in each case, relating to the Pledged Collateral, is
accurate and complete in all material respects. The Pledged Collateral described
on the schedules annexed to the Perfection Certificate constitutes all of the
property of such type of Pledged Collateral owned or held by the Pledgors.
SECTION 4.10. Insurance. In the event that the proceeds of any
insurance claim are paid after the Collateral Agent has exercised its right to
foreclose during the continuance of an Event of Default, such Net Cash Proceeds
shall be paid to the Collateral Agent to satisfy any deficiency remaining after
such foreclosure.
SECTION 4.11. Payment of Taxes; Compliance with Laws;
Contesting Liens; Claims. Each Pledgor represents and warrants that all Claims
imposed upon or assessed against the Pledged Collateral have been paid and
discharged except to the extent such Claims constitute a Lien not yet due and
payable which is a Contested Lien or a Permitted Collateral Lien. Each Pledgor
shall comply with all Requirements of Law applicable to the Pledged Collateral
the failure to comply with which would, individually or in the aggregate, have a
Material Adverse Effect. Each Pledgor may at its own expense contest the
validity, amount or applicability of any
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Claims so long as the contest thereof shall be conducted in accordance with, and
permitted pursuant to the provisions of, the Credit Agreement. Notwithstanding
the foregoing provisions of this Section 4.11, (i) no contest of any such
obligation may be pursued by such Pledgor if such contest would expose the
Collateral Agent or any other Secured Party to (A) any possible criminal
liability or (B) any additional civil liability for failure to comply with such
obligations unless such Pledgor shall have furnished a bond or other security
therefor satisfactory to the Collateral Agent, or such Secured Party, as the
case may be and (ii) if at any time payment or performance of any obligation
contested by such Pledgor pursuant to this Section 4.11 shall become necessary
to prevent the imposition of remedies because of non-payment, such Pledgor shall
pay or perform the same in sufficient time to prevent the imposition of remedies
in respect of such default or prospective default.
SECTION 4.12. Access to Pledged Collateral, Books and Records;
Other Information. Upon reasonable request to each Pledgor, the Collateral
Agent, its agents, accountants and attorneys shall have full and free access to
visit and inspect, as applicable, during normal business hours and such other
reasonable times as may be requested by the Collateral Agent upon reasonable
prior notice all of the Pledged Collateral and Mortgaged Property including all
of the books, correspondence and records of such Pledgor relating thereto. The
Collateral Agent and its representatives may examine the same, take extracts
therefrom and make photocopies thereof, and such Pledgor agrees to render to the
Collateral Agent, at such Pledgor's cost and expense, such clerical and other
assistance as may be reasonably requested by the Collateral Agent with regard
thereto. Such Pledgor shall, at any and all times, within a reasonable time
after written request by the Collateral Agent, furnish or cause to be furnished
to the Collateral Agent, in such manner and in such detail as may be reasonably
requested by the Collateral Agent, additional information with respect to the
Pledged Collateral.
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1. Pledge of Additional Securities Collateral. Each
Pledgor shall, upon obtaining any Pledged Securities or Intercompany Notes of
any person, accept the same in trust for the benefit of the Collateral Agent and
forthwith deliver to the Collateral Agent a pledge amendment, duly executed by
such Pledgor, in substantially the form of Exhibit 2 annexed hereto (each, a
"Pledge Amendment"), and the certificates and other documents required under
Section 3.1 and Section 3.2 hereof in respect of the additional Pledged
Securities or Intercompany Notes which are to be pledged pursuant to this
Agreement, and confirming the attachment of the Lien hereby created on and in
respect of such additional Pledged Securities or Intercompany Notes. Each
Pledgor hereby authorizes the Collateral Agent to attach each Pledge Amendment
to this Agreement and agrees that all Pledged Securities or Intercompany Notes
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listed on any Pledge Amendment delivered to the Collateral Agent shall for all
purposes hereunder be considered Pledged Collateral.
SECTION 5.2. Voting Rights; Distributions; etc.
(i) So long as no Event of Default shall have occurred and be
continuing:
(A) each Pledgor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Securities
Collateral or any part thereof for any purpose not inconsistent with
the terms or purposes hereof, the Credit Agreement or any other
document evidencing the Obligations; provided, however, that no Pledgor
shall in any event exercise such rights in any manner which could
reasonably be expected to have a Material Adverse Effect; and
(B) each Pledgor shall be entitled to receive and retain,
and to utilize free and clear of the Lien hereof, any and all
Distributions, but only if and to the extent made in accordance with
the provisions of the Credit Agreement; provided, however, that any and
all such Distributions consisting of rights or interests in the form of
securities shall be forthwith delivered to the Collateral Agent to hold
as Pledged Collateral and shall, if received by any Pledgor, be
received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of such Pledgor and be
forthwith delivered to the Collateral Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement).
(ii) The Collateral Agent shall be deemed without further
action or formality to have granted to each Pledgor all necessary
consents relating to voting rights and shall, if necessary, upon
written request of any Pledgor and at the sole cost and expense of the
Pledgors, from time to time execute and deliver (or cause to be
executed and delivered) to such Pledgor all such instruments as such
Pledgor may reasonably request in order to permit such Pledgor to
exercise the voting and other rights which it is entitled to exercise
pursuant to Section 5.2(i)(A) hereof and to receive the Distributions
which it is authorized to receive and retain pursuant to Section
5.2(i)(B) hereof.
(iii) Upon the occurrence and during the continuance of any
Event of Default:
(A) all rights of each Pledgor to exercise the voting and
other consensual rights it would otherwise be entitled to exercise
pursuant to Section 5.2(i)(A) hereof shall cease, and all such rights
shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise such voting and other
consensual rights; and
(B) all rights of each Pledgor to receive Distributions
which it would otherwise be authorized to receive and retain pursuant
to Section 5.2(i)(B) hereof shall cease and all such rights shall
thereupon become vested in the Collateral Agent, which shall
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thereupon have the sole right to receive and hold as Pledged Collateral
such Distributions.
(iv) Each Pledgor shall, at its sole cost and expense,
from time to time execute and deliver to the Collateral Agent
appropriate instruments as the Collateral Agent may request in order to
permit the Collateral Agent to exercise the voting and other rights
which it may be entitled to exercise pursuant to Section 5.2(iii)(A)
hereof and to receive all Distributions which it may be entitled to
receive under Section 5.2(iii)(B) hereof.
(v) All Distributions which are received by any Pledgor
contrary to the provisions of Section 5.2(i)(B) hereof shall be
received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Pledgor and shall immediately be
paid over to the Collateral Agent as Pledged Collateral in the same
form as so received (with any necessary endorsement).
SECTION 5.3. Defaults, etc. No Pledgor is in default in the
payment of any portion of any mandatory capital contribution, if any, required
to be made under any agreement to which any Pledgor is a party relating to the
Pledged Securities pledged by any of them, and no Pledgor is in violation of any
other provisions of any such agreement to which any Pledgor is a party, or
otherwise in default or violation thereunder. No Securities Collateral pledged
by any Pledgor is subject to any defense, offset or counterclaim, nor have any
of the foregoing been asserted or alleged against any Pledgor by any person with
respect thereto, and as of the date hereof, there are no certificates,
instruments, documents or other writings (other than the Organizational
Documents and certificates, if any, delivered to the Collateral Agent) which
evidence any Pledged Securities of any Pledgor.
SECTION 5.4. Certain Agreements of Pledgors As Issuers and
Holders of Equity Interests.
(i) In the case of each Pledgor which is an issuer of
Securities Collateral, such Pledgor agrees to be bound by the terms of this
Agreement relating to the Securities Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it.
(ii) In the case of each Pledgor which is a partner in a
partnership, limited liability company or other entity, such Pledgor hereby
consents, to the extent required by the applicable Organizational Document, to
the pledge by each other Pledgor, pursuant to the terms hereof, of the Pledged
Interests in such partnership, limited liability company or other entity and,
upon the occurrence and during the continuance of an Event of Default, to the
transfer of such Pledged Interests to the Collateral Agent or its nominee and to
the substitution of the Collateral Agent or its nominee as a substituted partner
or member in such partnership, limited liability company or other entity with
all the rights, powers and duties of a general partner or a limited partner or
member, as the case may be.
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ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1. Grant of License. Each Pledgor hereby grants to
the Collateral Agent an irrevocable, non-exclusive license to use, assign,
license or sublicense any and all of the Intellectual Property Collateral now
owned or licensed or hereafter acquired or licensed by such Pledgor, wherever
the same may be located, except, in the case of Intellectual Property Collateral
licensed to such Pledgor, if and to the extent this sublicense would result in
breach of the underlying license or give rise to termination rights by the
licensor with respect thereto, in each case, for the purpose of enabling the
Collateral Agent, during the continuance of an Event of Default, to exercise
rights and remedies under Article IX hereof at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose. Such license shall include access to all media in which any of
the licensed items may be recorded or stored and to all computer programs used
for the compilation or printout hereof.
SECTION 6.2. Protection of Collateral Agent's Security. On a
continuing basis, each Pledgor shall, at its sole cost and expense, (i) promptly
following its becoming aware thereof, notify the Collateral Agent of (A) any
materially adverse determination in any proceeding in the United States Patent
and Trademark Office or the United States Copyright Office or equivalent foreign
office with respect to any material Intellectual Property Collateral or (B) the
institution of any proceeding or any adverse determination in any federal,
state, local or foreign court or administrative body regarding such Pledgor's
claim of ownership in or right to use any material Intellectual Property
Collateral, its right to register such Intellectual Property Collateral or its
right to keep and maintain such registration in full force and effect, (ii)
maintain and protect material Intellectual Property Collateral, (iii) not permit
to lapse or become abandoned any material Intellectual Property Collateral, and
not settle or compromise any pending or future litigation or administrative
proceeding with respect to such Intellectual Property Collateral, in each case
except as shall be consistent with commercially reasonable business judgment,
(iv) upon such Pledgor obtaining knowledge thereof, promptly notify the
Collateral Agent in writing of any event which may be reasonably expected to
materially and adversely affect the value or utility of any material
Intellectual Property Collateral, the ability of such Pledgor or the Collateral
Agent to use, exploit, license or dispose of such Intellectual Property
Collateral or any portion thereof or the rights and remedies of the Collateral
Agent in relation thereto including a levy or threat of levy or any legal
process against such Intellectual Property Collateral or any portion thereof,
(v) not license any material Intellectual Property Collateral other than
licenses entered into by such Pledgor in, or incidental to, the ordinary course
of business, or amend or permit the amendment of any of the licenses in a manner
that materially and adversely affects the right to receive payments thereunder,
or in any manner that would materially impair the value of the Intellectual
Property Collateral or the Lien on and security interest in such Intellectual
Property Collateral intended to be granted to the Collateral Agent for the
benefit of the Secured Parties,
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without the consent of the Collateral Agent, (vi) diligently keep adequate
records respecting the Intellectual Property Collateral and (vii) furnish to the
Collateral Agent from time to time upon the Collateral Agent's request therefor
reasonably detailed statements and amended schedules further identifying and
describing the Intellectual Property Collateral and such other materials
evidencing or reports pertaining to the Intellectual Property Collateral as the
Collateral Agent may from time to time reasonably request.
SECTION 6.3. After-Acquired Property. If any Pledgor shall, at
any time before the Obligations have been paid in full (other than contingent
indemnification obligations which, pursuant to the provisions of the Credit
Agreement or the Security Documents, survive the termination thereof), the
Commitments have been terminated and all Letters of Credit have been canceled or
have expired, (i) obtain any rights to any additional Intellectual Property or
(ii) become entitled to the benefit of any additional Intellectual Property or
any renewal or extension thereof, including any reissue, division, continuation,
or continuation-in-part of any Intellectual Property, or any improvement on any
Intellectual Property, the provisions hereof shall automatically apply thereto
and any such item enumerated in clause (i) or (ii) of this Section 6.3 with
respect to such Pledgor shall automatically constitute Intellectual Property
Collateral if such would have constituted Intellectual Property Collateral at
the time of execution hereof and be subject to the Lien and security interest
created by this Agreement without further action by any party. Each Pledgor
shall promptly (i) provide to the Collateral Agent written notice of any of the
foregoing and (ii) confirm the attachment of the Lien and security interest
created by this Agreement to any rights described in clauses (i) and (ii) of the
immediately preceding sentence of this Section 6.3 by execution of an instrument
in form reasonably acceptable to the Collateral Agent and the filing of any
instruments or statements as shall be reasonably necessary to preserve, protect
or perfect the Collateral Agent's security interest in such Intellectual
Property. Further, each Pledgor authorizes the Collateral Agent to modify this
Agreement by amending Schedules 13(c) and 13(d) annexed to the Perfection
Certificate to include any Intellectual Property acquired or arising after the
date hereof of such Pledgor.
SECTION 6.4. Litigation. Unless there shall occur and be
continuing any Event of Default, each Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit and
at the sole cost and expense of the Pledgors, such applications for protection
of the Intellectual Property Collateral and suits, proceedings or other actions
to prevent the infringement, misappropriation, invalidation, abandonment,
counterfeiting, unfair competition, dilution, diminution in value or other
damage as are necessary to preserve and protect the Intellectual Property
Collateral. Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent shall have the right but shall in no way be
obligated to file applications for preservation and protection of the
Intellectual Property Collateral and/or bring suit in the name of any Pledgor,
the Collateral Agent or the Secured Parties to enforce the Intellectual Property
Collateral. In the event of such suit, each Pledgor shall, at the reasonable
request of the Collateral Agent, do any and all lawful acts and execute any and
all documents requested by the Collateral Agent in aid of such enforcement and
the Pledgors shall promptly reimburse and indemnify the Collateral Agent for all
costs and expenses incurred by the Collat-
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eral Agent in the exercise of its rights under this Section 6.4 in accordance
with Section 11.03 of the Credit Agreement. In the event that the Collateral
Agent shall elect not to bring suit to enforce the Intellectual Property
Collateral, each Pledgor agrees, at the reasonable request of the Collateral
Agent, to take all commercially reasonable actions necessary, whether by suit,
proceeding or other action, to prevent the infringement, misappropriation,
invalidation, abandonment, counterfeiting, unfair competition, dilution,
diminution in value of or other damage to any of the Intellectual Property
Collateral by others and for that purpose agrees to diligently maintain any
suit, proceeding or other action necessary to prevent such infringement.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.1. Maintenance of Records. Each Pledgor shall keep
and maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including records of all
payments received, all credits granted thereon, all merchandise returned and all
other documentation relating thereto. Each Pledgor shall, at such Pledgor's sole
cost and expense, upon the Collateral Agent's demand made at any time after the
occurrence and during the continuance of any Event of Default, deliver all
tangible evidence of Accounts, including all documents evidencing Accounts and
any books and records relating thereto to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Pledgor). Upon the occurrence and during the continuance of any Event of
Default, the Collateral Agent may transfer a full and complete copy of any
Pledgor's books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any person that has
acquired or is contemplating acquisition of an interest in the Accounts or the
Collateral Agent's security interest therein without the consent of any Pledgor.
SECTION 7.2. Legend. Each Pledgor shall legend, at the request
of the Collateral Agent and in form and manner reasonably satisfactory to the
Collateral Agent, the Accounts and the other books, records and documents of
such Pledgor evidencing or pertaining to the Accounts with an appropriate
reference to the fact that the Accounts have been collaterally assigned to the
Collateral Agent for the benefit of the Secured Parties and that the Collateral
Agent has a security interest therein.
SECTION 7.3. Modification of Terms, etc. No Pledgor shall
rescind or cancel any obligations evidenced by any Account or modify any term
thereof or make any adjustment with respect thereto except in the ordinary
course of business consistent with prudent business practice, or extend or renew
any such obligations except in the ordinary course of business consistent with
prudent business practice or compromise or settle any dispute, claim, suit or
legal proceeding relating thereto or sell any Account or interest therein except
in the ordinary course of business consistent with prudent business practice
without the prior written consent of the
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Collateral Agent. Each Pledgor shall timely fulfill all obligations on its part
to be fulfilled under or in connection with the Accounts.
SECTION 7.4. Collection. Each Pledgor shall cause to be
collected from the Account Debtor of each of the Accounts, as and when due in
the ordinary course of business and consistent with prudent business practice
(including Accounts that are delinquent, such Accounts to be collected in
accordance with generally accepted commercial collection procedures), any and
all amounts owing under or on account of such Account, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account, except that any Pledgor may, with respect to an Account, allow
in the ordinary course of business (i) a refund or credit due as a result of
returned or damaged or defective merchandise and (ii) such extensions of time to
pay amounts due in respect of Accounts and such other modifications of payment
terms or settlements in respect of Accounts as shall be commercially reasonable
in the circumstances, all in accordance with such Pledgor's ordinary course of
business consistent with its collection practices as in effect from time to
time. The costs and expenses (including attorneys' fees) of collection, in any
case, whether incurred by any Pledgor, the Collateral Agent or any Secured
Party, shall be paid by the Pledgors.
ARTICLE VIII
TRANSFERS
SECTION 8.1. Transfers of Pledged Collateral. No Pledgor shall
sell, convey, assign or otherwise dispose of, or grant any option with respect
to, any of the Pledged Collateral pledged by it hereunder except as permitted by
the Credit Agreement.
ARTICLE IX
REMEDIES
SECTION 9.1. Remedies. Upon the occurrence and during the
continuance of any Event of Default the Collateral Agent may from time to time
exercise in respect of the Pledged Collateral, in addition to the other rights
and remedies provided for herein or otherwise available to it, the following
remedies, in accordance with applicable law:
(i) personally, or by agents or attorneys, immediately
take possession of the Pledged Collateral or any part thereof, from any Pledgor
or any other person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon any Pledgor's
premises where any of the Pledged Collateral is located, remove such Pledged
Collateral, remain present at such premises to receive copies of all
communications and
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remittances relating to the Pledged Collateral and use in connection with such
removal and possession any and all services, supplies, aids and other facilities
of any Pledgor;
(ii) demand, ▇▇▇ for, collect or receive any money or
property at any time payable or receivable in respect of the Pledged Collateral
including instructing the obligor or obligors on any agreement, instrument or
other obligation constituting part of the Pledged Collateral to make any payment
required by the terms of such agreement, instrument or other obligation directly
to the Collateral Agent, and in connection with any of the foregoing,
compromise, settle, extend the time for payment and make other modifications
with respect thereto; provided, however, that in the event that any such
payments are made directly to any Pledgor, prior to receipt by any such obligor
of such instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Collateral Agent and shall promptly (but
in no event later than one (1) Business Day after receipt thereof) pay such
amounts to the Collateral Agent;
(iii) sell, assign, grant a license to use or otherwise
liquidate, or direct any Pledgor to sell, assign, grant a license to use or
otherwise liquidate, any and all investments made in whole or in part with the
Pledged Collateral or any part thereof, and take possession of the proceeds of
any such sale, assignment, license or liquidation;
(iv) take possession of the Pledged Collateral or any part
thereof, by directing any Pledgor in writing to deliver the same to the
Collateral Agent at any place or places so designated by the Collateral Agent,
in which event such Pledgor shall at its own expense: (A) forthwith cause the
same to be moved to the place or places designated by the Collateral Agent and
therewith delivered to the Collateral Agent, (B) store and keep any Pledged
Collateral so delivered to the Collateral Agent at such place or places pending
further action by the Collateral Agent and (C) while the Pledged Collateral
shall be so stored and kept, provide such security and maintenance services as
shall be necessary to protect the same and to preserve and maintain them in good
condition. Each Pledgor's obligation to deliver the Pledged Collateral as
contemplated in this Section 9.1(iv) is of the essence hereof. Upon application
to a court of equity having jurisdiction, the Collateral Agent shall be entitled
to a decree requiring specific performance by any Pledgor of such obligation;
(v) withdraw all moneys, instruments, securities and
other property in any bank, financial securities, deposit or other account of
any Pledgor constituting Pledged Collateral for application to the Obligations
as provided in Article X hereof;
(vi) retain and apply the Distributions to the Obligations
as provided in Article X hereof;
(vii) exercise any and all rights as beneficial and legal
owner of the Pledged Collateral, including perfecting assignment of and
exercising any and all voting, consensual and other rights and powers with
respect to any Pledged Collateral; and
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(viii) exercise any and all the rights and remedies of a
secured party on default under the UCC, and the Collateral Agent may also in its
sole discretion, without notice except as specified in Section 9.2 hereof, sell,
assign or grant a license to use the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange, broker's board
or at any of the Collateral Agent's offices or elsewhere, for cash, on credit or
for future delivery, and at such price or prices and upon such other terms as
the Collateral Agent may deem commercially reasonable. The Collateral Agent or
any other Secured Party or any of their respective Affiliates may be the
purchaser, licensee, assignee or recipient of any or all of the Pledged
Collateral at any such sale and shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Pledged Collateral sold, assigned or licensed at such sale, to use and apply
any of the Obligations owed to such person as a credit on account of the
purchase price of any Pledged Collateral payable by such person at such sale.
Each purchaser, assignee, licensee or recipient at any such sale shall acquire
the property sold, assigned or licensed absolutely free from any claim or right
on the part of any Pledgor, and each Pledgor hereby waives, to the fullest
extent permitted by law, all rights of redemption, stay and/or appraisal which
it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. The Collateral Agent shall not be
obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives, to the fullest extent permitted by
law, any claims against the Collateral Agent arising by reason of the fact that
the price at which any Pledged Collateral may have been sold, assigned or
licensed at such a private sale was less than the price which might have been
obtained at a public sale, even if the Collateral Agent accepts the first offer
received and does not offer such Pledged Collateral to more than one offeree.
SECTION 9.2. Notice of Sale. Each Pledgor acknowledges and
agrees that, to the extent notice of sale or other disposition of Pledged
Collateral shall be required by law, ten (10) days' prior notice to such Pledgor
of the time and place of any public sale or of the time after which any private
sale or other intended disposition is to take place shall be commercially
reasonable notification of such matters. No notification need be given to any
Pledgor if it has signed, in accordance with applicable law, after the
occurrence of an Event of Default, a statement renouncing or modifying any right
to notification of sale or other intended disposition.
SECTION 9.3. Waiver of Notice and Claims. Each Pledgor hereby
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Collateral Agent's taking possession or the
Collateral Agent's disposition of any of the Pledged Collateral, including any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law: (i)
all damages occasioned by such taking of possession, (ii) all other requirements
as to the time, place and terms of sale or other requirements with respect to
the enforcement of the Collateral Agent's rights hereunder and (iii) all rights
of redemption, appraisal, valuation, stay, extension or moratorium now
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or hereafter in force under any applicable law. The Collateral Agent shall not
be liable for any incorrect or improper payment made pursuant to this Article IX
in the absence of gross negligence or willful misconduct. Any sale of, or the
grant of options to purchase, or any other realization upon, any Pledged
Collateral shall operate to divest all right, title, interest, claim and demand,
either at law or in equity, of the applicable Pledgor therein and thereto, and
shall be a perpetual bar both at law and in equity against such Pledgor and
against any and all persons claiming or attempting to claim the Pledged
Collateral so sold, optioned or realized upon, or any part thereof, from,
through or under such Pledgor.
SECTION 9.4. Certain Sales of Pledged Collateral.
(i) Each Pledgor recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any Governmental
Authority, the Collateral Agent may be compelled, with respect to any sale of
all or any part of the Pledged Collateral, to limit purchasers to those who meet
the requirements of such Governmental Authority. Each Pledgor acknowledges that
any such sales may be at prices and on terms less favorable to the Collateral
Agent than those obtainable through a public sale without such restrictions,
and, notwithstanding such circumstances, agrees that any such restricted sale
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Collateral Agent shall have no
obligation to engage in public sales in respect of such Pledged Collateral.
(ii) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act, and applicable state securities
laws, the Collateral Agent may be compelled, with respect to any sale of all or
any part of the Securities Collateral and Investment Property, to limit
purchasers to persons who will agree, among other things, to acquire such
Securities Collateral or Investment Property for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Pledgor acknowledges that any such private sales may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Collateral Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Securities Collateral or Investment Property for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would agree to do so.
(iii) Notwithstanding the foregoing, each Pledgor shall,
upon the occurrence and during the continuance of any Event of Default, at the
reasonable request of the Collateral Agent, for the benefit of the Collateral
Agent, cause any registration, qualification under or compliance with any
Federal or state securities law or laws to be effected with respect to all or
any part of the Securities Collateral as soon as practicable and at the sole
cost and expense of the
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Pledgors. Each Pledgor will use its commercially reasonable efforts to cause
such registration to be effected (and be kept effective) and will use its
commercially reasonable efforts to cause such qualification and compliance to be
effected (and be kept effective) as may be so requested and as would permit or
facilitate the sale and distribution of such Securities Collateral including
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Collateral Agent to be kept advised in writing as to the progress of each
such registration, qualification or compliance and as to the completion thereof,
shall furnish to the Collateral Agent such number of prospectuses, offering
circulars or other documents incident thereto as the Collateral Agent from time
to time may request, and shall indemnify and shall cause the issuer of the
Securities Collateral to indemnify the Collateral Agent and all others
participating in the distribution of such Securities Collateral against all
claims, losses, damages and liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading.
(iv) If the Collateral Agent determines to exercise its
right to sell any or all of the Securities Collateral or Investment Property,
upon written request, the applicable Pledgor shall from time to time furnish to
the Collateral Agent all such information as the Collateral Agent may reasonably
request in order to determine the number of securities included in the
Securities Collateral or Investment Property which may be sold by the Collateral
Agent as exempt transactions under the Securities Act and the rules of the
Securities and Exchange Commission thereunder, as the same are from time to time
in effect.
(v) Each Pledgor further agrees that a breach of any of
the covenants contained in this Section 9.4 will cause irreparable injury to the
Collateral Agent and other Secured Parties, that the Collateral Agent and the
other Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
9.4 shall be specifically enforceable against such Pledgor, and such Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred and is continuing.
SECTION 9.5. No Waiver; Cumulative Remedies.
(i) No failure on the part of the Collateral Agent to
exercise, no course of dealing with respect to, and no delay on the part of the
Collateral Agent in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy; nor shall the
Collateral Agent be required to
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look first to, enforce or exhaust any other security, collateral or guaranties.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law.
(ii) In the event that the Collateral Agent shall have
instituted any proceeding to enforce any right, power or remedy under this
Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Collateral Agent, then and in every such case, the Pledgors,
the Collateral Agent and each other Secured Party shall be restored to their
respective former positions and rights hereunder with respect to the Pledged
Collateral, and all rights, remedies and powers of the Collateral Agent and the
other Secured Parties shall continue as if no such proceeding had been
instituted.
SECTION 9.6. Certain Additional Actions Regarding Intellectual
Property. If any Event of Default shall have occurred and be continuing, upon
the written demand of the Collateral Agent, each Pledgor shall execute and
deliver to the Collateral Agent an assignment or further license of the
Intellectual Property Collateral, in whole or in part as the Collateral Agent
determines, and such other documents as are necessary or appropriate to carry
out the intent and purposes hereof. Within five (5) Business Days of written
notice thereafter from the Collateral Agent, each Pledgor shall make available
to the Collateral Agent, to the extent within such Pledgor's power and
authority, such personnel in such Pledgor's employ on the date of the Event of
Default as the Collateral Agent may reasonably designate to permit such Pledgor
to continue, directly or indirectly, to produce, advertise and sell the products
and services sold by such Pledgor under the Intellectual Property Collateral,
and such persons shall be available to perform their prior functions on the
Collateral Agent's behalf.
ARTICLE X
PROCEEDS OF CASUALTY EVENTS AND COLLATERAL DISPOSITIONS;
APPLICATION OF PROCEEDS
SECTION 10.1. Proceeds of Casualty Events and Collateral
Dispositions. The Pledgors shall take all actions required by the Credit
Agreement with respect to any Net Cash Proceeds of any Casualty Event or from
the sale or disposition of any Pledged Collateral.
SECTION 10.2. Application of Proceeds. The proceeds received
by the Collateral Agent in respect of any sale of, collection from or other
realization upon all or any part of the Collateral pursuant to the exercise by
the Collateral Agent of its remedies shall be applied, together with any other
sums then held by the Collateral Agent pursuant to this Agreement, in accordance
with the Credit Agreement.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Concerning Collateral Agent.
(i) The Collateral Agent has been appointed as collateral
agent pursuant to the Credit Agreement. The actions of the Collateral Agent
hereunder are subject to the provisions of the Credit Agreement. The Collateral
Agent shall have the right hereunder to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain from
taking action (including the release or substitution of the Pledged Collateral),
in accordance with this Agreement and the Credit Agreement. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
liable for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith. The Collateral Agent may resign and a successor
Collateral Agent may be appointed in the manner provided in the Credit
Agreement. Upon the acceptance of any appointment as the Collateral Agent by a
successor Collateral Agent, that successor Collateral Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Collateral Agent under this Agreement, and the retiring
Collateral Agent shall thereupon be discharged from its duties and obligations
under this Agreement. After any retiring Collateral Agent's resignation, the
provisions hereof shall inure to its benefit as to any actions taken or omitted
to be taken by it under this Agreement while it was the Collateral Agent.
(ii) The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equivalent to that which the Collateral Agent, in its individual
capacity, accords its own property consisting of similar instruments or
interests, it being understood that neither the Collateral Agent nor any of the
Secured Parties shall have responsibility for (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Securities Collateral, whether or not the Collateral
Agent or any other Secured Party has or is deemed to have knowledge of such
matters or (ii) taking any necessary steps to preserve rights against any person
with respect to any Pledged Collateral.
(iii) The Collateral Agent shall be entitled to rely upon
any written notice, statement, certificate, order or other document or any
telephone message believed by it 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 and its duties hereunder, upon advice of counsel
selected by it.
(iv) If any item of Pledged Collateral also constitutes
collateral granted to the Collateral Agent under any other deed of trust,
mortgage, security agreement, pledge or instrument of any type, in the event of
any conflict between the provisions hereof and the provisions of
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such other deed of trust, mortgage, security agreement, pledge or instrument of
any type in respect of such collateral, the Collateral Agent, in its sole
discretion, shall select which provision or provisions shall control.
SECTION 11.2. Collateral Agent May Perform; Collateral Agent
Appointed Attorney-in-Fact. If any Pledgor shall fail to perform any covenants
contained in this Agreement (including such Pledgor's covenants to (i) pay the
premiums in respect of all required insurance policies hereunder, (ii) pay
Claims, (iii) make repairs, (iv) discharge Liens or (v) pay or perform any
obligations of such Pledgor under any Pledged Collateral) or if any
representation or warranty on the part of any Pledgor contained herein shall be
breached, the Collateral Agent may (but shall not be obligated to) do the same
or cause it to be done or remedy any such breach, and may expend funds for such
purpose; provided, however, that the Collateral Agent shall in no event be bound
to inquire into the validity of any tax, lien, imposition or other obligation
which such Pledgor fails to pay or perform as and when required hereby and which
such Pledgor does not contest in accordance with the provisions of Section 4.11
hereof. Any and all amounts so expended by the Collateral Agent shall be paid by
the Pledgors in accordance with the provisions of Section 11.03 of the Credit
Agreement. Neither the provisions of this Section 11.2 nor any action taken by
the Collateral Agent pursuant to the provisions of this Section 11.2 shall
prevent any such failure to observe any covenant contained in this Agreement nor
any breach of representation or warranty from constituting an Event of Default.
Each Pledgor hereby appoints the Collateral Agent its attorney-in-fact, with
full authority in the place and stead of such Pledgor and in the name of such
Pledgor, or otherwise, from time to time in the Collateral Agent's discretion to
take any action and to execute any instrument consistent with the terms of the
Credit Agreement, this Agreement and the other Security Documents which the
Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof. The foregoing grant of authority is a power of attorney coupled with an
interest and such appointment shall be irrevocable for the term hereof. Each
Pledgor hereby ratifies all that such attorney shall lawfully do or cause to be
done by virtue hereof.
SECTION 11.3. Continuing Security Interest; Assignment. This
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors, their respective successors and
assigns and (ii) inure, together with the rights and remedies of the Collateral
Agent hereunder, to the benefit of the Collateral Agent and the other Secured
Parties and each of their respective successors, transferees and assigns. No
other persons (including any other creditor of any Pledgor) shall have any
interest herein or any right or benefit with respect hereto. Without limiting
the generality of the foregoing clause (ii), any Secured Party may assign or
otherwise transfer any indebtedness held by it secured by this Agreement to any
other person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party, herein or otherwise,
subject however, to the provisions of the Credit Agreement and any Hedging
Agreement.
SECTION 11.4. Termination; Release. The Pledged Collateral
shall be released from the Lien of this Agreement in accordance with the
provisions of the Credit Agreement.
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Upon termination hereof or any release of Pledged Collateral in accordance with
the provisions of the Credit Agreement, the Collateral Agent shall, upon the
request and at the sole cost and expense of the Pledgors, assign, transfer and
deliver to Pledgor, against receipt and without recourse to or warranty by the
Collateral Agent except as to the fact that the Collateral Agent has not
encumbered the released assets, such of the Pledged Collateral to be released
(in the case of a release) as may be in possession of the Collateral Agent and
as shall not have been sold or otherwise applied pursuant to the terms hereof,
and, with respect to any other Pledged Collateral, proper documents and
instruments (including UCC-3 termination statements or releases) acknowledging
the termination hereof or the release of such Pledged Collateral, as the case
may be.
SECTION 11.5. Modification in Writing. No amendment,
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by any Pledgor therefrom, shall be effective unless
the same shall be made in accordance with the terms of the Credit Agreement and
unless in writing and signed by the Collateral Agent. Any amendment,
modification or supplement of or to any provision hereof, any waiver of any
provision hereof and any consent to any departure by any Pledgor from the terms
of any provision hereof shall be effective only in the specific instance and for
the specific purpose for which made or given. Except where notice is
specifically required by this Agreement or any other document evidencing the
Obligations, no notice to or demand on any Pledgor in any case shall entitle any
Pledgor to any other or further notice or demand in similar or other
circumstances.
SECTION 11.6. Notices. Unless otherwise provided herein or in
the Credit Agreement, any notice or other communication herein required or
permitted to be given shall be given in the manner and become effective as set
forth in the Credit Agreement, as to any Pledgor, addressed to it at the address
of the Borrower set forth in the Credit Agreement and as to the Collateral
Agent, addressed to it at the address set forth in the Credit Agreement, or in
each case at such other address as shall be designated by such party in a
written notice to the other party complying as to delivery with the terms of
this Section 11.6.
SECTION 11.7. Governing Law, Consent to Jurisdiction and
Service of Process; Waiver of Jury Trial. Sections 11.09 and 11.10 of the Credit
Agreement are incorporated herein, mutatis mutandis, as if a part hereof.
SECTION 11.8. Severability of Provisions. Any provision hereof
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.9. Execution in Counterparts. This Agreement and
any amendments, waivers, consents or supplements hereto 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 to be an original,
but all such counterparts together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page of this Agreement
-39-
by telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 11.10. Business Days. In the event any time period or
any date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
SECTION 11.11. Waiver of Stay. Each Pledgor covenants (to the
extent it may lawfully do so) that in the event that such Pledgor or any
property or assets of such Pledgor shall hereafter become the subject of a
voluntary or involuntary proceeding under Title 11 of the United States Code or
such Pledgor shall otherwise be a party to any federal or state bankruptcy,
insolvency, moratorium or similar proceeding to which the provisions relating to
the automatic stay under Section 362 of Title 11 of the United States Code or
any similar provision in any such law is applicable, then, in any such case,
whether or not the Collateral Agent has commenced foreclosure proceedings under
this Agreement, such Pledgor shall not, and each Pledgor hereby expressly waives
their right to (to the extent it may lawfully do so) at any time insist upon,
plead or in any manner whatsoever, claim or take the benefit or advantage of any
such automatic stay or such similar provision as it relates to the exercise of
any of the rights and remedies (including any foreclosure proceedings) available
to the Collateral Agent as provided in this Agreement, in any other Security
Document or any other document evidencing the Obligations. Each Pledgor further
covenants (to the extent it may lawfully do so) that it will not hinder, delay
or impede the execution of any power granted herein to the Collateral Agent, but
will suffer and permit the execution of every such power as though no law
relating to any stay or similar provision had been enacted.
SECTION 11.12. No Credit for Payment of Taxes or Imposition.
No Pledgor shall be entitled to any credit against the principal, premium, if
any, or interest payable under the Credit Agreement, and no Pledgor shall be
entitled to any credit against any other sums which may become payable under the
terms thereof or hereof, by reason of the payment of any Tax on the Pledged
Collateral or any part thereof.
SECTION 11.13. No Claims Against Collateral Agent. Nothing
contained in this Agreement shall constitute any consent or request by the
Collateral Agent, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Pledged Collateral or any part thereof, nor as giving any Pledgor any right,
power or authority to contract for or permit the performance of any labor or
services or the furnishing of any materials or other property in such fashion as
would permit the making of any claim against the Collateral Agent in respect
thereof or any claim that any Lien based on the performance of such labor or
services or the furnishing of any such materials or other property is prior to
the Lien hereof.
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SECTION 11.14. No Release. Nothing set forth in this Agreement
shall relieve any Pledgor from the performance of any term, covenant, condition
or agreement on such Pledgor's part to be performed or observed under or in
respect of any of the Pledged Collateral at any time prior to the sale,
assignment or transfer of such Pledged Collateral in accordance with the terms
of this Agreement or from any liability to any person under or in respect of any
of the Pledged Collateral or shall impose any obligation on the Collateral Agent
or any other Secured Party to perform or observe any such term, covenant,
condition or agreement on such Pledgor's part to be so performed or observed or
shall impose any liability on the Collateral Agent or any other Secured Party
for any act or omission on the part of such Pledgor relating thereto or for any
breach of any representation or warranty on the part of such Pledgor contained
in this Agreement, the Credit Agreement or the other Loan Documents, or under or
in respect of the Pledged Collateral or made in connection herewith or
therewith. The obligations of each Pledgor contained in this Section 11.14 shall
survive the termination hereof and the discharge of such Pledgor's other
obligations under this Agreement, the Credit Agreement and the other Loan
Documents.
SECTION 11.15. Obligations Absolute. All obligations of each
Pledgor hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of any
Pledgor;
(ii) any lack of validity or enforceability of the Credit
Agreement, any Hedging Agreement or any other Loan Document, or any
other agreement or instrument relating thereto;
(iii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the
Credit Agreement, any Hedging Agreement or any other Loan Document or
any other agreement or instrument relating thereto;
(iv) any pledge, exchange, release or non-perfection of
any other collateral, or any release or amendment or waiver of or
consent to any departure from any guarantee, for all or any of the
Obligations;
(v) any exercise, non-exercise or waiver of any right,
remedy, power or privilege under or in respect hereof, the Credit
Agreement, any Hedging Agreement or any other Loan Document except as
specifically set forth in a waiver granted pursuant to the provisions
of Section 11.5 hereof; or
(vi) any other circumstances which might otherwise
constitute a defense available to, or a discharge of, any Pledgor.
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[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the Pledgors and the Collateral Agent have
caused this Agreement to be duly executed and delivered by their duly authorized
officers as of the date first above written.
IONICS, INCORPORATED
as Pledgor
By: _________________________________________
Name:
Title:
[GUARANTORS],
as Pledgor
By: _________________________________________
Name:
Title:
S-2
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: _________________________________________
Name:
Title:
By: _________________________________________
Name:
Title:
SCHEDULE 3.4(b)
DEPOSIT ACCOUNTS
DEPOSIT ACCOUNTS NOT SUBJECT TO A CONTROL AGREEMENT
SCHEDULE 3.4(b)
THIRD PARTY AGREEMENTS
EXHIBIT 1
[Form of]
ISSUER'S ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges receipt of a copy of
that certain security agreement (as amended, amended and restated, supplemented
or otherwise modified from time to time, the "Security Agreement;" capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Security Agreement), dated as of February 13, 2004, made by
IONICS, INCORPORATED, a Massachusetts corporation (the "Borrower"), the
Guarantors party thereto and UBS AG, STAMFORD BRANCH, as collateral agent (in
such capacity and together with any successors in such capacity, the "Collateral
Agent"), (ii) agrees promptly to note on its books the security interests
granted to the Collateral Agent and confirmed under the Security Agreement,
(iii) agrees that it will comply with instructions of the Collateral Agent with
respect to the applicable Securities Collateral without further consent by the
applicable Pledgor, (iv) agrees to notify the Collateral Agent upon obtaining
knowledge of any interest in favor of any person in the applicable Securities
Collateral that is adverse to the interest of the Collateral Agent therein and
(v) waives any right or requirement at any time hereafter to receive a copy of
the Security Agreement in connection with the registration of any Securities
Collateral thereunder in the name of the Collateral Agent or its nominee or the
exercise of voting rights by the Collateral Agent or its nominee.
[ ]
By: ________________________________________
Name:
Title:
EXHIBIT 2
[Form of]
SECURITIES PLEDGE AMENDMENT
This Security Pledge Amendment, dated as of [ ], is
delivered pursuant to Section 5.1 of that certain security agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Security Agreement;" capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of February 13, 2004, made by IONICS, INCORPORATED, a
Massachusetts corporation (the "Borrower"), the Guarantors party thereto and UBS
AG, STAMFORD BRANCH, as collateral agent (in such capacity and together with any
successors in such capacity, the "Collateral Agent"). The undersigned hereby
agrees that this Pledge Amendment may be attached to the Security Agreement and
that the Pledged Securities and/or Intercompany Notes listed on this Pledge
Amendment shall be deemed to be and shall become part of the Pledged Collateral
and shall secure all Obligations.
PLEDGED SECURITIES
CLASS NUMBER OF PERCENTAGE OF
OF STOCK SHARES ALL ISSUED CAPITAL
OR PAR CERTIFICATE OR OR OTHER EQUITY
ISSUER INTERESTS VALUE NO(S). INTERESTS INTERESTS OF ISSUER
--------- --------- ----- ----------- --------- --------------------
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INTERCOMPANY NOTES
PRINCIPAL DATE OF INTEREST MATURITY
ISSUER AMOUNT ISSUANCE RATE DATE
--------- --------- -------- -------- --------
[ ],
as Pledgor
By: _________________________________________
Name:
Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Title:
EXHIBIT 3
[Form of]
JOINDER AGREEMENT
[Name of New Pledgor]
[Address of New Pledgor]
[Date]
_________________________
_________________________
_________________________
_________________________
Ladies and Gentlemen:
Reference is made to that certain security agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Security Agreement;" capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of February 13, 2004, made by IONICS, INCORPORATED, a
Massachusetts corporation (the "Borrower"), the Guarantors party thereto and UBS
AG, STAMFORD BRANCH, as collateral agent (in such capacity and together with any
successors in such capacity, the "Collateral Agent").
This letter supplements the Security Agreement and is
delivered by the undersigned, [ ] (the "New Pledgor"), pursuant to Section
3.5 of the Security Agreement. The New Pledgor hereby agrees to be bound as a
Guarantor and as a Pledgor by all of the terms, covenants and conditions set
forth in the Security Agreement to the same extent that it would have been bound
if it had been a signatory to the Security Agreement on the execution date of
the Security Agreement. The New Pledgor also hereby agrees to be bound as a
party by all of the terms, covenants and conditions applicable to it set forth
in Articles V, VI and VII of the Credit Agreement to the same extent that it
would have been bound if it had been a signatory to the Credit Agreement on the
execution date of the Credit Agreement. Without limiting the generality of the
foregoing, the New Pledgor hereby grants and pledges to the Collateral Agent, as
collateral security for the full, prompt and complete payment and performance
when due (whether at stated maturity, by acceleration or otherwise) of the
Obligations, a Lien on and security
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interest in, all of its right, title and interest in, to and under the Pledged
Collateral and expressly assumes all obligations and liabilities of a Guarantor
and Pledgor thereunder. The New Pledgor hereby makes each of the representations
and warranties and agrees to each of the covenants applicable to the Pledgors
contained in the Security Agreement and Article III of the Credit Agreement.
Annexed hereto are supplements to each of the schedules to the
Security Agreement and the Credit Agreement, as applicable, with respect to the
New Pledgor. Such supplements shall be deemed to be part of the Security
Agreement or the Credit Agreement, as applicable.
This agreement and any amendments, waivers, consents or
supplements hereto 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 to be an original, but all such
counterparts together shall constitute one and the same agreement. Delivery of
an executed counterpart of a signature page of this agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the New Pledgor has caused this letter
agreement to be executed and delivered by its duly authorized officer as of the
date first above written.
[NEW PLEDGOR]
By: _________________________________________
Name:
Title:
AGREED TO AND ACCEPTED:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Title:
[Schedules to be attached]
EXHIBIT 4
[Form of]
CONTROL AGREEMENT CONCERNING SECURITIES ACCOUNTS
This Control Agreement Concerning Securities Accounts (this
"Control Agreement"), dated as of [ ], by and among [ ] (the "Pledgor"),
UBS AG, Stamford Branch (the "Collateral Agent") and [ ] (the "Securities
Intermediary"), is delivered pursuant to Section 3.4(c) of that certain security
agreement (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Security Agreement"), dated as of February 13, 2004,
made by the Pledgor and each of the Guarantors listed on the signature pages
thereto in favor of UBS AG, Stamford Branch, as collateral agent, as pledgee,
assignee and secured party (the "Collateral Agent"). This Control Agreement is
for the purpose of perfecting the security interests of the Secured Parties
granted by the Pledgor in the Designated Accounts described below. All
references herein to the "UCC" shall mean the Uniform Commercial Code as in
effect from time to time in the State of New York. Capitalized terms used but
not defined herein shall have the meanings assigned to such terms in the
Security Agreement.
Section 1. Confirmation of Establishment and Maintenance of
Designated Accounts. The Securities Intermediary hereby confirms and agrees that
(i) the Securities Intermediary has established for the Pledgor and maintains
the account(s) listed in Schedule I annexed hereto (such account(s), together
with each such other securities account maintained by the Pledgor with the
Securities Intermediary collectively, the "Designated Accounts" and each a
"Designated Account"), (ii) each Designated Account will be maintained in the
manner set forth herein until termination of this Control Agreement, (iii) this
Control Agreement is the valid and legally binding obligation of the Securities
Intermediary, (iv) the Securities Intermediary is a "securities intermediary" as
defined in Article 8-102(a)(14) of the UCC, (v) each of the Designated Accounts
is a "securities account" as such term is defined in Section 8-501(a) of the UCC
and (vi) all securities or other property underlying any financial assets which
are credited to any Designated Account shall be registered in the name of the
Securities Intermediary, endorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to any Designated
Account be registered in the name of the Pledgor, payable to the order of the
Pledgor or specially endorsed to the Pledgor, except to the extent the foregoing
have been specially endorsed to the Securities Intermediary or in blank.
Section 2. "Financial Assets" Election. The Securities
Intermediary hereby agrees that each item of Investment Property credited to any
Designated Account shall be treated as a "financial asset" within the meaning of
Section 8-102(a)(9) of the UCC.
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Section 3. Entitlement Order. If at any time the Securities
Intermediary shall receive an "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) issued by the Collateral Agent and relating to any
financial asset maintained in one or more of the Designated Accounts, the
Securities Intermediary shall comply with such entitlement order without further
consent by the Pledgor or any other person. The Securities Intermediary shall
also comply with instructions directing the Securities Intermediary with respect
to the sale, exchange or transfer of financial assets held in each Designated
Account originated by a Pledgor, or any representative of, or investment manager
appointed by, a Pledgor until such time as the Collateral Agent delivers a
Notice of Sole Control pursuant to Section 9(i) to the Securities Intermediary.
Section 4. Subordination of Lien; Waiver of Set-Off. The
Securities Intermediary hereby agrees that any security interest in any
Designated Account it now has or subsequently obtains shall be subordinate to
the security interest of the Collateral Agent. The financial assets and other
items deposited to any Designated Account will not be subject to deduction,
set-off, banker's lien, or any other right in favor of any person other than the
Secured Parties (except that the Securities Intermediary may set off all amounts
due to the Securities Intermediary in respect of its customary fees and expenses
for the routine maintenance and operation of the Designated Accounts, including
overdraft fees and amounts advanced to settle authorized transactions.
Section 5. Choice of Law. Both this Control Agreement and the
Designated Accounts shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Securities Intermediary's location and the
Designated Accounts (as well as the security entitlements related thereto) shall
be governed by the laws of the State of New York.
Section 6. Conflict with Other Agreements; Amendments. As of
the date hereof, there are no other agreements entered into between the
Securities Intermediary and the Pledgor with respect to any Designated Account
or any security entitlements or other financial assets credited thereto (other
than standard and customary documentation with respect to the establishment and
maintenance of such Designated Accounts). The Securities Intermediary and the
Pledgor will not enter into any other agreement with respect to any Designated
Account unless the Collateral Agent shall have received prior written notice
thereof. The Securities Intermediary and the Pledgor have not and will not enter
into any other agreement with respect to (i) creation or perfection of any
security interest in or (ii) control of security entitlements maintained in any
of the Designated Accounts or purporting to limit or condition the obligation of
the Securities Intermediary to comply with entitlement orders with respect to
financial assets credited to any Designated Account as set forth in Section 3
hereof without the prior written consent of the Collateral Agent acting in its
sole discretion. In the event of any conflict with respect to control over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail. No amendment or modification of this Control
Agreement or waiver of any
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rights hereunder shall be binding on any party hereto unless it is in writing
and is signed by all the parties hereto.
Section 7. Certain Agreements.
(i) The Securities Intermediary has furnished to the
Collateral Agent the most recent account statement issued by the Securities
Intermediary with respect to each of the Designated Accounts and the financial
assets and cash balances held therein, identifying the financial assets held
therein in a manner reasonably acceptable to the Collateral Agent. Each such
statement accurately reflects the assets held in such Designated Account as of
the date thereof.
(ii) The Securities Intermediary will, upon its receipt of
each supplement to the Security Agreement signed by the Pledgor and identifying
one or more financial assets as "Pledged Collateral," enter into its records,
including computer records, with respect to each Designated Account a notation
with respect to any such financial asset so that such records and reports
generated with respect thereto identify such financial asset as "Pledged."
(iii) The Collateral Agent has delivered to the Securities
Intermediary a list, signed by an authorized representative of the officers of
the Collateral Agent authorized to give approvals or instructions under this
Control Agreement (the "Authorized Representatives") and the Securities
Intermediary shall be entitled to rely on communications from any such
authorized officers until the earlier of the termination of this Control
Agreement in accordance with the terms hereof and notification by an Authorized
Representative of a change in such list at any time.
Section 8. Notice of Adverse Claims. Except for the claims
and interest of the Collateral Agent and of the Pledgor in the financial assets
maintained in the Designated Account(s), the Securities Intermediary on the date
hereof does not know of any claim to, or security interest in, any Designated
Account or in any financial asset credited thereto and does not know of any
claim that any person other than the Collateral Agent has been given "control"
(within the meaning of Section 8-106 of the UCC) of any Designated Account or
any such financial asset. If the Securities Intermediary becomes aware that any
person is asserting any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process or
any claim of control) against any of the financial assets maintained in any
Designated Account, the Securities Intermediary promptly notify the Collateral
Agent and the Pledgor thereof.
Section 9. Maintenance of Designated Accounts. In addition to
the obligations of the Securities Intermediary in Section 3 hereof, the
Securities Intermediary agrees to maintain the Designated Accounts as follows:
(i) Notice of Sole Control. If at any time the Collateral
Agent delivers to the Securities Intermediary a notice of sole control
in substantially the form set forth in Exhibit A
-4-
attached hereto (the "Notice of Sole Control") with respect to any
Designated Account, the Securities Intermediary agrees that, after
receipt of such notice, it will take all instructions with respect to
such Designated Account solely from the Collateral Agent and cease
taking instructions from Pledgor, including, without limitation,
instructions for investment, distribution or transfer of any financial
asset maintained in any Designated Account. Permitting settlement of
trades pending at the time of receipt of such notice shall not
constitute a violation of the immediately preceding sentence.
(ii) Voting Rights. Until such time as the Securities
Intermediary receives a Notice of Sole Control, the Pledgor, or an
investment manager on behalf of the Pledgor, shall direct the
Securities Intermediary with respect to the voting of any financial
assets credited to any Designated Account.
(iii) Statements and Confirmations. The Securities
Intermediary will send copies of all statements and other
correspondence (excluding routine confirmations) concerning any
Designated Account or any financial assets credited thereto
simultaneously to each of the Pledgor and the Collateral Agent at the
address set forth in Section 11 hereof. The Securities Intermediary
will provide to the Collateral Agent, upon the Collateral Agent's
request therefor from time to time and, in any event, as of the last
business day of each calendar month, a statement of the market value of
each financial asset maintained in each Designated Account. The
Securities Intermediary shall not change the name or account number of
any Designated Account without the prior written consent of the
Collateral Agent.
(iv) Bailee for Perfection. The Securities Intermediary
acknowledges that, in the event that it should come into possession of
any certificate representing any security or other assets held as
financial assets in any of the Designated Accounts, the Securities
Intermediary shall retain possession of the same for the benefit of the
Collateral Agent and such act shall cause the Securities Intermediary
to be deemed a bailee for the Collateral Agent, if necessary to perfect
the Collateral Agent's security interest in such securities or assets.
The Securities Intermediary hereby acknowledges its receipt of a copy
of the Security Agreement, which shall also serve as notice to the
Securities Intermediary of a security interest in collateral held by a
bailee.
Section 10. Successors; Assignment. The terms of this Control
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective corporate successors and permitted assignees.
Section 11. Notices. Any notice, request or other
communication required or permitted to be given under this Control Agreement
shall be in writing and deemed to have been properly given when delivered in
person, or when sent by telecopy or other electronic means and electronic
confirmation of error free receipt is received or two (2) days after being sent
by certi-
-5-
fied or registered United States mail, return receipt requested, postage
prepaid, addressed to the party at the address set forth below.
Pledgor: [ ]
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President and General
Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇]
Securities
Intermediary: [ ]
[Address]
Attention:
Telecopy:
Telephone:
Collateral
Agent: UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy:
Telephone:
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-6-
Any party may change its address for notices in the manner set
forth above.
Section 12. Termination. The rights and powers granted herein
to the Collateral Agent are powers coupled with an interest and will be affected
neither by the bankruptcy of the Pledgor nor by the lapse of time. The
obligations of the Securities Intermediary hereunder shall continue in effect
until (i) the security interests of the Secured Parties with respect to the
financial assets maintained in the Designated Account(s) have been terminated
and an Authorized Representative has notified the Securities Intermediary of
such termination in writing or (ii) thirty days following the Securities
Intermediary's delivery of written notice of such termination to the Pledgor and
the Collateral Agent.
Section 13. Severability. If any term or provision set forth
in this Agreement shall be invalid or unenforceable, the remainder of this
Agreement, other than those provisions held invalid or unenforceable, shall be
construed in all respects as if such invalid or unenforceable term or provision
were omitted.
Section 14. Counterparts. This Control Agreement may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Control Agreement by
signing and delivering one or more counterparts.
S-1
[ ],
as Pledgor
By:____________________________________
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
[ ],
as Securities Intermediary
By:____________________________________
Name:
Title:
SCHEDULE I
Designated Account(s)
EXHIBIT A
[Letterhead of UBS AG, Stamford Branch]
[Date]
[Securities Intermediary]
[Address]
Attention:
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in Section 9(i) of the Control Agreement
Concerning Designated Accounts dated as of [ ], by and among [ ], us and you
(the "Control Agreement") (a copy of which is attached) we hereby give you
notice of our sole control over the financial assets maintained in the
Designated Account(s) referred to in the Control Agreement, account numbers:
________________ (the "Specified Designated Accounts"). You are hereby
instructed not to accept any direction, instruction or entitlement order with
respect to financial assets maintained in the Specified Designated Accounts from
any person other than the undersigned.
-2-
You are instructed to deliver a copy of this notice by
facsimile transmission to Ionics, Incorporated.
Very truly yours,
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
cc: Ionics, Incorporated
EXHIBIT 5
[Form of]
CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS
This CONTROL AGREEMENT CONCERNING DEPOSIT ACCOUNTS (this
"Control Agreement"), dated as of [ ], by and among [ ] (the "Pledgor"), UBS
AG, STAMFORD BRANCH (the "Collateral Agent") and [ ] (the "Bank"), is
delivered pursuant to Section 3.4(b) of that certain security agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Security Agreement"), dated as of February 13, 2004, made by the
Pledgor and each of the Guarantors listed on the signature pages thereto in
favor of UBS AG, STAMFORD BRANCH, as collateral agent, as pledgee, assignee and
secured party (the "Collateral Agent"). This Control Agreement is for the
purpose of perfecting the security interests of the Secured Parties granted by
the Pledgor in the Designated Accounts described below. All references herein to
the "UCC" shall mean the Uniform Commercial Code as in effect from time to time
in the State of New York. Capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Security Agreement.
Section 1. Confirmation of Establishment and Maintenance of
Designated Accounts. The Bank hereby confirms and agrees that (i) the Bank has
established for the Pledgor and maintains the deposit account(s) listed in
Schedule 1 annexed hereto (such account(s), together with each such other
deposit account maintained by the Pledgor with the Bank collectively, the
"Designated Accounts" and each a "Designated Account"), (ii) each Designated
Account will be maintained in the manner set forth herein until termination of
this Control Agreement, (iii) the Bank is a "bank," as such term is defined in
the UCC, (iv) this Control Agreement is the valid and legally binding obligation
of the Bank and (v) each Designated Account is a "deposit account" as such term
is defined in Article 9 of the UCC.
Section 2. Control. The Bank shall comply with instructions
originated by the Collateral Agent without further consent of the Pledgor or any
person acting or purporting to act for the Pledgor being required, including,
without limitation, directing disposition of the funds in each Designated
Account. The Bank shall also comply with instructions directing the disposition
of funds in each Designated Account originated by the Pledgor or its authorized
representatives until such time as the Collateral Agent delivers a Notice of
Sole Control pursuant to Section 8(i) hereof to the Bank.
Section 3. Subordination of Lien; Waiver of Set-Off. The Bank
hereby agrees that any security interest in any Designated Account it now has or
subsequently obtains
-2-
shall be subordinate to the security interest of the Collateral Agent. The funds
deposited into any Designated Account will not be subject to deduction, set-off,
banker's lien, or any other right in favor of any person other than the Secured
Parties (except that the Bank may set off (i) all amounts due to the Bank in
respect of its customary fees and expenses for the routine maintenance and
operation of the Designated Accounts, including overdraft fees, and (ii) the
face amount of any checks or other items which have been credited to any
Designated Account but are subsequently returned unpaid because of uncollected
or insufficient funds).
Section 4. Choice of Law. Both this Control Agreement and the
Designated Account(s) shall be governed by the laws of the State of New York.
Regardless of any provision in any other agreement, for purposes of the UCC, New
York shall be deemed to be the Bank's jurisdiction and the Designated Account(s)
shall be governed by the law of the State of New York.
Section 5. Conflict with Other Agreements; Amendments.
As of the date hereof, there are no other agreements entered into between the
Bank and the Pledgor with respect to any Designated Account or any funds
credited thereto (other than standard and customary documentation with respect
to the establishment and maintenance of such Designated Accounts). The Bank and
the Pledgor will not enter into any other agreement with respect to any
Designated Account unless the Collateral Agent shall have received prior written
notice thereof. The Bank and the Pledgor have not and will not enter into any
other agreement with respect to control of the Designated Accounts or purporting
to limit or condition the obligation of the Bank to comply with any orders or
instructions with respect to any Designated Account as set forth in Section 2
hereof without the prior written consent of the Collateral Agent acting in its
sole discretion. In the event of any conflict with respect to control over any
Designated Account between this Control Agreement (or any portion hereof) and
any other agreement now existing or hereafter entered into, the terms of this
Control Agreement shall prevail. No amendment or modification of this Control
Agreement or waiver of any right hereunder shall be binding on any party hereto
unless it is in writing and is signed by all the parties hereto.
Section 6. Certain Agreements.
(i) The Bank has furnished to the Collateral Agent the
most recent account statement issued by the Bank with respect to each
of the Designated Accounts and the cash balances held therein. Each
such statement accurately reflects the assets held in such Designated
Account as of the date thereof.
(ii) The Collateral Agent has delivered to the Bank a list
, signed by an authorized representative, of the officers of the
Collateral Agent authorized to give approvals or instructions under
this Control Agreement (the "Authorized Representatives") and the Bank
shall be entitled to rely on communications from any such authorized
officers until the earlier of the termination of this Control Agreement
in accordance with the terms
-3-
hereof and notification by an Authorized Representative of a change in
such list at any time.
Section 7. Notice of Adverse Claims. Except for the claims and
interest of the Secured Parties and of the Pledgor in the Designated Account(s),
the Bank on the date hereof does not know of any claim to, or security interest
in, any Designated Account or in any funds credited thereto and does not know of
any claim that any person other than the Collateral Agent has been given control
(within the meaning of Section 8-106 of the UCC) of any Designated Account or
any such funds. If the Bank becomes aware that any person is asserting any lien,
encumbrance or adverse claim (including any writ, garnishment, judgment, warrant
of attachment, execution or similar process or any claim of control) against any
funds in any Designated Account, the Bank will promptly notify the Collateral
Agent and the Pledgor thereof.
Section 8. Maintenance of Designated Accounts. In addition to
the obligations of the Bank in Section 2 hereof, the Bank agrees to maintain the
Designated Accounts as follows:
(i) Notice of Sole Control. If at any time the Collateral
Agent delivers to the Bank a notice of sole control in substantially
the form set forth in Exhibit A attached hereto (the "Notice of Sole
Control") with respect to any Designated Account, the Bank agrees that,
after receipt of such notice, it will take all instruction with respect
to such Designated Account solely from the Collateral Agent and cease
taking instructions from the Pledgor, including, without limitation,
instructions for distribution or transfer of any funds in any
Designated Account.
(ii) Statements and Confirmations. The Bank will send
copies of all statements and other correspondence (excluding routine
confirmations) concerning any Designated Account simultaneously to the
Pledgor and the Collateral Agent at the address set forth in Section 10
hereof. The Bank will promptly provide to the Collateral Agent, upon
request therefor from time to time and, in any event, as of the last
business day of each calendar month, a statement of the cash balance in
each Designated Account. The Bank shall not change the name or account
number of any Designated Account without the prior written consent of
the Collateral Agent.
Section 9. Successors; Assignment. The terms of this Control
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective corporate successors and permitted assignees.
Section 10. Notices. Any notice, request or other
communication required or permitted to be given under this Control Agreement
shall be in writing and deemed to have been properly given when delivered in
person, or when sent by telecopy or other electronic means and electronic
confirmation of error free receipt is received or two (2) days after being sent
by certi-
-4-
fied or registered United States mail, return receipt requested, postage
prepaid, addressed to the party at the address set forth below.
Pledgor: [ ]
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President and General
Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇]
Bank: [ ]
[ ]
[ ]
Attention:
Telecopy:
Telephone:
Collateral
Agent: UBS AG, Stamford Branch
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Telecopy:
Telephone:
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
-5-
Any party may change its address for notices in the manner set
forth above.
Section 11. Termination. The rights and powers granted herein
to the Collateral Agent are powers coupled with an interest and will be affected
neither by the bankruptcy of the Pledgor nor by the lapse of time. The
obligations of the Bank hereunder shall continue in effect until (i) the
security interests of the Secured Parties with respect to the Designated
Account(s) have been terminated and an Authorized Representative has notified
the Bank of such termination in writing or (ii) thirty days following the Bank's
delivery of written notice of such termination to the Collateral Agent and
Pledgor.
Section 12. Severability. If any term or provision set forth
in this Agreement shall be invalid or unenforceable, the remainder of this
Agreement, other than those provisions held invalid or unenforceable, shall be
construed in all respects as if such invalid or unenforceable term or provision
were omitted.
Section 13. Counterparts. This Control Agreement may be
executed in any number of counterparts, all of which shall constitute one and
the same instrument, and any party hereto may execute this Control Agreement by
signing and delivering one or more counterparts.
S-1
[ ]
By:____________________________________
Name:
Title:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
[ ],
as Bank
By:____________________________________
Name:
Title:
SCHEDULE 1
Designated Account(s)
EXHIBIT A
[Letterhead of UBS AG, Stamford Branch]
[Date]
[Bank]
[Address]
Attention:________________
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in Section 8(i) of the Control Agreement
Concerning Designated Accounts dated as of [ ], by and among [ ], us and you
(the "Control Agreement") (a copy of which is attached) we hereby give you
notice of our sole control over the Designated Account(s) referred to in the
Control Agreement, having account number(s): ___________________________________
(the "Specified Designated Accounts"). You are hereby instructed not to accept
any direction or instructions with respect to the Specified Designated Accounts
or any funds credited thereto from any person other than the undersigned, unless
otherwise ordered by a court of competent jurisdiction.
-2-
You are instructed to deliver a copy of this notice by
facsimile transmission to Ionics, Incorporated.
Very truly yours,
UBS AG, Stamford Branch,
as Collateral Agent
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
cc: Ionics, Incorporated
EXHIBIT 6
[Form of]
Copyright Security Agreement
Copyright Security Agreement, dated as of February 13, 2004,
by Ionics, Incorporated (the "Borrower") and each Guarantor listed on Schedule
II hereto (collectively, the "Original Guarantors," together with the Borrower,
the "Pledgors"), in favor of UBS AG, STAMFORD BRANCH, in its capacity as
collateral agent pursuant to the Credit Agreement (in such capacity, the
"Collateral Agent").
W I T N E S S E T H:
WHEREAS, Pledgors are party to a Security Agreement of even
date herewith (the "Security Agreement") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this
Copyright Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Collateral Agent, for the benefit of the Secured Parties, to enter into
Credit Agreement, the Pledgors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
terms defined in the Security Agreement and used herein have the meaning given
to them in the Security Agreement.
SECTION 2. Grant of Security Interest in Copyright Collateral.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all:
(a) Copyrights for which registrations or applications for
registration are listed on Schedule I attached hereto; and
(b) Proceeds of any and all of the foregoing (other than
Excluded Property).
SECTION 3. Security Agreement. The security interest granted
pursuant to this Copyright Security Agreement is granted in conjunction with the
security interest granted to the Collateral Agent pursuant to the Security
Agreement and Pledgors hereby acknowledge and affirm that the rights and
remedies of the Collateral Agent with respect to the security interest in
-2-
the Copyrights made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein. In the event that any provision of this
Copyright Security Agreement is deemed to conflict with the Security Agreement,
the provisions of the Security Agreement shall control unless the Collateral
Agent shall otherwise determine.
SECTION 4. Termination. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing security interest
in the Copyrights under the Security Agreement and this Copyright Security
Agreement.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Pledgor has caused this Copyright
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
IONICS, INCORPORATED
By:____________________________________
Name:
Title:
[ORIGINAL GUARANTORS]
By:____________________________________
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
-4-
SCHEDULE I
TO
COPYRIGHT SECURITY AGREEMENT
COPYRIGHT REGISTRATIONS AND COPYRIGHT APPLICATIONS
COPYRIGHT REGISTRATIONS:
REGISTRATION
OWNER NUMBER TITLE
---------------------- ------------------- ------
---------------------- ------------------- ------
---------------------- ------------------- ------
COPYRIGHT APPLICATIONS:
OWNER TITLE
---------------------- ------
---------------------- ------
---------------------- ------
-5-
SCHEDULE II
TO
COPYRIGHT SECURITY AGREEMENT
ORIGINAL GUARANTORS
NAME ADDRESS
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
EXHIBIT 7
[Form of]
Patent Security Agreement
Patent Security Agreement, dated as of February 13, 2004, by
Ionics, Incorporated (the "Borrower") and each Guarantor listed on Schedule II
hereto (collectively, the "Original Guarantors," and together with the Borrower,
the "Pledgors"), in favor of UBS AG, STAMFORD BRANCH, in its capacity as
collateral agent pursuant to the Credit Agreement (in such capacity, the
"Collateral Agent").
W I T N E S S E T H:
WHEREAS, Pledgors are party to a Security Agreement of even
date herewith (the "Security Agreement") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this Patent
Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Collateral Agent, for the benefit of the Secured Parties, to enter into
Credit Agreement, the Pledgors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
terms defined in the Security Agreement and used herein have the meaning given
to them in the Security Agreement.
SECTION 2. Grant of Security Interest in Patent Collateral.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all:
(a) Patents for which registration or applications for
registration are listed on Schedule I attached hereto; and
(b) Proceeds of any and all of the foregoing (other than
Excluded Property).
SECTION 3. Security Agreement. The security interest granted
pursuant to this Patent Security Agreement is granted in conjunction with the
security interest granted to the Collateral Agent pursuant to the Security
Agreement and Pledgors hereby acknowledge and af firm that the rights and
remedies of the Collateral Agent with respect to the security interest in the
-2-
Patents made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein. In the event that any provision of this
Patent Security Agreement is deemed to conflict with the Security Agreement, the
provisions of the Security Agreement shall control unless the Collateral Agent
shall otherwise determine.
SECTION 4. Termination. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing the security
interest in the Patents under the Security Agreement and this Patent Security
Agreement.
[signature page follows]
-3-
IN WITNESS WHEREOF, each Pledgor has caused this Patent
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
IONICS, INCORPORATED
By:____________________________________
Name:
Title:
[ORIGINAL GUARANTORS]
By:____________________________________
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
-4-
SCHEDULE I
TO
PATENT SECURITY AGREEMENT
PATENT REGISTRATIONS AND PATENT APPLICATIONS
PATENT REGISTRATIONS:
REGISTRATION
OWNER NUMBER NAME COUNTRY
----------------------- ------------------ ------------ ---------
----------------------- ------------------ ------------ ---------
----------------------- ------------------ ------------ ---------
PATENT APPLICATIONS:
APPLICATION
OWNER NUMBER NAME COUNTRY
----------------------- ------------------ ------------ ---------
----------------------- ------------------ ------------ ---------
----------------------- ------------------ ------------ ---------
-5-
SCHEDULE II
TO
PATENT SECURITY AGREEMENT
ORIGINAL GUARANTORS
NAME ADDRESS
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
-------------------------------------- -----------------------------------
EXHIBIT 8
[Form of]
Trademark Security Agreement
Trademark Security Agreement, dated as of February 13, 2004,
by Ionics, Incorporated (the "Borrower") and each Guarantor listed on Schedule
II hereto (collectively, the "Original Guarantors," together with the Borrower,
the "Pledgors"), in favor of UBS AG, STAMFORD BRANCH, in its capacity as
collateral agent pursuant to the Credit Agreement (in such capacity, the
"Collateral Agent").
W I T N E S S E T H:
WHEREAS, Pledgors are party to a Security Agreement of even
date herewith (the "Security Agreement") in favor of the Collateral Agent
pursuant to which the Pledgors are required to execute and deliver this
Trademark Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce
the Collateral Agent, for the benefit of the Secured Parties, to enter into
Credit Agreement, the Pledgors hereby agree with the Collateral Agent as
follows:
SECTION 1. Defined Terms. Unless otherwise defined herein,
terms defined in the Security Agreement and used herein have the meaning given
to them in the Security Agreement.
SECTION 2. Grant of Security Interest in Trademark Collateral.
Each Pledgor hereby pledges and grants to the Collateral Agent for the benefit
of the Secured Parties a lien on and security interest in and to all of its
right, title and interest in, to and under all:
(a) Trademarks for which registrations or applications for
registration are listed on Schedule I attached hereto;
(b) Goodwill associated with such Trademarks; and
(c) Proceeds of any and all of the foregoing (other than
Excluded Property).
SECTION 3. Security Agreement. The security interest granted
pursuant to this Trademark Security Agreement is granted in conjunction with the
security interest granted to the Collateral Agent pursuant to the Security
Agreement and Pledgors hereby acknowledge and af-
firm that the rights and remedies of the Trustee with respect to the security
interest in the Trademarks made and granted hereby are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein. In the event that any provision
of this Trademark Security Agreement is deemed to conflict with the Security
Agreement, the provisions of the Security Agreement shall control unless the
Collateral Agent shall otherwise determine.
SECTION 4. Termination. Upon the full performance of the
Obligations, the Collateral Agent shall execute, acknowledge, and deliver to the
Pledgor an instrument in writing in recordable form releasing the security
interest in the Trademarks under the Security Agreement and this Trademark
Security Agreement.
[signature page follows]
IN WITNESS WHEREOF, each Pledgor has caused this Trademark
Security Agreement to be executed and delivered by its duly authorized offer as
of the date first set forth above.
Very truly yours,
IONICS, INCORPORATED
By:____________________________________
Name:
Title:
[ORIGINAL GUARANTORS]
By:____________________________________
Name:
Title:
Accepted and Agreed:
UBS AG, STAMFORD BRANCH,
as Collateral Agent
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
SCHEDULE I
TO
TRADEMARK SECURITY AGREEMENT
TRADEMARK REGISTRATIONS AND TRADEMARK APPLICATIONS
TRADEMARK REGISTRATIONS:
REGISTRATION
OWNER NUMBER TRADEMARK COUNTRY
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----------------------- ------------------ ------------ ---------
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TRADEMARK REGISTRATIONS:
REGISTRATION
OWNER NUMBER TRADEMARK COUNTRY
----------------------- ------------------ ------------ ---------
----------------------- ------------------ ------------ ---------
----------------------- ------------------ ------------ ---------
SCHEDULE II
TO
TRADEMARK SECURITY AGREEMENT
ORIGINAL GUARANTORS
NAME ADDRESS
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EXHIBIT 9
FORM OF NOTICE TO BAILEE OF SECURITY INTEREST IN INVENTORY
CERTIFIED MAIL -- RETURN RECEIPT REQUESTED
[ ], 200[ ]
TO: [Bailee's Name]
[Bailee's Address]
Re: Ionics, Incorporated
Ladies and Gentlemen:
In connection with that certain Security Agreement, dated as
of February 13, 2004 (the "Security Agreement"), made by Ionics, Incorporated,
the Guarantors party thereto and UBS AG, Stamford Branch ("UBS") as Collateral
Agent, we have granted to UBS a security interest in substantially all of our
personal property, including our inventory.
This letter constitutes notice to you, and your signature
below will constitute your acknowledgment, of UBS's continuing first priority
security interest in all goods with respect to which you are acting as bailee.
Until you are notified in writing to the contrary by UBS, however, you may
continue to accept instructions from us regarding the delivery of goods stored
by you.
Your acknowledgment also constitutes a waiver and release, for
UBS's benefit, of any and all claims, liens, including bailee's liens, and
demands of every kind which you have or may later have against such property
(including any right to include such property in any secured financing to which
you may become party).
In order to complete our records, kindly have a duplicate of
this letter signed by an officer of your company and return same to us at your
earliest convenience.
Receipt acknowledged, confirmed and Very truly yours,
approved:
[BAILEE] [APPLICABLE PLEDGOR]
By:_________________________________ By:____________________________________
Name: Name:
Title: Title:
cc: UBS AG, Stamford Branch
EXHIBIT N-1
[Form of]
OPINION OF COMPANY COUNSEL(1)
1. Each Loan Party (a) is duly formed or organized and
validly existing under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to carry on its business as now conducted and
as proposed to be conducted, to own and lease its property and to enter into
each Loan Document to which it is a party, perform its obligations thereunder,
borrow any amounts specified therein and give any guarantee and grant any
security interest contemplated thereby and (c) is qualified and in good standing
(to the extent such concept is applicable in the applicable jurisdiction) to do
business in every jurisdiction where such qualification is required.
2. The Transactions to be entered into by each Loan
Party (including, without limitation, the execution, delivery and performance of
each Loan Document to which any such Loan Party is a party and the borrowings,
issuances of letters of credit, guarantees and uses of proceeds thereunder and
the granting of the security interests contemplated thereby) are within such
Loan Party's powers and have been duly authorized by all necessary action on the
part of such Loan Party. Each Loan Document has been duly executed and delivered
by each Loan Party which is a party to it and constitutes the legal, valid and
binding obligation of such Loan Party, enforceable against each such Loan Party
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
3. The Transactions (a) do not require any consent or
approval of, registration or filing with, or any other action by, any
Governmental Authority, except (i) such as have been obtained or made and are in
full force and effect, (ii) filings necessary to perfect Liens created by the
Loan Documents and (iii) consents, approvals, registrations, filings, permits or
actions the failure of which to obtain or perform could not reasonably be
expected to result in a Material Adverse Effect, (b) will not violate the
Organizational Documents of any Company or any judgment, decree or order of any
Governmental Authority, (c) will not violate or result in a default or require
any consent or approval under any indenture, Organizational Document, agreement
or other instrument binding upon any Company or its property, or give rise to a
right thereunder to require any payment to be made by any Company, except for
violations, defaults or the creation of such rights that could not reasonably be
expected to result in a Material Adverse Effect, and (d) will not result in the
creation or imposition of any Lien on any property of any Company, except Liens
created by the Loan Documents and Permitted Liens.
4. To the knowledge of such counsel, there are no
actions, suits or proceedings at law or in equity by or before any Governmental
Authority now pending or threatened against or affecting any Company or any
business, property or rights of any Company (i) that involve any Loan Document
or the Transactions or (ii) as to which there is a reasonably possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect.
--------------------
(1) Capitalized terms used and not defined herein are used with the
meanings assigned to such terms in the Credit Agreement.
5. No Company is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock. Neither the making of the Loans or the issuance
of Letters of Credit under the Credit Agreement, the use of proceeds therefrom
or the pledge of the Securities Collateral (as defined in the Security
Agreement) pursuant to the Security Agreement will violate or be inconsistent
with the provisions of Regulation T, U or X.
6. No Company is (a) an "investment company" or a
company "controlled" by an "investment company," as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, or (b) a
"holding company," an "affiliate" of a "holding company" or a "subsidiary
company" of a "holding company," as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935, as amended.
7. The Security Documents are effective to create in
favor of the Collateral Agent for the benefit of the Secured Parties, legal,
valid and enforceable Liens on and security interests in the Collateral which
security interest secures the Obligations.
8. Each Financing Statement is in proper form for filing
in the [Office of Secretary of State of [Jurisdiction]], and upon the filing in
such office(s), the Collateral Agent will have fully perfected security
interests in that portion of Security Agreement Collateral in which a security
interest can be perfected by filing a financing statement under the UCC.
9. Upon due filing of the Financing Statements in the
[Office of Secretary of State of [Jurisdiction]] and when the Security Agreement
or a short form thereof is filed in the United States Patent and Trademark
Office and the United States Copyright Office, the Liens created by such
Security Agreement shall constitute fully perfected Liens on, and security
interests in, all right, title and interest of the grantors thereunder in the
Intellectual Property Collateral (as defined in such Security Agreement), in
each case subject to no Liens other than Permitted Collateral Liens.
10. Upon delivery to the Collateral Agent in the State of
New York of the certificates representing the Securities Collateral that are
required to be delivered to the Collateral Agent pursuant to the Security
Agreement (the "Pledged Securities"), the security interests in the Pledged
Securities in favor of the Collateral Agent, for the benefit of the Secured
Parties, will be perfected. Assuming neither the Collateral Agent nor any of the
Secured Parties has notice of any adverse claim (within the meaning of the UCC)
to the Pledged Securities, and the Collateral Agent takes delivery in registered
form, indorsed in blank by an effective indorsement or accompanied by undated
stock powers with respect thereto duly indorsed in blank by an effective
indorsement, the Collateral Agent will have control (within the meaning of the
UCC) of the Pledged Securities for the benefit of the Secured Parties under the
UCC and the Collateral Agent will acquire the security interest in the Pledged
Securities for the benefit of the Secured Parties free of any adverse claim.
11. The provisions of the [Control Agreements] are
effective under the UCC to perfect the security interest in favor of the
Collateral Agent, for the benefit of the Secured Parties, in that portion of the
Security Agreement Collateral consisting of deposit accounts maintained with
[Applicable Bank] described in each such [Control Agreement]. The provisions of
the [Control Agreements] are effective under the UCC to perfect the security
interest in favor of the Collateral Agent, for the benefit of the Secured
Parties, in that portion of the Security Agreement Collateral consisting of
commodities accounts and securities account maintained with [Applicable Bank]
described in each such [Control Agreement]. The Collateral Agent's security
interest in the [Account[s]] has priority over any other security interest in
the [Account[s]] assuming no other secured party has control of, and the absence
of any other control agreement with respect to, the [Account[s]].
12. There are to the best of our knowledge, no
outstanding subscriptions, options, warrants, calls, rights, repurchase rights,
or other agreements or commitments of any nature relating to any of the Pledged
Securities or restricting the transfer thereof or voting thereunder and each of
the shares constituting Pledged Securities have been duly authorized and issued,
are fully paid and non-assessable and are free and clear of all liens.
13. The Liens and the security interests created by the
Security Documents on the Security Agreement Collateral will validly secure the
payment of all future advances pursuant to the Credit Agreement, whether or not
at the time such advances are made an Event of Default or other event not within
the control of the Lenders has relieved or may relieve the Lenders from their
obligations to make such advances, and are perfected to the extent set forth in
paragraphs 7 through 11 above with respect to such future advances.
14. A federal or state court sitting in New York will
honor the parties' choice of internal laws of the State of New York as the law
applicable to the Loan Documents (to the extent set forth in such Loan
Documents).
15. No registration under the Securities Act is required
for the execution or performance by any Loan Party of the Loan Documents.
16. There is no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official, now pending or,
to the best of our knowledge, threatened, to which any of Borrower or any
Subsidiary Guarantor is a party or to which the business, assets or property of
any of them is subject which is not disclosed in the Loan Documents, which (a)
involves the Loan Documents or the transactions contemplated thereby or (b)
could reasonably be expected to cause a Material Adverse Effect.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws other than the laws of states in which
such counsel is admitted to practice, upon the opinion of other counsel to
Borrower satisfactory to the Agents (which opinion shall be dated and furnished
to the Lenders at the Closing Date, shall be satisfactory in form and substance
to the Agents and shall expressly state that the Lenders may rely on such
opinion as if it were addressed to them); provided that Loan Party counsel shall
state in their opinion that they believe that they and the Lenders are justified
in relying upon such opinion, and (B) as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible
officers of Borrower and public officials. Such opinion may contain such
qualifications and assumptions as are customary for the Agents for transactions
of this type and are otherwise satisfactory to counsel for the Agents. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
EXHIBIT N-2
FORM OF OPINION OF LOCAL COUNSEL
[DATE]
UBS AG, Stamford Branch, as Collateral Agent
and
The Lenders Party to the Credit
Agreement Referred to Below
Ladies and Gentlemen:
We have acted as special counsel in the State of
_______________ ( the "State") to Ionics, Incorporated., a Massachusetts
corporation (the "Company") the Subsidiary Guarantors (as hereinafter defined)
(the Subsidiary Guarantors, together with Company, being hereinafter referred to
collectively as the "Pledgors"), in connection with the execution and delivery
today of and the consummation of the transactions contemplated by (i) that
certain credit agreement dated as of ________, 2004 (as at any time amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"; capitalized terms used herein and not defined have the
meanings assigned to such terms in the Credit Agreement), among the Company; the
Subsidiary Guarantors; the Lenders; UBS Securities LLC, as Lead Arranger, Sole
Bookmanager and Documentation Agent; UBS AG, Stamford Branch, as Issuing Bank,
Administrative Agent and Collateral Agent; UBS Loan Finance LLC, as Swingline
Lender; and Fleet Securities, Inc. and Banc of America Securities LLC, as
Syndication Agents and (ii) each of the Security Documents, including, without
limitation, the UCC-1 financing statements (collectively, the "Financing
Statements") relating to the Collateral naming the applicable Pledgor as debtor
thereunder and UBS AG, Stamford Branch, as collateral agent and secured party
thereunder (the "Collateral Agent").
In rendering the opinions hereinafter set forth, we have
reviewed final forms of the following documents (collectively, the
"Documents")(2):
(i) the Credit Agreement;
(ii) the Notes;
(iii) a mortgage, assignment of leases and rents, security agreement and
fixture filing, dated as of the date hereof (as at any time amended,
the "Mortgage"), made by the Company or the applicable Subsidiary
Guarantor in favor of the Collateral Agent;
----------------------
(1) To the extent any Pledgor is organized in the State, add Notes,
Guarantees and other corporate documents.
-2-
(iv) UCC-1 financing statements identified in Schedule A attached hereto
(collectively, the "Financing Statements") relating to the Mortgage;
and
(v) the other filings identified in Schedule A attached hereto
(collectively, the "Other Filings") relating to the Mortgage.
We have reviewed the Documents and such other instruments,
documents and agreements as we have deemed necessary or appropriate to enable us
to render the opinions hereinafter set forth. We are rendering this opinion to
you at the request of our clients pursuant to Section 4.01(g) of the Credit
Agreement.
In rendering the opinions hereinafter set forth, we have
assumed that (i) there has occurred due execution and delivery of the Documents
and all documentation in connection therewith(2) and (ii) each of the Company
and/or the Subsidiary Guarantors owns the Mortgaged Property (as defined in the
Mortgage) pledged by it.
In addition, the opinions contained in Paragraphs 1 and 2
below are qualified to the extent that enforceability of the Mortgage may be
limited by (i) bankruptcy, insolvency, moratorium, reorganization or other laws
relating to creditors' rights generally and (ii) general principles of equity,
whether considered in an action at law or in equity.
Subject to the foregoing assumptions and qualifications, we
are of the opinion that:
1. [Mortgage.](3) (a) The Mortgage (i) is a legal, valid and binding
obligation of the mortgagor named therein, enforceable against the mortgagor
named therein in accordance with its terms, (ii) is in proper form under
applicable laws of the State to be accepted for recording by the County
Recorder[s] identified in Schedule A attached hereto and (iii) creates and
constitutes (A) a valid mortgage lien on that portion of the Mortgaged Property
that constitutes real property ("Real Property"), (B) a valid security interest
in such of the Mortgaged Property (as defined in the Mortgage) (the "UCC
Property") as is subject to the provisions of Article 9 of the Uniform
Commercial Code as in effect in the State of _______________ (the "UCC") and (C)
a valid common law lien on or pledge of such of the Mortgaged Property as is not
UCC Property or Real Property (such property, together with the UCC Property,
the "Personal Property") in favor of the Collateral Agent for the benefit of the
Secured Parties (as defined in the Mortgage) securing the Secured Obligations
(as defined in the Mortgage).
(b) The recording of the Mortgage with the County Recorder[s] identified in
Schedule A attached hereto is the only filing or recording necessary to give
constructive notice of the lien created by the Mortgage to subsequent purchasers
and mortgagees of the Real Property. No other recordings, filings, re-
--------------------
(2) To the extent the Company and/or the Subsidiary Guarantors is organized
in the state, delete assumption (i) and incorporate the opinions set
forth in Exhibit A attached hereto.
(3) Opinion to be delivered to the extent any Loan is entering into the
Mortgage by virtue of having real property in the State.
-3-
recordings or refilings other than those identified in Schedule A are necessary
in order to maintain the validity or priority of the lien created by the
Mortgage.
(c) Assuming that the Financing Statements relating to the Mortgage have
been properly filed with the offices identified in Schedule A attached hereto,
the security interest, lien or pledge created by the Mortgage in that portion of
the Mortgaged Property which constitutes fixtures and are subject to the
provisions of Article 9 of the UCC is duly perfected. Such Financing Statements
adequately identify such Mortgaged Property described therein to provide
sufficient notice to third parties of the security interest referenced therein.
(d) The priority of the mortgage lien on the Real Property created by the
Mortgage with respect to any extension of credit or other amount (each, a
"Future Advance") secured thereby made or deemed to have been made after the
date of recording of the Mortgage will be the same as the priority of the
Mortgage applicable on such date of recording and such priority will not be
affected by the rights in and to the Real Property of any third party whose
interest in the Real Property attached thereto after the date of such recording
but prior to the date of such Future Advance. The priority of the lien of the
Mortgage will not be affected by (i) any prepayment of any portion of the Loans
or (ii) any increase in or reduction of the outstanding amount of the Loans from
time to time.]
2. Taxes etc. [No taxes or other charges, including, without limitation,
intangible or documentary stamp taxes, recording taxes, transfer taxes or
similar charges, are payable to the State or to any jurisdiction therein on
account of the execution and delivery of the Documents or the creation of the
indebtedness evidenced or secured by any of the Documents or the recording or
filing of the Financing Statements or Other Filings, except for nominal filing
or recording fees.]
OR
The recording taxes, documentary stamp taxes or note or
intangible taxes due and payable in connection with the subject transaction or
the recording of the Documents or the creation of the indebtedness evidenced or
secured by any of the Documents are as follows:
[insert amount of such taxes]
Any failure to pay such taxes in full or in part (i) shall not
result in the imposition of any penalty or interest on any unpaid taxes against
the Collateral Agent or the Lenders and (ii) shall not require the payment of
any unpaid taxes or any penalty or interest prior to the enforcement of the
Documents or otherwise prohibit, delay or limit the enforcement of the
Documents.
3. Concerning Collateral Agent. (a) The execution, delivery, recordation
and performance by the Collateral Agent, the Lenders or the Company and/or the
Subsidiary Guarantors of the Documents to which each is a party (i) will not
violate any existing law, governmental rule or regulation of the State and (ii)
do not require any license, permit, authorization, consent or other approval of,
any exemption by, or any registration, recording or filing with, any court,
administrative agency or other governmental authority of the State, except for
the recordings and the filings set forth in Schedule A attached hereto.
(b) Neither the Collateral Agent nor any of the Lenders is required (i) to
be qualified to transact business, file any designation for service of process,
file any reports or pay any taxes in the State or (ii) to
-4-
comply with any statutory or regulatory requirement applicable only to financial
institutions chartered or qualified to do business in the State, in each case,
solely by reason of the execution and delivery of any of the Documents or by
reason of the participation in any of the transactions under or contemplated by
the Documents including, without limitation, the making and receipt of payments
pursuant thereto and the exercise of any remedy thereunder. If it were
determined that any such qualification and filing were required, the validity of
the Documents would not be affected thereby, but if the Collateral Agent or the
Lenders were not qualified, the Collateral Agent, or the Lenders in the event
they institute remedies without the Collateral Agent, as the case may be, would
be precluded from enforcing their respective rights in the courts of the State
until such time as they are qualified to transact business in the State.
However, the lack of qualification would not result in any waiver of rights or
remedies pending such qualification.
(c) Neither the Collateral Agent nor any of the Lenders shall be liable for
any loss, cost, expense or liability (including, without limitation, clean-up,
corrective action or response costs, penalties, fines or other impositions of
governmental agencies and judgments of private or public litigants) in respect
of any matter arising out of or relating to or under any Environmental Laws of
the State by reason of the execution and delivery of or participation in any of
the transactions under or contemplated by any of the Documents, including,
without limitation, the making and receipt of payments pursuant thereto and the
exercise of any remedy under any of the Documents. The laws of the State do not
provide for a statutory or regulatory lien in favor of any governmental entity
for liability under the Environmental Laws of the State.
4. Usury. Assuming that the Documents are governed by the laws of the
State for the purpose of rendering the opinion set forth in this paragraph, none
of the provisions of the Documents (including, without limitation, the Secured
Obligations as defined in the Mortgage) will violate any law, statute or
regulation of the State relating to usury.
5. Remedies.
(a) The Collateral Agent is permitted under the laws of the State without
naming all of the Lenders in any applicable legal proceeding to exercise
remedies under the Security Documents for the realization of any of the
Mortgaged Property in its own name, as Collateral Agent.
(b) The transfer of all or any portion of the Mortgaged Property in
connection with the exercise of any remedy under the Mortgage, including,
without limitation, by way of judicial foreclosure, will not restrict, affect or
impair the liability of the Pledgors with respect to the indebtedness secured
thereby or the beneficiary's rights or remedies to the foreclosure or
enforcement of any other security interest or liens securing such indebtedness.
The laws of the State do not require a lienholder to elect to pursue its
remedies either against mortgaged real property or personal property where such
lienholder holds security interests and liens on both real and personal property
of debtor.
(c) The Mortgage contains the terms and provisions necessary to enable
Collateral Agent, following a default thereunder, to exercise the remedies which
are customarily available to a mortgage lienholder in the State of
_____________.
6. Choice of Law. A state or Federal court in the State applying the
State's choice of law principles will give effect to the provisions in the
Documents which select the laws of the State of New York as the
-5-
governing law thereof and will apply such laws, rather than the laws of the
State, to the enforceability, construction and application thereof.
7. Mortgaged Property. The present use and occupancy of the Mortgaged
Property complies in all respects with all applicable land use, subdivision,
building code and zoning rules and regulations affecting the Mortgaged Property.
We are admitted to practice in the State. We express no
opinion as to matters under or involving the laws of any jurisdiction other than
the laws of the United States and the State and its political subdivisions.
The foregoing opinions may be relied on by each of you, by any
successors and assigns of the Collateral Agent and by any participant, assignee
or successor to interests of the Lenders under the Documents.
Very truly yours,
Schedule A
Financing Statements relating to the Mortgage
[List all Financing Statements relating to the Mortgage[s] to be filed,
including filing locations]
Other Filings
[List all other necessary filings relating to the Mortgaged Property to
be filed, including filing locations (e.g. United States Patent and
Trademark Office or United States Copyright Office)]
Exhibit A
1. Corporation Existence; Due Authorization. (a) Each of [Insert Company
and/or Subsidiary Guarantor(s)] (the "[State] Company and/or Subsidiary
Guarantor(s)") has the requisite corporate or other organizational power and
authority, and has taken all necessary corporate or other organizational action,
to duly authorize the execution and delivery of each of the Documents to which
it is a party and the performance by it of the transactions contemplated
therein. Each of the Documents has been duly executed and delivered by each
[State] Company and/or Subsidiary Guarantor(s) which is a party thereto and
constitutes the legal, valid and binding obligation of each such [State] Company
and/or Subsidiary Guarantor(s).
(b) Neither the execution, delivery or performance by any [State] Company
and/or Subsidiary Guarantor(s) of the Documents to which it is a party, nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any applicable provision
of any law, statute, rule or regulation of [State] governmental authority or any
order, writ, injunction or decree of any [State] governmental authority or (ii)
will violate any provision of the certificate of incorporation, operating
agreement or by-laws of any [State] Company and/or Subsidiary Guarantor(s).
(c) No order, consent, approval, license, authorization, or validation of,
or filing, recording or registration with, or exemption by, any [State]
governmental authority (other than those which have previously been obtained or
made and except for filings to perfect security interests granted pursuant to
the Documents) is required to authorize or is required in connection with (i)
the execution, delivery and performance of any Document or the transactions
contemplated therein or (ii) the legality, validity, binding effect or
enforceability of any Document.
Exhibit B
(e) After giving effect to the delivery of the certificates
representing (i) the Pledged Stock (as defined in the Pledge Agreement) listed
on Schedule II to the Pledge Agreement, together with undated stock powers
and/or interest powers, as applicable,, duly endorsed in blank and (ii) the
Pledged Debt Securities (as defined in the Pledge Agreement) listed on Schedule
II to the Pledge Agreement, together with undated endorsements, duly endorsed in
blank, and assuming the continued possession and control by the Collateral Agent
of such Pledged Stock and Pledged Debt Securities in the State of [New York],
the security interests created in favor of the Collateral Agent under the Pledge
Agreement constitutes a valid and perfected security interest in such Pledged
Stock and Pledged Debt Securities in favor of the Collateral Agent, and no
filings or recordings in the State of [New York] are required to perfect (or
maintain perfection of) such security interests.
EXHIBIT O
[Form of]
SOLVENCY CERTIFICATE
I, the undersigned, [financial officer] of IONICS,
INCORPORATED, a Massachusetts corporation ("BORROWER"), DO HEREBY CERTIFY on
behalf of Borrower that:
1. This Certificate is furnished pursuant to Section
4.01(h)(ii) of the Credit Agreement (as in effect on the date of this
Certificate; the capitalized terms defined therein being used herein as therein
defined) dated as of February 13, 2004 among Borrower, the Subsidiary
Guarantors, the Lenders, UBS SECURITIES LLC, as lead arranger, sole bookmanager
and documentation agent, FLEET SECURITIES, INC. and BANK OF AMERICA, N.A., as
syndication agents, WACHOVIA BANK, N.A. and GENERAL ELECTRIC CAPITAL
CORPORATION, as co-documentation agents, UBS LOAN FINANCE LLC, as swingline
lender, HSBC BANK USA, as issuing bank and UBS AG, STAMFORD BRANCH, as
administrative agent for the Lenders and collateral agent for the Secured
Parties (as from time to time in effect, the "CREDIT AGREEMENT").
2. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan on the date hereof, (a) the fair value of the assets of each Loan Party
(individually and on a consolidated basis with its Subsidiaries) exceeds its
liabilities, subordinated, contingent or otherwise; (b) the present fair
saleable value of the assets of each Loan Party (individually and on a
consolidated basis with its Subsidiaries) is greater than the amount that will
be required to pay the probable liability of its other liabilities, as such
other liabilities become due and payable; (c) each Loan Party (individually and
on a consolidated basis with its Subsidiaries) is able to pay its debts and
liabilities, as such debts and liabilities become due and payable; and (d) each
Loan Party (individually and on a consolidated basis with its Subsidiaries) does
not have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
[Signature Page Follows]
IN WITNESS WHEREOF, I have hereunto set my hand this 13th day
of February, 2004.
IONICS,INCORPORATED
By:____________________________________
Name:
Title: [Financial Officer]
EXHIBIT P
[Form of]
INTERCOMPANY NOTE
New York, New York
[date]
FOR VALUE RECEIVED, each of the undersigned, to the extent a
borrower from time to time from any other entity listed on the signature page
hereto (each, in such capacity, a "PAYOR"), hereby promises to pay on demand to
the order of such other entity listed below (each, in such capacity, a "PAYEE"),
in lawful money of the United States of America in immediately available funds,
at such location in the United States of America as a Payee shall from time to
time designate, the unpaid principal amount of all loans and advances made by
such Payee to such Payor. Each Payor promises also to pay interest on the unpaid
principal amount of all such loans and advances in like money at said location
from the date of such loans and advances until paid at such rate per annum as
shall be agreed upon from time to time by such Payor and such Payee.
This note ("NOTE") is an Intercompany Note referred to in the
Credit Agreement dated as of February 13, 2004 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT") among Ionics, Incorporated, a Massachusetts corporation, the
Subsidiary Guarantors (such term and each other capitalized term used but not
defined herein having the meaning given it in Article I of the Credit
Agreement), the Lenders, UBS SECURITIES LLC, as lead arranger, sole bookmanager
and documentation agent, FLEET SECURITIES, INC. and BANK OF AMERICA, N.A., as
syndication agents, WACHOVIA BANK, N.A. and GENERAL ELECTRIC CAPITAL
CORPORATION, as co-documentation agents, UBS LOAN FINANCE LLC, as swingline
lender (in such capacity, "SWINGLINE LENDER"), UBS AG, STAMFORD BRANCH, as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") for the
Lenders and collateral agent for the Secured Parties and HSBC BANK USA, as
issuing bank (the "ISSUING BANK"), and is subject to the terms thereof, and
shall be pledged by each applicable Payee pursuant to the Security Agreement.
Each Payee hereby acknowledges and agrees that the Administrative Agent may
exercise all rights provided in the Credit Agreement and the Security Agreement
with respect to this Note.
Anything in this Note to the contrary notwithstanding, the
indebtedness evidenced by this Note owed by any Payor that is Borrower or a
Subsidiary Guarantor to any Payee other than Borrower shall be subordinate and
junior in right of payment, to the extent and in the manner hereinafter set
forth, to all Obligations of such Payor under the Credit Agreement, including,
without limitation, where applicable, under such Payor's guarantee of the
Obligations under the Credit Agreement (such Obligations and other indebtedness
and obligations in connection with any renewal, refunding, restructuring or
refinancing thereof, including interest thereon accruing after the commencement
of any proceedings referred to in clause (i) below, whether or not such interest
is an allowed claim in such proceeding, being hereinafter collectively referred
to as "SENIOR INDEBTEDNESS"):
(i) In the event of any insolvency or bankruptcy
proceedings, and any receivership, liquidation,
reorganization or other similar proceedings in connection
therewith, relative to any Payor or to its creditors, as such
, or to its property, and in the event of any proceedings for
voluntary liquidation, dissolution or other winding up of
such Payor, whether or not involving insolvency or bankruptcy
, then (x) the holders of Senior Indebtedness shall be paid
in full in cash in respect of all amounts constituting Senior
Indebtedness before any Payee is entitled to receive (whether
directly or indirectly), or make any demands for, any payment
on account of this Note and (y) until the holders of Senior
Indebtedness are paid in full in cash in respect of all
amounts constituting Senior Indebtedness, any payment or
distribution to which such Payee would otherwise be entitled
(other than debt securities of such Payor that are
subordinated, to at least the same extent as this Note, to
the payment of all Senior Indebtedness then outstanding (such
securities being hereinafter referred to as "RESTRUCTURED
DEBT SECURITIES")) shall be made to the holders of Senior
Indebtedness;
(ii) if any default occurs and is continuing with respect
to any Senior Indebtedness (including any Default under the
Credit Agreement), then no payment or distribution of any
kind or character shall be made by or on behalf of the Payor
or any other Person on its behalf with respect to this Note;
and
(iii) if any payment or distribution of any character,
whether in cash, securities or other property (other than
Restructured Debt Securities), in respect of this Note shall
(despite these subordination provisions) be received by any
Payee in violation of clause (i) or (ii) before all Senior
Indebtedness shall have been paid in full in cash, such
payment or distribution shall be held in trust for the
benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (or their representatives),
ratably according to the respective aggregate amounts
remaining unpaid thereon, to the extent necessary to pay all
Senior Indebtedness in full in cash.
To the fullest extent permitted by law, no present or future
holder of Senior Indebtedness shall be prejudiced in its right to enforce the
subordination of this Note by any act or failure to act on the part of any Payor
or by any act or failure to act on the part of such holder or any trustee or
agent for such holder. Each Payee and each Payor hereby agree that the
subordination of this Note is for the benefit of the Administrative Agent, the
Collateral Agent and the Lenders and the Administrative Agent, the Collateral
Agent and the Lenders are obligees under this Note to the same extent as if
their names were written herein as such and the Administrative Agent may, on
behalf of the itself, the Collateral Agent and the Lenders, proceed to enforce
the subordination provisions herein.
The indebtedness evidenced by this Note owed by any Payor that
is not Borrower or a Subsidiary Guarantor shall not be subordinated to, and
shall rank pari passu in right of payment with, any other obligation of such
Payor.
Nothing contained in the subordination provisions set forth
above is intended to or will impair, as between each Payor and each Payee, the
obligations of such Payor, which are absolute and unconditional, to pay to such
Payee the principal of and interest on this Note as and when due and payable in
accordance with its terms, or is intended to or will affect the relative rights
of such Payee and other creditors of such Payor other than the holders of Senior
Indebtedness.
Each Payee is hereby authorized to record all loans and
advances made by it to any Payor (all of which shall be evidenced by this Note),
and all repayments or prepayments thereof, in its books and records, such books
and records constituting prima facie evidence of the accuracy of the information
contained therein.
Each Payor hereby waives presentment, demand, protest or
notice of any kind in connection with this Note. All payments under this Note
shall be made without offset, counterclaim or deduction of any kind.
[signature page follows]
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS THEREOF.
[List Borrower and/or applicable
Subsidiaries]
By:____________________________________
Name:
Title:
EXHIBIT Q
[Form of]
NON-BANK CERTIFICATE
Reference is made to the Credit Agreement dated as of
February[13], 2004 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT") among Ionics, Incorporated,
a Massachusetts corporation ("BORROWER"), the Subsidiary Guarantors (such term
and each other capitalized term used but not defined herein having the meaning
given it in Article I of the Credit Agreement), the Lenders, UBS SECURITIES LLC,
as lead arranger, sole bookmanager and documentation agent, FLEET SECURITIES,
INC. and BANK OF AMERICA, N.A., as syndication agents, WACHOVIA BANK, N.A. and
GENERAL ELECTRIC CAPITAL CORPORATION, as co-documentation agents, UBS LOAN
FINANCE LLC, as swingline lender, HSBC BANK USA, as issuing bank and UBS AG,
STAMFORD BRANCH, as administrative agent for the Lenders and collateral agent
for the Secured Parties.
The undersigned is not a bank (as such term is used in Section
881(c)(3)(A)) of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:____________________________________
Name:
Title:
[ADDRESS]
Dated: ______________________, 200_.