EXECUTION VERSION
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CREDIT AGREEMENT
Dated as of February 8, 2010
among
APPLETON PAPERS INC.,
as Borrower,
PAPERWEIGHT DEVELOPMENT CORP.,
as Holdings,
FIFTH THIRD BANK,
as Administrative Agent, Swing Line Lender and
an L/C Issuer,
and
The Other Lenders Party Hereto
with
FIFTH THIRD BANK,
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..................................1
1.01. Defined Terms........................................................1
1.02. Other Interpretive Provisions.......................................31
1.03. Accounting Terms....................................................32
1.04. Rounding............................................................32
1.05. Times of Day........................................................33
1.06. Letter of Credit Amounts............................................33
ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS............................33
2.01. The Loans...........................................................33
2.02. Borrowings, Conversions and Continuations of Loans................. 33
2.03. Letters of Credit; Auto-Extension Letters of Credit.................35
2.04. Swing Line Loans.................................................. .43
2.05. Prepayments.........................................................45
2.06. Termination or Reduction of Commitments.............................46
2.07. Repayment of Loans..................................................47
2.08. Interest............................................................47
2.09. Fees................................................................48
2.10. Computation of Interest and Fees....................................49
2.11. Evidence of Debt....................................................49
2.12. Payments Generally; Administrative Agent's Clawback.................49
2.13. Sharing of Payments by Lenders......................................51
2.14. Increase in Facility................................................52
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY...........................53
3.01. Taxes...............................................................53
3.02. Illegality..........................................................56
3.03. Inability to Determine Rates........................................56
3.04. Increased Costs; Reserves on Eurodollar Rate Loans..................56
3.05. Compensation for Losses.............................................58
3.06. Mitigation Obligations; Replacement of Lenders......................58
3.07. Survival............................................................59
ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS........................59
4.01. Conditions of Initial Credit Extension..............................59
4.02. Conditions to all Credit Extensions.................................63
ARTICLE V REPRESENTATIONS AND WARRANTIES...................................63
5.01. Financial Condition.................................................64
5.02. No Change...........................................................64
5.03. Corporate Existence; Compliance with Law............................64
5.04. Power; Authorization; Enforceable Obligations.......................64
5.05. No Legal Bar........................................................65
5.06. Litigation..........................................................65
5.07. No Default..........................................................65
5.08. Ownership of Property; Liens; Insurance.............................65
5.09. Intellectual Property...............................................65
5.10. Taxes...............................................................66
5.11. Federal Regulations.................................................66
5.12. Labor Matters.......................................................66
5.13. ERISA...............................................................66
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5.14. Investment Company Act; Other Regulations...........................67
5.15. Subsidiaries........................................................67
5.16. Use of Proceeds.....................................................67
5.17. Environmental Matters...............................................67
5.18. Accuracy of Information, etc........................................68
5.19. Security Documents..................................................68
5.20. Solvency............................................................69
5.21. Senior Indebtedness.................................................69
5.22. Regulation H........................................................69
5.23. S Corporation Status................................................69
ARTICLE VI AFFIRMATIVE COVENANTS............................................70
6.01. Financial Statements................................................70
6.02. Certificates; Other Information.....................................71
6.03. Payment of Obligations..............................................73
6.04. Maintenance of Existence; Compliance................................73
6.05. Maintenance of Property; Insurance..................................73
6.06. Inspection of Property; Books and Records; Discussions..............73
6.07. Notices.............................................................74
6.08. Environmental Laws..................................................75
6.09. Additional Collateral, etc..........................................76
6.10. Further Assurances..................................................77
6.11. ERISA...............................................................78
6.12. Use of Proceeds.....................................................78
ARTICLE VII NEGATIVE COVENANTS...............................................78
7.01. Consolidated Fixed Charge Coverage Ratio............................78
7.02. Indebtedness........................................................78
7.03. Liens...............................................................80
7.04. Fundamental Changes.................................................82
7.05. Disposition of Property.............................................83
7.06. Restricted Payments.................................................83
7.07. Investments.........................................................84
7.08. Prepayments and Modifications of Certain Debt Instruments...........86
7.09. Transactions with Affiliates........................................87
7.10. Changes in Fiscal Periods...........................................87
7.11. Negative Pledge Clauses.............................................87
7.12. Clauses Restricting Subsidiary Distributions........................87
7.13. Lines of Business...................................................87
7.14. Material Agreements.................................................88
7.15. S Corporation Status................................................88
7.16. Holding Company Status..............................................88
7.17. PDC Capital Corporation.............................................88
7.18. ESOP Amendments.....................................................88
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES...................................88
8.01. Events of Default...................................................88
8.02. Application of Funds................................................92
ARTICLE IX ADMINISTRATIVE AGENT.............................................93
9.01. Appointment and Authority...........................................93
9.02. Rights as a Lender..................................................93
9.03. Exculpatory Provisions..............................................94
9.04. Reliance by Administrative Agent....................................94
9.05. Delegation of Duties................................................95
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9.06. Resignation of Administrative Agent.................................95
9.07. Non-Reliance on Administrative Agent and Other Lenders..............96
9.08. No Other Duties, Etc................................................96
9.09. Administrative Agent May File Proofs of Claim.......................96
9.10. Collateral and Guaranty Matters.....................................97
ARTICLE X MISCELLANEOUS....................................................97
10.01. Amendments, Etc.....................................................97
10.02. Notices; Effectiveness; Electronic Communications...................99
10.03. No Waiver; Cumulative Remedies.....................................101
10.04. Expenses; Indemnity; Damage Waiver.................................101
10.05. Payments Set Aside.................................................103
10.06. Successors and Assigns.............................................103
10.07. Treatment of Certain Information; Confidentiality..................107
10.08. Right of Setoff....................................................107
10.09. Interest Rate Limitation...........................................108
10.10. Counterparts; Integration; Effectiveness...........................108
10.11. Survival of Representations and Warranties.........................108
10.12. Severability.......................................................108
10.13. Replacement of Lenders.............................................108
10.14. Governing Law; Jurisdiction; Etc...................................109
10.15. Waiver of Jury Trial...............................................110
10.16. No Advisory or Fiduciary Responsibility............................110
10.17. USA PATRIOT Act Notice.............................................111
10.18. OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS; ETC..111
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SCHEDULES
1.01(c) Mortgaged Properties
2.01 Commitments and Percentages
5.08 Real Property
5.15 Subsidiaries
5.17 Environmental Matters
6.09 Guarantors
7.02 Permitted Existing Debt
7.03 Existing Liens
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
Form of
A Assignment and Assumption
B Form of Borrowing Base Certificate
C Committed Loan Notice
D Compliance Certificate
E Revolving Credit Note
F Swing Line Loan Notice
G Closing Certificate
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of February 8, 2010
among APPLETON PAPERS INC., a Delaware corporation (the "Borrower"), PAPERWEIGHT
DEVELOPMENT CORP., a Wisconsin corporation ("Holdings"), each lender from time
to time party hereto (collectively, the "Lenders" and individually, a "Lender"),
and FIFTH THIRD BANK, an Ohio banking corporation, as Administrative Agent,
Swing Line Lender and an L/C Issuer.
PRELIMINARY STATEMENTS:
The Borrower has requested that the Lenders provide a revolving credit
facility, and the Lenders have indicated their willingness to lend and each L/C
Issuer has indicated its willingness to issue letters of credit, in each case,
on the terms and subject to the conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Account Debtor" with respect to any Account, the Person who is obligated
on or under such Account.
"Accounts" means, with respect to any Person, as at any date of
determination, all "accounts" (as such term is defined in the Guarantee and
Collateral Agreement) of such Person.
"Acquisition Agreement" means that Purchase Agreement, dated as of July 5,
2001, among the Borrower, AWA and the other parties thereto, as amended prior to
the date hereof and, if in accordance with the terms hereof, on or after the
date hereof.
"Acquisition Documentation" means collectively, the Acquisition Agreement
and all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection therewith
including, without limitation, the Fox River Indemnity Arrangements.
"Adjusted Borrowing Base Amount" means, as determined as of the last day of
any fiscal month, an amount equal to (a) the sum of (i) the Borrowing Base as of
such date and (ii) the Borrowing Base as of the last day of the immediately
preceding fiscal month, in each case as set forth in the respective monthly
Borrowing Base Certificates prepared as of the last day of each such fiscal
month and delivered to the Administrative Agent pursuant to Section 6.02(c)
hereof, divided by (b) two (2).
"Administrative Agent" means Fifth Third in its capacity as administrative
agent under any of the Loans documents, or any successor administrative agent.
"Administrative Agent's Office" means the Administrative Agent's address
and, as appropriate, account as set forth on Schedule 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agreement" means this Credit Agreement.
"AIG Credit Support" means the Indemnity Claim Insurance Policy No.
5295316, issued on November 9, 2001, by Commerce & Industry Insurance Company in
favor of Bermuda Company, as amended and endorsed as of the date hereof.
"Appleton Canada" means Appleton Papers Canada Ltd., a corporation formed
under the laws of the Province of Ontario, Canada.
"Applicable Rate" means, (a) for the period commencing on the Closing Date
and ending on the date that is 3 Business Days following the date on which a
Borrowing Base Certificate as of the last day of the fiscal month of the
Borrower ending on or about February 28, 2010 is delivered to the Administrative
Agent in accordance with the terms and provisions hereof, a percentage amount
equal to (i) 4.00%, for purposes of calculating the Letter of Credit Fee
pursuant to Section 2.03(i), (ii) 4.00% for purposes of calculating the interest
rate applicable to Loans that are Eurodollar Rate Loans pursuant to Section 2.08
and (iii) 3.00%, for purposes of calculating the interest rate applicable to
Loans that are Swing Line Loans and Base Rate Loans pursuant to Section 2.08 and
(b) thereafter, the Applicable Rate shall be a percentage based upon the
applicable Average Excess Availability then in effect pursuant to the
appropriate column in the table below:
Eurodollar Rate
Loans
and
Average Excess Letter of Credit Base Rate
Pricing Level Availability Fee Loans
--------------- ---------------- ------------------ -----------
1 > 66% 3.50% 2.50%
2 > 33% but = 66% 3.75% 2.75%
3 = 33% 4.00% 3.00%
The Applicable Rate shall be adjusted from time to time upon delivery to the
Administrative Agent of the monthly Borrowing Base Certificate for each fiscal
month to be delivered pursuant to and in accordance with the requirements set
forth in Section 6.02(c). If such calculation indicates that the Applicable Rate
shall increase or decrease, then 3 days following the date of delivery of such
Borrowing Base Certificate the Applicable Rate shall be adjusted in accordance
therewith; provided, that if the Borrower shall fail to deliver a Borrowing Base
Certificate for any such fiscal month by the date required pursuant to Section
6.02(c), then, at the election of the Administrative Agent, effective as of 3
days following such date, and
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continuing until the date that is 3 days following the date when such Borrowing
Base Certificate is finally delivered or the next monthly Borrowing Base
Certificate is delivered by the Borrower pursuant to and in accordance with the
requirements set forth in Section 6.02(c), the Applicable Rate shall be
conclusively presumed to equal the highest Applicable Rate specified in the
pricing table set forth above.
In the event that any Borrowing Base Certificate with respect to any fiscal
month is inaccurate, and such inaccuracy, if corrected, would have led to the
imposition of a higher Applicable Rate for any period than the Applicable Rate
applied for that period, then (i) the Borrower shall immediately deliver to the
Administrative Agent a corrected Borrower Base Certificate for that period, (ii)
the Applicable Rate shall be determined based on the corrected Borrowing Base
Certificate for that period, and (iii) the Borrower shall immediately pay to the
Administrative Agent (for the account of the Lenders and the LC Issuer during
such period, or their successors and assigns) the accrued additional interest
and Letter of Credit Fee owing as a result of such increased Applicable Rate for
that period. This paragraph shall not limit the rights of the Administrative
Agent, the Lenders or the L/C Issuer with respect to Section 2.08(b), Section
2.09 and Article VIII, and shall survive the termination of this Agreement until
the payment in full in cash of the Total Outstandings.
"Appropriate Lender" means, at any time, (a) with respect to the Facility,
a Lender that has a Commitment or holds a Revolving Credit Loan at such time,
(b) with respect to the Letter of Credit Sublimit, (i) the L/C Issuer and (ii)
if any Letters of Credit have been issued pursuant to Section 2.03(a), the
Lenders and (c) with respect to the Swing Line Sublimit, (i) the Swing Line
Lender and (ii) if any Swing Line Loans are outstanding pursuant to Section
2.04(a), the Lenders.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Fifth Third Bank, an Ohio banking corporation, in its
capacities as sole lead arranger and sole book manager.
"Asset Sale" means any Disposition of property or series of related
Dispositions of property, excluding any such Disposition (a) to any Loan Party
or (b) permitted by clause (a), (b), (c) or (d) of Section 7.05.
"Assignee Group" means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.
"Assignment and Assumption" means an assignment and assumption entered into
by a Lender and an Eligible Assignee (with the consent of any party whose
consent is required by Section 10.06(b)), and accepted by the Administrative
Agent, in substantially the form of Exhibit A or any other form approved by the
Administrative Agent.
"Availability Period" means, in respect of the Facility, the period from
and including the Closing Date to the earliest of (i) the Maturity Date, (ii)
the date of termination of the Commitments pursuant to Section 2.06, and (iii)
the date of termination of the commitment of each Lender to make Loans and of
the obligation of each L/C Issuer to make L/C Credit Extensions pursuant to
Section 8.01.
"Availability Trigger Percentage" means, with respect to any fiscal month,
an amount (expressed as a percentage) equal to the following: (a) (i) the
Adjusted Borrowing Base Amount as of the last day of such fiscal month, minus
(ii) the average daily amount of the Total Outstandings during such fiscal
month, divided by (b) the Adjusted Borrowing Base Amount as of the last day of
such fiscal month.
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"Availability Trigger Period" shall mean a period commencing on the last
day of any fiscal month with respect to which the Availability Trigger
Percentage is equal to or less than 20% and ending on the last day of the first
fiscal month ending thereafter with respect to which the Availability Trigger
Percentage is greater than 20%.
"Available Eligible Inventory Amount" means, at any time, the sum at such
time of (i) Available Paper Raw Materials Inventory, (ii) Available Film Raw
Materials Inventory, (iii) Available Paper Finished Goods Inventory and (iv)
Available Film Finished Goods Inventory.
"Available Film Finished Goods Inventory" means, at any time, an amount
equal to the lesser at such time of (a) 70% of Eligible Film Finished Goods
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value), and (b) 85% of the product of (i) the Net Orderly
Liquidation Value percentage for such Eligible Inventory identified in the most
recent Inventory appraisal provided to the Administrative Agent in accordance
with the terms hereof, multiplied by (ii) an amount equal to such Eligible
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value) at such time.
"Available Film Raw Materials Inventory" means, at any time, an amount
equal to the lesser at such time of (a) 70% of Eligible Film Raw Materials
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value), and (b) 85% of the product of (i) the Net Orderly
Liquidation Value percentage for such Eligible Inventory identified in the most
recent Inventory appraisal provided to the Administrative Agent in accordance
with the terms hereof, multiplied by (ii) an amount equal to such Eligible
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value) at such time.
"Available Paper Raw Materials Inventory" means, at any time, an amount
equal to the lesser at such time of (a) 70% of Eligible Paper Raw Materials
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value), and (b) 85% of the product of (i) the Net Orderly
Liquidation Value percentage for such Eligible Inventory identified in the most
recent Inventory appraisal provided to the Administrative Agent in accordance
with the terms hereof, multiplied by (ii) an amount equal to such Eligible
Inventory (valued at the lower of cost (determined on a first-in, first-out
basis) or market value) at such time.
"Available Paper Finished Goods Inventory" means, at any time, an amount
equal to the lesser at such time of (a) 70% of Eligible Inventory Paper Finished
Goods Inventory (valued at the lower of cost (determined on a first-in,
first-out basis) or market value), and (b) 85% of the product of (i) the Net
Orderly Liquidation Value percentage for such Eligible Inventory identified in
the most recent Inventory appraisal provided to the Administrative Agent in
accordance with the terms hereof, multiplied by (ii) an amount equal to such
Eligible Inventory (valued at the lower of cost (determined on a first-in,
first-out basis) or market value) at such time.
"Average Excess Availability" means, with respect to any fiscal month, the
average daily Excess Availability for such fiscal month.
"AWA" means Arjo ▇▇▇▇▇▇▇ Appleton p.l.c.
"AWA Environmental Indemnity" means the indemnification provided pursuant
to the terms of (i) the Fox River AWA Environmental Agreement dated November 9,
2001, as amended, among Holdings, the Borrower, Arjo ▇▇▇▇▇▇▇ Appleton PLC and
New Appleton LLC, (ii) the insurance policy (Policy No. 529 5316) issued by
Commerce & Industry Insurance Company to Arjo ▇▇▇▇▇▇▇ Appleton
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(Bermuda) Limited and (iii) any other environmental indemnification agreement or
related insurance policy in favor of the Borrower.
"AWA Environmental Indemnity Agreement" means the Fox River AWA
Environmental Indemnity Agreement, dated as of November 9, 2001, among Holdings,
the Borrower and AWA, as amended prior to the date hereof and, if in accordance
with the terms hereof, on or after the date hereof.
"Base Rate" means for any day a fluctuating rate per annum equal to the
highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest
in effect for such day as publicly announced from time to time by Fifth Third as
its "prime rate" and (c) the Eurodollar Rate that would be applicable to a new
Eurodollar Rate Loan with a one month Interest Period plus 1%. The "prime rate"
is a rate set by Fifth Third based upon various factors including Fifth Third's
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at, above,
or below such announced rate. Any change in such rate announced by Fifth Third
shall take effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Revolving Credit Loan that bears interest based on
the Base Rate.
"Bermuda Company" means Arjo ▇▇▇▇▇▇▇ Appleton (Bermuda) Limited, a company
limited by shares organized under the Companies Act of 1981 of the Island of
Bermuda.
"Bermuda Company Agreements" means the collective reference to (a) the
Amended and Restated Relationship Agreement, dated as of June 11, 2004, among
Holdings, AWA, Holdings Sub, and AWA Sub, (b) the Assignment and Assumption
Deed, dated as of November 9, 2001, between AWA and the Bermuda Company, (c) the
By-Laws and Memorandum of Association of the Bermuda Company, (d) the
Certificate of Incorporation and By-laws of Holdings Sub, (e) the By-Laws and
Memorandum of Association of AWA Sub and (f) the Bermuda Security Agreement.
"Bermuda Security Agreement" means the Collateral Assignment, dated as of
November 9, 2001, by the Bermuda Company in favor of the Borrower.
"Borrower" has the meaning specified in the introductory paragraph hereto.
"Borrower Materials" has the meaning specified in Section 6.02.
"Borrowing" means a Revolving Credit Borrowing or a Swing Line Borrowing,
as the context may require.
"Borrowing Base" means, at any time, an amount equal, in each case at such
time, to (a) 85% of the Eligible Accounts, plus (b) the Available Eligible
Inventory Amount, minus (c) Reserves established by the Administrative Agent in
its Permitted Discretion. The Administrative Agent may, in its Permitted
Discretion and based on new information or a change in circumstances adjust
Reserves, with any such change to be effective three Business Days after
delivery of notice thereof to the Borrower and the Lenders. Subject to the
immediately preceding sentence, the Borrowing Base at any time shall be
determined by reference to the Borrowing Base Certificate most recently
delivered to the Administrative Agent pursuant to Section 6.02(c) (or, in the
case of the initial Borrowing Base Certificate delivered in connection with this
Agreement, pursuant to Section 4.01(a)(x)), subject to adjustments made by the
Administrative Agent in its Permitted Discretion to address any events or
conditions relating to any of the Collateral occurring on or after the date with
respect to which such Borrowing Base Certificate relates.
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"Borrowing Base Certificate" means a certificate, signed and certified as
accurate and complete by a Responsible Officer, in substantially the form of
Exhibit B or another form which is reasonably acceptable to each of the
Administrative Agent and the Borrower and attaching thereto a calculation of the
Borrowing Base in form and substance satisfactory to the Administrative Agent in
its Permitted Discretion.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state of New York or the state where the Administrative Agent's
Office with respect to Obligations denominated in Dollars is located and, if
such day relates to any interest rate settings as to a Eurodollar Rate Loan, any
fundings, disbursements, settlements and payments in respect of any such
Eurodollar Rate Loan, or any other dealings to be carried out pursuant to this
Agreement in respect of any such Eurodollar Rate Loan, means any such day on
which dealings in deposits in the relevant currency are conducted by and between
banks in the London or other applicable offshore interbank market for such
currency.
"Canadian Dollar" mean the lawful money of Canada.
"Capital Expenditures" means, for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations" means as to any Person, 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, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, all of the shares of
Capital Stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of Capital Stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of Capital Stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
"Cash Collateralize" has the meaning specified in Section 2.03(g) (and
derivatives of such term have corresponding meanings).
"Cash Equivalents" means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition, or in the case
of any Foreign Subsidiary only, such local currencies held by it from time to
time in the ordinary course of business; (b) certificates of deposit, time
deposits, eurodollar time deposits or overnight bank deposits having maturities
of one year or less from the date of acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States, any state thereof
or any member nation of the Organization for Economic Cooperation and
Development having combined capital and surplus of
6
not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1
by Standard & Poor's Ratings Services ("S&P") or P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. ("Moody's"), or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally, and maturing within
one year from the date of acquisition; (d) repurchase obligations of any Lender
or of any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days, with respect to securities
issued or fully guaranteed or insured by the United States government; (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or A by
Moody's; (f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this definition;
(g) shares of money market mutual or similar funds at least 95% of the assets of
which satisfy the requirements of clauses (a) through (f) of this definition; or
(h) in the case of any Foreign Subsidiary only, instruments equivalent to those
referred to in clauses (a) through (g) above in each case denominated in any
foreign currency comparable in credit quality and tenor to those referred to in
such clauses above and customarily used by corporations for cash management
purposes in any jurisdiction outside the United States to the extent reasonably
required in connection with any business conducted by any Foreign Subsidiary.
"Cash Management Agreement" means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card
(including corporate purchase and travel card), electronic funds transfer and
other cash management arrangements.
"Cash Management Bank" means any Person that (a) at the time it enters into
a Cash Management Agreement, is a Lender or an Affiliate of a Lender or (b) at
the time it or its Affiliate becomes a Lender, is a party to a Cash Management
Agreement, in each case in its capacity as a party to such Cash Management
Agreement.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.
"CFC" means a Person that is a controlled foreign corporation under Section
957 of the Code.
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Closing Date" means the first date all the conditions precedent in Section
4.01 are satisfied or waived in accordance with Section 10.01.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is created or purported to be created by any
Security Document.
7
"Collateral Access Agreement" means, in each case in form and substance
satisfactory to the Administrative Agent in the exercise of its Permitted
Discretion, (a) with respect to any premises leased by the Borrower or any other
Loan Party, an agreement between the Administrative Agent and the lessor of such
premises, and (b) with respect to any other premises at which the Borrower or
any other Loan Party maintains inventory (whether for storage, processing or
otherwise), an agreement between the Administrative Agent and warehouseman or
other bailee, as the case may be, of such Inventory.
"Commitment" means, as to each Lender, its obligation to (a) make Revolving
Credit Loans to the Borrower pursuant to Section 2.01, (b) purchase
participations in L/C Obligations, and (c) purchase participations in Swing Line
Loans, in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.01 under
the caption "Commitment" or opposite such caption in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this
Agreement..
"Committed Loan Notice" means a notice of (a) a Revolving Credit Borrowing,
(b) a conversion of Loans from one Type to the other, or (c) a continuation of
Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall
be substantially in the form of Exhibit C.
"Commonly Controlled Entity" means an entity, whether or not incorporated,
that is under common control with Holdings or the Borrower within the meaning of
Section 4001 of ERISA or is part of a group that includes Holdings or the.
Borrower and that is treated as a single employer under Section 414 of the Code.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit D.
"Consolidated EBITDAE" means, for any period, (a) Consolidated Net Income
for such period, plus (b) without duplication, and to the extent reflected as a
charge in the statement of such Consolidated Net Income, for such period, the
sum of (i) income tax expense, (ii) Consolidated Interest Expense, deferred debt
amortization and debt issuance costs, (iii) depreciation and amortization
expense, (iv) impairment of discontinued operations goodwill and long-lived
assets, (v) impairment of continuing operations goodwill, (vi) non-cash
extraordinary charges and non-cash non-recurring charges or losses, (vii) cash
restructuring charges and cash non-recurring charges or losses not to exceed
$2,000,000 in any twelve month period, (viii) non-cash charges from employee
deferrals and employer matching contributions, and (ix) any other non-cash
charges, expenses or losses agreed to in writing by the Administrative Agent;
minus (c) without duplication, and to the extent included in the statement of
such Consolidated Net Income, for such period, the sum of (i) interest income,
(ii) extraordinary income or gains, (iii) cash payments made relating to items
described in preceding clause (b)(ix) and previously added back to EBITDAE, and
(iv) any other non-cash income.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) Consolidated EBITDAE for such period minus the sum, without duplication,
for such period of (i) net capital expenditures not funded by Indebtedness, and
(ii) cash taxes, to (b) the sum, without duplication, for such period of (i)
scheduled principal payments on Indebtedness (except to the extent made with
proceeds of Indebtedness that is subordinated in right of payment to the
Obligations on terms reasonably satisfactory to the Administrative Agent and is
not secured by a Lien on any Collateral), (ii) Consolidated Interest Expense
paid in cash, and (iii) cash redemptions of Holdings' common stock pursuant to
the ESOP Documentation.
"Consolidated Interest Expense" means, for any period, total cash interest
expense (including that attributable to Capital Lease Obligations but, for the
avoidance of doubt, in any event excluding any
8
amortization or write-off of financing costs) of Holdings and its Subsidiaries
for such period with respect to all outstanding Indebtedness of Holdings and its
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and net
costs under Hedge Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP).
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of Holdings and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP; provided that there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of Holdings or is merged into or consolidated with Holdings or any of
its Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of Holdings) in which Holdings or any of its Subsidiaries has an
ownership interest, except to the extent that any such income is actually
received by Holdings or such Subsidiary in the form of dividends or similar
distributions, and (c) the undistributed earnings of any Subsidiary of Holdings
that is not a Loan Party to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"Consolidated Tangible Assets" means, with respect to Holdings and its
Subsidiaries as of any date, the aggregate of the assets of Holdings and its
Subsidiaries excluding goodwill, patents, trade names, trade marks, copyrights,
franchises, experimental expense (to the extent capitalized), organization
expense (to the extent capitalized) and any other assets properly classified as
intangible assets in accordance with GAAP, as of the date on which the most
recent financial statements were delivered pursuant to Section 6.01(a) or (b)
(or Section 5.01(a)) on a consolidated basis, determined in accordance with
GAAP. In the event that information relating to Consolidated Tangible Assets is
not available as of any date, then the most recently available information will
be used.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Extension" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"Defaulting Lender" means any Impacted Lender and any other Lender that (a)
has failed to fund any portion of the Revolving Credit Loans, participations in
L/C Obligations or participations in Swing Line Loans required to be funded by
it hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of any proceeding under
any Debtor Relief Laws.
9
"Derivatives Counterparty" means any financial institution, commodities or
stock exchange or clearinghouse.
"Dilution Reserve" means, as of any date of determination thereof, an
amount equal to (a) the Dilution Rate then in effect multiplied by (b) 85% of
the Eligible Accounts as of such date.
"Dilution Rate" means a rate established from time to time with respect to
the Accounts of the Borrower and its Subsidiaries that are Guarantors equal to a
percentage that is the result of dividing (a) the aggregate amount of all
dilutive items determined by the Administrative Agent in its Permitted
Discretion, including but not limited to discounts, advertising allowances, bid
credits, or other dilutive items with respect to the Eligible Accounts of such
Loan Parties, divided by (b) the aggregate amount of all Eligible Accounts
invoiced by such Persons, in each case for the period covered by the most recent
field examination conducted pursuant to Section 6.06(b); provided, that, until
the date of delivery of the first such field examination, the dilution rate
shall be (i) 14.4% with respect to Accounts generated by the coated solutions,
thermal paper, security paper, micro-encapsulation and any other technical paper
segments, if any, of such Persons, and (ii) 5.4% with respect to Accounts
generated by the performance packaging segments of such Persons.
"Disposition" or "Dispose" means the sale, transfer or other disposition
(including any sale and leaseback transaction, but excluding the granting of
Liens permitted by this Agreement and any exercise of remedies in connection
therewith, leases, licenses, sub-leases, sub-licenses and transfers pursuant to
condemnation and similar proceedings) of any property by any Person, including
any such sale, assignment, transfer or other disposal, with or without recourse,
of any notes or accounts receivable or any rights and claims associated
therewith.
"Disqualified Capital Stock" means any Capital Stock which, by its terms
(or by the terms of any security or other Capital Stock into which it is
convertible or for which it is exchangeable), or upon the happening of any event
or condition (a) matures or is mandatorily redeemable (other than solely for
Capital Stock that is not Disqualified Capital Stock), pursuant to a sinking
fund obligation or otherwise (except as a result of a change of control or asset
sale so long as any rights of the holders thereof upon the occurrence of a
change of control or asset sale event shall be subject to the prior repayment in
full of the Loans and all other Obligations that are accrued and payable and the
termination of the Commitments), (b) is redeemable at the option of the holder
thereof (other than solely for Capital Stock that is not Disqualified Capital
Stock), in whole or in part, (c) provides for the scheduled payments of
dividends in cash, or (d) is or becomes convertible into or exchangeable for
Indebtedness or any other Capital Stock that would constitute Disqualified
Capital Stock, in each case, prior to the date that is ninety-one (91) days
after the Maturity Date.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the laws
of any political subdivision of the United States.
"Eligible Assignee" means any Person that meets the requirements to be an
assignee under Section 10.06(b)(iii), (v) and (vi) (subject to such consents, if
any, as may be required under Section 10.06(b)(iii)).
"Eligible Accounts" means, at any time, the Accounts of the Borrower and
each of its Subsidiaries that is a Guarantor that the Administrative Agent
determines in its Permitted Discretion are eligible as the basis for the
extension of Revolving Credit Loans and the issuance of Letters of Credit.
10
Without limiting the Administrative Agent's Permitted Discretion, Eligible
Accounts shall not include any Account:
(a) which is not subject to a first priority perfected security interest
in favor of the Administrative Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Administrative Agent and is described in clauses (a),
(b), (e), (t) or (u) of Section 7.03;
(c) (i) which is unpaid more than 90 days after the date of the original
invoice therefor or more than 60 days after the original due date therefor, or
(ii) which has been written off the books of the any Loan Party or otherwise
designated as uncollectible (in determining the aggregate amount from the same
Account Debtor that is unpaid hereunder there shall be excluded the amount of
any net credit balances relating to Accounts due from an Account Debtor which
are unpaid more than 90 days after the date of the original invoices therefor or
more than 60 days after the original due dates); provided, that no Account owed
by an Account Debtor that (A) does not maintain its chief executive office in
the United States or Canada or (B) is not organized under applicable law of the
United States, any state of the United States, Canada, or any province of Canada
(each such Account Debtor, a "Foreign Account Debtor") shall be deemed to be
ineligible solely by reason of this subsection (c) to the extent that such
Account is paid or payable, as the case may be, within time periods acceptable
to the Administrative Agent in its Permitted Discretion;
(d) which is owing by an Account Debtor for which more than 25% of the
Accounts owing from such Account Debtor and its Affiliates are ineligible
pursuant to clause (c) above;
(e) which is owing by an Account Debtor to the extent the aggregate amount
of Accounts owing from such Account Debtor and its Affiliates to the Borrower
exceeds 25% of the aggregate Eligible Accounts;
(f) with respect to which any covenant, representation, or warranty
contained in this Agreement or in the Guarantee and Collateral Agreements has
been breached or is not true;
(g) which (i) does not arise from the sale of goods or performance of
services in the ordinary course of business, (ii) is not evidenced by an invoice
or other documentation satisfactory to the Administrative Agent which has been
sent to the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon the any Loan Party's completion of any further performance, (v)
represents a sale on a ▇▇▇▇-and-hold, guaranteed sale, sale-and-return, sale on
approval, consignment, cash-on-delivery or any other repurchase or return basis
or (vi) relates to payments of interest;
(h) for which the goods giving rise to such Account have not been shipped
to the Account Debtor or for which the services giving rise to such Account have
not been performed by any Loan Party or if such Account was invoiced more than
once;
(i) with respect to which any check or other instrument of payment has
been returned uncollected for any reason;
(j) which is owed by an Account Debtor which has (i) applied for,
suffered, or consented to the appointment of any receiver, custodian, trustee,
or liquidator of its assets, (ii) has had possession of all or a material part
of its property taken by any receiver, custodian, trustee or liquidator, (iii)
filed, or had filed against it, any request or petition for liquidation,
reorganization, arrangement, adjustment of debts,
11
adjudication as bankrupt, winding-up, or voluntary or involuntary case under any
state or federal bankruptcy laws, (iv) has admitted in writing its inability, or
is generally unable to, pay its debts as they become due, (v) become insolvent,
or (vi) ceased operation of its business;
(k) which is owed by any Account Debtor which has sold all or a
substantially all of its assets;
(l) which is owed by a Foreign Account Debtor unless, in any such case,
(A) such Account is backed by a letter of credit acceptable to the
Administrative Agent which is in the possession of, has been assigned to and is
directly drawable by, the Administrative Agent or (B) is covered by a credit
insurance policy in form and substance acceptable to the Administrative Agent
and issued by an insurer acceptable to the Administrative Agent;
(m) which is owed in any currency other than Dollars, Canadian Dollars or
Euros; provided, that for purposes of determining the amount of any Account
owned in Canadian Dollars or Euros to be included in the Borrowing Base, the
amount of such Account shall be converted at any time of determination thereof
to Dollars at the applicable Spot Rate of Exchange then in effect with respect
thereto;
(n) which is owed by (i) the government (or any department, agency, public
corporation, or instrumentality thereof) of any country other than the United
States unless such Account is backed by a letter of credit acceptable to the
Administrative Agent which is in the possession of the Administrative Agent, or
(ii) the government of the United States or any department, agency, public
corporation, or instrumentality thereof, unless the Federal Assignment of Claims
Act of 1940, as amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section 15
et seq.), and any other steps necessary to perfect the Lien of the
Administrative Agent in such Account have been complied with to the
Administrative Agent's satisfaction;
(o) which is owed by any Affiliate, employee, officer, director, agent or
stockholder of any Loan Party;
(p) which, for any Account Debtor, exceeds a credit limit determined by
the Administrative Agent in its Permitted Discretion, to the extent of such
excess;
(q) which is owed by an Account Debtor or any Affiliate of such Account
Debtor to which the any Loan Party is indebted, but only to the extent of such
indebtedness or is subject to any security, deposit, progress payment, retainage
or other similar advance made by or for the benefit of an Account Debtor, in
each case to the extent thereof;
(r) which is subject to any counterclaim, deduction, defense, setoff or
dispute but only to the extent of any such counterclaim, deduction, defense,
setoff or dispute;
(s) which is evidenced by any promissory note, chattel paper, or
instrument;
(t) which is owed by an Account Debtor located in any jurisdiction which
requires filing of a "Notice of Business Activities Report" or other similar
report in order to permit the any Loan Party to seek judicial enforcement in
such jurisdiction of payment of such Account, unless such Loan Party has filed
such report or qualified to do business in such jurisdiction;
(u) with respect to which a Loan Party has made any agreement with the
Account Debtor for any reduction thereof, other than discounts and adjustments
given in the ordinary course of business, or
12
any Account which was partially paid and a Loan Party created a new receivable
for the unpaid portion of such Account;
(v) which does not comply in all material respects with the requirements
of all applicable laws and regulations, whether Federal, state or local,
including the Federal Consumer Credit Protection Act, the Federal Truth in
Lending Act and Regulation Z of the Board;
(w) which is for goods that have been sold under a purchase order or
pursuant to the terms of a contract or other agreement or understanding (written
or oral) that indicates or purports that any Person other than a Loan Party has
or has had an ownership interest in such goods, or which indicates any party
other than a Loan Party as payee or remittance party;
(x) which was created on cash on delivery terms;
(y) which the Administrative Agent determines may not be paid by reason of
the Account Debtor's inability to pay or which the Administrative Agent
otherwise determines is unacceptable in its Permitted Discretion; or
(z) which is subject to any rebate or similar setoff, but only to the
extent of such rebate or setoff.
An Account which is at any time an Eligible Account, but which subsequently
fails to meet any of the foregoing requirements, shall cease to be an Eligible
Account. Any ineligibility described in the preceding two sentences shall become
effective immediately.
"Eligible Film Raw Materials Inventory" means Eligible Inventory consisting
of raw materials used in the performance packaging segments of the Borrower and
its Subsidiaries (as determined in a manner acceptable to Administrative Agent
in its Permitted Discretion).
"Eligible Film Finished Goods Inventory" means Eligible Inventory
consisting of performance packaging finished goods available for sale (as
determined in a manner acceptable to Administrative Agent in its Permitted
Discretion).
"Eligible Inventory" means, at any time, the Inventory of the Borrower and
each of its Subsidiaries that is a Guarantor which the Administrative Agent
determines in its Permitted Discretion is eligible as the basis for the
extension of Revolving Credit Loans and the issuance of Letters of Credit
hereunder. Without limiting the Administrative Agent's Permitted Discretion
provided herein, Eligible Inventory shall not include any Inventory:
(a) which is not subject to a first priority perfected Lien in favor of
the Administrative Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of the
Administrative Agent and (ii) a Permitted Lien which does not have priority over
the Lien in favor of the Administrative Agent and is described in clause (b) of
Section 7.03;
(c) which is, in the Administrative Agent's Permitted Discretion, slow
moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable
at prices approximating at least the cost of such Inventory in the ordinary
course of business or unacceptable due to age, type, category and/or quantity;
13
(d) with respect to which any covenant, representation, or warranty
contained in this Agreement or the Guarantee and Collateral Agreements has been
breached or is not true and which does not conform to all standards imposed by
any governmental authority;
(e) in which any Person other than a Loan Party shall (i) have any direct
or indirect ownership, interest or title to such Inventory or (ii) be indicated
on any purchase order or invoice with respect to such Inventory as having or
purporting to have an interest therein;
(f) which is not finished goods or raw materials or which constitutes
work-in-process, spare or replacement parts, subassemblies, packaging and
shipping material, manufacturing supplies, samples, prototypes, displays or
display items, ▇▇▇▇-and-hold goods, goods that are returned or marked for
return, repossessed goods, defective or damaged goods, goods held on
consignment, or goods which are not of a type held for sale in the ordinary
course of business;
(g) which is not located in the United States or is in transit with a
common carrier from vendors and suppliers;
(h) which is located in any location leased by a Loan Party unless (i) the
lessor has delivered to Administrative Agent a Collateral Access Agreement or
(ii) a Rent Reserve has been established by the Administrative Agent with
respect to such Inventory;
(i) which is located in any third party warehouse or is in the possession
of a bailee unless (i) a Collateral Access Agreement has been delivered to the
Administrative Agent with respect to such Inventory at such location or (ii) a
Rent Reserve has been established by the Administrative Agent with respect to
such Inventory;
(j) which is being processed offsite at a third party location or outside
processor, or is in-transit to or from said third party location or outside
processor unless (i) a Collateral Access Agreement has been delivered to the
Administrative Agent with respect to such Inventory at such location or (ii) a
Rent Reserve has been established by the Administrative Agent with respect to
such Inventory;;
(k) which is a discontinued product or component thereof;
(l) which is the subject of a consignment by any Loan Party as consignor;
(m) which is perishable;
(n) which contains or bears any intellectual property rights licensed to
any Loan Party unless the Administrative Agent is satisfied that it may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such
licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred
pursuant to sale of such Inventory under the current licensing agreement;
(o) which is not reflected in a current perpetual inventory report of any
Loan Party;
(p) for which reclamation rights have been asserted by the seller; or
(q) which the Administrative Agent otherwise determines is unacceptable in
its Permitted Discretion.
14
Inventory which is at any time Eligible Inventory but which subsequently
fails to meet any of the foregoing requirements shall cease to be Eligible
Inventory forthwith.
"Eligible Paper Raw Materials Inventory" means Eligible Inventory
consisting of raw materials used (a) in the coated solutions, thermal paper and
security paper segments of the Borrower and its Subsidiaries, (b) the
micro-encapsulation segments of the Borrowers and its Subsidiaries and (c) the
other technical paper segments, if any, of the Borrower and its Subsidiaries (in
each case as determined in a manner acceptable to Administrative Agent in its
Permitted Discretion).
"Eligible Paper Finished Goods Inventory" means Eligible Inventory
consisting of technical paper finished goods available for sale (as determined
in a manner acceptable to Administrative Agent in its Permitted Discretion).
"EMU Legislation" means the legislative measures of the European Counsel
for the introduction of, changeover to or operation of a single or unified
European currency.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESOP" means the Appleton Papers Retirement Savings and Employee Stock
Ownership Plan.
"ESOP Component" means the employee stock ownership plan component of the
ESOP.
"ESOP Documentation" means the collective reference to (a) the Appleton
Papers Retirement Savings and Employee Stock Ownership Plan, restated effective
January 1, 2001, (b) the Appleton Papers Inc. Employee Stock Ownership Trust,
adopted July 19, 2001 and (c) all amendments, supplements or other modifications
to any of the foregoing, all schedules, exhibits and annexes thereto and all
agreements affecting the terms thereof or entered into in connection therewith.
"ESOP Stock Issuances" means with respect to any period, any issuance of
common stock by Holdings to the ESOP during such period.
"ESOP Trust" means the Appleton Papers Inc. Employee Stock Ownership Trust.
15
"Euro" means the lawful currency of the Participating Member States
introduced in accordance with the EMU Legislation
"Eurodollar Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in Dollars for a period equal to such Interest
Period, which appears on the Reuters Screen LIBOR01 Page as of 11:00 a.m.
(London, England time) on the day 2 Business Days before the commencement of
such Interest Period.
"Eurodollar Rate" means, for an Interest Period for a Borrowing of
Eurodollar Rate Loans, (a) the Eurodollar Index Rate for such Interest Period,
if such rate is available, and (b) if the Eurodollar Index Rate cannot be
determined, the arithmetic average of the rates of interest per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) at which deposits in Dollars
in immediately available funds are offered to the Administrative Agent at 11:00
a.m. (London, England time) two (2) Business Days before the beginning of such
Interest Period by three (3) or more major banks in the interbank eurodollar
market selected by the Administrative Agent for delivery on the first day of and
for a period equal to such Interest Period and in an amount equal or comparable
to the principal amount of the Eurodollar Loan scheduled to be made by the
Administrative Agent as part of such Borrowing.
"Eurodollar Rate Loan" means a Revolving Credit Loan that bears interest at
a rate based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.01.
"Excess Availability" means, at any time, an amount equal at such time to
(a) the lesser of (i) the aggregate Commitments and (ii) the Borrowing Base,
minus (b) Total Outstandings.
"Exchange Offer" means the tender and exchange of Senior Unsecured Notes
and Senior Subordinated Notes for Second Lien Notes pursuant to that certain
Offering Circular, dated August 18, 2009, in respect of the Senior Unsecured
Notes, the Senior Subordinated Notes and the Second Lien Notes.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, any L/C Issuer or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) 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 branch
profits taxes imposed by the United States (or any political subdivision
thereof) or any similar tax imposed by any other jurisdiction (or any political
subdivision thereof) in which the Borrower is located, (c) any taxes imposed on
a Lender, the Administrative Agent or the L/C Issuer (if such Lender,
Administrative Agent, or L/C Issuer is not a United States person (as such term
is defined under Section 7701(a)(30) of the Code)) as a result of such Lender's,
Administrative Agent's or L/C Issuer's failure to satisfy the reporting
requirements as set forth in any statute enacted (or regulation or
administrative guidance promulgated thereunder) after the date hereof that is
based on, or similar to, the "Foreign Account Tax Compliance Act of 2009 (HR
3933, S. 1934);" and (d) except as provided in the following sentence, in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 10.13), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
hereto (or designates a new Lending Office) or is attributable to such Foreign
Lender's failure or inability (other than as a result of a Change in Law) to
comply with Section 3.01(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 the Borrower
16
with respect to such withholding tax pursuant to Section 3.01(a).
Notwithstanding anything to the contrary contained in this definition, "Excluded
Taxes" shall not include any withholding tax imposed at any time on payments
made by or on behalf of a Foreign Subsidiary to any Lender hereunder or under
any other Loan Document, so long as such Lender shall have complied with the
last paragraph of Section 3.01(e), as applicable; provided, that the definition
of "Excluded Taxes" shall include any withholding tax imposed on amounts payable
to an assignee of such Lender except to the extent that such Lender was entitled
to receive additional amounts from such Foreign Subsidiary with respect to such
withholding tax pursuant to Section 3.01(a) at the time of assignment.
"Existing Credit Agreement" means that certain Credit Agreement dated as of
June 5, 2007 among the Borrower, Holdings, Bank of America, N.A., as agent, and
a syndicate of lenders, as amended prior to the date hereof.
"Facility" means, at any time, the aggregate amount of the Lenders'
Commitments at such time.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Fifth Third
on such day on such transactions as determined by the Administrative Agent.
"Fee Letter" means the letter agreement, dated January 25, 2010, among the
Borrower and the Arranger.
"Fifth Third" means Fifth Third Bank, an Ohio banking corporation.
"First Lien Note Documents" means the First Lien Note Indenture, the First
Lien Notes, the First Lien Security Documents and each other document,
instrument or agreement relating to the issuance of the First Lien Notes, as the
same may be amended, restated, supplemented, waived and/or otherwise modified
from time to time in accordance with the terms thereof, of this Agreement and of
the First Lien Intercreditor Agreement.
"First Lien Note Indenture" means the indenture entered into by Holdings,
the Borrower, certain of its Subsidiaries and U.S. Bank National Association, as
trustee, in connection with the issuance of the First Lien Notes, as the same
may be amended, restated, supplemented, waived and/or otherwise modified from
time to time in accordance the terms thereof, of this Agreement and of the First
Lien Intercreditor Agreement.
"First Lien Note Intercreditor Agreement" means the Intercreditor Agreement
executed by Holdings, the Borrower, the other Loan Parties from time to time
party thereto, the Administrative Agent and the collateral agent under the First
Lien Note Indenture, as the same may be amended, restated, supplemented, waived
and/or otherwise modified from time to time in accordance with the terms thereof
and of this Agreement.
"First Lien Notes" means the 10.50% senior secured first lien notes of the
Borrower due 2015 to be issued and exchanged pursuant to the First Lien Note
Indenture.
17
"First Lien Security Documents" means the collective reference to each
security agreement, pledge agreement, mortgage, deed of trust, collateral
agreement, instrument or other document granting or perfecting a Lien on any
asset or assets of any Person in accordance with the terms of the First Lien
Intercreditor Agreement to secure the obligations and liabilities of Holdings,
the Borrower and certain of its Subsidiaries under the First Lien Note
Documents.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"Fox River Indemnity Arrangements" means the collective reference to the
PDC Environmental Indemnity Agreement, the AWA Environmental Indemnity
Agreement, the AIG Credit Support, the Fox River Security Agreement, the Bermuda
Company Agreements and the NCR Agreements.
"Fox River Security Agreement" means the Security Agreement, relating to
the AWA Environmental Indemnity Agreement, dated as of November 9, 2001, among
the Borrower, Holdings and AWA.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"Group Members" means the collective reference to Holdings, the Borrower
and their respective Subsidiaries.
"Guarantee and Collateral Agreement" has the meaning specified in Section
4.01(a)(iii).
"Guarantee and Collateral Agreement (Canada)" has the meaning specified in
Section 4.01(a)(iii).
"Guarantee and Collateral Agreements" means, collectively, the (i)
Guarantee and Collateral Agreement and the Guarantee and Collateral Agreement
(Canada).
"Guarantee Obligation" means, as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or
18
other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) 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 or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, however, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Guarantors" means, collectively, Holdings, the Subsidiaries of Holdings
listed on Schedule 6.09, including, without limitation, Appleton Canada, and
each other Subsidiary of Holdings that shall be required to execute and deliver
a guaranty or guaranty supplement pursuant to Section 6.09, in each case unless
and until released pursuant to the terms of the Loan Documents.
"Guaranty" means the Guarantee and Collateral Agreements, together with
each other guaranty and guaranty supplement delivered pursuant to Section 6.09.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedge Agreements" means all interest rate swaps, caps or collar agreements
or similar arrangements dealing with interest rates or currency exchange rates
or the exchange of nominal interest obligations or commodity agreements or other
similar arrangements designed to protect against fluctuations in commodity
prices, either generally or under specific contingencies.
"Hedge Bank" means any Person that, at the time it enters into a Hedge
Agreement, is a Lender or an Affiliate of a Lender, in its capacity as a party
to such Hedge Agreement.
"Hedge Termination Value" means, in respect of any one or more Hedge
Agreements, after taking into account the effect of any legally enforceable
netting agreement relating to such Hedge Agreements, (a) for any date on or
after the date such Hedge Agreements have been closed out and termination
value(s) determined in accordance therewith, such termination value(s), and (b)
for any date prior to the date referenced in clause (a), the amount(s)
determined as the ▇▇▇▇-to-market value(s) for such Hedge Agreements, as
determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Hedge Agreements (which may
include a Lender or any Affiliate of a Lender).
"Holdings" has the meaning specified in the introductory paragraph hereto.
19
"Impacted Lender" means any Lender as to which (a) any L/C Issuer has a
good faith belief that the Lender has defaulted in fulfilling its obligations
under one or more other syndicated credit facilities or (b) such Lender or an
entity that controls such Lender has been deemed insolvent or become subject to
a bankruptcy or other similar proceeding.
"Indebtedness" means, of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all obligations created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property, provided that, if recourse in respect of
such Indebtedness is so limited, the amount of such Indebtedness shall be deemed
to be the lesser of the principal amount thereof and the fair market value of
the property encumbered by such Lien as determined in good faith by the Board of
Directors of Holdings), (e) all Capital Lease Obligations and all Synthetic Debt
of such Person, (f) all obligations of such Person, contingent or otherwise, as
an account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all obligations of such Person
with respect of Disqualified Capital Stock, which in the case of redeemable
preferred Capital Stock shall be deemed to be the liquidation value of such
redeemable preferred Capital Stock of such Person, (h) all Guarantee Obligations
of such Person in respect of obligations of the kind referred to in clauses (a)
through (g) above, (i) all obligations of the kind referred to in clauses (a)
through (h) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation
(provided that, if such Person has not assumed or otherwise become liable in
respect of such Indebtedness, the amount of such Indebtedness shall be deemed to
be the lesser of the principal amount of such Indebtedness and the fair market
value of the property encumbered by such Lien as determined in good faith by the
Board of Directors of Holdings) and (j) for the purposes of Sections 7.02 and
8.01(e) only, all obligations of such Person in respect of Hedge Agreements. 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 to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor. The amount of any obligation under any Hedge Agreement on any date
shall be deemed to be the Hedge Termination Value thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning specified in Section 10.04(b).
"Information" has the meaning specified in Section 10.07.
"Insolvency" means, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Intellectual Property" means the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any
20
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.
"Intellectual Property Security Agreement" has the meaning specified in
Section 4.01(a)(v).
"Intercreditor Agreements" means the First Lien Note Intercreditor
Agreement and the Second Lien Note Intercreditor Agreement.
"Interest Payment Date" means, (a) as to any Eurodollar Rate Loan, the last
day of each Interest Period applicable to such Loan and the Maturity Date of the
Facility under which such Loan was made; provided, however, that if any Interest
Period for a Eurodollar Rate Loan exceeds three months, the respective dates
that fall every three months after the beginning of such Interest Period shall
also be Interest Payment Dates; and (b) as to any Base Rate Loan or Swing Line
Loan, the first Business Day after the end of each March, June, September and
December and the Maturity Date of the Facility under which such Loan was made
(with Swing Line Loans being deemed made under the Revolving Credit Facility for
purposes of this definition).
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two or three
months (or such other period of time as may be agreed to by each Lender)
thereafter, as selected by the Borrower in its Committed Loan Notice; provided
that:
(a) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period; and
(c) no Interest Period shall extend beyond the Maturity Date of the
Facility under which such Loan was made.
"Inventory" means all of the "inventory" as such term is defined in the
Guarantee and Collateral Agreement.
"Investment" means, as to any Person, any direct or indirect acquisition or
investment by such Person, by means of (a) the purchase or other acquisition of
Capital Stock of another Person, (b) a loan, advance or capital contribution to,
Guarantee Obligation or assumption of debt of, or purchase or other acquisition
of any other debt or interest in, another Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit or all or a substantial part of
the business of, such Person. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment, except as
otherwise provided therein.
"IP Rights" has the meaning specified in Section 5.17.
"IRS" means the United States Internal Revenue Service.
21
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice, Inc. (or such later version thereof as may be in effect at the time
of issuance).
"Issuer Documents" means with respect to any Letter of Credit, the Letter
of Credit Application, and any other document, agreement and instrument entered
into by any L/C Issuer and the Borrower (or any Subsidiary) or in favor of such
L/C Issuer and relating to such Letter of Credit.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Advance" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Percentage.
"L/C Borrowing" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C Issuer" means (a) Fifth Third or any other Lender acting in the
capacity of an issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.06. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the Swing Line Lender.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any standby letter of credit issued hereunder.
Letters of Credit shall be issued in Dollars.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the applicable L/C Issuer.
22
"Letter of Credit Expiration Date" means the day that is five Business Days
prior to the Maturity Date then in effect for the Revolving Credit Facility (or,
if such day is not a Business Day, the next preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.03(i).
"Letter of Credit Sublimit" means an amount equal to $25,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Facility.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Revolving Credit Loan or a Swing Line Loan.
"Loan Documents" means, collectively, (a) this Agreement, (b) the Notes,
(c) the Guaranty, (d) the Security Documents, (e) the Fee Letter, (f) each
Issuer Document, (g) each Secured Hedge Agreement (h), each Secured Cash
Management Agreement, (i) the First Lien Note Intercreditor Agreement, and (j)
the Second Lien Note Intercreditor Agreement; provided that for purposes of the
definition of "Material Adverse Effect" and Articles IV through IX, "Loan
Documents" shall not include Secured Hedge Agreements or Secured Cash Management
Agreements.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Mandatory Cost" means, with respect to any period, the percentage rate per
annum determined in accordance with Schedule 1.01(b).
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect on, the operations, business, assets, properties,
liabilities (actual or contingent) or financial condition of Holdings and its
Subsidiaries, taken as a whole; (b) a material impairment of the rights and
remedies of the Administrative Agent or any Lender under any Loan Document, or
of the ability of the Borrower and the Guarantors taken as a whole to perform
their obligations under any Loan Document to which they are parties; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower or any Guarantor of any Loan Document to
which it is a party.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Maturity Date" means February 8, 2015; provided, however, that if such
date is not a Business Day, the Maturity Date shall be the immediately preceding
Business Day.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor thereto.
"Mortgages" means each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Lenders.
23
"Mortgaged Properties" means the real properties listed under the heading
"Mortgaged Properties" on Schedule 1.01(c), as to which the Administrative Agent
for the benefit of the Lenders shall be granted a Lien pursuant to the
Mortgages.
"Multiemployer Plan" means a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any Disposition or issuance of
Indebtedness by Holdings or any of its Subsidiaries, or any proceeds of casualty
insurance or condemnation awards (or payments in lieu thereof) received or paid
to the account of Holdings or any of its Subsidiaries, the excess, if any, of
(i) the sum of cash and Cash Equivalents received in connection with such
transaction (including any cash or Cash Equivalents received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of
any Indebtedness that is secured by the applicable asset and that is required to
be repaid in connection with such transaction (other than Indebtedness under the
Loan Documents), (B) the reasonable and customary fees and out-of-pocket
expenses incurred by Holdings or such Subsidiary in connection with such
transaction and (C) income taxes reasonably estimated to be actually payable
within two years of the date of the relevant transaction as a result of any gain
recognized in connection therewith; provided that, if the amount of any
estimated taxes pursuant to subclause (C) exceeds the amount of taxes actually
required to be paid in cash in respect of such Disposition, the aggregate amount
of such excess with respect to estimated taxes shall constitute Net Cash
Proceeds and shall be deemed received as of the date the determination of such
excess with respect to estimated taxes is made.
"Net Orderly Liquidation Value" means, with respect to Inventory of any
Person, the orderly liquidation value thereof as determined in a manner
acceptable to the Administrative Agent in its Permitted Discretion by an
appraiser acceptable to the Administrative Agent in its Permitted Discretion,
net of all costs of liquidation thereof.
"Non-Guarantor" means any Subsidiary of Holdings that is not a Guarantor.
"Note" means any promissory note made by the Borrower in favor of a Lender
evidencing Revolving Credit Loans or Swing Line Loans, as the case may be, made
by such Lender, substantially in the form of Exhibit E.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan or Letter of Credit, whether direct or
indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and
fees that accrue after the commencement by or against any Loan Party or any
Affiliate thereof of any proceeding under any Debtor Relief Laws naming such
Person as the debtor in such proceeding, regardless of whether such interest and
fees are allowed claims in such proceeding.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
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"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies under the laws of the
United States (or any political subdivision thereof) arising from any payment
made hereunder or under any other Loan Document or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Outstanding Amount" means (a) with respect to Revolving Credit Loans and
Swing Line Loans on any date, the aggregate outstanding principal amount thereof
after giving effect to any borrowings and prepayments or repayments of Revolving
Credit Loans and Swing Line Loans, as the case may be, occurring on such date;
and (b) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements by the
Borrower of Unreimbursed Amounts.
"Participant" has the meaning specified in Section 10.06(d).
"Participating Member State" means each state so described in any EMU
Legislation.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PDC Environmental Indemnity Agreement" means the Fox River PDC
Environmental Indemnity Agreement, dated as of November 9, 2001, between
Holdings and the Borrower, as amended prior to the date hereof and, if in
accordance with the terms hereof, on or after the date hereof.
"Percentage" means, with respect to any Lender at any time, the percentage
(carried out to the ninth decimal place) of the Facility represented by such
Lender's Commitment at such time. If the Commitment of each Lender to make Loans
and the respective obligations of each L/C Issuer to make L/C Credit Extensions
have been terminated pursuant to Section 8.01, or if the Commitments have
expired, then the Percentage of each Lender in respect of the Facility shall be
determined based on the Percentage of such Lender in respect of the Facility
most recently in effect, giving effect to any subsequent assignments. The
initial Percentage of each Lender in respect of the Facility is set forth
opposite the name of such Lender on Schedule 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"Permitted Discretion" means a determination made in good faith and in the
exercise of commercially reasonable (from the perspective of a secured
asset-based lender) business judgment.
"Permitted Encumbrances" has the meaning specified in the Mortgages.
"Permitted Existing Debt" means Indebtedness described on Schedule 7.02.
"Permitted Lien" means any lien permitted pursuant to Section 7.03.
"Permitted Refinancing Debt" means:
(a) in connection with any refinancing of the First Lien Notes, new
Indebtedness of the Borrower having terms (other than pricing), taken as a
whole, not materially less favorable to the Borrower than those applicable to
the First Lien Notes or otherwise on then market terms and conditions for
comparable debt securities (as determined in good faith by the Borrower) or
otherwise acceptable to the Administrative Agent; provided, that in no event
shall such Indebtedness (i) amortize, or otherwise be subject to scheduled
redemptions, repurchases or other payments of principal or have a final maturity
date
25
that is earlier than June 15, 2015 (i.e., the original maturity date of the
First Lien Notes), (ii) require prepayments or mandatory redemptions in a manner
materially more extensive than the First Lien Notes, (iii) contain maintenance
financial covenants that are more restrictive than those under this Agreement,
(iv) be secured by Liens that are not subordinated to the Liens securing the
Obligations, except as otherwise permitted under the First Lien Intercreditor
Agreement, or (v) contain other terms and conditions (other than pricing) that
are more restrictive, taken as a whole, than those under this Agreement;
(b) in connection with any refinancing of the Second Lien Notes, new
Indebtedness of the Borrower on then market terms and conditions for comparable
debt securities (as determined in good faith by the Borrower); provided that in
no event shall such Indebtedness (i) amortize, or otherwise be subject to
scheduled redemptions, repurchases or other payments of principal or have a
final maturity date that is earlier than the date that is six (6) months after
the Maturity Date with respect to the Facility, (ii) require prepayments or
mandatory redemptions in a manner materially more extensive than the Second Lien
Notes, (iii) contain maintenance financial covenants that are more restrictive
than those under this Agreement, (iv) be secured by Liens that are not
subordinated to the Liens securing the Obligations in a manner at least as
favorable to the Lenders as provided for in the Second Lien Note Intercreditor
Agreement or (v) contain other terms and conditions (other than pricing) that
are more restrictive, taken as a whole, than those under this Agreement;
(c) in connection with any refinancing of the Senior Subordinated Notes,
new subordinated Indebtedness of the Borrower having terms (other than pricing),
taken as a whole, not materially less favorable to the Borrower than those
applicable to the Senior Subordinated Notes or otherwise acceptable to the
Administrative Agent; provided that in no event shall such Indebtedness (i)
amortize, or otherwise be subject to scheduled redemptions, repurchases or other
payments of principal or have a final maturity date that is earlier than the
Senior Subordinated Notes, (ii) be subordinated to the Obligations in a manner
less favorable to the Lenders than the Senior Subordinated Notes, (iii) provide
for covenants, events of default and remedies materially less favorable to the
Borrower than the Senior Subordinated Notes or (v) require prepayments or
mandatory redemptions in a manner materially more extensive than the Senior
Subordinated Notes; and
(d) in connection with any refinancing of the Senior Unsecured Notes, new
unsecured Indebtedness of the Borrower having terms (other than pricing), taken
as a whole, not materially less favorable to the Borrower than those applicable
to the Senior Unsecured Notes or otherwise on then market terms and conditions
for senior unsecured debt securities (as determined in good faith by the
Borrower) or otherwise acceptable to the Administrative Agent; provided that in
no event shall such Indebtedness (i) amortize, or otherwise be subject to
scheduled redemptions, repurchases or other payments of principal or have a
final maturity date that is earlier than the date that is six (6) months after
the Maturity Date with respect to the Facility, (ii) require prepayments or
mandatory redemptions in a manner materially more extensive than the Senior
Unsecured Notes, (iii) contain maintenance financial covenants that are more
restrictive than those under this Agreement or (iv) contain other terms and
conditions that are more restrictive, taken as a whole, than those under this
Agreement.
"Permitted Refinancing Debt Documents" means all instruments and other
agreements entered into by Holdings, the Borrower or any Subsidiaries in
connection with any Permitted Refinancing Debt.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
26
"Platform" has the meaning specified in Section 6.02.
"Pledged Stock" has the meaning specified in the Guarantee and Collateral
Agreement.
"Public Lender" has the meaning specified in Section 6.02.
"Recovery Event" means any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Loan Party.
"Register" has the meaning specified in Section 10.06(c).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse each L/C Issuer pursuant to Section 2.03 for amounts drawn under
Letters of Credit.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Rent Reserve" means, with respect to any warehouse, distribution center or
other location not owned by a Loan Party with respect to which no Collateral
Access Agreement is in effect, a reserve equal to (a) three months' rent in the
case of leased facilities and (b) three months of fees in the case of
third-party warehousers and outside processors.
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
Section 4043.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Revolving Credit Loans, a Committed Loan Notice,
(b) with respect to an L/C Credit Extension, a Letter of Credit Application, and
(c) with respect to a Swing Line Loan, a Swing Line Loan Notice.
"Required Lenders" means, as of any date of determination, Lenders holding
more than 50% of the sum of the (a) Total Outstandings (with the aggregate
amount of each Lender's risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed "held" by such Lender for purposes
of this definition) and (b) aggregate unused Commitments; provided that the
Commitment of, and the portion of the Total Outstandings held or deemed held by,
any Defaulting Lender shall be excluded for purposes of making a determination
of Required Lenders.
"Requirement of Law" means, as to any Person, the Certificate or
Articles of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
27
"Reserves" means, at any time of determination thereof, (a) the Dilution
Reserve then in effect, (b) aggregate Rent Reserves then in effect, and (c) any
other reserves that the Administrative Agent deems necessary in the exercise of
its Permitted Discretion to maintain with respect to the Collateral or any Loan
Party, provided, that, in the case of any reserves established pursuant to the
foregoing clause (c), such reserves have been established upon not less than
three Business Days' notice to the Borrower.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, treasurer, assistant treasurer or controller of a Loan Party
and any other officer of the applicable Loan Party so designated by any of the
foregoing officers in a notice to the Administrative Agent. Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party
shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Loan Party and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Loan Party.
"Restricted Payment" has the meaning set forth in Section 7.06.
"Revolving Credit Borrowing" means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate
Loans, having the same Interest Period made by each of the Lenders pursuant to
Section 2.01.
"Revolving Credit Loan" has the meaning specified in Section 2.01.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Second Lien Note Documents" means the Second Lien Note Indenture, the
Second Lien Notes, the Second Lien Security Documents and each other document,
instrument or agreement relating to the issuance of the Second Lien Notes, as
the same may be amended, restated, supplemented, waived and/or otherwise
modified from time to time in accordance with the terms thereof, of this
Agreement and of the Second Lien Intercreditor Agreement.
"Second Lien Note Indenture" means the indenture entered into by Holdings,
the Borrower, certain of its Subsidiaries and U.S. Bank National Association, as
trustee, in connection with the issuance of the Second Lien Notes, as the same
may be amended, restated, supplemented, waived and/or otherwise modified from
time to time in accordance the terms thereof, of this Agreement and of the
Second Lien Intercreditor Agreement.
"Second Lien Note Intercreditor Agreement" means the Intercreditor
Agreement executed by Holdings, the Borrower, the other Loan Parties from time
to time party thereto, the Administrative Agent and the collateral agent under
the Second Lien Note Indenture, as the same may be amended, restated,
supplemented, waived and/or otherwise modified from time to time in accordance
with the terms thereof and of this Agreement.
"Second Lien Notes" means the 11.25% senior secured second lien notes of
the Borrower due 2015 issued and exchanged pursuant to the Second Lien Note
Indenture and in accordance with the Exchange Offer.
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"Second Lien Security Documents" means the collective reference to each
security agreement, pledge agreement, mortgage, deed of trust, collateral
agreement, instrument or other document granting or perfecting a Lien on any
asset or assets of any Person in accordance with the terms of the Second Lien
Intercreditor Agreement to secure the obligations and liabilities of Holdings,
the Borrower and certain of its Subsidiaries under the Second Lien Note
Documents.
"Secured Cash Management Agreement" means any Cash Management Agreement
that is entered into by and between the Borrower or any other Loan Party and any
Cash Management Bank.
"Secured Hedge Agreement" means any interest rate, energy, raw materials,
commodity or currency exchange Hedge Agreement permitted under Article VII that
is entered into by and between the Borrower or any other Loan Party and any
Hedge Bank.
"Secured Parties" means, collectively, the Administrative Agent, the
Lenders, each L/C Issuer, the Hedge Banks, the Cash Management Banks, each
co-agent or sub-agent appointed by the Administrative Agent from time to time
pursuant to Section 9.05, and the other Persons the Obligations owing to which
are or are purported to be secured by the Collateral under the terms of the
Security Documents.
"Security Documents" means the collective reference to the Guarantee and
Collateral Agreements, the Mortgages, the Intellectual Property Security
Agreement (and any supplement thereto), each deposit account control agreement,
each securities account control agreement and all other security documents
hereafter delivered to the Administrative Agent granting or perfecting a Lien on
any property of any Person to secure the obligations and liabilities of any Loan
Party under any Loan Document.
"Senior Subordinated Notes" means the 9 3/4% unsecured subordinated notes
of the Borrower due 2014 in an aggregate original principal amount of
$185,000,000 issued and sold on June 11, 2004 pursuant to the Senior
Subordinated Note Indenture.
"Senior Subordinated Note Indenture" means the Indenture entered into by
Holdings, the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Subordinated Notes, together with all instruments and
other agreements entered into by Holdings, the Borrower or such Subsidiaries in
connection therewith, as amended prior to the Closing Date and as may be amended
thereafter in accordance with the terms of this Agreement.
"Senior Unsecured Notes" means the 8 1/8% unsecured notes of the Borrower
due 2011 in an aggregate original principal amount of $150,000,000 issued and
sold on June 11, 2004 pursuant to the Senior Unsecured Note Indenture.
"Senior Unsecured Note Indenture" means the Indenture entered into by
Holdings, the Borrower and certain of its Subsidiaries in connection with the
issuance of the Senior Unsecured Notes, together with all instruments and other
agreements entered into by Holdings, the Borrower or such Subsidiaries in
connection therewith, as amended prior to the Closing Date and as may be amended
thereafter in accordance with the terms of this Agreement.
"Single Employer Plan" means any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent" and "Solvency" mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such
Person is greater than the total amount of liabilities, including contingent
liabilities, of such Person, (b) the present fair salable value of the assets of
such
29
Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay such debts and
liabilities as they mature, (d) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which
such Person's property would constitute an unreasonably small capital, and (e)
such Person is able to pay its debts and liabilities, contingent obligations and
other commitments as they mature in the ordinary course of business. The amount
of contingent liabilities at any time shall be computed as the amount that, in
the light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
"Specified Change of Control" means a "Change of Control" (or any other
defined term having a similar purpose) as defined in the Senior Subordinated
Note Indenture, in the Senior Unsecured Note Indenture, in the First Lien Note
Indenture, in the Second Lien Note Indenture, in any Permitted Refinancing Debt
Document or in any other document (other than this Agreement) evidencing
Indebtedness, in each case so long as there is at least $15,000,000 aggregate
principal amount outstanding under the respective issue.
"Specified Litigation" means that certain litigation commenced by the
Borrower in September 2007 against a former contractor, in which the. Borrower
asserted claims including breach of obligations under a February 2007 agreement
to perform certain engineering services, and in connection with which the
Borrower received a favorable jury verdict on May 14, 2009.
"Spot Rate of Exchange" means, on any day, with respect to Canadian Dollars
or Euros, as the case may be, in relation to Dollars, the arithmetic mean of (a)
the spot rate at which Dollars are offered by Fifth Third for such currency, and
(b) the spot rate at which amounts in such currency are offered by Fifth Third
for Dollars, in each case as quoted generally to customers of Fifth Third on
such day.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
a Loan Party.
"Swing Line Borrowing" means a borrowing of a Swing Line Loan pursuant to
Section 2.04.
"Swing Line Lender" means Fifth Third in its capacity as provider of Swing
Line Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.04(a).
"Swing Line Loan Notice" means a notice of a Swing Line Borrowing pursuant
to Section 2.04(b), which, if in writing, shall be substantially in the form of
Exhibit F.
"Swing Line Sublimit" means an amount equal to the lesser of (a) $5,000,000
and (b) the Facility. The Swing Line Sublimit is part of, and not in addition
to, the Facility.
"Synthetic Debt" means, with respect to any Person as of any date of
determination thereof, all obligations of such Person in respect of transactions
entered into by such Person that are intended to
30
function primarily as a borrowing of funds (including any minority interest
transactions that function primarily as a borrowing) but are not otherwise
included in the definition of "Indebtedness" or as a liability on the
consolidated balance sheet of such Person and its Subsidiaries in accordance
with GAAP.
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, or similar types of assessments, fees or other charges
related to taxes imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.
"Total Outstandings" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"Transaction" means, collectively, (a) the entering into by the Loan
Parties and their applicable Subsidiaries of the Loan Documents to which they
are or are intended to be a party, (b) the entering into by the Loan Parties and
their applicable Subsidiaries of the First Lien Note Documents to which they are
or are intended to be a party, (c) the refinancing of certain outstanding
Indebtedness of the Borrower and its Subsidiaries and the termination of all
commitments with respect thereto and (c) the payment of the fees and expenses
incurred in connection with the consummation of the foregoing.
"Type" means, with respect to a Loan, its character as a Base Rate Loan or
a Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York; provided that, if perfection or the effect of perfection or non-perfection
or the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of
New York, "UCC" means the Uniform Commercial Code as in effect from time to time
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection, effect of perfection or non-perfection or priority.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).
"Wholly Owned Subsidiary" means as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
1.02. Other Interpretive Provisions. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) 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, (i) any definition of or reference
to any agreement, instrument or other document (including any Organization
Document) 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 or in any other Loan Document), (ii) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (iii) the words "herein," "hereof" and "hereunder,"
and words of similar import when used in any Loan
31
Document, shall be construed to refer to such Loan Document in its entirety
and not to any particular provision thereof, (iv) all references in a Loan
Document to Articles, Sections, Preliminary Statements, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and
Preliminary Statements, Exhibits and Schedules to, the Loan Document in
which such references appear, (v) any reference to any law shall include
all statutory and regulatory provisions consolidating, amending, replacing
or interpreting such law and any reference to any law or regulation shall,
unless otherwise specified, refer to such law or regulation as amended,
modified or supplemented from time to time, and (vi) the words "asset" and
"property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including;" the
words "to" and "until" each mean "to but excluding;" and the word "through"
means "to and including."
(c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03. Accounting Terms.
(a) Generally. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP, as in effect from time to time, applied
in a manner consistent with that used in preparing the audited consolidated
balance sheet of the Borrower and its Subsidiaries for the fiscal year
ended January 3, 2009, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal year of the
Borrower and its Subsidiaries, including the notes thereto, except as
otherwise required or permitted under GAAP (and subject to clause (b)
below) and disclosed to the Administrative Agent or the Lenders in the
first financial statements in which the change is made.
(b) Changes in GAAP. If at any time any change in GAAP (or a
change by the Loan Parties in the application thereof) would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in
good faith to amend such ratio or requirement to preserve the original
intent thereof in light of such change in GAAP (or the application thereof)
(subject to the approval of the Borrower and the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change
therein and (ii) the Borrower shall provide to the Administrative Agent and
the Lenders financial statements and other documents required under this
Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made
before and after giving effect to such change in GAAP (or the application
thereof).
1.04. Rounding. Any financial ratios required to be maintained by
the Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
32
1.05. Times of Day. Unless otherwise specified, all references herein
to times of day shall be references to Central time (daylight or standard, as
applicable).
1.06. Letter of Credit Amounts. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Document related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.
ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01. The Loans. Subject to the terms and conditions set forth herein
(including without limitation the conditions set forth in Section 4.02), each
Lender severally agrees to make loans (each such loan, a "Revolving Credit
Loan") to the Borrower in Dollars from time to time, on any Business Day during
the Availability Period, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Commitment; provided, however, that
after giving effect to any Revolving Credit Borrowing, (a) the Total
Outstandings shall not exceed an amount equal at such time to the lesser of (i)
the Facility, and (ii) the Borrowing Base, and (b) the aggregate Outstanding
Amount of the Revolving Credit Loans of any Lender, plus such Lender's
Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's
Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed an
amount equal at such time to such Lender's Commitment. Within the limits of each
Lender's Commitment, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.01, prepay under Section 2.05, and
reborrow under this Section 2.01. Revolving Credit Loans made to the Borrower
may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
2.02. Borrowings, Conversions and Continuations of Loans.
(a) Each Revolving Credit Borrowing, each conversion of
Revolving Credit Loans from one Type to the other, and each continuation of
Eurodollar Rate Loans shall be made upon the Borrower's irrevocable notice
to the Administrative Agent, which may be given by telephone. Each such
notice must be received by the Administrative Agent not later than 11:00
a.m. (i) three Business Days prior to the requested date of any Borrowing
of, conversion to or continuation of Eurodollar Rate Loans or of any
conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans. Each telephonic notice
by the pursuant to this Section 2.02(a) must be confirmed promptly by
delivery to the Administrative Agent of a written Committed Loan Notice,
appropriately completed and signed by a Responsible Officer of the
Borrower. Each Borrowing of, conversion to or continuation of Eurodollar
Rate Loans shall be in a principal amount of at least $3,000,000 or a whole
multiple of $500,000 in excess thereof. Except as provided in Sections
2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $50,000
in excess thereof. Each Committed Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Revolving
Credit Borrowing, a conversion of Revolving Credit Loans from one Type to
the other, or a continuation of Eurodollar Rate Loans, (ii) the requested
date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Revolving
Credit Loans to be borrowed, converted or continued, (iv) the Type of
Revolving Credit Loans to be borrowed or to which existing Revolving Credit
Loans are to be converted, and (v) if applicable, the duration of the
33
Interest Period with respect thereto. If the Borrower fails to specify a
Type of Revolving Credit Loan in a Committed Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation, then
the applicable Revolving Credit Loans shall be made as, or converted to,
Eurodollar Rate Loans with an Interest Period of one month. Any such
automatic conversion to Eurodollar Rate Loans shall be effective as of the
last day of the Interest Period then in effect with respect to the
applicable Eurodollar Rate Loans. If the Borrower requests a Borrowing of,
conversion to, or continuation of Eurodollar Rate Loans in any such
Committed Loan Notice, but fails to specify an Interest Period, it will be
deemed to have specified an Interest Period of one month. Notwithstanding
anything to the contrary herein, (x) a Swing Line Loan may not be converted
to a Eurodollar Rate Loan and (y) no Revolving Credit Loan shall be made as
or converted into a Eurodollar Rate Loan with an Interest Period of greater
than one (1) month until the earlier to occur of (I) completion of the
primary syndication of the Facility, as determined by the Administrative
Agent, and (II) the date that is 90 days following the Closing Date.
(b) Following receipt of a Committed Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of its
Percentage of the applicable Revolving Credit Loans, and if no timely
notice of a conversion or continuation is provided by the Borrower, the
Administrative Agent shall notify each Lender of the details of any
automatic continuation of Revolving Credit Loans, in each case as described
in Section 2.02(a). In the case of each Revolving Credit Borrowing, each
Appropriate Lender shall make the amount of its Revolving Credit Loan
available to the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 1:00 p.m. on the Business Day
specified in the applicable Committed Loan Notice. Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing is
the initial Credit Extension, Section 4.01), the Administrative Agent shall
make all funds so received available to the Borrower either by (i)
crediting the account of the Borrower on the books of Fifth Third with the
amount of such funds or (ii) wire transfer of such funds, in each case in
accordance with instructions provided to (and reasonably acceptable to) the
Administrative Agent by the Borrower; provided, however, that if, on the
date a Committed Loan Notice with respect to a Revolving Credit Borrowing
is given by the Borrower, there are L/C Borrowings outstanding, then the
proceeds of such Revolving Credit Borrowing, first, shall be applied to the
payment in full of any such L/C Borrowings, and second, shall be made
available to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan
may be continued only on the last day of an Interest Period for such
Eurodollar Rate Loan, however a Eurodollar Rate Loan may be converted at
any time subject to any applicable breakage fees to be paid by the
Borrower. During the existence of an Event of Default, no Loans may be
requested as or converted to Eurodollar Rate Loans or continued for an
Interest Period of longer than one month, in each case, if the
Administrative Agent or the Required Lenders shall have elected that the
restriction set forth in this sentence shall apply.
(d) The Administrative Agent shall promptly notify the Borrower
and the Lenders of the interest rate applicable to any Interest Period for
Eurodollar Rate Loans upon determination of such interest rate. At any time
that Base Rate Loans are outstanding, the Administrative Agent shall notify
the Borrower and the Lenders of any change in Fifth Third's prime rate used
in determining the Base Rate promptly following the public announcement of
such change.
(e) After giving effect to all Revolving Credit Borrowings, all
conversions of Revolving Credit
34
Loans from one Type to the other, and all continuations of Revolving Credit
Loans as the same Type, there shall not be more than ten (10) Interest
Periods in effect in respect of the Revolving Credit Facility.
2.03. Letters of Credit; Auto-Extension Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein
(including without limitation the conditions set forth in Section
4.02), (A) each L/C Issuer agrees, in reliance upon the
agreements of the Lenders set forth in this Section 2.03, (1)
from time to time on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue
Letters of Credit denominated in Dollars for the account of the
Borrower or one or more of its Subsidiaries, and to amend or
extend such Letters of Credit in accordance with Section 2.03(b),
and (2) to honor drawings under such Letters of Credit; and (B)
the Lenders severally agree to participate in Letters of Credit
issued for the account of the Borrower or one or more of its
Subsidiaries and any drawings thereunder; provided that after
giving effect to any L/C Credit Extension with respect to any
Letter of Credit, (I) the Total Outstandings shall not exceed an
amount equal to the lesser at such time of (x) the Facility and
(y) the Borrowing Base, and (II) the aggregate Outstanding Amount
of the Revolving Credit Loans of any Lender, plus such Lender's
Percentage of the Outstanding Amount of all L/C Obligations, plus
such Lender's Percentage of the Outstanding Amount of all Swing
Line Loans shall not exceed such Lender's Commitment, and (z) the
Outstanding Amount of the L/C Obligations shall not exceed the
Letter of Credit Sublimit. Each request by the Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be
a representation by the Borrower that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso
to the preceding sentence. Within the foregoing limits, and
subject to the terms and conditions hereof, the Borrower's
ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed.
(ii) No L/C Issuer shall issue any Letter of Credit if:
(A) the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of
issuance, unless the Required Lenders have approved such
expiry date; or
(B) the expiry date of such requested Letter of Credit
would occur after the Letter of Credit Expiration Date,
unless all the Lenders have approved such expiry date.
(iii) If the Borrower so requests in any applicable Letter
of Credit Application, the applicable L/C Issuer may, in its sole
and absolute discretion, agree to issue a Letter of Credit that
has automatic extension provisions (each, an "Auto-Extension
Letter of Credit"); provided that any such Auto-Extension Letter
of Credit must permit such L/C Issuer to prevent any such
extension 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 (the
"Non-Extension Notice Date") in each such twelve-month period to
be agreed upon at the time such Letter of Credit is issued.
Unless otherwise directed by an L/C Issuer, the Borrower shall
not be
35
required to make a specific request to such L/C Issuer for any
such extension. Once an Auto-Extension Letter of Credit has been
issued, the Lenders shall be deemed to have authorized (but may
not require) the L/C Issuer issuing such Letter of Credit to
permit the extension of such Letter of Credit at any time to an
expiry date not later than the Letter of Credit Expiration Date;
provided, however, that such L/C Issuer shall not permit any such
extension if (A) such L/C Issuer has determined that it would not
be permitted, or would have no obligation at such time to issue
such Letter of Credit in its revised form (as extended) under the
terms hereof (by reason of the provisions of clause (ii) or (iii)
of Section 2.03(a) or otherwise), or (B) it has received notice
(which may be by telephone or in writing) on or before the day
that is seven Business Days before the Non-Extension Notice Date
(1) from the Administrative Agent that the Lenders have elected
not to permit such extension or (2) from the Administrative
Agent, any Lender or the Borrower that one or more of the
applicable conditions specified in Section 4.02 is not then
satisfied, and in each such case directing such L/C Issuer not to
permit such extension.
(iv) No L/C Issuer shall be under any obligation to issue
any Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator (in the case of a binding
arbitration proceeding) shall by its terms purport to enjoin
or restrain such L/C Issuer from issuing such Letter of
Credit, or any Law applicable to such L/C Issuer or any
request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over
such L/C Issuer shall prohibit, or request that such L/C
Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall
impose upon such L/C Issuer with respect to such Letter of
Credit any restriction, reserve or capital requirement (for
which such L/C Issuer is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall
impose upon such L/C Issuer any unreimbursed loss, cost or
expense which was not applicable on the Closing Date and
which such L/C Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(B) the issuance of such Letter of Credit would
violate one or more policies of such L/C Issuer applicable
to letters of credit generally;
(C) except as otherwise agreed by the Administrative
Agent and such L/C Issuer, such Letter of Credit is in an
initial stated amount less than $250,000;
(D) except as otherwise agreed by the Administrative
Agent and such L/C Issuer, such Letter of Credit contains
any provisions for automatic reinstatement of the stated
amount after any drawing thereunder; or
(E) a default of any Lender's obligations to fund
under Section 2.03(c) exists or any Lender is at such time a
Defaulting Lender or an Impacted Lender hereunder, unless
such L/C Issuer has entered into Cash Collateral or other
arrangements satisfactory to such L/C Issuer with the
Borrower or such Lender to eliminate such L/C Issuer's risk
with respect to such Lender.
36
(v) No L/C Issuer shall amend any Letter of Credit if such
L/C Issuer would not be permitted at such time to issue such
Letter of Credit in its amended form under the terms hereof.
(vi) No L/C Issuer shall be under any obligation to amend
any Letter of Credit if (A) such L/C Issuer 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.
(vii) No L/C Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit issued by it and the documents
associated therewith, and each L/C Issuer shall have all of the
benefits and immunities (A) provided to the Administrative Agent
in Article IX with respect to any acts taken or omissions
suffered by such L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and Issuer Documents
pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in Article IX included such L/C
Issuer with respect to such acts or omissions, and (B) as
additionally provided herein with respect to such L/C Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as
the case may be, upon the request of the Borrower delivered to
the applicable L/C Issuer (with a copy to the Administrative
Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Responsible Officer of
the Borrower. Such Letter of Credit Application must be received
by such L/C Issuer and the Administrative Agent not later than
11:00 a.m. at least three Business Days (or such later date and
time as the Administrative Agent and such L/C Issuer may agree in
a particular instance in their sole discretion) prior to the
proposed issuance date or date of amendment, as the case may be.
In the case of a request for an initial issuance of a Letter of
Credit by an L/C Issuer, such Letter of Credit Application shall
specify in form and detail satisfactory to such L/C Issuer: (A)
the proposed issuance date of the requested Letter of Credit
(which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary
thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any
drawing thereunder; (G) the purpose and nature of the requested
Letter of Credit; and (H) such other matters as such L/C Issuer
may require. In the case of a request for an amendment of any
outstanding Letter of Credit issued by an Issuing Lender, such
Letter of Credit Application shall specify in form and detail
satisfactory to such L/C Issuer (1) the Letter of Credit to be
amended; (2) the proposed date of amendment thereof (which shall
be a Business Day); (3) the nature of the proposed amendment; and
(4) such other matters as such L/C Issuer may require.
Additionally, the Borrower shall furnish to the applicable L/C
Issuer and the Administrative Agent such other documents and
information pertaining to such requested Letter of Credit
issuance or amendment, including any Issuer Documents, as such
L/C Issuer or the Administrative Agent may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the applicable L/C Issuer will confirm with the
Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit
Application from the Borrower and, if not, such L/C Issuer will
provide the Administrative Agent with a
37
copy thereof. Unless the applicable L/C Issuer has received
written notice from any Lender, the Administrative Agent or any
Loan Party, at least one Business Day prior to the requested date
of issuance or amendment of the applicable Letter of Credit, that
one or more applicable conditions contained in Article IV shall
not then be satisfied, then, subject to the terms and conditions
hereof, such L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the Borrower or enter into
the applicable amendment, as the case may be, in each case in
accordance with such L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of
Credit, each Lender shall be deemed to, and hereby irrevocably
and unconditionally agrees to, purchase from the applicable L/C
Issuer a risk participation in such Letter of Credit in an amount
equal to the product of such Lender's Percentage times the amount
of such Letter of Credit.
(iii) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, each L/C Issuer
will also deliver to the Borrower and the Administrative Agent a
true and complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of
Credit of any notice of a drawing under a Letter of Credit issued
by any L/C Issuer, such L/C Issuer shall notify the Borrower and
the Administrative Agent thereof. Not later than 11:00 a.m. on
the date of any payment by any L/C Issuer under a Letter of
Credit (each such date, an "Honor Date"), the Borrower shall
reimburse such L/C Issuer through the Administrative Agent in an
amount equal to the amount of such drawing, which reimbursement
may be in the form of direct cash reimbursement or in the form of
a Base Rate Loan as set forth below. If the Borrower fails to
reimburse such L/C Issuer in the form of a direct cash
reimbursement by such time, the Administrative Agent shall
promptly notify each Lender of the Honor Date, the amount of the
unreimbursed drawing (the "Unreimbursed Amount"), and the amount
of such Lender's Percentage thereof. In such event, the Borrower
shall be deemed to have requested a Revolving Credit Borrowing of
Base Rate Loans to be disbursed on the Honor Date in an amount
equal to the Unreimbursed Amount, without regard to the minimum,
multiples or notice period specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of
the unutilized portion of the Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Committed
Loan Notice, and it being understood that any failure of the
Borrower to directly pay unreimbursed drawings on the Honor Date
in cash and without the need for a Base Rate Loan shall not
constitute a Default in determining whether the conditions to
such Revolving Credit Borrowing are satisfied). Any notice given
by any L/C Issuer or the Administrative Agent pursuant to this
Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding
effect of such notice.
(ii) Each Lender shall upon any notice pursuant to Section
2.03(c)(i) make funds available to the Administrative Agent for
the account of the applicable L/C Issuer at the Administrative
Agent's Office in an amount equal to its Percentage of the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon,
subject to the provisions of Section 2.03(c)(iii), each Lender
that so makes funds available shall be deemed to have made a
38
Base Rate Loan to the Borrower in such amount. The Administrative
Agent shall remit the funds so received to such L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Revolving Credit Borrowing of Base Rate
Loans because the conditions set forth in Section 4.02 cannot be
satisfied or for any other reason, the Borrower shall be deemed
to have incurred from the applicable L/C Issuer an L/C Borrowing
in the amount of the Unreimbursed Amount that is not so
refinanced, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the
interest rate specified in Section 2.08(b). In such event, each
Lender's payment to the Administrative Agent for the account of
such L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and
shall constitute an L/C Advance from such Lender in satisfaction
of its participation obligation under this Section 2.03.
(iv) Until each Lender funds its Revolving Credit Loan or
L/C Advance pursuant to this Section 2.03(c) to reimburse an L/C
Issuer for any amount drawn under any Letter of Credit issued by
such L/C Issuer, interest in respect of such Lender's Percentage
of such amount shall be solely for the account of such L/C
Issuer.
(v) Each Lender's obligation to make Revolving Credit
Loans or L/C Advances to reimburse any L/C Issuer for amounts
drawn under Letters of Credit issued by such L/C Issuer, as
contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against such L/C Issuer,
the Borrower or any other Person for any reason whatsoever; (B)
the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each Lender's obligation
to make Revolving Credit Loans pursuant to this Section 2.03(c)
is subject to the conditions set forth in Section 4.02 (other
than delivery by the Borrower of a Committed Loan Notice ). No
such making of an L/C Advance shall relieve or otherwise impair
the obligation of the Borrower to reimburse any L/C Issuer for
the amount of any payment made by such L/C Issuer under any
Letter of Credit, together with interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of any L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing
provisions of this Section 2.03(c) by the time specified in
Section 2.03(c)(ii), such L/C Issuer shall be entitled to recover
from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment
is immediately available to such L/C Issuer at a rate per annum
equal to the greater of the Federal Funds Rate and a rate
determined by such L/C Issuer in accordance with banking industry
rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by such L/C Issuer
in connection with the foregoing. If such Lender pays such amount
(with interest and fees as aforesaid), the amount so paid
(exclusive of interest and fees) shall constitute such Lender's
Revolving Credit Loan included in the relevant Borrowing or L/C
Advance in respect of the relevant L/C Borrowing, as the case may
be. A certificate of an L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts
owing under this Section 2.03(c)(vi) shall be conclusive absent
manifest error.
39
(d) Repayment of Participations.
(i) At any time after any L/C Issuer has made a payment
under any Letter of Credit and has received from any Lender such
Lender's L/C Advance in respect of such payment in accordance
with Section 2.03(c), if the Administrative Agent receives for
the account of such L/C Issuer any payment in respect of the
related Unreimbursed Amount or interest thereon (whether directly
from the Borrower or otherwise, including proceeds of Cash
Collateral applied thereto by the Administrative Agent), the
Administrative Agent will distribute to such Lender its
Percentage thereof in the same funds as those received by the
Administrative Agent.
(ii) If any payment received by the Administrative Agent
for the account of any L/C Issuer pursuant to Section 2.03(c)(i)
is required to be returned under any of the circumstances
described in Section 10.05 (including pursuant to any settlement
entered into by such L/C Issuer in its discretion), each Lender
shall pay to the Administrative Agent for the account of such L/C
Issuer its Percentage thereof on demand of the Administrative
Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect. The
obligations of the Lenders under this clause shall survive the
payment in full of the Obligations and the termination of this
Agreement.
(e) Obligations Absolute. The obligation of the Borrower to
reimburse each L/C Issuer for each drawing under each Letter of Credit
issued by such L/C Issuer and to repay each L/C Borrowing shall be
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of such Letter
of Credit, this Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff,
defense or other right that the Borrower or any Subsidiary may
have at any time against any beneficiary or any transferee of
such Letter of Credit (or any Person for whom any such
beneficiary or any such transferee may be acting), such L/C
Issuer or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or
any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under such Letter of
Credit;
(iv) any payment by such L/C Issuer under such Letter of
Credit against presentation of a draft or certificate that does
not strictly comply with the terms of such Letter of Credit; or
any payment made by such L/C Issuer under such Letter of Credit
to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to
any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any
Debtor Relief Law; or
40
(v) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any
other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or any of its
Subsidiaries.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will promptly (and in any event prior to the issuance and/or
effectiveness of such Letter of Credit or amendment) notify the applicable L/C
Issuer. The Borrower shall be conclusively deemed to have waived any such claim
against such L/C Issuer and its correspondents unless such notice is given as
aforesaid.
(f) Role of L/C Issuers. Each Lender and the Borrower agree
that, in paying any drawing under a Letter of Credit issued by any L/C
Issuer, such L/C Issuer shall not have any responsibility to obtain any
document (other than any sight draft, certificates and documents expressly
required by such Letter of Credit) or to ascertain or inquire as to the
validity or accuracy of any such document or the authority of the Person
executing or delivering any such document. None of any L/C Issuer, the
Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of any L/C Issuer shall be liable to
any Lender for (i) any action taken or omitted in connection herewith at
the request or with the approval of the Lenders or the Required Lenders, as
applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument
related to any Letter of Credit or Issuer Document. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee
with respect to its use of any Letter of Credit; provided, however, that
this assumption is not intended to, and shall not, preclude the Borrower's
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. None of any L/C Issuer, the
Administrative Agent, any of their respective Related Parties or any
correspondent, participant or assignee of any L/C Issuer shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e); provided, however, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against an L/C
Issuer, and an L/C Issuer may be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by such L/C Issuer's willful misconduct or gross negligence or such
L/C Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, each L/C Issuer may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, and no L/C Issuer shall be responsible for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative
Agent, (i) if any L/C Issuer has honored any full or partial drawing
request under any Letter of Credit and such drawing has resulted in an L/C
Borrowing, or (ii) if, as of the Maturity Date, any L/C Obligation for any
reason remains outstanding, the Borrower shall, in each case, immediately
Cash Collateralize the then Outstanding Amount of all L/C Obligations.
Sections 2.05 and 8.02(c) set forth certain additional requirements to
deliver Cash Collateral hereunder. For purposes of this Section 2.03,
Section 2.05 and Section 8.02(c), "Cash Collateralize" means to pledge and
deposit with or deliver to the Administrative Agent, for the benefit of the
L/C Issuers and the Lenders, as
41
collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and each L/C Issuer (which documents are hereby
consented to by the Lenders). Derivatives of such term have corresponding
meanings. The Borrower hereby grants to the Administrative Agent, for the
benefit of the L/C Issuers and the Lenders, a security interest in all such
cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash Collateral shall be maintained in blocked, non-interest
bearing deposit accounts at Fifth Third. If at any time the Administrative
Agent determines that any funds held as Cash Collateral are subject to any
right or claim of any Person other than the Administrative Agent or that
the total amount of such funds is less than the aggregate Outstanding
Amount of all L/C Obligations, the Borrower will, forthwith upon demand by
the Administrative Agent, pay to the Administrative Agent, as additional
funds to be deposited as Cash Collateral, an amount equal to the excess of
(x) such aggregate Outstanding Amount over (y) the total amount of funds,
if any, then held as Cash Collateral that the Administrative Agent
determines to be free and clear of any such right and claim. Upon the
drawing of any Letter of Credit for which funds are on deposit as Cash
Collateral, such funds shall be applied, to the extent permitted under
applicable Laws, to reimburse the applicable L/C Issuer.
(h) Applicability of ISP. Unless otherwise expressly agreed by
an L/C Issuer and the Borrower when a Letter of Credit is issued by such
L/C Issuer, the rules of the ISP shall apply to each standby Letter of
Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Percentage a Letter of Credit fee (the "Letter of Credit Fee") for each
Letter of Credit equal to the Applicable Rate times the daily amount
available to be drawn under such Letter of Credit. For purposes of
computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in
accordance with Section 1.06. Letter of Credit Fees shall be (i) due and
payable on the first Business Day of each April, July, October and January,
commencing with the first such date to occur after the issuance of such
Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand and (ii) computed on a quarterly basis in arrears. If there is any
change in the Applicable Rate during any quarter, the daily amount
available to be drawn under each Letter of Credit shall be computed and
multiplied by the Applicable Rate separately for each period during such
quarter that such Applicable Rate was in effect. Notwithstanding anything
to the contrary contained herein, upon the request of the Required Lenders,
while any Event of Default exists, all overdue Letter of Credit Fees shall
accrue interest thereon at the interest rate specified in Section 2.08(b).
(j) Fronting Fee and Documentary and Processing Charges Payable
to L/C Issuer. The Borrower shall pay directly to each L/C Issuer for its
own account a fronting fee with respect to each Letter of Credit issued by
such L/C Issuer, at the rate per annum of 0.125%, computed on the daily
amount available to be drawn under such Letter of Credit on a quarterly
basis in arrears. Such fronting fee shall be due and payable on the first
Business Day after the end of each March, June, September and December in
respect of the most recently-ended quarterly period (or portion thereof, in
the case of the first payment), commencing with the first such date to
occur after the issuance of such Letter of Credit, on the Letter of Credit
Expiration Date and thereafter on demand. For purposes of computing the
daily amount available to be drawn under any Letter of Credit, the amount
of such Letter of Credit shall be determined in accordance with Section
1.06. In addition, the Borrower shall pay directly to each L/C Issuer for
its own account the customary issuance, presentation, amendment and other
processing fees, and other standard costs and charges, of such L/C Issuer
relating to letters of credit as from time to time in effect. Such
42
customary fees and standard costs and charges are due and payable on demand
and are nonrefundable.
(k) Conflict with Issuer Documents. In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms
hereof shall control.
2.04. Swing Line Loans.
(a) The Swing Line. Subject to the terms and conditions set
forth herein (including without limitation the conditions set forth in
Section 4.02), the Swing Line Lender may, in its discretion and in reliance
upon the agreements of the other Lenders set forth in this Section 2.04,
make loans (each such loan, a "Swing Line Loan") to the Borrower from time
to time on any Business Day during the Availability Period in an aggregate
amount not to exceed at any time outstanding the amount of the Swing Line
Sublimit, notwithstanding the fact that such Swing Line Loans, when
aggregated with the Percentage of the Outstanding Amount of Revolving
Credit Loans and L/C Obligations of the Lender acting as Swing Line Lender,
may exceed the amount of such Lender's Commitment; provided, however, that
after giving effect to any Swing Line Loan, (i) the Total Outstandings
shall not exceed an amount equal to the lesser at such time of (x) the
Facility and (y) the Borrowing Base, and (ii) the aggregate Outstanding
Amount of the Revolving Credit Loans of any Lender at such time, plus such
Lender's Percentage of the Outstanding Amount of all L/C Obligations at
such time, plus such Lender's Percentage of the Outstanding Amount of all
Swing Line Loans at such time shall not exceed such Lender's Commitment,
and provided further that the Borrower shall not use the proceeds of any
Swing Line Loan to refinance any outstanding Swing Line Loan. Within the
foregoing limits, and subject to the other terms and conditions hereof, the
Borrower may borrow under this Section 2.04, prepay under Section 2.05, and
reborrow under this Section 2.04. Each Swing Line Loan shall bear interest
only at a rate based on the Base Rate. Immediately upon the making of a
Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of
such Lender's Percentage times the amount of such Swing Line Loan.
(b) Borrowing Procedures. Each Swing Line Borrowing shall be
made upon the Borrower's irrevocable notice to the Swing Line Lender and
the Administrative Agent, which may be given by telephone. Each such notice
must be received by the Swing Line Lender and the Administrative Agent not
later than 1:00 p.m. on the requested borrowing date, and shall specify (i)
the amount to be borrowed, which shall be a minimum of $250,000 and in
integral multiples of $50,000 in excess thereof and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice
must be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly
after receipt by the Swing Line Lender of any telephonic Swing Line Loan
Notice, the Swing Line Lender will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender
will notify the Administrative Agent (by telephone or in writing) of the
contents thereof. Unless the Swing Line Lender has received notice (by
telephone or in writing) from the Administrative Agent (including at the
request of any Lender) prior to 2:00 p.m. on the date of the proposed Swing
Line Borrowing (A) directing the Swing Line Lender not to make such Swing
Line Loan as a result of the limitations set forth in the first proviso to
the first sentence of Section 2.04(a), or (B) that one or more of the
applicable conditions specified in Article IV is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date
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specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrower at its office by crediting the account of
the Borrower on the books of the Swing Line Lender in immediately available
funds.
(c) Refinancing of Swing Line Loans.
(i) The Swing Line Lender at any time in its sole and
absolute discretion may request, on behalf of the Borrower (which
hereby irrevocably authorizes the Swing Line Lender to so request
on its behalf), that each Lender make a Base Rate Loan in an
amount equal to such Lender's Percentage of the amount of Swing
Line Loans then outstanding; provided, that the Swing Line Lender
shall be deemed to have made such a request as of the Wednesday
of each week (provided, further, that if such day is not a
Business Day, such request shall be deemed to have been made as
of the next succeeding Business Day) unless the Swing Line Lender
shall otherwise notify the other Lenders. Such request shall be
made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with
the requirements of Section 2.02, without regard to the minimum
and multiples specified therein for the principal amount of Base
Rate Loans, but subject to the unutilized portion of the Facility
and the conditions set forth in Section 4.02. The Swing Line
Lender shall furnish the Borrower with a copy of the applicable
Committed Loan Notice promptly after delivering such notice to
the Administrative Agent. Each Lender shall make an amount equal
to its Percentage of the amount specified in such Committed Loan
Notice available to the Administrative Agent in immediately
available funds for the account of the Swing Line Lender at the
Administrative Agent's Office not later than 1:00 p.m. on the day
specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrower in
such amount. The Administrative Agent shall remit the funds so
received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be
refinanced by such Borrowing in accordance with Section
2.04(c)(i), the request for Base Rate Loans submitted by the
Swing Line Lender as set forth herein shall be deemed to be a
request by the Swing Line Lender that each of the Lenders fund
its risk participation in the relevant Swing Line Loan and each
Lender's payment to the Administrative Agent for the account of
the Swing Line Lender pursuant to Section 2.04(c)(i) shall be
deemed payment in respect of such participation.
(iii) If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any
amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.04(c) by the time
specified in Section 2.04(c)(i), the Swing Line Lender shall be
entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to
the date on which such payment is immediately available to the
Swing Line Lender at a rate per annum equal to the greater of the
Federal Funds Rate and a rate determined by the Swing Line Lender
in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees
customarily charged by the Swing Line Lender in connection with
the foregoing. If such Lender pays such amount (with interest and
fees as aforesaid), the amount so paid (exclusive of interest and
fees) shall constitute such Lender's Revolving Credit Loan
included in the relevant Borrowing or funded participation in the
relevant Swing Line Loan, as the case may be. A certificate of
the
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Swing Line Lender submitted to any Lender (through the
Administrative Agent) with respect to any amounts owing under
this clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Revolving Credit
Loans or to purchase and fund risk participations in Swing Line
Loans pursuant to this Section 2.04(c) shall be absolute and
unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line
Lender, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, or
(C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided, however, that each
Lender's obligation to make Revolving Credit Loans pursuant to
this Section 2.04(c) is subject to the conditions set forth in
Section 4.02. No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to
repay Swing Line Loans, together with interest as provided
herein.
(d) Repayment of Participations.
(i) At any time after any Lender has purchased and funded
a risk participation in a Swing Line Loan, if the Swing Line
Lender receives any payment on account of such Swing Line Loan,
the Swing Line Lender will distribute to such Lender its
Percentage thereof in the same funds as those received by the
Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is
required to be returned by the Swing Line Lender under any of the
circumstances described in Section 10.05 (including pursuant to
any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its
Percentage thereof on demand of the Administrative Agent, plus
interest thereon from the date of such demand to the date such
amount is returned, at a rate per annum equal to the Federal
Funds Rate. The Administrative Agent will make such demand upon
the request of the Swing Line Lender. The obligations of the
Lenders under this clause shall survive the payment in full of
the Obligations and the termination of this Agreement.
(e) Interest for Account of Swing Line Lender. The Swing Line
Lender shall be responsible for invoicing the Borrower for interest on the
Swing Line Loans. Until each Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such Lender's
Percentage of any Swing Line Loan, interest in respect of such Percentage
shall be solely for the account of the Swing Line Lender.
(f) Payments Directly to Swing Line Lender. The Borrower
shall make all payments of principal and interest in respect of the Swing
Line Loans directly to the Swing Line Lender.
2.05. Prepayments.
(a) Optional.
(i) Subject to the last sentence of this Section
2.05(a)(i), the Borrower may, upon notice from the Borrower to
the Administrative Agent, at any time or from time to time
voluntarily prepay Revolving Loans in whole or in part without
premium or penalty; provided that (A) such notice must be
received by the Administrative Agent not later than
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11:00 a.m. (1) three Business Days prior to any date of
prepayment of Eurodollar Rate Loans, and (2) on the date of
prepayment of Base Rate Loans; (B) any prepayment of Eurodollar
Rate Loans shall be in a principal amount of at least $3,000,000
or a whole multiple of $500,000 in excess thereof (or, if less,
the entire principal amount of the respective Borrowing); and (C)
any prepayment of Base Rate Loans shall be in a principal amount
of $500,000 or a whole multiple of $100,000 in excess thereof or,
in each case, if less, the entire principal amount thereof then
outstanding. Each such notice shall specify the date and amount
of such prepayment and the Type(s) of Loans to be prepaid and, if
Eurodollar Rate Loans are to be prepaid, the Interest Period(s)
of such Loans. The Administrative Agent will promptly notify each
Lender of its receipt of each such notice, and of the amount of
such Lender's ratable portion of such prepayment (based on such
Lender's Percentage). If such notice is given by the Borrower,
the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date
specified therein. Any prepayment of a Eurodollar Rate Loan shall
be accompanied by all accrued interest on the amount prepaid,
together with any additional amounts required pursuant to Section
3.05.
(ii) The Borrower may, upon notice to the Swing Line Lender
(with a copy to the Administrative Agent), at any time or from
time to time, voluntarily prepay Swing Line Loans in whole or in
part without premium or penalty; provided that (A) such notice
must be received by the Swing Line Lender and the Administrative
Agent not later than 1:00 p.m. on the date of the prepayment, and
(B) any such prepayment shall be in a minimum principal amount of
$100,000 (or the amount outstanding, if less). Each such notice
shall specify the date and amount of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such
prepayment and the payment amount specified in such notice shall
be due and payable on the date specified therein.
(b) Mandatory.
(i) If for any reason the Total Outstandings at any time
exceed the lesser at such time of (x) the Facility, and (y) the
Borrowing Base, the Borrower shall immediately prepay Revolving
Credit Loans, Swing Line Loans and L/C Borrowings and/or Cash
Collateralize the L/C Obligations (other than the L/C Borrowings)
in an aggregate amount equal to such excess.
(ii) Prepayments of the Facility made pursuant to this
Section 2.05(b), first, shall be applied ratably to the L/C
Borrowings and the Swing Line Loans, second, shall be applied
ratably to the outstanding Revolving Credit Loans, and, third,
shall be used to Cash Collateralize the remaining L/C
Obligations. Upon the drawing of any Letter of Credit that has
been Cash Collateralized, the funds held as Cash Collateral shall
be applied (without any further action by or notice to or from
the Borrower or any other Loan Party) to reimburse the applicable
L/C Issuer or the Lenders, as applicable.
2.06. Termination or Reduction of Commitments.
(a) Optional. The Borrower may, upon notice to the
Administrative Agent, terminate in whole or in part the Facility, the
Letter of Credit Sublimit or the Swing Line Sublimit, or from time to time
permanently reduce the Facility, the Letter of Credit Sublimit or the Swing
Line Sublimit; provided that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to
the date of termination or reduction, (ii) any such partial reduction shall
be in an aggregate amount of $5,000,000 or any whole
46
multiple of $1,000,000 in excess thereof and (iii) the Borrower shall not
terminate or reduce (A) the Facility if, after giving effect thereto and to
any concurrent prepayments hereunder, the Total Outstandings would exceed
the Facility, (B) the Letter of Credit Sublimit if, after giving effect
thereto, the Outstanding Amount of L/C Obligations not fully Cash
Collateralized hereunder would exceed the Letter of Credit Sublimit, or (C)
the Swing Line Sublimit if, after giving effect thereto and to any
concurrent prepayments hereunder, the Outstanding Amount of Swing Line
Loans would exceed the Swing Line Sublimit.
(b) Application of Commitment Reductions; Payment of Fees. The
Administrative Agent will promptly notify the Lenders of any termination or
reduction of the Letter of Credit Sublimit, Swing Line Sublimit or the
Commitments under this Section 2.06. Upon any reduction of the Commitments,
the Commitment of each Lender shall be reduced by such Lender's Percentage
of such reduction amount. All fees in respect of the Facility accrued until
the effective date of any termination of the Facility shall be paid on the
effective date of such termination.
2.07 . Repayment of Loans.
(a) Revolving Credit Loans. The Borrower shall repay to the
Lenders on the Maturity Date the aggregate principal amount of all
Revolving Credit Loans outstanding on such date.
(b) Swing Line Loans. The Borrower shall repay each Swing Line
Loan on the earlier to occur of (i) within one Business Day of demand by
the Swing Line Lender and (ii) the Maturity Date.
2.08. Interest.
(a) Subject to the provisions of Section 2.08(b), (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
sum of (x) the Eurodollar Rate for such Interest Period plus (y) the
Applicable Rate; (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at
a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii)
each Swing Line Loan shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal
to (x) the Base Rate plus the Applicable Rate or (y) such other rate as
mutually agreed to by the Borrower and the Swing Line Lender.
(b) (i) If all or a portion of the principal amount of any Loan
or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such amount shall bear
interest at a rate per annum equal to (x) in the case of the Loans, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2% or (y) in the case of Reimbursement
Obligations, the rate applicable to Base Rate Loans plus 2%, and (ii) if
all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such amount shall bear interest at a rate per annum equal to
the rate then applicable to Base Rate Loans plus 2%, in each case, with
respect to clauses (i) and (ii) above, from the date of such non-payment
until such amount is paid in full (as well after as before judgment). Upon
the request of the Required Lenders, while any other Event of Default
exists (i.e. from the date such Event of Default occurred, it being
understood that with respect to an Event of Default related to
non-
47
compliance with Section 7.01, the date of occurrence shall be the
applicable test date, until the date such Event of Default is cured to the
satisfaction of the Required Lenders or waived pursuant to Section 10.01),
the Borrower shall pay interest on the principal amount of all outstanding
Obligations hereunder at the rates set forth above to the fullest extent
permitted by applicable Laws. Notwithstanding the foregoing, upon the
occurrence of an Event of Default under Sections 8.01(a) or 8.01(f), such
increase shall occur automatically. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable
upon demand.
(c) Interest on each Loan shall be due and payable in arrears on
each Interest Payment Date applicable thereto and at such other times as
may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.
2.09. Fees. In addition to certain fees described in Sections 2.03(i)
and (j):
(a) Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Lender, in accordance with its Percentage, a
commitment fee equal to the Applicable Commitment Fee Rate multiplied by
the actual daily amount by which the Facility exceeds the sum of the
Outstanding Amount of the Revolving Credit Loans and the Outstanding Amount
of the L/C Obligations. For purposes hereof, "Applicable Commitment Fee
Rate" means a per annum rate equal to (i) 0.75%, during the period
commencing on the Closing Date and ending on February 28, 2010, and (ii)
during each calendar month ending thereafter, (x) 0.50%, if the average
daily amount, if any, by which the Facility exceeded the sum of the
Outstanding Amount of the Revolving Credit Loans and the Outstanding Amount
of the L/C Obligations, in each case during the immediately preceding
calendar month, was equal to or less than 50% of the Facility, and (ii)
0.75%, if the average daily amount, if any, by which the Facility exceeded
the sum of the Outstanding Amount of the Revolving Credit Loans and the
Outstanding Amount of the L/C Obligations, in each case during the
immediately preceding calendar month, was greater than 50% of the Facility.
The commitment fee shall accrue at all times during the Availability
Period, including at any time during which one or more of the conditions in
Article IV is not met, and shall be due and payable quarterly in arrears on
the first Business Day after the end of each March, June, September and
December, commencing with the first such date to occur after the Closing
Date, and on the last day of the Availability Period. Notwithstanding
anything to the contrary contained herein, upon the request of the Required
Lenders, while any Event of Default exists, all overdue commitment fees
shall accrue interest thereon at the interest rate specified in Section
2.08(b).
(b) Other Fees.
(i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in
the amounts and at the times specified in the Fee Letter. Such
fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
(ii) The Borrower shall pay to the Administrative Agent
such fees as shall have been separately agreed upon in writing in
the amounts and at the times so specified. Such fees shall be
fully earned when paid and shall not be refundable for any reason
whatsoever.
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2.10. Computation of Interest and Fees. All computations of interest
for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as
the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.12(a), bear interest for one day. Each determination by the
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
2.11. Evidence of Debt.
(a) The Credit Extensions made by each Lender shall be evidenced
by one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Administrative Agent and each Lender shall be
conclusive absent manifest error of the amount of the Credit Extensions
made by the Lenders to the Borrower and the interest and payments thereon.
Any failure to so record or any error in doing so shall not, however, limit
or otherwise affect the obligation of the Borrower hereunder to pay any
amount owing with respect to the Obligations. In the event of any conflict
between the accounts and records maintained by any Lender and the accounts
and records of the Administrative Agent in respect of such matters, the
accounts and records of the Administrative Agent shall control in the
absence of manifest error. Upon the request of any Lender made through the
Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such
Lender's Loans in addition to such accounts or records. Each Lender may
attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect
thereto.
(b) In addition to the accounts and records referred to in
Section 2.11(a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the
purchases and sales by such Lender of participations in Letters of Credit
and Swing Line Loans. In the event of any conflict between the accounts and
records maintained by the Administrative Agent and the accounts and records
of any Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.
2.12. Payments Generally; Administrative Agent's Clawback.
(a) General. All payments to be made by the Borrower shall be
made without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein, all
payments by the Borrower hereunder shall be made to the Administrative
Agent, for the account of the respective Lenders to which such payment is
owed, at the Administrative Agent's Office in Dollars and in immediately
available funds not later than 2:00 p.m. on the date specified herein. The
Administrative Agent will promptly distribute to each Lender its Percentage
(or other applicable share as provided herein) of such payment in like
funds as received by wire transfer to such Lender's Lending Office. All
payments received by the Administrative Agent after 2:00 p.m. shall be
deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue. If any payment to be made by the
Borrower shall come due on a day other than a Business Day, payment shall
be made on the next following Business Day, and such extension of time
shall be reflected on computing interest or fees, as the case may be.
49
(b) (i) Funding by Lenders; Presumption by Administrative Agent.
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or,
in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the
date of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the
Administrative Agent may assume that such Lender has made such share
available on such date in accordance with Section 2.02 (or, in the case of
a Borrowing of Base Rate Loans, that such Lender has made such share
available in accordance with and at the time required by Section 2.02) and
may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the
Administrative Agent in connection with the foregoing, and (B) in the case
of a payment to be made by the Borrower, the interest rate applicable to
Base Rate Loans. If the Borrower and such Lender shall pay such interest to
the Administrative Agent for the same or an overlapping period, the
Administrative Agent shall promptly remit to the Borrower the amount of
such interest paid by the Borrower for such period. If such Lender pays its
share of the applicable Borrowing to the Administrative Agent, then the
amount so paid shall constitute such Lender's Loan included in such
Borrowing. Any payment by the Borrower shall be without prejudice to any
claim the Borrower may have against a Lender that shall have failed to make
such payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative
Agent. Unless the Administrative Agent shall have received notice
from the Borrower prior to the time at which any payment is due
to the Administrative Agent for the account of the Lenders or the
L/C Issuers hereunder that the Borrower will not make such
payment, the Administrative Agent may assume that the Borrower
has made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders
or the L/C Issuers, as the case may be, the amount due. In such
event, if the Borrower has not in fact made such payment, then
each of the Lenders or the L/C Issuers, as the case may be,
severally agrees to repay to the Administrative Agent forthwith
on demand the amount so distributed to such Lender or such L/C
Issuer, in immediately available funds 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 Rate and a rate
determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (b) shall be conclusive,
absent manifest error.
(c) Failure to Satisfy Conditions Precedent. If any Lender makes
available to the Administrative Agent funds for any Loan to be made by such
Lender as provided in the foregoing provisions of this Article II, and such
funds are not made available to the Borrower by the
50
Administrative Agent because the conditions to the applicable Credit
Extension set forth in Article IV are not satisfied or waived in accordance
with the terms hereof, the Administrative Agent shall return such funds (in
like funds as received from such Lender) to such Lender, without interest.
(d) Obligations of Lenders Several. The obligations of the
Lenders hereunder to make Revolving Credit Loans, to fund participations in
Letters of Credit and Swing Line Loans and to make payments pursuant to
Section 10.04(c) are several and not joint. The failure of any Lender to
make any Loan, to fund any such participation or to make any payment under
Section 10.04(c) on any date required hereunder shall not relieve any other
Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its
Loan, to purchase its participation or to make its payment under Section
10.04(c).
(e) Funding Source. Nothing herein shall be deemed to obligate
any Lender to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained
or will obtain the funds for any Loan in any particular place or manner.
(f) Insufficient Funds. With respect to any Loan Party's
Obligations hereunder, if at any time insufficient funds are received by
and available to the Administrative Agent to pay fully all amounts of
principal, L/C Borrowings, interest and fees then due hereunder with
respect to such Loan Party's Obligations, such funds shall be applied (i)
first, toward 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, toward payment
of principal and L/C Borrowings then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal and
L/C Borrowings then due to such parties, in each case with respect to the
Obligations of such Loan Party.
2.13. Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of (a) Obligations due and payable to such Lender hereunder and under
the other Loan Documents at such time in excess of its ratable share (according
to the proportion of (i) the amount of the Obligations due and payable to such
Lender at such time to (ii) the aggregate amount of the Obligations due and
payable to all Lenders hereunder and under the other Loan Documents at such
time) of payments on account of the Obligations due and payable to all Lenders
hereunder and under the other Loan Documents at such time obtained by all the
Lenders at such time or (b) Obligations owing (but not due and payable) to such
Lender hereunder and under the other Loan Documents at such time in excess of
its ratable share (according to the proportion of (i) the amount of the
Obligations owing (but not due and payable) to such Lender at such time to (ii)
the aggregate amount of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the other Loan Parties at such time) of payment on
account of the Obligations owing (but not due and payable) to all Lenders
hereunder and under the other Loan Documents at such time obtained by all of the
Lenders at such time then the Lender receiving such greater proportion shall (a)
notify the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Loans and subparticipations in L/C Obligations and
Swing Line Loans of the other Lenders, or make such other adjustments as shall
be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the Obligations then due and payable to the
Lenders or owing (but not due and payable) to the Lenders, as the case may be,
provided that:
(i) if any such participations or subparticipations are
purchased and all or any portion of the payment giving rise
thereto is recovered, such participations or
51
subparticipations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section shall not be construed
to apply to (A) any payment made by the Borrower pursuant to and
in accordance with the express terms of this Agreement or (B) any
payment obtained by a Lender as consideration for the assignment
of or sale of a participation in any of its Loans or
subparticipations in L/C Obligations or Swing Line Loans to any
assignee or participant, other than to the Borrower or any
Subsidiary thereof (as to which the provisions of this Section
shall apply) or any amounts received by any L/C Issuer and/or the
Swing Line Lender to secure the obligations of a Defaulting
Lender or an Impacted Lender to fund risk participations
hereunder.
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.
2.14. Increase in Facility.
(a) Increase. Provided there then exists no Default, upon notice
to the Administrative Agent, the Borrower may from time to time after the
Closing Date, increase the Facility by an amount (for all such requests)
not exceeding $25,000,000 such that the maximum amount of the Facility
shall at no time exceed $125,000,000; provided that any such increase shall
be in a minimum amount of $10,000,000 and in a whole multiple of $1,000,000
in excess thereof.
(b) Solicitation of Increase. To achieve the full amount of a
requested increase (i) the Administrative Agent with the consent of the
Borrower (which approval shall not be unreasonably withheld, delayed or
conditioned) or (ii) the Borrower with the consent of the Administrative
Agent (which approval shall not be unreasonably withheld, delayed or
conditioned) may solicit increased commitments from existing Lenders and/or
invite Eligible Assignees to become Lenders; provided, however that no
existing Lender shall be obligated or required to accept an increase in its
Commitment pursuant to this Section 2.14 unless it specifically consents to
such increase in writing and no Eligible Assignee (not already a Lender or
an Affiliate thereof) shall become a Lender unless its Commitment is at
least $5,000,000 (or such lesser amount as may be agreed by the Borrower
and the Administrative Agent). Any Lender or Eligible Assignee agreeing to
increase its Commitment or provide a new Commitment pursuant to this
Section 2.14 shall, in connection therewith, deliver to the Administrative
Agent a joinder agreement in form and substance satisfactory to the
Administrative Agent and its counsel.
(c) Effective Date and Allocations. If the Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the "Increase Effective Date")
and the final allocation of such increase. The Administrative Agent shall
promptly notify the Borrower and the Lenders of the final allocation of
such increase and the Increase Effective Date and Schedule 2.01 hereto
shall be deemed amended to reflect such increase and final allocation.
(d) Conditions to Effectiveness of Increase. As a condition
precedent to such increase, the Borrower shall deliver to the
Administrative Agent (i) a certificate of each Loan Party dated as of the
Increase Effective Date signed by a Responsible Officer of such Loan Party
52
(A) certifying and attaching the resolutions adopted by such Loan Party
approving or consenting to such increase and (B) a statement of
reaffirmation from the Loan Parties pursuant to which each Loan Party
ratifies this Agreement and the other Loan Documents and acknowledges and
reaffirms that, after giving effect to such increase, it is bound by all
terms of this Agreement and the other Loan Documents; (ii) a certificate of
the Borrower dated as of the Increase Effective Date signed by a
Responsible Officer of the Borrower certifying that, before and after
giving effect to such increase, (x) the representations and warranties
contained in Article V and the other Loan Documents are true and correct on
and as of the Increase Effective Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in
which case they are true and correct as of such earlier date, and except
that for purposes of this Section 2.14, the representations and warranties
contained in Section 5.01(a) shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (y) no Default or Event of Default has occurred or is
continuing, (iii) if any portion of the increase is being provided by a new
Lender, a Note in favor of such Lender if so requested by such Lender; and
(iv) payment of any applicable fees related to such increase (including,
without limitation, any applicable arrangement, upfront and/or
administrative fee). The Borrower shall prepay any Revolving Credit Loans
outstanding on the Increase Effective Date (and pay any additional amounts
required pursuant to Section 3.05) to the extent necessary to keep the
outstanding Revolving Credit Loans ratable with any revised Percentages
arising from any nonratable increase in the under this Section and/or, at
the discretion of the Administrative Agent, add the new Lenders to the
existing Borrowings.
(e) Amendments. The Administrative Agent is authorized to enter
into, on behalf of the Lenders and without the consent of any Lender, any
amendment to this Agreement or any other Loan Document as may be necessary
to solely incorporate the terms of any increase in the Commitments under
this Section 2.14.
(f) Conflicting Provisions. This Section shall supersede any
provisions in Section 2.13 or 10.01 to the contrary.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on
account of any obligation of the Borrower or Holdings hereunder or under
any other Loan Document shall be made free and clear of and without
reduction or withholding for any Indemnified Taxes or Other Taxes, provided
that if the Borrower or Holdings shall be required by applicable law to
deduct any Indemnified Taxes (including any Other Taxes) from such
payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, any
Lender or any L/C Issuer, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower or Holdings, as the case may be, shall make such deductions and
(iii) the Borrower or Holdings, as the case may be, shall timely pay the
full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
53
(b) Payment of Other Taxes by the Borrower and Holdings. Without
limiting the provisions of subsection (a) above, the Borrower and Holdings
shall timely pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) Indemnification by the Borrower and Holdings. The Borrower
and Holdings shall, jointly and severally, indemnify the Administrative
Agent, each Lender and each L/C Issuer, within 10 days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the
Administrative Agent, such Lender or such L/C Issuer, as the case may be,
and any penalties, interest and 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 the Borrower by a Lender or an L/C Issuer (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or
on behalf of a Lender or an L/C Issuer, shall be conclusive absent manifest
error.
(d) Evidence of Payments. As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by the Borrower or Holdings, as
the case may be, the Borrower shall deliver 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) Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the
jurisdiction in which the Borrower or Holdings, as applicable, is resident
for tax purposes, or any treaty to which such jurisdiction is a party, with
respect to payments hereunder or under any other Loan Document shall
deliver to the Borrower or Holdings, as applicable (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, Holdings or the Administrative Agent,
such properly completed and executed documentation prescribed by applicable
law as will permit such payments to be made without withholding or at a
reduced rate of withholding. In addition, any Lender, if requested by the
Borrower, Holdings or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower, Holdings or the Administrative Agent as will enable the Borrower,
Holdings or the Administrative Agent to determine whether or not such
Lender is subject to backup withholding or information reporting
requirements.
Without limiting the generality of the foregoing, if the Borrower or
Holdings, as the case may be, is resident for tax purposes in the United States,
any Foreign Lender shall deliver to the Borrower, Holdings and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the
Borrower, Holdings or the Administrative Agent, but only if such Foreign Lender
is legally entitled to do so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service
Form W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States is a party,
(ii) duly completed copies of Internal Revenue Service Form
W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits
of the exemption for portfolio interest under section 881(c) of
the Code, (A) a certificate to the effect that
54
such Foreign Lender is not (1) a "bank" within the meaning of
section 881(c)(3)(A) of the Code, (2) a "10 percent shareholder"
of the Borrower or Holdings within the meaning of section
881(c)(3)(B) of the Code, or (3) a "controlled foreign
corporation" described in section 881(c)(3)(C) of the Code and
(B) duly completed copies of Internal Revenue Service Form
W-8BEN, or
(iv) any other form prescribed by applicable law as a basis
for claiming exemption from or a reduction in United States
Federal withholding tax duly completed together with such
supplementary documentation as may be prescribed by applicable
law to permit the Borrower to determine the withholding or
deduction required to be made.
Without limiting the obligations of the Lenders set forth above regarding
delivery of certain forms and documents to establish each Lender's status for
U.S. withholding tax purposes, each Lender agrees promptly to deliver to the
Administrative Agent or the Borrower, as the Administrative Agent or the
Borrower shall reasonably request, and in a timely fashion, such other documents
and forms required by any relevant taxing authorities under the Laws of any
other jurisdiction, duly executed and completed by such Lender, as are required
under such Laws to confirm such Lender's entitlement to any available exemption
from, or reduction of, applicable withholding taxes in respect of all payments
to be made to such Lender outside of the U.S. by the Borrower pursuant to this
Agreement or otherwise to establish such Lender's status for withholding tax
purposes in such other jurisdiction. Each Lender shall promptly (i) notify the
Administrative Agent of any change in circumstances which would modify or render
invalid any such claimed exemption or reduction, and (ii) take such steps as
shall not be materially disadvantageous to it, in the reasonable judgment of
such Lender, and as may be reasonably necessary (including the re-designation of
its Lending Office) to avoid any requirement of applicable Laws of any such
jurisdiction that the Borrower make any deduction or withholding for taxes from
amounts payable to such Lender. Additionally, the Borrower shall promptly
deliver to the Administrative Agent or any Lender, as the Administrative Agent
or such Lender shall reasonably request, and in a timely fashion, such documents
and forms required by any relevant taxing authorities under the Laws of any
jurisdiction, duly executed and completed by the Borrower, as are required to be
furnished by such Lender or the Administrative Agent under such Laws in
connection with any payment by the Administrative Agent or any Lender of Taxes
or Other Taxes, or otherwise in connection with the Loan Documents, with respect
to such jurisdiction.
(f) Treatment of Certain Refunds. If the Administrative Agent,
any Lender or any L/C Issuer determines, in its sole discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or Holdings, as the case may be, or with
respect to which the Borrower or Holdings, as the case may be, has paid
additional amounts pursuant to this Section, it shall pay to the Borrower
or Holdings, as the case may be, an amount equal to such refund (but only
to the extent of indemnity payments made, or additional amounts paid, by
the Borrower or Holdings under this Section with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses
of the Administrative Agent, such Lender or such L/C Issuer, as the case
may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the
Borrower or Holdings, as the case may be, upon the request of the
Administrative Agent, such Lender or such L/C Issuer, agrees to repay the
amount paid over to the Borrower or Holdings, as the case may be, (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent, such Lender or such L/C Issuer if
the Administrative Agent, such Lender or such L/C Issuer is required to
repay such refund to such Governmental Authority. This subsection shall not
be construed to require the Administrative Agent, any Lender or any L/C
Issuer to make available its tax returns (or any other information relating
to its taxes that it deems confidential) to the Borrower, Holdings or any
other Person.
55
3.02. Illegality. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, or any Governmental Authority has imposed material restrictions
on the authority of such Lender to purchase or sell, or to take deposits of,
Dollars in the applicable interbank market, then, on notice thereof by such
Lender to the Borrower through the Administrative Agent, any obligation of such
Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans
to Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrower that the circumstances giving rise to such
determination no longer exist. Upon receipt of such notice, the Borrower shall,
upon demand from such Lender (with a copy to the Administrative Agent), prepay
or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate
Loans, either on the last day of the Interest Period therefor, if such Lender
may lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Rate Loans. Notwithstanding the foregoing and despite the illegality
for such a Lender to make, maintain or fund Eurodollar Rate Loans or Base Rate
Loans as to which the interest rate is determined with reference to the
Eurodollar Rate, that Lender shall remain committed to make Base Rate Loans and
shall be entitled to recover interest at the Base Rate; provided that, upon any
such notice by any Lender pursuant to this Section 3.02 of the suspension of its
obligation to make or continue Eurodollar Loans or to convert Base Rate Loans to
Eurodollar Loans, the Base Rate shall be determined without reference to clause
(c) of the definition of "Base Rate", and all Base Rate Loans shall be subject
to the Base Rate (as so determined without reference to clause (c) of said
definition) until such time as such suspension of the obligation of such Lender
to make or continue Eurodollar Loans or to convert Base Rate Loans to Eurodollar
Loans shall cease to be in effect. Upon any such prepayment or conversion, the
Borrower shall also pay accrued interest on the amount so prepaid or converted.
3.03. Inability to Determine Rates. If the Required Lenders determine
that for any reason in connection with any request for a Loan or a conversion to
or continuation thereof that (a) deposits are not being offered to banks in the
offshore interbank market for such currency for the applicable amount and
Interest Period of such Loan, (b) adequate and reasonable means do not exist for
determining the Eurodollar Rate for any requested Interest Period with respect
to a proposed Eurodollar Rate Loan or in connection with a Base Rate Loan, or
(c) the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan or in connection with a Eurodollar Rate Loan does
not adequately and fairly reflect the cost to such Lenders of funding such Loan,
the Administrative Agent will promptly so notify the Borrower and each Lender.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Rate
Loans shall be suspended, the Base Rate shall be determined without reference to
clause (c) of the definition of "Base Rate" and all Base Rate Loans shall be
subject to the Base Rate (as so determined without reference to clause (c) of
said definition) until the Administrative Agent (upon the instruction of the
Required Lenders) revokes such notice. Upon receipt of such notice, the Borrower
may revoke any pending request for a Borrowing of, conversion to or continuation
of Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Borrowing of Base Rate Loans (with the Base Rate
determined without reference to clause (c) of the definition of "Base Rate") in
the amount specified therein.
3.04. Increased Costs; Reserves on Eurodollar Rate Loans.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender or any L/C Issuer;
56
(ii) subject any Lender or any L/C Issuer to any tax of
any kind whatsoever with respect to this Agreement, any Letter of
Credit, any participation in a Letter of Credit or any Eurodollar
Rate Loan made by it, or change the basis of taxation of payments
to such Lender or any L/C Issuer in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax
payable by such Lender or such L/C Issuer); or
(iii) impose on any Lender or any L/C Issuer or the London
interbank market any other condition, cost or expense affecting
this Agreement or Eurodollar Rate 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 Rate Loan, or to
increase the cost to such Lender or such L/C Issuer of participating in,
issuing or maintaining any Letter of Credit (or of maintaining its
obligation to participate in or to issue any Letter of Credit), or to
reduce the amount of any sum received or receivable by such Lender or such
L/C Issuer hereunder (whether of principal, interest or any other amount)
then, upon request of such Lender or such L/C Issuer, the Borrower will pay
to such Lender or such L/C Issuer, as the case may be, such additional
amount or amounts as will compensate such Lender or such L/C Issuer, as the
case may be, for such additional costs incurred or reduction suffered;
provided that such increase in cost to such Lender is being charged to
customers of such Lender generally.
(b) Capital Requirements. If any Lender or any L/C Issuer
determines that any Change in Law affecting such Lender or such L/C Issuer
or any Lending Office of such Lender or such Lender's or such L/C Issuer's
holding company, if any, regarding capital requirements has or would have
the effect of reducing the rate of return on such Lender's or such L/C
Issuer's capital or on the capital of such Lender's or such L/C Issuer's
holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by
such L/C Issuer, to a level below that which such Lender or such L/C Issuer
or such Lender's or such L/C Issuer's holding company would have achieved
but for such Change in Law (taking into consideration such Lender's or such
L/C Issuer's policies and the policies of such Lender's or such L/C
Issuer's holding company with respect to capital adequacy), then from time
to time the Borrower will pay to such Lender or such L/C Issuer, as the
case may be, such additional amount or amounts as will compensate such
Lender or such L/C Issuer or such Lender's or such L/C Issuer's holding
company for any such reduction suffered; provided that such compensation
for reductions suffered by such Lender is being charged to customers of
such Lender generally.
(c) Certificates for Reimbursement. A certificate of a Lender or
an L/C Issuer setting forth in reasonable detail the amount or amounts
necessary to compensate such Lender or such L/C Issuer or its holding
company, as the case may be, as specified in subsection (a), (b) or (d) of
this Section and delivered to the. Borrower shall be conclusive absent
manifest error. The Borrower shall pay such Lender or such L/C Issuer, as
the case may be, the amount shown as due on any such certificate within 10
days after receipt thereof.
(d) Reserves on Eurodollar Rate Loans. The Borrower shall pay to
each Lender, as long as such Lender shall be required to maintain reserves
with respect to liabilities or assets consisting of or including Eurodollar
funds or deposits (currently known as "Eurodollar liabilities"), additional
interest on the unpaid principal amount of each Eurodollar Rate Loan made
in Dollars equal to the actual costs of such reserves allocated to such
Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive absent
57
manifest error), which shall be due and payable on each date on which
interest is payable on such Loan, provided the Borrower shall have received
at least 10 days' prior notice (with a copy to the Administrative Agent) of
such additional interest from such Lender in reasonable detail; and,
provided, further, that such additional interest is being charged to
customers of such Lender generally. If a Lender fails to give notice 10
days prior to the relevant Interest Payment Date, such additional interest
shall be due and payable 10 days from receipt of such notice.
(e) Delay in Requests. Failure or delay on the part of any
Lender or any L/C Issuer to demand compensation pursuant to the foregoing
provisions of this Section (or Sections 3.01 or 3.05) shall not constitute
a waiver of such Lender's or such L/C Issuer's right to demand such
compensation, provided that the Borrower shall not be required to
compensate a Lender or an L/C Issuer pursuant to the foregoing provisions
of this Section (or Sections 3.01 or 3.05) for any increased costs incurred
or reductions suffered more than six months prior to the date that such
Lender or such L/C Issuer, as the case may be, notifies the Borrower of the
Change in Law or other event giving rise to such increased costs or
reductions and of such Lender's or such L/C Issuer's intention to claim
compensation therefor (except that, if the Change in Law or other event
giving rise to such increased costs or reductions is retroactive, then the
six-month period referred to above shall be extended to include the period
of retroactive effect thereof).
3.05. Compensation for Losses. Upon demand of any Lender (with a copy
to the Administrative Agent) from time to time, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense (but not loss of anticipated profits or margin) incurred by it as a
result of:
(a) any continuation, conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or
convert any Loan other than a Base Rate Loan on the date or in the amount
notified by the Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than
the last day of the Interest Period therefor as a result of a request by
the Borrower pursuant to Section 10.13;
including, with respect to clauses (a), (b) and (c) above, any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained. The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing; provided that such
administrative fees are being charged to customers of such Lender generally.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit
or other borrowing in the London interbank eurodollar market for a comparable
amount and for a comparable period, whether or not such Eurodollar Rate Loan was
in fact so funded.
3.06. Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender
requests compensation under Section 3.04, or the Borrower is required to
pay any additional amount to any Lender or
58
any Governmental Authority for the account of any Lender pursuant to
Section 3.01, or if any Lender gives a notice pursuant to Section 3.02,
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 judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to
Section 3.01 or 3.04, as the case may be, in the future, or eliminate the
need for the notice pursuant to Section 3.02, as applicable, and (ii) in
each case, would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by
any Lender in connection with any such designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation
under Section 3.04, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 3.01, the Borrower may replace such Lender in
accordance with Section 10.13.
3.07. Survival. Subject to Section 3.04(e), all of the Borrower's
obligations under this Article III shall survive termination of the Commitments
and repayment of all other Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01. Conditions of Initial Credit Extension. The obligation of any
L/C Issuer and each Lender to make its initial Credit Extension hereunder is
subject to satisfaction of the following conditions precedent on the date of the
initial Credit Extensions under this Agreement:
(a) The Administrative Agent's receipt of the following, each of
which shall be originals or electronic copies (followed promptly by
originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Loan Party, each dated the Closing Date
(or, in the case of certificates of governmental officials, a recent date
before the Closing Date) and each in form and substance satisfactory to the
Administrative Agent and each of the Lenders:
(i) executed counterparts of this Agreement, in the number
requested by the Administrative Agent;
(ii) a Note executed by the Borrower in favor of each
Lender requesting a Note;
(iii) guarantee, pledge and security agreement, in form and
substance reasonably satisfactory to the Administrative Agent (x)
as duly executed by the Domestic Subsidiaries of Borrower (as it
may be amended, restated, modified and/or supplemented from time
to time, the "Guarantee and Collateral Agreement"), and (y) as
duly executed by Appleton Canada (as it may be amended, restated,
modified and/or supplemented from time to time, the "Guarantee
and Collateral Agreement (Canada)"; together with the Guarantee
and Collateral Agreement, collectively, the "Guarantee and
Collateral Agreements"), together with:
59
(A) certificates representing the Pledged Stock
referred to therein accompanied by undated stock powers
executed in blank and instruments evidencing any pledged
debt instruments indorsed in blank,
(B) a completed "perfection certificate", dated on or
before the date of the initial Credit Extension, describing
the assets of the Loan Parties substantially in the form
furnished by or on behalf of the Administrative Agent prior
to such date;
(C) evidence reasonably satisfactory to the
Administrative Agent that all other actions, recordings and
filings of or with respect to the Guarantee and Collateral
Agreements that the Administrative Agent may deem necessary
or desirable in order to perfect the Liens created thereby
are capable of being completed promptly following the
initial Credit Extensions hereunder,
(D) the control agreements with respect to Deposit
Accounts and Securities Accounts, in each case as referred
to in the Guarantee and Collateral Agreements (to the extent
required by the Administrative Agent), duly executed by the
appropriate parties,
(E) evidence that all other action that the
Administrative Agent may reasonably deem necessary or
desirable in order to perfect the Liens created under the
Guarantee and Collateral Agreements has been taken
(including receipt of duly executed payoff letters, UCC-3
termination statements and any landlords' and bailees'
waiver and consent agreements reasonably requested by the
Administrative Agent (to the extent the same are obtainable
using commercially reasonable efforts).
(iv) Mortgages, etc.
(A) The Administrative Agent shall have received a
Mortgage with respect to each Mortgaged Property, executed
and delivered by a duly authorized officer of each party
thereto.
(B) The Administrative Agent shall have received for
each Mortgaged Property either (a) a recent or updated
survey of the Mortgaged Property, in form and substance
reasonably satisfactory to the Administrative Agent or (b)
an existing survey of the Mortgaged Property (without
update), together with an affidavit of no change (or with
changes noted therein to the extent the Administrative Agent
has not objected), so long as the title insurance company
issuing the policy referred to in clause (C) below (the
"Title Insurance Company") shall agree to issue the
mortgagee's title insurance policy, excluding the standard
survey exception, but including the survey dependent
endorsements.
(C) The Administrative Agent shall have received in
respect of each Mortgaged Property a mortgagee's title
insurance policy (or policies) or marked up unconditional
binder for such insurance. Each such policy shall (1) be in
an amount reasonably satisfactory to the Administrative
Agent; (2) be issued at ordinary rates; (3) insure that the
Mortgage insured thereby creates a valid Lien on such
Mortgaged Property free and clear of all defects and
encumbrances, except as permitted under Section 7.03 hereof;
(4) name the Administrative
60
Agent for the benefit of the Lenders as the insured
thereunder; (5) be in the form of ALTA Loan Policy - 2006
(or equivalent policies); (6) contain such endorsements and
affirmative coverage as the Administrative Agent may
reasonably request and (7) be issued by First American Title
Insurance Company. The Administrative Agent shall have
received evidence reasonably satisfactory to it that all
premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any,
have been paid.
(D) If requested by the Administrative Agent and the
Mortgaged Property is located in a special flood hazard area
under the National Flood Insurance Act of 1968, the
Administrative Agent shall have received (1) a policy of
flood insurance that (a) covers any parcel of improved real
property that is encumbered by the applicable Mortgage, (b)
is written in an amount not less than the outstanding
principal amount of the indebtedness secured by such
Mortgage that is reasonably allocable to such real property
or the maximum limit of coverage made available with respect
to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (c) has a term
ending not later than the maturity of the Indebtedness
secured by such Mortgage and (2) confirmation that the
Borrower has received the notice required pursuant to
Section 208(e)(3) of Regulation H of the FRB.
(E) The Administrative Agent shall have received a
copy of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies
referred to in clause (C) above and a copy of all other
material documents affecting the Mortgaged Properties.
(v) an intellectual property security agreement, in form
and substance reasonably satisfactory to the Administrative Agent
(together with each other intellectual property security
agreement and intellectual property security agreement
supplement, in each case as amended, the "Intellectual Property
Security Agreement"), duly executed by each U.S. Loan Party,
together with evidence that all action that the Administrative
Agent may reasonably deem necessary or desirable in order to
perfect the Liens created under the Intellectual Property
Security Agreement has been taken;
(vi) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Loan Party as the Administrative Agent may
reasonably require evidencing the identity, authority and
capacity of each Responsible Officer thereof authorized to act as
a Responsible Officer in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party or is to
be a party;
(vii) such documents and certifications as the
Administrative Agent may reasonably require to evidence that each
Loan Party is duly organized or formed, and that each of the
Borrower, Holdings and the other Guarantors is validly existing,
in good standing and qualified to engage in business in each
jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such
qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;
(viii) a favorable opinion of White & Case LLP, counsel to
the Loan Parties, addressed to the Administrative Agent and each
Lender, as to the matters concerning the
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Loan Parties and the Loan Documents in form and substance
reasonably satisfactory to the Administrative Agent;
(ix) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that there has been no event or
circumstance since January 3, 2009 that has had or could be
reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect; and (B) no action, suit,
investigation or proceeding is pending, or to the knowledge of
the Borrower, threatened in any court or before any arbitrator or
governmental authority that could reasonably be expected to have
a Material Adverse Effect;
(x) a Borrowing Base Certificate signed by a Responsible
Officer setting forth a calculation of the Borrowing Base as of
the Closing Date, based on information as at January 31, 2010;
(xi) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in
effect, together with the certificates of insurance, naming the
Administrative Agent, on behalf of the Lenders, as an additional
insured or loss payee, as the case may be, under all insurance
policies maintained with respect to the assets and properties of
the Loan Parties (other than Foreign Subsidiaries) that
constitutes Collateral;
(xii) evidence of the receipt by the Borrower in immediately
available Dollars of proceeds of the issuance of the First Lien
Notes in an aggregate amount not less than $275,000,000;
(xiii) evidence that the Existing Credit Agreement has been,
or concurrently with the Closing Date is being, terminated and
all Liens securing obligations under the Existing Credit
Agreement have been, or concurrently with the Closing Date are
being, released;
(xiv) the First Lien Note Intercreditor Agreement duly
executed by each of the parties thereto (other than the
Administrative Agent) and in form and substance satisfactory to
the Administrative Agent;
(xv) such other assurances, certificates, documents,
consents or opinions as the Administrative Agent, any L/C Issuer,
the Swing Line Lender or any Lender reasonably may require.
(b) (i) All fees required to be paid to the Administrative Agent
and the Arranger on or before the Closing Date shall have been paid and
(ii) all fees required to be paid to the Administrative Agent for the
benefit of the Lenders on or before the Closing Date shall have been paid.
(c) Unless waived by the Administrative Agent, the Borrower
shall have paid all fees, charges and disbursements of counsel to the
Administrative Agent (directly to such counsel if requested by the
Administrative Agent) to the extent invoiced prior to the Closing Date,
plus such additional amounts of such fees, charges and disbursements as
shall constitute its reasonable estimate of such fees, charges and
disbursements incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a
final settling of accounts between the Borrower and the Administrative
Agent).
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(d) After giving effect to all Credit Extensions made on the
Closing Date, Excess Availability shall be equal to or greater than 50% of
the Borrowing Base set forth in the initial Borrowing Base Certificate
delivered by the Borrower pursuant to Section 4.01(a)(x).
Without limiting the generality of the provisions of the last paragraph of
Section 9.03, for purposes of determining compliance with the conditions
specified in this Section 4.01, each of the Administrative Agent and each Lender
that has signed this Agreement shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to a
Lender unless, in the case of a Lender, the Administrative Agent shall have
received notice from such Lender prior to the proposed Closing Date specifying
its objection thereto.
4.02. Conditions to all Credit Extensions. The obligation of each
Lender to honor any Request for Credit Extension (other than a Committed Loan
Notice requesting only a conversion of Loans to the other Type, or a
continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:
(a) The representations and warranties of the Borrower and each
other Loan Party contained in Article V or any other Loan Document shall be
true and correct in all material respects (or, if the applicable
representation and warranty is already subject to a materiality standard,
shall be true and correct in all respects) on and as of the date of such
Credit Extension, except to the extent that such representations and
warranties specifically relate to an earlier date, in which case they shall
be true and correct in all material respects (or, if the applicable
representation and warranty is already subject to a materiality standard,
shall be true and correct in all respects) as of such earlier date, and
except that for purposes of this Section 4.02, the representations and
warranties contained in Section 5.01(a) shall be deemed to refer to the
most recent statements furnished pursuant to Sections 6.01(a) and (b),
respectively.
(b) No Default shall then exist, or shall exist after giving pro
forma effect to such proposed Credit Extension and any application of the
proceeds thereof (including, without limitation, if such proposed Credit
Extension would result in the commencement of an Availability Trigger
Period, any Event of Default that would rise under Section 8.01(c) as a
result of the Loan Parties' failure to comply with Section 7.01 as of the
end of the next quarterly fiscal period ending thereafter).
(c) The Administrative Agent and, if applicable, the Swing Line
Lender and the applicable L/C Issuer shall have received a Request for
Credit Extension in accordance with the requirements hereof.
Each Request for Credit Extension (other than a Committed Loan Notice
requesting only a conversion of Loans to the other Type or a continuation of
Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a
representation and warranty that the relevant conditions specified in Sections
4.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, each of Holdings and the Borrower hereby, jointly and severally,
represents and warrants to the Administrative Agent, each L/C Issuer and each
Lender that:
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5.01. Financial Condition.
(a) The audited consolidated balance sheets of Holdings and its
consolidated subsidiaries as at January 3, 2009, and the related
consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by and accompanied by an unqualified report
from Holdings' independent auditor (such auditor to be a nationally
recognized auditing firm) present fairly in all material respects the
consolidated financial condition of Holdings and its consolidated
subsidiaries as at such dates, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years
then ended. The unaudited consolidated balance sheet of Holdings and its
consolidated subsidiaries as at October 4, 2009, and the related unaudited
consolidated statements of income and cash flows for the twelve-month
period ended on such date, present fairly in all material respects the
consolidated financial condition of Holdings and its consolidated
subsidiaries as at such date, and the consolidated results of its
operations and its consolidated cash flows for the quarterly period then
ended (subject to normal year-end audit adjustments and the absence of
footnotes). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). During the
period from the date of the most recent audited consolidated balance sheet
delivered pursuant to this Section 5.01(a) to and including the Closing
Date, there has been no Disposition by Holdings of any material part of its
business or property except for the sale of all of the issued and
outstanding equity securities of C & H Packaging, Inc., a Wisconsin
corporation, pursuant to the terms of that certain Stock Purchase Agreement
dated December 18, 2009. Without limiting the foregoing, on the Closing
Date the AIG Credit Support and the other Fox River Indemnity Arrangements
remain in full force and effect as described in Holdings' Form 10-K filing
for the fiscal year ended January 3, 2009.
(b) The unaudited and unadjusted consolidated balance sheet of
Holdings and its consolidated Subsidiaries as at January 2, 2010, and the
related unaudited unadjusted consolidated statements of income and cash
flows for the twelve-month period ended on such date, present fairly in all
material respects the consolidated financial condition of Holdings and its
consolidated Subsidiaries as at such date, and the consolidated results of
its operations and its consolidated cash flows for the twelve-month period
then ended (subject to year-end audit adjustments). The unaudited and
unadjusted financial statements have been prepared in accordance with GAAP
applied consistently throughout the periods involved (subject to normal
year-end audit adjustments and the absence of footnotes).
5.02. No Change. Since January 3, 2009, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
5.03. Corporate Existence; Compliance with Law. Each Group Member (a)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the legal
right, to own and operate its property, to lease the property it operates as
lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign entity and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect,
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
5.04. Power; Authorization; Enforceable Obligations. Each Loan Party
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and, in the case of the Borrower, to
obtain extensions of credit hereunder. Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan
64
Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the Transactions and the extensions of credit hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement or any of the Loan Documents, except (i) consents, authorizations,
filings and notices, which have been obtained or made and are in full force and
effect, (ii) filings required by, or to perfect the security interests granted
pursuant to, the various Security Documents and (iii) the filings referred to in
Section 5.19. Each Loan Document has been duly executed and delivered on behalf
of each Loan Party that is a party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party that is a party thereto, enforceable against each
such Loan Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
5.05. No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
material Requirement of Law or Contractual Obligation of Holdings, the Borrower
or any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any such Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). No Requirement of Law
or Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
5.06. Litigation. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of Holdings or the Borrower, threatened by or against Holdings, the Borrower or
any of its Subsidiaries or against any of their respective properties or
revenues that, either singly or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
5.07. No Default. Neither Holdings, the Borrower nor any of their
respective Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect that could reasonably be expected to have
a Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
5.08. Ownership of Property; Liens; Insurance. Each of Holdings, the
Borrower and their respective Subsidiaries has, except to the extent failure
thereof could not reasonably be expected to have a Material Adverse Effect,
title in fee simple to, or a valid leasehold interest in, all its real property
(as more fully described on Schedule 5.08), and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 7.03. The properties of the
Loan Parties and their Subsidiaries are insured with financially sound and
reputable insurance companies (as reasonably determined by the Borrower at the
time the insurance is taken) not Affiliates of the Borrower, in such amounts
(after giving effect to any self-insurance compatible with the following
standards), with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Borrower or the applicable Subsidiary operates.
5.09. Intellectual Property. Holdings, the Borrower and each of its
Subsidiaries owns, or is licensed to use, all Intellectual Property necessary
for the conduct of its business as currently conducted, except where the failure
to own or license such Intellectual Property could not reasonably be expected to
have a Material
65
Adverse Effect. No claim, which could reasonably be expected to have a Material
Adverse Effect, has been asserted and is pending by any Person challenging or
questioning the use of any Intellectual Property or the validity or
effectiveness of any Intellectual Property, nor does Holdings or the Borrower
know of any valid basis for any such claim. To the best of Holdings' and the
Borrower's knowledge, the use of Intellectual Property by Holdings, the Borrower
and its Subsidiaries does not infringe on the rights of any Person in any
material respect.
5.10. Taxes. Each of Holdings, the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other material taxes, fees or other charges imposed
on it or any of its property by any Governmental Authority (other than any the
amount or validity of that are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP (to the extent required thereby) have been provided on the books of
Holdings, the Borrower or its Subsidiaries, as the case may be); no tax Lien
(except to the extent permitted pursuant to Section 7.03) has been filed, and,
to the knowledge of Holdings and the Borrower, no claim has been asserted, with
respect to any such tax, fee or other charge, which Lien or claim, could
reasonably be expected to have a Material Adverse Effect.
5.11. Federal Regulations. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the FRB. If requested
by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1, as applicable,
referred to in Regulation U of the FRB.
5.12. Labor Matters. Except as, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect: (a) there are no strikes or
other labor disputes against any Group Member pending or, to the knowledge
of Holdings or the Borrower, threatened; (b) hours worked by and payment
made to employees of each Group Member have not been in violation of the
Fair Labor Standards Act or any other applicable Requirement of Law dealing
with such matters; and (c) all payments due from any Group Member on
account of employee wages and employee health and welfare insurance have
been paid or accrued as a liability on the books of the relevant Group
Member.
5.13. ERISA.
(a) Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302
of ERISA) has occurred during the five-year period prior to the Closing
Date with respect to any Plan, and as of the Closing Date each Plan has
complied in all material respects with the applicable provisions of ERISA,
the Code and all other applicable laws and regulations. No termination of a
Single Employer Plan has occurred, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period. The present value of all
accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the Closing Date, exceed the value of the assets of
such Plan allocable to such accrued benefits by a material amount. Neither
the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan that has resulted or could
reasonably be expected to result in a liability under ERISA which could
reasonably be expected to have a Material Adverse Effect. No such
Multiemployer Plan is in Reorganization or Insolvent.
66
(b) Favorable determination letters have been received prior to
the Closing Date from the Internal Revenue Service with respect to each
Plan which at such time is intended to comply with the provisions of
Section 401(a) of the Code. Prior to the Closing Date, the ESOP received a
favorable determination letter from the IRS that the ESOP is tax-qualified
and tax exempt under Sections 401(a) and 501(a), respectively, of the Code
and that the ESOP Component is an "employee stock ownership plan", within
the meaning of Section 4975(e)(7) of the Code.
(c) To Holdings' and the Borrower's knowledge, as of the Closing
Date neither Holdings nor the Borrower nor any Commonly Controlled Entity,
nor any trustee, administrator, or fiduciary of any of the Plans, has (i)
engaged in a "prohibited transaction," as that term is defined in Section
4975 of the Code or Section 406 of ERISA, which could directly or
indirectly subject the applicable Plan or trust or Holdings, the Borrower
or any Commonly Controlled Entity to any liability for a tax or penalty
imposed by Section 4975 of the Code or Section 502(i) of ERISA, or (ii)
committed a breach of its fiduciary duties (as defined in Section 404 of
ERISA) which could directly or indirectly subject the applicable Plan or
trust or Holdings, the Borrower, or any Commonly Controlled Entity to any
liability under Section 502 of ERISA.
5.14. Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the FRB) that limits its ability to incur Indebtedness, other
than with respect to any such regulations of general application to companies
generally.
5.15. Subsidiaries. On the Closing Date, (a) Schedule 5.15 sets forth
the name and jurisdiction of incorporation of each Subsidiary of Holdings and,
as to each such Subsidiary, the percentage of each class of Capital Stock owned
by any Loan Party and (b) except as set forth in the ESOP Documentation, there
are no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors' qualifying shares) of any nature relating to any
Capital Stock of Holdings, the Borrower or any of their Subsidiaries, except as
created by the Loan Documents.
5.16. Use of Proceeds. The proceeds of the Revolving Credit Loans shall
be used to (i) finance the repayment of the obligations of the Borrower under
the Existing Credit Agreement, (ii) for the issuance of standby letters of
credit and (iii) for working capital, Capital Expenditures and general corporate
purposes of the Borrower and its Subsidiaries.
5.17. Environmental Matters. Except as, in the aggregate (excluding
matters set forth on Schedule 5.17 to the extent described therein), could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by
any Group Member (the "Properties") do not contain, and have not previously
contained, any Materials of Environmental Concern in amounts or
concentrations or under circumstances that constitute or constituted a
violation of, or could give rise to liability under, any Environmental Law;
(b) no Group Member has received or is aware of any notice of
violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental
Laws with regard to any of the Properties or the business operated by any
Group Member (the "Business"), nor does Holdings or the Borrower have
knowledge or reason to believe that any such notice will be received or is
being threatened;
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(c) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or to a
location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could give rise to liability under, any applicable
Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of Holdings and the Borrower,
threatened, under any Environmental Law to which any Group Member is or
will be named as a party with respect to the Properties or the Business,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to the
Properties or the Business;
(e) there has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of any Group Member in connection with the
Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could give rise to liability under
Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and
(g) no Group Member has assumed any liability of any other
Person under Environmental Laws.
5.18. Accuracy of Information, etc. No statement or information, other
than the projections and pro forma financial information, contained in this
Agreement, any other Loan Document or any other document, certificate or
statement furnished by or on behalf of any Loan Party to the Administrative
Agent or the Lenders, or any of them, for use in connection with the
Transactions or the other transactions contemplated by this Agreement or the
other Loan Documents, contained as of the date such statement, information,
document or certificate was so furnished any untrue statement of a material fact
or, in the case of all such information (taken as a whole) furnished on or prior
to the Closing Date, omitted to state a material fact necessary to make the
statements contained herein or therein at such time, taken as a whole, not
misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the date hereof,
there is no fact known to any Loan Party that could reasonably be expected to
have a Material Adverse Effect that has not been expressly disclosed herein, in
the other Loan Documents or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection with
the Transactions or the other transactions contemplated hereby and by the other
Loan Documents.
5.19. Security Documents.
(a) The Guarantee and Collateral Agreements are effective to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. In the case of the Pledged Stock
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described in the Guarantee and Collateral Agreements, when stock
certificates and related stock powers representing such Pledged Stock are
delivered to the Administrative Agent (assuming the Administrative Agent
retains possession of such certificates and stock powers in the State of
New York; it being understood that if such Pledged Stock is held in a
jurisdiction other than the State of New York, the law of such other
jurisdiction will govern perfection), and in the case of the other
Collateral described in the Guarantee and Collateral Agreements, when
financing statements and other filings specified on Schedule 3(a) to the
Guarantee and Collateral Agreements in appropriate form are filed in the
offices specified on Schedule 3(a) to the Guarantee and Collateral
Agreements, to the extent that a security interest therein can be perfected
by the filing of a financing statement or by the other filings described in
Schedule 3(a) to the Guarantee and Collateral Agreements, the Guarantee and
Collateral Agreements shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in
such Collateral and the proceeds thereof, as security for the Obligations
(as defined in the respective Guarantee and Collateral Agreements), in each
case prior and superior in right to any other Person (except Liens
permitted by Section 7.03). ------------
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein, and when
the Mortgages are filed in the offices specified on Schedule 3(b) to the
Guarantee and Collateral Agreement, each such Mortgage shall constitute a
fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Mortgaged Properties, as security for
the Obligations (as defined in the relevant Mortgage), in each case prior
and superior in right to any other Person (except as permitted by Section
7.03). Schedule 1.01(c), which lists each parcel of real property in the
United States owned in fee simple by Holdings or any of its Subsidiaries as
of the Closing Date, shall include a sub-heading for "Mortgaged
Properties".
5.20. Solvency. The Loan Parties are, taken as a whole, and after
giving effect to the Transactions and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be,
Solvent.
5.21. Senior Indebtedness. The Obligations constitute "Senior Debt" and
"Designated Senior Debt" (or any other defined term having a similar purpose) of
the Borrower under the Senior Subordinated Note Indenture and any Permitted
Refinancing Debt Document. The obligations of each Subsidiary party thereto
under its respective Guarantee and Collateral Agreements will constitute
"Guarantor Senior Debt" (or any other defined term having a similar purpose) of
such Subsidiary under the Senior Subordinated Note Indenture and under any
Permitted Refinancing Debt Document (if such Subsidiary is an obligor or
guarantor thereunder). There is no other Indebtedness (other than the
Obligations) which has been designated as "Designated Senior Debt" (or any other
defined term having a similar purpose) for the purposes of the Senior
Subordinated Note Indenture or for purposes of any Permitted Refinancing Debt
Document.
5.22. Regulation H. As of the Closing Date, no Mortgage encumbers
improved real property that is located in an area that has been identified by
the Secretary of Housing and Urban Development as an area having special flood
hazards and in which flood insurance has been made available, and has not been
obtained, under the National Flood Insurance Act of 1968.
5.23. S Corporation Status.
(a) Prior to the Closing Date, Holdings has qualified and
elected to be treated as an "S Corporation" under Subchapter S of the Code,
and on the Closing Date each Domestic
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Subsidiary of Holdings (other than any such Subsidiary that is an
"Ineligible Corporation" under Section 1361(b)(2) of the Code) has
qualified and elected to be treated as a "qualified subchapter S
subsidiary", in each case for U.S. federal income tax purposes and in
accordance with all applicable Requirements of Law.
(b) Prior to the Closing Date, no Governmental Authority has
disputed Holdings' qualification as an "S Corporation" under Subchapter S
of the Code, or the qualification of each Domestic Subsidiary of Holdings
(other than any such Subsidiary that is an "Ineligible Corporation" under
Section 1361(b)(2) of the Code) as a "qualified subchapter S subsidiary",
in each case for U.S. federal income tax purposes.
ARTICLE VI
AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to the Administrative Agent,
any L/C Issuer or any Lender hereunder, each of Holdings and the Borrower shall
and shall cause each of its Subsidiaries to:
6.01. Financial Statements. Furnish to the Administrative Agent
(who shall then distribute such items to each Lender):
(a) as soon as available (but only if Holdings is no longer
required to make such filing with the SEC), but in any event within the
earlier of (i) 90 days after the end of each fiscal year of Holdings and
(ii) five days after such related filing (if any) with the SEC is due, a
copy of the audited consolidated balance sheet of Holdings and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by
PricewaterhouseCoopers LLC or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available (but only if Holdings is no longer
required to make such filing with the SEC), but in any event within the
earlier of (i) 45 days after the end of each quarterly period of each
fiscal year of Holdings (including the last quarterly period of such fiscal
year), and (ii) five days after such related filing with the SEC is due,
the unaudited consolidated balance sheet of Holdings and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and
the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the absence of
footnotes).
(c) During any Availability Trigger Period, as soon as
available, but in any event within 30 days after the end of each of fiscal
month (excluding the last fiscal month of each quarterly period in each
fiscal year), the unaudited consolidated balance sheet of Holdings and its
consolidated Subsidiaries as at the end of such fiscal month and the
related unaudited consolidated statements of income and of cash flows for
such fiscal month and the portion of the fiscal year through the end of
such fiscal month, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments and the absence of footnotes).
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All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail, and the financial statement
under paragraph (a) and (b) above shall be prepared in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except for the absence of footnotes in the quarterly statements and as
approved by such accountants or officer, as the case may be, and disclosed
therein). In regard to subsections (a), (b) and (c) of this Section 6.01, the
filing of Forms 10-Q and 10-K with the SEC shall constitute delivery for
purposes thereof (and shall satisfy the information requirements of Section
6.01(a) or (b) above, as the case may be, and satisfy the time requirements
thereof if filed within the time period required thereby); however, electronic
copies of such reports must still be delivered to the Administrative Agent.
6.02. Certificates; Other Information. Furnish to the Administrative
Agent (who shall then distribute such items to each Lender):
(a) concurrently with the delivery of any financial statements
pursuant to Section 6.01, (i) a certificate of a Responsible Officer of
Holdings or the Borrower stating that, to the best of such Responsible
Officer's knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements contained in this
Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate, (ii) in the case of the financial statements
delivered pursuant to subsections (a) and, only with respect to the first
three quarterly fiscal periods of any fiscal year, (b) of Section 6.01, a
Compliance Certificate containing all information and calculations
necessary for determining compliance with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal year
of Holdings, as the case may be, and (iii) in the case of annual financial
statements, (x) a listing of any Asset Sale consummated or entered into
during the relevant fiscal year, (y) to the extent not previously disclosed
to the Administrative Agent, a listing of any registered trademarks,
patents and copyrights acquired by any Loan Party since the date of the
most recent list delivered pursuant to this clause (iii) (or, in the case
of the first such list so delivered, since the Closing Date) and (z) annual
insurance certificate updates;
(b) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of Holdings, a detailed consolidated
budget for the following fiscal year (including a projected consolidated
balance sheet of Holdings and its Subsidiaries as of the end of the
following fiscal year, the related consolidated statements of projected
cash flow, projected changes in financial position and projected income and
a description of the underlying assumptions applicable thereto)
(collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are based on estimates, information and assumptions believed by
such Responsible Officer to be reasonable at the time made and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect at the time provided;
(c) on February 10, 2010 and within 10 Business Days of the end
of each fiscal month ending thereafter, a Borrowing Base Certificate
(together with supporting information required to be attached thereto)
setting forth (i) the Borrowing Base as of the last day of the preceding
fiscal month, (ii) Average Excess Availability for the preceding month and
(iii) the Adjusted Borrowing Base amount as of the last day of the
preceding fiscal month; provided, that, during any Availability Trigger
Period, in addition to each monthly Borrowing Base Certificate, the
Borrower shall deliver a Borrowing Base Certificate (together with any
supporting information required to be attached thereto) on a weekly basis
(assuming for such purposes a week that commences on a Monday and ends on a
Sunday) setting forth the Borrowing Base as of the last day of the
preceding week, in each case within 3 days after the end of the prior week;
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(d) promptly upon obtaining knowledge of any such event,
circumstance or change, a written notice of any event, circumstance or
change that has occurred since the delivery of the most recent Borrowing
Base Certificate in accordance with the terms of this Agreement that would
materially reduce the aggregate amount of the Eligible Accounts or the
Eligible Inventory or result in a material portion of the Eligible Accounts
reflected thereon ceasing to be Eligible Accounts or a material portion of
the Eligible Inventory reflected thereon ceasing to the Eligible Inventory;
(e) in the event that the Borrower is no longer required to make
periodic Form 10-Q and 10-K filings with the SEC, together with delivery of
the respective financial statements pursuant to Section 6.01, within 45
days after the end of each of the first three fiscal quarters of the fiscal
year of Holdings and within 90 days after the end of the last fiscal
quarter of the fiscal year of Holdings, a narrative discussion and analysis
of the financial condition and results of operations of Holdings and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as
compared to the portion of the Projections covering such periods and to the
comparable periods of the previous year;
(f) no later than 10 Business Days prior to the effectiveness
thereof (or, if such 10 Business Day prior notice is not reasonably
possible, 5 Business Days or such shorter period as may be acceptable to
the Administrative Agent), copies of substantially final drafts of any
proposed amendment, supplement, waiver or other modification with respect
to the First Lien Note Indenture, the Second Lien Note Indenture, the
Senior Subordinated Note Indenture, the Senior Unsecured Note Indenture,
any Permitted Refinancing Debt Document, the ESOP Documentation or, to the
extent relating to indemnity provisions, the Acquisition Documentation
(including, without limitation, the Fox River Indemnity Arrangements);
(g) without duplication of materials required elsewhere in this
Agreement, within five days after the same are sent, copies of all (i)
compliance certificates and similar reports that Holdings or the Borrower
sends to the holders of any class of its debt securities having an
aggregate outstanding principal amount in excess of $20,000,000 and (ii)
reports and registration statements (if any) which Holdings or the Borrower
is required to file with the SEC;
(h) to the extent permitted by law, during January of each year
a summary valuation analysis, prepared by an independent third party
engaged by the trustee for the ESOP, with respect to the valuation of the
common stock of Holdings owned by the ESOP as of a date at or near the end
of the prior year, together with supporting commentary, such analysis and
commentary to be in a form reasonably consistent with the analysis and
commentary delivered to the Administrative Agent prior to the Closing Date;
(i) promptly upon obtaining knowledge of any such event, a
written notice of the implementation by the applicable insurance carrier
under any policy of insurance in effect with respect to any Collateral of
any suspension of coverage thereunder with respect to any item of
Collateral;
(j) promptly, such additional financial and other information as
any Lender through the Administrative Agent may from time to time
reasonably request.
The Borrower hereby acknowledges that (a) the Administrative Agent and/or
the Arranger will make available to the Lenders and the L/C Issuers materials
and/or information provided by or on behalf of the Borrower hereunder
(collectively, "Borrower Materials") by posting the Borrower Materials on
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IntraLinks or another similar electronic system (the "Platform") and (b) certain
of the Lenders (each, a "Public Lender") may have personnel who do not wish to
receive material non-public information with respect to the Borrower or its
Affiliates, or the respective securities of any of the foregoing, and who may be
engaged in investment and other market-related activities with respect to such
Persons' securities. The Borrower hereby agrees that so long as the Borrower is
the issuer of any outstanding debt or equity securities that are registered or
issued pursuant to a private offering or is actively contemplating issuing any
such securities it will use commercially reasonable efforts to identify that
portion of the Borrower Materials that may be distributed to the Public Lenders
and that (w) all such Borrower Materials shall be clearly and conspicuously
marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall
appear prominently on the first page thereof; (x) by marking Borrower Materials
"PUBLIC," the Borrower shall be deemed to have authorized the Administrative
Agent, the Arranger, the L/C Issuers and the Lenders to treat such Borrower
Materials as not containing any material non-public information (although it may
be sensitive and proprietary) with respect to the Borrower or its securities for
purposes of United States Federal and state securities laws (provided, however,
that to the extent such Borrower Materials constitute Information, they shall be
treated as set forth in Section 10.07); (y) all Borrower Materials marked
"PUBLIC" are permitted to be made available through a portion of the Platform
designated "Public Investor;" and (z) the Administrative Agent and the Arranger
shall be entitled to treat any Borrower Materials that are not marked "PUBLIC"
as being suitable only for posting on a portion of the Platform not designated
"Public Investor."
6.03. Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where (x) the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the relevant Group Member or (y) would not have a Material Adverse
Effect.
6.04. Maintenance of Existence; Compliance. (a) (i) Preserve, renew and
keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.04 and except, in the case of clause (ii)
above, to the extent that failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (b) comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
6.05. Maintenance of Property; Insurance. (a) Keep all property (other than
property that is the subject of a Recovery Event) useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted,
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect, and (b)
maintain with financially sound and reputable insurance companies (as reasonably
determined by the Borrower at the time the insurance is obtained) insurance on
all its property in at least such amounts (after giving effect to any
self-insurance compatible with the following standards) and against at least
such risks (but including in any event general liability, product liability and
business interruption) as are usually insured against in the same general area
by companies engaged in the same or a similar business.
6.06. Inspection of Property; Books and Records; Discussions.
(a) Keep, and cause each of its Subsidiaries to keep, books of
record and account in a manner sufficient to permit the preparation of
financial statements in accordance with GAAP and all material Requirements
of Law. The Borrower will, and will cause each Loan Party to, permit any
representatives designated by the Administrative Agent (who may be
accompanied by a representative of any Lender at such Lender's expense),
upon reasonable prior notice and
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during normal working hours, no more frequently than annually, except if an
Event of Default shall have occurred and be continuing, to visit and
inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its
officers and independent accountants.
(b) The Administrative Agent shall be entitled to conduct, on
reasonable prior notice and during normal working hours, periodic field
examinations of the books and records relating to the Accounts of the
Borrower and the Inventory of the Borrower, in each case to ensure the
adequacy of the Collateral that constitutes the Borrowing Base and the
related reporting and control systems; provided, that, so long as no Event
of Default has occurred and is continuing, the Administrative Agent shall
be limited (i) in the first twelve-calendar-month period following the
Closing Date, to two such field examinations, and (ii) in each
twelve-calendar-month period thereafter, to one (or, at the Administrative
Agent's option, two) such field examinations.
(c) At any time that the Administrative Agent requests, the
Borrower will provide the Administrative Agent with appraisals or updates
thereof of its Inventory from an appraiser selected and engaged by the
Administrative Agent, and prepared on a basis satisfactory to the
Administrative Agent, in each case in its Permitted Discretion, and such
appraisals or updates, as the case may be, will include information
required by applicable law and regulations; provided, that, so long as no
Event of Default has occurred and is continuing, the Administrative Agent
shall be limited (i) in the first twelve-calendar-month period following
the Closing Date, to two such appraisals, and (ii) in each
twelve-calendar-month period thereafter, to one (or, at the Administrative
Agent's option, two) such appraisal. Each such appraisal shall be at the
sole cost and expense of the Borrower.
(d) Borrower acknowledges that the Administrative Agent, after
exercising its rights of inspection, field examination and/or appraisal
pursuant to this Section 6.06, may prepare (or have prepared) and
distribute to the Lenders reports pertaining to the Borrower's and the
other Loan Parties' assets for internal use by the Administrative Agent and
the Lenders.
6.07. Notices. Promptly give notice to the Administrative Agent, and
each Lender upon any Responsible Officer becoming aware of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between any Group Member and any
Governmental Authority, that in either case, could reasonably be expected
to have a Material Adverse Effect;
(c) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan, a failure
to make any required contribution to a Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan, in each case, to the extent such event or
proceeding (x) is expected to result in a material change in the ESOP or
ERISA disclosures contained in Holdings' next 10-Q or 10-K filing (as
compared to the most recent 10-Q or 10-K filing), or (y) to the extent
Holdings is no longer subject to the SEC filing requirements, is of
comparable materiality;
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(d) any material notice received by a Group Member related to
the commencement of, or any material development in, any litigation or
proceeding affecting any Group Member, in connection with any applicable
Environmental Laws or Environmental Liability, to the extent such
litigation or proceeding (i) is expected to result in a material change in
the environmental liability disclosures in Holdings' next 10-Q or 10-K
filing, or (ii) to the extent Holdings is no longer subject to the SEC
filing requirements, is of comparable materiality;
(e) of any matter that has resulted or could reasonably be
expected to result in a Material Adverse Effect, including (i) breach or
non-performance of, or any default under, a Contractual Obligation of any
Group Member; (ii) any dispute, litigation, investigation, proceeding or
suspension between any Group member and any Governmental Authority or (iii)
the commencement of, or any material development in, any litigation or
proceeding affecting any Group Member (other than pursuant to Environmental
Laws); and
(f) as required under the Guarantee and Collateral Agreements:
(i) notice upon the occurrence of any event which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests
created by the Guarantee and Collateral Agreements;
(ii) a copy of each material demand, notice or document
received by it that challenges the validity or enforceability of
more than five percent (5%) of the aggregate amount of the then
outstanding Receivables (as defined in the Guarantee and
Collateral Agreements);
(iii) notice if it knows that any application or
registration relating to any Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any
adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court
or tribunal in any country) regarding any Loan Party's ownership
of, or the validity of, any Intellectual Property or such Loan
Party's right to register the same or to own and maintain the
same, in each case to the extent such Intellectual Property is
material to the aggregate value of the Collateral; and
(iv) in the event that any Intellectual Property is
infringed, misappropriated or diluted by a third party, the
applicable Loan Party after it learns thereof, to the extent such
Intellectual Property is material to the aggregate value of the
Collateral.
Each notice pursuant to this Section 6.07 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings, the Borrower or the relevant
Subsidiary proposes to take with respect thereto.
6.08. Environmental Laws.
(a) Comply in all respects with, and ensure compliance in all
respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply in all respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in
all respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable
Environmental Laws, except to the extent that the failure to take such
actions could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
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(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all respects with all lawful
orders and directives of all Governmental Authorities regarding
Environmental Laws, except to the extent that the failure to take such
actions could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.09. Additional Collateral, etc.
(a) With respect to any property acquired after the Closing Date
by any Loan Party (other than (x) any property described in paragraph (b),
(c) or (d) below, and (y) any property subject to a Lien expressly
permitted by Section 7.03(f), (g), (p) and (r)) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative
Agent such amendments to the either of the Guarantee and Collateral
Agreements or such other documents as the Administrative Agent deems
necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a security interest in such property and (ii) take
all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Lenders, a perfected first priority security
interest in such property (subject to Liens permitted by Section 7.03),
including the filing of Uniform Commercial Code financing statements or the
making of such other filings or recordings in such jurisdictions as may be
required by the Guarantee and Collateral Agreements or by law or as may be
requested by the Administrative Agent.
(b) With respect to any fee interest in any real property having
an insured value (including with respect to improvements thereof) of at
least $2,000,000 acquired after the Closing Date by any Loan Party (other
than (y) any such real property subject to a Lien expressly permitted by
Section 7.03(f), (g), (p) and (r), promptly (i) execute and deliver a
second priority (or, if no Indebtedness evidenced by First Lien Notes or
Permitted Refinancing Debt in respect thereof is then outstanding, first
priority) Mortgage in favor of the Administrative Agent, for the benefit of
the Lenders, covering such real property, (ii) if requested by the
Administrative Agent, provide the Lenders with (x) title, flood and
extended coverage insurance covering such real property in an amount at
least equal to the purchase price of such real property (or such other
amount as shall be reasonably specified by the Administrative Agent), as
well as a current ALTA survey thereof (or an existing survey (without
update), together with an affidavit of no change, so long as Title
Insurance Company shall agree to issue the mortgagee's title insurance
policy, excluding the standard survey exception, but including the survey
dependent endorsements), together with a surveyor's certificate or, in the
case of real property located in any jurisdiction outside the United
States, any similar documentation relevant to such jurisdiction and (y) to
the extent obtainable using commercially reasonable efforts, any consents
or estoppels reasonably deemed necessary or advisable by the Administrative
Agent in connection with such Mortgage, each of the foregoing in form and
substance reasonably satisfactory to the Administrative Agent, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory
to the Administrative Agent.
(c) Subject to paragraph (d) below, with respect to any new
wholly-owned Domestic Subsidiary, or wholly-owned Foreign Subsidiary
organized under the laws of Canada or any of its provinces, organized or
acquired after the Closing Date by any Group Member, promptly (i) execute
and deliver to the Administrative Agent such amendments to either of the
Guarantee and Collateral Agreements or other applicable Security Documents,
or such new Security Documents as the Administrative Agent deems necessary
or advisable to grant to the Administrative Agent, for the benefit of the
Lenders, a perfected first priority security interest in the Capital Stock
of
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such new Subsidiary that is owned by any Loan Party, (ii) deliver to the
Administrative Agent the certificates, if any, representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered
by a duly authorized officer of the relevant Loan Party, (iii) cause any
such new wholly-owned Domestic Subsidiary (A) to become a party to either
of the Guarantee and Collateral Agreements, (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit
of the Lenders a perfected security interest in the Collateral described in
the Guarantee and Collateral Agreements prior and superior in right to any
other Person (except Liens permitted by Section 7.03) with respect to such
new Subsidiary, including the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by either of the
Guarantee and Collateral Agreements or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a
certificate of such Subsidiary, substantially in the form of Exhibit G,
with appropriate insertions and attachments, (iv) cause any such new
Foreign Subsidiary organized under the laws of Canada or any of its
provinces, (A) to execute and deliver to the Administrative Agent the
Guarantee and Collateral Agreement or other applicable Security Document
pursuant to which such Foreign Subsidiary shall guarantee the Obligations,
(B) to execute and deliver to the Administrative Agent the Guarantee and
Collateral Agreement or other applicable Security Document as the
Administrative Agent deems necessary or advisable to ▇▇▇▇▇ ▇ ▇▇▇▇ to the
Administrative Agent, for the benefit of the Lenders, on all property of
such Foreign Subsidiary to secure payment of the Obligations, (C) to take
such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Lenders a perfected security interest in the
Collateral described in the Guarantee and Collateral Agreements or other
applicable Security Document delivered pursuant to the foregoing clause (B)
prior and superior in right to any other Person (except Liens permitted by
Section 7.03) with respect to such new Subsidiary, including such filings
or other recordings in such jurisdictions as may be required by the
Guarantee and Collateral Agreements or other applicable Security Document
or by law or as may be reasonably requested by the Administrative Agent,
and (D) to deliver to the Administrative Agent a certificate of such
Subsidiary, substantially in the form of Exhibit G, with appropriate
insertions and attachments, with such modifications relevant to the
jurisdiction of such Foreign Subsidiary, as may be requested by the
Administrative Agent, and (v) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(d) Notwithstanding anything in this Section 6.09 to the
contrary, no Subsidiary shall provide a guarantee of or a lien over any of
its assets to secure all or any portion of the Borrower's obligations under
the Senior Subordinated Notes, Senior Unsecured Notes, First Lien Notes,
Second Lien Notes or any Permitted Refinancing Debt Document unless, prior
to or concurrently therewith, such Subsidiary complies with the
requirements of Section 6.09(c).
6.10. Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
thereof or with respect to any other property or assets hereafter acquired by
the Borrower or any Subsidiary which may be deemed to be part of the Collateral)
pursuant hereto or thereto. Upon the exercise by the Administrative Agent or any
Lender of any power, right, privilege or remedy pursuant to this Agreement or
the other Loan Documents which requires any consent, approval, recording
qualification or authorization of any Governmental Authority, the Borrower will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Administrative Agent or such Lenders may be
77
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
6.11. ERISA.
(a) In the case of Holdings, promptly contribute, loan or repay
to the Borrower all cash received by it (including, without limitation,
from the ESOP but excluding any cash received by it which is forthwith
remitted to the ESOP pursuant to transactions which do not violate the
provisions of this Agreement or used to pay amounts owing or payable by
Holdings in connection with its activities which do not violate this
Agreement) unless permitted to be retained by Holdings in accordance with
Section 7.16.
(b) Take all actions necessary to preserve the existence of the
ESOP and to maintain its tax-qualified status under Sections 401(a) and
501(a), or successor provisions, respectively, of the Code and the ESOP
Component's status as an employee stock ownership plan; and administer the
ESOP in compliance in all material respects with the terms of the ESOP and
the provisions of the Code and ERISA, as applicable to the ESOP, and make
any remedial amendments required by the IRS within the time period allowed
for the amendments.
6.12. Use of Proceeds. Use the proceeds of the Credit Extensions for
general corporate purposes not in contravention of any material Law or of any
Loan Document.
ARTICLE VII
NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree that, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding or
any Loan or other amount is owing to the Administrative Agent, any L/C Issuer or
any Lender hereunder, each of Holdings and the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
7.01. Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio, as determined as of March 31, 2010 and the last day
of each fiscal quarter of Holdings ending thereafter for which financial
statements have been (or were required to have been) delivered pursuant to
Section 6.01(b), in each case for the four (4) fiscal quarters of Holdings
ending on such date, to be less than 1.10 to 1.00; provided, that, if the
Availability Trigger Percentage with respect to every fiscal month ending in any
fiscal quarter, is greater than 20%, Holdings and the Borrower shall not be
required to comply with the foregoing financial covenant as of the last day of
such fiscal quarter (it being understood that, if the Availability Trigger
Percentage with respect to any fiscal month ending in any fiscal quarter is
equal to or less than 20%, Holdings and the Borrower shall be required to comply
with the foregoing financial covenant as of the end of such fiscal quarter).
7.02. Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness (i) of Holdings or the Borrower to any of their
respective Subsidiaries, (ii) of the Borrower or any Subsidiary that is a
Guarantor to Holdings, the Borrower or any other Subsidiary, (iii) of any
Non-Guarantor to any Non-Guarantor, (iv) of any Non-Guarantor to Holdings,
the Borrower or any other Subsidiary that is a Guarantor, and (v) resulting
78
from ESOP related loans and advances permitted by Section 7.07(g);
provided, that, in each case, any such Indebtedness described in the
foregoing clauses (i) through (iv) incurred by a Loan Party to a Group
Member that is not a Loan Party is expressly subordinated to the prior
payment in full in cash of the Obligations; and, provided, further, that,
the aggregate outstanding amount of all Indebtedness incurred pursuant to
Section 7.02(b)(iv), when added to the sum of (A) the aggregate outstanding
amount of all Guarantee Obligations incurred pursuant to Section
7.02(c)(ii), (B) the aggregate net book value of the assets of any Loan
Party subject to any merger, consolidation or amalgamation consummated
pursuant to Section 7.04(a)(iii), (C) the aggregate net book value of
assets disposed of pursuant to Section 7.04(b)(ii), and (D) the aggregate
outstanding amount of Investments made pursuant to Section 7.07(f), shall
not exceed $30,000,000 at any one time;
(c) Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of (i) obligations of
the Borrower and any Subsidiary that is a Guarantor and (ii) any
Non-Guarantor; provided, that, the aggregate amount of all Guarantee
Obligations incurred pursuant to Section 7.02(c)(ii), when added to the sum
of (A) the aggregate outstanding amount of all Indebtedness incurred
pursuant to Section 7.02(b)(iv), (B) the aggregate net book value of the
assets of any Loan Party subject to any merger, consolidation or
amalgamation consummated pursuant to Section 7.04(a)(iii), (C) the
aggregate net book value of assets disposed of pursuant to Section
7.04(b)(ii), and (D) the aggregate outstanding amount of Investments made
pursuant to Section 7.07(f), shall not exceed $30,000,000 at any one time;
(d) Permitted Existing Debt (excluding such Indebtedness
referenced in clauses (f), and (g) in this section) and any refinancings,
refundings, renewals or extensions thereof (without increasing, or
shortening the maturity of, the principal amount thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.03(g) in an aggregate
principal amount not to exceed the greater of $25,000,000 and 3.0% of
Consolidated Tangible Assets (measured as of the most recent quarter for
which a Compliance Certificate has been delivered pursuant to Section
6.02(a)) at any one time outstanding;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes, together with any Permitted Refinancing Debt in
connection therewith, in an aggregate principal amount not to exceed
$32,195,000 and (ii) Guarantee Obligations of Holdings and any Subsidiary
that is a Guarantor in respect of such Indebtedness, provided, that such
Guarantee Obligations are subordinated to the same extent as the
obligations of the Borrower in respect of the Senior Subordinated Notes or
the applicable Permitted Refinancing Debt, as the case may be;
(g) (i) Indebtedness of the Borrower in respect of the Senior
Unsecured Notes, together with any Permitted Refinancing Debt in connection
therewith, in an aggregate principal amount not to exceed $17,491,000 and
(ii) Guarantee Obligations of Holdings and any Subsidiary that is a
Guarantor in respect of such Indebtedness;
(h) Hedge Agreements (a) in respect of Indebtedness otherwise
permitted hereby that bears interest at a floating rate, so long as such
agreements are not entered into for speculative purposes, (b) in respect of
foreign currency exposure of any Group Member or in respect of energy, raw
materials and/or commodities, so long as, in each case, such agreements are
entered into in the ordinary course of business and not for speculative
purposes and (c) Guarantee Obligations of Holdings and any other Loan Party
in respect of such Indebtedness;
79
(i) Indebtedness under the AWA Environmental Indemnity
Agreement; provided that such Indebtedness is recourse only to the property
described in Section 7.03(i);
(j) Guarantee Obligations of the Borrower with respect to
obligations of Holdings pursuant to the AWA Environmental Indemnity
Agreement;
(k) 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 so long as such Indebtedness is
extinguished within three Business Days of the incurrence thereof;
(l) Indebtedness of the Borrower or any of its Subsidiaries in
respect of performance bonds and surety bonds incurred in the ordinary
course of business;
(m) Indebtedness of the Borrower or any Subsidiary of the
Borrower arising from agreements of the Borrower or a Subsidiary of the
Borrower providing for indemnification, adjustment of purchase price, earn
out or other similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or a Subsidiary of
the Borrower permitted under this Agreement, other than guarantees of
Indebtedness incurred by any Person acquiring all or any portion of such
business, assets or Subsidiary for the purpose of financing such
acquisition;
(n) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $20,000,000 at any one time outstanding;
(o) Indebtedness of one or more Loan Parties incurred in
connection with the Ohio Department of Development financing for the
Borrower's finishing area project investment and additional related
investments at West Carrolton, Ohio plant, and any subsequent refinancings
thereof; provided that the aggregate principal amount of Indebtedness at
any time outstanding pursuant to this clause (r) shall not exceed
$12,500,000;
(p) Indebtedness of the Borrower or any Loan Party in respect of
Cash Management Agreements entered into in the ordinary course of business
and Guarantee Obligations of Holdings and any Loan Party in respect of such
Indebtedness;
(q) (i) Indebtedness of the Borrower in respect of the First
Lien Notes, together with any Permitted Refinancing Debt in connection
therewith, in an aggregate principal amount not to exceed $305,000,000 and
(ii) Guarantee Obligations of Holdings and any Subsidiary that is a
Guarantor in respect of such Indebtedness; and
(r) (i) Indebtedness of the Borrower in respect of the Second
Lien Notes, together with any Permitted Refinancing Debt in connection
therewith, in an aggregate principal amount not to exceed $161,766,000
(exclusive of any interest paid and accrued in kind and added to the
principal amount thereof) and (ii) Guarantee Obligations of Holdings and
any Subsidiary that is a Guarantor in respect of such Indebtedness.
7.03. Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except for:
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(a) Liens for taxes or assessments not yet delinquent or that
are being contested in good faith by appropriate proceedings, provided that
adequate reserves with respect thereto are maintained on the books of
Holdings or its Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 30 days or that are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in
amount and that do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct
of the business of the Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.03, securing Indebtedness permitted by Section 7.02(d); provided that no
such Lien is spread or otherwise extended to cover any additional property
after the Closing Date and that the amount of Indebtedness secured thereby
is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.02(e) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
simultaneously with, or within 120 days after, the acquisition of such
fixed or capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (iii)
the amount of Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) Liens on rights to "Recovery" in favor of AWA pursuant to
and as defined in the AWA Environmental Indemnity Agreement and the API
Environmental Indemnity Agreement;
(j) any interest or title of a lessor under any lease entered
into by the Borrower or any other Subsidiary in the ordinary course of its
business and covering only the assets so leased;
(k) Liens arising from judgments, decrees or attachments except
to the extent that they give rise to an Event of Default;
(l) licenses, leases or subleases granted to third Persons in
the ordinary course of business not interfering in any material respect
with the business of Holdings or any of its Subsidiaries;
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(m) Liens in favor of customs or revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods so long as such Lien covers only the goods being
imported;
(n) Liens on the assets of a Non-Guarantor securing Indebtedness
incurred by such Non-Guarantor pursuant to Section 7.02(n);
(o) Liens existing on any asset prior to the acquisition thereof
by the Borrower or any Subsidiary or on any asset of any Person that
becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of, or in connection with, such acquisition or such Person
becoming a Subsidiary and (ii) such Lien shall not apply to any other
assets;
(p) Liens securing Indebtedness permitted to be incurred
pursuant to Section 7.02(o), which Liens shall extend only to the equipment
and other related personal property which is being financed by such
Indebtedness;
(q) Liens not otherwise permitted by this Section so long as (i)
the aggregate outstanding principal amount of the obligations secured
thereby does not exceed $20,000,000 at any one time outstanding and (ii)
the aggregate fair market value (as reasonably determined by the Borrower
as of the date the respective Lien is incurred) of the assets subject
thereto does not exceed (as to the Borrower and all Subsidiaries)
$25,000,000 at any one time;
(r) all exceptions to the title polices delivered pursuant to
Section 4.01(a)(iv) or Section 6.09(b);
(s) Liens, if any, in favor of an L/C Issuer and/or Swing Line
Lender to cash collateralize or otherwise secure the obligations of a
Defaulting Lender or an Impacted Lender to fund risk participations
hereunder;
(t) to the extent such Liens are permitted under, and subject
to, the First Lien Note Intercreditor Agreement, Liens securing
Indebtedness under the First Lien Note Documents and any Permitted
Refinancing Debt in respect thereof; and
(u) to the extent such Liens are permitted under, and subject
to, the Second Lien Note Intercreditor Agreement, Liens securing
Indebtedness under the Second Lien Note Documents and any Permitted
Refinancing Debt in respect thereof.
7.04. Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged, consolidated
or amalgamated (i) with or into the Borrower (provided that the Borrower
shall be the continuing or surviving corporation), (ii) with or into any
Guarantor (provided that a Guarantor shall be the continuing or surviving
corporation), (iii) with or into any Non-Guarantor, provided, that, the
aggregate net book value of the assets of any Loan Party subject to any
merger, consolidation or amalgamation consummated pursuant to Section
7.04(a)(iii), when added to the sum of (A) the aggregate outstanding amount
of all Indebtedness incurred pursuant to Section 7.02(b)(iv), (B) the
aggregate outstanding amount of all Guarantee Obligations incurred pursuant
to Section 7.02(c)(ii), (C) the aggregate net book value of assets disposed
of pursuant to Section 7.04(b)(ii),
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and (D) the aggregate outstanding amount of Investments made pursuant to
Section 7.07(f) shall not exceed $30,000,000 at any one time;
(b) any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) (i) to the Borrower or
any Guarantor, (ii) to any Non-Guarantor, or (iii) to any other Person in
connection with a Disposition permitted pursuant to Section 7.05; provided,
that, the aggregate net book value of assets disposed of pursuant to
Section 7.04(b)(ii), when added to the sum of (A) the aggregate outstanding
amount of all Indebtedness incurred pursuant to Section 7.02(b)(iv), (B)
the aggregate outstanding amount of all Guarantee Obligations incurred
pursuant to Section 7.02(c)(ii), (C) the aggregate net book value of the
assets of any Loan Party subject to any merger, consolidation or
amalgamation consummated pursuant to Section 7.04(a)(iii), and (D) the
aggregate outstanding amount of Investments made and outstanding pursuant
to Section 7.07(f) shall not exceed $30,000,000 at any one time;
(c) subject to Section 6.09, any Subsidiary of the Borrower
merge with any other Person to effect an Investment permitted pursuant to
Section 7.07(f) or (k); and
(d) any Non-Guarantor may merge with or into any other
Non-Guarantor.
7.05. Disposition of Property. Voluntarily Dispose of any of its
property, whether now owned or hereafter acquired, or, in the case of any
Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock to any
Person, except:
(a) the Disposition of obsolete or worn out property or other
assets no longer used or useful (as reasonably determined by the Borrower
and giving effect to its business plans) in the business of the Borrower
and its Subsidiaries in the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Sections 7.04, 7.06 and 7.07;
(d) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Guarantor;
(e) the Disposition of other property having a fair market value
not to exceed the greater of $25,000,000 or 3% of Consolidated Tangible
Assets in the aggregate for any fiscal year of the Borrower; and
(f) the sale of Non-Guarantors or the assets of Non-Guarantors.
7.06. Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of any Group Member, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of Holdings, the
Borrower or any Subsidiary (collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower
and any Subsidiary that is a Guarantor, and to any other Persons that
directly own a Capital Stock in such
83
Subsidiary, ratably according to their respective holdings of the type of
Capital Stock in respect of which such Restricted Payment is being made;
(b) so long as no Event of Default has occurred and is
continuing under Section 8.01(a) or Section 8.01(f) or would result
therefrom, Subsidiaries of Holdings may make Restricted Payments to permit
Holdings (and Holdings shall be permitted) (i) to make Restricted Payments
to satisfy its obligations to repurchase its common stock pursuant to the
ESOP Documentation from accounts allocated to participants in the ESOP to
the extent representing hardship (with "hardship" being determined in
accordance with the Code and the ESOP Documentation) distributions to the
participants in the ESOP in accordance with the Code and the ESOP
Documentation; provided that the aggregate amount of all Restricted
Payments made pursuant to this clause (b)(i) shall not exceed $2,000,000 in
any fiscal year of Holdings; (ii) to make Restricted Payments to satisfy
its obligations to repurchase its common stock pursuant to the ESOP
Documentation from accounts allocated to participants in the ESOP upon (x)
the election of such participants to diversify a portion of the common
stock held in the account eligible for diversification under section
401(a)(28) of the Code (or any relevant successor provision) and/or (y) the
death, disability, resignation, dismissal or permanent layoff of such
participants and/or (z) pursuant to a qualified domestic relation order
under Section 414(p) of the Code, so long as the aggregate amount of the
Restricted Payments then being made pursuant to this clause (b)(ii), when
aggregated with all other such Restricted Payments made pursuant to this
clause (b)(ii) during the same fiscal quarter and during the three
immediately preceding fiscal quarters, would not exceed $45,000,000; and
(iii) to the extent such Restricted Payments would be permitted under (x)
Section 4.07(a) of the Second Lien Note Indenture as in effect on the date
hereof, and Section 4.07(a) of the First Lien Note Indenture as in effect
on the date hereof, and (in each case taking into account any Investments
made pursuant to Section 7.07(l)), to make other Restricted Payments to, or
in connection with, the ESOP or the ESOP Documentation.
(c) Subsidiaries of Holdings may pay dividends to permit
Holdings or any of its Subsidiaries to (i) pay corporate overhead expenses
incurred in the ordinary course of business and (ii) pay any taxes that are
due and payable by Holdings and or any of its Subsidiaries as part of a
consolidated group;
(d) the Borrower and its Subsidiaries may make other Restricted
Payments (without duplication of amounts on-dividended) not to exceed (i)
$3,000,000 in the aggregate during any fiscal year of the Borrower and (ii)
$12,000,000 in the aggregate over the term of this Agreement;
(e) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower or
Holdings may make Restricted Payments to repurchase common stock issued to
the ESOP in exchange for, or out of the Net Cash Proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Borrower)
of, Capital Stock of the Borrower or Holdings (other than Disqualified
Capital Stock) or from the substantially concurrent contribution of common
equity capital to the Borrower or Holdings; and
(f) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Borrower may make
distributions to permit Holdings to repay intercompany loans so long as the
amount of any such distribution is simultaneously netted against amounts
owing to the Borrower under such loans and no cash is paid as a result of
any such distribution.
7.07. Investments. Make Investments except:
84
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Indebtedness and Guarantee Obligations permitted by Section
7.02;
(d) (i) loans and advances to employees of any Group Member of
the Borrower in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount for all Group
Members not to exceed $1,000,000 at any one time outstanding and (ii)
additional loans or advances to newly-hired employees of any Group Member
of the Borrower in the ordinary course of business for the purpose of
paying relocation expenses of such employees in an aggregate amount not to
exceed $1,000,000 at any time outstanding;
(e) intercompany Investments by any Group Member in Holdings,
the Borrower or any Subsidiary of the Borrower that, prior to such
Investment, is a Guarantor;
(f) So long as no Event of Default shall have occurred and be
continuing, Investments by the Borrower or any of its Subsidiaries in any
Person that, prior to such Investment, is not a Guarantor; provided, that,
the aggregate Investments made pursuant to this Section 7.07(f) (valued at
cost net of returns on such Investments actually received in cash by the
Loan Parties), when added to the sum of (A) the aggregate outstanding
amount of all Indebtedness incurred pursuant to Section 7.02(b)(iv), (B)
the aggregate outstanding amount of all Guarantee Obligations incurred
pursuant to Section 7.02(c)(ii), (C) the aggregate net book value of the
assets of any Loan Party subject to any merger, consolidation or
amalgamation consummated pursuant to Section 7.04(a)(iii), and (D) the
aggregate net book value of assets of any Loan Party disposed of pursuant
to Section 7.04(b)(ii), shall not exceed $30,000,000 at any one time;
(g) so long as (x) no Event of Default has occurred and is
continuing under Section 8.01(a) or Section 8.01(f) or would result
therefrom and (y) such Investment would be permitted under Section 7.06 if
it were deemed a "Restricted Payment" (until repaid), short-term loans and
advances (to be repaid in no more than 180 days) by (i) the Borrower to
Holdings to permit Holdings (and Holdings shall be permitted) (A) to
satisfy its obligation to repurchase its common stock pursuant to the ESOP
Documentation from accounts allocated to participants in the ESOP upon the
death, disability or termination of employment of such participants or upon
the exercise by any such participant of his or her diversification rights
under the ESOP Documentation, (B) to make loans to the ESOP to permit the
ESOP to make loans to participants in the ESOP in accordance with the ESOP
Documentation and (C) to provide funds to the ESOP to permit the ESOP to
fund hardship distributions to participants in the ESOP in accordance with
the ESOP Documentation and (ii) Holdings, the Borrower or any Subsidiary to
the ESOP to permit the ESOP (and the ESOP shall be permitted) to satisfy
its or Holdings' obligations to repurchase common stock pursuant to the
ESOP Documentation;
(h) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(i) non-cash consideration issued to the Borrower or any of its
Subsidiaries by the purchaser of assets in connection with a sale of such
assets to the extent permitted by Section 7.05 in an aggregate amount not
to exceed, in connection with all Asset Sales theretofore effected after
85
the Closing Date, 25% of the aggregate fair market value of the property
subject to such Asset Sales;
(j) Guarantee Obligations of customary indemnities and insurance
for directors and officers of any Group Member; and
(k) additional Investments to the extent such Investment,
together with all Restricted Payments made pursuant to Section
7.06(b)(iii), would be permitted under (x) Section 4.07(a) of the Second
Lien Note Indenture as in effect on the date hereof and (y) Section 4.07(a)
of the First Lien Note Indenture as in effect on the date hereof.
7.08. Prepayments and Modifications of Certain Debt Instruments.
(a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of or otherwise optionally or
voluntarily defease or segregate funds with respect to the Senior Unsecured
Notes, the Senior Subordinated Notes, the Second Lien Notes or any
Permitted Refinancing Debt with respect to any of the foregoing (it being
understood that this Section 7.08(a) shall not apply to (x) the payment of
any such Indebtedness at the maturity thereof or (y) the First Lien Notes
or any Permitted Refinancing Debt with respect to the First Lien Notes), or
enter into any derivative or other transaction with any Derivatives
Counterparty obligating Holdings, the Borrower or any Subsidiary to make
payments to such Derivatives Counterparty as a result of any change in
market value of the Senior Unsecured Notes, the Senior Subordinated Notes
or the Second Lien Notes or any Permitted Refinancing Debt with respect
thereto, other than (A) the refinancing of any Senior Subordinated Notes,
Senior Unsecured Notes or Second Lien Notes, in each case with applicable
Permitted Refinancing Debt, and (B) the payment, prepayment, repurchase or
redemption of the Senior Subordinated Notes, Senior Unsecured Notes, Second
Lien Notes, and any Permitted Refinancing Debt with respect thereto, so
long as the aggregate principal amount of the Senior Subordinated Notes,
Senior Unsecured Notes, Second Lien Notes, and Permitted Refinancing Debt
with respect thereto repaid, prepaid, repurchased or redeemed shall not
exceed (x) $35,000,000, in any fiscal year, and (y) $50,000,000 in the
aggregate after the Closing Date, provided, that in each case under the
foregoing clauses (A) and (B), before and after giving effect to such
refinancing payment, repurchase or redemption, as the case may be, no
Default or Event of Default shall have occurred and be continuing;
(b) amend, modify, waive or otherwise change, or consent or
agree to any amendment, modification, waiver or other change to, any of the
terms of the Senior Unsecured Notes, the Senior Subordinated Notes, the
First Lien Notes, the Second Lien Notes or any Permitted Refinancing Debt
with respect thereto (other than any such amendment, modification, waiver
or other change that is not materially adverse to the Lenders (it being
understood and agreed that an increase of greater than 2.00% to the
existing cash interest rate or other yield provisions is materially adverse
to the Lenders so long as the Commitments remain in effect, any Letter of
Credit remains outstanding or any Loan or other amount is owing to any
Lender or Agent hereunder)) and that, in any event, would not result in
such Indebtedness being unable to qualify as Permitted Refinancing
Indebtedness if it were newly issued; or
(c) designate any Indebtedness (other than obligations of the
Loan Parties pursuant to the Loan Documents) as "Designated Senior Debt"
(or any other defined term having a similar purpose) for the purposes of
the Senior Subordinated Note Indenture or any applicable Permitted
Refinancing Debt Document.
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7.09. Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than Holdings, the Borrower, any other Guarantor or any Wholly
Owned Subsidiary) unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of the relevant Group Member,
and (c) upon fair and reasonable terms no less favorable to the relevant Group
Member, than it would obtain in a comparable arm's length transaction with a
Person that is not an Affiliate; provided that the following shall in any event
be permitted: (i) the arrangements contemplated by the Fox River Indemnity
Arrangements; (ii) customary fees paid to non-officer directors of Holdings and
its Subsidiaries; (iii) employment agreements, employee benefit plans,
indemnification provisions, equity incentive plans and other similar
compensatory arrangements entered into by Holdings and its Subsidiaries with
officers and directors of Holdings and its Subsidiaries in the ordinary course
of business, in each case to the extent that such transactions are otherwise
permitted by this Agreement; (iv) transactions with the ESOP and pursuant to the
ESOP Documentation and the terms hereof, (v) transactions permitted pursuant to
Section 7.04, 7.06 and 7.07 and (vi) transactions among Holdings and its
Subsidiaries to the extent otherwise permitted under this Agreement.
7.10. Changes in Fiscal Periods. Permit the fiscal year of Holdings to
be other than the 52-week or 53-week period ending the Saturday nearest December
31 or change Holdings' method of determining fiscal quarters.
7.11. Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of any Loan Party
to create, incur, assume or suffer to exist any Lien upon any of its property or
revenues, whether now owned or hereafter acquired, to secure its obligations
under the Loan Documents to which it is a party, other than restrictions
existing under or by reason of (a) applicable law, (b) this Agreement and the
other Loan Documents, (c) the First Lien Note Indenture, (d) the Second Lien
Note Indenture, (e) the Senior Unsecured Note Indenture, (f) the Senior
Subordinated Note Indenture, (g) any Permitted Refinancing Debt Document, (h)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of Holdings or a Subsidiary of Holdings, (i) customary
provisions restricting assignment of any licensing agreement entered into by
Holdings or any Subsidiary of Holdings in the ordinary course of business, and
(j) any agreements governing any Liens otherwise permitted hereby (in which
case, any prohibition or limitation shall only be effective against the assets
subject to such Liens).
7.12. Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) this Agreement or the other Loan Documents,
(ii) applicable law, (iii) the First Lien Note Indenture, (iv) the Second Lien
Note Indenture, (v) the Senior Unsecured Note Indenture, (vi) the Senior
Subordinated Note Indenture, (vii) any Permitted Refinancing Debt Document,
(viii) the debt agreements in connection with Indebtedness permitted under
Section 7.02, (ix) any agreements governing any Liens otherwise permitted hereby
(in which case, any prohibition or limitation shall only be effective against
the assets subject to such Liens), or (x) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital Stock
or assets of such Subsidiary.
7.13. Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement or that are
reasonably related or complementary thereto.
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7.14. Material Agreements. (a) Amend, supplement or otherwise modify,
or permit the amendment, supplement or modification of, (pursuant to a waiver,
endorsement or otherwise) the terms and conditions of (i) the Fox River
Indemnity Arrangements without the consent of the Required Lenders (other than
to the extent necessary to change a notice address or to cure any ambiguity,
defect or inconsistency in a manner not adverse to the Lenders in any material
respect) or (ii) the other indemnities and licenses furnished to Holdings or any
of its Subsidiaries pursuant to the Acquisition Documentation (other than the
Fox River Indemnity Arrangements) such that after giving effect thereto such
indemnities or licenses shall be materially less favorable to the interests of
the Loan Parties or the Lenders with respect thereto, (b) deliver, or vote any
of Capital Stock owned by it in favor of the delivery of, any election of
"Reduced Cumulative Limits" (under and as defined in the AIG Credit Support)
except with the consent of the Administrative Agent or (c) assign any of its
rights under the Fox River Indemnity Arrangements without the consent of the
Required Lenders.
7.15. S Corporation Status. Take, or fail to take, any action that
would terminate, or could reasonably be expected to lead to the termination of,
Holdings' qualification as an "S Corporation" under Subchapter S of the Code, or
the qualification of each Domestic Subsidiary of Holdings (other than any such
Subsidiary that is an "Ineligible Corporation" under Section 1361(b)(2) of the
Code) as a "qualified subchapter S subsidiary", in each case for U.S. federal
income tax purposes.
7.16. Holding Company Status. In the case of Holdings, (a) conduct,
transact or otherwise engage in, or commit to conduct, transact or otherwise
engage in, any business or operations other than those incidental to (x) its
direct or indirect ownership of the Capital Stock of the Borrower, (y) its
ownership by the ESOP and transactions related to the ESOP and pursuant to the
ESOP Documentation or (z) to the exercise of its rights and remedies under the
Acquisition Documentation, (b) incur, create, assume or suffer to exist any
Indebtedness or other liabilities or financial obligations, except (i)
obligations arising by operation of the ESOP Documentation, (ii) nonconsensual
obligations imposed by operation of law, (iii) pursuant to the Loan Documents to
which it is a party, (iv) Indebtedness permitted under clauses (b), (f), (g),
(h), (i), (k), (p), (q) and (r) of Section 7.02, and (v) obligations with
respect to its Capital Stock, or (c) own, lease, manage or otherwise operate any
properties or assets (including cash (other than cash received in connection
with dividends made to Holdings in accordance with Section 7.06 or loans or
advances to or by Holdings in accordance with Section 7.07 pending any required
application in the manner contemplated by said Sections) and cash equivalents)
other than the direct ownership of shares of Capital Stock of the Borrower, as
the case may be.
7.17. PDC Capital Corporation. In the case of PDC Capital Corporation,
conduct, transact or otherwise engage in, or commit to conduct, transact or
otherwise engage in, any business, or operations other than those incidental to
its obligations under the Bermuda Company Agreements.
7.18. ESOP Amendments. Amend or terminate the ESOP without the prior
written consent of the Administrative Agent, not to be unreasonably withheld,
except that the Borrower or Holdings may amend the ESOP (a) to the extent
required by the Internal Revenue Service in order to obtain a favorable
determination letter with respect to the ESOP, (b) to comply with changes in the
law, (c) to incorporate administrative and non-economic changes and (d) to
incorporate other changes so long as, with respect to this clause (d), the
Borrower in good faith determines that such changes could not singly or in the
aggregate reasonably be expected to result in a Material Adverse Effect.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
8.01. Events of Default. If any of the following events shall occur and
be continuing:
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(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) any Loan Party shall default in the observance or
performance of (A) any agreement contained in Sections 6.01, 6.02, 6.03,
6.04(a) (with respect to Holdings and the Borrower only), 6.05, 6.06,
Section 6.07(a), 6.08, 6.09, or 6.10 or in Section 7 of this Agreement or
(B) any agreement contained in Sections 6.07(b), (c), (d), (e) and (f) and,
with respect to a default referenced in this clause (B), such default shall
continue unremedied for a period of 10 days; or
(d) any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other
Loan Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days after the earlier of (i) notice to the Borrower from the
Administrative Agent or any Lender and (ii) delivery by a Loan Party of a
default notice pursuant to Section 6.07(a); or
(e) any Group Member shall (i) default in making any payment of
any principal of any Indebtedness (including any Guarantee Obligation, but
excluding the Loans) on the due date with respect thereto; or (ii) default
in making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist (excluding (x) a change of control event, which is covered separately
under Section 8.01(k) and (y) an asset sale or similar event in the
ordinary course of business that requires Indebtedness to become due prior
to its stated maturity, but in the case of this clause (y) only to the
extent the amount becoming due is actually repaid), the effect of which
default or other event or condition is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such
holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due prior to its stated maturity or (in the
case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; provided, that a default, event or condition described in
clause (i), (ii) or (iii) of this paragraph (e) shall not at any time
constitute an Event of Default unless the same occurs with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $15,000,000; or
(f) (i) any Loan Party shall commence any case, proceeding or
other action (A) under any Debtor Relief Law or under any other existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any
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substantial part of its assets, or any Loan Party shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Loan Party any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against any Loan Party any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets that results in the entry of an order for any such relief that shall
not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (iv) any Loan Party shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) any Loan Party shall not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, shall exist with respect to any Plan
or any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
any Loan Party involving in the aggregate a liability (to the extent not
paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage or not fully covered by the AIG Credit
Support) of $10,000,000 or more, and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending appeal within
45 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason,
to be in full force and effect (except in accordance with the terms
thereof), or any Loan Party or any Affiliate of any Loan Party shall so
assert, or any Lien created by any of the Security Documents covering
Collateral having a fair market or book value in excess of $2,500,000 shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(j) the guarantee contained in Section 2 of each of the
Guarantee and Collateral Agreements shall cease, for any reason (except if
such release is in accordance with the terms thereof), to be in full force
and effect or any Loan Party or any Affiliate of any Loan Party shall so
assert;
(k) (i) the ESOP shall cease to have the power to vote or direct
the voting of securities having a majority of the ordinary voting power for
the election of directors of Holdings (determined on a fully diluted
basis); (ii) the ESOP Trust shall cease to own of record and
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beneficially greater than 50% of the outstanding Capital Stock of Holdings;
(iii) Holdings shall cease to own and control, of record and beneficially,
directly, 100% of each class of outstanding Capital Stock of the Borrower,
free and clear of all consensual Liens (except Liens created by the
Guarantee and Collateral Agreements); (iv) the board of directors of either
Holdings or the Borrower shall cease to include two independent directors;
or (v) a Specified Change of Control shall occur; or
(l) the Senior Subordinated Notes or the guarantees thereof, or
any related Permitted Refinancing Debt or the guarantees thereof, so long
as such Indebtedness is outstanding, shall cease, for any reason, to be
validly subordinated to the Obligations or the obligations of the
Subsidiaries party thereto under the Guarantee and Collateral Agreements,
as provided in the Senior Subordinated Note Indenture or any related
Permitted Refinancing Debt Document, as the case may, or any Loan Party,
any Affiliate of any Loan Party, the trustee or agent in respect of the
Senior Subordinated Notes or any related Permitted Refinancing Debt
Document, or the holders of at least 25% in aggregate principal amount of
the Senior Subordinated Notes or any related Permitted Refinancing Debt, as
the case may be, shall so assert; or
(m) (i) AWA shall default in the observance or performance of
any agreement contained in the AWA Environmental Indemnity Agreement (after
giving effect to any credit support provided with respect to such default
pursuant to the AIG Credit Support), where such default, singly or in the
aggregate with all other such defaults, if any, could reasonably be
expected to have a Material Adverse Effect, (ii) any of the Fox River
Indemnity Arrangements shall be terminated, held in any judicial proceeding
to be unenforceable or invalid or shall cease for any reason to be in full
force and effect or any party thereto, or any Person acting on behalf of
any party thereto, shall deny or disaffirm its obligations under any of the
Fox River Indemnity Arrangements or the Lien created by the Bermuda
Security Agreement shall cease to be enforceable and of the same effect and
priority purported to be created thereby, (iii) any party (other than a
Group Member) shall otherwise default in the observance or performance of
any material agreement contained in the Acquisition Documentation after
giving effect to any applicable cure period, where such default, singly or
in the aggregate with all other such defaults, if any, could reasonably be
expected to have a Material Adverse Effect, (iv) any party shall default in
the observance or performance of any agreement contained in the Bermuda
Company Agreements, where such default, singly or in the aggregate with all
other such defaults, if any, could reasonably be expected to have a
Material Adverse Effect, or (v) NCR Corp. shall default in the observance
or performance of any agreement contained in the NCR Agreements, where such
default, singly or in the aggregate with all other such defaults, if any,
could reasonably be expected to have a Material Adverse Effect; or
(n) the First Lien Note Intercreditor Agreement or any provision
thereof shall cease to be in full force and effect, or any Lien securing or
purporting to secure Indebtedness or other obligations owing under the
First Lien Note Documents shall, for any reason, cease to be subordinated
to the extent required pursuant to the terms and provisions of the First
Lien Note Intercreditor Agreement to the Lien created under the Security
Documents securing the RCF Obligations under, and as defined in, the First
Lien Note Intercreditor Agreement;
(o) the Second Lien Note Intercreditor Agreement or any
provision thereof shall cease to be in full force and effect, or any Lien
securing or purporting to secure Indebtedness or other obligations owing
under the Second Lien Note Documents shall, for any reason, cease to be
subordinated to the Lien created under the Security Documents securing the
First-Lien Obligations under, and as defined in, the Second Lien Note
Intercreditor Agreement; or
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(p) the trustee of the ESOP shall at any time fail to be an
independent institutional third-party fiduciary;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) to be due and
payable forthwith, whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time Cash Collateralize the L/C
Obligations in accordance with the other provisions of this Agreement. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived by the Borrower.
8.02. Application of Funds. After the exercise of remedies provided for
in Section 8.01 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in clause (A) at the end of Section 8.01), any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting
fees, indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Administrative Agent and amounts payable
under Article III) payable to the Administrative Agent in its capacity as
such;
Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal,
interest and Letter of Credit Fees) payable to the Lenders and the L/C
Issuers (including fees, charges and disbursements of counsel to the
respective Lenders and the L/C Issuers (including fees and time charges for
attorneys who may be employees of any Lender or any L/C Issuer) and amounts
payable under Article III, ratably among them in proportion to the
respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C
Borrowings and other Obligations, ratably among the Lenders and the L/C
Issuers in proportion to the respective amounts described in this clause
Third payable to them;
Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans, L/C Borrowings, Secured Hedge
Agreements (calculated in accordance with the applicable Hedge Termination
Value) and Secured Cash Management Agreements, ratably
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among the Lenders, the L/C Issuers, the Hedge Banks and the Cash Management
Banks in proportion to the respective amounts described in this clause
Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C
Issuers, to Cash Collateralize that portion of L/C Obligations comprised of
the aggregate undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX
ADMINISTRATIVE AGENT
9.01. Appointment and Authority.
(a) Each of the Lenders and L/C Issuers hereby irrevocably
appoints Fifth Third to act on its behalf as the Administrative Agent
hereunder and under the other Loan Documents and authorizes the
Administrative Agent to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the
benefit of the Administrative Agent, the Lenders and the L/C Issuers, and
neither the Borrower nor any other Loan Party shall have rights as a third
party beneficiary of any of such provisions.
(b) The Administrative Agent shall also act as the "collateral
agent" under the Loan Documents, and each of the Lenders (in its capacities
as a Lender, Swing Line Lender (if applicable), potential Hedge Bank and
potential Cash Management Bank) and the L/C Issuers hereby irrevocably
appoints and authorizes the Administrative Agent to act as the agent of
such Lender and such L/C Issuer for purposes of acquiring, holding and
enforcing any and all Liens on Collateral granted by any of the Loan
Parties to secure any of the Obligations, together with such powers and
discretion as are reasonably incidental thereto. In this connection, the
Administrative Agent, as "collateral agent" and any co-agents, sub-agents
and attorneys-in-fact appointed by the Administrative Agent pursuant to
Section 9.05 for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Security Documents,
or for exercising any rights and remedies thereunder at the direction of
the Administrative Agent), shall be entitled to the benefits of all
provisions of this Article IX and Article X (including Section 10.04(c), as
though such co-agents, sub-agents and attorneys-in-fact were the
"collateral agent" under the Loan Documents) as if set forth in full herein
with respect thereto.
9.02. Rights as a Lender. The Person serving as the Administrative
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 the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept
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deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if such Person were not
the Administrative Agent hereunder and without any duty to account therefor to
the Lenders.
9.03. Exculpatory Provisions. The Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the
Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents),
provided that the Administrative Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document
or applicable law; and
(c) shall not, except as expressly set forth herein and in the
other Loan Documents, have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or
any of its Affiliates that is communicated to or obtained by the Person
serving as the Administrative Agent or any of its Affiliates in any
capacity.
The Administrative Agent shall not be liable for any action taken or not
taken by it (i) with the consent or at the request of the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary, or as the
Administrative Agent shall believe in good faith shall be necessary, under the
circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. The Administrative Agent shall
be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or an L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, or the creation,
perfection or priority of any Lien purported to be created by the Security
Documents, (v) the value or the sufficiency of any Collateral, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04. Reliance by Administrative Agent. The Administrative 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 (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur
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any liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or an L/C Issuer,
the Administrative Agent may presume that such condition is satisfactory to such
Lender or such L/C Issuer unless the Administrative Agent shall have received
notice to the contrary from such Lender or such L/C Issuer prior to the making
of such Loan or the issuance of such Letter of Credit. The Administrative Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts 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 experts.
9.05. Delegation of Duties. The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative 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 Administrative Agent.
9.06. Resignation of Administrative Agent. The Administrative Agent may
at any time give notice of its resignation to the Lenders, the L/C Issuers and
the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the L/C Issuers, appoint a successor Administrative
Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (a) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents (except that in the case of any
collateral security held by the Administrative Agent on behalf of the Lenders or
the L/C Issuers under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and each L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent's resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.
Any resignation by Fifth Third as Administrative Agent pursuant to this
Section shall also constitute its resignation as an L/C Issuer and Swing Line
Lender. Upon the acceptance of a successor's appointment as Administrative Agent
hereunder, (i) such successor shall succeed to and become vested
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with all of the rights, powers, privileges and duties of the retiring L/C Issuer
and Swing Line Lender, (ii) the retiring L/C Issuer and Swing Line Lender shall
be discharged from all of their respective duties and obligations hereunder or
under the other Loan Documents, and (iii) the successor L/C Issuer shall issue
letters of credit in substitution for the Letters of Credit issued by such
retiring L/C Issuer, if any, outstanding at the time of such succession or make
other arrangements satisfactory to the retiring L/C Issuer to effectively assume
the obligations of the retiring L/C Issuer with respect to such Letters of
Credit.
9.07. Non-Reliance on Administrative Agent and Other Lenders. Each
Lender and each L/C Issuer acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties 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 and each L/C Issuer also acknowledges that it will,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
9.08. No Other Duties, Etc. Anything herein to the contrary
notwithstanding, the Arranger shall have no powers, duties or responsibilities
under this Agreement or any of the other Loan Documents, except in its capacity,
as applicable, as the Administrative Agent, a Lender or an L/C Issuer hereunder.
9.09. Administrative Agent May File Proofs of Claim. In case of the
pendency of any proceeding under any Debtor Relief Law or any other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower or
any other Loan Party) shall be entitled and empowered, by intervention in such
proceeding or otherwise
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to file
such other documents as may be necessary or advisable in order to have the
claims of the Lenders, the L/C Issuers and the Administrative Agent
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the L/C Issuers and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders, the L/C Issuers and the Administrative Agent under
Sections 2.03(i) and (j), 2.09 and 10.04) allowed in such judicial
proceeding; and
(b) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender and each L/C Issuer to make such payments to the Administrative
Agent and, if the Administrative Agent shall consent to the making of such
payments directly to the Lenders and the L/C Issuers, to pay to the
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and its agents and
counsel, and any other amounts due the Administrative Agent under Sections 2.09
and 10.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender or
any L/C Issuer any plan of reorganization,
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arrangement, adjustment or composition affecting the Obligations or the rights
of any Lender or any L/C Issuer to authorize the Administrative Agent to vote in
respect of the claim of any Lender or any L/C Issuer or in any such proceeding.
9.10. Collateral and Guaranty Matters. The Lenders and the L/C Issuers
irrevocably authorize the Administrative Agent, at its option and in its
discretion,
(a) to release any Lien on any property granted to or held by
the Administrative Agent under any Loan Document (i) upon termination of
the Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination
of all Letters of Credit, (ii) that is sold or to be sold as part of or in
connection with any sale permitted hereunder or under any other Loan
Document, (iii) if approved, authorized or ratified in writing in
accordance with Section 10.01, or (iv) by a Guarantor that is released
pursuant to clause (b) below;
(b) to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder; and
(c) to subordinate or release any Lien on any property granted
to or held by the Administrative Agent under any Loan Document to the
holder of any Lien on such property that is permitted by Section 7.03(f),
(g), (n), (o), (p) or (r).
Upon request by the Administrative Agent at any time, the Required Lenders will
confirm in writing the Administrative Agent's authority to release or
subordinate its interest in particular types or items of property, or to release
any Guarantor from its obligations under the Guaranty pursuant to this Section
9.10. In each case as specified in this Section 9.10, the Administrative Agent
will, at the Borrower's expense, execute and deliver to the applicable Loan
Party such documents as such Loan Party may reasonably request to evidence the
release of such item of Collateral from the assignment and security interest
granted under the Security Documents or to subordinate its interest in such
item, or to release such Guarantor from its obligations under the Guaranty, in
each case in accordance with the terms of the Loan Documents and this Section
9.10.
ARTICLE X
MISCELLANEOUS
10.01. Amendments, Etc. Except as provided in Section 2.14 with respect
to any increase in the Facility, no amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Required Lenders (or by the Administrative Agent with the consent
of the Required Lenders) and the Borrower or the applicable Loan Party, as the
case may be, and acknowledged by the Administrative Agent, and each such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no such amendment, waiver or
consent shall:
(a) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to Section 8.01) without the
written consent of such Lender;
(b) postpone any date fixed by this Agreement or any other Loan
Document for any payment (excluding mandatory prepayments) of principal,
interest, fees or other amounts due to the Lenders (or any of them)
hereunder or under such other Loan Document without the written
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consent of each Lender entitled to such payment; provided, however, that
only the consent of the Required Lenders shall be necessary to waive any
mandatory prepayment pursuant to Section 2.05(b);
(c) reduce the principal of, or the rate of interest specified
herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the
proviso to this Section 10.01) any fees or other amounts payable hereunder
or under any other Loan Document without the written consent of each Lender
entitled to such amount; provided, however, that only the consent of the
Required Lenders shall be necessary to amend the interest rate specified in
Section 2.08(b) or to waive any obligation of the Borrower to pay interest
or Letter of Credit Fees at the interest rate specified in Section 2.08(b);
(d) change Section 8.02 in a manner that would alter the pro
rata sharing of payments required thereby without the written consent of
each Lender affected thereby;
(e) change (i) any provision of this Section 10.01, (ii) the
definition of "Required Lenders" or any other provision hereof specifying
the number or percentage of Lenders required to amend, waive or otherwise
modify any rights hereunder or make any determination or grant any consent
hereunder, or (iii) without the written consent of Lenders holding more
than 75% of the sum of the (x) Total Outstandings (with the aggregate
amount of each Lender's risk participation and funded participation in L/C
Obligations and Swing Line Loans being deemed "held" by such Lender for
purposes hereof) and (y) aggregate unused Commitments), the definitions of
"Eligible Accounts," "Eligible Inventory" or "Borrowing Base" (including
the advance rates referenced therein and any defined term used therein
relevant to the determination of the Borrowing Base);
(f) release all or substantially all of the Collateral in any
transaction or series of related transactions, without the written consent
of each Lender; or
(g) release all or substantially all of the value of the
Guaranty, without the written consent of each Lender, except to the extent
the release of any Subsidiary from the Guaranty is permitted pursuant to
Section 9.10 (in which case such release may be made by the Administrative
Agent acting alone);
and, provided, further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by an L/C Issuer in addition to the Lenders required
above, affect the rights or duties of such L/C Issuer under this Agreement or
any Issuer Document relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the Fee Letter, any Secured Hedge Agreement, and any
Secured Cash Management Agreement may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
If any Lender does not consent to a proposed amendment, waiver, consent or
release with respect to any Loan Document that requires the consent of each
Lender (or the Lenders required pursuant to Section 10.01(e)(iii)) and that has
been approved by the Required Lenders, the Borrower may replace
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such non-consenting Lender in accordance with Section 10.13; provided that such
amendment, waiver, consent or release can be effected as a result of the
assignment contemplated by such Section (together with all other such
assignments required by the Borrower to be made pursuant to this paragraph).
Notwithstanding the foregoing, this Agreement may be amended (or amended
and restated) with the written consent of the Required Lenders, the
Administrative Agent and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
to share ratably in the benefits of this Agreement and the other Loan Documents
(including mandatory prepayments) with the Loans and the accrued interest and
fees in respect thereof and (b) to include appropriately the Lenders holding
such credit facilities in any determination of the Required Lenders.
10.02. Notices; Effectiveness; Electronic Communications.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all 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 facsimile transmission as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall
be made to the applicable telephone number, as follows:
(i) if to Holdings, the Borrower, the Administrative
Agent, any L/C Issuer or the Swing Line Lender, to the address,
facsimile number, electronic mail address or telephone number
specified for such Person on Schedule 10.02; and
(ii) if to any other Lender, to the address, facsimile
number, electronic mail address or telephone number specified in
its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified
or registered mail, shall be deemed to have been given when received;
notices sent by facsimile shall be deemed to have been given when sent
(except that, if not given during normal business hours for the recipient,
shall be deemed to have been given at the opening of business on the next
business day for the recipient). Notices delivered through electronic
communications to the extent provided in subsection (b) below shall be
effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications
to the Lenders and the L/C Issuers hereunder may be delivered or furnished
by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent,
provided that the foregoing shall not apply to notices to any Lender or any
L/C Issuer pursuant to Article II if such Lender or such L/C Issuer, as
applicable, has notified the Administrative Agent that it is incapable of
receiving notices under such Article by electronic communication. The
Administrative Agent or the Borrower may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as
by the "return receipt requested" function, as available, return e-mail or
other written acknowledgement), provided that if such notice or other
communication is not sent during the normal business hours of the
recipient, such notice or
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communication shall be deemed to have been sent at the opening of business
on the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.
(c) The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS
AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE
PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM
THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION
WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the
Administrative Agent or any of its Related Parties (collectively, the
"Agent Parties") have any liability to Holdings, the Borrower, any Lender,
any L/C Issuer or any other Person for losses, claims, damages, liabilities
or expenses of any kind (whether in tort, contract or otherwise) arising
out of the Borrower's or the Administrative Agent's transmission of
Borrower Materials through the Internet, except to the extent that such
losses, claims, damages, liabilities or expenses are determined by a court
of competent jurisdiction by a final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Agent
Party; provided, however, that in no event shall any Agent Party have any
liability to Holdings, the Borrower, any Lender, any L/C Issuer or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).
(d) Change of Address, Etc. Each of Holdings, the Borrower, the
Administrative Agent, each L/C Issuer and the Swing Line Lender may change
its address, facsimile or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, facsimile or telephone number for notices
and other communications hereunder by notice to the Borrower, the
Administrative Agent, each L/C Issuer and the Swing Line Lender. In
addition, each Lender agrees to notify the Administrative Agent from time
to time to ensure that the Administrative Agent has on record (i) an
effective address, contact name, telephone number, facsimile number and
electronic mail address to which notices and other communications may be
sent and (ii) accurate wire instructions for such Lender. Furthermore, each
Public Lender agrees to cause at least one individual at or on behalf of
such Public Lender to at all times have selected the "Private Side
Information" or similar designation on the content declaration screen of
the Platform in order to enable such Public Lender or its delegate, in
accordance with such Public Lender's compliance procedures and applicable
Law, including United States Federal and state securities Laws, to make
reference to Borrower Materials that are not made available through the
"Public Side Information" portion of the Platform and that may contain
material non-public information with respect to the Borrower or its
securities for purposes of United States Federal or state securities laws.
(e) Reliance by Administrative Agent, L/C Issuers and Lenders.
The Administrative Agent, the L/C Issuers and the Lenders shall be entitled
to rely and act upon any notices (including telephonic Committed Loan
Notices and Swing Line Loan Notices) purportedly given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form
of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation
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thereof. The Borrower shall indemnify the Administrative Agent, each L/C
Issuer, each Lender and the Related Parties of each of them from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower
except to the extent that such losses, costs, expenses or liabilities are
determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence or
willful misconduct of Administrative Agent, the L/C Issuers or the Lenders.
All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each
of the parties hereto hereby consents to such recording.
10.03. No Waiver; Cumulative Remedies. No failure by any Lender, any L/C
Issuer or the Administrative Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder or under any
other Loan Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided,
and provided under each other Loan Document, are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
10.04. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all
reasonable, invoiced out-of-pocket expenses incurred by the Administrative
Agent and its Affiliates (including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent), in connection with
the syndication of the credit facilities provided for herein, the
preparation, negotiation, execution, delivery and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable, invoiced out-of-pocket expenses incurred by each L/C Issuer in
connection with the issuance, amendment, renewal or extension of any Letter
of Credit or any demand for payment thereunder and (iii) all out-of-pocket
expenses incurred by the Administrative Agent, each L/C Issuer and, during
the existence of an Event of Default, any Lender (including the fees,
charges and disbursements of any counsel for the Administrative Agent, any
Lender or any L/C Issuer), in connection with the enforcement or protection
of its rights (A) in connection with this Agreement and the other Loan
Documents, including its rights under this Section, or (B) in connection
with Loans made or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Borrower. The Borrower shall
indemnify the Administrative Agent (and any sub-agent thereof), each Lender
and each L/C Issuer, and each Related Party of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities
and related expenses (including the fees, charges and disbursements of any
counsel for any Indemnitee) incurred by any Indemnitee or asserted against
any Indemnitee by any third party or by the Borrower or any other Loan
Party arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto of their respective obligations hereunder or thereunder
or the consummation of the transactions contemplated hereby or thereby, or,
in the case of the Administrative Agent (and any sub-agent thereof) and its
Related Parties only, the administration of this Agreement and the other
Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed
use of the proceeds therefrom (including any refusal by an L/C Issuer to
honor a demand for payment under a Letter of Credit if
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the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property
owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based
on contract, tort or any other theory, whether brought by a third party or
by the Borrower or any other Loan Party or any of the Borrower's or such
Loan Party's directors, shareholders or creditors, and regardless of
whether any Indemnitee is a party thereto; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses (x) 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 or its Related Parties or (y) is solely amongst Indemnitees
and/or their Related Parties and does not involve an act or omission by the
Borrower or any other Loan Party or (z) result from a claim brought by the
Borrower or any other Loan Party against an Indemnitee for material breach
of such Indemnitee's obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that the Borrower
for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), any L/C Issuer or any
Related Party of any of the foregoing, each Lender severally agrees to pay
to the Administrative Agent (or any such sub-agent), such L/C Issuer or
such Related Party, as the case may be, such Lender's Percentage
(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
the Administrative Agent (or any such sub-agent) or such L/C Issuer in its
capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or such L/C
Issuer in connection with such capacity. The obligations of the Lenders
under this subsection (c) are subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, neither the Borrower nor Holdings shall
assert, and each of them hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of,
in connection with, or as a result of, this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit
or the use of the proceeds thereof. No Indemnitee referred to in subsection
(b) above shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed to
such unintended recipients by such Indemnitee through telecommunications,
electronic or other information transmission systems in connection with
this Agreement or the other Loan Documents or the transactions contemplated
hereby or thereby other than for direct or actual damages resulting from
the gross negligence or willful misconduct of such Indemnitee as determined
by a final and nonappealable judgment of a court of competent jurisdiction.
(e) Payments. All amounts due under this Section shall be
payable not later than ten days after demand therefor.
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(f) Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent, any L/C Issuer and the Swing Line
Lender, the replacement of any Lender, the termination of the Commitments
and the repayment, satisfaction or discharge of all the other Obligations.
10.05. Payments Set Aside. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent, any L/C Issuer or
any Lender, or the Administrative Agent, any L/C Issuer or any Lender exercises
its right of setoff, and such payment or the proceeds of such setoff or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required (including pursuant to any settlement entered into by the
Administrative Agent, such L/C Issuer or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred, and (b) each Lender
and each L/C Issuer severally agrees to pay to the Administrative Agent upon
demand its applicable share (without duplication) of any amount so recovered
from or repaid by the Administrative Agent, plus interest thereon from the date
of such demand to the date such payment is made at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
and the L/C Issuers under clause (b) of the preceding sentence shall survive the
payment in full of the Obligations and the termination of this Agreement.
10.06. Successors and Assigns.
(a) Successors and Assigns Generally. 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, except
that neither the Borrower nor any other Loan Party may assign or otherwise
transfer any of its rights or obligations hereunder without the prior
written consent of the Administrative Agent and each Lender and no Lender
may assign or otherwise transfer any of its rights or obligations hereunder
except (i) to an assignee in accordance with the provisions of Section
10.06(b), (ii) by way of participation in accordance with the provisions of
Section 10.06(d), or (iii) by way of pledge or assignment of a security
interest subject to the restrictions of Section 10.06(f), (and any other
attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed
to confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative
Agent, the L/C Issuers and the Lenders) any legal or equitable right,
remedy or claim under or by reason of this Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to
one or more assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this Section 10.06(b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided
that any such assignment shall be subject to the following conditions:
(i) Minimum Amounts.
(A) in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and
the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an
Approved Fund, no minimum amount need be assigned; and
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(B) in any case not described in subsection (b)(i)(A)
of this Section, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding
thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the
date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if
"Trade Date" is specified in the Assignment and Assumption,
as of the Trade Date, shall not be less than $5,000,000,
unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the
Borrower otherwise consents (each such consent not to be
unreasonably withheld, delayed or conditioned); provided,
however, that concurrent assignments to members of an
Assignee Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an
Eligible Assignee and members of its Assignee Group) will be
treated as a single assignment for purposes of determining
whether such minimum amount has been met.
(ii) Proportionate Amounts. 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
with respect to the Loans and the Commitment assigned, except
that this clause (ii) shall not apply to the Swing Line Lender's
rights and obligations in respect of Swing Line Loans.
(iii) Required Consents. No consent shall be required for
any assignment except to the extent required by subsection
(b)(i)(B) of this Section and, in addition:
(A) the consent of the Borrower (such consent not to
be unreasonably withheld, delayed or conditioned) shall be
required unless (1) any Event of Default has occurred and is
continuing at the time of such assignment, or (2) such
assignment is to a Lender or Affiliate of a Lender; and
(B) the consent of the Administrative Agent and each
L/C Issuer (such consent not to be unreasonably withheld,
delayed or conditioned) shall be required unless such
assignment is to a Person that is not a Lender or an
Affiliate of a Lender.
(iv) Assignment and Assumption. The parties to each
assignment shall execute and deliver to the Administrative Agent
an Assignment and Assumption, together with a processing and
recordation fee in the amount of $3,500; provided, however, that
the Administrative Agent may, in its sole discretion, elect to
waive such processing and recordation fee in the case of any
assignment. The assignee, if it is not a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire.
(v) No Assignment to Borrower. No such assignment shall be
made to the Borrower or any of the Borrower's Affiliates or
Subsidiaries.
(vi) No Assignment to Natural Persons. No such assignment
shall be made to a natural person.
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective
date specified in each Assignment and Assumption, the assignee thereunder
shall be a party to this Agreement and, to the extent of the
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interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment
and Assumption, be released from its obligations under this Agreement (and,
in the case of an Assignment and Assumption 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 3.01, 3.04, 3.05 and 10.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment.
Upon request, the Borrower (at its expense) shall execute and deliver a
Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with Section 10.06(d). Notwithstanding the foregoing, as of the time of any
assignment, no assignee shall be entitled to greater increased costs or
indemnities under Sections 3.01 or 3.04 than the assignor Lender.
(c) Register. The Administrative Agent, acting solely for this
purpose as an agent of the Borrower, shall maintain at the Administrative
Agent's Office a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Lenders
and L/C Issuers, and the Commitments of, and principal amounts of the Loans
and L/C Obligations owing to, each Lender and L/C Issuer, as applicable,
pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Lenders and each L/C Issuer may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a
Lender or L/C Issuer, as applicable, hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. Any assignment or
transfer of the Commitments of a Lender or L/C Issuer and the rights to the
principal of, and interest on, any Loan or L/C Obligation made pursuant to
such Commitments shall not be effective until such transfer is recorded on
the Register. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Participations. Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrower
or any of the Borrower's Affiliates or Subsidiaries) (each, a
"Participant") in all or a portion of such Lender's rights and/or
obligations under this Agreement (including all or a portion of its
Commitment and/or the Loans (including such Lender's participations in L/C
Obligations and/or Swing Line 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) the Borrower, the Administrative
Agent, the Lenders and the L/C Issuers shall continue to deal solely and
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 this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement;
provided that such agreement or instrument may provide that such Lender
will not, without the consent of the Participant, agree to any amendment,
waiver or other modification described in the first proviso to Section
10.01 that affects such Participant. Subject to subsection (e) of this
Section, Borrower agrees that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to Section
10.06(b). To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.13 as though it
were a Lender.
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(e) Limitations upon Participant Rights. A Participant shall not
be entitled to receive any greater payment under Section 3.01 or 3.04 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 (expressly including the ability to
receive payments under Section 3.01 and 3.04 independent of the applicable
Lender) is made with the Borrower's prior written consent. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to
the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 3.01(e) as though it were a
Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign
a security interest in all or any portion of its rights under this
Agreement (including under its Note, if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment shall
release such Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment and
Assumption shall be deemed to include electronic signatures or the keeping
of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the
use of a paper-based recordkeeping system, as the case may be, to the
extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York
State Electronic Signatures and Records Act, or any other similar state
laws based on the Uniform Electronic Transactions Act.
(h) Resignation as L/C Issuer or Swing Line Lender after
Resignation as Administrative Agent. Notwithstanding anything to the
contrary contained herein, if at any time Fifth Third resigns as
Administrative Agent, Fifth Third may, (i) upon 30 days' notice to the
Borrower and the Lenders, resign as an L/C Issuer and/or (ii) upon 30 days'
notice to the Borrower, resign as Swing Line Lender and the Borrower may,
(i) upon 30 days' notice to Fifth Third remove Fifth Third as an L/C Issuer
and/or (ii) upon 30 days' notice to Fifth Third, remove Fifth Third as
Swing Line Lender. In the event of any such resignation as an L/C Issuer or
the Swing Line Lender, the Borrower shall be entitled to appoint from among
the Lenders a successor L/C Issuer or Swing Line Lender hereunder;
provided, however, that no failure by the Borrower to appoint any such
successor shall affect the resignation of Fifth Third as an L/C Issuer or
the Swing Line Lender, as the case may be. If Fifth Third resigns as an L/C
Issuer, it shall retain all the rights, powers, privileges and duties of an
L/C Issuer hereunder with respect to all Letters of Credit issued by it and
outstanding as of the effective date of its resignation as an L/C Issuer
and all L/C Obligations with respect thereto (including the right to
require the Lenders to make Base Rate Loans or fund risk participations in
Unreimbursed Amounts with respect to such Letters of Credit pursuant to
Section 2.03(c)). If Fifth Third resigns as the Swing Line Lender, it shall
retain all the rights of the Swing Line Lender provided for hereunder with
respect to Swing Line Loans made by it and outstanding as of the effective
date of such resignation, including the right to require the Lenders to
make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C
Issuer and/or Swing Line Lender, (a) such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the
successor L/C Issuer shall issue letters of credit in substitution for the
Letters of Credit, if any, issued by the retiring L/C Issuer and
outstanding at the time of such succession or
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make other arrangements satisfactory to Fifth Third to effectively assume
the obligations of Fifth Third respect to such Letters of Credit.
10.07. Treatment of Certain Information; Confidentiality. The
Administrative Agent, each Lender and each L/C Issuer each agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates' respective partners, directors, officers, employees, agents,
advisors and representatives who reasonably need to know same (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), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
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, 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 or any Eligible
Assignee invited to be a Lender pursuant to Section 2.14(b) or (ii) any actual
or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Administrative Agent, any Lender, any L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than
Holdings, the Borrower or any of their Subsidiaries or Related Parties.
For purposes of this Section, "Information" means all information received
from any Loan Party or any Subsidiary thereof relating to any Loan Party or any
Subsidiary thereof or their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or any L/C
Issuer on a nonconfidential basis prior to disclosure by any Loan Party or any
Subsidiary thereof. 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.
The Administrative Agent, each Lender and each L/C Issuer each acknowledges
that (a) the Information may include material non-public information concerning
the Borrower or a Subsidiary, as the case may be, (b) it has developed
compliance procedures regarding the use of material non-public information and
(c) it will handle such material non-public information in accordance with
applicable Law, including United States Federal and state securities Laws.
10.08. Right of Setoff. If an Event of Default has occurred and is
continuing under Section 8.01(a) or Section 8.01(f), each Lender, each L/C
Issuer and each of their respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by applicable law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Lender, such L/C
Issuer or any such Affiliate to or for the credit or the account of the Borrower
or any other Loan Party against any and all of the obligations of the Borrower
or such Loan Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender or such L/C Issuer, irrespective of whether or not
such Lender or such L/C Issuer shall have made any demand under this Agreement
or any other Loan Document and although such obligations of the Borrower or such
Loan Party may be contingent or unmatured or are owed to a branch or office of
such Lender or such L/C Issuer different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of
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each Lender, each L/C Issuer and their respective Affiliates under this Section
are in addition to other rights and remedies (including other rights of setoff)
that such Lender, the L/C Issuer or their respective Affiliates may have. Each
Lender and each L/C Issuer agrees to notify the Borrower and the Administrative
Agent promptly after any such setoff and application, provided that the failure
to give such notice shall not affect the validity of such setoff and
application.
10.09. Interest Rate Limitation. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
10.10. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents 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 that, when taken together, bear the
signatures of each of the other parties hereto. Delivery of an executed
counterpart of a signature page of this Agreement by email, facsimile or any
similar electronic transmission shall be effective as delivery of a manually
executed counterpart of this Agreement.
10.11. Survival of Representations and Warranties. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent, each Lender and each L/C Issuer, regardless of any
investigation made by the Administrative Agent, any Lender or any L/C Issuer on
their behalf and notwithstanding that the Administrative Agent, any Lender or
any L/C Issuer may have had notice or knowledge of any Default at the time of
any Credit Extension, and shall continue in full force and effect as long as any
Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any
Letter of Credit shall remain outstanding.
10.12. Severability. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.13. Replacement of Lenders. If (i) any Lender requests compensation
under Section 3.04, (ii) the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, (iii) a Lender does not consent to a proposed
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amendment, waiver, consent or release with respect to any Loan Document that
requires the consent of each Lender (or the Lenders required pursuant to Section
10.01(e)(iii)) that has been approved by the Required Lenders, or (iv) any
Lender is a Defaulting Lender or if any other circumstance exists hereunder that
gives the Borrower the right to replace a Lender as a party hereto, then the
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, and
consents required by, Section 10.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:
(a) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 10.06(b);
(b) such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans and L/C Advances, accrued
interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents (including any amounts under
Section 3.05) from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of
all other amounts);
(c) in the case of any such assignment resulting from a claim
for compensation under Section 3.04 or payments required to be made
pursuant to Section 3.01, such assignment will result in a reduction in
such compensation or payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
(e) in the case of any such assignment resulting from a Lender's
failure to consent to a proposed change, waiver, discharge or termination
with respect to any Loan Document, the applicable amendment, modification
and/or waiver of this Agreement that the Borrower has requested shall
become effective upon giving effect to such assignment (and any related
assignments required to be effected in connection therewith in accordance
with this Section 10.13).
A Lender shall not be required to make any such assignment or delegation
if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
10.14. Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. THE BORROWER AND EACH OTHER LOAN
PARTY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY,
TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE
EASTERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN
ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT,
AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE
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HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE 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 PROVIDED BY LAW. NOTHING IN THIS AGREEMENT
OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, ANY LENDER OR ANY L/C ISSUER MAY OTHERWISE HAVE TO
BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. THE BORROWER AND EACH OTHER LOAN PARTY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY 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 APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS
TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.
NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW
10.15. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
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 OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON 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 AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.16. No Advisory or Fiduciary Responsibility. In connection with all
aspects of each transaction contemplated hereby (including in connection with
any amendment, waiver or other modification hereof or of any other Loan
Document), each of the Borrower and Holdings acknowledges and agrees, and
acknowledges its Affiliates' understanding, that: (i) (A) the arranging and
other services regarding this Agreement provided by the Administrative Agent and
the Arranger are arm's-length commercial transactions between the Borrower,
Holdings and their respective Affiliates, on the one hand, and the
Administrative Agent and the Arranger on the other hand, (B) each of the
Borrower and Holdings has consulted its own legal, accounting, regulatory and
tax advisors to the extent it has deemed appropriate, and (C) each of the
Borrower and Holdings is capable of evaluating, and understands and
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accepts, the terms, risks and conditions of the transactions contemplated hereby
and by the other Loan Documents; (ii) (A) the Administrative Agent and the
Arranger each is and has been acting solely as a principal and, except as
expressly agreed in writing by the relevant parties, has not been, is not, and
will not be acting as an advisor, agent or fiduciary for the Borrower, Holdings
or any of their respective Affiliates, or any other Person and (B) neither the
Administrative Agent nor the Arranger has any obligation to the Borrower,
Holdings or any of their respective Affiliates with respect to the transactions
contemplated hereby except those obligations expressly set forth herein and in
the other Loan Documents; and (iii) the Administrative Agent, the Arranger and
their respective Affiliates may be engaged in a broad range of transactions that
involve interests that differ from those of the Borrower, Holdings and their
respective Affiliates, and neither the Administrative Agent nor any of the Joint
Lead Arrangers has any obligation to disclose any of such interests to the
Borrower, Holdings or any of their respective Affiliates. To the fullest extent
permitted by law, each of the Borrower and Holdings hereby waives and releases
any claims that it may have against the Administrative Agent and the Joint Lead
Arrangers with respect to any breach or alleged breach of agency to the Loan
Parties or fiduciary duty in connection with any aspect of any transaction
contemplated hereby.
10.17. USA PATRIOT Act Notice. Each Lender that is subject to the Act
(as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower and each other Loan Party
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the "Act"), it is required to
obtain, verify and record information that identifies each Loan Party, which
information includes the name and address of each Loan Party and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify each Loan Party in accordance with the Act. Each Loan
Party agrees to provide any such information as reasonably requested by a Lender
in order to comply with the Act.
10.18. OTHER LIENS ON COLLATERAL; TERMS OF INTERCREDITOR AGREEMENTS;
ETC.
(a) EACH LENDER HERETO UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT
LIENS EXIST AND SHALL HEREAFTER BE CREATED ON THE COLLATERAL PURSUANT TO
THE FIRST LIEN NOTE DOCUMENTS AND SECOND LIEN NOTE DOCUMENTS, RESPECTIVELY,
WHICH LIENS SHALL BE SUBJECT TO THE TERMS AND PROVISIONS OF EACH OF THE
INTERCREDITOR AGREEMENTS. EACH OF THE INTERCREDITOR AGREEMENTS ALSO HAS
OTHER PROVISIONS WHICH ARE BINDING UPON THE LENDERS, THE HEDGE BANKS AND
THE CASH MANAGEMENT BANKS. PURSUANT TO THE EXPRESS TERMS AND PROVISIONS OF
EACH OF THE INTERCREDITOR AGREEMENTS, IN THE EVENT OF ANY CONFLICT BETWEEN
THE TERMS AND PROVISIONS OF SUCH INTERCREDITOR AGREEMENT AND ANY OF THE
LOAN DOCUMENTS, THE PROVISIONS OF SUCH INTERCREDITOR AGREEMENT SHALL GOVERN
AND CONTROL.
(b) EACH LENDER AUTHORIZES AND INSTRUCTS THE ADMINISTRATIVE
AGENT TO ENTER INTO OR OTHERWISE BECOME A PARTY TO EACH INTERCREDITOR
AGREEMENT ON BEHALF OF THE LENDERS, AND TO TAKE ALL ACTIONS (AND TO EXECUTE
ALL AGREEMENTS, DOCUMENTS AND INSTRUMENTS) REQUIRED (OR DEEMED ADVISABLE)
BY THE ADMINISTRATIVE AGENT IN ACCORDANCE WITH THE RESPECTIVE TERMS AND
PROVISIONS THEREOF.
(c) THE PROVISIONS OF THIS SECTION 10.18 ARE NOT INTENDED TO
SUMMARIZE ALL RELEVANT PROVISIONS OF THE INTERCREDITOR AGREEMENTS.
111
REFERENCE MUST BE MADE TO EACH INTERCREDITOR AGREEMENT ITSELF TO UNDERSTAND
ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS
OWN ANALYSIS AND REVIEW OF EACH INTERCREDITOR AGREEMENT AND THE TERMS AND
PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS
RESPECTIVE AFFILIATES MAKES ANY REPRESENTATION TO ANY LENDER AS TO THE
SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN ANY
INTERCREDITOR AGREEMENT.
- Remainder of Page Intentionally Left Blank -
[Signature Pages Follow]
112
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
BORROWER AND HOLDINGS:
APPLETON PAPERS INC., a Delaware
corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Controller
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PAPERWEIGHT DEVELOPMENT
CORP., a Wisconsin corporation, as Holdings
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Controller
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
ADMINISTRATIVE AGENT, L/C ISSUERS
SWING LINE LENDER AND LENDERS:
FIFTH THIRD BANK, an Ohio banking
corporation, as Administrative Agent, an
L/C Issuer, Swing Line Lender and a Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ Di Cola
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Name: ▇▇▇▇▇▇▇▇▇ Di Cola
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Title: Vice President
-------------------------------------