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SECOND AMENDED AND RESTATED
$200,000,000
DEBTOR IN POSSESSION
CREDIT AGREEMENT
AMONG
SAFETY-KLEEN SERVICES, INC.,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
TORONTO DOMINION (TEXAS), INC.,
AS GENERAL ADMINISTRATIVE AGENT AND UNDERWRITER,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS, L.P.,
AS UNDERWRITER,
AND
THE CIT GROUP/ BUSINESS CREDIT INC.,
AS COLLATERAL AGENT AND UNDERWRITER,
DATED AS OF MARCH 22, 2002
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS.............................................................2
1.1 Defined Terms.........................................................2
1.2 Other Definitional Provisions........................................21
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS.......................................21
2.1 Revolving Credit Commitments.........................................21
2.2 Procedure for Revolving Credit Borrowing.............................22
2.3 Repayment of Revolving Credit Loans; Evidence of Debt................23
2.4 Termination or Reduction of Revolving Credit Commitments.............23
2.5 Funding Mechanisms During Borrower Notification Period...............24
SECTION 3. LETTERS OF CREDIT......................................................24
3.1 L/C Commitments......................................................24
3.2 Procedure for Issuance of Letter of Credit...........................25
3.3 Commissions, Fees and Other Charges..................................26
3.4 L/C Participations...................................................26
3.5 Reimbursement Obligation of the Borrower.............................27
3.6 Obligations Absolute.................................................28
3.7 Letter of Credit Payments............................................28
3.8 Applications.........................................................29
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT...........29
4.1 Commitment Fee.......................................................29
4.2 Optional Prepayments.................................................29
4.3 Mandatory Prepayments and Commitment Reductions......................30
4.4 Conversion and Continuation Options..................................32
4.5 Minimum Amounts of Tranches..........................................33
4.6 Interest Rates and Payment Dates.....................................33
4.7 Computation of Interest and Fees.....................................34
4.8 Inability to Determine Interest Rate.................................35
4.9 Pro Rata Treatment and Payments......................................35
4.10 Illegality..........................................................37
4.11 Requirements of Law.................................................38
4.12 Taxes...............................................................39
4.13 Indemnity...........................................................41
4.14 Change of Lending Office; Replacement Lender........................41
SECTION 5. REPRESENTATIONS AND WARRANTIES.........................................42
5.1 Accuracy of Information, etc.........................................42
5.2 No Change............................................................42
5.3 Corporate Existence; Compliance with Law.............................43
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5.4 Corporate Power; Authorization; Enforceable Obligations..............43
5.5 No Legal Bar.........................................................43
5.6 No Material Litigation...............................................43
5.7 No Default...........................................................44
5.8 Ownership of Property; Liens.........................................44
5.9 Intellectual Property................................................44
5.10 No Burdensome Restrictions..........................................44
5.11 Taxes...............................................................44
5.12 Federal Regulations.................................................45
5.13 ERISA...............................................................45
5.14 Investment Company Act; Other Regulations...........................45
5.15 Affiliates..........................................................45
5.16 Purpose of Loans....................................................45
5.17 Environmental Matters...............................................46
5.18 Security Documents..................................................47
5.19 Bank Accounts.......................................................47
SECTION 6. CONDITIONS PRECEDENT...................................................47
6.1 Conditions to Initial Extensions of Credit...........................47
6.2 Conditions to Extension of Credit....................................49
SECTION 7. AFFIRMATIVE COVENANTS..................................................51
7.1 Financial Statements.................................................51
7.2 Certificates; Other Information......................................51
7.3 Collateral Reports...................................................53
7.4 Collateral Audit.....................................................53
7.5 Conduct of Business and Maintenance of Existence.....................54
7.6 Maintenance of Property; Insurance...................................54
7.7 Inspection of Property; Books and Records; Discussions...............54
7.8 Notices..............................................................54
7.9 Environmental Laws...................................................55
7.10 Further Assurances..................................................56
7.11 Interest Escrow Account.............................................56
7.12 Chief Executive Officer.............................................57
SECTION 8. NEGATIVE COVENANTS.....................................................57
8.1 Proceeds of Revolving Credit Loans...................................57
8.2 Limitation on Indebtedness...........................................57
8.3 Limitation on Liens..................................................58
8.4 Limitation on Guarantee Obligations..................................59
8.5 Limitation on Fundamental Changes....................................59
8.6 Limitation on Disposition of Assets..................................59
8.7 Limitation on Dividends..............................................60
8.8 Limitation on Investments, Loans and Advances........................60
8.9 Limitation on Transactions with Affiliates...........................61
8.10 Limitation on Sales and Leasebacks..................................61
8.11 Limitation on Changes in Fiscal Year................................61
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8.12 Limitation on Lines of Business.....................................62
8.13 Chapter 11 Claims; Payment of Pre-Petition Date Claims..............62
8.14 Reclamation Claims; Bankruptcy Code Section 546(g) Agreements.......62
8.15 Employment Arrangements.............................................62
SECTION 9. EVENTS OF DEFAULT......................................................62
SECTION 10. THE GENERAL ADMINISTRATIVE AGENT AND COLLATERAL AGENT.................65
10.1 Appointments........................................................65
10.2 Delegation of Duties................................................66
10.3 Exculpatory Provisions..............................................66
10.4 Reliance by General Administrative Agent and Collateral Agent.......66
10.5 Notice of Default...................................................67
10.6 Non-Reliance on the General Administrative Agent, Collateral Agent
and Other Lenders...................................................67
10.7 Indemnification.....................................................68
10.8 Agents in Their Respective Individual Capacities....................68
10.9 Successor Agent.....................................................68
SECTION 11. MISCELLANEOUS.........................................................69
11.1 Amendments and Waivers..............................................69
11.2 Notices.............................................................70
11.3 No Waiver; Cumulative Remedies......................................72
11.4 Survival of Representations and Warranties..........................72
11.5 Payment of Expenses and Taxes.......................................72
11.6 Successors and Assigns; Participations and Assignments..............73
11.7 Adjustments; Set-off................................................76
11.8 Counterparts........................................................76
11.9 Severability........................................................77
11.10 Integration........................................................77
11.11 GOVERNING LAW......................................................77
11.12 Submission To Jurisdiction; Waivers................................77
11.13 Acknowledgments....................................................78
11.14 WAIVER OF JURY TRIAL...............................................78
11.15 Confidentiality....................................................78
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SCHEDULES
1.1A Commitments of Lenders
1.1B Addresses for Notices
1.1C Blocked Accounts
1.1D Tranche B Available Commitment Amount
3.1(b) Schedule `B' Sites and Yellow Schedule `C' Sites
5.6 Litigation
5.8 Existing Liens
5.9 Intellectual Property Matters
5.11 Tax Matters
5.15 Affiliates
5.17 Environmental Matters
6.2(e) Prepetition Financial Assurances
7.2(c) IT Projects
8.2(b) Existing Indebtedness
8.3(f) Existing Liens
8.4(a) Existing Guarantee Obligations
8.6 Permitted Asset Dispositions
8.8 Existing Investments
EXHIBITS
A Form of Amended and Restated Guarantee and Collateral Agreement
B Form of Borrowing Base Certificate
C-1 Form of Note for Tranche A Revolving Credit Loans
C-2 Form of Note for Tranche B Revolving Credit Loans
D Form of Closing Certificate
E Form of Borrowing Certificate
F Form of Final Order
G Form of Assignment and Acceptance
H Form of Intercreditor Agreement
I Form of Cash Collateral Agreement
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AMENDED AND RESTATED DEBTOR IN POSSESSION CREDIT AGREEMENT,
initially dated as of June 11, 2000, as amended and restated as of July 19,
2000, and as further amended and restated as of March 22, 2002, among
SAFETY-KLEEN SERVICES, INC., a Delaware corporation (the "Borrower"), the
financial institutions or entities from time to time parties to this Agreement
(the "Lenders"), THE TORONTO-DOMINION BANK and TORONTO-DOMINION (TEXAS), INC.,
as letter of credit issuing banks (as hereinafter defined, the "Issuing
Lenders"), TORONTO DOMINION (TEXAS), INC., as administrative agent (as
hereinafter defined, the "General Administrative Agent") and underwriter,
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS, L.P. ("GSCP") as an underwriter, and THE CIT
GROUP/ BUSINESS CREDIT INC. ("CIT"), as collateral agent and underwriter (the
"Collateral Agent"; collectively with GSCP (as defined below) and the General
Administrative Agent, the "Underwriters").
W I T N E S S E T H
WHEREAS, on June 9, 2000 (the "Petition Date"), the Borrower,
its sole shareholder, Safety-Kleen Corp., a Delaware corporation ("Holdings"),
and the wholly owned subsidiaries of the Borrower incorporated under the laws of
the United States of America (the "Subsidiaries"; collectively with Holdings,
the "Guarantors") filed voluntary petitions under Section 301 of the Bankruptcy
Code with the United States Bankruptcy Court for the District of Delaware (the
"Bankruptcy Court") initiating their Chapter 11 cases (the "Cases") and have
continued in the possession of their assets and in the management of their
businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code;
WHEREAS, the Borrower and the Underwriters entered into the
Amended and Restated Credit Agreement dated as of July 19, 2000 (the "Existing
DIP Credit Agreement"), among the Borrower, the financial institutions or
entities from time to time parties to thereto ("Existing Lenders"), and the
General Administrative Agent, which authorized extensions of credit up to
$100,000,000 ("Existing Facility"), of which approximately $75,000,000 is
currently outstanding;
WHEREAS, the Borrower has requested (i) that the Existing
Lenders amend and restate the Existing DIP Credit Agreement to continue to make
available $75,000,000 of the Existing Facility and (ii) other financial
institutions or entities make available extensions of credit up to $125,000,000,
such that revolving credit loans and letter of credit facilities shall be
available in an aggregate principal amount not to exceed $200,000,000 (inclusive
of (a) a $75,000,000 sublimit for the issuance of Tranche A Letters of Credit
(as hereinafter defined) and (b) a $50,000,000 sublimit for the issuance of
Tranche B Letters of Credit (as hereinafter defined)), guaranteed by the
Guarantors, the proceeds of which will be used (a) for working capital and
capital expenditures of the Borrower and the Subsidiaries, (b) for payment of
Chapter 11 expenses, including professional fees and (c) the payment of
interest, fees and expenses hereunder, in each case subject to the terms of this
Agreement, the orders entered from time to time by the Bankruptcy Court, the
FY02 Budget (as hereinafter defined) and the FY03 Budget (as hereinafter
defined);
WHEREAS, to provide security for the repayment and
reimbursement of the extensions of credit and the payment of the other
obligations of the Borrower and the Guarantors hereunder and under the other
Loan Documents, the Borrower and the Guarantors shall provide
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to the General Administrative Agent (for the benefit of the General
Administrative Agent, the Collateral Agent and the Lenders (in such order of
priority among the Lenders as determined in accordance with the Intercreditor
Agreement)), pursuant to this Agreement, the Guarantee and Collateral Agreement
and the Final Order, security interests in collateral as provided in the Final
Order;
WHEREAS, all of the claims and the Liens granted hereunder and
under the Guarantee and Collateral Agreement (as hereinafter defined) and the
Final Order (as hereinafter defined) to the General Administrative Agent and the
Lenders shall be subject to the Carve-Out (as hereinafter defined);
WHEREAS, the Tranche A Lenders (as hereinafter defined) are
willing to continue to make available $75,000,000 of the Existing Facility and
the Tranche B Lenders (as hereinafter defined) are willing to make available the
Tranche B Revolving Facility in the amount of $125,000,000, upon and subject to
the terms and conditions hereinafter set forth;
WHEREAS, the Borrower, the Lenders and the Underwriters desire
to amend and restate the Existing DIP Credit Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereby agree that, on the
Closing Date, the Existing DIP Credit Agreement shall be amended and restated in
its entirety as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Accounts": as defined in the Guarantee and Collateral
Agreement.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, 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
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Agreement": this Second Amended and Restated Debtor in
Possession Credit Agreement, as amended, supplemented or otherwise
modified from time to time.
"Applicable Margin": on any day, (a) for Base Rate Loans under
the Tranche A Revolving Facility, 1.00%, (b) for LIBOR Loans, 3.00% and
(c) for Tranche B Revolving Credit Loans, 7.25%. Beginning September 1,
2002, the Applicable Margin for Tranche B Revolving Credit Loans shall
increase monthly, on the first day of each calendar month, by .5% per
annum.
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"Application": an application, in such form as the Issuing
Lender may specify from time to time, requesting the Issuing Lender to
issue a Letter of Credit.
"Approved Fund": with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans
and is advised or managed by the same investment advisor as such Lender
or by an Affiliate of such investment advisor.
"Asset Sale": any Disposition of assets or series of related
Dispositions of assets, excluding any Disposition of assets permitted
by Section 8.6.
"Assignee": as defined in Section 11.6(c).
"Bankruptcy Code": the Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C.ss.ss.101 et
seq.
"Bankruptcy Court": as defined in the Recitals to this
Agreement.
"Base Rate": a rate per annum determined by the General
Administrative Agent on a daily basis, equal to the higher of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus one half of one percent (.50 of 1%) per
annum.
"Base Rate Loan": any Loan the rate of interest applicable to
which is based upon the Base Rate.
"Bi-Monthly Report": a bi-monthly report (reasonably
satisfactory to the General Administrative Agent) on the implementation
of the IT Projects, comprising, but not limited to, (i) a monthly
budget for all costs associated with any and all IT Projects and (ii) a
timeline detailing completion dates for each IT Project.
"Blocked Account": any bank account of a Loan Party that is
subject to irrevocable written instructions from the Borrower
satisfactory to the Collateral Agent (which will require, in the case
of the bank accounts listed on Schedule 1.1C, that the several banks at
which such accounts are maintained enter into Blocked Account
Agreements) to transfer all funds collected therein directly or
indirectly through other bank accounts of such Loan Party to the
Concentration Account.
"Blocked Account Agreement": the Blocked Account Agreement,
dated as of August 11, 2000, as amended, by and among the General
Administrative Agent, the Collateral Agent, the Borrower and the bank
party thereto.
"Blue Business": the Borrower's Chemical Services Division.
"Blue Business Net Proceeds": in connection with the Blue
Business Sale, the proceeds thereof in the form of cash and cash
equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of the Blue Business Sale, net of attorneys' fees,
accountants' fees, investment
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banking fees, other professional fees, fees and interest payments
previously paid hereunder after the Closing Date and any projected fees
and interest payments due hereunder until the Termination Date,
including such fees and interest payments due on or prior to the
Termination Date, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any
asset which is the subject of such the Blue Business Sale or pursuant
to the Final Order (other than any Lien pursuant to a Security
Document) and other fees and expenses associated with or actually
incurred or to be incurred in connection therewith (including, without
limitation, ▇▇▇▇▇▇▇'▇ compensation payments, disability insurance,
environmental penalties, working capital adjustments, costs incurred to
cure defaults under contracts and severance payments) and net of taxes
paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax
sharing arrangements) but including the amount of intercompany
Indebtedness, if any, repaid to any Loan Party as part of the Blue
Business Sale; provided, that (i) none of such proceeds shall
constitute Blue Business Net Proceeds until the earlier of (A) the date
all related working capital adjustments have been made or (B) 180 days
after the consummation of the Blue Business Sale (such date, the "Blue
Business Net Proceeds Release Date") and (ii) from the date of
consummation of the Blue Business Sale until all related working
capital adjustments have been made, all cash proceeds (net of any
deductions permitted above in respect of fees, expenses and other
payments made on or before the date of such dispositions) of the
consummation of the Blue Business Sale shall be held in an escrow
account (the "Blue Business Escrow Account"). Upon a reasonable request
in writing signed by a Responsible Officer of the Borrower to the
General Administrative Agent, amounts shall be released from the Blue
Business Escrow Account to the Borrower for uses consistent with the
definition of "Blue Business Net Proceeds". On the Blue Business Net
Proceeds Release Date, amounts necessary to pay projected fees and
interest payable hereunder until the Termination Date shall be
transferred to the Interest Escrow Account.
"Blue Business Sale": the Disposition of the Blue Business.
"Board": the Board of Governors of the Federal Reserve System.
"Borrower": as defined in the Preamble to this Agreement.
"Borrower Notice": a written notice transmitted from time to
time by the Underwriters (or, if requested by Bank One, NA, the
Underwriters shall be required to transmit a Borrower Notice on its
behalf) to the Borrower and the bank where the Concentration Account is
maintained, designating the Payment Account; provided, that no such
Borrower Notice shall be transmitted or enforced unless (i) Loans are
at such time outstanding or Letters of Credit have been issued but not
cash collateralized and (ii) either a Default or Event of Default has
occurred and is continuing or the cash management and deposit accounts
of the Borrower maintained at Bank One, NA are in an overdraft
position; and provided, further, that, if no Default or Event of
Default has occurred and is continuing and the cash management and
deposit accounts of the Borrower maintained at Bank One, NA are not in
an overdraft position, any outstanding Borrower Notice shall be
suspended by the Underwriters and any amounts in the
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Payment Account (which had not been applied to cover any overdraft
position, if applicable) shall be transferred to the Concentration
Account until such time as a new Borrower Notice is delivered in
accordance with the terms hereof.
"Borrower Notification Date": the Business Day (which shall be
no earlier than the third Business Day after the date of transmittal of
the related Borrower Notice) specified in a Borrower Notice.
"Borrower Notification Period": the period from and including
a Borrower Notification Date until the related Borrower Notice is
suspended by the Underwriters.
"Borrowing Base": on any date of determination, the amount
determined by the Underwriters in their reasonable judgment by
reference to the most recent Borrowing Base Certificate delivered
pursuant to this Agreement, equal to the lesser of (i) the aggregate
cash collections from Eligible Account Debtors for the five weeks
immediately preceding such date of determination and (ii) 75% of the
sales to Eligible Account Debtors in the five weeks immediately
preceding such date of determination, subject to such other reserves as
the Underwriters in their reasonable judgment may establish from time
to time.
"Borrowing Base Certificate": a borrowing base certificate
substantially in the form of Exhibit B with such changes as the
Underwriters, in their sole discretion, may approve.
"Borrowing Base Shortfall": shall occur at any time when the
aggregate outstanding principal amount of the Tranche A Revolving
Credit Loans exceeds the Borrowing Base then in effect by 10% or less.
"Borrowing Date": any Business Day specified in a notice
pursuant to Section 2.2 as a date on which the Borrower requests the
Lenders to make Loans hereunder.
"Budget": the FY02 Budget and/or FY03 Budget, as the context
requires.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Houston, Texas are
authorized or required by law to close; provided that when such term is
used with respect to notices and determinations in connection with, and
payments of principal of, and interest on, LIBOR Loans, any day which
is a Business Day in New York City and which is also a day on which
trading by and between banks in Dollar deposits may be carried out in
the London interbank eurodollar market.
"Canadian Subsidiaries": the collective reference to all
direct or indirect subsidiaries of Holdings domiciled in or
incorporated under the laws of Canada.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
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"Carve-Out": as defined in Section 4.3 of the Guarantee and
Collateral Agreement.
"Cases": as defined in the Recitals to this Agreement.
"Cash Collateral Account": as defined in Section 4.2(b).
"Cash Collateral Agreement": a Cash Collateral Agreement,
substantially in the form of Exhibit I, between a Tranche B Lender and
the Issuing Lender.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) 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, (d) commercial paper of a domestic issuer
rated at least A-2 by Standard and Poor's Rating Group ("S&P") or P-2
by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), (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 one year 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 or (g)
shares of money market mutual or similar funds which invest exclusively
in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Closing Date": the date on which the conditions precedent to
the making of the initial Extension of Credit set forth in Section 6.1
shall be satisfied.
"Co-Arrangers": TD Securities (USA) Inc. and GSCP, as
co-arrangers of the Revolving Credit Commitments.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document or the Final Order.
"Collateral Agent": as defined in the Preamble to this
Agreement.
"Commitment Period": the period from and including the Closing
Date to the Termination Date.
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"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer under
Section 414 of the Code.
"Concentration Account": the account, No. ▇▇▇▇▇▇▇, established
by the Borrower under the sole and exclusive control of the General
Administrative Agent, or the Collateral Agent as its designee,
maintained at the office of Bank One, N.A. (formerly known as The First
National Bank of Chicago) designated as the "Safety-Kleen Services,
Inc. Concentration Account" or other similar title, which shall be used
for the daily concentration of all funds received by the Borrower or
any Guarantor from the operation of their businesses.
"Contractual Obligation": 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.
"Default": any of the events specified in Section 9, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Disbursement Account": the account of the Borrower maintained
at the office of The Toronto-Dominion Bank at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ into which all Loan proceeds are to be
deposited.
"Disposition": with respect to any asset, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Elgin Building": the real estate, and any improvements
thereon, owned by Safety-Kleen Systems, Inc. and located at ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
"Eligible Account Debtors": at a particular date, the account
debtors in respect of all Accounts of any Loan Party arising in the
ordinary course of business, other than:
(a) an Affiliate or employee of any Loan Party;
(b) an account debtor which has commenced, or has had
commenced against it, a proceeding or case seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or
the composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator or the like of such
obligor or of all or any substantial part of its property, or (iii)
similar relief in respect of such obligor under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts; or an order for relief against such obligor shall
be entered in an involuntary case under the Bankruptcy Code or any
other applicable bankruptcy, insolvency or similar laws; and
8
(c) an account debtor located outside the United States of
America (including, without limitation, its commonwealth, territories
and possessions), unless it has provided standby letters of credit or
other instruments (in form and substance reasonably satisfactory to the
Underwriters) issued or confirmed by, and payable at, banks
satisfactory to the Underwriters having a place of business in the
United States of America and payable in Dollars, which letters of
credit are assigned or issued for the benefit of and delivered to the
Underwriters.
"Environmental Laws": any and all laws (including, without
limitation, all common and civil law), rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirement of any foreign government, the United States,
or any state, provincial, local, municipal or other governmental
authority, regulating, relating to or imposing liability or standards
of conduct concerning protection of the environment or of human health,
or employee health and safety, as has been, is now, or may at any time
hereafter be, in effect.
"Environmental Letters of Credit": as defined in Section
3.1(a).
"Environmental Permits": any and all permits, licenses,
registrations, approvals, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a LIBOR Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Business Day": any day on which banks are open for
dealings in dollar deposits in the London interbank market.
"Event of Default": any of the events specified in Section 9,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash": cash or Cash Equivalents of Holdings, the
Borrower and any of the Subsidiaries of the Borrower aggregating in
excess of $20,000,000 (excluding cash or Cash Equivalents in the Blue
Business Escrow Account, in the Interest Escrow Account, securing
Letters of Credit or securing financial assurances and performance
bonds permitted to be secured by Section 8.3(d)); provided that, in
determining "Excess Cash", the amounts to be paid under checks and wire
transfers which have not cleared the account of the Loan Party will not
be considered in such calculation.
9
"Extension of Credit": as to any Lender, the making of a Loan
by such Lender, or the issuance of (or acquisition of a participating
interest in) any Letter of Credit. It is expressly understood and
agreed that the continuations of Loans as LIBOR Loans or Base Rate
Loans or conversions of one Type of Loan to another pursuant to Section
4.4 do not constitute new Extensions of Credit for purposes of this
Agreement.
"Facility": each of (a) the Tranche A Revolving Credit
Commitment and the extensions of credit made thereunder (the "Tranche A
Revolving Facility") and (b) the Tranche B Revolving Credit Commitment
and the extensions of credit made thereunder (the "Tranche B Revolving
Facility").
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers
as published for such day (or, if such day is not a Business Day, for
the next preceding Business Day) by the Federal Reserve Bank of New
York or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the General Administrative Agent from three
federal funds brokers of recognized standing selected by it.
"Fee Letter": the fee letter, dated as of March 22, 2002,
between the Borrower and the General Administrative Agent.
"Final Order": the order of the Bankruptcy Court dated as of
March 20, 2002, entered in the Cases after a final hearing under
Bankruptcy Rule 4001(c)(2) granting final approval of this Agreement
and the other Loan Documents and the transactions contemplated hereby
and thereby and granting the Liens and Super-Priority Claims in favor
of the General Administrative Agent and the Lenders, which shall be
nonappealable and in form and substance reasonably satisfactory to the
General Administrative Agent.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Foreign Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction outside the United States of
America.
"FY02 Budget": a detailed monthly budget dated August 29, 2001
and updated on January 17, 2002, covering the period from the Closing
Date through August 31, 2002.
"FY03 Budget": a detailed monthly budget, substantially in the
form of the FY02 Budget (or as otherwise mutually agreed to by the
General Administrative Agent, the Borrower and Lenders holding more
than 50% of the total Revolving Credit Commitments or, if the Revolving
Credit Commitments have been terminated, the aggregate principal (or
face) amount of all Extensions of Credit then outstanding), for the
periods (a) from September 1, 2002 through and including October 31,
2002, together with a reasonably detailed estimate of the amount of
financing required for the Borrower
10
to emerge from bankruptcy on October 31, 2002, such budget and such
estimate to be pro forma for the Blue Business Sale as of August 31,
2002 and the consummation of a Plan of Reorganization for the Yellow
Business as of October 31, 2002 and (ii) from October 31, 2002 through
and including August 31, 2003.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"General Administrative Agent": Toronto Dominion (Texas) Inc.,
together with its affiliates, as a co-arranger of the Revolving Credit
Commitments and as administrative agent for the Lenders under this
Agreement and the other Loan Documents, and any successor thereto
pursuant to Section 10.9.
"GSCP": ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners, L.P., as a co-arranger
and an Underwriter.
"Governmental Authority": any nation or government, any state,
provincial or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Second Amended and
Restated Guarantee and Collateral Agreement, substantially in the form
of Exhibit A, as amended, supplemented or otherwise modified from time
to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which obligation the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation,
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
11
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. For avoidance of doubt, Guarantee Obligations will not include
obligations of Holdings and its Subsidiaries incurred in the ordinary
course of business to indemnify customers in connection with business
services provided by Holdings or its Subsidiaries.
"Guarantor": as defined in the Recitals to this Agreement.
"Holdings": as defined in the Recitals to this Agreement.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities
(other than obligations in respect of performance bonds and letters of
credit in the nature of performance bonds), (e) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or
otherwise acquire for value any Capital Stock (other than common stock)
of such Person, (f) all Guarantee Obligations of such Person in respect
of obligations of the kind referred to in clauses (a) through (e) above
and (g) all obligations of the kind referred to in clauses (a) through
(f) 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, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Agreement": a Collateral Agency and
Intercreditor Agreement, substantially in the form of Exhibit H, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Interest Determination Date": with respect to any Interest
Period for LIBOR Loans, the date which is two Eurodollar Business Days
prior to the first day of such LIBOR Interest Period.
"Interest Escrow Account": the interest escrow account
established by the Borrower no later than the Closing Date, in the name
of the General Administrative Agent, containing at least $5,000,000 in
immediately available funds as of the Closing Date and used as set
forth in Section 4.6(e).
12
"Interest Payment Date": (a) as to any Base Rate Loan the last
Business Day of each calendar month and (b) as to any LIBOR Loan, the
last day of the Interest Period related thereto.
"Interest Period": with respect to any LIBOR Loan:
(a) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Loan
and ending one month thereafter; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such LIBOR Loan and ending
one month thereafter;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day; and
(2) any Interest Period that would otherwise extend
beyond the Termination Date shall end on the Termination Date;
and
(3) 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 a calendar month.
"Interest Settlement Period": during the Borrower Notification
Period, (a) with respect to Base Rate Loans, each calendar month, and
(b) with respect to each set of LIBOR Rate Loans having the same
Interest Period, such Interest Period.
"Investment Grade Entity": any Tranche B Lender that (as
determined conclusively by The Toronto-Dominion Bank) either (i) is
wholly-owned by an entity having senior unsecured debt ratings at least
as high as BBB- by S&P and Baa3 by ▇▇▇▇▇'▇ or (ii) itself has senior
unsecured debt ratings at least as high as BBB- by S&P and Baa3
▇▇▇▇▇'▇.
"Issuance Date": any Business Day specified in a notice
pursuant to Section 3.2 as a date on which an Issuing Lender is
requested to issue a Letter of Credit hereunder.
"Issuing Lender": with respect to each Letter of Credit,
either of The Toronto-Dominion Bank or Toronto-Dominion (Texas), Inc.,
(as determined between them) as the issuer of such Letter of Credit.
13
"IT Projects": each of the information technology projects
listed on Schedule 7.2(c).
"L/C Fee Payment Date": the last day of each calendar month.
"L/C Lenders": the collective reference to the Tranche A L/C
Lenders and the Tranche ▇ ▇/C Lenders.
"L/C Obligations": the collective reference to Tranche A L/C
Obligations and Tranche ▇ ▇/C Obligations.
"Leaseholds": leaseholds of any Loan Party in real property
that is not used for the treatment, storage or disposal of Materials of
Environmental Concern.
"Lenders": as defined in the Recitals to this Agreement.
"Letters of Credit": the collective reference to the Tranche A
Letters of Credit and the Tranche B Letters of Credit.
"LIBOR Loan": any Loan the rate of interest applicable to
which is based upon the LIBOR Rate.
"LIBOR Rate": with respect to a LIBOR Loan for the relevant
Interest Period, the rate per annum determined by the General
Administrative Agent as follows:
(a) on the Interest Determination Date relating to such
Interest Period, the General Administrative Agent shall obtain the
offered quotation(s) for U.S. Dollar deposits for a period comparable
to such Interest Period that appear on the Reuters' Screen as of 11:00
a.m., London time. If at least two such offered quotations appear on
the Reuters' Screen, the LIBOR Rate shall be the arithmetic average
(rounded up to the nearest 1/16th of 1%) of such offered quotations, as
determined by the General Administrative Agent;
(b) if the Reuters' Screen is not available or has been
discontinued, the LIBOR Rate shall be the rate per annum determined by
the LIBOR Reference Bank as the rate at which deposits in U.S. Dollars
are offered to such Reference Banks in the London interbank market at
11:00 a.m., London time, on the Interest Determination Date in the
approximate amount of the LIBOR Reference Bank's relevant LIBOR Loan
and having a maturity approximately equal to the relevant LIBOR
Interest Period; and
(c) if the General Administrative Agent is not able to obtain
quotations for the determination of the LIBOR Rate pursuant to
subsection (a) or (b) above, the LIBOR Rate shall be the rate per annum
which the General Administrative Agent in good faith determines to be
the arithmetic average (rounded as aforesaid) of the offered quotations
for U.S. Dollar deposits in an amount comparable to the General
Administrative Agent's share of the relevant amount in respect of which
the LIBOR Rate is being determined for a period comparable to the
relevant LIBOR Interest Period that leading banks in New York City
selected by the General Administrative Agent are quoting at 11:00 a.m.,
New
14
York City time, on the Interest Determination Date in the New York
interbank market to major international banks.
"LIBOR Reference Bank": The Toronto-Dominion Bank.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": the collective reference to this Agreement,
any Notes, the Applications, the Blocked Account Agreements, the
Intercreditor Agreement and the Security Documents; individually a
"Loan Document".
"Loan Parties": the collective reference to the Borrower and
each Guarantor; individually a "Loan Party".
"Material Adverse Effect": (a) a material adverse effect on
(i) the business, assets, property, condition (financial or otherwise)
or prospects of the Borrower and the Guarantors taken as a whole, (ii)
the ability of the Borrower and the Guarantors, taken as a whole, to
perform the obligations under the Final Order and the Loan Documents,
(iii) the ability of the Borrower and the Guarantors taken as a whole
to reorganize as a going concern under Chapter 11 of the Bankruptcy
Code, (iv) the validity or enforceability of the Final Order or any of
the Loan Documents, (v) the rights and remedies of the Lenders and the
General Administrative Agent under the Final Order and the Loan
Documents or (vi) timely payment of the principal of or interest on the
Loans, outstanding Letters of Credit or other amounts payable in
connection therewith, (b) failure to provide the FY03 Budget to the
General Administrative Agent by August 31, 2002 or (c) the failure to
consummate the Blue Business Sale prior to October 15, 2002; provided,
that the shutdown of the business of Safety-Kleen (Pinewood), Inc.,
taken alone and expressly excluding any legislative, administrative or
judicial action in respect thereof, shall not constitute a Material
Adverse Effect.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, biohazards, radioactivity, and any
other substances or forces of any kind, whether or not any such
substance or force is defined as hazardous or toxic under any
Environmental Law, that is regulated pursuant to or could give rise to
liability under any Environmental Law.
"Maturity Date": the date determined pursuant to clause (a) of
the definition of Termination Date.
15
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and cash
equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event or pursuant to the Final Order (other than any
Lien pursuant to a Security Document) and other customary fees and
expenses actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof (after
taking into account any available tax credits or deductions and any tax
sharing arrangements) but including in the case of any Asset Sale the
amount of intercompany Indebtedness, if any, repaid to any Loan Party
as part of such Asset Sale; provided that the following shall not
constitute Net Cash Proceeds: (i) up to $6,237,575 of any proceeds
realized from the sale of the Elgin Building, (ii) an amount equal to
the amount of fees and interest payments previously paid hereunder
after the Closing Date and (iii) any proceeds realized from the sale of
the Elgin Building and the 3E Sale which are deposited into the
Interest Escrow Account.
"Non-Excluded Taxes": as defined in Section 4.12.
"Notes": the promissory notes for the Tranche A Revolving
Credit Loans of the Borrower, substantially in the form of Exhibit C-1,
and the promissory notes for the Tranche B Revolving Credit Loans of
the Borrower, substantially in the form of Exhibit C-2, as applicable,
each payable to the order of a Lender.
"Obligations": as defined in the Guarantee and Collateral
Agreement.
"Participant": as defined in Section 11.6(b).
"Payment Account": the bank account of the Collateral Agent
designated in the written notice from the Underwriters referred to in
the definition of Borrower Notice.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Person": an individual, partnership, corporation, business
trust, joint stock Borrower, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Petition Date": as defined in the Recitals to this Agreement.
"PIK Interest Rate": as defined in 4.6(c).
16
"Plan": at a particular time, any employee benefit plan which
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.
"Plan of Reorganization": a Chapter 11 plan of reorganization
in any of the Cases.
"Prepetition Agent": the general administrative agent under
the Prepetition Credit Agreement.
"Prepetition Collateral": all property securing the
Prepetition Obligations.
"Prepetition Credit Agreement": the Amended and Restated
Credit Agreement, dated as of April 3, 1998, among the Borrower,
Safety-Kleen (Canada) Ltd., the Prepetition Lenders, Toronto Dominion
(Texas), Inc., as general administrative agent, The Toronto-Dominion
Bank, as Canadian administrative agent, TD Securities (USA) Inc., as
arranger, The Bank of Nova Scotia, Bank of America, Bank One, N.A., and
Wachovia Bank, N.A., as managing agents, the Bank of Nova Scotia and
Bank One, N.A., as co-documentation agent, and Bank of America, as
syndication agent, as amended, supplemented or otherwise modified from
time to time.
"Prepetition Lenders": collectively, the financial
institutions and other entities from time to time parties to the
Prepetition Credit Agreement.
"Prepetition Obligations": the aggregate outstanding principal
amount of the loans and other financial accommodations made under or
pursuant to the Prepetition Credit Agreement, and all accrued but
unpaid interest and fees, costs and other charges payable to the agents
or the Prepetition Lenders under or pursuant to the Prepetition Credit
Agreement and all obligations owing by any Loan Party to any
Prepetition Lender under any Hedging Agreement entered into before the
Petition Date and all interest, fees, costs, other charges or other
obligations that may accrue after the Petition Date (whether or not
allowed as a claim in the Cases).
"Prime Rate": the prime commercial lending rate of The
Toronto-Dominion Bank as in effect from time to time in New York City
for loans in U.S. Dollars, such rate to be adjusted on and as of the
effective date of any change in the Prime Rate. The Prime Rate is only
one of the bases for computing interest on loans made by the Lenders,
and by basing interest on the unpaid principal amount of the Loans on
the Prime Rate, the Lenders have not committed to charge, and the
Borrower has not in any way bargained for, interest based on a lower or
the lowest rate at which the Lenders may now or in the future make
loans to other borrowers.
"Principal Settlement Period": initially, the period from and
including a Borrower Notification Date to and including the last day of
the calendar week in which such Borrower Notification Date falls, and
thereafter, each succeeding calendar week.
17
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Borrower or any of its Subsidiaries in
excess of $5,000,000 in the aggregate.
"Register": as defined in Section 11.6(d).
"Regulation U": Regulation U of the Board as in effect from
time to time.
"Reimbursement Obligation": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": 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 subsection .27, .28, .29, .30, .31, .32,
.34 or .35 of PBGC ▇▇▇.▇▇. 4043.
"Required Lenders": the holders of more than 66-2/3% of the
total Revolving Credit Commitments or, if the Revolving Credit
Commitments have been terminated, the aggregate principal (or face)
amount of all Extensions of Credit then outstanding.
"Required Tranche A Lenders": the holders of more than 66-2/3%
of the total Tranche A Revolving Credit Commitments or, if the Tranche
A Revolving Credit Commitments have been terminated, the aggregate
principal (or face) amount of all Extensions of Credit under the
Tranche A Revolving Facility then outstanding.
"Required Tranche B Lenders": the holders of more than 66-2/3%
of the total Tranche B Revolving Credit Commitments or, if the Tranche
B Revolving Credit Commitments have been terminated, the aggregate
principal (or face) amount of all Extensions of Credit under the
Tranche B Revolving Facility then outstanding.
"Requirement of Law": as to any Person, the Certificate 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.
"Responsible Officer": the chief executive officer and the
president of the Borrower or Holdings, as the case may be, or, with
respect to financial matters, the chief financial officer of the
Borrower or Holdings, as the case may be.
"Reuters' Screen": the display designated at page "LIBO" on
the Reuters Monitor System or such other display on the Reuters Monitor
System as may replace such page displaying the London interbank bid or
offered rates.
"Revolving Credit Commitments": the collective reference to
the Tranche A Revolving Credit Commitment and the Tranche B Revolving
Credit Commitment.
18
"Revolving Credit Loans": the collective reference to Tranche
A Revolving Credit Loans and Tranche B Revolving Credit Loans.
"▇▇▇▇▇▇▇▇▇▇▇ Liens": shall have the meaning assigned thereto
under paragraph 8(b) of the Final Order.
"Schedule `B' Sites": "B" Sites listed on Schedule 3.1(b).
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, and all other security documents
hereafter delivered to the General Administrative Agent granting a Lien
on any property of any Person to secure the obligations and liabilities
of any Loan Party under any Loan Document.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Steering Committee": the informal committee of certain
Prepetition Lenders from time to time.
"Subsidiary": as defined in the Recitals to this Agreement.
"Super-Priority Claim": a claim against the Borrower or any
Guarantor which is an administrative expense claim having priority over
any or all administrative expenses of the kind specified in Sections
503(b) or 507(b) of the Bankruptcy Code.
"Termination Date": the earliest to occur of (a) the one-year
anniversary of the Closing Date; (b) the effective date of a Plan of
Reorganization; and (c) the earlier termination of the Revolving Credit
Commitments in accordance with the terms hereof.
"3E Sale": the sale or other Disposition of 3E Company
Environmental, Ecological and Engineering.
"Tranche": the collective reference to LIBOR Loans, the then
current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Tranche A Available Revolving Credit Commitment": as to any
Tranche A Lender at any time, an amount equal to the excess, if any, of
(a) such Tranche A Lender's Tranche A Revolving Credit Commitment over
(b) such Tranche A Lender's Tranche A Revolving Credit Percentage of
the sum of the then outstanding aggregate principal amount of Tranche A
Revolving Credit Loans and Tranche A L/C Obligations.
"Tranche A Commitment Fee Rate": 1/2of 1% per annum.
"Tranche A L/C Lenders": with respect to each Tranche A Letter
of Credit, the collective reference to all the Tranche A Lenders other
than the Issuing Lender with respect to such Tranche A Letter of
Credit.
19
"Tranche A L/C Obligations": at any time, an amount equal to
the sum of (a) the aggregate then undrawn and unexpired amount of the
then outstanding Tranche A Letters of Credit and (b) the aggregate
amount of drawings under Tranche A Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
"Tranche A Lender": each Lender that has a Tranche A Revolving
Credit Commitment or that holds Tranche A Revolving Credit Loans.
"Tranche A Letters of Credit": as defined in 3.1(a).
"Tranche A Revolving Credit Commitment": as to any Tranche A
Lender, the obligation of such Tranche A Lender, if any, to make
Tranche A Revolving Credit Loans and provide Tranche A Letters of
Credit to the Borrower hereunder in an aggregate principal amount not
to exceed the amount set forth under the heading "Tranche A Revolving
Credit Commitment" opposite such Tranche A Lender's name on Schedule
1.1A (which may be amended from time to time to reflect Tranche A
Lenders who have made additional Tranche A Revolving Credit
Commitments) or, as the case may be, in the Assignment and Acceptance
pursuant to which such Tranche A Lender became a party hereto, as the
same may be changed from time to time pursuant to the terms hereof. The
aggregate amount of the Tranche A Revolving Credit Commitments on the
Closing Date is $75,000,000.
"Tranche A Revolving Credit Loan": as defined in Section 2.1.
"Tranche A Revolving Credit Percentage": as to any Tranche A
Lender at any time, the percentage which such Tranche A Lender's
Tranche A Revolving Credit Commitment then constitutes of the aggregate
Tranche A Revolving Credit Commitments (or, if the Tranche A Revolving
Credit Commitments have been terminated, the percentage which the
aggregate principal amount of such Tranche A Lender's Extensions of
Credit then outstanding constitutes of the aggregate principal (or
face) amount of all Extensions of Credit then outstanding).
"Tranche A Revolving Facility": as defined in the definition
of "Facility".
"Tranche B Available Commitment Amount": the amounts set forth
on Schedule 1.1D hereto.
"Tranche B Available Revolving Credit Commitment": as to any
Tranche B Lender at any time, an amount equal to the excess, if any, of
(a) such Tranche B Lender's Tranche B Revolving Credit Commitment over
(b) such Tranche B Lender's Tranche B Revolving Credit Percentage of
the sum of the then outstanding aggregate principal amount of Tranche B
Revolving Credit Loans and Tranche ▇ ▇/C Obligations.
"Tranche B Commitment Fee Rate": 4.00% per annum.
"Tranche B Environmental Letters of Credit": as defined in
Section 3.1(b).
20
"Tranche ▇ ▇/C Lenders": with respect to each Tranche B Letter
of Credit, the collective reference to all the Tranche B Lenders other
than the Issuing Lender with respect to such Tranche B Letter of
Credit.
"Tranche ▇ ▇/C Obligations": at any time, an amount equal to
the sum of (a) the aggregate then undrawn and unexpired amount of the
then outstanding Tranche B Letters of Credit and (b) the aggregate
amount of drawings under Tranche B Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
"Tranche B Lender": each Lender that has a Tranche B Revolving
Credit Commitment or that holds Tranche B Revolving Credit Loans.
"Tranche B Letter of Credit Sublimit": initially, $50,000,000
and thereafter, as such amount may be reduced by mandatory commitment
reductions hereunder.
"Tranche B Letters of Credit": as defined in Section 3.1(b).
"Tranche B Revolving Credit Commitment": as to any Tranche B
Lender, the obligation of such Tranche B Lender, if any, to make
Tranche B Revolving Credit Loans and provide Tranche B Letters of
Credit to the Borrower hereunder in an aggregate principal amount not
to exceed the amount set forth under the heading "Tranche B Revolving
Credit Commitment" opposite such Tranche B Lender's name on Schedule
1.1A (which may be amended from time to time to reflect Tranche B
Lenders who have made additional Tranche B Revolving Credit
Commitments) or, as the case may be, in the Assignment and Acceptance
pursuant to which such Tranche B Lender became a party hereto, as the
same may be changed from time to time pursuant to the terms hereof. The
aggregate amount of the Tranche B Revolving Credit Commitments on the
Closing Date is $125,000,000.
"Tranche B Revolving Credit Loan": as defined in Section 2.1.
"Tranche B Revolving Credit Percentage": as to any Tranche B
Lender at any time, the percentage which such Tranche B Lender's
Revolving Credit Commitment then constitutes of the aggregate Tranche B
Revolving Credit Commitments (or, if the Tranche B Revolving Credit
Commitments have been terminated, the percentage which the aggregate
principal amount of such Tranche B Lender's Extensions of Credit then
outstanding constitutes of the aggregate principal (or face) amount of
all Extensions of Credit then outstanding).
"Tranche B Revolving Facility": as defined in the definition
of "Facility".
"Transferee": as defined in Section 11.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a
LIBOR Loan.
"Underwriters": as defined in the Preamble to this Agreement.
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"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"U.S. Dollars" and "$": dollars in the lawful currency of the
United States of America.
"Yellow Business": the Borrower's Branch Sales and Service
Division.
"Yellow Schedule `C' Sites": the "C" Sites listed on Schedule
3.1(b).
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Loan Parties not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP; provided that, if the Borrower notifies the General
Administrative Agent that the Borrower requests an amendment to any provision
hereof to eliminate the effect of any change occurring after the date hereof in
GAAP or in the application thereof on the operation of such provision (or if the
General Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then, pending execution and delivery of such an amendment,
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Tranche A Lender severally agrees to make revolving
credit loans (each, a "Tranche A Revolving Credit Loan") denominated in U.S.
Dollars to the Borrower during the Commitment Period in an aggregate principal
amount at any one time outstanding which, after giving effect to such borrowing
and the use of proceeds thereof, does not exceed the lesser of (i) the amount of
such Tranche A Lender's Tranche A Available Revolving Credit Commitment and (ii)
such Tranche A Lender's Tranche A Revolving Credit Percentage of the Borrowing
Base
22
then in effect. During the Commitment Period, the Borrower may use the Tranche A
Revolving Credit Commitments by borrowing, prepaying the Tranche A Revolving
Credit Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof. The Tranche A Revolving Credit Loans may from time
to time be LIBOR Loans or Base Rate Loans, as determined by the Borrower and
notified to the General Administrative Agent and, during the Borrower
Notification Period, the Collateral Agent in accordance with Sections 2.2 and
4.4. Pursuant to the Existing DIP Credit Agreement, the Tranche A Lenders have
made revolving credit loans to the Borrower; on the Closing Date such loans, to
the extent outstanding, shall constitute Tranche A Revolving Credit Loans.
(b) Subject to the terms and conditions hereof, each Tranche B Lender
severally agrees to make revolving credit loans (each, a "Tranche B Revolving
Credit Loan"), denominated in U.S. Dollars to the Borrower during the Commitment
Period in an aggregate principal amount at any one time outstanding which after
giving effect to such borrowing and the use of proceeds thereof does not exceed
such Tranche B Lender's Tranche B Revolving Credit Percentage of the Tranche B
Available Commitment Amount. During the Commitment Period, the Borrower may use
the Tranche B Revolving Credit Commitments by borrowing, prepaying Tranche B
Revolving Credit Loans, in whole or in part, and reborrowing, all in accordance
with the terms hereof.
2.2 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments during the Commitment Period on any
Business Day in accordance with this Section 2.2, provided, that the Borrower
shall give the General Administrative Agent and, during the Borrower
Notification Period, the Collateral Agent irrevocable written notice (which
notice must be received by the General Administrative Agent prior to 12:00 Noon,
New York City time, (i) three Business Days prior to the requested Borrowing
Date, in the case of LIBOR Loans, or (ii) one Business Day prior to the
requested Borrowing Date, in the case of Base Rate Loans prior to the Borrower
Notification Date and, during the Borrower Notification Period, prior to 1:00
p.m., New York City time, on the requested Borrowing Date), specifying (A) the
Facility to be borrowed under and the amounts and Types of Revolving Credit
Loans to be borrowed under such Facility and (B) the requested Borrowing Date;
provided, further, that the Borrower shall not submit a notice to borrow under
the Tranche B Revolving Facility more than once per two week period. Each
borrowing under the Revolving Credit Commitments shall be in an amount equal to
(x) in the case of Base Rate Loans, $1,000,000 or a multiple of $500,000 in
excess thereof and (y) in the case of LIBOR Loans, $5,000,000 or a whole
multiple of $1,000,000 in excess thereof. Upon receipt of any such notice from
the Borrower, the General Administrative Agent shall promptly notify each
relevant Lender thereof unless the procedures for daily revolving borrowing and
settlement among the Lenders contemplated by subsections 2.5, 4.3(g) and (h) and
4.9(e) and (f) are in effect, in which event such procedures shall govern. Each
relevant Lender will make the amount of its Tranche A Revolving Credit
Percentage or Tranche B Revolving Credit Percentage, as applicable, of each
borrowing available to the General Administrative Agent for the account of the
Borrower at the office of the General Administrative Agent specified in Section
11.2 prior to 12:00 Noon, New York City time, on the Borrowing Date requested by
the Borrower in funds immediately available to the General Administrative Agent
unless the procedures for daily revolving borrowing and settlement among the
Lenders contemplated by subsections 2.5, 4.3(g) and (h) and 4.9(e) and (f) are
in effect in which event such procedures shall govern. Such
23
borrowing will then be made available to the Borrower by crediting the
Disbursement Account with the aggregate amounts made available by the Lenders
and in like funds as received unless the procedures for daily revolving
borrowing and settlement among the Lenders contemplated by subsections 2.5,
4.3(g) and (h) and 4.9(e) and (f) are in effect in which event such procedures
shall govern.
2.3 Repayment of Revolving Credit Loans; Evidence of Debt. (a) The
Borrower hereby unconditionally promises to pay to the General Administrative
Agent for the account of the appropriate Lender the then unpaid principal amount
of each Revolving Credit Loan of such Lender on the Termination Date. The
Borrower hereby further agrees to pay interest on the unpaid principal amount of
the Revolving Credit Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 4.6.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Revolving Credit Loan of such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement.
(c) The General Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 11.6(e), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Revolving Credit
Loan made hereunder and any Note evidencing such Revolving Credit Loan, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder and (iii) both the amount of any sum
received by the General Administrative Agent hereunder from the Borrower and
each Lender's share thereof; provided, that, if the procedures for daily
revolving borrowing and repayment and for settlement among the Lenders
contemplated by subsections 2.5, 4.3(g) and (h) and 4.9(e) and (f) are in
effect, such procedures shall govern.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.3(b) shall be prima facie evidence of the
existence and amounts of the obligations of the Borrower; provided, however,
that the failure of any Lender or the General Administrative Agent to maintain
the Register or any such account, or any error therein, shall not in any manner
affect the obligation of the Borrower or any other Loan Party to repay (with
applicable interest) the Revolving Credit Loans in accordance with the terms of
this Agreement.
(e) The Borrower agrees that, upon the request to the General
Administrative Agent by any Lender, the Borrower will execute and deliver to
such Lender a Note with appropriate insertions as to date and principal amount.
2.4 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than three Business Days'
irrevocable written notice to the General Administrative Agent of its intention
to do so, to terminate the Revolving Credit Commitments or, from time to time,
to reduce the amount of the Revolving Credit Commitments without premium or
penalty; provided that no such termination or reduction of Revolving Credit
Commitments under either Facility shall be permitted if, after giving effect
thereto and to any prepayments of the Revolving Credit Loans made on the
effective date thereof, the outstanding
24
Extensions of Credit under such Facility would exceed the Revolving Credit
Commitments under such Facility then in effect. Any such reduction shall be in
an amount equal to $5,000,000, or a whole multiple of $250,000 in excess
thereof, and shall reduce permanently the Revolving Credit Commitments under the
relevant Facility then in effect.
2.5 Funding Mechanisms During Borrower Notification Period.
Notwithstanding any other provision of this Agreement, and in order to reduce
the number of fund transfers among the Borrower, the Lenders and the Collateral
Agent, during the Borrower Notification Period, the Collateral Agent may (but
shall not be obligated to), without any requirement of notice, fund, on behalf
of all Lenders, Loans pursuant to Section 2.1, subject to the procedures for
settlement set forth in subsection 4.9(e) and (f); provided, however, that (a)
the Collateral Agent shall in no event fund any such Loan if it shall have
received written notice from the Required Lenders at least one Business Day
before the proposed Borrowing Date that one or more of the conditions precedent
specified in Section 6.2 will not be satisfied as of the Borrowing Date and (b)
the Collateral Agent shall otherwise not be required to determine that, or take
notice whether, any such conditions precedent have been satisfied.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitments. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the Tranche A L/C Lenders
set forth in Section 3.4(a), agrees to issue letters of credit (the "Tranche A
Letters of Credit") for the account of the Borrower on any Business Day during
the Commitment Period in such form as may be approved from time to time by the
Issuing Lender; provided that the Issuing Lender shall have no obligation to
provide any Tranche A Letter of Credit if, after giving effect thereto, (i) the
aggregate amount of the Tranche A L/C Obligations then outstanding would exceed
$75,000,000; (ii) the aggregate Extensions of Credit of all of the Tranche A
Lenders would exceed the lesser of (x) the aggregate Tranche A Revolving Credit
Commitments then in effect or (y) the Borrowing Base then in effect and
provided, further, that up to $44,500,000 of Tranche A Letters of Credit shall
be available solely to provide additional financial assurance as required for
compliance with Environmental Law with respect to those facilities identified in
Attachment K to the Consent Agreement and Final Order (CAFO) Between Certain
Debtors and the United States Environmental Protection Agency, as Amended on May
16, 2001 and for additional financial assurance as required for shoring up
existing Indian Harbor policies (collectively referred to herein as
"Environmental Letters of Credit"). Each Tranche A Letter of Credit shall (i) be
denominated in U.S. Dollars and (ii) expire no later than the date which is 60
days after the Maturity Date, provided, however, that Environmental Letters of
Credit shall expire no later than the date which is 190 days after the Maturity
Date. On the Closing Date, letters of credit issued under the Existing DIP
Credit Agreement and then outstanding shall constitute Tranche A Letters of
Credit.
(b) Subject to the terms and conditions hereof, the Issuing Lender, in
reliance on the agreements of the Tranche ▇ ▇/C Lenders set forth in Section
3.4(a), agrees to issue letters of credit (the "Tranche B Letters of Credit")
for the account of the Borrower on any Business Day during the Commitment Period
in such form as may be approved from time to time by the
25
Issuing Lender; provided that the Issuing Lender shall have no obligation to
provide any Tranche B Letter of Credit if, after giving effect thereto, (i) the
aggregate amount of the Tranche ▇ ▇/C Obligations then outstanding would exceed
the Tranche B Letters of Credit Sublimit, or (ii) the aggregate Extensions of
Credit of all of the Tranche B Lenders would exceed the aggregate Tranche B
Revolving Credit Commitments then in effect; provided further, that up to
$40,000,000 of Tranche B Letters of Credit shall be available for the same
purpose as the Environmental Letters of Credit or to replace such Environmental
Letters of Credit, including the replacement of existing cash collateral pledged
to support financial assurance with respect to the Schedule "B" Sites and Yellow
Schedule "C" Sites ("Tranche B Environmental Letters of Credit"). Each Tranche B
Letter of Credit shall (i) be denominated in U.S. Dollars and (ii) expire no
later than the date which is 60 days after the Maturity Date, provided, however,
that Tranche B Environmental Letters of Credit shall expire no later than the
date which is 190 days after the Maturity Date.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor specifying the purpose therefor, completed to the
satisfaction of the Issuing Lender, the certificate of a Responsible Officer of
the Borrower and such other certificates, documents and other papers and
information as the Issuing Lender may request, with a copy to the General
Administrative Agent. Upon receipt of any Application, the Issuing Lender agrees
to process such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall such Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by such
Issuing Lender and the Borrower, provided, (a) that no Tranche A Letter of
Credit to provide financial assurance of reclamation, clean up or other similar
changes shall be issued unless and until the General Administrative Agent shall
have reasonably determined that such additional financial assurance is required
in the amount and at the time requested and that the Loan Party that owns the
site or operation in respect of which such assurance is requested is likely to
fully perform the obligations supported by such Letter of Credit and (b) that no
Tranche B Letter of Credit for increased financial assurances shall be issued
unless and until the General Administrative Agent shall have reasonably
determined that such additional financial assurance is required in the amount
and at the time requested. The Issuing Lender shall furnish a copy of each
Letter of Credit by it hereunder to the Borrower promptly following the issuance
thereof. The Issuing Lender shall promptly furnish to the General Administrative
Agent, which shall in turn promptly furnish to the L/C Lenders, notice of the
issuance of each Letter of Credit (including the amount thereof).
3.3 Commissions, Fees and Other Charges. (a) The Borrower shall pay to
the General Administrative Agent, for the account of the Tranche A L/C Lenders,
a letter of credit commission with respect to each Tranche A Letter of Credit
outstanding under this Agreement for the period from the Issuance Date of such
Tranche A Letter of Credit to the expiration or termination of such Tranche A
Letter of Credit, computed at a per annum rate equal to the Applicable Margin
then in effect with respect to LIBOR Loans under the Tranche A Revolving
26
Facility on the average aggregate amount available to be drawn under such
Tranche A Letter of Credit during the period for which such fee is calculated.
Such commission shall be shared ratably among the Tranche A L/C Lenders and
payable in arrears on each L/C Fee Payment Date to occur after the respective
Issuance Date and on the Termination Date and shall be nonrefundable.
(b) The Borrower shall pay to the General Administrative Agent, for the
account of each of the Tranche ▇ ▇/C Lenders, (a) a letter of credit commission
with respect to each Tranche B Letter of Credit outstanding under this Agreement
for the period from the Issuance Date of such Tranche B Letter of Credit to the
expiration or termination of such Tranche B Letter of Credit, computed at a per
annum rate of 12% on the average aggregate amount available to be drawn under
such Tranche B Letter of Credit during the period for which such fee is
calculated and (b) a 2.5% per annum fee on the average daily unused portion of
the Tranche B Letters of Credit Sublimit. Such commissions or fees shall be
shared ratably among the Tranche ▇ ▇/C Lenders and payable in arrears on each
L/C Fee Payment Date to occur after the respective Issuance Date and shall be
nonrefundable.
(c) The Borrower shall pay to the Issuing Lender with respect to each
Letter of Credit issued by the Issuing Lender under this Agreement, for its own
account, a fronting fee with respect to the period from the Issuance Date of
such Letter of Credit to the expiration or termination date of such Letter of
Credit, computed at a rate of 1/4 of 1% per annum on the average aggregate
amount available to be drawn under such Letter of Credit during the period for
which such fee is calculated. Such fronting fee shall be payable in arrears on
each L/C Fee Payment Date to occur after the Issuance Date and on the
Termination Date and shall be nonrefundable.
(d) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) Effective on the Issuance Date in respect
of each Letter of Credit, the Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Lender (other than such Issuing Lender), and, to
induce the Issuing Lender to issue Letters of Credit hereunder, each L/C Lender
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Issuing Lender, on the terms and conditions hereinafter stated, for such L/C
Lender's own account an undivided interest equal to such L/C Lender's Tranche A
Revolving Credit Percentage (with respect to Tranche A Letters of Credit) or
Tranche B Revolving Credit Percentage (with respect to Tranche B Letters of
Credit) of the Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Lender unconditionally and irrevocably agrees with the
Issuing Lender that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Lender shall pay to the Issuing Lender upon
demand at the Issuing Lender's address for notices specified herein an amount
equal to such L/C Lender's Tranche A Revolving Credit Percentage (with respect
to Tranche A Letters of Credit) or Tranche B
27
Revolving Credit Percentage (with respect to Tranche B Letters of Credit) of the
amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Lender to the Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by the Issuing Lender under any Letter of Credit issued by the
Issuing Lender is not paid when due but is paid within three Business Days after
the date such payment is due, the L/C Lender shall pay to the Issuing Lender on
demand an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Effective Rate during the period from and including the
date such payment is required to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. If any such amount required to be paid by any L/C Lender pursuant
to Section 3.4(a) is not made available to the Issuing Lender by such L/C Lender
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Lender, on demand, such amount
with interest thereon calculated from such due date at the rate per annum
applicable to Base Rate Loans under the relevant Facility. A certificate of the
Issuing Lender submitted to any L/C Lender with respect to any amounts owing
under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit issued by the Issuing Lender and has received from
any L/C Lender its Tranche A Revolving Credit Percentage (with respect to
Tranche A Letters of Credit) or Tranche B Revolving Credit Percentage (with
respect to Tranche B Letters of Credit) of such payment in accordance with
Section 3.4(a), the Issuing Lender receives any payment related to such Letter
of Credit (whether directly from the Borrower or otherwise, including proceeds
of collateral applied thereto by the Issuing Lender, but excluding payments from
L/C Lenders), or any payment of interest on account thereof, the Issuing Lender
will distribute to such L/C Lender its Tranche A Revolving Credit Percentage
(with respect to Tranche A Letters of Credit) or Tranche B Revolving Credit
Percentage (with respect to Tranche B Letters of Credit) thereof; provided,
however, that in the event that any such payment received by the Issuing Lender
shall be required to be returned by the Issuing Lender, such L/C Lender shall
return to the Issuing Lender the portion thereof previously distributed by the
Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. If any draft shall be
presented for payment under any Letter of Credit issued by the Issuing Lender,
the Issuing Lender shall promptly notify the Borrower of the date and amount
thereof. If the Issuing Lender notifies the Borrower prior to 10:00 a.m., New
York City time, on any Business Day, of any drawing under any Letter of Credit
issued by it, the Borrower shall reimburse the Issuing Lender with respect to
such drawing on the next succeeding Business Day. If the Issuing Lender notifies
the Borrower after 10:00 a.m., New York City time, on any Business Day of any
drawing under any Letter of Credit issued by it, the Borrower shall reimburse
the Issuing Lender with respect to such drawing on the second succeeding
Business Day. Interest shall be payable on any and all amounts drawn under
Letters of Credit from the date of such drawing until the date on which
reimbursement of such amount is due pursuant to the two immediately preceding
sentences at the interest rate then applicable to Base Rate Loans. In addition,
the Borrower agrees to reimburse the Issuing Lender for any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with any
payment under any Letter of Credit issued by the Issuing Lender. Each
28
payment by the Borrower pursuant to this Section 3.5 shall be made to the
Issuing Lender at its address for notices specified herein in U.S. Dollars and
in immediately available funds.
3.6 Obligations Absolute. The Borrower's obligations under this Section
3 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit issued by the Issuing Lender, the Issuing
Lender shall promptly notify the Borrower of the date and amount thereof. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3 or any other provision of this Agreement, the provisions of this
Section 3 or such other provisions of this Agreement shall apply.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO
LOANS AND LETTERS OF CREDIT
4.1 Commitment Fee. (a) The Borrower agrees to pay to the General
Administrative Agent for the account of each Tranche A Lender a commitment fee
for the period from and including the Closing Date to the Termination Date,
computed at the Tranche A Commitment Fee Rate on the average daily amount of the
Tranche A Available Revolving Credit Commitment of such Tranche A Lender during
the period for which payment is made, payable
29
monthly in arrears on the last day of each calendar month and on the Termination
Date, commencing on the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the General Administrative Agent for
the account of each Tranche B Lender a commitment fee for the period from and
including the Closing Date to the Termination Date, computed at the Tranche B
Commitment Fee Rate on the average daily amount of the difference of (i) the
Tranche B Available Revolving Credit Commitment of such Tranche B Lender during
the period for which payment is made minus (ii) such Tranche B Lender's Tranche
B Revolving Credit Percentage of the Tranche B Letters of Credit Sublimit,
payable monthly in arrears on the last day of each calendar month and on the
Termination Date, commencing on the first of such dates to occur after the date
hereof.
4.2 Optional Prepayments. (a) Subject to the provisions of Section 4.3,
the Borrower may at any time and from time to time prepay the Revolving Credit
Loans, in whole or in part, without premium or penalty, upon (i) at least one
Business Day's prior notice for Base Rate Loans and (ii) three Business Days'
notice for LIBOR Loans, provided, that if a LIBOR Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 4.13 and provided, further,
that if after giving effect to any prepayment of LIBOR Loans there remain LIBOR
Loans outstanding, such outstanding LIBOR Loans shall be in an amount in excess
of $5,000,000. Upon receipt of any such notice, the General Administrative Agent
shall promptly notify each relevant Lender thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to Section 4.13
and accrued interest to such date on the amount prepaid. Partial prepayments of
Revolving Credit Loans shall be in an aggregate principal amount of not less
than $5,000,000 and whole multiples of $250,000 in excess thereof.
(b) The amount of each optional prepayment shall be applied first, to
the prepayment of the Tranche A Revolving Credit Loans, second, payment of any
unpaid drawings under Tranche A Letters of Credit, third, to the prepayment of
the Tranche B Revolving Credit Loans, fourth, payment of any unpaid drawings
under Tranche B Letters of Credit, fifth, to the cash collateralization of
outstanding undrawn Tranche A Letters of Credit by depositing into a cash
collateral account (the "Cash Collateral Account") maintained at a bank or
financial institution acceptable to the General Administrative Agent an amount
equal to 105% of the amount by which the aggregate undrawn Tranche A Letters of
Credit exceeds the amount of cash held in the Cash Collateral Account for
Tranche A Letters of Credit and sixth, to the cash collateralization of
outstanding undrawn Tranche B Letters of Credit by depositing into the Cash
Collateral Account an amount equal to 105% of the amount by which the aggregate
undrawn Tranche B Letters of Credit exceeds the amount of cash held in the Cash
Collateral Account for Tranche B Letters of Credit.
4.3 Mandatory Prepayments and Commitment Reductions. (a) If, at any
time during the Commitment Period, the sum of the aggregate outstanding Loans
and L/C Obligations under the Tranche A Revolving Facility exceeds the lesser of
(i) the Borrowing Base then in effect or (ii) the aggregate Tranche A Revolving
Credit Commitments then in effect, the Borrower shall, without notice or demand,
immediately pay to the General Administrative Agent an amount equal to such
excess to be applied first, to the prepayment of the Tranche A
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Revolving Credit Loans, second, to the payment of any unpaid drawings under
Tranche A Letters of Credit, and third, to the cash collateralization of
outstanding undrawn Tranche A Letters of Credit by depositing into the Cash
Collateral Account an amount equal to 105% of the amount by which the aggregate
undrawn Tranche A Letters of Credit then outstanding exceeds the amount of cash
held in the Cash Collateral Account; provided that, in the event of a Borrowing
Base Shortfall, the Borrower shall have 10 Business Days to effect a cure,
provided the Borrower shall have such grace period on no more than two occasions
while this Agreement is in effect.
(b) Within one Business Day after the receipt by the Borrower or any of
the Guarantors of any Net Cash Proceeds from any Asset Sale (including the 3E
Sale and Disposition of the Elgin Building but excluding the Blue Business Sale)
or Recovery Event, an amount equal to 100% of such Net Cash Proceeds shall be
applied on such date first, to the prepayment of the Tranche A Revolving Credit
Loans, second, to the payment of any unpaid drawings under Tranche A Letters of
Credit third, to the prepayment of the Tranche B Revolving Credit Loans, fourth,
to the payment of any unpaid drawings under Tranche B Letters of Credit, fifth,
if the Underwriters shall request, to the cash collateralization of outstanding
undrawn Tranche A Letters of Credit by depositing into the Cash Collateral
Account an amount equal to 105% of the amount by which the aggregate undrawn
Letters of Credit then outstanding exceeds the amount of cash held in the Cash
Collateral Account, sixth, if the Underwriters shall request, to the cash
collateralization of outstanding undrawn Tranche B Letters of Credit by
depositing into the Cash Collateral Account an amount equal to 105% of the
amount by which the aggregate undrawn Letters of Credit then outstanding exceeds
the amount of cash held in the Cash Collateral Account, and seventh, as adequate
protection payments in respect of the Prepetition Obligations.
(c) If, on any date, Holdings and its Subsidiaries shall have Excess
Cash for more than three consecutive Business Days, the Borrower shall, on the
next Business Day, apply such excess first to the prepayment of the Tranche A
Revolving Credit Loans until the aggregate outstanding principal amount thereof
has been reduced to $10,000,000, second, to the prepayment of the Tranche B
Revolving Credit Loans until the aggregate outstanding principal amount thereof
has been reduced to $10,000,000; third, to the payment of unpaid drawings under
Tranche A Letters of Credit; and fourth, to the payment of unpaid drawings under
Tranche B Letters of Credit; provided, that if any prepayment would result in
breakage costs under Section 4.13(c), the Borrower may at its option deposit the
amount of prepayment that would result in such costs in a cash collateral
account with the General Administrative Agent to be applied to the Loans in
question at the end of the applicable Interest Period.
(d) Within one Business Day after receipt by the Borrower or any of the
Guarantors of any Blue Business Net Proceeds, an amount equal to 100% of such
Blue Business Net Proceeds shall be applied on such date to prepay the Tranche B
Revolving Credit Loans.
(e) Upon the Termination Date, the Revolving Credit Commitments and the
L/C Commitments shall be terminated in full and the Borrower shall pay the
Revolving Credit Loans in full (including all accrued and unpaid interest
thereon), Reimbursement Obligations, fees and other obligations in respect
thereof and, if there are any issued but undrawn Letters of Credit, the Borrower
shall replace such Letters of Credit, provide a "back-to-back" letter of credit
or deposit
31
into the Cash Collateral Account an amount equal to 105% of the amount by which
the aggregate Letters of Credit then outstanding exceeds the amount of cash held
in the Cash Collateral Account.
(f) The General Administrative Agent and, during the Borrower
Notification Period, the Collateral Agent shall be, and hereby is, irrevocably
authorized, to debit the Concentration Account for the Tranche A Lenders and/or
Tranche B Lenders, as applicable, in the amount of any prepayment that becomes
due.
(g) At any time, the Underwriters jointly may deliver to the Borrower a
written notice specifying a Borrower Notification Date.
(h) The Borrower shall, and shall cause each other Loan Party to (A)
maintain, at its expense, its existing bank accounts as Blocked Accounts, (B)
deposit, and cause its account debtors to remit, all payments on Accounts and
all other Proceeds of Collateral into such Blocked Accounts in the identical
form in which such payments are received, whether by cash, check or other manner
and (C) during the Borrower Notification Period, transfer, or cause to be
transferred, at its own expense, on a daily basis, by wire transfer or other
immediately effective means, all available funds in the Concentration Account to
the Payment Account. During the Borrower Notification Period, the Collateral
Agent shall apply on a daily basis all amounts in the Payment Account or
otherwise received from the Borrower to cover any overdraft position on the cash
management and deposit accounts of the Borrower maintained at Bank One, NA and
then may apply such amounts to the Obligations in such order as the Collateral
Agent may determine, and may charge all principal, interest, fees, costs,
expenses and other charges provided for in this Agreement or the other Loan
Documents directly to the Payment Account or Disbursement Account in such order
and manner as it may determine.
(i) At any time the L/C Obligations supporting the Blue Business are no
longer outstanding, the Tranche B Revolving Credit Commitment shall be reduced
by $17,000,000 (and the Tranche B Letter of Credit Sublimit shall also be
reduced by $17,000,000); provided, that in the event the Blue Business Sale
occurs prior to the release of the Tranche B Letters of Credit, the Borrower
shall be required to cash collateralize such Tranche B Letters of Credit in an
amount equal to 105% of the lesser of (i) $17,000,000 and (ii) the amount of
Tranche B Letters of Credit still outstanding which support the Blue Business;
provided, further, that upon the release of all Tranche B Letters of Credit
supporting the Blue Business, the Collateral Agent shall retain only that
portion of such cash collateral which constitutes Blue Business Net Proceeds and
shall return the remaining cash collateral to the Borrower.
(j) In the event Letters of Credit in an aggregate amount of less than
$15,000,000 are used to support the Borrower's fiscal year 2003 property and
casualty insurance, automobile insurance, general insurance and ▇▇▇▇▇▇▇'▇
compensation program and such other uses as the General Administrative Agent and
the holders of 50.1% of Tranche B Revolving Credit Commitments may allow, the
Tranche B Revolving Credit Commitment shall be reduced by an amount equal to the
$15,000,000 less the amount of Letters of Credit used to support the Borrower's
fiscal year 2003 property and casualty insurance, automobile insurance, general
insurance and ▇▇▇▇▇▇▇'▇ compensation program and such other uses.
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4.4 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert LIBOR Loans to Base Rate Loans under the Tranche A
Revolving Facility, by giving the General Administrative Agent and, during the
Borrower Notification Period, the Collateral Agent at least two Business Days'
prior irrevocable notice of such election; provided that any such conversion of
LIBOR Loans may only be made on the last day of an Interest Period with respect
thereto. The Borrower may elect from time to time to convert Base Rate Loans to
LIBOR Loans under the Tranche A Revolving Facility by giving the General
Administrative Agent and, during the Borrower Notification Period, the
Collateral Agent at least three Business Days' prior irrevocable notice of such
election. Any such notice of conversion to LIBOR Loans shall specify the length
of the initial Interest Period or Interest Periods therefor. Upon receipt of any
such notice the General Administrative Agent shall promptly notify each affected
Lender thereof unless the provisions of subsections 2.5, 4.3(g) and (h) and
4.9(e) and (f) are in effect, in which case such provisions shall govern. All or
any part of outstanding LIBOR Loans and Base Rate Loans under the Tranche A
Revolving Facility may be converted as provided herein, provided that (i) no
Base Rate Loan may be converted into a LIBOR Loan when any Event of Default has
occurred and is continuing and the General Administrative Agent and, during the
Borrower Notification Period, the Collateral Agent has determined in its sole
discretion that such a conversion is not appropriate and (ii) no Loan may be
converted into a LIBOR Loan after the date that is one month prior to the
Termination Date.
(b) Any LIBOR Loans may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving notice
to the General Administrative Agent and, during the Borrower Notification
Period, the Collateral Agent, in accordance with the applicable provisions of
the term "Interest Period" set forth in Section 1.1, of the length of the next
Interest Period to be applicable to such Loans, provided that no LIBOR Loan may
be continued as such (i) when any Event of Default has occurred and is
continuing and the General Administrative Agent and, during the Borrower
Notification Period, the Collateral Agent has determined in its sole discretion
that such a continuation is not appropriate or (ii) after the date that is one
month prior to the Termination Date and provided, further, that if the Borrower
shall fail to give such notice or if such continuation is not permitted such
Loans shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice the General
Administrative Agent shall promptly notify each Lender thereof unless the
provisions of subsections 2.5, 4.3(g) and (h) and 4.9(e) and (f) are in effect,
in which case such provisions shall govern.
(c) All Tranche B Revolving Credit Loans shall be Base Rate Loans.
4.5 Minimum Amounts of Tranches. Notwithstanding anything to the
contrary in this Agreement, all borrowings, conversions and continuations of
LIBOR Loans hereunder and all selections of Interest Periods hereunder shall be
in such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the LIBOR Loans comprising
each Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof.
4.6 Interest Rates and Payment Dates. (a) Each LIBOR Loan shall bear
interest for each day during each Interest Period with respect thereto at a rate
per annum equal to the LIBOR Rate determined for such day plus the Applicable
Margin.
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(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin; provided, however, that
notwithstanding anything to the contrary contained in this Agreement, at no time
shall the interest rate applicable to Tranche B Revolving Credit Loans be less
than 12% per annum.
(c) In addition to the interest payable in respect of Tranche B
Revolving Credit Loans pursuant to Section 4.6(b), each Tranche B Revolving
Credit Loan shall also bear interest at a rate per annum equal to 3.00% ("PIK
Interest Rate"); provided, that if the Termination Date does not occur prior to
September 1, 2002, the PIK Interest Rate shall increase by 1.00% per annum
monthly, on the first day of each calendar month, commencing on September 1,
2002. The amount of interest accrued pursuant to this paragraph (c) shall be
calculated monthly, on the last day of each calendar month, and such accrued
amount shall be added to the principal amount of the Tranche B Revolving Credit
Loans on each such last day; provided, however, that amounts added to principal
pursuant to this Section 4.6(c) shall not (i) be included in determining Tranche
B Available Revolving Credit Commitments and (ii) bear cash interest pursuant to
Section 4.6(b) but shall bear interest at the PIK Interest Rate pursuant to this
Section 4.6(c).
(d) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee, (iv) any Reimbursement
Obligation or (v) any Letter of Credit fee or commission or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans, the Reimbursement
Obligations and any such overdue interest, fee or other amount shall bear
interest at a rate per annum which is the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
3%.
(e) Interest, fees and expenses payable to the Tranche B Lenders
hereunder shall be paid out of the Interest Escrow Account. Interest, fees and
expenses payable to the Tranche A Lenders hereunder shall be paid out of the
Interest Escrow Account to the extent that the amount in the Interest Escrow
Account exceeds the lesser of (a) $5,000,000 and (b) the amount of fees and
interest projected to be paid to the Tranche B Lenders until the Termination
Date.
(f) Interest shall be payable in arrears on each Interest Payment Date,
provided that (i) interest payable pursuant to paragraph (c) of this Section 4.6
shall be payable on the Termination Date and (ii) interest accruing pursuant to
paragraph (d) of this Section 4.6 shall be payable from time to time on demand.
4.7 Computation of Interest and Fees. (a) Whenever it is calculated on
the basis of the Base Rate, interest shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed; and whenever
it is calculated on the basis of the LIBOR Rate, interest shall be calculated on
the basis of a 360-day year for the actual days elapsed. The General
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of each determination of a LIBOR Rate. Any change in the interest rate
on a Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The General Administrative Agent shall as
soon as practicable notify the Borrower and the Lenders of the effective date
and the amount of each such change in the Base Rate.
34
(b) Each determination of an interest rate by the General
Administrative Agent or Collateral Agent pursuant to any provision of
this Agreement shall be conclusive and binding on the Borrower and the
Lenders in the absence of manifest error.
(c) For purposes of calculating interest on the Loans, funds
received in the Payment Account shall be applied (conditional upon
final collection) when the Collateral Agent is advised by the bank
where the Payment Account is maintained of its receipt of "collected
funds" if such advice is received before 1:00 p.m., New York City time,
on the date of receipt and otherwise on the next Business Day. For
purposes of calculating the aggregate Tranche A Available Revolving
Credit Commitments or the Tranche B Available Revolving Credit
Commitments, as applicable,, funds received in the Payment Account will
be applied (conditional upon final collection) to the Loans on the
Business Day of receipt when the Collateral Agent is advised by the
bank where the Payment Account is maintained of its receipt of
"collected funds" if such advice is received before 1:00 p.m., New York
City time, on such date and otherwise on the next Business Day.
4.8 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:
(a) the General Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the LIBOR Rate for such Interest Period, or
(b) the General Administrative Agent shall have received notice from
the Required Lenders that the LIBOR Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the General Administrative Agent shall give telecopy or telephonic notice
thereof to the Borrower and the relevant Lenders as soon as practicable
thereafter. If such notice is given (x) any LIBOR Loans requested to be made on
the first day of such Interest Period shall be made as Base Rate Loans, (y) any
Loans that were to have been converted on the first day of such Interest Period
to LIBOR Loans shall be continued as Base Rate Loans and (z) any outstanding
LIBOR Loans shall be converted, on the first day of such Interest Period, to
Base Rate Loans. Until such notice has been withdrawn by the General
Administrative Agent, no further LIBOR Loans shall be made or continued as such,
nor shall the Borrower have the right to convert Loans to LIBOR Loans.
4.9 Pro Rata Treatment and Payments. (a) Except as provided in
subsection 2.5: (i) Each borrowing by the Borrower from the Tranche A Lenders
under the Tranche A Revolving Facility shall be made pro rata according to their
respective Tranche A Revolving Credit Percentages, (ii) each payment by the
Borrower on account of any commitment fee, facility fee and letter of credit
commission applicable to the Tranche A Revolving Facility and any reduction of
the Tranche A Revolving Credit Commitments shall be made pro rata according to
their respective Tranche A Revolving Credit Percentages, (iii) each borrowing by
the Borrower from the Tranche B Lenders under the Tranche B Revolving Facility
shall be made pro rata according
35
to their respective Tranche B Revolving Credit Percentages and (iv) each payment
by the Borrower on account of any commitment fee, facility fee and letter of
credit commission applicable to the Tranche B Revolving Facility and any
reduction of the Tranche B Revolving Credit Commitments shall be made pro rata
according to their respective Tranche B Revolving Credit Percentages.
(b) Each payment (including each prepayment) on account of principal of
and interest on the Tranche A Revolving Credit Loans shall be made pro rata
according to the respective outstanding principal amounts of the Tranche A
Revolving Credit Loans then held by the Tranche A Lenders and (ii) each payment
(including each prepayment) on account of principal of and interest on the
Tranche B Revolving Credit Loans shall be made pro rata according to the
respective outstanding principal amounts of the Tranche B Revolving Credit Loans
then held by the Tranche B Lenders.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise shall be
made without setoff or counterclaim and shall be made prior to 12:00 Noon, New
York City time, on the due date thereof to the General Administrative Agent, for
the account of the Lenders, at the General Administrative Agent's office
specified in Section 11.2 (unless the provisions of subsections 4.3(g) and (h)
are in effect, in which case such provisions shall govern) in Dollars and in
immediately available funds. The General Administrative Agent shall distribute
such payments to the Lenders promptly upon receipt in like funds as received
(unless the provisions of subsections 2.5, 4.3(g) and (h) and 4.9(e) and (f) are
in effect, in which case such provisions shall govern). If any payment by the
Borrower hereunder (other than payments on the LIBOR Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a LIBOR Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(d) Unless the General Administrative Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will not make
available to the General Administrative Agent the amount that would constitute
its share of the Loans to be disbursed to the Borrower on the such Borrowing
Date, the General Administrative Agent may assume that such Lender is making
such amount available to the General Administrative Agent, and the General
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to the
General Administrative Agent by the required time on the Borrowing Date
therefor, such Lender shall pay to the General Administrative Agent, on demand,
such amount with interest thereon at a rate equal to the daily average Federal
Funds Effective Rate for the period until such Lender makes such amount
immediately available to the General Administrative Agent. A certificate of the
General Administrative Agent, submitted to any Lender with respect to any
amounts owing under this Section 4.9(d) shall be conclusive in the absence of
manifest error. If such Lender's share of such amount is not made available to
the General Administrative Agent by such Lender
36
within three Business Days of such Borrowing Date, the General Administrative
Agent shall also be entitled to recover such amount from the Borrower on demand
with interest thereon at the rate per annum applicable to Base Rate Loans under
the relevant Facility. At any time that the provisions in subsections 2.5(e) and
4.9(e) and (f) are in effect, references in this paragraph to the General
Administrative Agent shall be deemed references to the Collateral Agent.
(e) With respect to each Interest Settlement Period, on the last
Business Day of such Interest Settlement Period, the Collateral Agent shall
notify each Lender of the average daily unpaid principal amount of Loans that
are the subject of such Interest Settlement Period. In the event that such
amount is greater than the average daily unpaid principal amount of such Loans
outstanding during the immediately preceding Interest Settlement Period for such
Loans (or if such Interest Settlement Period is the initial Interest Settlement
Period for such Loans, greater than the principal amount of such Loans on the
Business Day prior to the Borrower Notification Date), each Lender shall
promptly pay to the Collateral Agent its Tranche A Revolving Credit Percentage
or Tranche B Revolving Credit Percentage, as applicable, of such difference,
together with interest on the amount of such difference at the Federal Funds
Effective Rate for such Interest Settlement Period. In the event that such
amount is less than the average daily unpaid principal amount of such Loans
during the immediately preceding Interest Settlement Period (or if such Interest
Settlement Period is the initial Interest Settlement Period for such Loans, less
than the principal amount of Loans on the Business Day prior to the Borrower
Notification Date), the Collateral Agent shall promptly pay to each Lender its
Tranche A Revolving Credit Percentage or Tranche B Revolving Credit Percentage,
as applicable, of such difference, together with interest on the amount of such
difference at the Federal Funds Effective Rate for such Interest Settlement
Period. The obligations of each Lender under this subsection 4.9(e) shall be
absolute and unconditional without defense, setoff or counterclaim. Each Lender
shall only be entitled to receive interest on its Tranche A Revolving Credit
Percentage or Tranche B Revolving Credit Percentage, as applicable, of the Loans
that have been funded by such Lender.
(f) With respect to each Principal Settlement Period, on the last day
of such Principal Settlement Period, the Collateral Agent shall notify each
Lender of the principal amount of Loans outstanding at the end of such Principal
Settlement Period. In the event that such amount is greater than the principal
amount of Loans outstanding at the end of the immediately preceding Principal
Settlement Period (or if such Principal Settlement Period is the initial
Principal Settlement Period, greater than the principal amount of Loans on the
Business Day prior to the Borrower Notification Date), each Lender shall
promptly pay to the Collateral Agent its Tranche A Revolving Credit Percentage
or Tranche B Revolving Credit Percentage, as applicable, of such difference. In
the event that such amount is less than the principal amount of Loans
outstanding at the end of the immediately preceding Principal Settlement Period
(or if such Principal Settlement Period is the initial Principal Settlement
Period, less than the principal amount of Loans on the Business Day prior to the
Borrower Notification Date), the Collateral Agent shall promptly pay to each
Lender its Tranche A Revolving Credit Percentage or Tranche B Revolving Credit
Percentage, as applicable, of such difference. In addition, if the General
Administrative Agent shall request at any time when a Default or Event of
Default has occurred and is continuing, or any other event shall have occurred
as a result of which the General Administrative Agent shall have determined that
it is desirable for the Lenders to present their claims against the Borrower for
repayment, each Lender shall promptly remit to the Collateral
37
Agent or, as the case may be, the Collateral Agent shall promptly remit to each
Lender sufficient funds to adjust the interests of each Lender in the then
outstanding Loans such that each Lender's interest in the Loans then outstanding
is equal to its Tranche A Revolving Credit Percentage or Tranche B Revolving
Credit Percentage, as applicable, thereof. The obligations of each Lender under
this subsection 4.9 shall be absolute and unconditional without defense, setoff
or counterclaim.
4.10 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
LIBOR Loans as contemplated by this Agreement, (i) the commitment of such Lender
hereunder to make LIBOR Loans, continue LIBOR Loans as such and convert Base
Rate Loans to LIBOR Loans shall forthwith be canceled and (ii) such Lender's
Loans then outstanding as LIBOR Loans, if any, shall be converted automatically
to Base Rate Loans on the respective last days of the then current Interest
Periods with respect to such Loans or within such earlier period as required by
law. If any such conversion of a LIBOR Loan occurs on a day which is not the
last day of the then current Interest Period with respect thereto, the Borrower
shall pay to such Lender such amounts, if any, as may be required pursuant to
Section 4.13.
4.11 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law, but with which similarly-situated entities generally comply) from any
central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit or any LIBOR Loan
made by it, or change the basis of taxation of payments to such Lender
in respect thereof (except for Non-Excluded Taxes covered by Section
4.12 and changes in the rate of tax on the overall net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate; or
(iii) shall impose on such Lender any other condition, the
cost of which is not otherwise included in the determination of the
LIBOR Rate;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans or issuing or participating in Letters of
Credit, or to reduce any amount receivable hereunder in respect thereof, then,
in any such case, the Borrower shall promptly pay such Lender such additional
amount or amounts as will compensate such Lender on an after-tax basis for such
increased cost or reduced amount receivable.
38
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law, but with which
similarly-situated entities generally comply) from any Governmental Authority
made subsequent to the date such Lender becomes a party hereto shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, the Borrower shall promptly
pay to such Lender such additional amount or amounts as will compensate such
Lender on an after-tax basis for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the General Administrative Agent of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to the Borrower (with a copy to the General
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this Section shall survive the termination of this Agreement, the
payment of the Loans, and all other amounts payable hereunder.
4.12 Taxes. (a) All payments made by the Borrower under this Agreement
and any Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the General Administrative Agent,
Collateral Agent or any Lender as a result of a present or former connection
between the General Administrative Agent, Collateral Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the General Administrative Agent, Collateral
Agent or such Lender having executed, delivered or performed its obligations or
received a payment under, or enforced, this Agreement or any other Loan
Document). If any such non-excluded taxes, levies, imposts, duties, charges,
fees deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to the General Administrative Agent,
Collateral Agent, or any Lender hereunder or under any Note, the amounts so
payable to the General Administrative Agent, Collateral Agent or such Lender
shall be increased to the extent necessary to yield to the General
Administrative Agent, Collateral Agent or such Lender (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender if such Lender fails to comply with the requirements of paragraph (b) of
this Section. Whenever any Non-Excluded Taxes are payable by the Borrower, as
promptly as possible thereafter such Borrower shall send to the General
Administrative Agent or Collateral Agent for its own account or for the account
of such Lender, as the case may be, a certified copy of an original official
receipt or other documentary evidence received by such Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to
39
remit to the applicable Administrative Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the General
Administrative Agent, Collateral Agent and the Lenders for any incremental
Non-Excluded Taxes or interest or penalties thereon that may become payable by
the General Administrative Agent, Collateral Agent or any Lender as a result of
any such failure. The agreements in this subsection shall survive the
termination of this Agreement, the payment of the Loans, and all other amounts
payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) in the case of a Lender other than a Lender described in
subsection 4.12(b)(ii);
(A) deliver to the Borrower and the General Administrative
Agent (A) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, or successor applicable form, as the case
may be, and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
(B) deliver to the Borrower and the General Administrative
Agent two further copies of any such form or certification on or before
the date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Borrower; and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the General Administrative Agent; and
(D) file amendments to such forms as and when required; and
(ii) in the case of a Lender that is not a "bank" under
Section 881(c)(3)(A) of the Code and that is legally unable to comply
with the requirements of subsection 4.12(b)(i);
(A) at least five Business Days before the date of the initial
payment to be made by the Borrower under this Agreement to such Lender,
deliver to the Borrower and the General Administrative Agent (I) a
statement that such Lender (x) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as
a bank for purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any application made to
a rating agency or qualification for any exemption from tax, securities
law or other legal requirements, (y) is not a 10-percent shareholder
within the meaning of Section 881(c)(3)(B) of the Code and (z) is not a
controlled foreign corporation receiving interest from a related person
within the meaning of Section 881(c)(3)(C) of the Code and (II) a
properly completed and duly executed Internal Revenue Service Form W-8
or applicable successor form; and
40
(B) deliver to the Borrower and the General Administrative
Agent two further properly completed and duly executed copies of said
Form W-8, or any successor applicable form at least five Business Days
on or before the date that any such Form W-8 expires or becomes
obsolete or after the occurrence of any event requiring a change in the
most recent form previously delivered by it to the Borrower or upon the
request of the Borrower or the General Administrative Agent; and
(C) obtain such extensions of time for filing and completing
such forms or certifications as may be reasonably requested by the
Borrower and the General Administrative Agent; and
(D) file amendments to such forms as and when required;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the General
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to Section 11.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
4.13 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of LIBOR Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after such
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of LIBOR Loans on a day which is not
the last day of an Interest Period with respect thereto. Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
41
4.14 Change of Lending Office; Replacement Lender. Each Lender agrees
that if it makes any demand for payment under Section 4.11 or 4.12(a), or if any
adoption or change of the type described in Section 4.10 shall occur with
respect to it, (i) it will use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions and so long as such efforts would
not be disadvantageous to it, as determined in its sole discretion) to designate
a different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under Section 4.11 or
4.12(a), or would eliminate or reduce the effect of any adoption or change
described in Section 4.10; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and (ii) such
Lender may be replaced involuntarily through an amendment approved by the
Required Lenders, the General Administrative Agent and the Borrower and upon
payment in full of all amounts owed to such Lender, provided, that nothing in
this Section 4.14 shall affect or postpone any of the obligations of the
Borrower or the rights of any Lender pursuant to Section 4.11 or 4.12(a).
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the General Administrative Agent and the Lenders to enter
into this Agreement and to make the Extensions of Credit hereunder, the Borrower
hereby represents and warrants to the General Administrative Agent and each
Lender that:
5.1 Accuracy of Information, etc. No statement or written information
contained in this Agreement, any other Loan Document or any other document,
certificate or written statement furnished to the General Administrative Agent
or the Lenders or any of them, by or on behalf of any Loan Party for use in
connection with the 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
omitted to state a material fact necessary in order to make the statements
contained herein or therein 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 such Loan Party
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. 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 General Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
5.2 No Change. Since the Petition Date there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
5.3 Corporate Existence; Compliance with Law. Each Loan Party, except
as otherwise set forth in the legal opinion of general counsel to the Borrower
delivered pursuant to Section 6.1(h), (a) is duly organized, validly existing
and in good standing under the laws of the
42
jurisdiction of its organization, (b) subject to applicable provisions of the
Bankruptcy Code requiring Bankruptcy Court approval, has the corporate 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 corporation 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 would 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.
5.4 Corporate Power; Authorization; Enforceable Obligations. Upon entry
of the Final Order, each Loan Party shall have the corporate 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 borrow and obtain
letters of credit hereunder and has taken all necessary corporate action to
authorize the borrowings on the terms and conditions of this Agreement, the
Final Order and any Notes and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority (other than entry of the Final Order) or any other Person
is required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of each Loan Party which is a party
thereto. Upon entry of the Final Order, this Agreement will constitute, and each
other Loan Document to which it is a party when executed and delivered will
constitute, a legal, valid and binding obligation of the Loan Party which is a
party thereto enforceable against such Loan Party in accordance with its terms
and the Final Order.
5.5 No Legal Bar. The execution, delivery and performance of the Loan
Documents, the issuance of Letters of Credit, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law applicable
to any Loan Party 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 (other than the Liens created by the Security Documents
and the Final Order).
5.6 No Material Litigation. Except for the Cases or as set forth in
Schedule 5.6, no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of any Loan
Party, threatened by or against any Loan Party or against any of its properties
or revenues (i) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (ii) which could reasonably be
expected to have a Material Adverse Effect.
5.7 No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any of its Contractual Obligations in any
respect which could have a Material Adverse Effect during the Cases. No Default
or Event of Default has occurred and is continuing.
43
5.8 Ownership of Property; Liens. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, 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 set forth in Schedule 5.8 or otherwise permitted
hereunder.
5.9 Intellectual Property. Each Loan Party owns, or is licensed to use,
all trademarks, trade names, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted (the
"Intellectual Property"). Except as set forth in Schedule 5.9, no claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Loan Party know of any valid basis for any
such claim. The use of such Intellectual Property by each Loan Party does not
infringe on the rights of any Person, except for such claims and infringements
that, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect. An adverse determination of any or all of the matters set forth
on Schedule 5.9 could not reasonably be expected to have a Material Adverse
Effect.
5.10 No Burdensome Restrictions. Except with regard to the Consent and
Final Order between the Borrower and the Environmental Protection Agency dated
October 17, 2000 (as amended), no Requirement of Law or Contractual Obligation
of the Borrower or any of its Subsidiaries could reasonably be expected to have
a Material Adverse Effect.
5.11 Taxes. Other than (a) any taxes, fees or other charges, the amount
or validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of such Loan Party, (b) payments or filings which are
prohibited by the Bankruptcy Code or the Bankruptcy Court, or liens which result
from prohibitions or (c) as set forth on Schedule 5.11: each Loan Party has
filed, caused to be filed or requested and received an extension to file, all
material tax returns which, to the knowledge of such Loan Party, 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; no tax Lien has been filed and, to the knowledge of such
Loan Party, no claim is being asserted, with respect to any such tax, fee or
other charge.
5.12 Federal Regulations. No part of the proceeds of any Loans will be
used in violation of Regulation U of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect.
5.13 ERISA. 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 date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. 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
44
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits.
Neither the Borrower nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan, and neither the Borrower nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent. The present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Borrower and
each Commonly Controlled Entity for post retirement benefits to be provided to
their current and former employees under Plans which are welfare benefit plans
(as defined in Section 3(1) of ERISA) does not, in the aggregate, exceed the
assets under all such Plans allocable to such benefits by an amount in excess of
$2,000,000.
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 Federal or State statute or regulation
(other than Regulation X of the Board of Governors of the Federal Reserve
System) which limits its ability to incur Indebtedness.
5.15 Affiliates. Schedule 5.15 sets forth a complete list of the
Canadian Subsidiaries and other Affiliates of the Borrower on the Closing Date.
5.16 Purpose of Loans. The proceeds of the Loans shall be used to pay
expenses in the Cases, including professional fees approved by the Bankruptcy
Court, finance the ongoing working capital needs of the Borrower and its
Subsidiaries in the ordinary course of business and capital expenditures in
accordance with the terms hereof and substantially in accordance with the terms
of the FY02 Budget and the FY03 Budget, to pay interest, fees and other expenses
hereunder and to fund the adequate protection payments as provided in the Final
Order.
5.17 Environmental Matters. Other than exceptions to any of the
following that could not, individually or in the aggregate, reasonably be
expected to give rise to a Material Adverse Effect and except as set forth on
Schedule 5.17:
(a) Each Loan Party (i) is, and within the period of all applicable
statutes of limitation has been, in compliance with all applicable Environmental
Laws; (ii) holds all Environmental Permits (each of which is in full force and
effect) required for any of their current or intended operations or for any
property owned, leased, or otherwise operated by any of them; (iii) is, and
within the period of all applicable statutes of limitation has been, in
compliance with all of their Environmental Permits; and (iv) reasonably believes
that: each of its Environmental Permits will be timely renewed and complied
with, without material expense; any additional Environmental Permits that may be
required of it will be timely obtained and complied with, without material
expense; and compliance with any Environmental Law that is or is expected to
become applicable to it will be timely attained and maintained, without material
expense.
45
(b) Materials of Environmental Concern have not been transported,
disposed of, emitted, discharged, or otherwise released or threatened to be
released, to or at any real property now or formerly owned, leased or operated
by any Loan Party or at any other location, which could reasonably be expected
to (i) interfere with the continued operations of such Loan Party, or (ii)
impair the fair saleable value of any real property owned or leased by such Loan
Party.
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which any Loan Party is, or to the knowledge of such
Loan Party will be, named as a party that is pending or, to the knowledge of
such Loan Party, threatened.
(d) No Loan Party has received any written request for information, or
been notified that it is a potentially responsible party under or relating to
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
U.S.C. ▇▇.▇▇. 9601 et seq., or any similar Environmental Law, or with respect to
any Materials of Environmental Concern.
(e) No Loan Party has entered into or agreed to any consent decree,
order, or settlement or other agreement, nor is subject to any judgment, decree,
or order or other agreement, in any judicial, administrative, arbitral, or other
forum, relating to compliance with or liability under any Environmental Law.
(f) No Loan Party has assumed or retained, by contract or operation of
law, any liabilities of any kind, fixed or contingent, known or unknown, under
any Environmental Law or with respect to any Materials of Environmental Concern.
5.18 Security Documents. The Guarantee and Collateral Agreement and the
Final Order, taken as a whole, are effective to create in favor of the General
Administrative Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the Collateral described therein and proceeds
thereof. Upon entry of the Final Order, the Guarantee and Collateral Agreement
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 Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person other than as permitted by the Guarantee and Collateral Agreement or the
Final Order.
5.19 Bank Accounts. All bank accounts of any Loan Party constitute
Blocked Accounts. The Blocked Accounts identified on Schedule 1.1C constitute
all the bank accounts of any Loan Party that feed directly into the
Concentration Account.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extensions of Credit. The agreement of each
Tranche A Lender to extend the Termination Date for the Tranche A Revolving
Facility and the agreement of each Tranche B Lender to make the initial
Extension of Credit under the Tranche B Revolving Facility are subject to the
satisfaction, immediately prior to or concurrently with such extension
46
of the Termination Date and the making of such Extension of Credit on the
Closing Date, of the following conditions precedent:
(a) Loan Documents. The General Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized officer
of the Borrower and each Lender, with a counterpart for each Lender, (ii) the
Guarantee and Collateral Agreement, executed and delivered by a duly authorized
officer of the parties thereto, with a counterpart or a conformed copy for each
Lender, (iii) the Intercreditor Agreement, executed and delivered by a duly
authorized officer of the parties thereto, with a counterpart or a conformed
copy for each Lender, and (iv) if requested by a Lender, a Note for the account
of each relevant Lender, conforming to the requirements hereof and executed and
delivered by a duly authorized officer of the Borrower.
(b) Final Order. The entry of the Final Order after notice given and a
hearing conducted in accordance with Bankruptcy Rule 4001 (c), authorizing and
approving the transactions contemplated by this Agreement finding that the
Lenders are extending additional credit to the Borrower in good faith within the
meaning of Bankruptcy Code 364 (e), which (i) find that there exists adequate
protection of the interests of the prepetition secured lenders on account of the
priming of liens granted to secure the Prepetition Obligations and the use of
cash collateral, or, in the alternative, that the prepetition secured lenders
have consented to or are deemed to have consented to such priming and use of
cash collateral on the terms specified herein and (ii) approve the payment by
the Borrower of all of the fees provided for herein and in the Fee Letter.
(c) Cash Collateral. The Bankruptcy Court shall have entered and the
General Administrative Agent shall have received a copy of, a final order or
orders, in form and substance reasonably satisfactory to the General
Administrative Agent, pursuant to Section 363(c)(2)(B) of the Bankruptcy Code,
authorizing the continuing use by the Borrower and the Guarantors of any Cash
Collateral in which the Prepetition Lenders under the Prepetition Credit
Agreement may have an interest and providing for Super-Priority Claims, Liens
and other adequate protection, which order(s) shall not have been stayed,
reversed, vacated, rescinded, modified or amended in any respect without the
prior written consent of the General Administrative Agent or, in the
alternative, that the Prepetition Lenders have consented or are deemed to have
consented to such priming and use of cash collateral on the terms specified
herein. The Liens, Super-Priority Claims and adequate protection described in
this paragraph, and the other rights granted in respect of the use of Cash
Collateral, may be contained in the Final Order.
(d) Fees and Expenses. The Lenders, the General Administrative Agent
and the Co-Arrangers shall have received all fees required to be paid, and all
expenses for which invoices have been presented, as referenced herein and in the
Fee Letter, on or before the Closing Date. All fees shall be paid in immediately
available funds and shall not be refundable under any circumstances.
(e) Budget. The General Administrative Agent and the Lenders shall have
received the FY02 Budget and other cash flow and financial projections itemizing
all revenues
47
projected to be received and all material expenditures proposed to be made
through August 31, 2002, in form and substance reasonably satisfactory to the
General Administrative Agent.
(f) Due Diligence. Satisfactory completion by the General
Administrative Agent of all due diligence deemed necessary by the Lenders in
their sole discretion.
(g) Closing Certificate. The General Administrative Agent shall have
received, with a copy for each Lender, a certificate of each Loan Party, dated
the Closing Date, substantially in the form of Exhibit D, with appropriate
insertions and attachments and such changes as the General Administrative Agent
shall approve, otherwise, satisfactory in form and substance to the General
Administrative Agent, executed by the chief executive officer or any chief
financial officer and the Secretary or Assistant Secretary of such party.
(h) Legal Opinions. The General Administrative Agent shall have
received the following executed legal opinions:
(i) the executed legal opinion of Skadden, Arps, Slate,
▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the Borrower and the other Loan
Parties, in form and substance reasonably satisfactory to the General
Administrative Agent; and
(ii) the executed legal opinion of general counsel to the
Borrower and the Guarantors, in form and substance reasonably
satisfactory to the General Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the General
Administrative Agent may reasonably require.
(i) Approvals. All governmental and third party approvals necessary in
connection with the continuing operations of the Loan Parties and the
transactions contemplated hereby shall have been obtained and be in full force
and effect.
(j) Insurance. The Underwriters shall have received evidence in form
and substance satisfactory to it that all of the requirements of Section 7.6 of
this Agreement and Section 5.3 of the Guarantee and Collateral Agreement shall
have been satisfied.
(k) Additional Matters. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Underwriters, and the Underwriters
shall have received such other documents and legal opinions in respect of any
aspect or consequence of the transactions contemplated hereby or thereby as they
shall reasonably request.
(l) Cash Collateral Agreements. Each Tranche B Lender that is not an
Investment Grade Entity shall have entered into a Cash Collateral Agreement with
the Issuing Lender.
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6.2 Conditions to Extension of Credit. The agreement of each Lender to
make any Extension of Credit requested to be made by it on any date (including,
without limitation, unless otherwise specified herein, its initial Extension of
Credit) is subject to the satisfaction of the following conditions precedent:
(a) Notice. The General Administrative Agent shall have received in a
timely manner a borrowing notice (of the type described in Section 2.2) or the
Issuing Lender shall have received an Application, as the case may be, in
accordance with Section 3.2.
(b) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of such date as if made on
and as of such date.
(c) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the Extensions of Credit
requested to be made on such date.
(d) Borrowing Certificate. The General Administrative Agent shall have
received, with a copy for each Lender, a certificate executed by a Responsible
Officer of the Borrower, substantially in the form of Exhibit E, certifying that
(i) the requested Extension of Credit and the intended use thereof are
substantially consistent with the FY02 Budget (and the FY03 Budget once
presented to the Lenders) and the other terms of this Agreement and are
necessary, after utilization and application of the available cash of the Loan
Parties (other than Excess Cash), in order for the Loan Parties to satisfy their
obligations in the ordinary course of business or as otherwise permitted under
this Agreement, (ii) all of the representations and warranties contained in
Section 5 are true and correct in all material respects as required by Section
6.2(b), (iii) each Loan Party has observed and performed in all material
respects all applicable covenants and agreements contained herein and in the
other Loan Documents and the Final Order (as applicable), and satisfied each
condition to the making of such Extension of Credit contained herein or in the
other Loan Documents or in the Final Order (as applicable), to be observed,
performed or satisfied by it, (iv) the making of the requested Extension of
Credit would not cause (A) the aggregate Extensions of Credit under the Tranche
A Revolving Facility then outstanding at such time to exceed the lesser of (I)
the aggregate Tranche A Revolving Credit Commitments then in effect and (II) the
Borrowing Base at such time or (B) in the case of a Letter of Credit under the
Tranche A Revolving Facility, the aggregate L/C Obligations under the Tranche A
Revolving Facility then outstanding to exceed the limits set forth in Section
3.1, (v) the making of the requested Extension of Credit would not cause (A) the
aggregate Extensions of Credit under the Tranche B Revolving Facility then
outstanding at such time to exceed the aggregate Tranche B Revolving Commitments
then in effect or (B) in the case of a Letter of Credit under the Tranche B
Revolving Facility, the aggregate L/C Obligations then outstanding under the
Tranche B Revolving Facility to exceed the limits set forth in Section 3.1 and
(vi) such Responsible Officer has no knowledge of any Default or Event of
Default.
(e) Use of Proceeds or Letter of Credit. The Underwriters shall be
satisfied that no Tranche B Letters of Credit shall be used to replace financial
assurances listed on Schedule 6.2(e) unless otherwise agreed between the General
Administrative Agent and the Borrower.
49
(f) Fees and Expenses. The Underwriters shall have received payment of
all documented fees, costs and expenses owing hereunder at the time of such
Extension of Credit. All fees shall be paid in immediately available funds and
shall not be refundable under any circumstances.
(g) Budget. The General Administrative Agent shall be satisfied that
the proposed Extensions of Credit and their intended use are substantially
consistent with the terms of this Agreement, the FY02 Budget (and once presented
to the Lenders, the FY03 Budget) and are necessary, after utilization and
application of the Borrower's available cash, in order to satisfy the Borrower's
obligations in the ordinary course of business or as otherwise permitted under
this Agreement.
(h) Borrowing Base Certificate. For each Extension of Credit under the
Tranche A Revolving Facility, the Underwriters shall have received a Borrowing
Base Certificate (dated no more than 3 days before the date of the Extension of
Credit), executed and delivered by a Responsible Officer of the Borrower.
(i) Additional Condition to Issuance of Tranche B Letters of Credit. In
the case of a request for the issuance of any Tranche B Letter of Credit, each
Tranche B Lender that is not an Investment Grade Entity shall have delivered to
the Issuing Lender cash in an amount equal to the face amount of such requested
Tranche B Letter of Credit, such cash to be held by the Issuing Lender pursuant
to the Cash Collateral Agreement between the Issuing Lender and such Tranche B
Lender.
Each request by the Borrower for an Extension of Credit hereunder shall
constitute a representation and warranty by the Borrower as of the date thereof
that the conditions contained in this subsection 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Revolving Credit
Commitments remain in effect, any Loan or L/C Obligation remains outstanding or
any amount is owing to any Lender, the General Administrative Agent hereunder or
under any other Loan Document, the Borrower shall and (except in the case of
delivery of financial information, reports and notices) shall cause each of its
Subsidiaries and, where applicable, each of its Canadian Subsidiaries to:
7.1 Financial Statements. Furnish to the General Administrative Agent,
and each Lender:
(a) commencing with fiscal year 2001, as soon as available, a copy of
the consolidated balance sheet of Holdings and its consolidated subsidiaries as
at the end of such year and the related consolidated statement of income and
retained earnings 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
qualification arising out of the scope of the audit, by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or other
independent certified public accountants of nationally recognized standing, and
50
consolidating schedules and supporting analysis in form and substance reasonably
satisfactory to the Underwriters; and
(b) as soon as available after the end of each of the first three
quarterly periods of each fiscal year of Holdings, commencing with the fiscal
quarter ending March 31, 2002, the unaudited consolidated balance sheets of
Holdings and its consolidated subsidiaries as at the end of such quarter and the
related unaudited consolidated statements of income and retained earnings and of
cash flows of Holdings and its consolidated subsidiaries 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, and
consolidating schedules and supporting analysis in form and substance
satisfactory to the Underwriters, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
7.2 Certificates; Other Information. Furnish to the General
Administrative Agent and each Lender, or, in the case of clause (m), to the
relevant Lender:
(a) as soon as available but no later than (i) the last Business Day of
each week, commencing with the week in which the Final Order is entered, a
treasury budget for such week and the following four weeks itemizing on a weekly
basis during such period all revenues projected to be received and material
expenditures proposed to be made during such period, consistent with, and in the
form of, such treasury budget or otherwise in form and substance reasonably
satisfactory to the Underwriters, and (ii) thereafter, no later than 10 days
before the end of each fiscal month, an update to such treasury budget for the
following month, itemizing on a weekly basis for such month with a certificate
of a Responsible Officer of the Borrower stating that such update to such
treasury budget is based upon reasonable estimates and is accurate to the best
knowledge of such Responsible Officer and detailing the material assumptions on
which such update was based;
(b) on the last Business Day of every calendar week, commencing with
the week in which the Final Order is entered, a comparison of (i) actual
receipts to receipts forecasted in such treasury budget for the preceding week
and (ii) actual disbursements to the disbursements forecasted in such treasury
budget for the preceding week, with an explanation of any significant variances;
(c) as soon as available, but no later than the fifteenth day, or if
such day is not a Business Day, the next succeeding Business Day, of every other
fiscal month, commencing on April 15, 2002, a Bi-Monthly Report;
(d) concurrently with the delivery of any report pursuant to Section
7.1(b), a certificate of a Responsible Officer stating that, to the best of such
Responsible Officer's knowledge, each Loan Party during such period has observed
or performed in all material
51
respects all of its covenants and other agreements, and satisfied in all
material respects every condition, 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;
(e) as soon as available, but no later than the fifteenth Business Day
of each fiscal month, commencing on the Closing Date, the monthly flash report
customarily prepared for management, which may contain items such as revenues,
operating expenses, EBITDA, selling, general and administrative expenses and
other details prepared on a preliminary basis for the immediately preceding
fiscal month;
(f) as soon as available, but no later than the sixtieth day after the
end of each fiscal month, commencing on the Closing Date, a final monthly report
similar in form to that required by Section 7.2(d) above;
(g) deliver to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel to the General
Administrative Agent, Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to the Steering
Committee, Otterbourg, Steindler, Houston & ▇▇▇▇▇, P.C., counsel to CIT, and
promptly after the same is available, copies of all pleadings, motions,
applications, judicial information, financial information or other documents
filed on or on behalf of any Loan Party with the Bankruptcy Court or the United
States Trustee in the Cases, or distributed to any official committee appointed
in the Cases (including, without limitation, the filed Plan of Reorganization);
(h) within five days after the same are sent, copies of all financial
statements and reports that Holdings sends to the holders of any class of its
debt securities or public equity securities and, within five days after the same
are filed, copies of all financial statements and reports that the Holdings may
make to, or file with, the SEC;
(i) promptly, all information requested by the General Administrative
Agent or its representatives concerning the assets, liabilities, business,
operations, cash flow or other aspects of the Canadian Subsidiaries;
(j) with respect to any proposed Asset Sale or other Disposition
greater than $250,000 but less than $5,000,000, a memorandum from the Borrower:
(i) describing the asset, how such asset is used in the Borrower's business and
other potential uses of the asset, (ii) identifying the legal entity owning the
asset, (iii) specifying the estimated tax or estimated book basis of asset, (iv)
explaining the rationale for the proposed sale, (v) summarizing business losses,
cost increases or savings associated with the sale, (vi) summarizing the
proposed asset sale process and (vii) to the extent available, summarizing
appraisal(s) or other underlying valuation analyses;
(k) with respect to any proposed Asset Sale or other Disposition equal
to or greater than $5,000,000, a memorandum from the Borrower (i) containing the
information described in Section 7.2(j) (ii) a detailed financial (cost/benefit)
analysis of the asset demonstrating why a sale is superior to continued
operation or redeployment of the asset, (iii) copies of any
solicitation/offering memoranda/term sheets or other sales materials prepared
52
in conjunction with the sale process and (iv) any supporting analyses prepared
by the Borrower's financial advisors;
(l) as soon as available, but no later than August 31, 2002, the FY03
Budget; and
(m) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
7.3 Collateral Reports. Furnish to the Underwriters:
(a) as soon as available but in any event on or before the last
Business Day of each week, a Borrowing Base Certificate, certified as true and
correct in all material respects by a Responsible Officer of the Borrower
setting forth the Borrowing Base and the calculation thereof as of the close of
business of the last Business Day of the preceding week and accompanied by such
supporting detail and documentation as shall be requested by the Underwriters in
their reasonable discretion; and
(b) such other reports, statements and reconciliations with respect to
the Borrowing Base or Collateral as the Underwriters shall from time to time
request in their reasonable discretion.
7.4 Collateral Audit. Permit employees, representatives and/or agents
of any Underwriter, at any time upon such Underwriter's reasonable request,
during normal business hours, to enter into the premises of the Borrower and any
of its Subsidiaries to conduct audits, the reasonable cost and expense of which
will be borne by the Borrower, of (a) the assets of the Borrower and its
Subsidiaries that comprise the Collateral and (b) the Borrower's and the
Guarantors' practices in the computation of the Borrowing Base.
7.5 Conduct of Business and Maintenance of Existence. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to Section 8.5 and 8.6; comply with all Requirements of Law except to
the extent that failure to comply therewith could not, in the aggregate, have a
Material Adverse Effect.
7.6 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business (including, but not limited to, property and casualty insurance
in an amount of at least $100,000,000 and a deductible of not more than
$5,000,000 per occurrence).
7.7 Inspection of Property; Books and Records; Discussions. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of either Underwriter (or, with the coordination of the
53
General Administrative Agent, the Lenders) to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
7.8 Notices. Promptly give notice to the General Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between any Loan Party
and any Governmental Authority, which in either case, if not cured or if
adversely determined, as the case may be, could have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Loan Party in which the
amount involved is $1,000,000 or more and not covered by insurance or in which
criminal sanctions, injunctive or similar relief is sought and that is not
subject to the automatic stay of Section 362 of the Bankruptcy Code;
(d) 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 or expected 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 terminating, Reorganization or Insolvency of, any Plan;
(e) the occurrence or expected occurrence of any event that is
reasonably likely to result in any Loan Party being unable to obtain, renew,
retain or comply with any Environmental Permit, the absence of which could
reasonably be expected to have a Material Adverse Effect, or being unable to
comply with any Environmental Law in a manner that could reasonably be expected
to have a Material Adverse Effect including, without limitation, any notice that
any Governmental Authority may deny any application for an Environmental Permit
sought by, or revoke or refuse to renew any Environmental Permit held by, any
Loan Party; and
(f) any other Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
7.9 Environmental Laws. (a) (i) Comply with all Environmental Laws
applicable to it, and obtain, comply with and maintain any and all Environmental
Permits necessary for its operations as conducted and as planned; and (ii) take
all reasonable efforts to ensure that all of its tenants, subtenants,
contractors, subcontractors, and invitees comply with all
54
Environmental Laws, and obtain, comply with and maintain any and all
Environmental Permits, applicable to any of them insofar as any failure to so
comply, obtain or maintain reasonably could adversely affect any Loan Party;
provided, no Loan Party shall be required by this Agreement to comply with
demands for financial assurance. For purposes of this Section 7.9(a),
noncompliance by any Loan Party with any applicable Environmental Law or
Environmental Permit shall be deemed not to constitute a breach of this
covenant; provided that, upon learning of any actual or suspected noncompliance,
each Loan Party shall promptly undertake all reasonable efforts to achieve
compliance; and provided further that, in any case, such non-compliance, and any
other noncompliance with any Environmental Law, individually or in the
aggregate, could not reasonably be expected to give rise to a Material Adverse
Effect.
(b) Promptly comply with all orders and directives of all Governmental
Authorities regarding Environmental Laws, other than such orders and directives
as to which an appeal has been timely and properly taken in good faith and
provided that the pendency of any and all such appeals does not give rise to a
Material Adverse Effect; provided, no Loan Party shall be required by this
Agreement to comply with demands for financial assurance.
(c) Prior to acquiring any ownership or leasehold interest in real
property for which a permit would be required for operation as a hazardous waste
facility, or any other real property or other interest in any real property that
could reasonably be expected to give rise to any Loan Party being found to be
subject to potential liability under any Environmental Law: (i) obtain a written
report by a reputable environmental consultant of the environmental consultant's
assessment of the presence or potential presence of significant levels of any
Materials of Environmental Concern on, under, in, or about the property, or of
other conditions or operations that could give rise to potentially significant
liability under or violations of Environmental Law relating to such acquisition;
and (ii) inform the Underwriters of its plans to acquire such interest in real
property and, upon either Underwriters' request, afford the Underwriters a
reasonable opportunity to review and discuss the contents of such report with
the environmental consultant who prepared it and a knowledgeable representative
of the Borrower.
(d) Promptly upon either Underwriter's request if there has been an
Event of Default which has not been fully and timely cured, permit an
environmental consultant whom the Underwriters in their discretion designates to
perform an environmental assessment (including, without limitation: reviewing
documents; interviewing knowledgeable persons; and sampling and analyzing soil,
air, surface water, groundwater, building materials, and/or other media or
substances) in or about property owned or leased by the Borrower or any of its
Subsidiaries, or on which operations of the Borrower or any of its Subsidiaries
otherwise take place. Such environmental assessment shall be in form, scope, and
substance satisfactory to the Underwriters. The Borrower and its Subsidiaries
shall cooperate fully in the conduct of such environmental assessment, and shall
pay the costs of such environmental assessment immediately upon written demand
by the Underwriters. Pursuant to this Section 7.9(d), the Underwriters shall
have the right, but shall not have any duty, to request and/or obtain any such
environmental assessment.
7.10 Further Assurances. (a) Upon the request of the Underwriters,
promptly perform or cause to be performed any and all acts and execute or cause
to be executed any and all documents (including, without limitation, financing
statements and continuation statements)
55
for filing under the provisions of the Uniform Commercial Code or any other
Requirement of Law which are necessary or advisable to maintain, in favor of the
General Administrative Agent, for the benefit of the Lenders, Liens on the
Collateral that are duly perfected in accordance with all applicable
Requirements of Law and
(b) After delivery of the preliminary Plan of Reorganization to the
Underwriters, the Borrower shall consult in good faith with the Underwriters and
consider in good faith any suggestions made by the Underwriters with respect to
the Plan of Reorganization prior to the filing of the Plan of Reorganization
with the Bankruptcy Court.
7.11 Interest Escrow Account. (a) In the event that at any time the
amount of immediately available funds in the Interest Escrow Account are less
than $1,000, immediately deposit into the Interest Escrow Account an amount such
that the balance in the Interest Escrow Account equals or exceeds $5,000,000;
provided, that in the event that on the date six months after the Closing Date,
the amount of immediately available funds in the Interest Escrow Account
contains less than $5,000,000, immediately deposit into the Interest Escrow
Account an amount such that the balance in the Interest Escrow Account equals or
exceeds $5,000,000.
7.12 Chief Executive Officer. In the event the Chief Executive Officer
of the Borrower, serving in such capacity as of the Closing Date, is at any time
prior to the Termination Date no longer serving in such capacity ("Succession
Event"), the Borrower shall (i) within 10 days of the Succession Event, in
consultation with the General Administrative Agent, appoint an interim Chief
Executive Officer acceptable to the General Administrative Agent, (ii) within 20
days of the Succession Event, engage an executive search firm and establish a
process for retaining a permanent Chief Executive Officer, both reasonably
acceptable to the General Administrative Agent and (iii) within 90 days from the
date the search firm is retained, hire a Chief Executive Officer reasonably
acceptable to the General Administrative Agent; provided that the Underwriters
may in their reasonable discretion extend such 90 day period.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Petition Date, so
long as the Revolving Credit Commitments remain in effect, any Loan,
Reimbursement Obligation, or Letter of Credit remains outstanding or any amount
is owing to any Lender or the General Administrative Agent hereunder or under
any other Loan Document, the Borrower shall not, and shall not permit any
Subsidiary or Canadian Subsidiary to, directly or indirectly:
8.1 Proceeds of Revolving Credit Loans. (a) Make (except in the case of
any Canadian Subsidiary) any expenditures, including without limitation, by
using the proceeds of Revolving Credit Loans, for purposes other than
substantially consistent with the FY02 Budget or the FY03 Budget; or (b) use any
portion of the proceeds of the Revolving Credit Loans, the Carve-Out, the
Collateral, or the Prepetition Lenders' cash collateral to commence or prosecute
any adversary proceeding or contested matter (i) against the General
Administrative Agent, the Lenders, the Prepetition Agent or the Prepetition
Lenders or (ii) with respect to the amount, validity, enforceability, perfection
or priority of (x) the claims of the Prepetition Lenders against
56
the Borrower or the Prepetition Lenders' Liens which secure the Prepetition
Obligations or (y) the Super-Priority Claims or Liens granted to the
Administrative Agent and the Lenders pursuant to this Agreement, the Guarantee
and Collateral Agreement and the Final Order.
8.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the Petition Date listed on Schedule
8.2(b) and Indebtedness not exceeding $4,000,000 under certain contracts with
System One Technologies, Inc. existing on the date hereof;
(c) Indebtedness incurred after the Petition Date of the Borrower to
any wholly owned Guarantor and, to the extent permitted by Section 8.8, of any
wholly owned Guarantor to the Borrower or any other wholly owned Guarantor,
provided that such Indebtedness shall be evidenced by a promissory note which
shall be pledged to the General Administrative Agent;
(d) Indebtedness as to the Borrower, its Subsidiaries and the Canadian
Subsidiaries incurred after the Petition Date to finance (i) the acquisition of
fixed or capital assets (whether pursuant to a loan, a Financing Lease or
otherwise) in an aggregate principal amount not exceeding $5,000,000 any one
time outstanding and (ii) the acquisition of fixed or capital assets related to
the projects listed on Schedule 7.2(c) (whether pursuant to a loan, a Financing
Lease or otherwise) in an aggregate principal amount not exceeding $5,000,000
any one time outstanding; and
(e) Indebtedness in the form of Guarantee Obligations permitted by
Section 8.4.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested or
otherwise stayed in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(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;
57
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which 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 such Subsidiary;
(f) Liens in existence on the Petition Date to be listed on Schedule
8.3(f), provided that no such Lien is spread to cover any additional property
after the Closing Date and that the amount of Indebtedness secured thereby is
not increased provided further that, if any such Liens are not permitted under
the Prepetition Credit Agreement, such Liens shall not be material in amount;
(g) the ▇▇▇▇▇▇▇▇▇▇▇ Liens;
(h) Liens securing Indebtedness of the Borrower, its Subsidiaries and
the Canadian Subsidiaries permitted by Section 8.2(d) incurred to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall be
created substantially simultaneously with 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; and
(i) Liens created pursuant to the Security Documents and the Final
Order.
8.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the Petition Date and to be
listed on Schedule 8.4(a);
(b) Guarantee Obligations in respect of, or in the nature of,
performance bonds or performance letters of credit or similar obligations
incurred in the ordinary course of business;
(c) Guarantee Obligations in respect of the obligations of Subsidiaries
incurred in the ordinary course of business;
(d) the Guarantee Obligations under any Loan Document or the Final
Order; and
(e) Guarantee Obligations constituting indemnities to a bank party to a
Blocked Account Agreement to the extent such indemnity relates to performance by
such bank under such Blocked Account Agreement.
8.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except that ▇▇▇▇ and ▇▇▇▇▇▇▇ Holdings, Inc. and its subsidiaries may
be amalgamated into Safety-Kleen Canada, Inc.
58
8.6 Limitation on Disposition of Assets. Dispose of any of its
property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the case
of any Subsidiary, issue or sell any shares of such Subsidiary's or Canadian
Subsidiary's Capital Stock to any Person other than the Borrower or any wholly
owned Subsidiary, except:
(a) the sale or other Disposition of inventory, materials and equipment
and uneconomical, obsolete or worn out property in the ordinary course of
business;
(b) the sale of the Elgin Building, the 3E Sale or the Blue Business
Sale; provided, that the Net Cash Proceeds thereof and Blue Business Net
Proceeds thereof, as applicable, are applied in accordance with subsections
4.3(b) and 4.3(d);
(c) the sale or Disposition of assets to be listed on Schedule 8.6;
(d) the sale or Disposition of any line of business having less than
$20,000,000 in annual revenue (determined by annualizing the revenue of such
line of business during the calendar month most recently ended prior to such
Disposition for which revenue numbers are available); and
(e) the sale or Disposition of property, business or assets in addition
to other sales permitted under this Section 8.6 in an aggregate amount not to
exceed $5,000,000.
8.7 Limitation on Dividends. 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 shares of any class of Capital Stock of the Borrower or any
of its Subsidiaries or any warrants or options to purchase any such Stock,
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 the Borrower or any Subsidiary (such declarations, payments,
setting apart, purchases, redemptions, defeasances, retirements, acquisitions
and distributions being herein called "Restricted Payments"), except that (a)
any Subsidiary may make Restricted Payments to the Borrower or any wholly owned
Subsidiary of the Borrower and so long as, on the date of such Restricted
Payment, both before and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing and (b) the Borrower may make
Restricted Payments to Holdings to provide for payment in the ordinary course of
business of taxes, directors' fees, stock exchange fees, and other de minimis
costs and expenses of its operations as a public company permitted by the
Guarantee and Collateral Agreement.
8.8 Limitation on Investments, Loans and Advances. Make, forgive or
exchange any advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities of or any
assets constituting a business unit of, or make any other investment in, any
Person, except any Loan Party may make:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
59
(c) loans and advances to employees of the Borrower or its Subsidiaries
who are not on administrative leave for travel, entertainment and relocation
expenses in the ordinary course of business in an aggregate amount for the
Borrower and its Subsidiaries not to exceed $1,000,000 at any one time
outstanding;
(d) investments by the Borrower and its Subsidiaries in the
Subsidiaries of the Borrower that are parties to the Guarantee and Collateral
Agreement;
(e) investments in existence on the Petition Date and to be listed on
Schedule 8.8;
(f) investments in the form of securities received as a result of
bankruptcy proceedings involving customers or suppliers; and
(g) hardship advances to employees of the Borrower or its Subsidiaries
who are not on administrative leave in the ordinary course of business in an
aggregate amount for the Borrower and its Subsidiaries not to exceed $50,000.
8.9 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Borrower's or such Subsidiary's business and (c) upon
fair and reasonable terms no less favorable to the Borrower or such Subsidiary,
as the case may be, than it would obtain in a comparable arm's length
transaction with a Person which is not an Affiliate.
8.10 Limitation on Sales and Leasebacks. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary or
Canadian Subsidiary of real or personal property which has been or is to be sold
or transferred by the Borrower or such Subsidiary or Canadian Subsidiary to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Borrower or such Subsidiary or Canadian Subsidiary, except (a) the sale and
leaseback of transportation equipment in the ordinary course of business,
provided that such sale and leaseback transactions occur within six months of
the purchase of such equipment and (b) without duplication, for any such
arrangements with respect to real or personal property with respect to which the
aggregate sales price shall not exceed $5,000,000.
8.11 Limitation on Changes in Fiscal Year. Permit the fiscal year of
the Borrower to end on a day other than August 31, unless the Borrower shall
have provided to the General Administrative Agent evidence satisfactory to it
that such change will have no effect on the calculation of, or compliance by the
Borrower with, any financial covenants established pursuant to this Agreement;
or permit the fiscal years of the Borrower and Holdings to end on different
days.
8.12 Limitation on Lines of Business. Enter to any substantial extent
in any line or lines of business activity other than businesses of the same
general type as those in which the Borrower and the Guarantors are engaged on
the date of this Agreement or which are directly related thereto.
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8.13 Chapter 11 Claims; Payment of Pre-Petition Date Claims. (a) Except
for the Carve-Out, the ▇▇▇▇▇▇▇▇▇▇▇ Liens and Liens permitted pursuant to
subsection 8.3(g), incur or create any other Super-Priority Claim or Lien which
is pari passu with or senior to the claims of (i) the General Administrative
Agent and the Lenders granted pursuant to the Loan Documents and the Final Order
or (ii) other than for claims referenced in clause (i), the Prepetition Agent
and the Prepetition Lenders granted pursuant to Sections 2 and 3 of the
Guarantee and Collateral Agreement and the Final Order.
(b) Make any payments of pre-Petition Date obligations other than (i)
as permitted under the Final Order and (ii) as otherwise permitted or required
under this Agreement.
8.14 Reclamation Claims; Bankruptcy Code Section 546(g) Agreements. (a)
Make any payments or transfer any property on account of claims asserted by any
vendors of the Borrower or any Guarantor for reclamation in accordance with
Section 2-702 of the Uniform Commercial Code and Section 546(c) of the
Bankruptcy Code.
(b) Enter into any agreements or file any motion seeking a Bankruptcy
Court order for the return of property of the Borrower or any Guarantor to any
vendor pursuant to Section 546(g) of the Bankruptcy Code.
8.15 Employment Arrangements. Without the prior written consent of the
General Administrative Agent, enter into any employment or consulting agreement
with any individual providing for compensation (including without limitation,
incentive or contingency payments) in excess of $1,000,000 over the term of such
contract or amend, extend, supplement or replace any such contracts, including
any such contracts in existence on the date hereof.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms thereof or hereof; or the Borrower shall fail to
pay any interest on any Loan, or any other amount payable hereunder, within one
(1) Business Day after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or which 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 incorrect in any material respect on or
as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 5 of the
Guarantee and Collateral Agreement; or
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(d) The Borrower or any other Loan Party shall default in the
performance or observance of any covenant or agreement contained in Section
7.2(a) or 7.3(a) and such default shall contain unremedied for three (3)
Business Days; or
(e) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement (other than the delivery of
information required by Sections 7.2(h) and 7.2(i)) contained in this Agreement
or any other Loan Document (other than as provided in paragraphs (a) through (d)
of this Section), and such default shall continue unremedied for a period of 20
days; or
(f) (i) Any of the Cases shall be dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code or (ii) an order of the Bankruptcy Court
shall be entered in any of the Cases appointing a trustee under Chapter 11 of
the Bankruptcy Code; or
(g) (i) Except for the Carve-Out, the ▇▇▇▇▇▇▇▇▇▇▇ Liens, an order of
the Bankruptcy Court shall be entered granting another Super-Priority Claim or
Lien pari passu with or senior to that granted (x) to the General Administrative
Agent (for the benefit of the Lenders) pursuant to this Agreement and the Final
Order, or (y) to the Prepetition Lenders pursuant to the Final Order (other than
pursuant to clause (x) above), (ii) an order of a court of competent
jurisdiction shall be entered staying, reversing, vacating or otherwise
modifying the Final Order without the General Administrative Agent's and the
Required Lenders' consent, or (iii) the Prepetition Lenders' cash collateral
shall be used in a manner inconsistent with the Final Order; or
(h) An order of the Bankruptcy Court shall be entered in any of the
Cases appointing an examiner having enlarged powers (beyond those set forth
under Sections 1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b)
of the Bankruptcy Code; or
(i) The entry of an order granting relief from the automatic stay so as
to allow a third party to proceed against any asset or assets of any Loan Party
which have a value in excess of $1,000,000 in the aggregate; or
(j) The filing of any pleading by any Loan Party seeking, or otherwise
consenting to, any of the matters set forth in paragraphs (f) through (i) of
this Section; or
(k) Any Loan Party files any pleading seeking, or otherwise consenting
to, the invalidation, subordination or other challenging of the Liens granted to
secure the Obligations; or
(l) There shall occur after the Petition Date any event which results
in a Material Adverse Effect; or
(m) (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
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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 have a Material Adverse Effect; or
(n) One or more judgments or decrees shall be entered after the
Petition Date against the Borrower or any of its Subsidiaries involving for the
Borrower and its Subsidiaries taken as a whole a liability (not paid or fully
covered by insurance as to which the relevant insurance company has acknowledged
coverage) of $1,000,000 or more, and all such judgments or decrees shall not
have been vacated, discharged, stayed or bonded pending appeal within 30 days
from the entry thereof; or
(o) Any Lien created by any Loan Document or the Final Order shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(p) The Borrower shall have failed to deliver to the Underwriters by
October 31, 2002, a preliminary Plan of Reorganization;
then, and in every such event and at any time thereafter during the continuance
of such event, and without further order of or application to the Bankruptcy
Court, the General Administrative Agent may, and, at the request of the Required
Lenders, the General Administrative Agent shall, by notice to the Borrower (with
a copy to counsel for any statutory committee of unsecured creditors appointed
in the Cases and to the United States Trustee), take one or more of the
following actions, at the same or different times (provided, that with respect
to clause (iii) below and the enforcement of Liens or other remedies with
respect to the Collateral under clause (iv) below, the General Administrative
Agent shall provide the Borrower (with a copy to counsel for any statutory
committee of unsecured creditors appointed in the Cases and to the United States
Trustee) with five Business Days' written notice prior to taking the action
contemplated thereby): (i) terminate forthwith the Revolving Credit Commitments;
(ii) declare the Revolving Credit Loans then outstanding to be forthwith due and
payable, whereupon the principal of the Revolving Credit Loans, together with
accrued interest thereon and any unpaid accrued fees and all other Obligations
of the Borrower and the Guarantors accrued hereunder and under any other Loan
Document, shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived by the Borrower and the Guarantors, anything contained herein or in any
other Loan Document to the contrary notwithstanding; (iii) require each Letter
of Credit to be replaced and returned to the Issuing Bank, undrawn and marked
"canceled", or to the extent that the Borrower is unable to do so, require the
Borrower to forthwith deposit in the Cash Collateral Account cash in an amount
equal to 105% of the face amount of each unpaid Letter of Credit, such cash to
be remitted to the Borrower upon the expiration, cancellation or other
termination or satisfaction of the Borrower's Reimbursement Obligations in
respect of any such Letter(s) of Credit and all other obligations then
outstanding under this Agreement; (iv) set-off amounts in the Cash Collateral
Account and
63
the Concentration Account or any other accounts of the Borrower and apply such
amounts to the Obligations of the Borrower and the Guarantors hereunder and
under the other Loan Documents; and (v) exercise any and all remedies under this
Agreement, the Final Order, and applicable law available to the General
Administrative Agent and the Lenders.
Except as otherwise expressly provided above in this Section 9, the
Borrower waives presentment, demand, protest or other notice of any kind.
SECTION 10. THE GENERAL ADMINISTRATIVE AGENT
AND COLLATERAL AGENT
10.1 Appointments. Each Lender hereby irrevocably designates and
appoints Toronto Dominion (Texas), Inc. as the General Administrative Agent of,
and CIT as the Collateral Agent of, such Lender under this Agreement, the other
Loan Documents and in the Cases, and each such Lender irrevocably authorizes the
General Administrative Agent and the Collateral Agent to take such action on its
behalf under the provisions of this Agreement, the other Loan Documents and in
the Cases and to exercise such powers and perform such duties as are expressly
delegated to the General Administrative Agent and Collateral Agent by the terms
of this Agreement, the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, neither the General Administrative Agent nor the
Collateral Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement, any Loan Document or the Final
Order or otherwise exist against the General Administrative Agent or Collateral
Agent.
The Issuing Lender shall act on behalf of the Lenders with respect to
Letters of Credit issued by it under this Agreement and the documents associated
therewith. It is understood and agreed that the Issuing Lender (a) shall have
all of the benefits and immunities (i) provided to an Administrative Agent in
this Section 10 with respect to acts taken or omissions suffered by such Issuing
Lender in connection with Letters of Credit issued by it under this Agreement
and the documents associated therewith as fully as if the term "General
Administrative Agent" as used in this Section 10 included the Issuing Lender
with respect to such acts or omissions and (ii) as additionally provided in this
Agreement and (b) shall have all of the benefits of the provisions of Section
10.7 as fully as if the term "General Administrative Agent," as used in Section
10.7, included the Issuing Lender.
10.2 Delegation of Duties. The General Administrative Agent and the
Collateral Agent may execute any of their respective powers and duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact, may delegate any or all such powers and duties to each other
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. Neither the General Administrative Agent nor the Collateral Agent
shall be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
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10.3 Exculpatory Provisions. Neither the General Administrative Agent
nor the Collateral Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or Affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with any Loan Document or the Final Order (except for its or such
Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in any Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by the General Administrative Agent or the
Collateral Agent under or in connection with, any Loan Document or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
any Loan Document or for any failure of the Borrower to perform its obligations
hereunder or thereunder. Neither the General Administrative Agent nor the
Collateral Agent shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, any Loan Document, or to inspect the properties, books or
records of any Loan Party or other Person.
10.4 Reliance by General Administrative Agent and Collateral Agent. The
General Administrative Agent and the Collateral Agent shall be entitled to rely,
and shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the General Administrative Agent or Collateral Agent. The General
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the General Administrative Agent.
The General Administrative Agent and the Collateral Agent shall be fully
justified in failing or refusing to take any action under this Agreement, any
other Loan Document or in the Cases unless they shall first receive such advice
or concurrence of the Required Lenders, as they deem appropriate or shall first
be indemnified by the Lenders against any and all liability and expense which
may be incurred by reason of taking or continuing to take any such action. The
General Administrative Agent and the Collateral Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement,
the other Loan Documents or in the Cases in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
10.5 Notice of Default. Neither the General Administrative Agent nor
the Collateral Agent shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the General
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default." In the event that the General
Administrative Agent receives such a notice, the General Administrative Agent
shall give notice thereof to the Lenders. The General Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
General Administrative Agent shall have received such directions, the General
Administrative Agent may (but shall not be obligated to) take such action,
65
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
10.6 Non-Reliance on the General Administrative Agent, Collateral Agent
and Other Lenders. (a) Each Lender expressly acknowledges that neither the
General Administrative Agent nor the Collateral Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
the General Administrative Agent or Collateral Agent hereinafter taken,
including any review of the affairs of any Loan Party shall be deemed to
constitute any representation or warranty by the General Administrative Agent or
Collateral Agent to any Lender. Each Lender represents to the General
Administrative Agent and the Collateral Agent that it has, independently and
without reliance upon the General Administrative Agent, Collateral Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and made its own decision to make its Loans hereunder and enter
into this Agreement. Each Lender also represents that it will, independently and
without reliance upon the General Administrative Agent, Collateral Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, the other
Loan Documents and in the Cases, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Loan Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the General Administrative Agent or Collateral Agent hereunder,
neither the General Administrative Agent nor the Collateral Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of any Loan Party which may come
into the possession of the General Administrative Agent, Collateral Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
(b) For purposes of determining compliance with the conditions
specified in Section 6.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the General Administrative Agent or any
Loan Party to such Lender prior to the Closing Date, or required thereunder to
be consented to or approved by or acceptable or satisfactory to such Lender.
10.7 Indemnification. The Lenders agree to indemnify the General
Administrative Agent and Collateral Agent, each in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to its respective Tranche A Revolving
Credit Percentage or Tranche B Revolving Credit Percentage, as applicable, in
effect on the date on which indemnification is sought, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans) be imposed on, incurred by or asserted against the General Administrative
Agent or Collateral Agent in any way relating to or arising out of, the
Revolving Credit Commitments, this Agreement, the other
66
Loan Documents, the Cases or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the General Administrative Agent or Collateral Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from, respectively, the General Administrative Agent's or
Collateral Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
10.8 Agents in Their Respective Individual Capacities. The General
Administrative Agent, Collateral Agent and their respective Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the General Administrative Agent or Collateral Agent were
not the General Administrative Agent or Collateral Agent hereunder and under the
other Loan Documents. With respect to the Loans made by it and with respect to
any Letter of Credit issued or participated in by it, the General Administrative
Agent and Collateral Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not the General Administrative Agent or Collateral Agent, and
the terms "Lender" and "Lenders" shall include the General Administrative Agent
and Collateral Agent in their individual capacity.
10.9 Successor Agent. The General Administrative Agent or Collateral
Agent may resign upon 10 days' notice to the Lenders. If the General
Administrative Agent or Collateral Agent shall resign under this Agreement and
the other Loan Documents, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent, shall succeed
to the rights, powers and duties of the General Administrative Agent or
Collateral Agent hereunder. Effective upon such appointment and approval, the
term "General Administrative Agent" or "Collateral Agent", respectively, shall
mean such successor agent, and such former General Administrative Agent's or
Collateral Agent's rights, powers and duties as General Administrative Agent or
Collateral Agent shall be terminated, without any other or further act or deed
on the part of such former General Administrative Agent or Collateral Agent or
any of the parties to this Agreement or any holders of the Loans. After any
retiring General Administrative Agent's or Collateral Agent's resignation, the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was General Administrative Agent or
Collateral Agent under this Agreement and the other Loan Documents.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1 or
another Section hereof expressly specifying the method of amendment. The
Required Lenders may, or, with the written consent of the Required Lenders, the
General Administrative Agent may, from time to time, (a) with the Borrower,
enter into written amendments, supplements or modifications hereto and to the
other
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Loan Documents or the Final Order for the purpose of adding any provisions to
this Agreement, the other Loan Documents or the Final Order or changing in any
manner the rights of the Lenders or of the Borrower hereunder or thereunder or
(b) waive, on such terms and conditions as the Required Lenders or the General
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or the Final
Order or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of maturity of any
Loan, or reduce the stated rate of any interest or any fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Commitment, increase the total amount
of Commitments by more than $10,000,000 or extend the expiry date of any Letter
of Credit beyond the dates referred to in Sections 3.1(a) and Section 3.1(b), or
modify the provisions of Section 4.9, in each case without the consent of each
Lender affected thereby, (ii) amend, modify or waive any provision of this
Section 11.1 or change the percentage specified in the definition of Required
Lenders, or consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement, the other Loan Documents and the
Final Order or release all or substantially all of the Collateral (and the Liens
thereon), or amend or modify Section 3 of the Guarantee and Collateral Agreement
to include as additional Collateral, or otherwise take Liens on or security
interests in, Materials of Environmental Concern or real or personal property
utilized in the transport, storage or processing of Materials of Environmental
Concern, or release all or substantially all of the Guarantors from their
obligations under the Guarantee and Collateral Agreement, in each case without
the written consent of all the Lenders, (iii) waive any Event of Default under
Sections 9(p) or 7.12 without the written consent of the holders of 50.1% of the
Revolving Credit Commitments (or, if the Revolving Credit Commitments shall have
terminated, 50.1% of the Extensions of Credit then outstanding), (iv) amend,
modify or waive any provision of subsection 4.9(d) or Section 10 without the
written consent of the General Administrative Agent and Collateral Agent, (v)
amend, modify or waive Sections 4.9(e) and (f) without the consent of the
Collateral Agent, (vi) amend, modify or waive any provision of Section 3 without
the written consent of the Issuing Lender or (vii) amend, modify or waive (A)
any provision of the Intercreditor Agreement, (B) Sections 4.3, 4.9 or this
subclause (vii), or (C) amend any defined term used in any of the Sections
referenced in this subclause (vii) if the effect of any such amendment is to
alter the substantive rights and benefits of the Tranche B Lenders under such
Section in a manner that materially adversely affects the rights and benefits,
taken as a whole, of the Tranche B Lenders under this Agreement, without the
written consent of each of the Required Tranche A Lenders and Required Tranche B
Lenders. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the General Administrative Agent and Collateral Agent and
all future holders of the Loans. Notwithstanding the foregoing, in addition to
the consents required by the previous sentence, the consent of the Required
Tranche B Lenders shall be required for (i) any amendment to this sentence, (ii)
any increase in the respective Tranche B Revolving Credit Commitments, (iii) any
reduction in any interest rate, fees, charges or expenses payable to the Tranche
B Lenders and any amendment to the respective references to "interest rate" or
"expenses" or "fees" to the extent such references relate to "interest rate" or
"expenses" or "fees" of the Tranche B Lenders, including, without limitation,
Sections 3.3(b), 4.1(b), 4.6(b) and (c), (iv) change the definition of Blue
Business Net Proceeds, Tranche B Revolving Credit Percentage or Required Tranche
B Lenders and (v) any amendment
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of any defined term used in any of the Sections referenced in this sentence if
the effect of any such amendment is to alter the substantive rights and benefits
of the Tranche B Lenders under such Section in a manner that materially
adversely affects the rights and benefits, taken as a whole, of the Tranche B
Lenders hereunder. In the case of any waiver, the Borrower, the Lenders and the
General Administrative Agent and Collateral Agent shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon. If the Borrower
requests an amendment or waiver that requires all Lenders' consent, and the
consent of the Required Lenders is obtained but the consent of all Lenders is
not obtained, the Lender or Lenders which withheld consent may be replaced
involuntarily through an amendment approved by all Required Lenders, the General
Administrative Agent and upon payment in full of all amounts owing to such
non-consenting Lender.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower, the General Administrative Agent, and as
set forth in Schedule 1.1B in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: Safety-Kleen Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief
Financial Officer
▇▇▇▇▇ ▇▇▇▇▇▇, Esq., General
Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ St. Clair, Esq.
▇▇▇▇▇▇▇ ▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The General Administrative Agent: Toronto Dominion (Texas), Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
TD Securities (USA) Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the General
Administrative Agent or the Lenders pursuant to Sections 2.2, 2.4, 4.2, 4.3 and
4.4 shall not be effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the General Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents 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 are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a) subject to
the terms of the Final Order, to pay or reimburse the General Administrative
Agent, the Collateral Agent and Steering Committee for all their respective
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement, the other Loan Documents, the Final Order and any other
documents prepared in connection herewith or therewith, and the consummation and
70
administration of the transactions contemplated hereby and thereby, including,
without limitation, the reasonable fees and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, counsel to the General Administrative Agent, Otterbourg, Steindler,
Houston & ▇▇▇▇▇, Counsel to CIT, and Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel to the
Steering Committee, (b) subject to the terms of the Final Order, to pay or
reimburse each Lender for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents and any such other documents, including, without limitation, the
fees and disbursements of counsel to each Lender and of counsel to the General
Administrative Agent and Collateral Agent, (c) to pay, indemnify, and hold each
Lender, the Collateral Agent and the General Administrative Agent harmless from,
any and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and other taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, (d) subject to the terms of the Final
Order, to pay all the actual and reasonable expenses of the General
Administrative Agent, the Collateral Agent and the Steering Committee related to
this Agreement, the other Loan Documents, the Final Order, the Revolving Credit
Loans, the Letters of Credit or in connection with the Cases (including, without
limitation, the on-going monitoring by the General Administrative Agent, each
Underwriter and the Steering Committee of the Cases, including attendance by the
General Administrative Agent, each Underwriter and the Steering Committee, and
their respective counsel at hearings or other proceedings and the on-going
review of documents filed with the Bankruptcy Court) and (e) to pay, indemnify,
and hold each Lender, the Collateral Agent and the General Administrative Agent
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including, without limitation, any of
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Borrower or any
of its Subsidiaries or any of the facilities or properties owned, leased or
operated by the Borrower or any of its Subsidiaries (all the foregoing in this
clause (e), collectively, the "indemnified liabilities"), provided that the
Borrower shall have no obligation hereunder to any person seeking
indemnification with respect to indemnified liabilities arising from the gross
negligence or willful misconduct of such person. Without limiting the foregoing,
and to the extent permitted by applicable law, the Borrower agrees, and shall
cause each of its Subsidiaries to agree, not to assert, and hereby waives and
agrees to cause each of its Subsidiaries to waive, all rights for contribution
or any other rights of recovery with respect to all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of whatever kind or nature whatsoever, under or related to
Environmental Laws, that any of them might have by statute or otherwise against
each Lender and the General Administrative Agent. The agreements in this Section
shall survive repayment of the Loans and all other amounts payable hereunder.
11.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the General Administrative Agent, all future holders of the Extensions
of Credit and their respective
71
successors and assigns, except that the Borrower may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking or
institutional financial business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants") participating
interests in any Loan owing to such Lender, any Commitment of such Lender or any
other interest of such Lender hereunder and under the other Loan Documents. In
the event of any such sale by a Lender of a participating interest to a
Participant, such Lender's obligations under this Agreement to the other parties
to this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any such Loan or other interest for all purposes under this Agreement and the
other Loan Documents, and the Borrower and the General Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents. No Lender shall be entitled to create in favor of any Participant, in
the participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the proviso to Section 11.1. The
Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 11.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 4.11, 4.12, and 4.13
with respect to its participation in the Revolving Credit Commitments and the
Loans and other amounts outstanding from time to time as if it was a Lender;
provided that, in the case of Section 4.12, such Participant shall have complied
with the requirements of said Section and provided, further, that no Participant
shall be entitled to receive any greater amount pursuant to any such Section
than the transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial banking or
institutional financial business and in accordance with applicable law, at any
time and from time to time assign to any Lender, an Approved Fund of any Lender,
or any affiliate thereof or, with the consent of the Borrower and the General
Administrative Agent (at the sole discretion of the Borrower and the General
Administrative Agent), to an additional bank, financial institution or fund (an
"Assignee") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit G, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender, an
Approved Fund of any Lender, or an affiliate thereof, by the Borrower and the
General Administrative Agent) and delivered to the General Administrative Agent
for its acceptance and recording in the Register, provided that (i) no such
assignment to an Assignee (other than any Lender, any Approved Fund of any
Lender, or any affiliate thereof)
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shall be in an aggregate principal amount of less than $5,000,000, (ii) the
assigning Lender shall retain a Commitment, after giving effect to such
assignment, not less than $5,000,000, (other than in the case of an assignment
of all of a Lender's interests under this Agreement) in each case unless
otherwise agreed by the Borrower and the General Administrative Agent and (iii)
no assignment by a Tranche B Lender of any portion of its Tranche B Revolving
Credit Commitment shall be permitted unless the assignee of such Tranche B
Revolving Credit Commitment either (A) is an Investment Grade Entity or (B) has
entered into a Cash Collateral Agreement with the Issuing Lender. Upon such
execution, delivery, acceptance and recording, from and after the effective date
determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment as set forth therein, and (y) the assigning Lender thereunder
shall, to the extent provided in such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto). Notwithstanding any provision of this paragraph (c) and paragraph
(e) of this Section, the consent of the Borrower shall not be required, and,
unless requested by the Assignee and/or the assigning Lender, new Notes shall
not be required to be executed and delivered by the Borrower, for any assignment
which occurs at any time when any Event of Default shall have occurred and be
continuing.
(d) The General Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the General Administrative Agent referred to in
Section 11.2 a copy of each Assignment and Acceptance delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitments of, and principal amounts of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrower, the General
Administrative Agent and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender, an Approved Fund of any Lender, or an affiliate thereof, by the
Borrower and the General Administrative Agent) together with payment to the
General Administrative of a registration and processing fee of $3,500, the
General Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "Transferee") and any prospective Transferee, subject to
the provisions of Section 11.15, any and all financial information in such
Lender's possession concerning the Borrower and its Subsidiaries and Affiliates
which has been delivered to such Lender by or on
73
behalf of the Borrower pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Borrower in connection with such Lender's
credit evaluation of the Borrower and its Subsidiaries and Affiliates prior to
becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
11.7 Adjustments; Set-off. (a) Except to the extent this Agreement or
the Intercreditor Agreement provide for payments to be allowed to a particular
Lender or to the Lenders under a particular Facility, if any Lender (a
"benefitted Lender") shall at any time receive any payment of all or part of its
Extensions of Credit, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Extensions of Credit, or
interest thereon such benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other Lender's
Extensions of Credit, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders (to the extent required
by the foregoing clause (i)) provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest. The General
Administrative Agent shall use its best efforts to provide calculations and
documentation needed to effect such participations and to arrange a simultaneous
closing of such participations.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to
set-off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency, and
any other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch, agency or Affiliate thereof to or
for the credit or the account of the Borrower. Each Lender agrees promptly to
notify the Borrower and the General Administrative Agent after any such set-off
and application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
(c) Notwithstanding the foregoing provisions of this subsection 11.7,
no Lender shall institute any proceeding to collect any amounts owed hereunder
or exercise any remedies (including setoff) with respect to the amounts owed to
it unless such Lender shall comply with the notice procedures and time periods
applicable to the exercise of remedies contained in the Final Order.
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11.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
General Administrative Agent.
11.9 Severability. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the General Administrative Agent, and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the General
Administrative Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents. In the
event of a conflict between the terms of this Agreement or the Guarantee and
Collateral Agreement and the terms of the Intercreditor Agreement, the terms of
this Agreement or the Guarantee and Collateral Agreement shall control;
provided, that in the event of any such conflict relating to the rights and
remedies of the General Administrative Agent and the Lenders, inter se, such
provision of the Intercreditor Agreement shall control.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. Each party to this Agreement
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Bankruptcy Court and,
if the Bankruptcy Court does not have (or abstains from) jurisdiction, courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its
address set forth in Section 11.2 or Schedule
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1.1C or at such other address of which each Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to ▇▇▇
in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary, punitive or consequential damages.
11.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the General Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the General Administrative Agent and Lenders, on one hand,
and the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among such Borrower and the Lenders.
11.14 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE GENERAL
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
11.15 Confidentiality. Each Lender agrees to keep confidential all
non-public information provided to it by the Borrower pursuant to this Agreement
that is designated by the Borrower in writing as confidential; provided that
nothing herein shall prevent any Lender from disclosing any such information (i)
to its affiliates, the General Administrative Agent or any other Lender, (ii) to
any Transferee which agrees to comply with the provisions of this subsection,
(iii) to its employees, directors, agents, attorneys, accountants and other
professional advisors, or to direct or indirect contractual counterparts in swap
agreements relating to swaps with the Borrower or such contractual
counterparties' professional advisors provided that any such contractual
counterparty or its professional advisors shall agree to keep such confidential
information confidential, (iv) upon the request or demand of any Governmental
Authority having jurisdiction over such Lender, (v) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (vi) which has been publicly disclosed other
than in breach of this Agreement, or is currently publicly available or is in
the possession of a Lender on a nonconfidential basis or is disclosed to a
Lender on a nonconfidential basis by a person who in so doing has not violated a
duty of confidentiality owing to the Borrower (vii) to the National Association
of Insurance Commissioners or any similar organization or any nationally
recognized rating agency that requires access to
76
information about a Lender's investment portfolio in connection with ratings
issued with respect to such Lender or (viii) in connection with the exercise of
any remedy hereunder