CONFORMED COPY
EXHIBIT 10.1
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SDW HOLDINGS CORPORATION
S.D. ▇▇▇▇▇▇ COMPANY
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$875,576,698.39
AMENDED AND RESTATED
CREDIT AND GUARANTEE
AGREEMENT
April 26, 1996
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CHEMICAL BANK,
as Agent
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS...................................................... 1
1.1 DEFINED TERMS.................................................... 1
1.2 OTHER DEFINITIONAL PROVISIONS; FINANCIAL CALCULATIONS............ 22
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS........................ 23
2.1 TERM LOANS....................................................... 23
2.2 PROCEDURE FOR TERM LOAN BORROWING................................ 23
2.3 REPAYMENT OF TRANCHE A TERM LOANS................................ 23
2.4 REPAYMENT OF TRANCHE B TERM LOANS................................ 24
2.5 EVIDENCE OF TERM LOAN DEBT....................................... 24
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS................. 25
3.1 REVOLVING CREDIT COMMITMENTS..................................... 25
3.2 PROCEDURE FOR REVOLVING CREDIT BORROWING......................... 25
3.3 COMMITMENT FEE................................................... 26
3.4 TERMINATION OR REDUCTION OF COMMITMENTS.......................... 26
3.5 REPAYMENT OF REVOLVING CREDIT LOANS; EVIDENCE OF DEBT............ 26
3.6 SWING LINE COMMITMENT............................................ 27
3.7 REPAYMENT OF SWING LINE LOANS; EVIDENCE OF DEBT.................. 27
3.8 PROCEDURE FOR BORROWING SWING LINE LOANS......................... 28
3.9 SWING LINE LOAN PARTICIPATIONS................................... 28
3.10 L/C COMMITMENT................................................... 29
3.11 PROCEDURE FOR ISSUANCE OF REVOLVING CREDIT LETTERS OF CREDIT..... 29
3.12 FEES, COMMISSIONS AND OTHER CHARGES.............................. 30
3.13 L/C PARTICIPATIONS............................................... 30
3.14 REIMBURSEMENT OBLIGATION OF THE BORROWER......................... 31
3.15 OBLIGATIONS ABSOLUTE............................................. 31
3.16 LETTER OF CREDIT PAYMENTS........................................ 32
3.17 APPLICATION...................................................... 32
3.18 QUARTERLY REPORTS................................................ 32
SECTION 4. AMOUNT AND TERMS OF LOC LETTER OF CREDIT FACILITY................ 32
4.1 LOC LETTER OF CREDIT FACILITY.................................... 32
4.2 PROCEDURE FOR ISSUANCE OF LOC LETTERS OF CREDIT.................. 33
4.3 FEES, COMMISSIONS AND OTHER CHARGES.............................. 33
4.4 LOC PARTICIPATIONS............................................... 34
4.5 REIMBURSEMENT OBLIGATION OF THE BORROWER; LOC LOANS.............. 34
4.6 REPAYMENT OF LOC LOANS; EVIDENCE OF DEBT......................... 35
4.7 OBLIGATIONS ABSOLUTE............................................. 36
4.8 LOC LETTER OF CREDIT PAYMENTS.................................... 36
4.9 APPLICATION...................................................... 37
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT..... 37
5.1 OPTIONAL AND MANDATORY PREPAYMENTS............................... 37
5.2 CONVERSION AND CONTINUATION OPTIONS.............................. 40
5.3 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES................... 40
5.4 INTEREST RATES AND PAYMENT DATES................................. 41
5.5 COMPUTATION OF INTEREST AND FEES................................. 41
5.6 INABILITY TO DETERMINE INTEREST RATE............................. 41
5.7 PRO RATA TREATMENT AND PAYMENTS.................................. 42
5.8 ILLEGALITY....................................................... 42
Page
5.9 REQUIREMENTS OF LAW.............................................. 43
5.10 TAXES............................................................ 44
5.11 INDEMNITY........................................................ 45
5.12 CHANGE OF LENDING OFFICE; FILING OF CERTIFICATES OR DOCUMENTS.... 46
5.13 REPLACEMENT LENDERS.............................................. 46
SECTION 6. REPRESENTATIONS AND WARRANTIES................................... 46
6.1 FINANCIAL CONDITION.............................................. 46
6.2 NO CHANGE........................................................ 47
6.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW......................... 47
6.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.......... 47
6.5 NO LEGAL BAR..................................................... 48
6.6 NO MATERIAL LITIGATION........................................... 48
6.7 NO DEFAULT....................................................... 48
6.8 OWNERSHIP OF PROPERTY; LIENS..................................... 48
6.9 INTELLECTUAL PROPERTY............................................ 48
6.10 NO BURDENSOME RESTRICTIONS....................................... 49
6.11 TAXES............................................................ 49
6.12 FEDERAL REGULATIONS.............................................. 49
6.13 ERISA............................................................ 49
6.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS........................ 49
6.15 SUBSIDIARIES..................................................... 49
6.16 PURPOSE OF LOANS................................................. 49
6.17 ENVIRONMENTAL MATTERS............................................ 50
6.18 REGULATION H..................................................... 50
6.19 ACCURACY OF INFORMATION.......................................... 50
6.20 SOLVENCY......................................................... 51
6.21 STOCK PURCHASE AGREEMENT......................................... 51
SECTION 7. CONDITIONS PRECEDENT............................................. 51
7.1 CONDITIONS TO EFFECTIVENESS AND INITIAL EXTENSIONS OF CREDIT..... 51
7.2 CONDITIONS TO EACH EXTENSION OF CREDIT........................... 54
SECTION 8. AFFIRMATIVE COVENANTS............................................ 54
8.1 FINANCIAL STATEMENTS............................................. 54
8.2 CERTIFICATES; OTHER INFORMATION.................................. 55
8.3 PAYMENT OF OBLIGATIONS........................................... 55
8.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE................. 55
8.5 MAINTENANCE OF PROPERTY; INSURANCE............................... 56
8.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS........... 56
8.7 NOTICES.......................................................... 56
8.8 ENVIRONMENTAL LAWS............................................... 56
8.9 MAINTENANCE OF LIENS OF THE SECURITY DOCUMENTS................... 57
8.10 PLEDGE OF AFTER ACQUIRED PROPERTY; ADDITIONAL GUARANTORS........ 57
8.11 INTEREST RATE PROTECTION........................................ 58
8.12 PERMANENT RECEIVABLES REFINANCING............................... 58
SECTION 9. NEGATIVE COVENANTS............................................... 58
9.1 FINANCIAL CONDITION COVENANTS.................................... 58
9.2 LIMITATION ON INDEBTEDNESS....................................... 59
9.3 LIMITATION ON LIENS.............................................. 61
9.4 LIMITATION ON GUARANTEE OBLIGATIONS.............................. 63
9.5 LIMITATION ON FUNDAMENTAL CHANGES................................ 64
9.6 LIMITATION ON SALE OF ASSETS..................................... 64
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Page
9.7 LIMITATION ON RESTRICTED PAYMENTS................................ 65
9.8 LIMITATION ON CAPITAL EXPENDITURES............................... 66
9.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES.................... 66
9.10 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS AND OPTIONAL TERMINATION OF ANY PERMITTED
RECEIVABLES FINANCING............................................ 67
9.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES....................... 68
9.12 LIMITATION ON SALES AND LEASEBACKS............................... 68
9.13 LIMITATION ON CHANGES IN FISCAL YEAR............................. 68
9.14 LIMITATION ON CERTAIN CLAUSES.................................... 68
9.15 LIMITATION ON LINES OF BUSINESS.................................. 68
SECTION 9A.NEGATIVE COVENANTS OF HOLDINGS................................... 69
9A.1 LIMITATION ON HOLDINGS' ACTIVITIES............................... 69
9A.2 LIMITATION ON REDEMPTION OF HOLDINGS PREFERRED STOCK............. 69
9A.3 RESTRICTED PAYMENTS.............................................. 69
9A.4 NET PROCEEDS..................................................... 69
9A.5 DIVIDENDS........................................................ 69
SECTION 10. GUARANTEE....................................................... 69
10.1 GUARANTEE....................................................... 69
10.2 NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY........ 70
10.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF
RIGHTS.......................................................... 70
10.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL............................ 71
10.5 REINSTATEMENT................................................... 71
10.6 PAYMENTS........................................................ 71
SECTION 11. EVENTS OF DEFAULT............................................... 71
SECTION 12. THE AGENT....................................................... 74
12.1 APPOINTMENT..................................................... 74
12.2 DELEGATION OF DUTIES............................................ 75
12.3 EXCULPATORY PROVISIONS.......................................... 75
12.4 RELIANCE BY AGENT............................................... 75
12.5 NOTICE OF DEFAULT............................................... 75
12.6 NON-RELIANCE ON AGENT AND OTHER LENDERS......................... 75
12.7 INDEMNIFICATION.................................................. 76
12.8 AGENT IN ITS INDIVIDUAL CAPACITY................................ 76
12.9 SUCCESSOR AGENT................................................. 76
12.10 ISSUING BANKS; SWING LINE LENDER................................ 76
SECTION 13. MISCELLANEOUS................................................... 76
13.1 AMENDMENTS AND WAIVERS.......................................... 76
13.2 NOTICES......................................................... 77
13.3 NO WAIVER; CUMULATIVE REMEDIES.................................. 78
13.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES...................... 78
13.5 PAYMENT OF EXPENSES AND TAXES................................... 78
13.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.......... 79
13.7 ADJUSTMENTS; SET-OFF............................................ 81
13.8 COUNTERPARTS.................................................... 81
13.9 SEVERABILITY.................................................... 81
13.10 INTEGRATION..................................................... 81
13.11 GOVERNING LAW................................................... 81
13.12 SUBMISSION TO JURISDICTION; WAIVERS............................. 81
13.13 ACKNOWLEDGEMENTS................................................ 82
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13.14 WAIVERS OF JURY TRIAL........................................... 82
13.15 CONFIDENTIALITY................................................. 82
13.16 RELEASE OF TIMBERLANDS.......................................... 83
ANNEXES:
Annex A Pricing Grid
SCHEDULES:
Schedule 1.1(a) Commitments, Addresses and Lending Offices
Schedule 4.2 LOC Letters of Credit Beneficiaries
Schedule 6.1(a) Undisclosed Liabilities
Schedule 6.6 Litigation
Schedule 6.8 Real Property
Schedule 6.10 Burdensome Restrictions
Schedule 6.13 ERISA Reportable Events and Accumulated Funding Deficiencies
Schedule 6.15 Subsidiaries of Holdings and the Borrower
Schedule 6.21 Exceptions
Schedule 8.11 Existing Interest Rate Protection Agreements
Schedule 9.2(d) Assumed Financings
Schedule 9.3(e) Easements, Licenses, Etc.
Schedule 9.3(h) Existing Liens
Schedule 9.3(r) Timber Cutting, Hauling and Sales Agreements
Schedule 9.4(a) Guarantee Obligations
Schedule 9.9(e) Securities Held by Borrower or any Subsidiary
Schedule 9.11(xii) Affiliate Transactions
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EXHIBITS:
Exhibit A Form of Borrower Leasehold Mortgage
Exhibit B Form of Borrower Mortgage
Exhibit C-1 Form of Amended and Restated Borrower Security Agreement
Exhibit C-2 Form of Borrower Patent and Trademark Security Agreement
Exhibit D Form of Amended and Restated Borrower Stock Pledge Agreement
Exhibit E Form of Amended and Restated Holdings Stock Pledge Agreement
Exhibit F Form of Amended and Restated Subsidiaries Guarantee
Exhibit G Form of Subsidiary Leasehold Mortgage
Exhibit H Form of Subsidiary Mortgage
Exhibit I Form of Amended and Restated Subsidiary Security Agreement
Exhibit J Form of Amended and Restated Subsidiary Stock Pledge Agreement
Exhibit K Form of Swing Line Loan Participation Certificate
Exhibit L Form of Tranche A Term Note
Exhibit M Form of Tranche B Term Note
Exhibit N Form of Revolving Credit Note
Exhibit O Form of Swing Line Note
Exhibit P Form of Standby Letter of Credit
Exhibit Q Form of LOC Note
Exhibit R Form of Borrowing Certificate
Exhibit S-1 Form of Opinion of Cravath, Swaine & ▇▇▇▇▇
Exhibit S-2 Form of Opinion of General Counsel
Exhibit S-3 Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Exhibit T Form of Assignment and Acceptance
Exhibit U Form of Confidentiality Letter
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1
AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT, dated as of
April 26, 1996, among SDW HOLDINGS CORPORATION, a Delaware corporation
("HOLDINGS"), S.D. ▇▇▇▇▇▇ COMPANY (as successor by merger to SDW Acquisition
Corporation), a Pennsylvania corporation (the "BORROWER"), the several banks,
financial institutions and other entities from time to time parties to this
Agreement (collectively, the "LENDERS"; individually, a "LENDER"), and CHEMICAL
BANK, a New York banking corporation, as agent for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, Holdings and the Borrower are parties to that certain Credit
and Guarantee Agreement, dated as of December 20, 1994 (the "EXISTING CREDIT
AGREEMENT"), among Holdings, the Borrower, the several banks, financial
institutions and other entities parties thereto (the "EXISTING LENDERS"), and
Chemical Bank, as agent for the Existing Lenders;
WHEREAS, Holdings and the Borrower have requested that the Existing
Credit Agreement be amended and restated in its entirety as provided for herein;
and
WHEREAS, the Lenders and the Agent are willing, upon the terms and
conditions hereof, to amend and restate the Existing Credit Agreement in its
entirety in the manner provided for herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree that on the Effective Date the
Existing Credit Agreement shall be amended and restated to read 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:
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the
Prime Rate in effect on such day, (b) the Base CD Rate in effect on
such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. For purposes hereof: "PRIME RATE" shall
mean the rate of interest per annum publicly announced from time to
time by the Agent as its prime rate in effect at its principal office
in New York City (the Prime Rate not being intended to be the lowest
rate of interest charged by the Agent in connection with extensions of
credit to debtors); "BASE CD RATE" shall mean the sum of (a) the
product of (i) the Three-Month Secondary CD Rate and (ii) a fraction,
the numerator of which is one and the denominator of which is one
minus the C/D Reserve Percentage and (b) the C/D Assessment Rate;
"THREE-MONTH SECONDARY CD RATE" shall mean, for any day, the secondary
market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day,
the next preceding Business Day) by the Board of Governors through the
public information telephone line of the Federal Reserve Bank of New
York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the
week following such day), or, if such rate shall not be so reported on
such day or such next preceding Business Day, the average of the
secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately
10:00 A.M., New York City time, on such day (or, if such day shall not
be a Business Day, on the next preceding Business Day) by the Agent
from three New York City negotiable certificate of deposit dealers of
recognized standing selected by it; "C/D ASSESSMENT RATE" shall mean,
for any day, the annual assessment rate in effect on such day which is
payable by a member of the Bank Insurance Fund maintained by the FDIC
classified as well-capitalized and within supervisory subgroup "B" (or
a comparable successor assessment risk classification) within the
meaning of 12 C.F.R. Section 327.3(d) (or any successor provision) to
the FDIC for the FDIC's insuring time deposits at offices of such
institution in the United States; "C/D RESERVE PERCENTAGE" shall mean,
for any day, that percentage (expressed as a decimal) which is in
effect on such day, as prescribed by the Board of Governors, for
determining the maximum reserve requirement for a Depositary
Institution (as defined
2
in Regulation D of the Board of Governors) in respect of new
non-personal time deposits in Dollars having a maturity of 30 days
or more; and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day,
the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent
from three federal funds brokers of recognized standing selected by it.
Any change in the ABR due to a change in the Prime Rate, the
Three-Month Secondary CD Rate, the C/D Assessment Rate, the C/D
Reserve Percentage or the Federal Funds Effective Rate shall be
effective as of the opening of business on the effective day of such
change in the Prime Rate, the Three-Month Secondary CD Rate, the C/D
Assessment Rate, the C/D Reserve Percentage or the Federal Funds
Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is
based upon the ABR.
"ACCEPTING TRANCHE B LENDERS": as defined in subsection 5.1(e).
"ACCOUNTS": as defined in the NYUCC.
"ACQUISITION DOCUMENTS": collectively, the Stock Purchase
Agreement and any other documents effectuating the Stock Purchase or
the Merger.
"ADJUSTMENT DATE": the first Business Day following receipt by
the Agent of both (i) the financial statements required to be
delivered pursuant to subsection 8.1(a) or 8.1(b), as the case may be,
for the most recently completed fiscal period and (ii) the certificate
required to be delivered pursuant to subsection 8.2(b) with respect to
such fiscal period.
"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.
"AFTER-ACQUIRED MORTGAGE PROPERTY": any parcel (or adjoining
parcels) of real property or Timberland Property (including any
leaseholds) acquired by any Loan Party after the Original Closing
Date.
"AGENT": Chemical Bank, together with its affiliates, as the
arranger of the Commitments and as the agent for the Lenders under
this Agreement and the other Loan Documents, and any successor thereto
pursuant to subsection 12.9.
"AGGREGATE REVOLVING CREDIT OUTSTANDINGS": as to any Revolving
Credit Lender at any time, an amount equal to the sum of (a) the
aggregate principal amount of all Revolving Credit Loans made by such
Revolving Credit Lender then outstanding PLUS (b) such Revolving
Credit Lender's Revolving Credit Commitment Percentage of the
Revolving Credit L/C Obligations then outstanding PLUS (c) such
Revolving Credit Lender's Revolving Credit Commitment Percentage of
all Swing Line Loans made by the Swing Line Lender then outstanding.
"AGREEMENT": this Amended and Restated Credit and Guarantee
Agreement, as amended, supplemented or otherwise modified from time to
time.
"APPLICABLE MARGIN": (a) for all Loans other than Tranche B Term
Loans, 0.75% if such Loans are ABR Loans and 1.75% if such Loans are
Eurodollar Loans and (b) for Tranche B Term Loans, 1.25% if such Loans
are ABR Loans and 2.25% if such Loans are Eurodollar Loans, PROVIDED
that, from and after September 30, 1996, (i) the Applicable Margin for
all Tranche A Term Loans and Revolving Credit Loans will be adjusted,
if required, on each Adjustment Date, to the Applicable Margin set
forth on ANNEX A hereto opposite the level for which the Consolidated
Leverage Ratio for the 12-month period ended on the
3
date of the financial statements relating to such Adjustment Date as
determined based upon such financial statements satisfies the
corresponding criteria set forth under the heading "Consolidated
Leverage Ratio" and (ii) the Applicable Margin for all Tranche B
Term Loans will be adjusted, if required, on each Adjustment Date,
such that the Applicable Margin for all Tranche B Term Loans shall
equal (A) if such Loans are ABR Loans, the greater of (I) the
Applicable Margin then in effect for Tranche A Term Loans which are
ABR Loans plus 0.50% and (II) 1.25% and (B) if such Loans are
Eurodollar Loans, the greater of (I) the Applicable Margin then in
effect for Tranche A Term Loans which are Eurodollar Loans plus
0.50% and (II) 2.25%, and PROVIDED, FURTHER, that, in the event that
the financial statements required to be delivered pursuant to
subsection 8.1(a) or 8.1(b), as applicable, and the related
certificate required pursuant to subsection 8.2(b), are not
delivered when due, then if such financial statements are not
delivered prior to the date upon which the resultant Default shall
become an Event of Default, then, effective upon such Default becoming
an Event of Default, during the period from the date upon which such
financial statements were required to be delivered until one Business
Day following the date upon which they actually are delivered, the
Applicable Margin (1) for all Loans other than Tranche B Term Loans
shall be 1.50%, if such Loans are ABR Loans, and 2.50%, if such Loans
are Eurodollar Loans and (2) for Tranche B Term Loans shall be 2.00%,
if such Loans are ABR Loans, and 3.00%, if such Loans are Eurodollar
Loans.
"APPLICATION": an application, in such form as the Revolving
Credit Issuing Bank or the LOC Issuing Bank, as the case may be, may
specify from time to time, requesting the Revolving Credit Issuing
Bank or the LOC Issuing Bank, as the case may be, to open a Letter of
Credit.
"ASSET SALE": as to any Person, any sale or other disposition
(including any Sale/Leaseback Transaction and any mortgage or lease of
real property) subsequent to the Original Closing Date of any property
of such Person.
"ASSUMED FINANCINGS": as defined in subsection 9.2(d).
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) the amount of such Revolving Credit Lender's Revolving Credit
Commitment at such time over (b) such Revolving Credit Lender's
Aggregate Revolving Credit Outstandings at such time; collectively, as
to all the Revolving Credit Lenders, the "AVAILABLE REVOLVING CREDIT
COMMITMENTS".
"BASE YEAR": as defined in subsection 5.1(b).
"BOARD OF GOVERNORS": the Board of Governors of the Federal
Reserve System and any Governmental Authority which succeeds to the
powers and functions thereof.
"BOND FINANCINGS": all the Assumed Financings other than amounts
owed under the Power Sales Agreement and the Feedwater Equipment Lease
Agreement.
"BORROWER": as defined in the Preamble to this Agreement.
"BORROWER LEASEHOLD MORTGAGES": collectively, (a) each Existing
Borrower Leasehold Mortgage and (b) each Leasehold Mortgage executed
and delivered by the Borrower, substantially in the form of EXHIBIT A
or in such other form as the Agent shall reasonably require, with
respect to each lease of real property entered into by the Borrower
after the Effective Date for which a Leasehold Mortgage is granted
pursuant to subsection 8.10, as the same may be amended, supplemented
or otherwise modified from time to time.
"BORROWER MORTGAGES": collectively, (a) each Existing Borrower
Mortgage and (b) each Mortgage executed and delivered by the Borrower,
substantially in the form of EXHIBIT B or in such other form as the
Agent shall reasonably require, with respect to each parcel of
After-Acquired Mortgage Property for which a Mortgage is granted to
the Agent pursuant to subsection 8.10, as the same may be amended,
supplemented or otherwise modified from time to time.
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"BORROWER PATENT AND TRADEMARK SECURITY AGREEMENT": the Patent
and Trademark Security Agreement to be executed and delivered by the
Borrower, substantially in the form of EXHIBIT C-2, as the same may be
amended, supplemented or otherwise modified from time to time.
"BORROWER SECURITY AGREEMENT": the Amended and Restated Security
Agreement to be executed and delivered by the Borrower, substantially
in the form of EXHIBIT C-1, as the same may be amended, supplemented
or otherwise modified from time to time.
"BORROWER SECURITY DOCUMENTS": collectively, the Borrower
Leasehold Mortgages, the Borrower Mortgages, the Borrower Security
Agreement and the Borrower Stock Pledge Agreement.
"BORROWER STOCK PLEDGE AGREEMENT": the Amended and Restated
Stock Pledge Agreement to be executed and delivered by the Borrower,
substantially in the form of EXHIBIT D, as the same may be amended,
supplemented or otherwise modified from time to time.
"BORROWER'S PORTION OF EXCESS CASH FLOW": as defined in
subsection 5.1(a)(ii).
"BORROWING DATE": any Business Day specified in a notice
pursuant to subsection 2.2, 3.2 or 3.8 as a date on which the Borrower
requests the Lenders to make Loans hereunder.
"BUSINESS": as defined in subsection 6.17.
"BUSINESS DAY": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required
by law to close.
"CAPITAL EXPENDITURES": as to any Person for any period, the
aggregate amount paid or accrued by such Person and its Subsidiaries
for the rental, lease, purchase (including by way of the acquisition
of securities of a Person), construction or use of any property during
such period, the value or cost of which, in accordance with GAAP,
would appear on such Person's consolidated balance sheet in the
category of property, plant or equipment at the end of such period,
excluding (a) if any of the types of events described in Section 11(f)
shall have occurred with respect to ▇▇▇▇▇, any such expenditure in
respect of the purchase of the ▇▇▇▇▇▇▇▇▇ Facility (as defined in the
Power Sales Agreement) following a termination of the Power Sales
Agreement or in respect of the purchase of the Equipment (as defined
in the Feedwater Equipment Lease Agreement) following a termination of
the Feedwater Equipment Lease Agreement, (b) any such expenditure in
respect of any Replacement Asset and (c) any such expenditure made to
restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of
such property, to the extent such expenditure is made with insurance
proceeds or condemnation awards relating to any such damage, loss,
destruction or condemnation.
"CAPITALIZATION RATIO": at any date of determination, the ratio
of (a) Consolidated Senior Debt on such date of determination to (b)
an amount equal to the sum of (i) Consolidated Senior Debt on such
date of determination, PLUS (ii) Consolidated Subordinated Debt on
such date of determination, PLUS (iii) Consolidated Net Worth on such
date of determination, all as determined on a consolidated basis in
accordance with GAAP.
"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.
"CASH EQUIVALENTS": (a) securities issued or directly and fully
guaranteed or insured by the United States Government, or any agency
or instrumentality thereof, having maturities of not more than one
year from the date of acquisition, (b) marketable general obligations
issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at
the time of acquisition thereof, having a credit rating of "A" or
better from either Standard & Poor's Ratings Group or ▇▇▇▇▇'▇
Investors Service, Inc.;
5
(c) certificates of deposit, time deposits, eurodollar time
deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition
thereof of any Lender, or of any domestic commercial bank the
long-term debt of which is rated at the time of acquisition thereof
at least A or the equivalent thereof by Standard & Poor's
Ratings Group, or A or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc., and having capital and surplus in excess of
$500,000,000, (d) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses
(a), (b) and (c) entered into with any bank meeting the qualifications
specified in clause (c) above, (e) commercial paper rated at the time
of acquisition thereof at least A-2 or the equivalent thereof by
Standard & Poor's Ratings Group or P-2 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of investments, and in either case
maturing within 270 days after the date of acquisition thereof and
(f) other investment instruments approved in writing by the Required
Lenders and offered by any Lender or by any financial institution
which has a combined capital and surplus of not less than
$100,000,000.
"CASH FLOW PERCENTAGE": as defined in subsection 5.1(b).
"CHEMICAL": Chemical Bank, a New York banking corporation.
"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.
"COMMERCIAL LETTER OF CREDIT": as defined in subsection
3.10(b)(i)(2).
"COMMITMENT": with respect to any Lender, the collective
reference to such Lender's Tranche A Commitment, Tranche B Commitment,
Revolving Credit Commitment and/or LOC Commitment; collectively, as to
all the Lenders, the "COMMITMENTS".
"COMMITMENT PERCENTAGE": as to any Lender at any time, the
percentage which (i) the sum of (a) such Lender's then Available
Revolving Credit Commitment and other unused Commitments (other than
Revolving Credit Commitments) PLUS (b) such Lender's Loans (other than
Swing Line Loans) then outstanding PLUS (c) the product of such
Lender's Revolving Credit Commitment Percentage times the sum of (I)
the Swing Line Loans then outstanding and (II) the Revolving Credit
L/C Obligations then outstanding PLUS (d) such Lender's LOC Commitment
Percentage of the LOC Obligations then outstanding then constitutes of
(ii) the sum of (w) the aggregate Available Revolving Credit
Commitments of the Revolving Credit Lenders and the other unused
Commitments of all the Lenders (other than Revolving Credit
Commitments) PLUS (x) the aggregate principal amount of Loans of all
the Lenders then outstanding PLUS (y) the aggregate Revolving Credit
L/C Obligations of all the Lenders then outstanding PLUS (z) the
aggregate LOC Obligations of all the Lenders then outstanding.
"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(b) or (c) of the Code or, solely for purposes of
determining liability under Section 412 of the Code, which is treated
as a single employer under Section 414 (b), (c), (m) or (o) of the
Code.
"COMMON STOCK": the Common Stock of Holdings.
"CONSOLIDATED ADJUSTED EBITDA": for any period, Consolidated
EBITDA for such period MINUS Capital Expenditures of the Borrower
during such period.
"CONSOLIDATED CASH INTEREST EXPENSE": for any period,
Consolidated Interest Expense paid in cash during such period.
6
"CONSOLIDATED CURRENT ASSETS": at any date of determination, all
assets (other than cash, Cash Equivalents and deferred tax assets)
which would, in accordance with GAAP, be classified on a consolidated
balance sheet of the Borrower and its Subsidiaries as current assets
at such date of determination.
"CONSOLIDATED CURRENT LIABILITIES": at any date of
determination, all liabilities (other than short term debt, current
maturities of long term debt and deferred taxes) which would, in
accordance with GAAP, be classified on a consolidated balance sheet of
the Borrower and its Subsidiaries as current liabilities at such date
of determination.
"CONSOLIDATED EBITDA": for any period, the Consolidated Net
Income for such period, PLUS, to the extent deducted in determining
such Consolidated Net Income, (i) Consolidated Interest Expense, (ii)
depreciation, (iii) depletion, (iv) amortization, (v) all Federal,
state, local and foreign income taxes and (vi) all other non-cash
expenses, MINUS, to the extent added in determining such Consolidated
Net Income, any non-cash income or non-cash gains, all as determined
on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE": for any period, the sum of,
without duplication, (a) the net interest expense of the Borrower and
its Subsidiaries for such period as determined on a consolidated basis
in accordance with GAAP and (b) an amount equal to the interest (or
other fees or other amounts in the nature of interest or discount
accrued and paid or payable in cash for such period) in respect of the
Receivables Facility and any other Permitted Receivables Financing.
"CONSOLIDATED INTEREST EXPENSE RATIO": for any period, the ratio
of (a) Consolidated Adjusted EBITDA for such period to (b)
Consolidated Interest Expense for such period.
"CONSOLIDATED LEVERAGE RATIO": for any period, the ratio of (a)
Consolidated Total Net Debt at the last day of such period to (b)
Consolidated EBITDA for such period.
"CONSOLIDATED NET INCOME": for any period, the net income of the
Borrower and its Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, but excluding from the
determination of Consolidated Net Income (without duplication) (a) any
extraordinary or non-recurring gains or losses or gains or losses from
Asset Sales, (b) restructuring charges (but deducting from the
determination of Consolidated Net Income for any period, cash payments
(other than cash payments associated with severance of employees) made
during such period in respect of any restructuring charges recorded
after the Original Closing Date), (c) effects of discontinued
operations, (d) the income (or loss) of any Person in which any other
Person (other than the Borrower or any of the Subsidiaries) has a
joint interest, except to the extent of the amount of dividends or
other distributions actually paid in cash to the Borrower or any of
its Subsidiaries by such Person during such period and (e) the income
(or loss) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries or the date such Person's assets
are acquired by the Borrower or any of its Subsidiaries.
"CONSOLIDATED NET WORTH": at any date of determination, all
items which would, in accordance with GAAP, be included under
shareholders' equity on a consolidated balance sheet of the Borrower
and its Subsidiaries at such date of determination and, including,
without limitation, the Preferred Stock.
"CONSOLIDATED SENIOR DEBT": at any date of determination, the
sum of, without duplication, (a) all Indebtedness of the Borrower and
its Subsidiaries at such date of determination which is not
subordinated to any other Indebtedness of the Borrower or any of its
Subsidiaries as determined on a consolidated basis in accordance with
GAAP and (b) the Receivables Facility Outstandings at such date of
determination; PROVIDED that Consolidated Senior Debt shall under no
circumstances include (a) obligations in respect of Rate Protection
Agreements or (b) Reimbursement Obligations in respect of LOC Letters
of Credit except to the extent that a LOC Letter of Credit is drawn
and the proceeds are applied to repay indebtedness that prior to such
drawing and application appeared as indebtedness on a consolidated
balance sheet of the Borrower and its Subsidiaries in accordance with
GAAP.
7
"CONSOLIDATED SUBORDINATED DEBT": at any date of determination,
all Indebtedness of the Borrower and its Subsidiaries at such date of
determination which is subordinated to any other Indebtedness of the
Borrower or any of its Subsidiaries as determined on a consolidated
basis in accordance with GAAP and, including, without limitation, any
Indebtedness outstanding pursuant to subsection 9.2(f).
"CONSOLIDATED TOTAL DEBT": at any date of determination, the sum
of, without duplication, (a) all Indebtedness of the Borrower and its
Subsidiaries at such date of determination as determined on a
consolidated basis in accordance with GAAP and (b) the Receivables
Facility Outstandings at such date of determination.
"CONSOLIDATED TOTAL NET DEBT": at any date of determination,
Consolidated Total Debt at such date of determination MINUS the
aggregate amount of Cash Equivalents of the Borrower and its
Subsidiaries on hand at such date of determination.
"CONSOLIDATED WORKING CAPITAL": at any date of determination,
Consolidated Current Assets at such date of determination MINUS
Consolidated Current Liabilities at such date of determination.
"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.
"CURRENCY RATE PROTECTION AGREEMENTS": as to any Person, all
foreign exchange contracts, currency swap agreements or other similar
agreements or arrangements entered into in the ordinary course of
business by such Person designed to protect such Person against
fluctuations in currency values.
"DEFAULT": any of the events specified in Section 11, whether or
not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DLJMB": collectively, DLJ Merchant Banking Partners, L.P., DLJ
International Partners, C.V., DLJ Offshore Partners, C.V. and DLJ
Merchant Banking Funding, Inc.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"EFFECTIVE DATE": the date on which the conditions precedent set
forth in subsection 7.1 shall be satisfied or waived (but in no event
later than April 30, 1996).
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning protection of
human health or the environment, as now or may at any time hereafter
be in effect.
"ENVIRONMENTAL PERMITS": all permits, licenses, registrations,
notifications, exemptions, and other authorizations required under
Environmental Laws.
"EQUITY INTEREST": Capital Stock and all warrants, options or
other rights to acquire Capital Stock, (but excluding any debt
security that is convertible into, or exchangeable for, Capital
Stock).
"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
Eurodollar 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
or other Governmental Authority having jurisdiction with respect
thereto) dealing with reserve requirements prescribed for eurocurrency
funding (currently referred to as
8
"Eurocurrency Liabilities" in Regulation D of the Board of
Governors) maintained by a member bank of the Federal Reserve System.
"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate at which Chemical is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market
where the eurodollar and foreign currency and exchange operations in
respect of its Eurodollar Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"EURODOLLAR LOANS": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined
for such day in accordance with the following formula (rounded upward
to the nearest 1/1,000th of 1%):
EURODOLLAR BASE RATE
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in Section 11,
PROVIDED that all requirements for the giving of notice, the lapse of
time, or both, and any other conditions, have been satisfied.
"EXCESS CASH FLOW": for any fiscal year, Consolidated EBITDA for
such fiscal year, MINUS (a) to the extent deducted in determining
Consolidated Net Income for such fiscal year, Consolidated Interest
Expense for such fiscal year, (b) scheduled principal amortization in
respect of Consolidated Total Debt (including, without limitation, (i)
with respect to the fiscal year in which the Effective Date occurs,
the prepayment of the Existing Tranche B Term Loans on the Effective
Date and (ii) the aggregate amount of all repayments of Financing
Lease Obligations (other than any portion thereof allocable to
Consolidated Cash Interest Expense)) during such fiscal year (whether
or not such payments are made but after giving effect to reductions in
scheduled principal amortization as a result of optional prepayments
thereof) and payments (other than with the proceeds of Loans under
this Agreement pursuant to subsection 4.5(b) or 4.5(c)) made on
account of Reimbursement Obligations in respect of LOC Letter of
Credit drawings, (c) the aggregate amount of all prepayments of
Revolving Credit Loans to the extent the Revolving Credit Commitments
were concurrently reduced by a like amount during such fiscal year,
(d) Capital Expenditures of the Borrower and its Subsidiaries during
such fiscal year, (e) all current Federal, state, local and foreign
taxes of the Borrower and its Subsidiaries during such fiscal year,
(f) an amount equal to any increase in Consolidated Working Capital
during such fiscal year (other than increases attributable solely to
Asset Sales not involving casualty or condemnation), (g) costs paid in
cash during such period in connection with the establishment of Rate
Protection Agreements but not deducted in determining Consolidated Net
Income for such fiscal year and (h) to the extent added in determining
Consolidated Net Income for such fiscal year, all items which did not
result from a cash payment to the Borrower or any of its Subsidiaries
during such fiscal year, PLUS (x) an amount equal to any decrease in
Consolidated Working Capital during such fiscal year (other than
decreases in Consolidated Working Capital resulting from Indebtedness
permitted under subsection 9.2(g)) and (y) to the extent subtracted in
determining Consolidated Net Income for such fiscal year, all items
which did not result from a cash payment by the Borrower or any of its
Subsidiaries during such fiscal year.
"EXCHANGE DEBENTURES": exchange debentures, if and when issued,
issued pursuant to an exchange debenture indenture in exchange for the
Senior Preferred Stock having substantially the same terms as the
Senior Preferred Stock and in all respects in form and substance
reasonably satisfactory to the Agent.
"EXISTING BORROWER LEASEHOLD MORTGAGES": collectively, the
Leasehold Mortgages described on SCHEDULE 6.8 under the heading
"Borrower Leasehold Mortgages", as the same may be amended,
supplemented or otherwise modified from time to time.
9
"EXISTING BORROWER MORTGAGES": collectively, the Mortgages
described on SCHEDULE 6.8 under the heading "Borrower Mortgages", as
the same may be amended, supplemented or otherwise modified from time
to time.
"EXISTING CREDIT AGREEMENT": as defined in the recitals to this
Agreement.
"EXISTING LEASEHOLD MORTGAGES": collectively, the Existing
Borrower Leasehold Mortgages and the Existing Subsidiary Leasehold
Mortgages.
"EXISTING LENDERS": as defined in the recitals to this
Agreement.
"EXISTING MORTGAGES": collectively, the Existing Borrower
Mortgages and the Existing Subsidiary Mortgages.
"EXISTING SUBSIDIARY LEASEHOLD MORTGAGES": collectively, the
Leasehold Mortgages described on SCHEDULE 6.8 under the heading
"Subsidiary Leasehold Mortgages", as the same may be amended,
supplemented or otherwise modified from time to time.
"EXISTING SUBSIDIARY MORTGAGES": collectively, the Mortgages
described on SCHEDULE 6.8 under the heading "Subsidiary Mortgages", as
the may be amended, supplemented or otherwise modified from time to
time.
"EXISTING TRANCHE B TERM LOAN": as defined in subsection 2.2.
"EXTENSION OF CREDIT": with respect to any Lender, (a) the
making of a Loan by such Lender, (b) if such Lender is a Revolving
Credit Lender, the issuance of a Revolving Credit Letter of Credit and
(c) if such Lender is a LOC Participant, the issuance of a LOC Letter
of Credit; with respect to all the Lenders, the "EXTENSIONS OF
CREDIT".
"FDIC": the Federal Deposit Insurance Corporation and any
Governmental Authority which succeeds to the powers and functions
thereof.
"FEDERAL FUNDS EFFECTIVE RATE": as defined in the definition of
ABR contained in this subsection 1.1.
"FEEDWATER EQUIPMENT LEASE AGREEMENT": the Lease Agreement dated
December 14, 1981 among the Connecticut Bank and Trust Company, as
Trustee, General Electric Credit Corporation, as Owner, and ▇▇▇▇▇, as
Lessee.
"FINAL OFFERING MEMORANDUM": the Offering Memorandum dated
December 13, 1994, with respect to the issuance of the Senior
Subordinated Notes, the Series A Preferred Stock and certain Warrants,
a copy of which has been furnished to each Lender, together with the
Preliminary Offering Memorandum.
"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.
"FINANCING LEASE OBLIGATIONS": as to any Person, the obligations
of such Person to pay rent or other amounts under any Financing Lease;
the amount of such obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower organized
under the laws of any jurisdiction outside the United States of
America.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time (subject to subsection
1.2(e)).
10
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE": the guarantee contained in Section 10 or the
Subsidiaries Guarantee.
"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 the Guaranteeing Person has
issued a reimbursement, counter indemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
lease, dividend or other obligation (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
which such Guaranteeing Person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation
shall be such Guaranteeing Person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good
faith.
"GUARANTORS": Holdings and each Subsidiary (other than Foreign
Subsidiaries) of the Borrower.
"HAZARDOUS MATERIALS": any petroleum (including crude oil or any
fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos and asbestos-containing
materials, pollutants, contaminants, and all other materials and
substances including but not limited to radioactive materials
regulated pursuant to any Environmental Laws or that could result in
liability under any Environmental Law.
"HOLDINGS": as defined in the Preamble to this Agreement.
"HOLDINGS PREFERRED STOCK": the 15% Senior Exchangeable
Preferred Stock issued by Holdings on the Original Closing Date.
"HOLDINGS STOCK PLEDGE AGREEMENT": the Amended and Restated
Stock Pledge Agreement to be executed and delivered by Holdings,
substantially in the form of EXHIBIT E, as the same may be amended,
supplemented or otherwise modified from time to time.
"INDEBTEDNESS": of any Person at any date, without duplication,
(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 in respect
of acceptances issued or created for the account of such Person and
(e) all indebtedness of others of the types described in (a) through
(d) above secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise become liable for
the payment thereof (the amount
11
of such indebtedness with respect to such Person being deemed to be
the lesser of the value of such property or the amount of
indebtedness of others so secured).
"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.
"INTELLECTUAL PROPERTY": as defined in subsection 6.9.
"INTEREST PAYMENT DATE": (a) as to ABR Loans, the last day of
each March, June, September and December, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day
of such Interest Period and (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three
months, or a whole multiple thereof, after the first day of such
Interest Period and the last day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(i) initially, the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with
respect thereto; and
(ii) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to
the Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan
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;
(2) no Interest Period that would otherwise extend beyond
the Termination Date or beyond the date final payment is due on
the Term Loans shall be selected by the Borrower;
(3) any Interest Period pertaining to a Eurodollar Loan
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; and
(4) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Eurodollar Loan.
"INTEREST RATE PROTECTION AGREEMENTS": as to any Person, all
interest rate swaps, caps or collar agreements or similar arrangements
entered into by such Person providing for protection against
fluctuations in interest rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"INVESTMENT": as defined in subsection 9.9.
"INVESTORS": collectively, Sappi, one or more Subsidiaries of
Sappi, DLJMB and UBSCC.
"ISSUING BANKS": collectively, the LOC Issuing Bank and the
Revolving Credit Issuing Bank.
12
"L/C FEE PAYMENT DATE": the last day of each March, June,
September and December.
"L/C OBLIGATIONS": collectively, the Revolving Credit L/C
Obligations and the LOC Obligations.
"LEASEHOLD MORTGAGES": the collective reference to the Borrower
Leasehold Mortgages and the Subsidiary Leasehold Mortgages.
"LENDERS": as defined in the Preamble to this Agreement.
"LETTERS OF CREDIT": collectively, LOC Letters of Credit and
Revolving Credit Letters of Credit.
"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 Tranche A Term Loan, Tranche B Term Loan, Revolving
Credit Loan, Swing Line Loan or LOC Loan.
"LOAN DOCUMENTS": this Agreement, any Notes, the Guarantees, the
Applications and the Security Documents.
"LOAN PARTICIPANT": as defined in subsection 13.6(b).
"LOAN PARTIES": the Borrower, Holdings and each Subsidiary of
the Borrower which is a party to (or the Capital Stock of which has
been pledged pursuant to) a Loan Document.
"LOC COMMITMENT": with respect to any Lender, its obligation to
participate in LOC Letters of Credit and to make LOC Loans pursuant to
subsection 4.4 in an amount not to exceed the amount set forth
opposite such Lender's name on SCHEDULE 1.1(a) under the heading "LOC
Commitment", as such amount may be reduced from time to time pursuant
to this Agreement or as such amount may be adjusted from time to time
pursuant to subsection 13.6; collectively, as to all such Lenders, the
"LOC COMMITMENTS".
"LOC COMMITMENT AMOUNT": $170,484,931.48, as such amount may be
reduced from time to time pursuant to this Agreement.
"LOC COMMITMENT PERCENTAGE": as to any LOC Participant at any
time, the percentage which (a) the sum of (i) the product of the
percentage of the LOC Commitments of all the LOC Participants then
constituted by such LOC Participant's LOC Commitment times the
aggregate LOC Obligations then outstanding PLUS (ii) such LOC
Participant's LOC Loans then outstanding then constitutes of (b) the
sum of (i) the aggregate LOC Obligations then outstanding and (ii) the
aggregate principal amount of the LOC Loans of all the LOC
Participants then outstanding.
"LOC COMMITMENT PERIOD": the period from and including the
Effective Date to but not including the Termination Date or such
earlier date on which the LOC Commitments shall terminate as provided
herein.
"LOC FEE PERCENTAGE": as defined in subsection 4.3(b).
"LOC ISSUING BANK": Chemical or any of its Affiliates, in its
capacity as issuer of any LOC Letter of Credit.
"LOC LETTERS OF CREDIT": as defined in paragraph 4.1(a).
"LOC LOAN": as defined in subsection 4.5(c).
13
"LOC NOTE": as defined in subsection 4.6(e).
"LOC OBLIGATIONS": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding LOC Letters of Credit and (b) the aggregate amount of
drawings under LOC Letters of Credit which have not then been
reimbursed pursuant to subsection 4.5.
"LOC PARTICIPANT": any Lender with a LOC Commitment hereunder.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole or (b) the
validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Agent or the Lenders
hereunder or thereunder.
"MERGER": the merger of SDW Acquisition Corporation with and
into the Borrower following the Stock Purchase, with the Borrower as
the surviving corporation.
"MORTGAGED PROPERTY": the real properties acquired by the Loan
Parties on the Original Closing Date as specified on SCHEDULE 6.8
hereto.
"MORTGAGES": collectively, the Borrower Mortgages and the
Subsidiary Mortgages.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"MUSKEGON SOLID WASTE BONDS": Michigan Strategic Fund Adjustable
Tender Solid Waste Disposal Revenue Bonds (S.D. ▇▇▇▇▇▇ Company
Project) due 2002.
"NET PROCEEDS": with respect to any Person, (a) with respect to
any Asset Sale by such Person, the cash proceeds (including any cash
payments 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 net of (i) attorneys' fees, accountants' fees, investment banking
fees, survey costs, title insurance premiums, and related search and
recording charges, transfer taxes, deed or mortgage recording taxes,
required debt payments (other than pursuant hereto), other customary
expenses, 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 (other than any Lien in
favor of the Agent for the benefit of the Lenders) and brokerage,
consultant and other customary fees actually incurred in connection
therewith and (ii) taxes paid or payable as a result thereof and (b)
with respect to any issuance of equity securities or the incurrence of
any Indebtedness by such Person subsequent to the Original Closing
Date, the cash proceeds received from such issuance or incurrence net
of investment banking fees, legal fees, accountants fees, underwriting
discounts and commissions and other customary fees and expenses and
other reasonable costs and expenses actually incurred in connection
therewith.
"NEW LENDING OFFICE": as defined in subsection 5.10(c).
"NON-EXCLUDED TAXES": as defined in subsection 5.10.
"NOTES": collectively, the Swing Line Note, Revolving Credit
Notes, Term Notes and LOC Notes, if any.
"NYUCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"OBLIGATIONS": the unpaid principal of and interest on the Loans
and all other obligations and liabilities of the Borrower to the Agent
and the Lenders (including, without limitation, interest accruing at
the then applicable rate provided in this Agreement after the maturity
of the Loans and interest accruing at the then applicable rate
provided in this Agreement after the filing of any petition in
bankruptcy, or the
14
commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding),
whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, the other Loan Documents,
any Rate Protection Agreement entered into by the Borrower with any
Lender or any Affiliate of any Lender permitted under subsection 8.11,
any cash management services agreement entered into by the Borrower
with any Lender or any Affiliate of any Lender or any other document
made, delivered or given in connection herewith or therewith, in each
case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Agent or to the Lenders that are required to be paid by the
Borrower pursuant to the terms of this Agreement, any other Loan
Document or any such Rate Protection Agreement or cash management
services agreement entered into by the Borrower with any Lender or any
Affiliate of any Lender), PROVIDED that the maximum amount of
obligations and liabilities of the Borrower in respect of cash
management services agreements entered into by the Borrower with the
Lenders or any Affiliates of any Lenders that shall constitute
"Obligations" shall not exceed $3,000,000 in the aggregate.
"OBSOLETE PROPERTY": any property of the Borrower or any of its
Subsidiaries which is obsolete, outdated or worn out or the useful
life of which has ended, in each case in the good faith determination
of the Borrower or any applicable Subsidiary.
"ORIGINAL CLOSING DATE": December 20, 1994.
"ORIGINAL LOC LETTERS OF CREDIT": as defined in subsection
4.1(a).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any Governmental
Authority which succeeds to the powers and functions thereof.
"PERMITTED RECEIVABLES FINANCING": (i) the Receivables Facility,
as may be amended, modified, changed or replaced from time to time
pursuant to subsection 9.10(e) or 9.10(f) and/or (ii) any transaction
providing for the sale or financing of Receivables and Related
Security by the Borrower to SDW Finance and/or by SDW Finance to any
Receivables Company or any other Person with customary limited
recourse based on the collectability of the Receivables sold;
PROVIDED, HOWEVER, that the terms, conditions and structure (including
the legal and organizational structure of SDW Finance and the
restrictions imposed on its activities) of and the documentation
relating to any such transactions entered into after the date hereof
must be reasonably acceptable to the Agent.
"PERSON": an individual, partnership, corporation, business
trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"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.
"POWER SALES AGREEMENT": the Power Sales Agreement dated as of
January 1, 1982, between The Connecticut Bank and Trust Company, as
Owner Trustee, and ▇▇▇▇▇, as Purchaser, as amended pursuant to
Amendment No. 1 thereto, dated as of December 15, 1986.
"PREFERRED STOCK": collectively, the Series A Preferred Stock,
the Series B Preferred Stock and the Holdings Preferred Stock.
"PRELIMINARY OFFERING MEMORANDUM": the Offering Memorandum dated
November 16, 1994, with respect to the issuance of the Senior
Subordinated Notes, the Series A Preferred Stock and certain Warrants,
a copy of which has been furnished to each Lender.
15
"PREPAYMENT ACCOUNT": as defined in subsection 5.1(d).
"PRIMARY OBLIGATION": as defined in the definition of "Guarantee
Obligation" contained in this subsection 1.1.
"PROCEEDS": as defined in the NYUCC.
"PROPERTIES": as defined in subsection 6.17.
"QUALIFIED ASSETS": as defined in subsection 5.1(c).
"RATE PROTECTION AGREEMENTS": collectively, any Currency Rate
Protection Agreements and Interest Rate Protection Agreements.
"RECEIVABLE": any indebtedness and other obligations owed to the
Borrower or SDW Finance or any right of SDW Finance or the Borrower to
payment from or on behalf of an obligor, whether constituting an
account, chattel paper, instrument or general intangible, arising in
connection with the sale or lease of goods or the rendering of
services by the Borrower or SDW Finance, including, without
limitation, the obligation to pay any finance charges, fees and other
charges with respect thereto.
"RECEIVABLES COMPANY": Pooled Accounts Receivable Capital
Corporation, a Delaware corporation, or any other entity formed for
the purpose of purchasing or financing Receivables of the Borrower
and/or SDW Finance in connection with any Permitted Receivables
Financing.
"RECEIVABLES FACILITY": as defined in subsection 7.1(b).
"RECEIVABLES FACILITY OUTSTANDINGS": at any date of
determination, (a) with respect to the Receivables Facility, the
aggregate outstanding Investment (as defined in the applicable
Receivables Sale Agreement as in effect on the date hereof) at such
date of determination and (b) with respect to any other Permitted
Receivables Financing, the amount corresponding or equivalent to the
aggregate outstanding Investment (as defined in the applicable
Receivables Sale Agreement as in effect on the date hereof) at such
date of determination.
"RECEIVABLES SALE AGREEMENT": the collective reference to (a)
the Purchase and Contribution Agreement between the Borrower and SDW
Finance (as in effect on the date hereof and as may be amended,
supplemented, restated, replaced or otherwise modified from time to
time pursuant to subsections 9.10(e) or 9.10(f) in connection with any
Permitted Receivables Financing) and (b) the Receivables Purchase
Agreement among SDW Finance, the Borrower and the Receivables Company
(as in effect on the date hereof and as may be amended, supplemented,
restated, replaced or otherwise modified from time to time pursuant to
subsections 9.10(e) or 9.10(f) in connection with any Permitted
Receivables Financing).
"REGISTER": as defined in subsection 13.6(d).
"REGULATION H": Regulation H of the Board of Governors as in
effect from time to time.
"REGULATION U": Regulation U of the Board of Governors as in
effect from time to time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse (a) the Revolving Credit Issuing Bank pursuant to subsection
3.14(a) for amounts drawn under Revolving Credit Letters of Credit and
(b) the LOC Issuing Bank pursuant to subsection 4.5(a) for amounts
drawn under LOC Letters of Credit.
"RELATED SECURITY: with respect to any Receivable,
16
(i) all of the Borrower's or SDW Finance's interest,
as the case may be, in any goods (including returned goods), and
documentation or title evidencing the shipment or storage of any
goods (including returned goods), relating to any sale giving
rise to such Receivable;
(ii) all other security interests or liens and property
subject thereto from time to time purporting to secure payment of
such Receivable together with all UCC financing statements or
similar filings signed by an obligor relating thereto; and
(iii) all guaranties, indemnities, insurance and other
agreements or arrangements of whatever character from time to
time supporting or securing payment of such Receivable or
otherwise relating to such Receivable.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPLACEMENT ASSET": any property acquired by the Borrower or
any of its Subsidiaries subsequent to the Original Closing Date which
replaces Obsolete Property of the same type and utility as the
property acquired.
"REPLACEMENT LOC LETTER OF CREDIT": as defined in subsection
4.1(a).
"REPORTABLE EVENT": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. Section 2615.
"REQUIRED LENDERS": at any time, Lenders the Commitment
Percentages of which aggregate more than 50%.
"REQUIRED LOC PARTICIPANTS": at any time, LOC Participants the
LOC Commitment Percentages of which aggregate more than 50%.
"REQUIRED REVOLVING CREDIT LENDERS": at any time, Revolving
Credit Lenders the Revolving Credit Commitment Percentages of which
aggregate more than 50%.
"REQUIRED TRANCHE A LENDERS": at any time, Tranche A Lenders the
Tranche A Commitment Percentages of which aggregate more than 50%.
"REQUIRED TRANCHE B LENDERS": at any time, Tranche B Lenders the
Tranche B Commitment Percentages of which aggregate more than 50%.
"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": as to any Person, the chief executive
officer and the president of such Person or, with respect to financial
matters, the chief financial officer of such Person or, in either
case, such other executive officers as may be designated from time to
time by such Person in writing to the Agent.
"RESTRICTED PAYMENTS": as defined in subsection 9.7.
"REVOLVING CREDIT COMMITMENT": with respect to any Lender, its
obligation to make Revolving Credit Loans and/or issue or participate
in Revolving Credit Letters of Credit issued on behalf of the Borrower
and/or make or participate in Swing Line Loans made to the Borrower in
an amount not to exceed the amount set forth opposite such Lender's
name on SCHEDULE 1.1(a) under the heading "Revolving Credit
17
Commitment", as such amount may be reduced from time to time pursuant
to this Agreement or as such amount may be adjusted from time to time
pursuant to subsection 13.6; collectively, as to all such Lenders, the
"REVOLVING CREDIT COMMITMENTS".
"REVOLVING CREDIT COMMITMENT PERCENTAGE": as to any Revolving
Credit Lender at any time, the percentage which (i) the sum of (a)
such Revolving Credit Lender's then unused Revolving Credit Commitment
PLUS (b) such Revolving Credit Lender's Revolving Credit Loans then
outstanding PLUS (c) the product of the percentage of the Revolving
Credit Commitments of all the Revolving Credit Lenders then
constituted by such Revolving Credit Lender's Revolving Credit
Commitment times the sum of (I) the Swing Line Loans then outstanding
and (II) the Revolving Credit L/C Obligations then outstanding then
constitutes of (ii) the sum of (w) the aggregate outstanding then
unused Revolving Credit Commitments of all the Revolving Credit
Lenders PLUS (x) the aggregate principal amount of Revolving Credit
Loans of all the Revolving Credit Lenders then outstanding PLUS (y)
the aggregate Revolving Credit L/C Obligations then outstanding PLUS
(z) the Swing Line Loans then outstanding.
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and
including the Effective Date to but not including the Termination Date
or such earlier date on which the Revolving Credit Commitments shall
terminate as provided herein.
"REVOLVING CREDIT FEE PERCENTAGE": as defined in subsection
3.12(b).
"REVOLVING CREDIT ISSUING BANK": Chemical or any of its
Affiliates, in its capacity as issuer of any Revolving Credit Letter
of Credit.
"REVOLVING CREDIT L/C COMMITMENT": $75,000,000.
"REVOLVING CREDIT 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 Revolving Credit Letters of Credit and (b) the
aggregate amount of drawings under Revolving Credit Letters of Credit
which have not been reimbursed pursuant to subsection 3.14.
"REVOLVING CREDIT L/C PARTICIPANTS": collectively, all the
Revolving Credit Lenders other than the Revolving Credit Issuing Bank.
"REVOLVING CREDIT LENDER": any Lender with an unused Revolving
Credit Commitment hereunder and/or any Revolving Credit Loans
outstanding hereunder; collectively, the "REVOLVING CREDIT LENDERS".
"REVOLVING CREDIT LETTERS OF CREDIT": collectively, Commercial
Letters of Credit and Standby Letters of Credit.
"REVOLVING CREDIT LOANS": as defined in subsection 3.1(a).
"REVOLVING CREDIT NOTE": as defined in subsection 3.5(e).
"SALE/LEASEBACK TRANSACTION": as defined in subsection 9.12.
"SAPPI": Sappi Limited, a corporation organized under the laws
of the Republic of South Africa.
"▇▇▇▇▇": ▇▇▇▇▇ Paper Company, a Pennsylvania corporation.
"SDW FINANCE": S.D. ▇▇▇▇▇▇ Finance Co., a Delaware corporation.
"SEC": the Securities and Exchange Commission or any
Governmental Authority which succeeds to the powers and functions
thereof.
18
"SECURITY AGREEMENTS": collectively, the Borrower Security
Agreement and the Subsidiary Security Agreements.
"SECURITY DOCUMENTS": collectively, the Leasehold Mortgages, the
Mortgages, the Security Agreements, the Borrower Patent and Trademark
Security Agreement, the Stock Pledge Agreements, and all other
security documents hereafter delivered to the Agent granting a Lien on
any asset or assets of any Person to secure the Obligations or to
secure any guarantee of any such Obligations and, including, without
limitation, any such document delivered pursuant to subsection 8.10.
"SENIOR PREFERRED STOCK": the Series A Preferred Stock and the
Series B Preferred Stock.
"SENIOR SUBORDINATED NOTE INDENTURE": the Indenture, dated as of
December 20, 1994, between the Borrower and The Bank of New York, as
Trustee, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with subsection 9.10.
"SENIOR SUBORDINATED NOTES": the 12% Series A Senior
Subordinated Notes due 2004 issued pursuant to the Senior Subordinated
Note Indenture.
"SERIES A PREFERRED STOCK": the 14% Series A Senior Exchangeable
Preferred Stock due 2006 issued by the Borrower on the Original
Closing Date.
"SERIES B PREFERRED STOCK": the 14% Series B Senior Exchangeable
Preferred Stock due 2006 issuable by the Borrower in exchange for the
Series A Preferred Stock as set forth in the Final Offering
Memorandum.
"SHAREHOLDERS AGREEMENT": the Shareholders Agreement dated as of
December 20, 1994, among Holdings, the Borrower, Sappi, one or more
Subsidiaries of Sappi, DLJMB and UBSCC, as the same may be amended,
supplemented or otherwise modified.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as
of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount that will be required to pay all "liabilities of
such Person, contingent or otherwise", as of such date (as such quoted
terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors) as such
debts become absolute and matured, (b) such Person will not have, as
of such date, an unreasonably small amount of capital with which to
conduct its business, and (c) such Person will be able to pay its
debts as they mature, taking into account the timing of and amounts of
cash to be received by such Person and the timing of and amounts of
cash to be payable on or in respect of indebtedness of such Person; in
each case after giving effect to (A) as of the Effective Date the
making of the extensions of credit to be made on the Effective Date
and to the application of the proceeds of such extensions of credit
and (B) on any date after the Effective Date, the making of any
extension of credit to be made on such date, and to the application of
the proceeds of such extension of credit. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim"
means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured
or unmatured, disputed, undisputed, secured or unsecured.
"STANDBY LETTER OF CREDIT": as defined in subsection
3.10(b)(i)(1).
"STOCK PLEDGE AGREEMENTS": collectively, the Borrower Stock
Pledge Agreement, the Holdings Stock Pledge Agreement and the
Subsidiary Stock Pledge Agreements.
19
"STOCK PURCHASE": the purchase of all of the issued and
outstanding capital stock of the Borrower pursuant to the Stock
Purchase Agreement.
"STOCK PURCHASE AGREEMENT": Stock Purchase Agreement, dated as
of October 8, 1994, among ▇▇▇▇▇ Paper Company, Sappi and SDW
Acquisition Corporation.
"SUBSIDIARIES GUARANTEE": the Amended and Restated Guarantee to
be executed and delivered by each Subsidiary, substantially in the
form of EXHIBIT F, as the same may be amended, supplemented or
otherwise modified from time to time.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Borrower.
"SUBSIDIARY LEASEHOLD MORTGAGE": (a) each Existing Subsidiary
Leasehold Mortgage and (b) each Leasehold Mortgage executed and
delivered by a Subsidiary, substantially in the form of EXHIBIT G or
in such other form as the Agent shall reasonably require, with respect
to each lease of real property entered into after the Effective Date
for which a Leasehold Mortgage is granted pursuant to subsection 8.10,
as the same may be amended, supplemented or otherwise modified from
time to time.
"SUBSIDIARY MORTGAGE": (a) each Existing Subsidiary Mortgage and
(b) each Mortgage executed and delivered by a Subsidiary,
substantially in the form of EXHIBIT H or in such other form as the
Agent shall reasonably require, with respect to each parcel of
After-Acquired Mortgage Property for which a mortgage is granted to
the Agent pursuant to subsection 8.10, as the same may be amended,
supplemented or otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT": the Amended and Restated
Security Agreement to be executed and delivered by each Subsidiary in
favor of the Agent, substantially in the form of EXHIBIT I, as the
same may be amended, supplemented or otherwise modified from time to
time.
"SUBSIDIARY SECURITY DOCUMENTS": collectively, the Subsidiary
Leasehold Mortgages, the Subsidiary Mortgages, the Subsidiary Security
Agreements and the Subsidiary Stock Pledge Agreements.
"SUBSIDIARY STOCK PLEDGE AGREEMENT": the Amended and Restated
Stock Pledge Agreement to be executed and delivered by each
Subsidiary, substantially in the form of EXHIBIT J, as the same may be
amended, supplemented or otherwise modified from time to time.
"SUPPORTED OBLIGATIONS": at any time with respect to the Assumed
Financings, an amount equal to the sum of (a) all payments required to
be made by ▇▇▇▇▇ at or after such time under the Power Sales Agreement
and the Feedwater Equipment Lease Agreement for which a release has
not been obtained from General Electric Capital Corporation, PLUS (b)
the sum of: (i) the then outstanding principal of the bonds issued
under the Bond Financings (other than the Muskegon Solid Waste Bonds),
PLUS (ii) the premium, if any, payable on such bonds upon optional
redemption thereof (or, if such bonds are not then subject to optional
redemption, on the first optional redemption date), PLUS (iii) one
year's interest on such bonds, PLUS (iv) if such bonds are not then
subject to optional redemption, an amount equal to interest in excess
of one year's interest that will accrue on such bonds until the first
date such bonds are subject to optional redemption; as to each Assumed
Financing, a "SUPPORTED OBLIGATION".
"SWING LINE COMMITMENT": the obligation of the Swing Line Lender
to make Swing Line Loans pursuant to subsection 3.6 in an aggregate
amount at any one time outstanding not to exceed $25,000,000.
20
"SWING LINE LENDER": as defined in subsection 3.6.
"SWING LINE LOAN PARTICIPATION CERTIFICATE": a certificate
substantially in the form of EXHIBIT K.
"SWING LINE LOANS": as defined in subsection 3.6.
"SWING LINE NOTE": as defined in subsection 3.7(e).
"SWING LINE PARTICIPATION AMOUNT": as defined in subsection
3.9(b).
"TERMINATION DATE": the seventh anniversary of the Original
Closing Date.
"TERM LOAN": a Tranche A Term Loan or a Tranche B Term Loan, as
the context shall require; collectively, the "TERM LOANS".
"TERM LOAN COMMITMENT PERCENTAGE": as to any Term Loan Lender at
any time, the percentage of the Term Loan Commitments then constituted
by such Term Loan Lender's Term Loan Commitments (or, after the Term
Loans are made, the percentage of the aggregate Term Loans then
constituted by such Term Loan Lender's Term Loans).
"TERM LOAN COMMITMENTS": collectively, the Tranche A Commitments
and the Tranche B Commitments; individually, a "TERM LOAN COMMITMENT".
"TERM LOAN LENDER": any Lender with an unused Term Loan
Commitment hereunder and/or any Term Loans outstanding hereunder;
collectively, the "TERM LOAN LENDERS".
"TERM NOTE": a Tranche A Term Note or a Tranche B Term Note, as
the context shall require; collectively, the "TERM NOTES".
"TIMBER": at any time, all trees, timber, including, without
limitation, standing timber and crops located on or planted or growing
in the soil of any real property, or any part or parcel thereof, and
any and all severed timber from time to time located on such real
property.
"TIMBERLAND PROPERTY": any real property on which Timber is
located.
"TIMBERLANDS": at any time, all Timberland Property owned or
leased by the Borrower or any of its Subsidiaries in which a security
interest is purported or required to have been granted pursuant to the
Security Documents at such time.
"TRANCHE": collectively, Eurodollar 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); Tranches may be identified
as "EURODOLLAR TRANCHES".
"TRANCHE A COMMITMENT": as to any Lender, its obligation to make
a Tranche A Term Loan to the Borrower in an amount equal to the amount
set forth opposite such Lender's name in SCHEDULE 1.1(a) under the
heading "Tranche A Commitment", as such amount may be reduced from
time to time pursuant to this Agreement or as such amount may be
adjusted from time to time pursuant to subsection 13.6; collectively,
as to all such Lenders, the "TRANCHE A COMMITMENTS".
"TRANCHE A COMMITMENT PERCENTAGE": as to any Tranche A Lender at
any time, the percentage of the Tranche A Commitments then constituted
by such Tranche A Lender's Tranche A Commitment (or, after the Tranche
A Term Loans are made, the percentage of the aggregate Tranche A Term
Loans then constituted by such Tranche A Lender's Tranche A Term
Loan).
21
"TRANCHE A LENDER": any Lender with an unused Tranche A
Commitment hereunder and/or any Tranche A Term Loans outstanding
hereunder; collectively, the "TRANCHE A LENDERS".
"TRANCHE A TERM LOAN": as defined in subsection 2.1(a).
"TRANCHE A TERM NOTE": as defined in subsection 2.5(d)(i).
"TRANCHE B COMMITMENT": as to any Lender, its obligation to make
a Tranche B Term Loan to the Borrower in an amount equal to the amount
set forth opposite such Lender's name in SCHEDULE 1.1(A) under the
heading "Tranche B Commitment", as such amount may be reduced from
time to time pursuant to this Agreement or as such amount may be
adjusted from time to time pursuant to subsection 13.6; collectively,
as to all the such Lenders, the "TRANCHE B COMMITMENTS".
"TRANCHE B COMMITMENT PERCENTAGE": as to any Tranche B Lender at
any time, the percentage of the Tranche B Commitments then constituted
by such Tranche B Lender's Tranche B Commitment (or, after the Tranche
B Term Loans are made, the percentage of the aggregate Tranche B Term
Loans then constituted by such Tranche B Lender's Tranche B Term
Loan).
"TRANCHE B ESCROW ACCOUNT": as defined in subsection 5.1(e).
"TRANCHE B LENDER": any Lender with an unused Tranche B
Commitment hereunder and/or any Tranche B Term Loans outstanding
hereunder; collectively, the "TRANCHE B LENDERS".
"TRANCHE B MANDATORY PREPAYMENT DATE": as defined in subsection
5.1(e).
"TRANCHE B MATURITY DATE": the eighth anniversary of the
Original Closing Date.
"TRANCHE B PREPAYMENT AMOUNT": as defined in subsection 5.1(e).
"TRANCHE B PREPAYMENT OPTION NOTICE": as defined in subsection
5.1(e).
"TRANCHE B TERM LOAN": as defined in subsection 2.1(b).
"TRANCHE B TERM NOTE": as defined in subsection 2.5(d)(ii).
"TRANSFEREE": as defined in subsection 13.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a
Eurodollar Loan.
"UBSCC": UBS Capital Corporation, a New York corporation.
"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.
"WARRANTS": warrants to purchase shares of Common Stock.
1.2 OTHER DEFINITIONAL PROVISIONS; FINANCIAL CALCULATIONS. (a) Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
22
(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.
(e) Notwithstanding anything to the contrary herein, for purposes of
making all calculations in connection with the covenants contained in Section 9,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP consistently
applied as in effect on the date of this Agreement. In the event of any
material difference at any time between GAAP in effect on the date of this
Agreement and GAAP from time to time in effect, the certificate of a Responsible
Officer required pursuant to subsection 8.2(b)(ii) shall include a
reconciliation of the calculations required thereby with the financial
statements being delivered with such certificate.
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
2.1 TERM LOANS. Subject to the terms and conditions hereof, (a) each
Tranche A Lender severally agrees (a) to make a term loan (a "TRANCHE A TERM
LOAN") to the Borrower on the Effective Date in an amount equal to the Tranche A
Commitment of such Tranche A Lender and (b) each Tranche B Lender severally
agrees to make a term loan (a "TRANCHE B TERM LOAN") to the Borrower on the
Effective Date in an amount equal to the Tranche B Commitment of such Tranche B
Lender. The Term Loans may from time to time be (a) Eurodollar Loans, (b) ABR
Loans or (c) a combination thereof, as determined by the Borrower and notified
to the Agent in accordance with subsections 2.2 and 5.2.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower hereby requests a
Tranche A Term Loan borrowing on the Effective Date in an amount equal to the
aggregate amount of the Tranche A Commitments of the Tranche A Lenders and a
Tranche B Term Loan borrowing on the Effective Date in an amount equal to the
aggregate amount of the Tranche B Commitments of the Tranche B Lenders. The
Borrower shall give the Agent irrevocable notice (which notice must be received
by the Agent prior to 12:00 Noon, New York City time, three Business Days prior
to the Effective Date), if all or any part of the Term Loans are to be initially
Eurodollar Loans, specifying (a) the amount of Term Loans which are initially to
be Eurodollar Loans and (b) the respective amounts thereof and the lengths of
the initial Interest Periods therefor. To the extent that the Borrower does not
deliver a notice pursuant to the immediately preceding sentence, the Term Loans
shall initially be ABR Loans. Upon receipt of any such notice from the
Borrower, the Agent shall promptly notify each Term Loan Lender thereof. Each
Term Loan Lender will make the amount of its PRO RATA share of the Term Loans
available to the Agent for the account of the Borrower at the office of the
Agent specified in subsection 13.2 prior to 10:00 A.M., New York City time, on
the Effective Date in Dollars and in funds immediately available to the Agent,
PROVIDED that to the extent a Tranche B Lender has a Tranche B Term Loan
outstanding under the Existing Credit Agreement (an "EXISTING TRANCHE B TERM
LOAN"), such Tranche B Lender may, at its option, elect to have its Existing
Tranche B Term Loan be a Tranche B Term Loan under this Agreement to the extent
the principal amount of such Existing Tranche B Term Loan does not exceed the
Tranche B Commitment of such Tranche B Lender and such Tranche B Lender shall be
deemed to have made a Tranche B Term Loan on the Effective Date in an amount
equal to the principal amount of such Tranche B Term Loan. The Agent shall
credit the account of the Borrower by 11:00 A.M., New York City time, on the
Effective Date, on the books of such office of the Agent or such other account
as specified by the Borrower with the aggregate of the amounts made available to
the Agent by the Term Loan Lenders and in like funds as received by the Agent.
2.3 REPAYMENT OF TRANCHE A TERM LOANS. The Borrower hereby
unconditionally promises to pay to the Agent for the account of the Tranche A
Lenders the principal amount of the Tranche A Term Loans made by such Tranche A
Lenders in twelve consecutive semi-annual installments, payable on the last day
of June and December of each year commencing June 30, 1996, each of which
installments on any such date shall be in an amount equal to 50% of the amount
set forth below opposite the year in which such date occurs (or such earlier
date on which the Tranche A Term Loans become due and payable pursuant to
Section 11), PROVIDED that (a) as a result of payments made under the Existing
Credit Agreement, no installment shall be payable on June 30, 1996 and the
installment payable on December 31, 1996 shall be
23
in an amount equal to 100% of the amount set forth below opposite the year in
which such date occurs and (b) the final installment of the Tranche A Term
Loans shall be payable on the Termination Date:
Year Amount
---- ------
1996 $16,357,776.71
1997 $46,736,504.88
1998 $51,410,155.36
1999 $51,410,155.36
2000 $51,410,155.36
2001 $51,410,155.36
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Tranche A Term 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 subsection 5.4.
2.4 REPAYMENT OF TRANCHE B TERM LOANS. The Borrower hereby
unconditionally promises to pay to the Agent for the account of the Tranche B
Lenders the principal amount of the Tranche B Term Loans made by such Tranche B
Lenders in fourteen consecutive semi-annual installments, payable on the last
day of June and December of each year commencing June 30, 1996, each of which
installments on any such date shall be in an amount equal to 50% of the amount
set forth below opposite the year in which such date occurs (or such earlier
date on which the Tranche B Term Loans become due and payable pursuant to
Section 11), PROVIDED that the final installment of the Tranche B Term Loans
shall be payable on the Tranche B Maturity Date:
Year Amount
---- ------
1996 $ 2,643,294.12
1997 $ 2,643,294.12
1998 $ 2,643,294.12
1999 $ 2,643,294.12
2000 $ 13,216,470.64
2001 $ 35,243,921.72
2002 $127,323,295.04
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Tranche B Term 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 subsection 5.4.
2.5 EVIDENCE OF TERM LOAN DEBT. (a) Each Term Loan Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Term Loan Lender resulting from the Tranche
A Term Loan and/or Tranche B Term Loan made by such Term Loan Lender from time
to time, including the amounts of principal and interest payable and paid to
such Term Loan Lender from time to time under this Agreement.
(b) The Agent shall record in the Register, with separate subaccounts
therein for each Term Loan Lender,(i) the amount of each Tranche A Term Loan and
Tranche B Term Loan made hereunder, the Type thereof and, in the case of
Eurodollar Loans, each Interest Period applicable thereto,(ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Term Loan Lender hereunder and (iii) both the amount of any sum
received by the Agent hereunder from the Borrower and each Term Loan Lender's
share thereof, if any.
(c) The entries made in the Register and the accounts of each Term
Loan Lender maintained pursuant to subsections 2.5(a) and 2.5(b) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; PROVIDED, HOWEVER,
that the failure of any Term Loan Lender or the Agent to maintain the Register
or any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Tranche A
Term Loan and/or Tranche B Term Loan made to the Borrower by such Term Loan
Lender in accordance with the terms of this Agreement.
24
(d) The Borrower agrees that, upon the request to the Agent by any
Term Loan Lender, which request is communicated to the Borrower, the Borrower
will execute and deliver to such Term Loan Lender (i) if such Term Loan Lender
is a Tranche A Lender, a promissory note of the Borrower dated the Effective
Date evidencing the Tranche A Term Loans made by such Tranche A Lender,
substantially in the form of EXHIBIT L (a "TRANCHE A TERM NOTE"), payable to the
order of such Tranche A Lender and in a principal amount equal to, in the case
of Tranche A Term Notes issued on the Effective Date, the lesser of (A) the
initial Tranche A Commitment of such Tranche A Lender or (B) the unpaid
principal amount of the Tranche A Term Loan made by such Tranche A Lender, and,
in the case of Tranche A Term Notes issued after the Effective Date, the unpaid
principal amount of the Tranche A Term Loan made by such Tranche A Lender and/or
(ii) if such Term Loan Lender is a Tranche B Lender, a promissory note of the
Borrower dated the Effective Date evidencing the Tranche B Term Loan made by
such Tranche B Lender, substantially in the form of EXHIBIT M (a "TRANCHE B TERM
NOTE"), payable to the order of such Tranche B Lender and in a principal amount
equal to, in the case of Tranche B Term Notes issued on the Effective Date, the
lesser of (A) the initial Tranche B Commitment of such Tranche B Lender or (B)
the unpaid principal amount of the Tranche B Term Loan made by such Tranche B
Lender and, in the case of Tranche B Term Notes issued after the Effective Date,
the unpaid principal amount of the Tranche B Term Loan made by such Tranche B
Lender. Each Term Loan Lender is hereby authorized to record the date, Type and
amount of each Tranche A Term Loan or Tranche B Term Loan, as the case may be,
made by such Term Loan Lender, the date and amount of each payment or prepayment
of principal thereof, each continuation thereof, each conversion of all or a
portion thereof to another Type and, in the case of Eurodollar Loans, the length
of each Interest Period and Eurodollar Rate with respect thereto, on the
schedule (or any continuation of the schedule) annexed to and constituting a
part of its Tranche A Term Note or Tranche B Term Note, as the case may be, and
any such recordation shall, to the extent permitted by applicable law,
constitute prima facie evidence of the accuracy of the information so recorded,
PROVIDED that the failure to make any such recordation (or any error therein)
shall not affect the obligation of the Borrower to repay (with applicable
interest) the Tranche A Term Loans and/or Tranche B Term Loans made to the
Borrower in accordance with the terms of this Agreement.
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS
3.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Revolving Credit
Lender's Revolving Credit Commitment Percentage of (i) the then outstanding
Swing Line Loans and (ii) the then outstanding Revolving Credit L/C Obligations,
does not exceed the amount of such Revolving Credit Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period, the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans,(ii) ABR Loans or (iii) a combination thereof, as determined by
the Borrower and notified to the Agent in accordance with subsections 3.2 and
5.2, PROVIDED that no Revolving Credit Loan shall be made as a Eurodollar Loan
after the day that is one month prior to the Termination Date.
3.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, PROVIDED that the Borrower shall give the Agent
irrevocable notice (which notice must be received by the Agent prior to 12:00
Noon, New York City time,(a) three Business Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans, or (b) prior to 12:00 Noon, New York City
time, one Business Day prior to the requested Borrowing Date, otherwise),
specifying (i) the amount to be borrowed, (ii)the requested Borrowing Date,(iii)
whether the borrowing is to be of Eurodollar Loans, ABR Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar
Loans, the respective amounts of each such Type of Loan and the lengths of the
initial Interest Periods therefor. Each borrowing under the Revolving Credit
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$10,000,000 or a whole multiple of $1,000,000 in excess thereof (or, if the then
Available Revolving Credit Commitments are less than $10,000,000, such lesser
amount) and (y) in the case of Eurodollar Loans, $10,000,000 or a whole multiple
of $1,000,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Agent shall promptly notify each Revolving Credit Lender thereof.
Each Revolving Credit Lender will make the
25
amount of its pro rata share of each borrowing available to the Agent for the
account of the Borrower at the office of the Agent specified in subsection
13.2 prior to 12:00 Noon, New York City time, on the Borrowing Date requested
by the Borrower in funds immediately available to the Agent. Such borrowing
will then be made available to the Borrower by the Agent crediting the
account of the Borrower on the books of such office prior to 1:00 P.M., New
York City time, on such Borrowing Date with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by the
Agent.
3.3 COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
account of each Revolving Credit Lender a commitment fee for the period from and
including the first day of the Revolving Credit Commitment Period to the
Termination Date, computed at the rate of 3/8 of 1% per annum on the average
daily amount of the unused Revolving Credit Commitment of such Revolving Credit
Lender during the period for which payment is made, payable quarterly in arrears
on the last day of each March, June, September and December and on the
Termination Date or such earlier date as the Revolving Credit Commitments shall
terminate as provided herein, commencing on the first of such dates to occur
after the date hereof, PROVIDED that, from and after September 30, 1996, the
commitment fee will be adjusted, if required, on each Adjustment Date, to the
rate set forth on ANNEX A hereto opposite the level for which the Consolidated
Leverage Ratio for the 12-month period ended on the date of the financial
statements relating to such Adjustment Date as determined based upon such
financial statements satisfies the corresponding criteria set forth under the
heading "Consolidated Leverage Ratio" and PROVIDED, FURTHER, that, in the event
that the financial statements required to be delivered pursuant to subsection
8.1(a) or 8.1(b), as applicable, and the related certificate required pursuant
to subsection 8.2(b), are not delivered when due, then if such financial
statements are not delivered prior to the date upon which the resultant Default
shall become an Event of Default, then, effective upon such Default becoming an
Event of Default, during the period from the date upon which such financial
statements were required to be delivered until one Business Day following the
date upon which they actually are delivered, the commitment fee shall be 1/2 of
1%.
3.4 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower shall have
the right, upon not less than one Business Day's prior notice to the Agent, to
terminate the Revolving Credit Commitments or, from time to time, to reduce the
amount of the Revolving Credit Commitments, PROVIDED that no such termination or
reduction shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans made on the effective date thereof,
the aggregate principal amount of the Revolving Credit Loans then outstanding,
when added to the then outstanding Revolving Credit L/C Obligations and Swing
Line Loans, would exceed the Revolving Credit Commitments then in effect. Any
such reduction shall be in an amount equal to $3,000,000 or a whole multiple of
$1,000,000 in excess thereof and shall reduce permanently the Revolving Credit
Commitments then in effect.
3.5 REPAYMENT OF REVOLVING CREDIT LOANS; EVIDENCE OF DEBT. (a) The
Borrower hereby unconditionally promises to pay to the Agent for the account of
each Revolving Credit Lender the then unpaid principal amount of each Revolving
Credit Loan of such Revolving Credit Lender on the Termination Date (or such
earlier date on which the Revolving Credit Loans become due and payable pursuant
to Section 11). 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 subsection 5.4.
(b) Each Revolving Credit Lender shall maintain in accordance with
its usual practice an account or accounts evidencing indebtedness of the
Borrower to such Revolving Credit Lender resulting from each Revolving Credit
Loan of such Revolving Credit Lender from time to time, including the amounts of
principal and interest payable and paid to such Revolving Credit Lender from
time to time under this Agreement.
(c) The Agent shall record in the Register, with separate subaccounts
for each Revolving Credit Lender, (i)the amount and Borrowing Date of each
Revolving Credit Loan made hereunder, the Type thereof and each Interest Period
applicable thereto,(ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Revolving Credit Lender
hereunder and (iii) both the amount of any sum received by the Agent hereunder
from the Borrower and each Revolving Credit Lender's share thereof.
(d) The entries made in the Register and the accounts of each
Revolving Credit Lender maintained pursuant to subsections 3.5(a) and 3.5(b)
shall, to the extent permitted by applicable law, be PRIMA FACIE evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
PROVIDED, HOWEVER, that the failure of any Revolving Credit Lender or the Agent
to maintain the Register or any such account, or any error therein, shall not in
any manner
26
affect the obligation of the Borrower to repay (with applicable interest) the
Revolving Credit Loans made to such Borrower by such Revolving Credit Lender
in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by any
Revolving Credit Lender, which request is communicated to the Borrower, the
Borrower will execute and deliver to such Revolving Credit Lender a promissory
note of the Borrower dated the Effective Date evidencing the Revolving Credit
Loans of such Revolving Credit Lender, substantially in the form of EXHIBIT N
with appropriate insertions as to date and principal amount (a "REVOLVING CREDIT
NOTE"). Each Revolving Credit Lender is hereby authorized to record the date,
Type and amount of each Revolving Credit Loan made by such Revolving Credit
Lender, the date and amount of each payment or prepayment of principal thereof,
each continuation thereof, each conversion of all or a portion thereof to
another Type and, in the case of Eurodollar Loans, the length of each Interest
Period and Eurodollar Rate with respect thereto, on the schedule (or any
continuation of the schedule) annexed to and constituting a part of its
Revolving Credit Note, and any such recordation shall, to the extent permitted
by applicable law, constitute PRIMA FACIE evidence of the accuracy of the
information so recorded, PROVIDED that the failure to make any such recordation
(or any error therein) shall not affect the obligation of the Borrower to repay
(with applicable interest) the Revolving Credit Loans made to the Borrower in
accordance with the terms of this Agreement.
3.6 SWING LINE COMMITMENT. Subject to the terms and conditions
hereof, Chemical (in such capacity, the "SWING LINE LENDER") agrees to make a
portion of the Revolving Credit Commitments available to the Borrower during the
Revolving Credit Commitment Period by making swing line loans ("SWING LINE
LOANS") to the Borrower in an aggregate principal amount not to exceed at any
one time outstanding the Swing Line Commitment; PROVIDED that (a) the aggregate
principal amount of Swing Line Loans outstanding at any time shall not exceed
the Swing Line Commitment then in effect and (b) the Borrower shall not request,
and the Swing Line Lender shall not make, any Swing Line Loan if, after giving
effect to the making of such Swing Line Loan, the Aggregate Revolving Credit
Outstandings of all the Lenders would exceed the Revolving Credit Commitments at
such time. During the Revolving Credit Commitment Period, the Borrower may use
the Swing Line Commitment by borrowing, repaying and reborrowing, Swing Line
Loans all in accordance with the terms and conditions hereof. Swing Line Loans
may be ABR Loans only.
3.7 REPAYMENT OF SWING LINE LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Agent for the account of the Swing
Line Lender the then unpaid principal amount of the Swing Line Loans on the
Termination Date (or such earlier date on which the Swing Line Loans become due
and payable pursuant to Section 11). The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Swing Line 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 subsection 5.4.
(b) The Swing Line Lender shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Borrower to
the Swing Line Lender resulting from the Swing Line Loans made by the Swing Line
Lender from time to time, including the amounts of principal and interest
payable and paid to the Swing Line Lender from time to time under this
Agreement.
(c) The Agent shall record in the Register (i) the amount and
Borrowing Date of each Swing Line Loan made hereunder,(ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to the Swing Line Lender hereunder and (iii) the amount of any sum
received by the Agent hereunder in respect of Swing Line Loans.
(d) The entries made in the Register pursuant to subsection 3.7(c)
shall, to the extent permitted by applicable law, be PRIMA FACIE evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
PROVIDED, HOWEVER, that the failure of the Swing Line Lender or the Agent to
maintain the Register, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Swing Line
Loans made to the Borrower by the Swing Line Lender in accordance with the terms
of this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by the
Swing Line Lender, which request is communicated to the Borrower, the Borrower
will execute and deliver to the Swing Line Lender a promissory note of the
Borrower, dated the Effective Date, evidencing the Swing Line Loans of the Swing
Line Lender, substantially in the form of EXHIBIT O with appropriate insertions
as to date and principal amount (a "SWING LINE NOTE"). The Swing Line Lender is
hereby authorized to record the date and amount of each Swing Line Loan made by
the Swing Line Lender and the date
27
and amount of each payment or prepayment of principal thereof on the schedule
annexed to and constituting a part of the Swing Line Note, and any such
recordation shall, to the extent permitted by applicable law, constitute
PRIMA FACIE evidence of the accuracy of the information so recorded, PROVIDED
that the failure to make any such recordation (or any error therein) shall
not affect the obligation of the Borrower to repay (with applicable interest)
the Swing Line Loans made to the Borrower by the Swing Line Lender in
accordance with the terms of this Agreement.
3.8 PROCEDURE FOR BORROWING SWING LINE LOANS. Whenever the Borrower
desires that the Swing Line Lender make Swing Line Loans under subsection 3.6,
it shall give the Swing Line Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swing Line
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Credit Commitment
Period). Each borrowing under the Swing Line Commitment shall be in a minimum
amount of $500,000. Not later than 2:00 P.M., New York City time, on the
Borrowing Date specified in a notice in respect of Swing Line Loans, the Swing
Line Lender shall make available to the Agent for the account of the Borrower at
the office of the Agent specified in subsection 13.2 an amount in immediately
available funds equal to the amount of the Swing Line Loan to be made by the
Swing Line Lender. The Agent shall make the proceeds of such Swing Line Loan
available to the Borrower not later than 3:00 p.m., New York City time, on such
Borrowing Date by crediting the account of the Borrower, on the books of such
office, such proceeds in immediately available funds.
3.9 SWING LINE LOAN PARTICIPATIONS. (a) Notwithstanding anything
herein to the contrary, the Swing Line Lender shall not be obligated to make any
Swing Line Loans if a Default under Section 11(a) or an Event of Default shall
have occurred and be continuing. The Swing Line Lender shall notify the
Borrower of such election not to make any Swing Line Loans unless the Event of
Default is of the type specified in Section 11(f).
(b) If prior to the repayment of any Swing Line Loan, one of the
events described in Section 11(f) shall have occurred, each Revolving Credit
Lender shall purchase an undivided participating interest in an amount equal to
such Revolving Credit Lender's Revolving Credit Commitment Percentage of the
aggregate principal amount of Swing Line Loans then outstanding (the "SWING LINE
PARTICIPATION AMOUNT"). On the date of such purchase, each Revolving Credit
Lender shall transfer to the Swing Line Lender, in immediately available funds,
such Revolving Credit Lender's Swing Line Participation Amount and upon receipt
thereof the Swing Line Lender shall deliver to such Revolving Credit Lender a
Swing Line Loan Participation Certificate dated the date of the Swing Line
Lender's receipt of such funds and in an amount equal to such Revolving Credit
Lender's Swing Line Participation Amount.
(c) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Revolving Credit Lender's Swing Line
Participation Amount, the Swing Line Lender receives any payment on account of
the Swing Line Loans, the Swing Line Lender will distribute to such Revolving
Credit Lender its PRO RATA share of such payment (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which such
Revolving Credit Lender's participating interest was outstanding and funded);
PROVIDED, HOWEVER, that in the event that such payment received by the Swing
Line Lender is required to be returned, such Revolving Credit Lender will return
to the Swing Line Lender any portion thereof previously distributed to it by the
Swing Line Lender.
(d) Each Revolving Credit Lender's obligation to purchase
participating interests pursuant to subsection 3.9(b) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any set-off, counterclaim, recoupment, defense or other right
which such Revolving Credit Lender or the Borrower may have against the Swing
Line Lender, the Borrower or any other Person for any reason whatsoever; (ii)
the occurrence or continuance of a Default or an Event of Default; (iii) any
adverse change in the condition (financial or otherwise) of the Borrower; (iv)
any breach of this Agreement or any other Loan Document by any of the Loan
Parties or any other Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
3.10 L/C COMMITMENT. (a) Subject to the terms and conditions hereof,
the Revolving Credit Issuing Bank, in reliance on the agreements of the other
Revolving Credit Lenders set forth in subsection 3.13(a), agrees to issue
Revolving Credit Letters of Credit for the account of the Borrower on any
Business Day during the Revolving Credit Commitment Period in such form as may
be approved from time to time by the Revolving Credit Issuing Bank; PROVIDED
that the Revolving Credit Issuing Bank shall have no obligation to, and shall
not, issue any Revolving Credit Letter of Credit if, after giving effect to such
issuance,(i) the Revolving Credit L/C Obligations would exceed the Revolving
Credit
28
L/C Commitment or (ii) the Available Revolving Credit Commitments would be
less than zero. Revolving Credit Letters of Credit issued under the Existing
Credit Agreement and outstanding as of the Effective Date shall be deemed to
be issued under this Agreement on the Effective Date by the Revolving Credit
Issuing Bank and shall be Revolving Credit Letters of Credit for all purposes
of this Agreement.
(b) Each Revolving Credit Letter of Credit shall:
(i) be denominated in Dollars and shall be either (1) a standby
letter of credit issued to support obligations of the Borrower,
contingent or otherwise, in connection with the working capital and
business needs (including the needs contemplated by subsections 9.3(c)
and (d)) of the Borrower in the ordinary course of business (a
"STANDBY LETTER OF CREDIT") or (2) a commercial letter of credit
issued in respect of the purchase of goods or services by the Borrower
and its Subsidiaries in the ordinary course of business (a "COMMERCIAL
LETTER OF CREDIT"); and
(ii) expire no later than the earlier of (A) five Business Days
prior to the Termination Date and (B) one year after the date of
issuance thereof, PROVIDED that, subject to clause (A) above, any such
Revolving Credit Letter of Credit may, at the request of the Borrower
as set forth in the applicable Application or prior to expiration
thereof, be automatically renewed on each anniversary of the issuance
thereof for an additional period of one year unless the Revolving
Credit Issuing Bank shall have given 60 days prior written notice to
the Borrower and the beneficiary of such Revolving Credit Letter of
Credit that such Revolving Credit Letter of Credit will not be
renewed.
(c) Each Revolving Credit Letter of Credit shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith, the laws of the
State of New York.
(d) The Revolving Credit Issuing Bank shall not at any time be
obligated to issue any Revolving Credit Letter of Credit hereunder if such
issuance would conflict with, or cause the Revolving Credit Issuing Bank or any
Revolving Credit L/C Participant to exceed any limits imposed by, any applicable
Requirement of Law.
3.11 PROCEDURE FOR ISSUANCE OF REVOLVING CREDIT LETTERS OF CREDIT.
The Borrower may from time to time request that the Revolving Credit Issuing
Bank issue a Revolving Credit Letter of Credit by delivering to the Revolving
Credit Issuing Bank at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Revolving Credit Issuing Bank,
and such other certificates, documents and other papers and information as the
Revolving Credit Issuing Bank may request. The Revolving Credit Issuing Bank
shall notify the Revolving Credit Lenders promptly of the receipt of any request
pursuant to the immediately preceding sentence. Upon receipt of any
Application, the Revolving Credit Issuing Bank will 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 Revolving Credit Letter of Credit requested thereby (but in
no event shall the Revolving Credit Issuing Bank be required to issue any
Revolving Credit 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 Revolving Credit Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Revolving Credit Issuing Bank and the Borrower.
The Revolving Credit Issuing Bank shall furnish a copy of such Revolving Credit
Letter of Credit to the Agent and the Borrower promptly following the issuance
thereof.
3.12 FEES, COMMISSIONS AND OTHER CHARGES. (a) The Borrower shall pay
to the Agent, for the account of the Revolving Credit Issuing Bank, a fronting
fee with respect to each Revolving Credit Letter of Credit, computed for the
period from the date of issuance of such Revolving Credit Letter of Credit or
the immediately preceding L/C Fee Payment Date, as the case may be, to the next
L/C Fee Payment Date to occur thereafter at a rate per annum to be agreed upon
by the Borrower and the Revolving Credit Issuing Bank, calculated on the basis
of a 360-day year for actual days elapsed, of the aggregate amount available to
be drawn under such Revolving Credit 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 of such Revolving Credit
Letter of Credit and on the Termination Date and shall be nonrefundable.
(b) The Borrower shall pay to the Agent, for the account of the
Revolving Credit L/C Participants, a letter of credit commission with respect to
each Revolving Credit Letter of Credit, computed for the period from the date of
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issuance of such Revolving Credit Letter of Credit or the immediately preceding
L/C Fee Payment Date, as the case may be, to the next L/C Fee Payment Date to
occur thereafter at the rate of 1-3/4% per annum (the "REVOLVING CREDIT FEE
PERCENTAGE"), calculated on the basis of a 360-day year for actual days elapsed,
of the aggregate amount available to be drawn under such Revolving Credit Letter
of Credit during the period for which such fee is calculated, to be shared
ratably among the Revolving Credit L/C Participants in accordance with their
respective Revolving Credit Commitment Percentages, PROVIDED, that from and
after September 30. 1996, the Revolving Credit Fee Percentage shall be equal to
the Applicable Margin for Revolving Credit Loans that are Eurodollar Loans in
effect from time to time. Such commissions shall be payable in arrears on each
L/C Fee Payment Date to occur after the issuance of such Revolving Credit Letter
of Credit and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Revolving Credit Issuing Bank for such normal and
customary costs and expenses as are incurred or charged by the Revolving Credit
Issuing Bank in issuing, effecting payment under, amending or otherwise
administering any Revolving Credit Letter of Credit.
(d) The Agent shall, promptly following its receipt thereof,
distribute to the Revolving Credit Issuing Bank and the Revolving Credit L/C
Participants all fees and commissions received by the Agent for their respective
accounts pursuant to this subsection.
3.13 L/C PARTICIPATIONS. (a) The Revolving Credit Issuing Bank
irrevocably agrees to grant and hereby grants to each Revolving Credit L/C
Participant, and, to induce the Revolving Credit Issuing Bank to issue Revolving
Credit Letters of Credit hereunder, each Revolving Credit L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the Revolving Credit Issuing Bank, on the terms and conditions hereinafter
stated, for such Revolving Credit L/C Participant's own account and risk an
undivided interest equal to such Revolving Credit L/C Participant's Revolving
Credit Commitment Percentage in the Revolving Credit Issuing Bank's obligations
and rights under each Revolving Credit Letter of Credit issued hereunder and the
amount of each draft paid by the Revolving Credit Issuing Bank thereunder. Each
Revolving Credit L/C Participant unconditionally and irrevocably agrees with the
Revolving Credit Issuing Bank that, if a draft is paid under any Revolving
Credit Letter of Credit for which the Revolving Credit Issuing Bank is not
reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such Revolving Credit L/C Participant shall pay to the Revolving
Credit Issuing Bank upon demand at the Revolving Credit Issuing Bank's address
for notices specified herein an amount equal to such Revolving Credit L/C
Participant's Revolving Credit Commitment Percentage 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 Revolving Credit L/C
Participant to the Revolving Credit Issuing Bank pursuant to subsection 3.13(a)
in respect of any unreimbursed portion of any payment made by the Revolving
Credit Issuing Bank under any Revolving Credit Letter of Credit is paid to the
Revolving Credit Issuing Bank within three Business Days after the date such
payment is due, such Revolving Credit L/C Participant shall pay to the Revolving
Credit Issuing Bank 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 Revolving Credit Issuing Bank, 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 Revolving Credit L/C Participant pursuant to subsection 3.13(a)
is not in fact made available to the Revolving Credit Issuing Bank by such
Revolving Credit L/C Participant within three Business Days after the date such
payment is due, the Revolving Credit Issuing Bank shall be entitled to recover
from such Revolving Credit L/C Participant, on demand, such amount with interest
thereon calculated from such due date at the rate per annum applicable to ABR
Loans hereunder. A certificate of the Revolving Credit Issuing Bank submitted
to any Revolving Credit L/C Participant with respect to any amounts owing under
this subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Revolving Credit Issuing Bank has
made payment under any Revolving Credit Letter of Credit and has received from
any Revolving Credit L/C Participant its PRO RATA share of such payment in
accordance with subsection 3.13(a), the Revolving Credit Issuing Bank receives
any payment related to such Revolving Credit Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Revolving Credit Issuing Bank), or any payment of interest on account
thereof, the Revolving Credit Issuing Bank will distribute to such Revolving
Credit L/C Participant its PRO RATA share thereof; PROVIDED, HOWEVER, that in
the event that any such payment received by the Revolving Credit Issuing Bank
shall be required to be returned by the Revolving Credit
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Issuing Bank, such Revolving Credit L/C Participant shall return to the
Revolving Credit Issuing Bank the portion thereof previously distributed by
the Revolving Credit Issuing Bank to it.
3.14 REIMBURSEMENT OBLIGATION OF THE BORROWER. (a) The Revolving
Credit Issuing Bank shall notify the Borrower promptly of each drawing under a
Revolving Credit Letter of Credit. The Borrower agrees to reimburse the
Revolving Credit Issuing Bank on each date on which the Revolving Credit Issuing
Bank notifies the Borrower of the date and amount of a draft presented under any
Revolving Credit Letter of Credit and paid by the Revolving Credit Issuing Bank
for the amount of (i) such draft so paid and (ii) any taxes, fees, charges or
other costs or expenses incurred by the Revolving Credit Issuing Bank in
connection with such payment. Each such payment shall be made to the Revolving
Credit Issuing Bank at its address for notices specified herein in lawful money
of the United States of America and in immediately available funds.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this subsection 3.14 (i) from the date the draft presented
under the affected Letter of Credit is paid to the date on which the Borrower is
required to pay such amounts pursuant to paragraph (a) of this subsection at the
rate which would then be payable on any Revolving Credit Loans that are ABR
Loans and (ii) thereafter, until payment in full at the rate which would be
payable on any outstanding Revolving Credit Loans that are ABR Loans which were
then overdue.
(c) Each drawing under any Revolving Credit Letter of Credit shall
constitute a request by the Borrower to the Agent for a borrowing pursuant to
subsection 3.2 of ABR Loans in the amount of such drawing (but without any
requirement for compliance with the prior notice provisions of subsection 3.2 or
the conditions set forth in subsection 7.2). The Borrowing Date with respect to
such borrowing shall be the date of such drawing and each Revolving Credit
Lender shall make its Revolving Credit Commitment Percentage of such borrowing
available to the Agent on such date to be used to repay the Reimbursement
Obligation created by such drawing. The Revolving Credit Issuing Bank shall
notify the Revolving Credit Lenders promptly of each drawing under a Revolving
Credit Letter of Credit to be reimbursed pursuant to this subsection 3.4(c).
3.15 OBLIGATIONS ABSOLUTE. (a) The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Revolving Credit Issuing Bank, any
Lender or any beneficiary of a Revolving Credit Letter of Credit.
(b) The Borrower also agrees with the Revolving Credit Issuing Bank
and the Lenders that neither the Revolving Credit Issuing Bank nor any Lender
shall be responsible for, and the Borrower's Reimbursement Obligations under
subsection 3.14(a) shall not be affected by, among other things,(i) 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 (ii) any
dispute between or among the Borrower and any beneficiary of any Revolving
Credit Letter of Credit or any other party to which such Revolving Credit Letter
of Credit may be transferred or (iii) any claims whatsoever of the Borrower
against any beneficiary of such Revolving Credit Letter of Credit or any such
transferee.
(c) The Revolving Credit Issuing Bank 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 Revolving
Credit Letter of Credit, except for errors, omissions, interruptions or delays
caused by the Revolving Credit Issuing Bank's gross negligence or willful
misconduct.
(d) The Borrower agrees that any action taken or omitted by the
Revolving Credit Issuing Bank under or in connection with any Revolving Credit
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 Customs, and to the extent not inconsistent
therewith, 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 Revolving
Credit Issuing Bank to the Borrower.
3.16 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Revolving Credit Letter of Credit, the Revolving Credit
Issuing Bank shall, within a reasonable time after its receipt thereof, examine
all documents purporting to represent a demand for payment under such Revolving
Credit Letter of Credit to ascertain that the same appear on their face to be in
conformity with the terms and conditions of such Revolving Credit Letter of
Credit.
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The Revolving Credit Issuing Bank shall also promptly notify the Borrower of
the date and amount thereof. The responsibility of the Revolving Credit
Issuing Bank to the Borrower in connection with any draft presented for
payment under any Revolving Credit Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Revolving Credit Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Revolving Credit Letter of Credit in connection with
such presentment are in conformity with such Revolving Credit Letter of
Credit.
3.17 APPLICATION. To the extent that any provision of any Application
related to any Revolving Credit Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
3.18 QUARTERLY REPORTS. The Revolving Credit Issuing Bank shall
furnish to each Revolving Credit Lender a quarterly report with respect to
Revolving Credit Letters of Credit issued or outstanding during such quarter and
any drawings thereunder.
SECTION 4. AMOUNT AND TERMS OF LOC LETTER OF CREDIT FACILITY
4.1 LOC LETTER OF CREDIT FACILITY. (a) LOC Letters of Credit issued
under the Existing Credit Agreement and outstanding as of the Effective Date
(collectively, "ORIGINAL LOC LETTERS OF CREDIT") shall be deemed to be issued
under this Agreement on the Effective Date by the LOC Issuing Bank and shall be
LOC Letters of Credit for all purposes of this Agreement. Subject to the terms
and conditions hereof, the LOC Issuing Bank, in reliance on the agreements of
the other Lenders set forth in subsection 4.4(a), agrees to issue letters of
credit for the account of the Borrower to the extent that such letter of credit
constitutes a replacement, extension or substitution (but not any increase) of
any other LOC Letter of Credit (a "REPLACEMENT LOC LETTER OF CREDIT"; together
with the Original LOC Letters of Credit, the "LOC LETTERS OF CREDIT"), on the
date of surrender, cancellation or expiration of any such other LOC Letter of
Credit; PROVIDED that the LOC Issuing Bank shall have no obligation to, and
shall not, issue any LOC Letter of Credit if, after giving effect to such
surrender, cancellation or expiration and to such issuance, the sum of the LOC
Obligations and the aggregate principal amount of LOC Loans then outstanding,
would exceed the LOC Commitment Amount.
(b) Each LOC Letter of Credit shall (i) be denominated in Dollars and
shall be either (1) a standby letter of credit substantially in the form of
EXHIBIT P issued to support obligations of the Borrower in respect of the
Assumed Financings (other than the Muskegon Solid Waste Bonds), or (2) a
Replacement LOC Letter of Credit issued to support obligations of the Borrower
in respect of Assumed Financings and (ii) expire on the first anniversary of the
issuance thereof, PROVIDED that such Letter of Credit shall be automatically
renewed on each anniversary of the issuance thereof for an additional period of
one year (but in no event shall any such LOC Letter of Credit expire later than
the Termination Date) unless the LOC Issuing Bank shall have given 90 days prior
written notice to the Borrower and 45 days prior written notice to the
Beneficiary and the beneficiary of the LOC Letter of Credit that such LOC Letter
of Credit will not be renewed, PROVIDED, FURTHER that the LOC Issuing Bank shall
not, so long as no Default or Event of Default shall have occurred and then be
continuing, issue any such notice without the consent of the Borrower.
(c) Each LOC Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(d) The LOC Issuing Bank shall not at any time be obligated to issue
any LOC Letter of Credit hereunder if such issuance would conflict with, or
cause the LOC Issuing Bank or any LOC Participant to exceed any limits imposed
by, any applicable Requirement of Law.
4.2 PROCEDURE FOR ISSUANCE OF LOC LETTERS OF CREDIT. The Borrower may
from time to time request that the LOC Issuing Bank issue a Replacement LOC
Letter of Credit by delivering to the LOC Issuing Bank at its address for
notices specified herein an Application therefor, completed to the satisfaction
of the LOC Issuing Bank, and such other certificates, documents and other papers
and information as the LOC Issuing Bank may request. Upon receipt of any
Application, the LOC Issuing Bank will 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 Replacement LOC Letter of Credit requested thereby (but in no
event shall the LOC Issuing Bank be required to issue any Replacement LOC Letter
of Credit earlier than three Business Days after its receipt of the Application
therefor and
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all such other certificates, documents and other papers and information
relating thereto) by issuing the original of such Replacement LOC Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the LOC
Issuing Bank and the Borrower. The LOC Issuing Bank shall furnish a copy of
such Replacement LOC Letter of Credit to the Agent and the Borrower promptly
following the issuance thereof.
4.3 FEES, COMMISSIONS AND OTHER CHARGES. (a) The Borrower agrees to
pay to the Agent for the account of the LOC Issuing Bank, a fronting fee with
respect to each LOC Letter of Credit, computed for the period from the date of
issuance of such LOC Letter of Credit or the immediately preceding L/C Fee
Payment Date, as the case may be, to the next L/C Fee Payment Date to occur
thereafter at a rate per annum to be agreed upon by the Borrower and the LOC
Issuing Bank, calculated on the basis of a 360-day year for actual days elapsed,
of the aggregate amount available to be drawn under such LOC 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 of
such LOC Letter of Credit and shall be nonrefundable.
(b) The Borrower shall pay to the Agent, for the account of the LOC
Participants, a letter of credit commission with respect to each LOC Letter of
Credit, computed for the period from the date of issuance or the immediately
preceding L/C Fee Payment Date, as the case may be, to the next succeeding L/C
Fee Payment Date at the rate of 1-3/4% per annum (the "LOC FEE PERCENTAGE"),
calculated on the basis of a 360 day year, of the aggregate amount available to
be drawn under such LOC Letter of Credit during the period for which such fee is
calculated to be shared ratably among the LOC Participants in accordance with
their respective LOC Commitment Percentages, PROVIDED that from and after
September 30, 1996, the LOC Fee Percentage shall be equal to the Applicable
Margin for Revolving Credit Loans that are Eurodollar Loans in effect from time
to time. Such commissions shall be payable in arrears on each L/C Fee Payment
Date to occur after the issuance of such LOC Letter of Credit and shall be
nonrefundable.
(c) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the LOC Issuing Bank for such normal and customary costs
and expenses as are incurred or charged by the LOC Issuing Bank in issuing,
effecting payment under, amending or otherwise administering any LOC Letter of
Credit.
(d) The Agent shall, promptly following its receipt thereof,
distribute to the LOC Issuing Bank and the LOC Participants all fees and
commissions received by the Agent for their respective accounts pursuant to this
subsection.
4.4 LOC PARTICIPATIONS. (a) The LOC Issuing Bank irrevocably agrees
to grant and hereby grants to each LOC Participant, and, to induce the LOC
Issuing Bank to issue Letters of Credit hereunder, each LOC Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the LOC Issuing Bank, on the terms and conditions hereinafter stated, for such
LOC Participant's own account and risk an undivided interest equal to such LOC
Participant's LOC Commitment Percentage of the LOC Issuing Bank's obligations
and rights under each LOC Letter of Credit issued hereunder and the amount of
each draft paid by the LOC Issuing Bank thereunder. Subject to subsection
4.5(c), each LOC Participant unconditionally and irrevocably agrees with the LOC
Issuing Bank that, if a draft is paid under any LOC Letter of Credit for which
the LOC Issuing Bank is not reimbursed in full by the Borrower in accordance
with the terms of this Agreement, such LOC Participant shall pay to the LOC
Issuing Bank upon demand at the LOC Issuing Bank's address for notices specified
in subsection 13.2 an amount equal to such LOC Participant's LOC Commitment
Percentage 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 LOC Participant to the
LOC Issuing Bank pursuant to subsection 4.4(a) in respect of any unreimbursed
portion of any payment made by the LOC Issuing Bank under any LOC Letter of
Credit is paid to the LOC Issuing Bank within three Business Days after the date
such payment is due, such LOC Participant shall pay to the LOC Issuing Bank 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 LOC Issuing Bank, 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 LOC Participant
pursuant to paragraph 4.4(a) is not in fact made available to the LOC Issuing
Bank by such LOC Participant within three Business Days after the date such
payment is due, the LOC Issuing Bank shall be entitled to recover from such LOC
Participant, on demand, such amount with interest thereon calculated from such
due date at the rate per annum applicable to ABR Loans hereunder. A certificate
of the LOC Issuing Bank submitted to any
33
LOC Participant with respect to any amounts owing under this subsection shall
be conclusive in the absence of manifest error.
(c) Whenever, at any time after the LOC Issuing Bank has made payment
under any LOC Letter of Credit and has received from any LOC Participant its PRO
RATA share of such payment in accordance with subsection 4.4(a), the LOC Issuing
Bank receives any payment related to such LOC Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the LOC Issuing Bank), or any payment of interest on account thereof, the LOC
Issuing Bank will distribute to such LOC Participant its PRO RATA share thereof;
PROVIDED, HOWEVER, that in the event that any such payment received by the LOC
Issuing Bank shall be required to be returned by the LOC Issuing Bank, such LOC
Participant shall return to the LOC Issuing Bank the portion thereof previously
distributed by the LOC Issuing Bank to it.
4.5 REIMBURSEMENT OBLIGATION OF THE BORROWER; LOC LOANS. (a) Upon
notice to the Borrower by the LOC Issuing Bank of the date and amount of a draft
presented under any LOC Letter of Credit and paid by the LOC Issuing Bank
stating the amount of (i) such draft so paid and (ii) any taxes, fees, charges
or other costs or expenses incurred by the LOC Issuing Bank in connection with
such payment, the Borrower agrees to reimburse the LOC Issuing Bank for the
amount of such draft and such other amounts, such reimbursement to be payable as
set forth in this subsection 4.5. The LOC Issuing Bank shall notify the
Borrower promptly of each request for a drawing under a LOC Letter of Credit and
each drawing under a LOC Letter of Credit.
(b) In the event that a draft presented and paid under a LOC Letter of
Credit became payable in respect of a Supported Obligation as a result of a
default by the Borrower with respect to such Supported Obligation, such drawing
under such LOC Letter of Credit shall constitute a request by the Borrower to
the Agent for a Revolving Credit Loan pursuant to subsection 3.2 of an ABR Loan
in the amount of the lesser of (A) such drawing and (B) an amount equal to the
Available Revolving Credit Commitment on the date of such drawing (but without
any requirement for compliance with the prior notice provisions of subsection
3.2). The Borrowing Date with respect to such Revolving Credit Loan shall be
the date of such drawing and each Revolving Credit Lender shall make its
Revolving Credit Commitment Percentage of such drawing available to the Agent on
such date to be used to repay the Reimbursement Obligation created by such
drawing. The LOC Issuing Bank shall notify the Revolving Credit Lenders of any
drawing under a LOC Letter of Credit to be so reimbursed. The Revolving Credit
Loans made pursuant to this subsection shall be applied to the payment of any
such drawing as of the date of such drawing. To the extent that the amount of
the draft drawn exceeds the Available Revolving Credit Commitments on the date
of such drawing, the Reimbursement Obligation in respect of the unpaid balance
of the drawing shall be immediately due and payable by the Borrower.
(c) In the event that (i) a Supported Obligation becomes due and
payable as a result of the occurrence of any of the types of events described in
Section 11(f) with respect to ▇▇▇▇▇, (ii) a draft is presented and paid under a
LOC Letter of Credit in respect of such Supported Obligation and, after payment
of such draft, the Borrower's and its Subsidiaries' liability with respect to
such Supported Obligation reduces by an amount at least equal to the amount of
such draft and (iii) so long as no Default or Event of Default has occurred and
is continuing or would occur as a result thereof, such drawing under such LOC
Letter of Credit shall constitute a request by the Borrower to the LOC
Participants to borrow on the date of such drawing from each LOC Participant an
amount equal to such LOC Participant's LOC Commitment Percentage of the amount
of such drawing (a "LOC LOAN"). In the event that LOC Loans are to be made
available to the Borrower in respect of any Supported Obligation, such LOC Loans
shall be made available by the LOC Issuing Bank, on behalf of the LOC
Participants, at the time the related draft is presented and paid. Each LOC
Participant unconditionally and irrevocably agrees with the LOC Issuing Bank
that, if a draft is paid under any LOC Letter of Credit pursuant to this
subsection 4.5(c), such LOC Participant shall pay to the LOC Issuing Bank at the
LOC Issuing Bank's address for notices specified in subsection 13.2 on the date
such draft is paid an amount equal to such LOC Participant's LOC Commitment
Percentage of the amount of such draft. The LOC Loans may from time to time be
(a) Eurodollar Loans, (b) ABR Loans or (c) a combination thereof, as determined
by the Borrower and notified to the Agent in accordance with subsection 5.2.
Each LOC Loan shall initially be an ABR Loan.
(d) Each payment to the LOC Issuing Bank pursuant to this subsection
shall be made to the LOC Issuing Bank at its address for notices specified in
subsection 13.2 in lawful money of the United States of America and in
immediately available funds.
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4.6 REPAYMENT OF LOC LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay to the Agent for the account of the LOC
Participants the principal amount of the LOC Loans made by the LOC Participants
at the times and in the amounts that payments otherwise would be due in respect
of the Supported Obligations, in the absence of acceleration thereof, in respect
of which such LOC Loans are made, PROVIDED that the remaining unpaid amount of
such drawing shall be due and payable in full on the Termination Date (or such
earlier date on which the LOC Loans become due and payable pursuant to Section
11). The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the LOC 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
subsection 5.4.
(b) Each LOC Participant shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
LOC Participant resulting from each LOC Loan made by such LOC Participant from
time to time, including the amounts of principal and interest payable and paid
to such LOC Participant from time to time under this Agreement.
(c) The Agent shall record in the Register, with separate subaccounts
therein for each LOC Participant, (i)the amount of each LOC Loan made hereunder,
the Type thereof and, in the case of Eurodollar Loans, each Interest Period
applicable thereto,(ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each LOC Participant hereunder
and (iii) both the amount of any sum received by the Agent hereunder from the
Borrower and each LOC Participant's share thereof, if any.
(d) The entries made in the Register and the accounts of each LOC
Participant maintained pursuant to subsections 4.6(b) and 4.6(c) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; PROVIDED, HOWEVER,
that the failure of any LOC Participant or the Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) each LOC Loan
made to the Borrower by such LOC Participant in accordance with the terms of
this Agreement.
(e) The Borrower agrees that, upon the request to the Agent by any LOC
Participant, which request is communicated to the Borrower, the Borrower will
execute and deliver to such LOC Participant with respect to each LOC Loan made
by such LOC Participant a promissory note of the Borrower dated the date such
LOC Loan is made evidencing such LOC Loan, substantially in the form of EXHIBIT
Q (a "LOC NOTE"), payable to the order of such LOC Participant and in a
principal amount equal to the unpaid principal amount of such LOC Loan, which
shall be payable in accordance with the amortization schedule attached thereto.
Each LOC Participant is hereby authorized to record the date, Type and amount of
the LOC Loan evidenced by LOC Note, the date and amount of each payment or
prepayment of principal thereof, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period and Eurodollar Rate with respect thereto, on
the schedule (or any continuation of the schedule) annexed to and constituting a
part of such LOC Notes, and any such recordation shall, to the extent permitted
by applicable law, constitute prima facie evidence of the accuracy of the
information so recorded, PROVIDED that the failure to make any such recordation
(or any error therein) shall not affect the obligation of the Borrower to repay
(with applicable interest) the LOC Loans made to the Borrower in accordance with
the terms of this Agreement.
4.7 OBLIGATIONS ABSOLUTE. (a) The Borrower's obligations under this
Section 4 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the LOC Issuing Bank, any Lender or any
beneficiary of a LOC Letter of Credit.
(b) The Borrower also agrees with the LOC Issuing Bank and the Lenders
that neither the LOC Issuing Bank nor any Lender shall be responsible for, and
the Borrower's Reimbursement Obligations under subsection 4.5(a) shall not be
affected by, among other things,(i) 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,(ii) any dispute between or among the Borrower
and any beneficiary of any LOC Letter of Credit or any other party to which such
LOC Letter of Credit may be transferred or (iii) any claims whatsoever of the
Borrower against any beneficiary of such LOC Letter of Credit or any such
transferee.
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(c) The LOC Issuing Bank 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 LOC Letter of Credit, except
for errors, omissions, interruptions or delays caused by the LOC Issuing Bank's
gross negligence or willful misconduct.
(d) The Borrower agrees that any action taken or omitted by the LOC
Issuing Bank under or in connection with any LOC 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
Customs, and to the extent not inconsistent therewith, 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 LOC Issuing Bank to the Borrower.
4.8 LOC LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for payment under any LOC Letter of Credit, the LOC Issuing Bank shall, within a
reasonable time after its receipt thereof, examine all documents purporting to
represent a demand for payment under such LOC Letter of Credit to ascertain that
the same appear on their face to be in conformity with the terms and conditions
of such LOC Letter of Credit. The LOC Issuing Bank shall also promptly notify
the Borrower of the date and amount thereof. The responsibility of the LOC
Issuing Bank to the Borrower in connection with any draft presented for payment
under any LOC Letter of Credit shall, in addition to any payment obligation
expressly provided for in such LOC Letter of Credit, be limited to determining
that the documents (including each draft) delivered under such LOC Letter of
Credit in connection with such presentment are in conformity with such LOC
Letter of Credit.
4.9 APPLICATION. To the extent that any provision of any Application
related to any LOC Letter of Credit is inconsistent with the provisions of this
Section 4, the provisions of this Section 4 shall apply.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
5.1 OPTIONAL AND MANDATORY PREPAYMENTS. (a) (i) The Borrower may at
any time and from time to time prepay the Loans, in whole or in part, without
premium or penalty, upon irrevocable notice to the Agent prior to 11:00 a.m.,
New York City time, one Business Day prior to such prepayment, specifying the
date and amount of prepayment and whether the prepayment is of Eurodollar Loans,
ABR Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of any such notice the Agent shall notify each
affected Lender thereof on the date of receipt of such notice. 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
subsection 5.11 and, in the case of prepayments of the Term Loans and LOC Loans
only, accrued interest to such date on the amount prepaid. Amounts prepaid on
account of the Term Loans may not be reborrowed. Partial prepayments shall be
in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000
in excess thereof. Except as provided in paragraph (ii) below, all optional
prepayments of the Term Loans shall be made on a PRO RATA basis between the
Tranche A Term Loans and the Tranche B Term Loans and shall be applied to the
remaining installments of principal thereof PRO RATA.
(ii) Optional prepayments of Term Loans made by the Borrower during
any fiscal year pursuant to subsection 5.1(a)(i) out of the portion of Excess
Cash Flow for the previous fiscal year not required to be applied to prepay the
Term Loans and/or LOC Loans pursuant to subsection 5.1(b) (which portion shall
be equal to the product of the Excess Cash Flow for such fiscal year times the
percentage obtained by subtracting the Cash Flow Percentage in effect at such
time from 100%) (with respect to any fiscal year, "BORROWER'S PORTION OF EXCESS
CASH FLOW") shall, at the option of the Borrower by written notice to such
effect to the Agent, FIRST be allocated between the Tranche A Term Loans and the
Tranche B Term Loans in amounts to be determined by the Borrower, SECOND, be
applied against the scheduled installments of principal, if any, of the Tranche
A Term Loans due within six months of the date of such prepayment and/or against
the scheduled installments of principal, if any, of the Tranche B Term Loans due
within six months of the date of such prepayment, as the case may be, and,
THIRD, be applied to the remaining installments of the Tranche A Term Loans
and/or the Tranche B Term Loans, as the case may be, PRO RATA, PROVIDED that, to
the extent the Borrower pays any dividends pursuant to subsection 9.7(f), the
amount of the Borrower's Portion of Excess Cash Flow available to make
prepayments pursuant to this subsection 5.1(a)(ii) shall be reduced by the
amount of such dividend payments.
(b) Unless the Required Lenders otherwise agree, if with respect to
any fiscal year of the Borrower, commencing with its fiscal year ending
September 27, 1995, the Borrower shall have Excess Cash Flow for such fiscal
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year, (i) the Term Loans shall be prepaid in an aggregate amount equal to the
Cash Flow Percentage of such Excess Cash Flow and (ii) after the Term Loans
shall have been prepaid in full, any outstanding LOC Loans shall be prepaid in
an aggregate amount equal to the Cash Flow Percentage of such Excess Cash Flow.
For purposes of this subsection 5.1(b), the "CASH FLOW PERCENTAGE" shall be
equal to 75%, PROVIDED that, at any time after the aggregate principal amount of
Term Loans outstanding (before giving effect to any such prepayment) is less
than or equal to $250,000,000 and so long as the Consolidated Interest Expense
Ratio for the period of four consecutive fiscal quarters ended the last day of
the fiscal quarter immediately preceding the date of such prepayment exceeds
3.00 to 1.00, the Cash Flow Percentage with respect to Term Loans and LOC Loans
shall be 50%. Each such prepayment shall be made on or before the date which is
90 days after the end of such fiscal year. In the event that (x) the Borrower
makes any optional prepayment of Term Loans during any fiscal year (the "BASE
YEAR") or the portion of the next succeeding fiscal year preceding the date on
which any mandatory prepayment is required to be made in respect of the Base
Year pursuant to this subsection 5.1(b) and (y) such optional prepayment is
applied in accordance with subsection 5.1(a)(i), then the Borrower may credit
the amount of any such optional prepayment against (and thereby reduce) the
amount of any mandatory prepayment required pursuant to this subsection 5.1(b)
in respect of such Base Year by delivering a notice to such effect to the Agent
which specifies the dates and amounts of any such optional prepayments, PROVIDED
that no such optional prepayment may be credited against any such mandatory
prepayment to the extent that such optional prepayment (I) reduced any prior
mandatory prepayment pursuant to this subsection 5.1(b) or (II) reduced the
amount of any prepayment required to be made with Excess Cash Flow for the
relevant fiscal year pursuant to the first sentence of this subsection 5.1(b).
(c) Unless the Required Lenders otherwise agree, the Term Loans and,
after the Term Loans shall have been prepaid in full, any outstanding LOC Loans
shall be prepaid with (i) 100% of the Net Proceeds of (A) any Indebtedness in
respect of Sale/Leaseback Transactions permitted under subsection 9.2(e)
incurred by the Borrower or any of its Subsidiaries subsequent to the Original
Closing Date in respect of an asset owned by the Borrower or any Subsidiary for
a period of at least 180 days prior to the incurrence of such Indebtedness or
(B) any Indebtedness permitted under subsection 9.2(g) incurred by the Borrower
or any of its Subsidiaries subsequent to the Original Closing Date to the extent
the aggregate amount of Indebtedness outstanding under such subsection exceeds
$20,000,000 at such time, (ii) 50% of the Net Proceeds of the issuance of
Capital Stock by Holdings or any of its Subsidiaries subsequent to the Original
Closing Date (other than the issuance of additional shares of Capital Stock by
the Borrower or any of its Subsidiaries to Holdings or any of its Subsidiaries
(PROVIDED that such shares of Capital Stock are pledged to the Agent, for the
benefit of the Lenders, pursuant to the Pledge Agreements)) and (iii) 100% of
the Net Proceeds of any Asset Sale by the Borrower or any of its Subsidiaries
permitted under subsection 9.6(b), 9.6(c) (to the extent such Asset Sale
constitutes an Asset Sale of Timberland Property) or 9.6(i)(II), PROVIDED that,
(x) if the Net Proceeds realized from any such Asset Sale (or series of related
Asset Sales) are less than $500,000, such Net Proceeds shall not be applied to
the prepayment of the Term Loans pursuant to this subsection, (y) if the Net
Proceeds realized from any such Asset Sale exceed $500,000, such Net Proceeds
shall not be applied to the prepayment of the Term Loans pursuant to this
subsection until such time as the aggregate amount of such Net Proceeds in any
fiscal year exceeds $10,000,000 and then such Net Proceeds shall be applied to
prepay the Term Loans pursuant to this subsection to the extent such Net
Proceeds exceed $10,000,000 in any fiscal year, PROVIDED that, notwithstanding
anything to the contrary in this clause (y), such Net Proceeds shall be applied
to the prepayment of the Term Loans pursuant to this subsection to the extent
such Net Proceeds would otherwise result in "Excess Proceeds" (as defined in
Section 4.10 of the Senior Subordinated Note Indenture) exceeding $25,000,000 in
the aggregate, and (z) at the option of the Borrower and so long as no Event of
Default shall have occurred and be continuing or would be caused thereby, the
Borrower may use or cause the appropriate Subsidiary to use the Net Proceeds of
any Asset Sale permitted under subsection 9.6(b) to purchase assets of the same
general kind as those disposed of in such Asset Sale ("QUALIFIED ASSETS") within
one year after the consummation of such Asset Sale. In the event the Borrower
elects to exercise its right to purchase Qualified Assets with the Net Proceeds
of an Asset Sale pursuant to this subsection 5.1(c), the Borrower shall promptly
deliver a certificate of a Responsible Officer to the Agent setting forth the
amount of the Net Proceeds which the Borrower expects to use to purchase
Qualified Assets during the subsequent one year period. On the date which is
one year after the relevant Asset Sale, the Borrower shall (I) deliver a
certificate of a Responsible Officer to the Agent certifying as to the amount
and use of such Net Proceeds actually used to purchase Qualified Assets (which
amount of Net Proceeds so used, to the extent that it would otherwise be
included in any computation of Net Proceeds from Asset Sales pursuant to
clause (y) of the proviso to the first sentence of this subsection, shall be
excluded from such computation) and (II) deliver to the Agent, for application
in accordance with this subsection 5.1(c), an amount equal to the remaining
unused Net Proceeds. Except as otherwise provided in this subsection 5.1(c) or
in subsection 5.1(e), each prepayment pursuant to this subsection 5.1(c) shall
be made on the third Business Day following receipt of the Net Proceeds from (a)
the incurrence of Indebtedness, (b) issuance of Capital Stock or (c) after and
to the extent the Net
37
Proceeds of an Asset Sale are required to be applied to prepay the Term Loans
and/or LOC Loans pursuant to subsection 5.1(c)(iii), such Asset Sale, as the
case may be.
(d) Subject to subsection 5.1(e), prepayments of the Term Loans
pursuant to subsection 5.1(b) and 5.1(c) shall be applied to the prepayment of
the Tranche A Term Loans and the Tranche B Term Loans PRO RATA and shall be
applied to the remaining installments thereof on a PRO RATA basis. Prepayments
of outstanding LOC Loans pursuant to subsection 5.1(b) and 5.1(c) shall be
applied to the prepayment of such LOC Loans PRO RATA. Amounts to be applied
pursuant to this subsection 5.1(d) to the prepayment of Term Loans and/or LOC
Loans shall be applied, as applicable, first to reduce outstanding Term Loans
and/or LOC Loans which are ABR Loans. Any amounts remaining after each such
application shall, at the option of the Borrower, be applied to prepay Term
Loans and/or LOC Loans which are Eurodollar Loans immediately and/or shall be
deposited in the Prepayment Account (as defined below). The Agent shall apply
any cash deposited in the Prepayment Account (i) allocable to Term Loans to
prepay Term Loans which are Eurodollar Loans and (ii) allocable to LOC Loans to
prepay LOC Loans which are Eurodollar Loans, in each case on the last day of the
respective Interest Periods therefor (or, at the direction of the Borrower, on
any earlier date) until all outstanding Term Loans and/or LOC Loans which are
Eurodollar Loans have been prepaid or until all cash on deposit in the
Prepayment Account with respect to such Loans has been exhausted. For purposes
of this Agreement, the term "PREPAYMENT ACCOUNT" shall mean an account
established by the Borrower with the Agent and over which the Agent shall have
exclusive dominion and control, including the right of withdrawal for
application in accordance with this subsection 5.1(d). The Agent will, at the
request of the Borrower, invest amounts on deposit in the Prepayment Account in
Cash Equivalents that mature prior to the last day of the applicable Interest
Periods of the Eurodollar Loans to be prepaid, PROVIDED that the Agent shall not
be required to make any investment that, in its sole judgment, would require or
cause the Agent to be in, or would result in any, violation of any Requirement
of Law and (ii) the Agent shall have no obligation to invest amounts on deposit
in the Prepayment Account if a Default or Event of Default shall have occurred
and be continuing. The Borrower shall indemnify the Agent for any losses
relating to the investments so that the amount available to prepay Eurodollar
Loans on the last day of the applicable Interest Periods therefor is not less
than the amount that would have been available had no investments been made.
Other than any interest earned on such investments, the Prepayment Account shall
not bear interest. Interest or profits, if any, on such investments shall be
deposited and reinvested and disbursed as described above. If the maturity of
the Loans has been accelerated pursuant to Section 11, the Agent shall first
apply all amounts on deposit in the Prepayment Account to prepay the outstanding
Tranche A Term Loans and the Tranche B Term Loans PRO RATA and, then, to prepay
any outstanding LOC Loans. The Borrower hereby grants to the Agent, for its
benefit and the benefit of the Lenders, a security interest in the Prepayment
Account to secure the Obligations.
(e) Notwithstanding the provisions of subsection 5.1(d), with respect
to the amount of any mandatory prepayment described therein that is allocated to
the then outstanding Tranche B Term Loans (such amount, the "TRANCHE B
PREPAYMENT AMOUNT"), the Borrower may in lieu of applying such amount to the
prepayment of Tranche B Term Loans as set forth in subsection 5.1(d), at least
one Business Day prior to the date specified therein for such prepayment, (i)
deposit in the Tranche B Escrow Account (as defined below) the Tranche B
Prepayment Amount and (ii) provide to each Tranche B Lender a notice (each a
"TRANCHE B PREPAYMENT OPTION NOTICE") as described below. Each Tranche B
Prepayment Option Notice shall be in writing, shall refer to this subsection
5.1(e) and shall (i) set forth the Tranche B Prepayment Amount and the portion
thereof that the applicable Tranche B Lender will be entitled to receive if it
accepts such mandatory prepayment in accordance with this subsection 5.1(e),
(ii) offer to prepay on a specified date (each a "TRANCHE B MANDATORY PREPAYMENT
DATE"), which shall be not less than 20 days or more than 25 days after the date
of the Tranche B Option Prepayment Notice, the Tranche B Term Loans of such
Tranche B Lender in an amount equal to the portion of the Tranche B Prepayment
Amount indicated in such Tranche B Lender's Tranche B Prepayment Option Notice
as being applicable to such Tranche B Lender, (iii) request such Tranche B
Lender to notify the Borrower and the Agent in writing, no later than the fifth
day prior to the Tranche B Mandatory Prepayment Date, of such Tranche B Lender's
acceptance or rejection of such offer of prepayment and (iv) inform such Tranche
B Lender that failure by such Tranche B Lender to accept such offer in writing
on or before the fifth day prior to the Tranche B Mandatory Prepayment Date
shall be deemed a rejection of such prepayment offer. Each Tranche B Prepayment
Option Notice shall be given by telecopy, confirmed by hand delivery, overnight
courier service or registered or certified mail, in each case addressed as
provided in subsection 13.2. On the Tranche B Mandatory Prepayment Date, the
Agent shall withdraw from the Tranche B Escrow Account the aggregate amount
necessary to prepay the portion of the Tranche B Prepayment Amount in respect of
which the Tranche B Lenders have accepted prepayment as described above (such
Tranche B Lenders, the "ACCEPTING TRANCHE B LENDERS"), and shall apply such
amount on behalf of the Borrower PRO RATA against the remaining
38
installments of principal due in respect of the Tranche B Term Loans of the
Accepting Tranche B Lenders. The amount remaining in the Tranche B Escrow
Account after the payment of the amount described in the immediately
preceding sentence shall be allocated PRO RATA between (i) the then
outstanding Tranche A Term Loans and (ii) the then outstanding Tranche B Term
Loans of the Accepting Tranche B Lenders and applied to the remaining
installments thereof on a PRO RATA basis. For purposes of this Agreement,
the term "TRANCHE B ESCROW ACCOUNT" shall mean an account established by the
Borrower with the Agent and over which the Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal for
application in accordance with this subsection 5.1(e). The Agent will, at
the request of the Borrower, invest amounts on deposit in the Tranche B
Escrow Account in Cash Equivalents that mature prior to the Tranche B
Mandatory Prepayment Date, PROVIDED that the Agent shall not be required to
make any investment that, in its sole judgment, would require or cause the
Agent to be in, or would result in any, violation of any Requirement of Law
and (ii) the Agent shall have no obligation to invest amounts on deposit in
the Tranche B Escrow Account if a Default or Event of Default shall have
occurred and be continuing. The Borrower shall indemnify the Agent for any
losses relating to the investments so that the amount available to prepay the
Tranche B Term Loans of the Accepting Tranche B Lenders on the Tranche B
Mandatory Prepayment Date is not less than the amount that would have been
available had no investments been made. Other than any interest earned on
such investments, the Tranche B Escrow Account shall not bear interest.
Interest or profits, if any, on such investments shall be deposited and
reinvested and disbursed as described above. If the maturity of the Loans has
been accelerated pursuant to Section 11, the Agent shall apply all amounts on
deposit in the Tranche B Escrow Account to prepay outstanding Tranche B Term
Loans and, after repayment in full of the Tranche B Term Loans, to the other
Obligations in such order as the Agent may determine. The Borrower hereby
grants to the Agent, for its benefit and the benefit of the Lenders, a
security interest in the Tranche B Escrow Account to secure the Obligations.
(f) It is understood and agreed that, with respect to the Net
Proceeds from any Permitted Receivables Financing, the Borrower shall apply
$100,000,000 of such Net Proceeds received pursuant to the Receivables Facility
on the Effective Date to prepay Tranche B Term Loans under the Existing Credit
Agreement, and any other Net Proceeds in excess of the initial $100,000,000 of
Net Proceeds from any Permitted Receivables Financing shall not be required to
be applied to repayment of any Loans hereunder nor included in the computation
of Excess Cash Flow.
5.2 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the Agent
at least one Business Day's prior irrevocable notice of such election, PROVIDED
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto (or on any other day if on the date of
such conversion the Borrower pays to the Agent for the account of the applicable
Lenders accrued interest on such Eurodollar Loans to the date of such conversion
together with all amounts payable under Section 5.11). The Borrower may elect
from time to time to convert ABR Loans to Eurodollar Loans by giving the Agent
at least three Business Days' prior irrevocable notice of such election. Any
such notice of conversion to Eurodollar Loans shall specify the length of the
initial Interest Period or Interest Periods therefor. Upon receipt of any such
notice the Agent shall promptly notify each affected Lender thereof. All or any
part of outstanding Eurodollar Loans and ABR Loans may be converted as provided
herein, PROVIDED that (i) no Loan may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Agent has or the
Required Term Loan Lenders or the Required Revolving Credit Lenders, as the case
may be, have determined that such a conversion is not appropriate and (ii) no
Loan may be converted into a Eurodollar Loan after the date that is one month
prior to the Termination Date (in the case of conversions of Revolving Credit
Loans) or the date of the final installment of principal of the applicable Term
Loans (in the case of conversions of Term Loans).
(b) Any Eurodollar 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 Agent, in accordance with the applicable provisions of the term
"Interest Period" set forth in subsection 1.1, of the length of the next
Interest Period to be applicable to such Loans, PROVIDED that no Eurodollar Loan
may be continued as such (i) when any Event of Default has occurred and is
continuing and the Agent has or the Required Term Loan Lenders or the Required
Revolving Credit Lenders, as the case may be, have determined that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the Termination Date (in the case of continuations of Revolving Credit Loans)
or the date of the final installment of principal of the applicable Term Loans
(in the case of continuations of Term Loans) 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 ABR Loans on the last day of such
then expiring Interest Period.
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5.3 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES. All borrowings,
conversions and continuations of 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 Loans comprising each Eurodollar Tranche shall be equal to $10,000,000 or
a whole multiple of $1,000,000 in excess thereof. In no event shall there be
more than nine Eurodollar Tranches outstanding at any time.
5.4 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise, but taking into account any applicable grace period
under Section 11(a)), such overdue amount shall bear interest at a rate per
annum which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, commitment fees or
other amounts due and payable hereunder, the rate described in subsection 5.4(b)
plus 2%, in each case from the date of such non-payment until such amount is
paid in full (after as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date
and, in the case of all Loans other than the Tranche B Term Loans, the
Termination Date, and, in the case of Tranche B Term Loans, the Tranche B
Maturity Date, PROVIDED that interest accruing pursuant to subsection 5.4(c)
shall be payable from time to time on demand.
5.5 COMPUTATION OF INTEREST AND FEES. (a) Commitment fees and interest
shall be calculated on the basis of a 360-day year for the actual days elapsed,
except that whenever interest is calculated on the basis of the Prime 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. The Agent shall as soon as
practicable, notify the Borrower and the affected Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from
a change in the ABR or the Eurocurrency Reserve Requirement shall become
effective as of the opening of business on the day on which such change becomes
effective. The Agent shall, as soon as practicable, notify the Borrower and the
affected Lenders of the effective date and the amount of each such change in
interest rate.
(b) Each determination of an interest rate by the 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. The Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Agent in determining any interest rate pursuant to
subsection 5.4(a).
5.6 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Agent shall have received notice from the Required
Lenders that the Eurodollar 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 Agent shall give telecopy or telephonic notice thereof to the Borrower and
the affected Lenders as soon as practicable thereafter. If such notice is given
(x) any Eurodollar Loans requested to be made on the first day of such Interest
Period shall be made as ABR Loans, (y) any Loans that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
converted to or continued as ABR Loans and (z) any outstanding Eurodollar Loans
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Agent,
40
no further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert ABR Loans to Eurodollar Loans.
5.7 PRO RATA TREATMENT AND PAYMENTS. (a) All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off or
counterclaim and shall be made prior to 12:30 P.M., New York City time, on the
due date thereof to the Agent, for the account of the Revolving Credit Lenders
or the Term Loan Lenders, as the case may be, at the Agent's office specified in
subsection 13.2, in Dollars and in immediately available funds. Payments
received by the Agent after such time shall be deemed to have been received on
the next Business Day. The Agent shall distribute such payments to the Lenders
entitled to receive the same promptly upon receipt in like funds as received.
If any payment hereunder (other than payments on the Eurodollar Loans) becomes
due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension. If any payment on a Eurodollar 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 (and, with respect to payments of principal,
interest shall be payable thereon at the then applicable rate during such
extension) 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. If, and to the extent that, on any Business
Day the Agent receives any payment hereunder or under the other Loan Documents
(including any such payment representing a realization upon the Collateral), and
such payment is not sufficient to pay in full all principal, interest and fees
then due and payable hereunder, the Agent shall apply such payment ratably to
all such amounts then due and payable.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its portion of such borrowing available to the Agent, the Agent may
assume that such Lender is making such amount available to the Agent, and the
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Agent by the
required time on the Borrowing Date therefor, such Lender shall pay to the
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 Agent. A certificate of the Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error. If such Lender's portion of such
borrowing is not made available to the Agent by such Lender within three
Business Days of such Borrowing Date, the Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the Borrower, without prejudice to any
right or claim the Borrower may have against such Lender.
(c) Each borrowing by the Borrower of Tranche A Term Loans, Tranche B
Term Loans, LOC Loans and Revolving Credit Loans shall be made ratably from the
Tranche A Lenders, Tranche B Lenders and Revolving Credit Lenders, respectively,
in accordance with their respective Tranche A Commitment Percentages, Tranche B
Commitment Percentages, LOC Commitment Percentages and Revolving Credit
Commitment Percentages. Any reduction of the Revolving Credit Commitments shall
be made ratably among the Revolving Credit Lenders, in accordance with their
respective Revolving Credit Commitment Percentages. Any reduction of the LOC
Commitments shall be made ratably among the LOC Participants, in accordance with
their respective LOC Commitment Percentages.
5.8 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
Eurodollar Loans as contemplated by this Agreement,(a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be suspended until such
time as it shall no longer be unlawful for such Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement and (b) such Lender's Loans
then outstanding as Eurodollar Loans, if any, shall be converted automatically
to ABR 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 Eurodollar Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the Borrower shall
pay to such Lender such amounts, if any, as may be required pursuant to
subsection 5.11.
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5.9 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) from any central bank or other Governmental Authority, in each case made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Note, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes as defined in subsection 5.10, changes in the rate
of tax on the overall net income of such Lender and taxes imposed as a
result of any future, present or former connection between the 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 Lender having
executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any Note));
(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 Eurodollar Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
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 Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall, within 10 Business Days
after receipt by the Borrower of such Lender's written demand (with a copy to
the Agent), pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable. If any Lender
has demanded compensation under this subsection 5.9(a) with respect to any
Eurodollar Loan, the Borrower shall have the option to convert immediately such
Eurodollar Loan into an ABR Loan until the circumstances giving rise to such
demand for compensation no longer apply; PROVIDED, that (i) no such conversion
shall affect the Borrower's obligation to pay compensation as provided herein
which is due with respect to the period prior to such conversion and (ii) on the
date of such conversion the Borrower shall pay to the Agent for the benefit of
the relevant Lender accrued interest on such Eurodollar Loan to the date of
conversion, together with any amounts payable pursuant to subsection 5.11.
(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) from any Governmental
Authority, in each case made subsequent to the date hereof, 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 or under any Letter of
Credit 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,
within 10 Business Days after receipt by the Borrower of such Lender's written
demand (with a copy to the Agent), the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to subsection 5.9(a) or (b), it shall promptly notify the Borrower
(with a copy to the Agent) of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender to the Borrower (with a copy to the Agent)
shall be conclusive in the absence of manifest error. The Borrower shall not be
obligated to compensate any Lender pursuant to this subsection 5.9 for amounts
accruing prior to the date which is 180 days before such Lender notifies the
Borrower of such event, PROVIDED that such notice need not include a computation
of amounts in respect thereof. The agreements in this subsection shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.
5.10 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
42
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 Agent or any Lender (or Transferee)
as a result of any future, present or former connection between the Agent or
such Lender (or Transferee) 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 Agent or such
Lender (or Transferee) having executed, delivered or performed its obligations
or received a payment under, or enforced, this Agreement or any Note 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 Agent or any Lender (or Transferee)
hereunder or under any Note, the amounts so payable to the Agent or such Lender
(or Transferee) shall be increased ("INCREASED AMOUNTS") to the extent necessary
to yield to the Agent or such Lender (or Transferee) (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. Whenever any Non-Excluded
Taxes are payable by the Borrower, the Borrower shall promptly send to the Agent
for its own account or for the account of such Lender (or Transferee), as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof or other evidence of remittance of Non-Excluded
Taxes reasonably acceptable to the Agent. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other reasonably acceptable
evidence, the Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the Agent or
any Lender as a result of any such failure. The Borrower will indemnify each
Lender (or Transferee) and the Agent for the amount of Non-Excluded Taxes paid
by such Lender (or Transferee) or the Agent, as the case may be, and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. The agreements in this subsection 5.10 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(b) Each Lender (and each Transferee) that is not incorporated or
organized under the laws of the United States of America or a state thereof
shall:
(i) in the case of a Lender or a Transferee that is a "bank"
under Section 881(c)(3)(A) of the Code;
(A) on or before the date it becomes a party to this
Agreement (or, in the case of a Loan Participant, on or before
the date such Loan Participant becomes a Loan Participant
hereunder) and on or before the date, if any, such Lender (or
Transferee) changes its applicable lending office by designating
a different lending office (a "NEW LENDING OFFICE") deliver to
the Borrower and the Agent (y) two properly completed and duly
executed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case may
be, and (z) 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 Agent two further
properly completed and duly executed 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 or upon the
request of the Borrower or the Agent; and
(C) obtain such extensions of time for filing and
completing such forms or certifications as may reasonably be
requested by the Borrower;
(ii) in the case of a Lender or a Transferee that is not a "bank"
under Section 881(c)(3)(A) of the Code:
(A) on or before the date it becomes a party to this
Agreement (or, in the case of a Loan Participant, on or the date
such Loan Participant becomes a Loan Participant hereunder)
deliver to the Borrower and the Agent (I) a statement under
penalties of perjury 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
43
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;
(B) deliver to the Borrower and the Agent two further
properly completed and duly executed copies of said Form W-8, or
any successor applicable form 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; and
(C) obtain such extensions of time for filing and
completing such forms or certifications as may be reasonably
requested by the Borrower or the Agent;
unless in any such case any change in law or regulation has occurred subsequent
to the date such Lender (or Transferee) became a party to this Agreement (or in
the case of a Loan Participant, the date such Loan Participant became a Loan
Participant hereunder) which renders all such forms inapplicable or which would
prevent such Lender from properly completing and executing any such form with
respect to it and such Lender so advises the Borrower and the Agent in writing
no later than 15 calendar days before any payment hereunder or under any Note is
due. Each such Lender (and each Transferee) 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 delivered pursuant to subsection
5.10(b)(i), that it is entitled to an exemption from United States backup
withholding tax.
(c) The Borrower shall not be required to indemnify any Lender (or
Transferee), or to pay any increased amounts to any Lender (or Transferee) in
respect of any Non-Excluded Tax, pursuant to this subsection 5.10 to the extent
that (i) any obligation to withhold or deduct amounts with respect to tax
existed on the date such Lender (or Transferee) became a party to this Agreement
(or, in the case of a Transferee that is a Loan Participant, on the date such
Loan Participant became a Loan Participant hereunder) or, with respect to
payments to a New Lending Office, the date such Lender (or Transferee)
designated such New Lending Office with respect to a Loan; PROVIDED, HOWEVER,
that this clause (i) shall not apply to any Transferee or New Lending Office
that becomes a Transferee or New Lending Office as a result of an assignment,
participation, transfer or designation made at the written request of the
Borrower, or (ii) any Lender (or Transferee) fails to comply in full with the
provisions of subsection 5.10(b) hereof.
(d) If a Lender (or Transferee) or the Agent shall become aware that
it is entitled to claim a refund from a Governmental Authority in respect of
Non-Excluded Taxes as to which it has been indemnified by the Borrower, or with
respect to which the Borrower has paid increased amounts, pursuant to this
subsection 5.10, it shall promptly notify the Borrower of the availability of
such refund claim and shall make the appropriate claim to such Governmental
Authority for such refund. If a Lender (or Transferee) or the Agent receives a
refund (including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Non-Excluded Tax as to which it has been indemnified
by the Borrower, or with respect to which the Borrower has paid increased
amounts, pursuant to this subsection 5.10, it shall within 30 days from the date
of such receipt pay over such refund to the Borrower, net of all out-of-pocket
third-party expenses of such Lender (or Transferee) or the Agent.
5.11 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense (other than the loss of any
payments in respect of the Applicable Margin) which such Lender may sustain or
incur as a consequence of (a) default by the Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrower has given
a notice requesting the same in accordance with the provisions of this
Agreement,(b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans or converting
any Eurodollar Loans to ABR 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
44
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.
5.12 CHANGE OF LENDING OFFICE; FILING OF CERTIFICATES OR DOCUMENTS.
Each Lender agrees that if it makes any demand for payment, or becomes entitled
to any increased amounts, under subsection 5.8, 5.10 or 5.11(a) or if any
adoption or change of the type described in subsection 5.9 shall occur with
respect to it, 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 or file any certificate or document reasonably
requested in writing by the Borrower if such action would reduce or obviate the
need for the Borrower to make payments under subsection 5.8, 5.10 or 5.11(a) or
would eliminate or reduce the effect of any adoption or change described in
subsection 5.9.
5.13 REPLACEMENT LENDERS. In the event that the Borrower becomes
obligated to pay additional amounts or increased amounts to, or receives notice
from, any Lender pursuant to subsection 5.8, 5.9 or 5.10 then, unless such
Lender has theretofore removed or cured the conditions which result in the
obligation to pay such additional amounts or increased amounts, the Borrower
may, on ten Business Days' prior written notice to the Agent and such Lender,
cause such Lender to (and such Lender shall) assign pursuant to
subsection 13.6(c) all of its rights and obligations under this Agreement to
another bank or financial institution which is willing to become a Lender and is
acceptable (which acceptance shall not be unreasonably withheld) to the Agent,
for a purchase price equal to the outstanding principal amount of the Loans
payable to such Lender plus any accrued but unpaid interest on such Loans, any
accrued but unpaid commitment fees in respect of such Lender's Commitment and
any other amounts payable to such Lender under this Agreement (including,
without limitation, amounts payable under subsection 5.11).
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, Holdings
and the Borrower hereby represent and warrant to the Agent and each Lender that:
6.1 FINANCIAL CONDITION. (a) The combined balance sheet of the
Continuing Business (as defined in the Stock Purchase Agreement) as at December
26, 1992 and as at December 25, 1993 and the related combined statements of
income and of cash flows for the fiscal years ended on such dates, reported on
by Coopers & ▇▇▇▇▇▇▇, copies of which have heretofore been furnished to each
Lender, present fairly in all material respects the combined financial condition
of the Continuing Business (as defined in the Stock Purchase Agreement) as at
such dates, and the combined results of their operations and their combined cash
flows for the fiscal years then ended. The combined balance sheet of the
Continuing Business (as defined in the Stock Purchase Agreement) as at
September 24, 1994 and the related combined statements of income and of cash
flows for the nine-month period ended on such date, reported on by Coopers &
▇▇▇▇▇▇▇, copies of which have heretofore been furnished to each Lender, present
fairly in all material respects the combined financial condition of the
Continuing Business (as defined in the Stock Purchase Agreement) as at such
date, and the combined results of their operations and their combined cash flows
for the nine-month period then ended. All such financial statements have been
prepared in accordance with GAAP consistently applied throughout the periods
presented. To the knowledge of the Borrower, neither the Borrower nor any of
its consolidated or combined Subsidiaries had, at the date of the most recent
balance sheet referred to above, any material liability or material obligation
which would be required to be included in the financial statements referred to
in this subsection in accordance with GAAP which was not so included and was not
disclosed in the Final Offering Memorandum. Except as reflected in the
financial statements referred to in this subsection 6.1 or as set forth on
SCHEDULE 6.1(A) or as disclosed in the Final Offering Memorandum, during the
period from September 24, 1994 to and including the Original Closing Date, no
sale, transfer or other disposition was made by any Loan Party of any material
part of its business or property, no material liabilities were incurred by any
Loan Party and no purchase or other acquisition of any business or property
(including any capital stock of any other Person) was made by any Loan Party
which was material in relation to the combined financial condition of the
Continuing Business (as defined in the Stock Purchase Agreement) at September
24, 1994.
45
(b) The consolidated balance sheet of the Borrower and its
consolidated Subsidiaries as at September 27, 1995 and the related consolidated
statements of income and of cash flows for the fiscal year ended on such date,
reported on by Deloitte & Touche, copies of which have heretofore been furnished
to each Lender, are complete and correct and present fairly the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at such
date, and the consolidated results of their operations and their consolidated
cash flows for the fiscal year then ended. The unaudited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at January 3, 1996
and the related unaudited consolidated statements of income and of cash flows
for the three-month period ended on such date, certified by a Responsible
Officer, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly the consolidated financial condition of
the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows for
the three-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants or
Responsible Officer, as the case may be, and as disclosed therein). Neither the
Borrower nor any of its consolidated Subsidiaries had, at the date of the most
recent balance sheet referred to above, any material Guarantee Obligation,
contingent liability or liability for taxes, or any long-term lease or unusual
forward or long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is not reflected in
the foregoing statements or in the notes thereto. During the period from
September 27, 1995 to and including the date hereof there has been no sale,
transfer or other disposition by the Borrower or any of its consolidated
Subsidiaries of any material part of its or their business or property and no
purchase or other acquisition of any business or property (including any capital
stock of any other Person) material in relation to the consolidated financial
condition of the Borrower and its consolidated Subsidiaries at September 27,
1995.
6.2 NO CHANGE. (a) Since September 27, 1995, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from the Original Closing
Date to and including the date of this Agreement no dividends or other
distributions have been declared, paid or made upon the Capital Stock of
Holdings or the Borrower nor has any of the Capital Stock of Holdings or the
Borrower been redeemed, retired, purchased or otherwise acquired for value by
the Borrower or any of its Subsidiaries except as disclosed in the financial
statements referred to in subsection 6.1 or as set forth on SCHEDULE 6.1(a).
6.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Loan Party (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization,(b) has the corporate power and authority 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 or
licensed to do business 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 and/or in good standing, in the aggregate could not
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has 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 hereunder. Each Loan Party has taken all necessary
corporate action to authorize the Extensions of Credit on the terms and
conditions of this Agreement and any Notes and to authorize the execution,
delivery and performance by it 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 or any other Person is required to be
obtained or made by any Loan Party in connection with the Extensions of Credit
hereunder or with the execution, delivery or performance by each applicable Loan
Party or the validity or enforceability with respect to or against any Loan
Party of the Loan Documents to which it is a party other than consents,
authorizations and (i) the filing of Uniform Commercial Code financing
statements and filings with the United States Patent and Trademark Office and
the United States Copyright Office to perfect the security interest that can be
perfected by such filings, (ii) recordation of the Mortgages and the Leasehold
Mortgages, (iii) filings in connection with enforcement of Loan Documents and
(iv) filings as contemplated by subsection 7.1. This Agreement has been, and
each other Loan Document will be, duly executed and delivered on behalf of each
Loan Party that is a party thereto. This Agreement constitutes, and each other
Loan Document when executed and delivered will constitute, a legal, valid and
binding obligation of each Loan Party that is a party thereto enforceable
against such Loan Party in accordance with its terms, except as enforceability
may be limited by applicable
46
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
6.5 NO LEGAL BAR. The execution, delivery and performance of the Loan
Documents, the Extensions of Credit hereunder and the use of the proceeds
thereof by each applicable Loan Party will not violate any Requirement of Law or
Contractual Obligation of any Loan Party which could reasonably be expected to
have a Material Adverse Effect and will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Requirement of Law or Contractual Obligation other
than as contemplated in or permitted by the Loan Documents.
6.6 NO MATERIAL LITIGATION. Except as set forth in SCHEDULE 6.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against any Loan Party or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby or (b) which has a reasonable
possibility of an adverse determination, and if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
6.7 NO DEFAULT. No Loan Party is in default under or with respect to
any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
6.8 OWNERSHIP OF PROPERTY; LIENS. Each Loan Party has good record and
marketable title in fee simple to, or a valid leasehold interest in, all its
real property except for such matters as do not materially adversely affect the
use of the property in the conduct of the business as currently conducted, and
good title to, or a valid leasehold interest in, all its other material
property, and none of such property is subject to any Lien except as permitted
by subsection 9.3. SCHEDULE 6.8 sets forth a true and complete list of all real
property owned or leased by the Loan Parties as of the Original Closing Date and
all Mortgages and Leasehold Mortgages granted by any Loan Party in respect of
any real property owned or leased by it as of the date hereof. The Borrower
shall deliver to the Agent within 45 days after the Effective Date a true and
complete list of all real property owned or leased by the Loan Parties as of
such date and all Mortgages and Leasehold Mortgages granted by any Loan Party in
respect of any real property owned or leased by it as of such date.
6.9 INTELLECTUAL PROPERTY. (a) Each Loan Party owns, or is licensed
to use, all material patents, trademarks (registered or unregistered), trade
names, service marks, assumed names and copyrights (such items, together with
all applications therefor and all other material intellectual property and
proprietary rights, whether or not subject to statutory registration or
protection, of the Borrower or any of its Subsidiaries that are used in or
necessary for the conduct of the business of the Borrower and its Subsidiaries
being collectively referred to herein as the "INTELLECTUAL PROPERTY") necessary
for the conduct of its business except for those the failure to own or license
which could not reasonably be expected to have a Material Adverse Effect and (b)
no claim of which Holdings or the Borrower has been given notice 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 Holdings or the Borrower know of any valid basis
for any such claim, except for such claims that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
6.10 NO BURDENSOME RESTRICTIONS. Except as set forth on SCHEDULE
6.10, no Requirement of Law or Contractual Obligation applicable to any Loan
Party could reasonably be expected to have a Material Adverse Effect.
6.11 TAXES. Holdings and the Borrower and its Subsidiaries have filed
or caused to be filed all tax returns which, to the knowledge of Holdings or the
Borrower and its Subsidiaries, are required to be filed in respect of periods
subsequent to the Original Closing Date and have paid all taxes shown to be due
and payable on said returns or on any assessments made against it or any of its
property in respect of such periods and all other material taxes imposed on it
or any of its property by any Governmental Authority (other than any taxes the
amount or validity of which are 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 the applicable Loan Party and other than any taxes
which in the aggregate would not have a Material Adverse Effect as the case may
be) in respect of such periods.
6.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of
47
the Board of Governors as now and from time to time hereafter in effect. If
requested by any Lender or the Agent, the Borrower will furnish to the Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation G or
Regulation U, as the case may be.
6.13 ERISA. Except as set forth in SCHEDULE 6.13, 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, except where, in
connection with any such event, the liability which would be likely to result
could not be reasonably expected to have a Material Adverse Effect. No
termination of a Single Employer Plan has occurred except where, in connection
with any such termination, the liability which would be likely to result could
not be reasonably expected to have a Material Adverse Effect, and no Lien which
remains unsatisfied in favor of the PBGC or a Plan has arisen, during such
five-year period. The present value of all accrued benefits under each Single
Employer Plan (based on those assumptions used to fund such Plans) did not, as
of the last annual valuation date prior to the date on which this representation
is made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by an amount in excess of $30,000,000. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan; 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; and no such Multiemployer
Plan is in Reorganization or Insolvent, except where, in any such case, the
liability which would be likely to result could not be reasonably expected to
have a Material Adverse Effect.
6.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. The Borrower is not subject to regulation under any Federal or
State statute or regulation (other than Regulation X of the Board of Governors)
which limits its ability to incur Indebtedness as contemplated herein.
6.15 SUBSIDIARIES. The Subsidiaries of Holdings and the Borrower, as
set forth in SCHEDULE 6.15, constitute all the Subsidiaries of Holdings and the
Borrower as of the Effective Date.
6.16 PURPOSE OF LOANS. The proceeds of the Term Loans shall be used
by the Borrower to replace the Term Loans under the Existing Credit Agreement.
The proceeds of the Revolving Credit Loans and/or Swing Line Loans shall be used
for working capital purposes in the ordinary course of business.
6.17 ENVIRONMENTAL MATTERS. Except to the extent that the inaccuracy
of any of the following (or the circumstances giving rise to such inaccuracy),
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:
(a) The facilities and properties owned, leased or operated by
the Borrower or any of its Subsidiaries (the "PROPERTIES") do not
contain any Hazardous Materials in amounts or concentrations which (i)
constitute a violation of, or (ii) could give rise to any liability
under, any Environmental Law or could interfere with the continued
operation of the Properties or could reasonably be expected to impair
the fair saleable value thereof.
(b) The Borrower and its Subsidiaries and the Properties are in
compliance, and to the knowledge of the Borrower and its Subsidiaries
have in the last three years been in compliance with all applicable
Environmental Laws and applicable Environmental Permits, and the
Borrower and its Subsidiaries reasonably believe that they will be
able to comply with all applicable Environmental Laws in the future
and renew or obtain all Environmental Permits necessary for their
operations in the future.
(c) Neither the Borrower nor any of its Subsidiaries has received
any written notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the
Properties or the business of the Borrower and its Subsidiaries (the
"BUSINESS"), nor to the knowledge of the Borrower or any of its
Subsidiaries is such notice being threatened.
48
(d) Hazardous Materials have not been transported, disposed of,
emitted, discharged, or otherwise released or threatened to be
released, nor has their disposal been arranged for, (i) by the
Borrower or any of its Subsidiaries in violation of, or (ii) in a
manner or to a location which could reasonably be expected to give
rise to liability under, any applicable Environmental Law; nor have
any Hazardous Materials been generated, treated, stored, emitted,
discharged or otherwise released or threatened to be released or
disposed of at, on or under any of the Properties in violation of, or
in a manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened, under any Environmental Law to which the
Borrower or any Subsidiary is or to the knowledge of the Borrower or
any of its Subsidiaries will be named as a party, nor are there any
consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to
the Borrower or any of its Subsidiaries, or the Properties or the
Business.
6.18 REGULATION H. To the extent available, the Borrower has obtained
for all Mortgaged Properties which are located in a "flood hazard area", as
designated in any Flood Insurance Rate Map published by the Federal Emergency
Management Agency, flood insurance in such total amount as the Agent has from
time to time reasonably required.
6.19 ACCURACY OF INFORMATION. The factual statements and information
contained in the Confidential Information Memorandum dated March 1996 relating
to Holdings and its Subsidiaries (as the same may be supplemented in writing
through the Effective Date, the "INFORMATION MEMORANDUM"), when taken as a
whole, were, as of the date of such Information Memorandum or the dates
otherwise specified therein or written supplements thereto, accurate in all
material respects and did not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading, PROVIDED that (a) with respect to trade data which relates to a
Person which is not a Loan Party or an Affiliate thereof, the Borrower
represents and warrants only that such information is believed by it in good
faith to be accurate in all material respects, (b) the statements therein
describing documents and agreements are summary only and as such are qualified
in their entirety by reference to such documents and agreements, (c) to the
extent any such information therein was based upon or constitutes a forecast or
projection or pro forma financial information, Holdings and the Borrower
represent only that such forecasts or projections or pro forma financial
information were based upon good faith estimates and assumptions believed by
management of the Borrower to be reasonable at the time made and (d) as to the
information which is specified as having been supplied by third parties,
Holdings and the Borrower represent only that they are not aware of any material
misstatement or omission therein.
6.20 SOLVENCY. As of the Effective Date, after giving effect to the
transactions contemplated to occur on the Effective Date, each Loan Party is
Solvent.
6.21 STOCK PURCHASE AGREEMENT. The Agent has received a complete copy
of each of the Stock Purchase Agreement (including all exhibits, schedules and
disclosure letters referred to therein or delivered pursuant thereto) and all
amendments and waivers relating thereto and other side letters or agreements
affecting the terms thereof. As of the Effective Date, none of such documents
and agreements has been amended or supplemented, nor have any of the provisions
thereof been waived, in any material respect, except pursuant to a written
agreement or instrument which has heretofore been consented to by the Agent. As
of the Effective Date, to the knowledge of Holdings and the Borrower, the
representations and warranties contained in the Stock Purchase Agreement are
true and correct in all material respects on the Effective Date as if made on
and as of the Effective Date (except as contemplated by the Stock Purchase
Agreement or other Acquisition Documents or as set forth on SCHEDULE 6.21) and
each Lender shall be entitled to rely on such representations and warranties
with the same force and effect as if they were incorporated in this Agreement
and made to each Lender directly by Holdings and the Borrower.
SECTION 7. CONDITIONS PRECEDENT
7.1 CONDITIONS TO EFFECTIVENESS AND INITIAL EXTENSIONS OF CREDIT. The
effectiveness of this Agreement and the agreement of each Lender to make the
initial Extension of Credit requested to be made by it is subject to the
49
satisfaction, immediately prior to or concurrently with the making of such
Extension of Credit on the Effective Date, of the following conditions
precedent:
(a) LOAN DOCUMENTS. The Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of
Holdings and the Borrower with a counterpart for each Lender, (ii)for
the account of each Revolving Credit Lender which requests a Revolving
Credit Note on the Effective Date, a Revolving Credit Note conforming
to the requirements hereof and executed by a duly authorized officer
of the Borrower,(iii) for the account of each Tranche A Lender which
requests a Tranche A Term Note on the Effective Date, a Tranche A Term
Note conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower,(iv) for the account of each
Tranche B Lender which requests a Tranche B Term Note on the Effective
Date, a Tranche B Term Note conforming to the requirements hereof and
executed by a duly authorized officer of the Borrower,(v) if requested
by the Swing Line Lender on the Effective Date, for the account of the
Swing Line Lender, a Swing Line Note conforming to the requirements
hereof and executed by a duly authorized officer of the Borrower,(vi)
each of the Stock Pledge Agreements (other than the Subsidiary Stock
Pledge Agreements), each executed and delivered by a duly authorized
officer of each Loan Party party thereto, with a counterpart for the
Agent and a counterpart or a conformed copy for each Lender,(vii) the
Subsidiaries Guarantee, executed and delivered by a duly authorized
officer of each Loan Party party thereto, with a counterpart for the
Agent and a counterpart or a conformed copy for each Lender and
(viii)each of the Security Agreements, each executed and delivered by
a duly authorized officer of each Loan Party party thereto, with a
counterpart for the Agent and a counterpart or a conformed copy for
each Lender.
(b) ESTABLISHMENT OF RECEIVABLES FACILITY. The Agent and the
Lenders shall have received evidence reasonably satisfactory to them
that the Borrower shall have established a receivables purchase
facility (as the same may be amended, modified or changed from time to
time pursuant to subsection 9.10(e), the "RECEIVABLES FACILITY") on
terms and conditions satisfactory to the Agent and the Lenders, at
least $85,000,000 (but not more than $100,000,000) of the Net Proceeds
of which are applied to prepay Existing Tranche B Term Loans. The
Borrower shall also have prepaid Existing Tranche B Term Loans in an
amount equal to the difference, if any, between (i) $100 million and
(ii) the amount of Existing Tranche B Term Loans prepaid with the Net
Proceeds of the Receivables Facility in accordance with the previous
sentence.
(c) RELATED AGREEMENTS AND DOCUMENTS. The Agent shall have
received, with a copy for each Lender, true and correct copies,
certified as to authenticity by the Borrower of the Receivables Sale
Agreement delivered in connection with the establishment of the
Receivables Facility, which shall be satisfactory to the Agent and the
Lenders.
(d) BORROWING CERTIFICATE. The Agent shall have received, with a
counterpart for each Lender, a certificate of the Borrower, dated the
Effective Date, substantially in the form of EXHIBIT R, with
appropriate insertions and attachments, satisfactory in form and
substance to the Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of the
Borrower.
(e) CORPORATE PROCEEDINGS OF THE BORROWER. The Agent shall have
received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Agent, of the
Board of Directors of the Borrower authorizing (i) the execution,
delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the Extensions of Credit
contemplated hereunder and (iii) the granting by it of the Liens
created pursuant to the Borrower Security Documents, certified by the
Secretary or an Assistant Secretary of the Borrower as of the
Effective Date, which certificate shall be in form and substance
reasonably satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(f) BORROWER INCUMBENCY CERTIFICATE. The Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Effective Date, as to the incumbency and signature
of the officers of the Borrower executing any Loan Document reasonably
satisfactory in form and substance to
50
the Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of the Borrower.
(g) CORPORATE PROCEEDINGS OF HOLDINGS. The Agent shall have
received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Agent, of the Board of Directors of Holdings authorizing (i) the
execution, delivery and performance of the Loan Documents to which
Holdings is a party and (ii) the granting by it of the Liens created
pursuant to the Security Documents to which it is a party, certified
by the Secretary or an Assistant Secretary of Holdings as of the
Effective Date, which certificate shall be in form and substance
reasonably satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(h) HOLDINGS INCUMBENCY CERTIFICATE. The Agent shall have
received, with a counterpart for each Lender, a certificate of
Holdings, dated the Effective Date, as to the incumbency and signature
of the officers of Holdings executing any Loan Document reasonably
satisfactory in form and substance to the Agent, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of Holdings.
(i) CORPORATE PROCEEDINGS OF SUBSIDIARIES. The Agent shall have
received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Agent, of the Board of Directors of each Subsidiary of the Borrower
which is a party to a Loan Document authorizing (i) the execution,
delivery and performance of the Loan Documents to which it is a party
and (ii) the granting by it of the Liens created pursuant to the
Subsidiaries Security Documents to which it is a party, certified by
the Secretary or an Assistant Secretary of each such Subsidiary as of
the Effective Date, which certificate shall be in form and substance
reasonably satisfactory to the Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked
or rescinded.
(j) SUBSIDIARY INCUMBENCY CERTIFICATES. The Agent shall have
received, with a counterpart for each Lender, a certificate of each
Subsidiary of the Borrower which is a Loan Party, dated the Effective
Date, as to the incumbency and signature of the officers of such
Subsidiaries executing any Loan Document, reasonably satisfactory in
form and substance to the Agent, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of each such
Subsidiary.
(k) CORPORATE DOCUMENTS. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of the
certificate of incorporation and by-laws of each Loan Party, certified
as of the Effective Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of such Loan Party.
(l) CONSENTS, LICENSES AND APPROVALS. The Agent shall have
received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower (i) attaching copies of such
consents, authorizations and filings referred to in subsection 6.4
(other than those contemplated by subsection 7.1(o)) as are reasonably
requested by the Agent, and (ii) stating that such consents, licenses
and filings are in full force and effect, and each such consent,
authorization and filing shall be in form and substance reasonably
satisfactory to the Agent.
(m) FEES. The Agent shall have received the fees to be received
on the Effective Date referred to in the Fee Letter dated March 15,
1996, from Chemical and Chemical Securities Inc. to the Borrower.
(n) LEGAL OPINIONS. The Agent shall have received, with a
counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinion of Cravath, Swaine &
▇▇▇▇▇, special counsel to Holdings and the Borrower,
substantially in the form of EXHIBIT S-1;
(ii) the executed legal opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
General Counsel to the Borrower, substantially in the form of
EXHIBIT S-2; and
51
(iii) the executed legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ substantially in the form of EXHIBIT S-3.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may
reasonably require.
(o) PLEDGED STOCK; STOCK POWERS; ACKNOWLEDGMENT AND CONSENTS.
The Agent shall have received (i) the certificates representing the
shares pledged pursuant to each of the Stock Pledge Agreements
(including, without limitation, the shares of Capital Stock of the
special purpose Subsidiary formed in connection with the Receivables
Facility), together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the
pledgor and (ii) Acknowledgment and Consents in the form attached to
each Pledge Agreement executed by a duly authorized officer of each
Loan Party whose Capital Stock is pledged pursuant to such Pledge
Agreement.
(p) INSURANCE. The Agent shall have received evidence in form
and substance satisfactory to it that all of the requirements of
subsection 8.5 and those Sections of the Security Documents requiring
the maintenance of insurance shall have been satisfied.
(q) EXISTING CREDIT AGREEMENT. The Agent shall have received
evidence in form and substance satisfactory to it that the Borrower
shall (i) have paid in full all accrued interest, fees and other
amounts (other than principal) owing to the Existing Lenders under the
Existing Credit Agreement as of the Effective Date and (ii) shall have
satisfied all its obligations (other than under this Credit Agreement)
in respect of all Loans outstanding under the Existing Credit
Agreement as of the Effective Date.
7.2 CONDITIONS TO EACH 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, its initial Extension of Credit), and the
agreement of the Issuing Banks to issue any Letter of Credit for which an
Application is presented, is subject to the satisfaction of the following
conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by the Borrower and the other Loan Parties in or
pursuant to the Loan Documents shall be true and correct in all
material respects on and as of such date (and, in the case of the
representations and warranties made on the Original Closing Date,
after giving effect to the Stock Purchase and the Merger) as if made
on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date.
(b) NO DEFAULT. No Default under Section 11(a) or Event of
Default (and, except in the case of a Swing Line Loan, no other
Default) shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit requested to be made on such
date.
(c) BORROWING REQUESTS AND APPLICATIONS. The Agent shall have
received a request or Application for such Loan or Letter of Credit if
and as required by subsection 3.2, 3.8, 3.11, 3.14, 4.2 or 4.5, as
applicable.
Each borrowing by and Letter of Credit issued on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date thereof that the conditions contained in clauses (a) and (b) of this
subsection have been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Agent hereunder or under any
other Loan Document or any Letter of Credit remains outstanding, it shall and
(except in the case of delivery of financial information, reports and notices
and subsection 8.11 and 8.12 which shall be performed by the Borrower) shall
cause each of its Subsidiaries to, unless the Required Lenders shall otherwise
consent in writing:
52
8.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of the Borrower, a copy of the audited
consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such year and the related
audited consolidated and consolidating statements 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 "going concern" or like qualification or
exception, or a qualification arising out of the scope of the audit,
by Deloitte & Touche or other independent certified public accountants
of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated and
consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated and consolidating statements of income and retained
earnings and of cash flows of the Borrower 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, certified by a
Responsible Officer of the Borrower 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 Responsible Officer, as the
case may be, and disclosed therein).
8.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified
in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a) and (b), a certificate of a
Responsible Officer (i) stating that, to the best of such Responsible
Officer's knowledge, the Borrower during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by it during such
period, and that such Officer has obtained no knowledge of any Default
or Event of Default except as specified in such certificate and (ii)
setting forth in reasonable detail the calculations required to
determine compliance with subsections 9.1 and 9.8;
(c) not later than fifteen days after the beginning of each
fiscal year of the Borrower, a copy of the projections by the Borrower
of the operating budget and cash flow budget of the Borrower and its
Subsidiaries for such fiscal year, such projections to be accompanied
by a certificate of a Responsible Officer of the Borrower to the
effect that such projections have been prepared using assumptions
believed in good faith by management of the Borrower to be reasonable
at the time made and that such Responsible Officer has no reason to
believe that such projections are incorrect or misleading in any
material respect;
(d) within five Business Days after the same are sent, copies of
all financial statements and reports which Holdings or the Borrower
sends to the holders of the Senior Subordinated Notes, the Senior
Preferred Stock or any securities of the Loan Parties registered with
the SEC, and within five Business Days after the same are filed,
copies of all financial statements and reports which Holdings or the
Borrower may make to, or file with, the SEC or any successor or
analogous Governmental Authority;
(e) within fifteen Business Days after the end of each fiscal
quarter, a certificate of a Responsible Officer of the Borrower
setting forth in reasonable detail the aggregate amount of Supported
Obligations as at the end of such fiscal quarter; and
53
(f) promptly, such additional financial and other information
within the possession of the Borrower or any of its Subsidiaries as
any Lender may from time to time reasonably request through the Agent.
8.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except as contemplated by this
Agreement or where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the Borrower or any of
its Subsidiaries, as the case may be.
8.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by ▇▇▇▇▇▇ 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 subsection 9.5; comply in all material respects with all
Contractual Obligations and Requirements of Law (excluding, for purposes of this
subsection 8.4, Requirements of Law and Contractual Obligations specifically
addressed elsewhere in this Section 8) except where (a) any such Contractual
Obligation is being contested in good faith, a bona fide dispute exists with
respect to any such Contractual Obligation or failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (b) any such Requirement of Law is being contested in good faith and the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
8.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property material to
the conduct of its business in good working order and condition; maintain
insurance with financially sound and reputable insurance companies (or, to the
extent consistent with prudent business practice, a program of self-insurance)
on such of its property and 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; and furnish to each Lender, upon
written request, full information as to the insurance carried.
8.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper financial records in conformity with GAAP and all Requirements of Law;
and permit (a) representatives of the Agent (and, after the occurrence and
during the continuance of an Event of Default, any Lender) to visit and inspect
any of its properties and examine and make abstracts from any of its books and
records at any reasonable time, upon reasonable notice, and as often as may
reasonably be desired, and (b) upon reasonable notice during normal business
hours, representatives of the Agent or any Lender 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.
8.7 NOTICES. Promptly give notice to the 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 the Borrower or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured, or resolved or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of
its Subsidiaries in which the amount involved is not covered by
insurance or in which injunctive or similar relief is sought which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect;
(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
54
from, or the termination, Reorganization or Insolvency of,
any Plan, in each of cases (i) and (ii), where such event could
reasonably be expected to have a Material Adverse Effect; and
(e) any development or event which could reasonably be expected
to have a Material Adverse Effect.
Each notice pursuant to this subsection 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.
8.8 ENVIRONMENTAL LAWS. (a) Comply with, and use reasonable efforts
to ensure compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use reasonable
efforts to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all Environmental Permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws, except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect.
8.9 MAINTENANCE OF LIENS OF THE SECURITY DOCUMENTS. Promptly, upon
the reasonable request of the Agent, at the Borrower's expense, execute,
acknowledge and deliver, or cause the execution, acknowledgement and delivery
of, and thereafter register, file or record, or cause to be registered, filed or
recorded, in an appropriate governmental office, any document or instrument
supplemental to or confirmatory of the Security Documents or otherwise
reasonably deemed by the Agent necessary or desirable for the continued
validity, perfection and priority of the Liens on the Collateral covered
thereby.
8.10 PLEDGE OF AFTER ACQUIRED PROPERTY; ADDITIONAL GUARANTORS. (a) If
at any time following the Original Closing Date the Borrower or any of its
Subsidiaries shall acquire property of any nature whatsoever having a value in
excess of $1,000,000 which is intended by the terms of the applicable Security
Document to be, but is not, subject to the Liens created by the Security
Documents, the Borrower shall, or shall cause the relevant Subsidiaries to, as
soon as possible and in no event later than 30 days after the relevant
acquisition date and, to the extent permitted by applicable law, grant to the
Agent for the ratable benefit of the Lenders a first priority (subject to Liens
permitted under subsection 9.3) Lien (to the extent the applicable Loan Party is
then permitted to grant such a Lien) on such property as collateral security for
the Obligations pursuant to documentation reasonably satisfactory in form and
substance to the Agent. The Borrower, at its own expense, shall execute,
acknowledge and deliver, or cause the execution, acknowledgement and delivery
of, and thereafter register, file or record in an appropriate governmental
office, any document or instrument (including legal opinions, title insurance,
consents and corporate documents) and take all such actions reasonably deemed by
the Agent to be necessary or desirable to ensure the creation, priority and
perfection of such Lien.
(b) Notwithstanding the provisions of subsection 8.10(a), (i) no
After-Acquired Mortgage Property with a fair market value (as determined by the
Agent in its reasonable judgment, it being understood that the purchase price
shall be indicative thereof) (the "FAIR MARKET VALUE") of less than $1,000,000
shall be subject to the provisions of subsection 8.10(a), (ii) each item of
After-Acquired Mortgage Property with a fair market value of at least $1,000,000
but less than $20,000,000 shall not be subject to the provisions of subsection
8.10(a) unless and until the aggregate Fair Market Value of all items of
After-Acquired Mortgage Property described in this clause (ii) and not pledged
to the Agent pursuant to the next sentence equals or exceeds $20,000,000 and
(iii) if, at any time, the aggregate amount of outstanding Term Loans is less
than or equal to $250,000,000 and the Consolidated Interest Expense Ratio of the
Borrower for the period of four consecutive fiscal quarters ended on the last
day of the most recently ended fiscal quarter is at least 3.00 to 1.00, no
Timberland Property from and after such time shall be subject to the provisions
of subsection 8.10(a). On each occasion that the Fair Market Value of all items
of After-Acquired Mortgage Property described in clause (ii) of the immediately
preceding sentence shall equal or exceed $20,000,000, all such property (and not
merely the portion of the property in excess of $20,000,000) shall be pledged to
the Agent for the benefit of the Lenders pursuant to paragraph (a) above and,
after such pledge, the provisions of such clause (ii) shall apply to
subsequently acquired After-Acquired Mortgage Property described in such clause.
55
(c) The Borrower shall cause each new Subsidiary (other than a Foreign
Subsidiary) of the Borrower created or acquired after the date hereof, promptly
upon such creation or acquisition, to execute a Subsidiary Security Agreement
and an instrument in form and substance reasonably satisfactory to the Agent (it
being acknowledged and agreed that an instrument in the form attached to the
Subsidiaries Guarantee as EXHIBIT A shall satisfy this requirement) pursuant to
which such new Subsidiary shall become a party to the Subsidiaries' Guarantee as
a guarantor thereunder, and the Borrower shall execute and deliver a Supplement
to the Borrower Stock Pledge Agreement in form and substance reasonably
satisfactory to the Agent, or shall cause the Subsidiary of the Borrower which
holds the Capital Stock of such new Subsidiary to execute and deliver a
Subsidiary Stock Pledge Agreement or a Supplement to the Subsidiary Stock Pledge
Agreement to which it is a party, providing for the pledge of 100% of the issued
and outstanding common stock of such new Subsidiary (PROVIDED, that in no event
shall Capital Stock representing more than 65% of the voting power of the
Capital Stock of any such new Subsidiary which is a Foreign Subsidiary be so
pledged) to the Agent for the benefit of the Lenders, and the Borrower shall
deliver to the Agent the stock certificates evidencing such Capital Stock
together with undated stock powers for each such certificate, duly executed in
blank.
8.11 INTEREST RATE PROTECTION. Without the prior written consent of
the Agent, not terminate any of the Interest Rate Protection Agreements entered
into in connection with the Existing Credit Agreement described on SCHEDULE 8.11
unless the Borrower shall have entered into Interest Rate Protection Agreements
which, considered together with the terms of the Borrower's outstanding
Indebtedness bearing a fixed rate of interest and any other Interest Rate
Protection Agreements then in effect, provide to the Borrower fixed interest
rates with respect to not less than one-half of the aggregate outstanding
principal amount of the Borrower's outstanding Indebtedness as of the Original
Closing Date (other than Revolving Credit Loans repaid within 10 Business Days
of the Original Closing Date and Indebtedness in respect of Letters of Credit
issued on the Original Closing Date) for a period of at least three years after
the Original Closing Date, and the Borrower agrees and confirms that the
Borrower Security Agreement grants to the Agent, for the benefit of the Lenders,
a first priority (subject to any Liens permitted pursuant to subsection 9.3)
perfected security interest in its rights under any such Interest Rate
Protection Agreements. The Borrower covenants and agrees that it will not (and
it will not permit its Subsidiaries to) enter into Rate Protection Agreements
for the purpose of (i) reducing the amount of Indebtedness bearing a fixed rate
of interest or swapped or capped into a fixed rate of interest as required by
this subsection 8.11 or (ii) speculating on interest rates or currency
movements. It is understood and agreed that the foregoing prohibition is not
intended to restrict the use of Rate Protection Agreements in the ordinary
course of business to match assets and liabilities of the Borrower and its
Subsidiaries.
8.12 PERMANENT RECEIVABLES REFINANCING. To the extent the Receivables
Facility has a term which expires prior to the fifth anniversary of the
Effective Date, the Borrower shall use its reasonable best efforts until
October 26, 1996 to cause the Receivables Facility to be refinanced with a
Permitted Receivables Facility with a term of five years, which Permitted
Receivables Facility results in Net Proceeds to the Borrower equal to the amount
of Net Proceeds received in connection with the Receivables Facility and applied
to prepay the Existing Tranche B Term Loans in accordance with subsection
7.1(b).
SECTION 9. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Agent hereunder or under any
other Loan Document or any Letter of Credit remains outstanding, the Borrower
shall not, nor (except with respect to subsection 9.1) shall the Borrower permit
any of its Subsidiaries to, directly or indirectly, unless the Required Lenders
shall otherwise agree in writing:
9.1 FINANCIAL CONDITION COVENANTS.
(a) MAINTENANCE OF NET WORTH. Permit Consolidated Net Worth at
the end of any fiscal quarter ending after the Original Closing Date
to be less than an amount equal to the sum of (i) $350,000,000 and
(ii) 50% of aggregate Consolidated Net Income for each fiscal year,
for which Consolidated Net Income was positive, elapsed during the
period commencing January 1, 1995 and ending at the end of the most
recently completed fiscal year.
56
(b) CAPITALIZATION RATIO. Permit the Capitalization Ratio at the
end of any fiscal quarter ending during any "Test Period" set forth
below to be greater than the amount set forth opposite such period
below:
Test Period Capitalization Ratio
----------- --------------------
12/29/94 - 01/01/97 0.65 to 1.00
01/02/97 - 12/31/97 0.60 to 1.00
01/01/98 - 12/30/98 0.55 to 1.00
12/31/98 and thereafter 0.50 to 1.00
(c) INTEREST COVERAGE. Permit for any period of four consecutive
fiscal quarters ending during any "Test Period" set forth below the
ratio of (i) Consolidated EBITDA for such period to (ii) Consolidated
Cash Interest Expense for such period to be less than the ratio set
forth opposite such period below:
Test Period Interest coverage Ratio
----------- -----------------------
06/28/95 - 12/27/95 1.50 to 1
12/28/95 - 01/01/97 1.75 to 1
01/02/97 - 12/31/97 2.25 to 1
01/01/98 - 12/30/98 2.75 to 1
12/31/98 and thereafter 3.00 to 1
PROVIDED, that, for the periods ended June 28, 1995 and September 27, 1995, the
ratio of Consolidated EBITDA to Consolidated Cash Interest Expense shall be
calculated with respect to the six-month and nine-month periods ended on such
dates, respectively.
9.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness in respect of the Loans, any Notes, the
Guarantees, the Letters of Credit and the other obligations of the
Loan Parties under this Agreement and the other Loan Documents;
(b) subject to subsection 9.9(d), Indebtedness of the Borrower to
any Subsidiary and of any Subsidiary to the Borrower or any other
Subsidiary;
(c) Indebtedness of the Borrower and any of its Subsidiaries
incurred to finance the acquisition, construction or improvement of
fixed or capital assets (whether pursuant to a loan, a Financing Lease
or otherwise) in an aggregate principal amount, together with
outstanding Indebtedness permitted under subsection 9.2(e) and any
Indebtedness guaranteed pursuant to and not excluded from such
computation under subsection 9.4(h), not exceeding as to the Borrower
and its Subsidiaries $100,000,000 at any time outstanding;
(d) Indebtedness in respect of the financings described on
SCHEDULE 9.2(d) (the "ASSUMED FINANCINGS") and, so long as (i) no LOC
Letter of Credit is outstanding with respect to any such Assumed
Financing and (ii) the Borrower may not request a Letter of Credit to
be issued with respect to such Assumed Financing, any renewals,
extensions, refundings or refinancings of such Indebtedness, PROVIDED
the amount thereof is not increased (except that the amount of such
Indebtedness may be increased by an aggregate amount not to exceed
$15,000,000 in connection with all such renewals, extensions,
refundings or refinancings, PROVIDED that the proceeds of such
increase of Indebtedness are used only to pay fees and expenses
incurred in connection with such renewals, extensions, refundings or
refinancings), the maturity of principal thereof is not shortened
(unless to a maturity after the Obligations shall have been paid in
full, the Commitments shall have been terminated and no Letter of
Credit is outstanding) and any subordination provisions thereof are
not amended or modified except on terms and conditions satisfactory to
the Required Lenders, in each case after giving effect to such
renewal, extension, refunding or refinancing;
57
(e) Indebtedness in respect of Sale/Leaseback Transactions
permitted under subsection 9.12 in an aggregate principal amount
incurred subsequent to the Original Closing Date, together with
outstanding Indebtedness permitted under subsection 9.2(c) and any
Indebtedness guaranteed pursuant to and not excluded from such
computation under subsection 9.4(h), not to exceed $100,000,000 at any
time outstanding;
(f) Indebtedness of the Borrower in an aggregate principal amount
not exceeding $375,000,000 in respect of the Senior Subordinated Notes
and any senior subordinated notes of the Borrower issued in exchange
therefor and having substantially identical terms as contemplated by
the Senior Subordinated Note Indenture;
(g) Indebtedness not exceeding, together with any Guarantee
Obligations outstanding and not excluded from such computation under
subsection 9.4(b), $100,000,000 in aggregate principal and/or
guaranteed amount at any one time outstanding, PROVIDED that such
Indebtedness is not secured by a Lien on any assets of the Loan
Parties;
(h) Indebtedness consisting of Guarantee Obligations expressly
permitted pursuant to subsection 9.4;
(i) Indebtedness of the Borrower or any of its Subsidiaries
which represents the assumption of Indebtedness of a wholly owned
Subsidiary of the Borrower in connection with the merger of such
wholly owned Subsidiary with or into the assuming Person or the
purchase of all or substantially all the assets of such wholly owned
Subsidiary, in each case pursuant to a transaction permitted under
subsection 9.5(a) or 9.5(b), as the case may be;
(j) Indebtedness in respect of performance bonds, bid bonds,
appeal bonds, bankers acceptances, letters of credit, surety bonds or
other similar obligations arising in the ordinary course of business,
and any refinancings thereof, PROVIDED that no such bond, bankers
acceptance, letter of credit or similar obligation is provided to
secure the repayment of other Indebtedness;
(k) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business,
PROVIDED that such Indebtedness is extinguished within five Business
Days of notice to the Borrower of its incurrence;
(l) Indebtedness which is (i) secured by Liens expressly
permitted by subsection 9.3(m) and (ii) assumed in connection with the
acquisition of the assets subject to such Liens;
(m) Indebtedness of a Person which becomes a Subsidiary after
the date hereof, PROVIDED that (i) such Indebtedness existed at the
time such Person became a Subsidiary and was not created in
anticipation of the acquisition and (ii) immediately after giving
effect to the acquisition of such Person by the Borrower (solely for
the purpose of computing compliance with the covenants contained in
subsection 9.1) no Default or Event of Default shall have occurred and
be continuing;
(n) Indebtedness of the Borrower or any of its Subsidiaries to
Holdings, PROVIDED that (i) such Indebtedness is subordinated to the
Obligations on terms and conditions satisfactory to the Agent and (ii)
such Indebtedness is funded by Holdings with proceeds of Indebtedness
of Holdings to any of the Investors or any of their respective
Affiliates or the cash proceeds from the sale of Capital Stock by
Holdings to, or capital contributions received from, any of the
Investors or any of their respective Affiliates;
(o) Indebtedness in respect of Rate Protection Agreements
permitted under subsection 8.11;
(p) Indebtedness of the Borrower or SDW Finance (i) under the
Receivables Sale Agreement in connection with the Receivables Facility
or (ii) arising out of any other Permitted Receivables Financing; and
58
(q) any renewals, extensions, refundings or refinancings of such
Indebtedness (other than the Indebtedness described in subsections
9.2(a) and 9.2(f) above) subject, in the case of the Indebtedness
described in subsection 9.2(d), to the specific limitations, renewals,
extensions, refundings and refinancings described therein, PROVIDED
that the principal amount of such Indebtedness is not increased
pursuant to any such renewal, extension, refunding or refinancing,
other than, subject to the approval of the Agent, in connection with
any Permitted Receivables Financing.
9.3 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 on the books of the Borrower or
its Subsidiaries, as the case may be, in conformity with GAAP;
(b) statutory landlords' liens and carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens arising in
the ordinary course of business for sums which are not overdue for a
period of more than 60 days or which are being contested in good faith
by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation 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;
(e) all easements, zoning restrictions, flowage rights,
rights-of-way, covenants, conditions, restrictions, reservations,
licenses, agreements and other similar matters, including the
unrecorded easements and similar agreements set forth in
SCHEDULE 9.3(e), which, in the aggregate, are not substantial in
amount and which do not in any case materially detract from the use of
the property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or such Subsidiary and, in the
case of the Timberlands, which do not materially interfere with access
to, or ability to remove material amounts of Timber;
(f) Liens securing Indebtedness of the Borrower and its
Subsidiaries permitted by subsection 9.2(c) incurred to finance the
acquisition, construction or improvement of fixed or capital assets,
PROVIDED that (i) such Liens shall be created within 180 days after
the acquisition, construction or improvement of such fixed or capital
assets,(ii) such Liens do not at any time encumber any property other
than the property acquired, constructed or improved with the proceeds
of such Indebtedness,(iii) the amount of Indebtedness secured thereby
shall not subsequently be increased and (iv) the principal amount of
Indebtedness secured by any such Lien shall at no time exceed 100% of
the original purchase price of such asset or the amount expended to
construct or improve such asset, as the case may be;
(g) Liens in existence on the date hereof securing Indebtedness
permitted by subsection 9.2(d), PROVIDED that (i) no such Lien is
spread to cover any additional property after the Original Closing
Date, except that such Lien may cover any replacement property
acquired with such Indebtedness in connection with any renewal,
extension, refunding or refinancing of such Indebtedness permitted
under subsection 9.2(d) and (ii) the amount of Indebtedness secured
thereby shall not subsequently be increased (except to the extent
expressly required by any agreement governing the terms of any Assumed
Financing as such agreement is in effect on the Original Closing Date
or as permitted under subsection 9.2(d). It is understood and agreed
that (i) the Liens securing the Muskegon Solid Waste Bonds were
permitted under subsection 9.3(g) of the Existing Credit Agreement,
(ii) the Muskegon Solid Waste Bonds were amended on August 21, 1995
and (iii) the Liens securing the Indebtedness under the Muskegon Solid
Waste Bonds (as amended), to the extent they are perfected in the
property permitted to be subject to such Liens under this subsection
9.3(g), shall be prior to any Liens in such property securing
Indebtedness and other amounts owing under this Agreement and the
other Loan Documents;
59
(h) Liens in existence on the date hereof listed on SCHEDULE
9.3(h), PROVIDED that no such Lien is spread to cover any additional
property after the Original Closing Date and that the amount of
Indebtedness secured thereby shall not subsequently be increased;
(i) all building codes and zoning ordinances and other laws,
ordinances, regulations, rules, orders or determinations of any
federal, state, county, municipal or other governmental authority now
or hereafter enacted;
(j) all immaterial encroachments, overlaps, boundary line
disputes, shortages in area, cemeteries and burial grounds and other
similar matters not of record which would be disclosed by an accurate
survey or inspection of the real property of the Borrower and its
Subsidiaries;
(k) all existing public and private roads and streets (whether
dedicated or undedicated);
(l) Liens created pursuant to the Security Documents;
(m) any Lien on any asset securing Indebtedness permitted to be
incurred under subsection 9.2(e) in connection with Sale/Leaseback
Transactions expressly permitted by subsection 9.12; PROVIDED that
(i) the proceeds of such Indebtedness shall be at least equal to 80%
of the fair market value (as determined in good faith by the Board of
Directors, or any duly authorized committee thereof, of the Borrower)
of such asset and (ii) at the time of incurrence of such Indebtedness,
no Event of Default shall have occurred and be continuing or would
result as a result thereof;
(n) any Lien on any asset acquired directly or indirectly by the
Borrower or any of its Subsidiaries after the Original Closing Date
which is not incurred in contemplation of such acquisition;
(o) judgment Liens created by or resulting from any litigation or
legal proceeding if released or bonded within 30 days of the date of
creation thereof, unless such litigation or legal proceeding could
reasonably be expected to have a Material Adverse Effect;
(p) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by
subsection 9.2(m), PROVIDED that (i) such Liens existed at the time
such Person became a Subsidiary and were not created in anticipation
of the acquisition, (ii) any such Lien does not by its terms cover any
property or assets after the time such Person becomes a Subsidiary
which were not covered immediately prior thereto and (iii) any such
Lien does not by its terms secure any Indebtedness other than
Indebtedness existing immediately prior to the time such Person
becomes a Subsidiary;
(q) all rights with respect to the mining, extraction and removal
of all minerals of whatever kind and character, including, without
limitation, all metals, precious and base, metallic and non-metallic
minerals, all coal, iron ore, oil, gas, sulfur, methane gas in coal
seams, limestone and other minerals, metals and ores located on, in or
under each of the Mortgaged Properties which have heretofore been
granted or leased to, or accepted or reserved by persons or entities
all in accordance with the terms set forth in such grant, lease,
exception or reservation;
(r) with respect to Timberland Properties: (i) all existing
leases, licenses and other agreements, if any, for roads, bridges,
boat ramps, woodyards, forestry practice and research activities,
hunting and fishing (including cabins and camps relating thereto) and
other residential and recreational purposes, whether or not of record;
(ii) timber cutting and hauling contracts and timber sales agreements
and similar agreements which have been entered into by the Borrower in
the ordinary course of business as set forth in SCHEDULE 9.3(r)
hereof; (iii) any immaterial loss or claim that may arise by reason of
or in connection with any indefiniteness or uncertainty in the legal
descriptions of Timberland Properties; (iv) any immaterial loss or
claim due to lack of access to any portion of the Timberland
Properties; and (v) rights, if any, of persons in possession, with or
without the consent of the applicable owner, of the Timberland
Properties;
60
(s) Liens on Receivables and Related Security created to secure
the Receivables Facility under the applicable Receivables Sale
Agreement and any Liens on Receivables and Related Security created to
secure any other Permitted Receivables Financing; and
(t) Liens to secure any Indebtedness permitted under subsection
9.2(q), PROVIDED that (i) such Lien shall be limited to all or part of
the same property, if any, that secured the Indebtedness renewed,
extended, refunded or refinanced with such Indebtedness or any other
property acquired in connection with such renewal, extension,
refunding or refinancing to replace such property and (ii) the
principal amount of the Indebtedness secured by such Lien is not
increased.
9.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on SCHEDULE 9.4(a);
(b) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed, together with any Indebtedness
outstanding under subsection 9.2(g), $100,000,000 at any one time
outstanding, PROVIDED that such Guarantee Obligations are not secured
by a Lien on any assets of the Loan Parties, and PROVIDED FURTHER,
that no Guarantee Obligation shall be included in any computation with
respect to the $100,000,000 limit contained in this subsection and
subsection 9.2(g) if such Guarantee Obligation relates to a Primary
Obligation included in any computation of such limit;
(c) the Guarantees and Letters of Credit;
(d) guarantees made in the ordinary course of its business by the
Borrower of obligations of any Subsidiary, which obligations are
otherwise permitted under this Agreement;
(e) reimbursement obligations of the Borrower pursuant to
Indebtedness expressly permitted by subsection 9.2(j);
(f) guarantees by any Subsidiary (i) in respect of Indebtedness
permitted under subsection 9.2(f)(i) on the terms, or on terms
substantially identical to (including with respect to the
subordination of such guarantees to the Obligations) the terms, of the
Senior Subordinated Note Indenture and (ii) in respect of Indebtedness
permitted under subsection 9.2(f)(ii) on the terms of, or on terms
substantially identical to (including with respect to the
subordination of such guarantees to the Obligations) the terms of, the
Subordinated Bridge Notes, the Subordinated Rollover Notes or such
other subordinated notes or debentures incurred to refinance the
Subordinated Bridge Notes or the Subordinated Rollover Notes, as the
case may be, permitted under subsection 9.2(f)(ii);
(g) guarantees in respect of the Indebtedness permitted under
subsection 9.2(d);
(h) Guarantee Obligations in respect of Indebtedness of a Person
or Persons other than a Loan Party consisting of tax-exempt industrial
development or pollution control revenue bonds (either through
Financing Lease Obligations or installment purchase obligations in
respect of facilities to be acquired by a Loan Party and to be
financed by such bonds, and including a direct guarantee of such
bonds) giving rise to Indebtedness of the nature described in
subsection 9.2(c) or 9.2(e) not exceeding, together with any
outstanding Indebtedness under subsection 9.2(c) and 9.2(e),
$100,000,000 at any time outstanding, PROVIDED, that no Guarantee
Obligation shall be included in any computation with respect to the
$100,000,000 limit contained in this subsection or subsection 9.2(c)
or 9.2(e) if such Guarantee Obligation relates to a Primary Obligation
included in any computation of such limit; and
(i) Guarantee Obligations in existence on the date hereof not
exceeding $5,000,000 in the aggregate at any time.
61
9.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger (other
than the 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:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more
wholly owned Subsidiaries of the Borrower (PROVIDED that the wholly
owned Subsidiary or Subsidiaries shall be the continuing or surviving
corporation);
(b) any wholly owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Borrower or any other wholly owned
Subsidiary of the Borrower; and
(c) pursuant to any sale of assets expressly permitted by
subsection 9.6.
9.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise 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 Capital Stock to any Person other than the
Borrower or any wholly owned Subsidiary, except:
(a) the conveyance, sale, lease, assignment, transfer or other
disposition of Obsolete Property or surplus property in the ordinary
course of business;
(b) Asset Sales (other than Asset Sales of inventory (including
Timber) or of Timberland Property and other than any other Asset Sale
permitted under this subsection 9.6) in the ordinary course of
business, PROVIDED that (i) the Net Proceeds of any such Asset Sale
are applied to prepay Term Loans and/or LOC Loans to the extent
required by subsection 5.1(c) and (ii) the aggregate amount of Net
Proceeds of Asset Sales subsequent to the Original Closing Date shall
not exceed $100,000,000;
(c) any Asset Sale pursuant to any Sale/Leaseback Transaction
permitted pursuant to subsection 9.12, PROVIDED that the Net Proceeds
of any such Asset Sale are applied to prepay Term Loans and/or LOC
Loans to the extent required by subsection 5.1(c);
(d) the sale of inventory (including Timber) in the ordinary
course of business;
(e) the sale or discount for fair value without recourse of
accounts receivable arising in the ordinary course of business in
connection with the compromise or collection thereof;
(f) as permitted by subsection 9.5(b);
(g) the license of Intellectual Property in the ordinary course
of business;
(h) leases or subleases not materially interfering with the
ordinary course of conduct of the business of the Borrower and its
Subsidiaries;
(i) (I) Asset Sales of Timberland Property in the ordinary course
of business consistent with past practice and (II) other Asset Sales
of Timberland Property (other than pursuant to a Sale/Leaseback
Transaction), PROVIDED that the Net Proceeds of any such Asset Sale
pursuant to this clause (II) are applied to prepay Term Loans and/or
LOC Loans to the extent required by subsection 5.1(c);
(j) sales of electric power generated by the Plant (as defined in
the Power Sales Agreement as in effect on the date hereof); and
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(k) (i) sales of Receivables and rights to all Related Security
by the Borrower to SDW Finance and by SDW Finance to the Receivables
Company, in each case, in connection with the Receivables Facility and
(ii) sales of Receivables and rights to all Related Security in
connection with any other Permitted Receivables Financing which shall
be in addition to and not limited by subsection 9.6(b).
9.7 LIMITATION ON RESTRICTED PAYMENTS. Declare or pay any dividend
(other than dividends payable solely in common stock or Senior Preferred Stock
of the Borrower) 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 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) the Borrower may pay cash dividends to Holdings to pay any
taxes or expenses required to be paid by Holdings in the ordinary
course of business and to maintain a cash balance of $25,000 for the
payment of such taxes and expenses, PROVIDED that any such taxes or
expenses are paid no later than fifteen Business Days after the date
on which the relevant dividend is made;
(b) the Borrower may pay cash dividends to Holdings to the extent
necessary to enable Holdings to pay fees, expenses and other
obligations incurred or required in connection with the Stock Purchase
or the Merger or in connection with the matters described in
subsection 9A.1(iii)(D) or subsection 9A.1(vi), PROVIDED that Holdings
shall pay each obligation in respect of which such dividend is made no
later than fifteen Business Days after the date on which the relevant
dividend is made;
(c) the Borrower may repurchase, redeem or otherwise acquire or
retire for value (or pay cash dividends to Holdings which are used by
Holdings to repurchase, redeem or otherwise acquire or retire for
value) any Common Stock or other Equity Interests of Holdings held by
employees of Holdings, the Borrower or any of its Subsidiaries
pursuant to any employee equity subscription agreement, stock option
agreement or stock ownership arrangement; PROVIDED that (i) the
aggregate price paid for all such repurchased, redeemed, acquired or
retired Common Stock or other Equity Interests shall not exceed
$5,000,000 in any twelve-month period plus the aggregate cash proceeds
received by the Borrower during such twelve-month period from any
reissuance of Common Stock or other Equity Interests of Holdings to
employees of Holdings, the Borrower or its Subsidiaries; and (ii) no
Event of Default shall have then occurred and be continuing or would
result therefrom, PROVIDED, that this clause (ii) shall not prohibit
any transaction under this subsection 9.7(c) within 60 days of the
date of declaration or the making of any binding commitment in respect
of any such transaction if at said date of declaration or commitment
no Event of Default shall have then occurred and be continuing or
would result therefrom;
(d) upon exercise of Warrants, the Borrower may make cash
dividends to Holdings to the extent necessary to enable Holdings to
pay any cash payments made in lieu of the issuance of fractional
shares of Common Stock in respect of the Warrants, PROVIDED that any
such payments are made no later than fifteen Business Days after the
date on which the relevant dividend is made;
(e) the Borrower may pay all or part of the administrative fee
referred to in clause (vi) of the proviso contained in subsection 9.11
in the form of a dividend; and
(f) if the aggregate outstanding principal amount of the Term
Loans is less than or equal to $250,000,000 and so long as the
Consolidated Interest Expense Ratio of the Borrower for the period of
four consecutive quarters ended on the last day of the immediately
preceding fiscal quarter is at least 3.00 to 1.00, the Borrower may
pay cash dividends during any fiscal year on the Senior Preferred
Stock out of the Borrower's Portion of Excess Cash Flow for the
previous fiscal year, PROVIDED that (i) the amount of the Borrower's
Portion of Excess Cash Flow which shall be available to make dividend
payments pursuant to this subsection 9.7(f) shall be reduced by the
amount of any optional prepayments applied in accordance
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with the first sentence of subsection 5.1(a)(ii) and (ii) no Default
or Event of Default has then occurred and is continuing or would
result therefrom.
9.8 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make
Capital Expenditures in the aggregate for the Borrower and its Subsidiaries
during any of the fiscal years of the Borrower set forth below, in excess of the
amount set forth opposite such fiscal year below:
Fiscal Year Amount
----------- ------
1995 $100,000,000
1996 150,000,000
1997 160,000,000
1998 165,000,000
1999 125,000,000
2000 135,000,000
2001 145,000,000
2002 150,000,000
PROVIDED, that (i) Capital Expenditures with respect to the 1995 fiscal year
shall be calculated with respect to the period beginning on September 29, 1994
and ending on September 27, 1995,(ii) Capital Expenditures permitted to be made
during any fiscal year (and not carried over from a prior fiscal year) and not
made during such fiscal year may be carried over and expended during the next
succeeding fiscal year and (iii) Capital Expenditures made during any fiscal
year shall be first deemed made in respect of amounts carried over from the
prior fiscal year and then deemed made in respects of amounts permitted for such
fiscal year.
9.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make 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 (an "INVESTMENT"),
except:
(a) extensions of trade credit and endorsements of negotiable
instruments and other negotiable documents in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) loans and advances to employees and directors of Holdings,
the Borrower or any of its Subsidiaries for travel, entertainment and
relocation expenses in the ordinary course of business in an aggregate
amount for Holdings, the Borrower and its Subsidiaries not to exceed
$5,000,000 at any time outstanding;
(d) Investments by the Borrower in its Subsidiaries and
Investments by such Subsidiaries in the Borrower and in other
Subsidiaries, PROVIDED that the aggregate amount of all such
Investments (including Investments in the nature of sales and
transfers of assets (including, pursuant to a transaction permitted
under subsection 9.5(b)) for less than fair market value) after the
Original Closing Date in Foreign Subsidiaries shall not exceed
$25,000,000, PROVIDED, FURTHER, that the Borrower may contribute the
assets owned by the Borrower and located in Belgium as of the Original
Closing Date to a Foreign Subsidiary and such contribution shall not
be deemed to constitute an Investment for purposes of the Dollar
limitation contained in the immediately preceding proviso;
(e) securities held by the Borrower or any of its Subsidiaries
prior to the Original Closing Date and listed on SCHEDULE 9.9(e);
(f) advances by the Borrower to Holdings, in lieu of the payment
of cash dividends, to enable Holdings to make the payments
contemplated by subsection 9.7 (other than subsection 9.7(e)),
PROVIDED that, if such advances are made with respect to the payments
contemplated by subsection 9.7(a), 9.7(b) or 9.7(d), such advances are
used to make such payments within fifteen Business Days after such
advances are made;
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(g) loans or advances made by the Borrower or any Subsidiary to
any Subsidiary or made by any Subsidiary to the Borrower or any
Subsidiary;
(h) any Investments consisting of (i) any contract pursuant to
which a Loan Party obtains the right to cut, harvest or otherwise
acquire timber on property owned by any other Person, whether or not
such Loan Party's obligations under such contract are evidenced by a
note or other instrument or (ii) loans or advances to customers of a
Loan Party, including leases of personal property of such Loan Party
to such customers, not exceeding $10,000,000 in the aggregate at any
time outstanding; PROVIDED that the contracts, loans and advances
pursuant to this subsection 9.9(h) are made in the ordinary course of
business;
(i) guarantees of a Person or Persons other than a Loan Party
consisting of tax-exempt industrial development or pollution control
revenue bonds (either through Financing Lease Obligations or
installment purchase obligations in respect of facilities to be
acquired by a Loan Party and to be financed by such bonds, and
including a direct guarantee of such bonds) giving rise to
Indebtedness incurred to finance the acquisition, construction or
improvement of fixed or capital assets pursuant to subsection 9.2(c);
(j) promissory notes issued to the Borrower or any of its
Subsidiaries by the purchasers of assets sold in accordance with
subsection 9.6(a), 9.6(b) or 9.6(c), PROVIDED that (i) the principal
amount of all such promissory notes in connection with any sale of
assets shall not exceed 15% of the total sales price for such assets
and (ii) the aggregate principal amount of all such promissory notes
at any time outstanding shall not exceed $3,000,000;
(k) acquisitions of Timberland Properties in the ordinary course
of business consistent with past practice; and
(l) other Investments not to exceed $15,000,000 at any time
outstanding, PROVIDED that the Loan Parties comply with the
requirements of subsection 8.10 with respect to any property or
Capital Stock acquired in any such acquisition.
9.10 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS AND OPTIONAL TERMINATION OF ANY PERMITTED RECEIVABLES FINANCING. (a)
Make any optional payment or prepayment on or redemption, defeasance or purchase
of any Senior Subordinated Notes, Subordinated Bridge Notes, Subordinated
Rollover Notes or other Indebtedness permitted under subsection 9.2(f), except
that the Borrower shall, if Subordinated Bridge Notes are outstanding, take such
action as may be required of it to convert such Subordinated Bridge Notes to
Subordinated Rollover Notes in accordance with the terms thereof,(b) amend,
modify or change, or consent or agree to any amendment, modification or change
to any of the terms of the Senior Subordinated Note Indenture or any other
agreement or indenture governing the terms and conditions of any other
Indebtedness permitted under subsection 9.2(f) (other than by any amendment,
modification change, supplement or waiver which (i) would extend the maturity or
reduce the amount of any payment of principal thereof or would reduce the rate
or extend the date for payment of interest thereon or (ii) does not in any way
adversely affect the interests of the Agent or the Lenders hereunder or under
the other Loan Documents or (iii) is of a technical or clarifying nature),(c)
amend, modify or change any of the terms of the Series A Preferred Stock or the
Series B Preferred Stock (other than by any amendment, modification or change
which (i) would extend the maturity or reduce the dividends payable in respect
thereof or would reduce the rate or extend the date for payment of dividend
thereon or (ii) does not in any way adversely affect the interests of the Agent
or the Lenders hereunder or under the Loan Documents or (iii) is of a technical
or clarifying nature), (d) exchange any shares of Senior Preferred Stock for
Exchange Debentures, (e) amend, modify or change any of the terms of the
Receivables Facility or any other Permitted Receivables Financing (other than by
any amendment, modification, change, supplement or waiver which (i) would extend
the maturity thereof or (ii) does not in any way adversely affect the interests
of the Agent or the Lenders hereunder or under the Loan Documents or (iii) is of
a technical or clarifying nature) or (f) optionally terminate the Receivables
Facility or any other Permitted Receivables Financing (other than in connection
with the establishment of a Permitted Receivables Financing).
9.11 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
65
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, PROVIDED,
that the foregoing restriction shall not prohibit (i) payment of reasonable
fees to directors of Holdings, the Borrower and its Subsidiaries, (ii) the
transactions contemplated by the Acquisition Documents, (iii) any payment or
other transaction pursuant to any tax sharing agreement, (iv) payments
permitted under subsection 9.7 or subsection 9.9, (v) underwriting or similar
agreements with DLJMB, UBSCC or any of their respective Affiliates on
customary terms, (vi) the payment of an administrative fee to Holdings in an
amount not to exceed $1,000,000 in any calendar year to pay costs and
expenses incurred by it in the ordinary course of business, (vii) the payment
of an advisory fee to Sappi and/or its Affiliates in an amount not to exceed
$1,000,000 in any calendar year, (viii) the Indebtedness permitted pursuant
to subsection 9.2(b) or 9.2(n), (ix) any employment agreement entered into by
the Borrower or any of its Subsidiaries in the ordinary course of business,
(x) any issuance of securities in connection with employment arrangements,
stock options and stock ownership plans of the Borrower entered into in the
ordinary course of business, (xi) transactions between the Borrower and its
Subsidiaries and (xii) the transactions contemplated by the agreements listed
on SCHEDULE 9.11(xii).
9.12 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or such 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 (a "SALE/LEASEBACK
TRANSACTION"), except for Sale/Leaseback Transactions (a) with respect to
Timberland Property and (b) subsequent to the Original Closing Date the
aggregate sales price of which, together with the aggregate principal amount of
Indebtedness incurred under subsection 9.2(c), does not exceed $100,000,000 at
any time outstanding.
9.13 LIMITATION ON CHANGES IN FISCAL YEAR. Other than a change to
permit the Borrower to align its fiscal year with that of Sappi, change the
fiscal year of the Borrower.
9.14 LIMITATION ON CERTAIN CLAUSES. Enter into with any Person any
agreement, other than (a) this Agreement, (b) any industrial revenue or
development financings, purchase money mortgages or Financing Leases permitted
by this Agreement (in which cases, any prohibition or limitation shall only be
effective against the assets financed thereby or securing any such financing,
mortgage or Lease) or other Liens permitted by subsection 9.3 (in which case any
prohibition or limitations may only be effective against the assets subject to
such Liens) or (c) the Senior Subordinated Note Indenture, which prohibits or
limits the ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter acquired or which prohibits or limits loans or
dividends by Subsidiaries to the Borrower.
9.15 LIMITATION ON LINES OF BUSINESS. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or which
are reasonably related thereto.
SECTION 9A. NEGATIVE COVENANTS OF HOLDINGS
Holdings agrees that, so long as the Commitments remain in effect or
any amount is owing to any Lender or the Agent hereunder or under any other Loan
Document or any Letter of Credit remains outstanding, Holdings shall not, unless
the Required Lenders shall otherwise agree in writing:
9A.1 LIMITATION ON HOLDINGS' ACTIVITIES. Incur any Indebtedness
(other than as contemplated by subsection 9.9(f)) or create any Guarantee
Obligations, or make any investments, loans or advances to any Person, or
purchase any material assets, or conduct, transact or otherwise engage, or
commit to transact, conduct or otherwise engage, in any business or operations
other than (i) transactions contemplated in connection with the consummation of
the Stock Purchase and the Merger, (ii) the ownership of the Capital Stock of
the Borrower, and the exercise of rights and performance of obligations in
connection therewith, (iii) the entry into, and exercise of rights and
performance of obligations in respect of, (A) this Agreement and the Holdings
Stock Pledge Agreement, (B) contracts and agreements with or for the benefit of
officers, directors and employees of Holdings or any Subsidiary thereof relating
to their employment or directorships, (C) insurance policies and related
contracts and agreements and (D) equity subscription agreements, registration
rights agreements, warrant agreements, voting and other stockholder agreements,
engagement letters, underwriting agreements
66
and other agreements in respect of its equity securities or any offering,
issuance or sale thereof, (iv) the offering, issuance and sale of its equity
securities to the extent such offering, issuance or sale does not constitute
a Default or Event of Default under Section 11(k), (v) the offering, issuance
and sale of the Holdings Preferred Stock and the Warrants, (vi) the filing of
registration statements, and compliance with applicable reporting and other
obligations, under and compliance with its federal, state or other securities
laws, (vii) the performance of obligations under and compliance with its
certificate of incorporation and by-laws, or any applicable law, ordinance,
regulation, rule, order, judgment, decree or permit, including, without
limitation, as a result of or in connection with the activities of its
Subsidiaries, (viii) the performance of contractual obligations in existence
on the date hereof or otherwise permitted hereunder, (ix) the incurrence and
payment of its business expenses and any taxes for which it may be liable and
(x) other activities reasonably incidental or related to the foregoing.
9A.2 LIMITATION ON REDEMPTION OF HOLDINGS PREFERRED STOCK. Redeem
with more than 30% of the Net Proceeds of an initial or subsequent public
offering of Common Stock by Holdings the Holdings Preferred Stock (together with
any accreted liquidation value payable in respect thereof).
9A.3 RESTRICTED PAYMENTS. Use any amount received by it pursuant to
subsection 9.7 from the Borrower or any of its Subsidiaries for any purpose
other than as set forth in such subsection.
9A.4 NET PROCEEDS. Fail to contribute the Net Proceeds of any
issuance of Capital Stock securities by Holdings subsequent to the Original
Closing Date to the Borrower within five Business Days of the receipt of such
Net Proceeds, PROVIDED that Holdings may retain an amount equal to 30% of such
Net Proceeds to redeem, within one hundred twenty days after receipt of such Net
Proceeds, Holdings Preferred Stock (together with any accreted liquidation value
payable in respect thereof).
9A.5 DIVIDENDS. Except as contemplated by subsection 9.7(c) or
9.7(d), declare or pay any dividend (other than dividends payable solely in
Common Stock, Holdings Preferred Stock or other Capital Stock of Holdings) on,
or, except as set forth in subsection 9A.4, 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 Capital Stock of
Holdings, 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
Holdings or any of its Subsidiaries.
SECTION 10. GUARANTEE
10.1 GUARANTEE. (a) To induce the Agent and the Lenders to execute
and deliver this Agreement and to make the Extensions of Credit provided for
herein to the Borrower, Holdings hereby unconditionally and irrevocably
guarantees to the Agent and the Lenders and their respective successors,
permitted transferees and permitted assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations. Holdings further agrees to pay
any and all reasonable expenses (including, without limitation, all reasonable
fees and disbursements of counsel) which may be paid or incurred by the Agent or
any Lender in enforcing, or obtaining advice of counsel in respect of, any
rights with respect to, or collecting, any or all of the Obligations and/or
enforcing any rights with respect to, or collecting against, Holdings under this
Section 10. This Guarantee shall remain in full force and effect until the
Obligations are paid in full and the Commitments are terminated, notwithstanding
that from time to time prior thereto the Borrower may be free from any
Obligations.
(b) No payment or payments made by the Borrower or any other Person or
received or collected by the Agent or any Lender from the Borrower or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application, at any time or from time to time, in reduction of or in payment of
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of Holdings under this Section 10 which shall, notwithstanding any
such payment or payments, remain in full force and effect until the Obligations
are paid in full and the Commitments are terminated. Holdings agrees that
whenever, at any time, or from time to time, it shall make any payment to the
Agent or any Lender on account of its liability under this Section 10, it will
notify the Agent and such Lender in writing that such payment is made under this
Section 10 for such purpose.
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10.2 NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY.
Notwithstanding anything to the contrary in this Section 10, Holdings shall not
be entitled to be subrogated to any of the rights of the Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by any Lender for the payment of the
Obligations, nor shall Holdings seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by Holdings hereunder, until all amounts owing to the Agent and the Lenders
by the Borrower on account of the Obligations are paid in full, the Commitments
are terminated and no Letter of Credit remains outstanding. If any amount shall
be paid to Holdings on account of such subrogation rights at any time when all
of the Obligations shall not have been paid in full, the Commitments shall not
have been terminated or a Letter of Credit remains outstanding, such amount
shall be held by Holdings in trust for the Agent and the Lenders, segregated
from other funds of Holdings, and shall, forthwith upon receipt by Holdings, be
turned over to the Agent in the exact form received by Holdings (duly indorsed
by Holdings to the Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Agent may determine. The
provisions of this paragraph shall survive the termination of the guarantee
contained in this Section 10 and the payment in full of the Obligations, the
termination of the Commitments and the cancellation, revocation or termination
of all outstanding Letters of Credit.
10.3 AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF
RIGHTS. Holdings shall remain obligated hereunder notwithstanding that, without
any reservation of rights against Holdings, and without notice to or further
assent by Holdings, any demand for payment of any of the Obligations made by the
Agent or any Lender may be rescinded by the Agent or such Lender, and any of the
Obligations continued, and the Obligations, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the Agent or any Lender, and this Agreement, the
other Loan Documents, any Interest Rate Protection Agreement entered into by the
Borrower with any Lender or any Affiliate of any Lender and any other documents
executed and delivered in connection herewith or therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Agent (or the
Required Lenders, as the case may be) or such Lender or Affiliate may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Agent or any Lender for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. Neither
the Agent nor any Lender or its Affiliates shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Obligations or for the guarantee contained in this Section 10 or any property
subject thereto. When making any demand hereunder against Holdings, the Agent
or any Lender may, but shall be under no obligation to, make a similar demand on
the Borrower or any other guarantor, and any failure by the Agent or any Lender
to make any such demand or to collect any payments from the Borrower or any such
other guarantor or any release of the Borrower or such other guarantor shall not
relieve Holdings of its obligations or liabilities under this Section 10, and
shall not impair or affect the rights and remedies, express or implied, or as a
matter of law, of the Agent or any Lender against Holdings. For the purposes
hereof "demand" shall include the commencement and continuance of any legal
proceedings.
10.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Holdings waives, to the
fullest extent permitted by applicable law, any and all notice of the creation,
renewal, extension or accrual of any of the Obligations and notice of or proof
of reliance by the Agent or any Lender upon the guarantee contained in this
Section 10 or acceptance of the guarantee contained in this Section 10; the
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon the guarantee contained in this Section 10; and all dealings between the
Borrower or Holdings, on the one hand, and the Agent and the Lenders, on the
other, shall likewise be conclusively presumed to have been had or consummated
in reliance upon the guarantee contained in this Section 10. Holdings waives,
to the fullest extent permitted by applicable law, diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or Holdings with respect to the Obligations. This Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity, regularity or enforceability of this
Agreement, any Note, any other Loan Document or any Interest Rate Protection
Agreement entered into by the Borrower with any Lender or any Affiliate of any
Lender, any of the Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Agent or any Lender, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) which may at any time be
available to or be asserted by the Borrower against the Agent or any Lender or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or Holdings) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Obligations,
or of Holdings under the guarantee contained in this Section 10, in bankruptcy
or in any other instance. When pursuing its
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rights and remedies hereunder against Holdings, the Agent and any Lender may,
but shall be under no obligation to, pursue such rights and remedies as it
may have against the Borrower or any other Person or against any collateral
security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by the Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or
to exercise any such right of offset, or any release of the Borrower or any
such other Person or of any such collateral security, guarantee or right of
offset, shall not relieve Holdings of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Agent or any Lender against Holdings.
The guarantee contained in this Section 10 shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon
Holdings and its successors, and shall inure to the benefit of the Agent and
the Lenders, and their respective successors, permitted transferees and
permitted assigns, until all the Obligations and the obligations of Holdings
under this Guarantee shall have been satisfied by payment in full and the
Commitments shall be terminated, notwithstanding that from time to time
during the term of this Agreement the Borrower may be free from any
Obligations.
10.5 REINSTATEMENT. The guarantee contained in this Section 10 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Obligations is rescinded or must
otherwise be restored or returned by the Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any
substantial part of its property, or otherwise, all as though such payments had
not been made.
10.6 PAYMENTS. Holdings hereby agrees that the Obligations will be
paid to the Agent without set-off or counterclaim in Dollars at the office of
the Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 11. 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 or any
Reimbursement Obligation 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 five Business Days 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 subsection 8.12,
Section 9 or Section 9A (other than subsection 9A.3), Section 6 of each of
the Mortgages, Section 36(a) or 36(d) of each of the Leasehold Mortgages,
Section 5(b) of each of the Stock Pledge Agreements or Section 5(l) of each
of the Security Agreements; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days after the earlier of (i) the date on
which a Responsible Officer of the Borrower first learns of such default or
(ii) the date on which written notice thereof shall have been given to the
Borrower by the Agent or any Lender; or
(e) The Borrower or any other Loan Party shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation in respect of
Indebtedness or in any payments required under any Rate Protection
Agreement, beyond the period of grace (not to exceed 60 days), if any,
provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created or under such Rate Protection Agreement,
as the case may be, if the aggregate amount
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of the Indebtedness and/or Guarantee Obligations and/or payments under
Rate Protection Agreements in respect of which such default or defaults
shall have occurred is at least $10,000,000; or (ii) default in the
observance or performance of any other agreement or condition to be
observed or performed by such Loan Party relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or
the full amount of such Guarantee Obligation to become payable, PROVIDED,
HOWEVER, that (A) a default, event or condition described in this Section
11(e)(ii) shall not constitute an Event of Default under this Section 11(e)
unless, at the time of such default, event or condition, defaults, events
or conditions of the type described in this Section 11(e)(ii) shall have
occurred and are continuing with respect to Indebtedness and Guarantee
Obligations in respect to Indebtedness the aggregate amount of which
exceeds $10,000,000 and (B) if any Assumed Financing shall become due and
payable prior to its stated maturity as a result of the occurrence of any
of the events described in Section 11(f) with respect to ▇▇▇▇▇, such event
shall not constitute an Event of Default under this Section 11(e), PROVIDED
that (x) the amount then due and payable in respect of such Assumed
Financing is paid within fifteen Business Days of such event and (y) after
giving effect to such payment, the Borrower's and its Subsidiaries'
liability with respect to such Supported Obligation reduces by an amount at
least equal to the amount of such payment; or
(f)(i) The Borrower or any other Loan Party shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any other Loan Party shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any other Loan Party any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Borrower
or any other Loan Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv)the Borrower or any other Loan Party shall take
any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any other Loan Party shall generally not, or
shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(g)(i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan,(ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity,(iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA,(iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA,(v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan, or (vi)
any other similar event or condition shall occur or exist with respect to a
Plan that could result in a liability (other than in the ordinary course),
and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect; or
70
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving individually a liability of
$10,000,000 (not paid or fully covered by insurance or indemnity of ▇▇▇▇▇
under the Stock Purchase Agreement) or in the aggregate a liability (not
paid or fully covered by insurance or indemnity of ▇▇▇▇▇ under the Stock
Purchase Agreement) of $15,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or
(i)(i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or the Borrower or any other Loan Party which
is a party to any of the Security Documents shall so assert in writing or
(ii) any Lien created by any of the Security Documents shall, by reason of
any breach by any Loan Party thereto of any of its covenants or other
obligations contained in such Security Documents, cease to be enforceable
and of the same effect and priority, subject to Section 11(d), purported to
be created thereby (other than Liens with respect to property not
constituting a material portion of the Collateral); or
(j) Any Guarantee shall cease, for any reason, to be in full force and
effect or any Guarantor shall so assert; or
(k) (i) Sappi and its wholly owned Subsidiaries shall cease to
beneficially own at least 51% (or 40% after an initial public offering or
subsequent public offering of Common Stock) of the Capital Stock of
Holdings or to have the right to appoint a majority of the Board of
Directors of Holdings, (ii) Holdings shall cease to own all the Capital
Stock of the Borrower (other than the Senior Preferred Stock) or (iii) a
Change of Control (as defined in the Subordinated Note Indenture) shall
occur under the Senior Subordinated Note Indenture;
(l) The subordination provisions contained in Article 10 of the Senior
Subordinated Note Indenture cease to be enforceable in accordance with
their terms; or
(m) Any "Termination Event" under the applicable Receivables Sales
Agreement or any similar such event or occurrence as defined in the
documentation relating to any Permitted Receivables Financing, or any event
or circumstance entitling the Persons purchasing, or financing the purchase
of, Receivables under the Receivables Facility or any other Permitted
Receivables Financing to stop so purchasing or financing, other than by
reason of the occurrence of the stated expiry date of the Receivables
Facility or such Permitted Receivables Financing; PROVIDED that any notices
or cure periods that are conditions to the rights of such Persons to stop
purchasing, or financing the purchase of, such Receivables have been given
or have expired, as the case may be.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i), (ii) or (iii) of paragraph (f) of this Section with respect to
the Borrower, automatically the Commitments (including the Swing Line
Commitment) shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement (including,
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the consent of the Required Lenders, the Agent
may, or upon the request of the Required Lenders, the Agent shall, by notice to
the Borrower declare the Commitments (including the Swing Line Commitment) to be
terminated forthwith, whereupon the Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Agent may, or upon the
request of the Required Lenders, the Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts (including, without limitation, all amounts of L/C Obligations, whether
or not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) owing under this Agreement to be
due and payable forthwith, whereupon the same shall immediately become due and
payable. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Borrower shall at such time deposit in
a cash collateral account opened by the Agent an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit. The Borrower
hereby grants to the Agent, for the benefit of the Issuing Banks and the L/C
Participants, a security interest in such cash collateral to secure all
obligations of the Borrower under this Agreement and the other Loan
71
Documents. Amounts held in such cash collateral account shall be applied by
the Agent to the payment of drafts drawn under such Letters of Credit, and
the unused portion thereof after all such Letters of Credit shall have
expired or been fully drawn upon, if any, shall be applied to repay other
Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other Obligations shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrower. The Borrower
shall execute and deliver to the Agent, for the account of the Issuing Banks
and the L/C Participants, such further documents and instruments as the Agent
may request to evidence the creation and perfection of the security interest
in such cash collateral account.
SECTION 12. THE AGENT
12.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not 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 or any other Loan Document or otherwise exist against the Agent.
12.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
12.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
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 this Agreement or any other Loan Document
(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 the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower to perform its obligations hereunder or
thereunder. The Agent shall not 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, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
12.4 RELIANCE BY AGENT. The 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 Agent. The 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 Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents 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.
12.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower or
72
Holdings 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 Agent receives such a notice, the Agent shall give notice thereof to
the Lenders. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
PROVIDED that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
12.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents
to the Agent that it has, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower 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 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 and the other Loan Documents, 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
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
12.7 INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever 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 Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; PROVIDED that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
12.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though the Agent were not the 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 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
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
12.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 10 days'
notice to the Lenders and the Borrower. If the Agent shall resign as Agent
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 be subject to the approval of the Borrower (which approval
shall not be unreasonably withheld), whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent, and the term "Agent"
shall mean such successor agent effective upon such appointment and approval,
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Loans. After any
retiring Agent's resignation as Agent, the provisions of this Section 12 shall
inure to its
73
benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.
12.10 ISSUING BANKS; SWING LINE LENDER. The provisions of this
Section 12 (other than subsection 12.9) shall apply to the Issuing Banks and the
Swing Line Lender MUTATIS MUTANDIS to the same extent as such provisions apply
to the Agent. At any time after the occurrence and during the continuance of a
Default or Event of Default, the LOC Issuing Bank will not issue any notice of
non-renewal without the consent of the Required LOC Participants.
SECTION 13. MISCELLANEOUS
13.1 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 subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Agent may, from time to time,(a) enter into with the Borrower and each Loan
Party which is a party to the relevant Loan Documents written amendments,
supplements or modifications hereto and to the other Loan Documents for the
purpose of adding any provisions to this Agreement or the other Loan Documents
or changing in any manner the rights of the Lenders or of the Borrower hereunder
or thereunder,(b) release collateral (except that no consent of any Lender or
the Required Lenders is required to permit the release of a Lien in connection
with any Asset Sale permitted under Section 9 of this Agreement or any other
transaction permitted under such Section) or (c) waive, on such terms and
conditions as the Required Lenders or the Agent, as the case may be, may specify
in such instrument, any of the requirements of this Agreement or the other Loan
Documents 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
made by any Lender or of any installment thereof, or reduce the stated rate of
any interest thereon or reduce the fee payable hereunder to any Lender or extend
the scheduled date of any payment thereof or increase the aggregate amount or
extend the expiration date of any Lender's Commitments, in each case without the
consent of such Lender directly affected thereby,(ii) amend, modify or waive any
provision of this subsection or reduce 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 and the other
Loan Documents or release all or substantially all of the Collateral, in each
case without the written consent of all the Lenders,(iii) amend, modify or waive
subsection 5.1(d) without the written consent of the Required Tranche A Lenders
or reduce the percentage in the definition of Required Tranche A Lenders without
the consent of all the Tranche A Lenders,(iv) amend, modify or waive subsection
5.1(d) or 5.1(e) without the written consent of the Required Tranche B Lenders
or reduce the percentage in the definition of Required Tranche B Lenders without
the consent of all the Tranche B Lenders,(v) amend, modify or waive any
provision of Section 3 without the prior written consent of the Required
Revolving Credit Lenders and the Revolving Credit Issuing Bank or reduce the
percentage in the definition of Required Revolving Credit Lenders or amend,
modify or waive the penultimate sentence of subsection 5.7(c) without the
consent of all the Revolving Credit Lenders and the Revolving Credit Issuing
Bank,(vi) amend, modify or waive any provision of Section 4 without the prior
written consent of the Required LOC Participants and the LOC Issuing Bank or
reduce the percentage in the definition of Required LOC Participants or amend,
modify or waive the last sentence of subsection 5.7(c) without the consent of
all the LOC Participants and the LOC Issuing Bank, or (vii) amend, modify or
waive any provision of Section 12 without the written consent of the then Agent.
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 Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the 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. Notwithstanding
anything to the contrary in this subsection 13.1, no consent of any Lender or of
the Required Lenders shall be required to permit the release of a Lien in
connection with any Asset Sale or other transaction permitted by Section 9 of
this Agreement; the Agent shall execute such release and termination as may be
required by this Agreement.
13.2 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 when delivered, or three days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the Borrower and the
Agent, and as set forth
74
in SCHEDULE 1.1(a) in the case of the other parties hereto, or to such other
address as may be hereafter notified by the respective parties hereto:
Holdings: SDW Holdings Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Borrower: S.D. ▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Sappi Limited
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: 011-27-11-339-8297
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: Chemical Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Chemical Bank Agent Bank Services
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 3.2, 3.4, 3.7, 3.11, 4.2, 5.1, 5.2 or 5.7 shall not
be effective until received.
13.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the 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.
75
13.4 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.
13.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Agent for all its reasonable 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 and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent,(b) to pay or reimburse each Lender and
the Agent 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 prepared in connection herewith or
therewith, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel in lieu of the
fees and expenses of outside counsel) to each Lender and of counsel to the
Agent,(c) to pay, indemnify, and hold each Lender and the 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 similar
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, 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, and (d) to pay, indemnify, and hold each Lender and
the 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, the Stock Purchase Agreement, the Stock Purchase, the
Merger or the use of the proceeds of the Loans in connection with the Stock
Purchase, 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, any
of its Subsidiaries or any of the Properties (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), PROVIDED, that the Borrower
shall have no obligation hereunder to the Agent or any Lender with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Agent or any such Lender or (ii) legal proceedings commenced
against the Agent or any such Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such. The agreements in this subsection
shall survive repayment of the Loans and all other amounts payable hereunder.
13.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower,
Holdings, the Lenders, the Agent and their respective successors and assigns,
except that neither the Borrower nor Holdings may assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
each Lender and any assignment or transfer by any Lender of its rights or
obligations under this Agreement or any Loan Document must be made in compliance
with this subsection 13.6 (and any purported assignment in violation of this
subsection shall be null and void).
(b) Any Lender may, in the ordinary course of its lending or
investment business and in accordance with applicable law, at any time sell to
one or more financial institutions or other entities ("LOAN 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 Loan Participant, (i) such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible for the performance thereof, (iii)
such Lender shall remain the holder of any such Loan for all purposes under this
Agreement and the other Loan Documents, (iv) the Borrower and the 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, and (v) no Loan Participant under any participation shall have any
right to approve any amendment or waiver of any provision of any Loan Document,
or any consent to any departure by any Loan Party therefrom, except with respect
to the matters described in clauses (i) and (ii) of the proviso to the second
sentence of subsection 13.1. The Borrower agrees that, while an Event of
Default shall have occurred and be continuing 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 Loan
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
76
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 subsection 13.7(a) as fully as if
it were a Lender hereunder. The Borrower also agrees that each Loan
Participant shall be entitled to the benefits of subsections 5.9, 5.10 and
5.11 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; PROVIDED that, in the
case of subsection 5.10 such Loan Participant shall have complied with the
requirements of said subsection and PROVIDED, FURTHER, that no Loan
Participant shall be entitled to receive any greater amount pursuant to any
such subsection 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 Loan Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its lending or
investment business and in accordance with applicable law, at any time and from
time to time assign, with the consent of the Borrower and the Agent (which in
each case shall not be unreasonably withheld), to any other Lender or any
affiliate thereof or to an additional bank or financial institution (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 T, executed by such Assignee and such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Borrower and the Agent) and delivered to the Agent
for its acceptance and recording in the Register, PROVIDED that, (i) in the case
of any such assignment to an Assignee that is an affiliate of the assigning
Lender, the consent of the Borrower shall only be required if, at the time of
such assignment, such Assignee would be entitled to require the Borrower to pay,
or the Borrower would be required to pay, greater amounts under subsection 5.9
or 5.10 than if no such assignment had occurred and (ii) in the case of any such
assignment to an additional bank or financial institution, if such assignment is
of less than all of the rights and obligations of the assigning Lender, the sum
of the aggregate principal amount of the Loans, the aggregate amount of the L/C
Obligations and the aggregate amount of the unused Commitments remaining with
the assigning Lender are not less than $5,000,000 (or such lesser amount as may
be agreed to by the Borrower and the Agent). 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
subsection, 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 when any of the events described in Section 11(f) shall have occurred and
be continuing.
(d) The Agent, on behalf of the Borrower, shall maintain at the
address of the Agent referred to in subsection 13.2 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 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 Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of a Loan or other obligation hereunder
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 (whether or not evidenced by a Note) shall be
effective only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(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 or an affiliate thereof, by the Borrower and the Agent) together
with, except in the case of an assignment pursuant to subsection 5.13, payment
to the Agent of a registration and processing fee of $3,500, the 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 Loan
Participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee,
subject to the provisions of subsection 13.15, any and all financial information
in such Lender's possession concerning the Borrower and its Affiliates which has
been delivered to such
77
Lender by or on 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
Affiliates prior to becoming a party to this Agreement, PROVIDED, that unless
the Agent and the Borrower shall otherwise agree, prior to any such
disclosure such Transferee shall have executed a Confidentiality Letter in
the form of EXHIBIT U.
(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, PROVIDED that no such assignment, whether to
a Federal Reserve Bank or other entity, shall release a Lender from any of its
obligations hereunder or substitute any such Federal Reserve Bank or other
entity for such Lender as a party hereto or permit an absolute assignment to
occur other than in accordance with such provisions of this subsection.
13.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Loans or the
Reimbursement Obligations owing to it, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 11(f), 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 Loans or
the Reimbursement Obligations owing to it, 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 Loan or the Reimbursement
Obligations owing to it, 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; 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.
(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 or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify
the Borrower and the 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.
13.8 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
Agent.
13.9 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.
13.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
13.11 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 WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
78
13.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower and Holdings
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
judgement in respect thereof, to the non-exclusive general
jurisdiction of the 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 the Borrower or Holdings at its address set forth in
subsection 13.2 or at such other address of which the 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.
13.13 ACKNOWLEDGEMENTS. 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 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 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 the Borrower and the
Lenders.
13.14 WAIVERS OF JURY TRIAL. THE BORROWER, HOLDINGS, THE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
13.15 CONFIDENTIALITY. Each Lender agrees to keep confidential (and
to cause its employees, officers, directors, agents, attorneys, accountants and
other professional advisors to keep confidential) all non-public information (a)
provided to it by the Borrower or any Loan Party pursuant to or in connection
with this Agreement or any other Loan Documents or (b) obtained by such Lender
based on a review of books and records of the Borrower or any other Loan Party;
PROVIDED that nothing herein shall prevent any Lender from disclosing any such
information (i)to the Agent or any other Lender,(ii) to any Transferee or
prospective Transferee which agrees to comply with the provisions of this
subsection,(iii) on a need-to-know basis to its employees, directors, agents,
attorneys, accountants and other professional advisors (each of which shall be
instructed to hold the same in confidence),(iv) upon the request or demand of
any Governmental Authority (including, without limitation, the National
Association of Insurance Commissioners) 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
79
of this Agreement or (vii) in connection with the exercise of any remedy
hereunder or under any of the other Loan Documents.
13.16 RELEASE OF TIMBERLANDS. If the aggregate outstanding principal
amount of the Term Loans is less than or equal to $250,000,000 and so long as
the Consolidated Interest Expense Ratio of the Borrower for the period of four
consecutive quarters ended on the last day of the immediately preceding fiscal
quarter is at least 3.00 to 1.00, the Agent shall, at the request of the
Borrower, release the security interest in the Timberlands granted pursuant to
the Security Documents, PROVIDED that no Default or Event of Default has then
occurred and is continuing or would result therefrom.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
SDW HOLDINGS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
S.D. ▇▇▇▇▇▇ COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President and CFO
CHEMICAL BANK, as Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Managing Director
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Duly Authorized Signatory
BANK OF MONTREAL
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Director
BARCLAYS BANK PLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Associate Director
BHF-BANK Aktiengesellschaft
By: /s/ ▇▇▇▇▇ ▇▇▇▇
---------------------------------
Title: Assistant Vice President
CITICORP U.S.A. INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Attorney in Fact
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Assistant Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Title: Vice President
MIDLAND BANK PLC, NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Director
SOCIETE GENERALE
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇ ▇. JUDGE
---------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇
---------------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
---------------------------------
Title: Director
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ ▇▇▇▇▇ ▇▇▇
---------------------------------
Title: Senior Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
---------------------------------
Title: Senior Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING RATE FUND,
INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.,
as successor in interest to
SENIOR HIGH INCOME PORTFOLIO II, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.,
as successor in interest to
SENIOR STRATEGIC INCOME FUND, INC.
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ PRIME RATE PORTFOLIO
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Asset Management, L.P.,
as Investment Advisor
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Authorized Signatory
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Sr. Vice Pres. - Portfolio Mgr.
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
as Investment Advisor
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
THE NORTHWESTERN MUTUAL LIFE INSURANCE
COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
ORIX USA CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Deputy President & COO
ARAB BANKING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
BANK OF SCOTLAND
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
THE NIPPON CREDIT BANK, LTD.
By: /s/ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President & Manager
WACHOVIA BANK OF GEORGIA, N.A.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
Title: Vice President
CHRISTIANA BANK OG KREDITKASSE
By: /s/ ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: First Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. PANENESE
---------------------------------
Title: Vice President
D G BANK DEUTSCHE GENOSSENSCHAFTSBANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
THE FIRST NATIONAL BANK OF MARYLAND
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
KREDIETBANK N.V.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
THE YASUDA TRUST AND BANKING COMPANY
LIMITED
By: /s/ R.M. LAUDENSCHLOGER
---------------------------------
Title: Senior Vice President
UNITED STATES NATIONAL BANK OF OREGON
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
MEESPIERSON N.V.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ VAN DEN ▇▇▇▇▇
---------------------------------
Title: Vice President
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
NORDDEUTSCHE LANDESBANK GIROZENTRALE
NEW YORK BRANCH AND/OR CAYMAN ISLANDS
BRANCH
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
COBANK, ACB
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------------------------
Title: Vice President
RESTRUCTURED OBLIGATIONS BACKED BY SENIOR
ASSETS B.V.
By its Portfolio Adviser, as
attorney-in-fact,
CHANCELLOR SENIOR SECURED MANAGEMENT,INC.
By:
---------------------------------
Title:
BANK AUSTRIA AKTIENGESELLSCHAFT
By: /s/ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
BANK OF TOKYO-MISTUBISHI TRUST COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Vice President
IMPERIAL BANK, CALIFORNIA BANKING
CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President
MELLON BANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Title: Vice President
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇
---------------------------------
Title: Senior Vice President
THE SANWA BANK, LIMITED
By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Senior Vice President
NEW YORK LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Investment Vice President
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Investment Vice President
CHL HIGH YIELD LOAN PORTFOLIO (a unit
of Chemical Bank)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
▇▇▇▇▇▇ BANK LTD.
By: /s/ ▇. ▇▇▇▇▇▇
---------------------------------
Title: AVP
By: /s/ ▇. ▇▇▇▇
---------------------------------
Title: VP
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Managing Director
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
FALCON 94, LIMITED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Director
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By: /s/ ▇▇▇▇▇▇▇ DELEIDER
---------------------------------
Title: Assistant Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Vice President - Group Manager
AERIES FINANCE LTD.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Title: Director
CERES FINANCE LTD.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Director
STRATA FUNDING LTD.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Director
EXHIBIT A TO
CREDIT AND GUARANTEE AGREEMENT
MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
from
S.D. ▇▇▇▇▇▇ Company, Mortgagor
(as successor by merger to SDW Acquisition Corporation)
to
CHEMICAL BANK,
as Agent, Mortgagee
DATED AS OF DECEMBER __, 1994
After recording, please return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
a partnership which includes
professional corporations
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
EXHIBIT A TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF BORROWER LEASEHOLD MORTGAGE]
[NOTE: THIS FORM IS NOT STATE-LAW SPECIFIC. SPECIFIC PROVISIONS,
SATISFACTORY TO AGENT'S COUNSEL, THAT ARE NECESSARY OR DESIRABLE UNDER THE LAW
OR REAL ESTATE PRACTICE OF ANY PARTICULAR STATE IN WHICH THIS FORM IS USED WILL
BE ADDED.]
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
(collectively, the "Mortgage"), dated as of __________ is made by S.D. ▇▇▇▇▇▇
Company (as successor by merger to SDW Acquisition Corporation), a Pennsylvania
corporation ("MORTGAGOR"), whose mailing address is _________________ to
CHEMICAL BANK, whose mailing address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ as agent (the "AGENT"; in such capacity, together with its successors and
assigns, "MORTGAGEE") for the several banks and other financial institutions
(the "LENDERS") from time to time parties to that certain Credit and Guarantee
Agreement dated as of December ____, 1994 (as the same may have been and may be
further amended, supplemented, restated, replaced or otherwise modified from
time to time, the "CREDIT AGREEMENT") among SDW Holdings Corporation, a Delaware
corporation, the Mortgagee, the Mortgagor and the Lenders. References to this
"MORTGAGE" shall mean this instrument and any and all renewals, modifications,
amendments, supplements, extensions, consolidations, substitutions, spreaders
and replacements of this instrument.
BACKGROUND
A. Mortgagor has, on the date hereof, become the owner of (i) the
parcel(s) of real property described on Exhibit A attached hereto (the "Fee
Property") and (ii) the leasehold estate in the parcels of real property
described on Exhibit B attached hereto (the "LEASEHOLD PARCELS") created
pursuant to those certain leases described on Exhibit C attached hereto (the
"MORTGAGED LEASES") (the Fee Property and the Leasehold Parcels, together with
all of the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "IMPROVEMENTS"), being collectively referred to as the
"REAL ESTATE").
B. Pursuant to the Credit Agreement, following the consummation of
the Stock Purchase, SDW Acquisition Corporation, a Pennsylvania corporation
("ACQUISITION CORP.") has, on the date hereof, been merged with and into
Mortgagor, with Mortgagor being the surviving corporation of such Merger and
assuming the obligations of Acquisition Corp. under the Credit Agreement.
C. Pursuant to the Credit Agreement, the Lenders have severally
agreed (i) to make certain Term Loans to the Borrower,
2
portions of which, in the aggregate principal amount of $630,000,000, are
more particularly described in the Credit Agreement as the Tranche A Term
Loans and the Tranche B Term Loans, (ii) to make certain Revolving Credit
Loans and Swing Line Loans, in the aggregate principal amount of
$250,000,000 to the Borrower and (iii) to issue LOC Letters of Credit, in the
aggregate principal amount of $220,000,000, all upon the terms and subject to
the conditions set forth therein. The Tranche A Term Loans and the Tranche B
Term Loans are respectively evidenced by (i) the Credit Agreement, and may,
as provided therein, be evidenced by those certain Tranche A Term Loan Notes
dated as of even date herewith in the aggregate principal amount of
$305,000,000 (as each of the same may be further assigned, amended,
supplemented, modified, extended, restated or replaced from time to time, the
"TRANCHE A TERM NOTES") and (ii) the Credit Agreement, and may, as provided
therein, be evidenced by those certain Tranche B Term Loan Notes dated as of
even date herewith in the aggregate principal amount of $325,000,000 (as
each of the same may be further assigned, amended, supplemented, modified,
extended, restated or replaced from time to time, the "TRANCHE B TERM NOTES";
the Tranche A Term Notes and the Tranche B Term Notes are collectively
referred to as the "TERM NOTES"). The Revolving Credit Loans are evidenced by
the Credit Agreement, and may, as provided therein, be evidenced by those
certain Revolving Credit Notes dated as of even date herewith (as the same
may be further assigned, amended, supplemented, modified, extended, restated
or replaced from time to time, the "REVOLVING CREDIT NOTES"). The Swing Line
Loans are evidenced by the Credit Agreement, and may, as provided therein, be
evidenced by those certain Swing Line Notes dated as of even date herewith
(as the same may be further assigned, amended, supplemented, modified,
extended, restated or replaced from time to time, the "SWING LINE NOTES").
The reimbursement obligations with respect to drawings under LOC Letters of
Credit are evidenced by the Credit Agreement and may, as provided therein, be
evidenced by those certain LOC Notes dated as of even date herewith (as the
same may be further assigned, amended, supplemented, modified, extended,
restated or replaced from time to time, the "LOC NOTES").
D. Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement. References in this Mortgage
to the "DEFAULT RATE" shall mean a rate per annum equal to the ABR plus 2%.
GRANTING CLAUSES
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the Credit
Agreement and as may be evidenced by the Term Notes, the Revolving Credit Notes,
the Swing Line Notes and the LOC Notes and (ii) all interest and fees payable
thereon
3
(the items set forth in clauses (i) and (ii) being referred to collectively
as the "INDEBTEDNESS"); and
(b) the performance of all covenants, agreements, obligations and
liabilities of Mortgagor (the "OBLIGATIONS") under or pursuant to the
provisions of the Term Notes, the Revolving Credit Notes, the Swing Line
Notes, the LOC Notes, this Mortgage, the Credit Agreement and any other
document securing payment of the Indebtedness (the "SECURITY DOCUMENTS")
and any amendments, supplements, extensions, renewals, restatements,
replacements or modifications of any of the foregoing (the Term Notes, the
Revolving Credit Notes, the Swing Line Notes, the LOC Notes, the Credit
Agreement, the Security Documents and all other documents and instruments
from time to time evidencing, securing or guaranteeing the payment of the
Indebtedness or the performance of the Obligations, as any of the same may
be amended, supplemented, extended, renewed, restated, replaced or modified
from time to time, are collectively referred to as the "LOAN DOCUMENTS");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE WITH
MORTGAGE COVENANTS:
(A) the Real Estate;
(B) the leasehold estate created under and by virtue of the Mortgaged
Leases, any interest in any fee, greater or lesser title to the Real Estate
that Mortgagor may own or hereafter acquire (whether acquired pursuant to a
right or option contained in one or more of the Mortgaged Leases or
otherwise) and all credits, deposits, options, privileges and rights of
Mortgagor under the Mortgaged Leases (including all rights of use,
occupancy and enjoyment) and under any amendments, supplements, extensions,
renewals, restatements, replacements and modifications thereof (including,
without limitation, (i) the right to give consents, (ii) the right to
receive moneys payable to Mortgagor, (iii) the right, if any, to renew or
extend one or more of the Mortgaged Leases for a succeeding term or terms,
(iv) the right, if any, to purchase the Real Estate and (v) the right to
terminate or modify one or more of the Mortgaged Leases); all of
Mortgagor's claims and rights to the payment of damages arising under the
Bankruptcy Code (as determined below) from any rejection of one or more of
the Mortgaged Leases by the lessor thereunder or any other party;
(C) to the extent not included in (A) or (B), all right, title and
interest Mortgagor now has or may hereafter acquire in and to the
Improvements or any part thereof (whether owned in fee by Mortgagor or held
pursuant to one or more of the Mortgaged Leases or otherwise) and all the
4
estate, right, title, claim or demand whatsoever of Mortgagor, in
possession or expectancy, in and to the Real Estate or any part thereof;
(D) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, timber, timber rights, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to the
Real Estate, and any reversions, remainders, rents, issues, profits and
revenue thereof and all land lying in the bed of any street, road or
avenue, in front of or adjoining the Real Estate to the center line
thereof;
(E) subject to Section 18(d) hereof, all of the fixtures, chattels,
business machines, machinery, apparatus, equipment, furnishings, fittings
and articles of personal property of every kind and nature whatsoever, and
all appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts and
accessories) currently owned or subsequently acquired by Mortgagor and, in
each case, now or subsequently attached to, or contained in or used or
usable in any way in connection with any operation or letting of the Real
Estate (all of the foregoing in this paragraph (D) being referred to as the
"EQUIPMENT");
(F) subject to Section 18(d) hereof, all right, title and interest of
Mortgagor in and to all substitutes and replacements of, and all additions
and improvements to, the Real Estate and the Equipment, subsequently
acquired by or released to Mortgagor or constructed, assembled or placed by
Mortgagor on the Real Estate, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation, any
and all building materials whether stored at the Real Estate or offsite,
and, in each such case, without any further mortgage, conveyance,
assignment or other act by Mortgagor;
(G) subject to Section 18(d) hereof, all right, title and interest of
Mortgagor in, to and under all leases, subleases, underlettings, concession
agreements, management agreements, licenses and other agreements relating
to the use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and whether
written or oral and all guarantees of any of the foregoing (collectively,
as any of the foregoing may be amended, restated, extended, renewed or
modified from time to time, the "LEASES"), and all rights of Mortgagor in
respect of cash and securities deposited thereunder and the right to
receive and collect the revenues, income, rents,
5
issues and profits thereof, together with all other rents, royalties,
issues, profits, revenue, income and other benefits arising from the use
and enjoyment of the Mortgaged Property (as defined below) (collectively,
the "RENTS");
(H) subject to Section 18(d) hereof, all insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or Equipment
and Mortgagor's interest in and to all unearned premiums thereunder and all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds, subject
to the provisions relating to insurance generally set forth below; and all
awards and other compensation, including the interest payable thereon and
the right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by eminent
domain, condemnation or otherwise, of all or any part of the Real Estate or
any easement or other right therein;
(I) subject to Section 18(d) hereof, all right, title and interest of
Mortgagor in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the ownership,
construction, maintenance, repair, operation, occupancy, sale or financing
of the Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or,
subject to Section 8.10 of the Credit Agreement, any property which is
adjacent or peripheral to the Real Estate, together with the right to
exercise such options and all leases of Equipment (collectively, the
"CONTRACTS"), (ii) all consents, licenses, building permits, certificates
of occupancy and other governmental approvals relating to construction,
completion, occupancy, use or operation of the Real Estate or any part
thereof (collectively, the "PERMITS") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "PLANS");
(J) subject to Section 18(d) hereof, all of Mortgagor's right, title
and interest in any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real Estate
or for the payment of premiums on insurance policies covering the foregoing
property or otherwise on deposit with or held by Mortgagee as provided in
this Mortgage; all capital, operating, reserve or similar accounts held by
or on behalf of Mortgagor and related to the operation of the Mortgaged
Property, whether now existing or hereafter arising and all monies held in
any of the foregoing accounts and any certificates or instruments related
to or evidencing such accounts;
6
(K) subject to Section 18(d) hereof, all accounts resulting from the
sale of timber; and
(L) subject to Section 18(d) hereof, all proceeds, both cash and
noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Mortgagor and described in the foregoing
clauses (A) through (F) are collectively referred to as the "PREMISES", and
those described in the foregoing clauses (A) through (L) are collectively
referred to as the "MORTGAGED PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
TERMS AND CONDITIONS
Mortgagor further represents, warrants, covenants and agrees with
Mortgagee as follows:
1. WARRANTY OF TITLE. (a) Mortgagor warrants that Mortgagor has good
title to the Fee Property in fee simple and good title to the rest of the
Mortgaged Property related to the Fee Property, subject only to the matters
referred to in subsection 9.3 of the Credit Agreement (collectively, the
"PERMITTED ENCUMBRANCES"), and Mortgagor shall warrant, defend and preserve such
title and the lien of the Mortgage thereon against all claims of all persons and
entities. Mortgagor further warrants that it has the right to mortgage the
Mortgaged Property.
(b) Mortgagor warrants (i) that Mortgagor has good title to the
leasehold estate in the Leasehold Parcels pursuant to the Mortgaged Leases and
has a right to mortgage the same, subject only to the matters referred to in
subsection 9.3 of the Credit Agreement (collectively, the "PERMITTED
ENCUMBRANCES"), (ii) that the Real Estate is subject to no leases or liens other
than the Mortgaged Leases and this Mortgage nor to any encumbrances, defects or
other matters, subject only to the matters referred to in subsection 9.3 of the
Credit Agreement (collectively, the "PERMITTED ENCUMBRANCES"), (iii) that
Mortgagor shall warrant and defend the lien thereon granted or intended to be
granted by this Mortgage against all persons and entities, (iv) that the
Mortgaged Leases are in full force and effect and Mortgagor is the holder of the
lessee's or tenant's interest thereunder, (v) that the Mortgaged Leases have not
been amended, supplemented or otherwise modified, except as may be specifically
described in Exhibit C attached to this Mortgage, (vi) that Mortgagor is not in
default under the Mortgaged Leases, has received no notice of default from any
of the lessors
7
thereunder and knows of no material default by any of the lessors thereunder,
and (vii) that the granting of this Mortgage does not violate the terms of the
Mortgaged Leases nor is any consent of any of the lessors under the Mortgaged
Leases required to be obtained in connection with the granting of this Mortgage
unless such consent has been obtained.
2. PAYMENT OF INDEBTEDNESS. Mortgagor shall pay the Indebtedness at
the times and places and in the manner specified in the Credit Agreement and
shall perform all the Obligations.
3. REQUIREMENTS. (a) To the extent required in the Credit
Agreement, Mortgagor shall promptly comply with, or cause to be complied with,
and conform to all present and future laws, statutes, codes, ordinances, orders,
judgments, decrees, rules, regulations and requirements, and irrespective of the
nature of the work to be done, of each of the United States of America, any
State and any municipality, local government or other political subdivision
thereof and any agency, department, bureau, board, commission or other
instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall not by
act or omission permit any building or other improvement on any premises not
subject to the lien of this Mortgage to rely on the Premises or any part thereof
or any interest therein to fulfill any Legal Requirement, and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used.
4. PAYMENT OF TAXES AND OTHER IMPOSITIONS. (a) To the extent
required in the Credit Agreement, promptly prior to the time when same become
delinquent and before any interest or penalties accrue thereon or attach
thereto, Mortgagor shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes
imposed upon or assessed against the Mortgaged Property), all charges for any
easement or agreement maintained for the benefit of any of the Mortgaged
Property, all general and special assessments, levies, permits, inspection and
license
8
fees, all water and sewer rents and charges and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Upon request by Mortgagee, Mortgagor shall deliver to Mortgagee
(i) original or copies of receipted bills and cancelled checks or other
reasonably satisfactory evidence evidencing payment of such Imposition if it is
a real estate tax or other public charge and (ii) evidence acceptable to
Mortgagee showing the payment of any other such Imposition. If by law any
Imposition, at Mortgagor's option, may be paid in installments (whether or not
interest shall accrue on the unpaid balance of such Imposition), Mortgagor may
elect to pay such Imposition in such installments and shall be responsible for
the payment of such installments with interest, if any.
(b) Mortgagor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Mortgage or on any interest
payable thereon for any taxes assessed against the Mortgaged Property or any
part thereof, and shall not claim any deduction from the taxable value of the
Mortgaged Property by reason of this Mortgage.
5. INSURANCE. (a) Mortgagor shall not use or permit the use of the
Mortgaged Property in any manner which would permit any insurer to cancel any
insurance policy, unless replaced prior to or simultaneously with such
cancellation (such that there is no gap in coverage) by another policy
satisfactory to Mortgagee or void coverage required to be maintained by the
Credit Agreement.
(b) In the event of foreclosure of this Mortgage or other transfer of
title to the Mortgaged Property in extinguishment of the Indebtedness, all
right, title and interest of Mortgagor in and to any insurance policies then in
force shall pass to the purchaser or grantee and Mortgagor hereby appoints
Mortgagee its attorney-in-fact, in Mortgagor's name, to assign and transfer all
such policies and proceeds to such purchaser or grantee.
(c) Until an Event of Default shall have occurred and be continuing,
all insurance and eminent domain proceeds shall be payable to Mortgagor, free
and clear of the lien of this Mortgage. All parties having dealings with
Mortgagor in connection with insurance and eminent domain matters shall be
entitled to rely on an affidavit of Mortgagor to the effect that no Event of
Default has occurred and is continuing, absent receipt of written notice from
Mortgagee to the contrary.
6. RESTRICTIONS. Mortgagor shall not (i) except for the lien of this
Mortgage and the Permitted Encumbrances, further mortgage, nor otherwise
encumber the Mortgaged Property nor
9
create or suffer to exist any lien, charge or encumbrance on the Mortgaged
Property, or any part thereof, whether superior or subordinate to the lien of
this Mortgage and whether recourse or non-recourse, nor (ii) sell, transfer,
convey or assign nor permit to be sold transferred, conveyed or assigned all or
any portion of, or any interest in, the Mortgaged Property, except, in each
case, as may be otherwise expressly permitted under the Credit Agreement. In
the event of any such permitted sale, transfer, conveyance, assignment or other
disposition of any part of the Mortgaged Property, this Mortgage will remain in
effect with respect to all of the remaining Mortgaged Property.
7. MAINTENANCE; UTILITIES. (a) Mortgagor shall maintain or cause to
be maintained all the Improvements in good working order and condition and shall
not commit or suffer any material waste of the Improvements.
(b) Mortgagor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
8. RIGHTS OF TENANTS. This Mortgage is subject to the rights of any
and all tenants of the Mortgaged Property now or hereafter existing and, for so
long as said tenants are not in default under the terms of their respective
leases and shall agree to attorn to Mortgagee (or Mortgagee's designee) upon its
acquisition of title to the Mortgaged Property, Mortgagee shall not disturb the
use or possession by said tenants to all or a portion of the Mortgaged Property,
as described in such tenant's lease. If an Event of Default shall have occurred
and be continuing and Mortgagee elects to foreclose this Mortgage in pursuant to
the Section of this Mortgage entitled "Remedies", so long as said tenants are
not in default under the terms of their respective leases, Mortgagee shall take
no action or fail to take any action, as the case may be, the effect of which
would be to terminate the rights of said tenants under their respective leases;
PROVIDED that if, in order validly to foreclose the lien of this Mortgage such
lease must be terminated, Mortgagee may nevertheless proceed with such
foreclosure but following the completion of such foreclosure shall enter into a
new lease of the Mortgaged Property with such tenant on the same terms and
conditions as those set forth in the then terminated lease. Mortgagor may, in
the ordinary course of business and without the consent of Mortgagee, enter into
any new leases or modify, surrender, terminate, extend or renew any lease now
existing or hereafter created upon the Mortgaged Property, or any portion
thereof, without the consent of Mortgagee. Mortgagee agrees to execute such
other and further instruments as may be necessary to effectuate the terms of
this Section.
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9. FURTHER ASSURANCES. To further assure Mortgagee's rights under
this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
reasonably required by Mortgagee to confirm the lien of this Mortgage and all
other rights or benefits conferred on Mortgagee.
10. MORTGAGEE'S RIGHT TO PERFORM. If Mortgagor fails to perform any
of the covenants or agreements of Mortgagor after an Event of Default shall have
occurred and be continuing, Mortgagee, without waiving or releasing Mortgagor
from any obligation or default under this Mortgage, with reasonable efforts to
provide simultaneous written notice to Mortgagor, may, at any time (but shall be
under no obligation to) pay or perform the same, and the amount or cost thereof,
with interest at the Default Rate, shall immediately be due from Mortgagor to
Mortgagee and the same shall be secured by this Mortgage and shall be a lien on
the Mortgaged Property prior to any right, title to, interest in or claim upon
the Mortgaged Property attaching subsequent to the lien of this Mortgage. No
payment or advance of money by Mortgagee under this Section shall be deemed or
construed to cure Mortgagor's default or waive any right or remedy of Mortgagee.
11. MORTGAGOR'S EXISTENCE, ETC. Upon recordation of this Mortgage
in the appropriate office or offices, payment of all mortgage recording fees and
taxes in respect thereof and compliance with the formal requirements of state
law applicable to the recording of real estate mortgages generally, this
Mortgage shall constitute a fully perfected mortgage lien on and security
interest in the Mortgaged Property, subject only to such encumbrances, defects
and exceptions as are expressly permitted under the Credit Agreement.
12. ASBESTOS AND HAZARDOUS WASTE. Mortgagor shall comply with
Environmental Laws to the extent provided in the Credit Agreement. If Mortgagor
shall fail to so comply to the extent required in the Credit Agreement,
Mortgagee may declare an Event of Default and may (but shall not be obligated
to) do whatever is necessary to comply with the applicable Environmental Laws,
and the costs thereof, with interest at the Default Rate, shall be immediately
due from Mortgagor to Mortgagee and the same shall be added to the Indebtedness
and be secured by this Mortgage. If an Event of Default exists, Mortgagor shall
give Mortgagee and its agents and employees access to the Premises to cause such
compliance.
13. EVENT OF DEFAULT. (a) The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder; and
11
(b) to the extent it would have a Material Adverse Effect (as defined
in the Credit Agreement), a failure of Mortgagor to duly perform and observe, or
a violation or breach of, any other terms, covenants, provisions or conditions
of this Mortgage and the continuation thereof for a 30-day period after notice
shall have been given to Mortgagor by Mortgagee specifying such default and
requiring such default be remedied, shall constitute an Event of Default
hereunder; which period may be extended to the extent required (but no longer
than 180 days) if such default is not susceptible of cure within 30 days so long
as Mortgagor has commenced to cure such default within such 30-day period and is
thereafter diligently prosecuting such cure to completion and so long as such
delay is not likely to have a Material Adverse Effect on either the Mortgaged
Property or Mortgagee's rights under this Mortgage; provided, however, any such
default that can be cured by the payment of money shall be promptly cured after
notice by Mortgagee.
14. REMEDIES.
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Loan Documents, or
as provided by law, and without limitation, (x) if such event is an Event of
Default specified in clause (i) or (ii) of Section 11(f) of the Credit Agreement
with respect to Mortgagor, automatically the Indebtedness immediately shall
become due and payable, and (y) if such event is any other Event of Default
under Section 11 of the Credit Agreement, in addition to any other rights and
remedies Mortgagee may have pursuant to the Credit Agreement, Mortgagee may
immediately take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Mortgagor and in and to the Mortgaged
Property, including, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such manner as
Mortgagee may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all or any
part of the Mortgaged Property, (B) institute and maintain an action on the
Credit Agreement, the Term Notes, if any, the Revolving Credit Notes, if
any, the Swing Line Notes, if any, and the LOC Notes, if any, (C) sell all
or part of the Mortgaged Property (Mortgagor expressly granting to
Mortgagee the power of sale), or (D) take such other action at law or in
equity for the enforcement of this Mortgage or any of the Loan Documents as
the law may allow. Mortgagee may proceed in any such action to final
judgment and execution thereon for all sums due hereunder, together with
interest thereon at the Default Rate and all costs of suit, including,
without limitation, reasonable attorneys' fees and
12
disbursements. Interest at the Default Rate shall be due on any judgment
obtained by Mortgagee from the date of judgment until actual payment is
made of the full amount of the judgment;
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the Mortgaged
Property or any other collateral as security for the Indebtedness and
Obligations enter into and upon the Mortgaged Property and each and every
part thereof and exclude Mortgagor and its agents and employees therefrom
without liability for trespass, damage or otherwise (Mortgagor hereby
agreeing to surrender possession of the Mortgaged Property to Mortgagee
upon demand at any such time) and use, operate, manage, maintain and
control the Mortgaged Property and every part thereof. Following such
entry and taking of possession, Mortgagee shall be entitled, without
limitation, (x) to lease all or any part or parts of the Mortgaged Property
for such periods of time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease and (z)
generally to execute, do and perform any other act, deed, matter or thing
concerning the Mortgaged Property as Mortgagee shall deem appropriate as
fully as Mortgagor might do.
(b) To the extent permitted under applicable law, the holder of this
Mortgage, in any action to foreclose it, shall be entitled to the appointment of
a receiver. In case of a foreclosure sale, the Real Estate may be sold, at
Mortgagee's election, in one parcel or in more than one parcel and Mortgagee is
specifically empowered, (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Mortgaged
Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding any
exculpatory or non-recourse language which may be contained herein to the
contrary, Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.
15. RIGHT OF MORTGAGEE TO CREDIT SALE. Upon the occurrence of any
sale made under this Mortgage, whether made under the power of sale or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof.
In lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the
13
action and any other sums which Mortgagee is authorized to deduct under this
Mortgage. In such event, this Mortgage, the Credit Agreement, the Term Notes,
if any, the Revolving Credit Notes, if any, the Swing Line Notes, if any, the
LOC Notes, if any, and documents evidencing expenditures secured hereby may be
presented to the person or persons conducting the sale in order that the amount
so used or applied may be credited upon the Indebtedness as having been paid.
16. APPOINTMENT OF RECEIVER. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Mortgagee in case of entry as
provided in this Mortgage, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Mortgaged Property, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
17. EXTENSION, RELEASE, ETC. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall not
reduce the amount of the lien of this Mortgage until the lien amount shall equal
the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of
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Mortgagee hereunder, and such liens, rights, powers and remedies shall continue
unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that ownership
of this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.
18. SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE. (a) It is the
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "CODE") of the
State in which the Mortgaged Property is located. If an Event of Default shall
occur and be continuing under this Mortgage, then in addition to having any
other right or remedy available at law or in equity, Mortgagee shall have the
option of either (i) proceeding under the Code and exercising such rights and
remedies as may be provided to a secured party by the Code with respect to all
or any portion of the Mortgaged Property which is personal property (including,
without limitation, taking possession of and selling such property) or (ii)
treating such property as real property and proceeding with respect to both the
real and personal property constituting the Mortgaged Property in accordance
with Mortgagee's rights, powers and remedies with respect to the real property
(in which event the default provisions of the Code shall not apply). If
Mortgagee shall elect to proceed under the Code, then ten days' notice of sale
of the personal property shall be deemed reasonable notice and the reasonable
expenses of retaking, holding, preparing for sale, selling and the like incurred
by Mortgagee shall include, but not be limited to, attorneys' fees and legal
expenses. At Mortgagee's request, Mortgagor shall assemble the personal
property and make it available to Mortgagee at a place designated by Mortgagee
which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) some of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) as to those
fixtures, this Mortgage upon recording or registration in the real estate
records of the proper office shall constitute a financing statement filed as a
"fixture filing" within the meaning of Sections 9-313 and 9-402 of the Code;
(iii) except as otherwise
15
provided, Mortgagor is the record owner of the Real Estate and the leasehold
estate in the Leasehold Parcels; and (iv) the mailing addresses of Mortgagor and
Mortgagee are as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form reasonably satisfactory to Mortgagee, covering all or any
part of the Mortgaged Property and will further execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any financing
statement, affidavit, continuation statement or certificate or other document as
Mortgagee may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Mortgage and such
security instrument. Mortgagor shall from time to time, on request of
Mortgagee, deliver to Mortgagee an inventory in reasonable detail of any of the
Mortgaged Property which constitutes personal property. If Mortgagor shall fail
to furnish any financing or continuation statement within 10 days after request
by Mortgagee, then pursuant to the provisions of the Code, Mortgagor hereby
authorizes Mortgagee, without the signature of Mortgagor, to execute and file
any such financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above. A photocopy of this Mortgage may be filed as a Financing
Statement.
(d) All rights, remedies and obligations granted, created or
otherwise arising hereunder and all representations, warranties and other
provisions hereof shall be construed, and all actions hereunder shall be
performed, in a manner consistent with, and subject to the terms and provisions
of, the Security Agreement. To the extent that the rights granted hereunder in
any item of the Mortgaged Property (other than the Real Estate and other
interests which are exclusively real property interests) conflict with any
rights granted in the same item of Mortgaged Property under the Security
Agreement, the Security Agreement shall prevail.
19. ASSIGNMENT OF RENTS. Mortgagor hereby assigns to Mortgagee the
Rents as further security for the payment of the Indebtedness and performance of
the Obligations, and Mortgagor grants to Mortgagee the right to enter the
Mortgaged Property for the purpose of collecting the same and to let the
Mortgaged Property or any part thereof, and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents and Mortgagor shall be entitled to collect,
16
receive, use and retain the Rents until the occurrence of an Event of Default
under this Mortgage; such right of Mortgagor to collect, receive, use and retain
the Rents may be revoked by Mortgagee upon the occurrence of any Event of
Default under this Mortgage by giving not less than fifteen days' written notice
of such revocation to Mortgagor; in the event such notice is given, so long as
an Event of Default shall have occurred and be continuing, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any).
20. ADDITIONAL RIGHTS. Upon the occurrence of any Event of Default,
Mortgagee may, in its sole discretion and without regard to the adequacy of its
security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the Indebtedness,
in accordance with the provisions of the Credit Agreement and the other Loan
Documents (as defined therein). Any such application shall not be construed to
cure or waive any Event of Default or invalidate any act taken by Mortgagee on
account of such Event of Default.
21. NOTICES. All notices, requests, demands and other communications
hereunder shall be given in the manner and to the addresses determined under
Section 13.2 of the Credit Agreement.
22. NO ORAL MODIFICATION. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate lien or encumbrance.
23. PARTIAL INVALIDITY. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage
or in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that neither Mortgagee nor any Lender shall
charge,
17
take or receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee or any Lender, any amounts constituting interest in excess of the
maximum rate permitted by law to be charged by Mortgagee or any Lender, as the
case may be.
24. MORTGAGOR'S WAIVER OF RIGHTS. To the fullest extent permitted by
law, Mortgagor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of any
portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshalling in the event of foreclosure of the liens hereby created.
25. REMEDIES NOT EXCLUSIVE. Mortgagee shall be entitled to enforce
payment of the Indebtedness and performance of the Obligations and to exercise
all rights and powers under this Mortgage or under any of the other Loan
Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this Mortgage nor its
enforcement, shall prejudice or in any manner affect Mortgagee's right to
realize upon or enforce any other security now or hereafter held by Mortgagee,
it being agreed that Mortgagee shall be entitled to enforce this Mortgage and
any other security now or hereafter held by Mortgagee in such order and manner
as Mortgagee may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Mortgagee is intended to be exclusive of any other
remedy herein or by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy given by any
of the Loan Documents to Mortgagee or to which it may otherwise be entitled, may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by Mortgagee. In no event shall Mortgagee, in the
exercise of the remedies provided in this Mortgage (including, without
limitation, in connection
18
with the assignment of Rents to Mortgagee, or the appointment of a receiver and
the entry of such receiver on to all or any part of the Mortgaged Property), be
deemed a "mortgagee in possession," and Mortgagee shall not in any way be made
liable for any act, either of commission or omission, in connection with the
exercise of such remedies.
26. MULTIPLE SECURITY. If (a) the Premises shall consist of one or
more parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold one or more additional mortgages, liens, deeds of trust or other security
(directly or indirectly) for the Indebtedness upon other property in the State
in which the Premises are located (whether or not such property is owned by
Mortgagor or by others) or (c) both the circumstances described in clauses (a)
and (b) shall be true, then to the fullest extent permitted by law, Mortgagee
may, at its election, commence or consolidate in a single foreclosure action all
foreclosure proceedings against all such collateral securing the Indebtedness
(including the Mortgaged Property), which action may be brought or consolidated
in the courts of any county in which any of such collateral is located.
Mortgagor acknowledges that the right to maintain a consolidated foreclosure
action is a specific inducement to some or all of the Lenders to make certain
loans to and to enter into certain agreements with Mortgagor, and for Mortgagee
to enter into the Credit Agreement, and Mortgagor expressly and irrevocably
waives any objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any objections to the laying of venue or
based on the grounds of FORUM NON CONVENIENS which it may now or hereafter have.
Mortgagor further agrees that if Mortgagee shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Mortgaged Property or
against any collateral other than the Mortgaged Property, which collateral
directly or indirectly secures the Indebtedness, or if Mortgagee shall have
obtained a judgment of foreclosure and sale or similar judgment against such
collateral, then, whether or not such proceedings are being maintained or
judgments were obtained in or outside the State in which the Premises are
located, Mortgagee may commence or continue foreclosure proceedings and exercise
its other remedies granted in this Mortgage against all or any part of the
Mortgaged Property and Mortgagor waives any objections to the commencement or
continuation of a foreclosure of this Mortgage or exercise of any other remedies
hereunder based on such other proceedings or judgments, and waives any right to
seek to dismiss, stay, remove, transfer or consolidate either any action under
this Mortgage or such other proceedings on such basis. Neither the commencement
nor continuation of proceedings to foreclose this Mortgage nor the exercise of
any other rights hereunder nor the recovery of any judgment by Mortgagee in any
such proceedings shall prejudice, limit or preclude Mortgagee's right to
commence or continue one or more foreclosure or other proceedings or obtain a
judgment against any other collateral (either in or outside the
19
State in which the Premises are located) which directly or indirectly secures
the Indebtedness, and Mortgagor expressly waives any objections to the
commencement of, continuation of, or entry of a judgment in such other
proceedings or exercise of any remedies in such proceedings based upon any
action or judgment connected to this Mortgage, and Mortgagor also waives any
right to seek to dismiss, stay, remove, transfer or consolidate either such
other proceedings or any action under this Mortgage on such basis. It is
expressly understood and agreed that to the fullest extent permitted by law,
Mortgagee may, at its election, cause the sale of all collateral which is the
subject of a single foreclosure action at either a single sale or at multiple
sales conducted simultaneously and take such other measures as are appropriate
in order to effect the agreement of the parties to dispose of and administer all
collateral securing the Indebtedness (directly or indirectly) in the most
economical and least time-consuming manner.
27. EXPENSES; INDEMNIFICATION. Mortgagor agrees (a) to pay or
reimburse Mortgagee for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, the Credit Agreement and the other
Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to Mortgagee, (b) to pay or reimburse each
Lender and the Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under the Credit Agreement, the
other Loan Documents and any such other documents prepared in connection
herewith or therewith, including, without limitation, the fees and disbursements
of counsel (including the allocated fees and expenses of in-house counsel in
lieu of the fees and expenses of outside counsel) to each Lender and of counsel
to the Agent, (c) to pay, indemnify, and hold each Lender and the 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
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, 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, the Credit Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the 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 the
Credit Agreement, the other Loan Documents, the Stock Purchase Agreement, the
Stock Purchase, the Merger or the use of the proceeds of the Loans in connection
with the Stock Purchase, and any such other documents, including, without
limitation, any of
20
the foregoing relating to the violation of, noncompliance with or liability
under, any Environmental Law applicable to the operations of the Mortgagor, any
of its Subsidiaries or any of the Properties (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), PROVIDED, that the Mortgagor
shall have no obligation hereunder to the Agent or any Lender with respect to
indemnified liabilities arising from (1) the gross negligence or willful
misconduct of the Agent or any such Lender or (2) legal proceedings commenced
against the Agent or any such Lender by any security holder or creditor thereof
arising out of and based upon rights afforded any such security holder or
creditor solely in its capacity as such. The agreements in this subsection
shall survive repayment of the Loans and all other amounts payable under the
Credit Agreement.
28. SUCCESSORS AND ASSIGNS. Except to the extent prohibited in the
Credit Agreement, all covenants of Mortgagor contained in this Mortgage are
imposed solely and exclusively for the benefit of Mortgagee and the Lenders and
their respective successors and assigns, and no other person or entity shall
have standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor
shall run with the land and bind Mortgagor, the successors and assigns of
Mortgagor (and each of them) and all subsequent owners, encumbrancers and
tenants of the Mortgaged Property, and shall inure to the benefit of Mortgagee
and the Lenders and their respective successors and assigns. The word
"Mortgagor" shall be construed as if it read "Mortgagors" whenever the sense of
this Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.
29. NO WAIVERS, ETC. Any failure by Mortgagee to insist upon the
strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor.
Mortgagee may release, regardless of consideration and without the necessity for
any notice to or consent by the holder of any subordinate lien on the Mortgaged
Property, any part of the security held for the obligations secured by this
Mortgage without, as to the remainder of the security, in anywise impairing or
affecting the lien of this Mortgage or the priority of such lien over any
subordinate lien.
30. GOVERNING LAW, ETC. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises are
located, except that Mortgagor
21
expressly acknowledges that by their terms the Term Notes, if any, the Revolving
Credit Notes, if any, the Swing Line Notes, if any, and the LOC Notes, if any,
shall be governed and construed in accordance with the laws of the State of New
York, without regard to principles of conflict of law, and for purposes of
consistency, Mortgagor agrees that in any IN PERSONAM proceeding related to this
Mortgage the rights of the parties to this Mortgage shall also be governed by
and construed in accordance with the laws of the State of New York governing
contracts made and to be performed in that State, without regard to principles
of conflict of law.
31. WAIVER OF TRIAL BY JURY. Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim, suit
or proceeding relating to this Mortgage and for any counterclaim (other than
compulsory counterclaims) brought therein. Mortgagor hereby waives all rights
to interpose any counterclaim (other than compulsory counterclaims) in any suit
brought by Mortgagee hereunder and all rights to have any such suit consolidated
with any separate suit, action or proceeding.
32. CERTAIN DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "MORTGAGOR" shall mean "each Mortgagor or any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein," the word
"MORTGAGEE" shall mean "Mortgagee or any successor agent under the Credit
Agreement," the words "TERM NOTES, REVOLVING CREDIT NOTES, SWING LINE NOTES, LOC
NOTES" shall mean respectively "the Term Notes, the Revolving Credit Notes, the
Swing Line Notes, the LOC Notes or any other evidence of indebtedness secured by
this Mortgage," the word "PERSON" shall include any individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, or other entity, and the words "MORTGAGED PROPERTY" shall include any
portion of the Mortgaged Property or interest therein. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.
33. RELEASE. (a) Any Mortgaged Property that is permitted to be sold
or otherwise transferred free of the lien of the Security Documents as provided
in the Credit Agreement shall be sold or otherwise transferred, as the case may
be, free and clear of this Mortgage. In connection with any such sale or
transfer, the Mortgagee shall execute and deliver to Mortgagor, or to such
person or persons as Mortgagor shall reasonably designate, a satisfaction of
mortgage and such other documents as Mortgagor may reasonably request to
evidence the release of this
22
Mortgage with respect to such Mortgaged Property, as well as a release of any
collateral assignments or other Security Documents in favor of Mortgagee that
burden such Mortgaged Property.
(b) In addition, and not in limitation of the foregoing, any
Mortgaged Property (other than the Real Estate) that also constitutes collateral
under any other Security Document shall automatically be released from this
Mortgage in the event that such Mortgaged Property is released from the security
interest created by such other Security Document in accordance with the terms
thereof and of the Credit Agreement.
34. MORTGAGED LEASE PROVISIONS. (a) To the extent failure to do so
would have a Material Adverse Effect (as defined in the Credit Agreement),
Mortgagor will pay or cause to be paid all rent and other charges required under
the Mortgaged Leases as and when the same are due and will promptly and
faithfully observe, abide by, discharge and perform, or cause to be kept,
observed, discharged and performed, all other material terms, obligations,
covenants, conditions, agreements, indemnities, representations, warranties or
liabilities of the Mortgaged Leases on the part of the lessee thereunder to be
kept, observed, discharged and performed, and will not without the express
written consent of Mortgagee (i) in any manner, cancel, terminate or surrender,
or permit the cancellation, termination or surrender of any of the Mortgaged
Leases, in whole or in part, (ii) either orally or in writing, modify, amend or
permit any modification or amendment of any of the terms thereof in any material
respect or (iii) permit the subordination thereof to any mortgage; and any
attempt on the part of Mortgagor to do any of the foregoing without such written
consent of Mortgagee shall be null and void and of no effect and shall
constitute an Event of Default hereunder.
(b) To the extent failure to do so would have a Material Adverse
Effect (as defined in the Credit Agreement), Mortgagor will do, or cause to be
done, all things necessary to preserve and keep unimpaired all material rights
of Mortgagor as lessee under the Mortgaged Leases, and to prevent any default
under the Mortgaged Leases, or any termination, surrender, cancellation,
forfeiture, subordination or impairment thereof. In the event of the failure of
Mortgagor to make any payment required to be made by the lessee pursuant to the
provisions of the Mortgaged Leases or to observe, abide by, discharge or
perform, or cause to be observed, kept, discharged or performed, any of the
material terms, obligations, covenants, conditions, agreements, indemnities,
representations, warranties or liabilities of the Mortgaged Leases on the part
of lessee thereunder to be observed, kept, discharged and performed, Mortgagor
does hereby authorize and irrevocably appoint and constitute Mortgagee as its
true and lawful attorney-in-fact, which appointment is coupled with an interest,
in its name, place and stead, to take any and all actions deemed necessary or
desirable by Mortgagee to perform and comply with all the
23
obligations of Mortgagor under the Mortgaged Leases, to do and take, but without
any obligation so to do, any action which Mortgagee deems necessary or desirable
to prevent or cure any default by Mortgagor under the Mortgaged Leases, to enter
into and upon the Premises or any part thereof to such extent and as often as
Mortgagee, in its sole discretion, deems necessary or desirable in order to
prevent or cure any default of Mortgagor pursuant thereto, to the end that the
rights of Mortgagor in and to the leasehold estate created by the Mortgaged
Leases shall be kept unimpaired and free from default, and all sums so expended
by Mortgagee, with interest thereon at the Default Rate from the date of each
such expenditure, shall be paid by Mortgagor to Mortgagee promptly upon demand
by Mortgagee. Mortgagor shall, within five (5) business days after written
request by Mortgagee, execute and deliver to Mortgagee, or to any person
designated by Mortgagee, such further instruments, agreements, powers,
assignments, conveyances or the like as may be necessary to complete or perfect
the interest, rights or powers of Mortgagee pursuant to this paragraph (b).
(c) If any action or proceeding shall be instituted to evict
Mortgagor or to recover possession of any Leasehold Parcel or any part thereof
or interest therein or any action or proceeding otherwise affecting any of the
Mortgaged Leases or this Mortgage shall be instituted, then Mortgagor will,
immediately upon service thereof on or to Mortgagor, deliver to Mortgagee a true
and complete copy of each petition, summons, complaint, notice of motion, order
to show cause and of all other provisions, pleadings, and papers, however
designated, served in any such action or proceeding.
(d) Mortgagor covenants and agrees that unless Mortgagee shall
otherwise expressly consent in writing, the fee title to the property demised by
the Mortgaged Leases and the leasehold estate and/or any subleasehold estate
shall not merge but shall always remain separate and distinct, notwithstanding
the union of said estates either in Mortgagor or a third party by purchase or
otherwise; and in case Mortgagor acquires the fee title or any other estate,
title or interest in and to any Leasehold Parcel, the lien of this Mortgage
shall, without further conveyance, simultaneously with such acquisition, be
spread to cover and attach to such acquired estate and as so spread and attached
shall be prior to the lien of any mortgage placed on the acquired estate
subsequent to the date of this Mortgage.
(e) No release or forbearance of any of Mortgagor's obligations under
the Mortgaged Leases, pursuant to the Mortgaged Leases, or otherwise, shall
release Mortgagor from any of its obligations under this Mortgage, including its
obligation with respect to the payment of rent as provided for in the Mortgaged
Leases and the performance of all of the terms, provisions, covenants,
conditions and agreements contained in the Mortgaged
1
Leases, to be kept, performed and completed by the lessee therein.
This Mortgage has been duly executed by Mortgagor on the date first
above written.
WITNESS: S.D. ▇▇▇▇▇▇ COMPANY
By:
------------------------- ---------------------------
Name:
Title:
[CORPORATE SEAL]
STATE OF NEW YORK ) December ___, 1994
: ss.:
COUNTY OF NEW YORK )
Then personally appeared the above-named
in his/her capacity as of S.D. ▇▇▇▇▇▇, and
acknowledged the foregoing instrument to be his/her free act and deed in his/her
said capacity and the free act and deed of said corporation.
Before me,
-------------------------
-------------------------
(Print Name)
Notary Public State of
-----------
My commission expires:
-----------
EXHIBIT A
Description of the Premises
[Attach Legal Description of all parcels]
EXHIBIT B TO
CREDIT AND GUARANTEE AGREEMENT
MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
from
S.D. ▇▇▇▇▇▇ Company, Mortgagor
(as successor by merger to SDW Acquisition Corporation)
to
CHEMICAL BANK,
as Agent, Mortgagee
DATED AS OF DECEMBER __, 1994
After recording, please return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
a partnership which includes
professional corporations
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
EXHIBIT D TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF BORROWER FEE MORTGAGE]
[NOTE: THIS FORM IS NOT STATE-LAW SPECIFIC. SPECIFIC PROVISIONS,
SATISFACTORY TO AGENT'S COUNSEL, THAT ARE NECESSARY OR DESIRABLE UNDER THE
LAW OR REAL ESTATE PRACTICE OF ANY PARTICULAR STATE IN WHICH THIS FORM IS USED
WILL BE ADDED.]
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
(collectively, the "Mortgage"), dated as of __________ is made by S.D. ▇▇▇▇▇▇
Company (as successor by merger to SDW Acquisition Corporation), a
Pennsylvania corporation ("MORTGAGOR"), whose mailing address is
_________________ to CHEMICAL BANK, whose mailing address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as agent (the "AGENT"; in such capacity, together
with its successors and assigns, "MORTGAGEE") for the several banks and other
financial institutions (the "LENDERS") from time to time parties to that
certain Credit and Guarantee Agreement dated as of December ____, 1994 (as
the same may have been and may be further amended, supplemented, restated,
replaced or otherwise modified from time to time, the "CREDIT AGREEMENT")
among SDW Holdings Corporation, a Delaware corporation, the Mortgagee, the
Mortgagor and the Lenders. References to this "MORTGAGE" shall mean this
instrument and any and all renewals, modifications, amendments, supplements,
extensions, consolidations, substitutions, spreaders and replacements of
this instrument.
BACKGROUND
A. Mortgagor has, as of the date hereof, become the owner of
the parcel(s) of real property described on Exhibit A attached (such real
property, together with all of the buildings, improvements, structures and
fixtures now or subsequently located thereon (the "IMPROVEMENTS"), being
collectively referred to as the "REAL ESTATE").
B. Pursuant to the Credit Agreement, following the
consummation of the Stock Purchase, SDW Acquisition Corporation, a
Pennsylvania corporation ("ACQUISITION CORP.") has, on the date hereof, been
merged with and into Mortgagor, with Mortgagor being the surviving
corporation of such Merger and assuming the obligations of Acquisition Corp.
under the Credit Agreement.
C. Pursuant to the Credit Agreement, the Lenders have
severally agreed (i) to make certain Term Loans to the Borrower, portions of
which, in the aggregate principal amount of $ 630,000,000, are more
particularly described in the Credit Agreement as the Tranche A Term Loans
and the Tranche B Term Loans, (ii) to make certain Revolving Credit Loans and
Swing Line
2
Loans to the Borrower, in the aggregate principal amount of $ 250,000,000 and
(iii) to issue LOC Letters of Credit, in the aggregate principal amount of $
220,000,000, all upon the terms and subject to the conditions set forth
therein. The Tranche A Term Loans and the Tranche B Term Loans are
respectively evidenced by (i) the Credit Agreement, and may, as provided
therein, be evidenced by those certain Tranche A Term Loan Notes dated as of
even date herewith in the aggregate principal amount of $ 305,000,000 (as
each of the same may be further assigned, amended, supplemented, modified,
extended, restated or replaced from time to time, the "TRANCHE A TERM NOTES")
and (ii) the Credit Agreement, and may, as provided therein, be evidenced by
those certain Tranche B Term Loan Notes dated as of even date herewith in the
aggregate principal amount of $ 325,000,000 (as each of the same may be
further assigned, amended, supplemented, modified, extended, restated or
replaced from time to time, the "TRANCHE B TERM NOTES"; the Tranche A Term
Notes and the Tranche B Term Notes are collectively referred to as the "TERM
NOTES"). The Revolving Credit Loans are evidenced by the Credit Agreement,
and may, as provided therein, be evidenced by those certain Revolving Credit
Notes dated as of even date herewith (as the same may be further assigned,
amended, supplemented, modified, extended, restated or replaced from time to
time, the "REVOLVING CREDIT NOTES"). The Swing Line Loans are evidenced by
the Credit Agreement, and may, as provided therein, be evidenced by those
certain Swing Line Notes dated as of even date herewith (as the same may be
further assigned, amended, supplemented, modified, extended, restated or
replaced from time to time, the "SWING LINE NOTES"). The reimbursement
obligations with respect to drawings under LOC Letters of Credit are
evidenced by the Credit Agreement and may, as provided therein, be evidenced
by those certain LOC Notes dated as of even date herewith (as the same may be
further assigned, amended, supplemented, modified, extended, restated or
replaced from time to time, the "LOC NOTES").
D. Capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Credit Agreement. References in this
Mortgage to the "DEFAULT RATE" shall mean a rate per annum equal to the ABR
plus 2%.
GRANTING CLAUSES
For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the
Cedit Agreement and as may be evidenced by the Term Notes, the
Revolving Credit Notes, the Swing Line Notes and the LOC Notes and (ii)
all interest and fees payable thereon (the items set forth in clauses
(i) and (ii) being referred collectively as the "INDEBTEDNESS"); and
3
(b) the performance of all covenants, agreements, obligations and
liabilities of Mortgagor (the "OBLIGATIONS") under or pursuant to the
provisions of the Term Notes, the Revolving Credit Notes, the Swing Line
Notes, the LOC Notes, this Mortgage, the Credit Agreement and any other
document securing payment of the Indebtedness (the "SECURITY DOCUMENTS")
and any amendments, supplements, extensions, renewals, restatements,
replacements or modifications of any of the foregoing (the Term Notes, the
Revolving Credit Notes, the Swing Line Notes, the LOC Notes, the Credit
Agreement, the Security Documents and all other documents and instruments
from time to time evidencing, securing or guaranteeing the payment of the
Indebtedness or the performance of the Obligations, as any of the same may
be amended, supplemented, extended, renewed, restated, replaced or
modified from time to time, are collectively referred to as the "LOAN
DOCUMENTS");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE WITH
MORTGAGE COVENANTS:
(A) the Real Estate;
(B) to the extent not included in (a), all the estate, right,
title, claim or demand whatsoever of Mortgagor, in possession or
expectancy, in and to the Real Estate or any part thereof;
(C) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, timber, timber rights, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to the
Real Estate, and any reversions, remainders, rents, issues, profits and
revenue thereof and all land lying in the bed of any street, road or
avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) subject to Section 18(d) hereof, all of the fixtures, chattels,
business machines, machinery, apparatus, equipment, furnishings, fittings
and articles of personal property of every kind and nature whatsoever, and
all appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts and
accessories) currently owned or subsequently acquired by Mortgagor and, in
each case, now or subsequently attached to, or contained in or used or
usable in any way in connection with any operation or letting of the Real
Estate (all of the foregoing in this paragraph (d) being referred to as
the "EQUIPMENT");
4
(E) subject to Section 18(d) hereof, all right, title and interest
of Mortgagor in and to all substitutes and replacements of, and all
additions and improvements to, the Real Estate and the Equipment,
subsequently acquired by or released to Mortgagor or constructed,
assembled or placed by Mortgagor on the Real Estate, immediately upon such
acquisition, release, construction, assembling or placement, including,
without limitation, any and all building materials whether stored at the
Real Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;
(F) subject to Section 18(d) hereof, all right, title and interest
of Mortgagor in, to and under all leases, subleases, underlettings,
concession agreements, management agreements, licenses and other
agreements relating to the use or occupancy of the Real Estate or the
Equipment or any part thereof, now existing or subsequently entered into
by Mortgagor and whether written or oral and all guarantees of any of the
foregoing (collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "LEASES"), and all
rights of Mortgagor in respect of cash and securities deposited thereunder
and the right to receive and collect the revenues, income, rents, issues
and profits thereof, together with all other rents, royalties, issues,
profits, revenue, income and other benefits arising from the use and
enjoyment of the Mortgaged Property (as defined below) (collectively, the
"RENTS");
(G) subject to Section 18(d) hereof, all insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all unearned premiums
thereunder and all proceeds of any such insurance policies (including
title insurance policies) including the right to collect and receive such
proceeds, subject to the provisions relating to insurance generally set
forth below; and all awards and other compensation, including the interest
payable thereon and the right to collect and receive the same, made to the
present or any subsequent owner of the Real Estate or Equipment for the
taking by eminent domain, condemnation or otherwise, of all or any part of
the Real Estate or any easement or other right therein;
(H) subject to Section 18(d) hereof, all right, title and interest
of Mortgagor in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the ownership,
construction, maintenance, repair, operation, occupancy, sale or financing
of the Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or,
subject to Section 8.10 of the Credit Agreement, any property which is
adjacent or peripheral to the Real Estate, together with the right to
exercise such
5
options and all leases of Equipment (collectively, the "CONTRACTS"),
(ii) all consents, licenses, building permits, certificates of occupancy
and other governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "PERMITS") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "PLANS");
(I) subject to Section 18(d) hereof, all of Mortgagor's right,
title and interest in any and all monies now or subsequently on deposit
for the payment of real estate taxes or special assessments against the
Real Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by Mortgagee
as provided in this Mortgage; all capital, operating, reserve or similar
accounts held by or on behalf of Mortgagor and related to the operation of
the Mortgaged Property, whether now existing or hereafter arising and all
monies held in any of the foregoing accounts and any certificates or
instruments related to or evidencing such accounts;
(J) subject to section 18(d) hereof, all accounts resulting from
the sale of timber; and
(K) subject to Section 18(d) hereof, all proceeds, both cash and
noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned
or held or subsequently acquired by Mortgagor and described in the foregoing
clauses (a) through (e) are collectively referred to as the "PREMISES", and
those described in the foregoing clauses (a) through (k) are collectively
referred to as the "MORTGAGED PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for
the uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
TERMS AND CONDITIONS
Mortgagor further represents, warrants, covenants and agrees with
Mortgagee as follows:
1. WARRANTY OF TITLE. Mortgagor warrants that Mortgagor has
good title to the Real Estate in fee simple and good title to the rest of the
Mortgaged Property, subject only to the matters referred to in subsection 9.3
of the Credit Agreement (collectively, the "PERMITTED ENCUMBRANCES"), and
Mortgagor shall warrant, defend and preserve such title and the lien of the
6
Mortgage thereon against all claims of all persons and entities. Mortgagor
further warrants that it has the right to mortgage the Mortgaged Property.
2. PAYMENT OF INDEBTEDNESS. Mortgagor shall pay the
Indebtedness at the times and places and in the manner specified in the
Credit Agreement and shall perform all the Obligations.
3. REQUIREMENTS. (a) To the extent required in the Credit
Agreement, Mortgagor shall promptly comply with, or cause to be complied
with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements,
and irrespective of the nature of the work to be done, of each of the United
States of America, any State and any municipality, local government or other
political subdivision thereof and any agency, department, bureau, board,
commission or other instrumentality of any of them, now existing or
subsequently created (collectively, "Governmental Authority") which has
jurisdiction over the Mortgaged Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of any of the
Mortgaged Property. All present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements
of every Governmental Authority applicable to Mortgagor or to any of the
Mortgaged Property and all covenants, restrictions, and conditions which now
or later may be applicable to any of the Mortgaged Property are collectively
referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall
not by act or omission permit any building or other improvement on any
premises not subject to the lien of this Mortgage to rely on the Premises or
any part thereof or any interest therein to fulfill any Legal Requirement,
and Mortgagor hereby assigns to Mortgagee any and all rights to give consent
for all or any portion of the Premises or any interest therein to be so used.
4. PAYMENT OF TAXES AND OTHER IMPOSITIONS. (a) To the extent
required in the Credit Agreement, promptly prior to the time when same become
delinquent and before any interest or penalties accrue thereon or attach
thereto, Mortgagor shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes
imposed upon or assessed against the Mortgaged Property), all charges for any
easement or agreement maintained for the benefit of any of the Mortgaged
Property, all general and special assessments, levies, permits, inspection
and license fees, all water and sewer rents and charges and all other public
charges even if unforeseen or extraordinary, imposed upon or assessed against
or which may become a lien on any of the
7
Mortgaged Property, or arising in respect of the occupancy, use or possession
thereof, together with any penalties or interest on any of the foregoing (all
of the foregoing are collectively referred to as the "Impositions"). Upon
request by Mortgagee, Mortgagor shall deliver to Mortgagee (i) original or
copies of receipted bills and cancelled checks or other reasonably
satisfactory evidence evidencing payment of such Imposition if it is a real
estate tax or other public charge and (ii) evidence acceptable to Mortgagee
showing the payment of any other such Imposition. If by law any Imposition,
at Mortgagor's option, may be paid in installments (whether or not interest
shall accrue on the unpaid balance of such Imposition), Mortgagor may elect
to pay such Imposition in such installments and shall be responsible for the
payment of such installments with interest, if any.
(b) Mortgagor shall not claim, demand or be entitled to receive
any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged
Property or any part thereof, and shall not claim any deduction from the
taxable value of the Mortgaged Property by reason of this Mortgage.
5. INSURANCE. (a) Mortgagor shall not use or permit the use of
the Mortgaged Property in any manner which would permit any insurer to cancel
any insurance policy, unless replaced prior to or simultaneously with such
cancellation (such that there is no gap in coverage) by another policy
satisfactory to Mortgagee or void coverage required to be maintained by the
Credit Agreement.
(b) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any
insurance policies then in force shall pass to the purchaser or grantee and
Mortgagor hereby appoints Mortgagee its attorney-in-fact, in Mortgagor's
name, to assign and transfer all such policies and proceeds to such purchaser
or grantee.
(c) Until an Event of Default shall have occurred and be
continuing, all insurance and eminent domain proceeds shall be payable to
Mortgagor, free and clear of the lien of this Mortgage. All parties having
dealings with Mortgagor in connection with insurance and eminent domain
matters shall be entitled to rely on an affidavit of Mortgagor to the effect
that no Event of Default has occurred and is continuing, absent receipt of
written notice from Mortgagee to the contrary.
6. RESTRICTIONS. Mortgagor shall not (i) except for the lien of
this Mortgage and the Permitted Encumbrances, further mortgage, nor otherwise
encumber the Mortgaged Property nor create or suffer to exist any lien,
charge or encumbrance on the Mortgaged Property, or any part thereof, whether
superior or subordinate to the lien of this Mortgage and whether recourse or
8
non-recourse, nor (ii) sell, transfer, convey or assign nor permit to be sold
transferred, conveyed or assigned all or any portion of, or any interest in,
the Mortgaged Property, except, in each case, as may be otherwise expressly
permitted under the Credit Agreement. In the event of any such permitted
sale, transfer, conveyance, assignment or other disposition of any part of
the Mortgaged Property, this Mortgage will remain in effect with respect to
all of the remaining Mortgaged Property.
7. MAINTENANCE; UTILITIES. (a) Mortgagor shall maintain or
cause to be maintained all the Improvements in good working order and
condition and shall not commit or suffer any material waste of the
Improvements.
(b) Mortgagor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
8. RIGHTS OF TENANTS. This Mortgage is subject to the rights of
any and all tenants of the Mortgaged Property now or hereafter existing and,
for so long as said tenants are not in default under the terms of their
respective leases and shall agree to attorn to Mortgagee (or Mortgagee's
designee) upon its acquisition of title to the Mortgaged Property, Mortgagee
shall not disturb the use or possession by said tenants to all or a portion
of the Mortgaged Property, as described in such tenant's lease. If an Event
of Default shall have occurred and be continuing and Mortgagee elects to
foreclose this Mortgage in pursuant to the Section of this Mortgage entitled
"Remedies", so long as said tenants are not in default under the terms of
their respective leases, Mortgagee shall take no action or fail to take any
action, as the case may be, the effect of which would be to terminate the
rights of said tenants under their respective leases; PROVIDED that if, in
order validly to foreclose the lien of this Mortgage such lease must be
terminated, Mortgagee may nevertheless proceed with such foreclosure but
following the completion of such foreclosure shall enter into a new lease of
the Mortgaged Property with such tenant on the same terms and conditions as
those set forth in the then terminated lease. Mortgagor may, in the ordinary
course of business and without the consent of Mortgagee, enter into any new
leases or modify, surrender, terminate, extend or renew any lease now
existing or hereafter created upon the Mortgaged Property, or any portion
thereof, without the consent of Mortgagee. Mortgagee agrees to execute such
other and further instruments as may be necessary to effectuate the terms of
this Section.
9. FURTHER ASSURANCES. To further assure Mortgagee's rights
under this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act
or execute any additional documents (including, but not limited to, security
agreements on any
9
personalty included or to be included in the Mortgaged Property and a
separate assignment of each Lease in recordable form) as may be reasonably
required by Mortgagee to confirm the lien of this Mortgage and all other
rights or benefits conferred on Mortgagee.
10. MORTGAGEE'S RIGHT TO PERFORM. If Mortgagor fails to perform
any of the covenants or agreements of Mortgagor after an Event of Default
shall have occurred and be continuing, Mortgagee, without waiving or
releasing Mortgagor from any obligation or default under this Mortgage, with
reasonable efforts to provide simultaneous written notice to Mortgagor, may,
at any time (but shall be under no obligation to) pay or perform the same,
and the amount or cost thereof, with interest at the Default Rate, shall
immediately be due from Mortgagor to Mortgagee and the same shall be secured
by this Mortgage and shall be a lien on the Mortgaged Property prior to any
right, title to, interest in or claim upon the Mortgaged Property attaching
subsequent to the lien of this Mortgage. No payment or advance of money by
Mortgagee under this Section shall be deemed or construed to cure Mortgagor's
default or waive any right or remedy of Mortgagee.
11. MORTGAGOR'S EXISTENCE, ETC. Upon recordation of this
Mortgage in the appropriate office or offices, payment of all mortgage
recording fees and taxes in respect thereof and compliance with the formal
requirements of state law applicable to the recording of real estate
mortgages generally, this Mortgage shall constitute a fully perfected
mortgage lien on and security interest in the Mortgaged Property, subject
only to such encumbrances, defects and exceptions as are expressly permitted
under the Credit Agreement.
12. ASBESTOS AND HAZARDOUS WASTE. Mortgagor shall comply with
Environmental Laws to the extent provided in the Credit Agreement. If
Mortgagor shall fail to so comply to the extent required in the Credit
Agreement, Mortgagee may declare an Event of Default and may (but shall not
be obligated to) do whatever is necessary to comply with the applicable
Environmental Laws, and the costs thereof, with interest at the Default Rate,
shall be immediately due from Mortgagor to Mortgagee and the same shall be
added to the Indebtedness and be secured by this Mortgage. If an Event of
Default exists, Mortgagor shall give Mortgagee and its agents and employees
access to the Premises to cause such compliance.
13. EVENT OF DEFAULT. (a) The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder; and
(b) to the extent it would have a Material Adverse Effect (as
defined in the Credit Agreement), a failure of Mortgagor to duly perform and
observe, or a violation or breach of, any other terms, covenants, provisions
or conditions of this
10
Mortgage and the continuation thereof for a 30-day period after notice shall
have been given to Mortgagor by Mortgagee specifying such default and
requiring such default be remedied, shall constitute an Event of Default
hereunder; which period may be extended to the extent required (but no longer
than 180 days) if such default is not susceptible of cure within 30 days so
long as Mortgagor has commenced to cure such default within such 30-day
period and is thereafter diligently prosecuting such cure to completion and
so long as such delay is not likely to have a Material Adverse Effect on
either the Mortgaged Property or Mortgagee's rights under this Mortgage;
provided, however, any such default that can be cured by the payment of money
shall be promptly cured after notice by Mortgagee.
14. REMEDIES.
(a) Upon the occurrence of any Event of Default, in addition to
any other rights and remedies Mortgagee may have pursuant to the Loan
Documents, or as provided by law, and without limitation, (x) if such event
is an Event of Default specified in clause (i) or (ii) of Section 11(f) of
the Credit Agreement with respect to Mortgagor, automatically the
Indebtedness immediately shall become due and payable, and (y) if such event
is any other Event of Default under Section 11 of the Credit Agreement, in
addition to any other rights and remedies Mortgagee may have pursuant to the
Credit Agreement, Mortgagee may immediately take such action, without notice
or demand, as it deems advisable to protect and enforce its rights against
Mortgagor and in and to the Mortgaged Property, including, but not limited
to, the following actions, each of which may be pursued concurrently or
otherwise, at such time and in such manner as Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights
and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all or
any part of the Mortgaged Property, (B) institute and maintain an action
on the Credit Agreement, the Term Notes, if any, the Revolving Credit
Notes, if any, the Swing Line Notes, if any, and the LOC Notes, if any,
(C) sell all or part of the Mortgaged Property (Mortgagor expressly
granting to Mortgagee the power of sale), or (D) take such other action at
law or in equity for the enforcement of this Mortgage or any of the Loan
Documents as the law may allow. Mortgagee may proceed in any such action
to final judgment and execution thereon for all sums due hereunder,
together with interest thereon at the Default Rate and all costs of suit,
including, without limitation, reasonable attorneys' fees and
disbursements. Interest at the Default Rate shall be due on any judgment
obtained by Mortgagee from the date of judgment until actual payment is
made of the full amount of the judgment;
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(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other collateral as security for the
Indebtedness and Obligations enter into and upon the Mortgaged Property
and each and every part thereof and exclude Mortgagor and its agents and
employees therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender possession of the Mortgaged
Property to Mortgagee upon demand at any such time) and use, operate,
manage, maintain and control the Mortgaged Property and every part
thereof. Following such entry and taking of possession, Mortgagee shall
be entitled, without limitation, (x) to lease all or any part or parts of
the Mortgaged Property for such periods of time and upon such conditions
as Mortgagee may, in its discretion, deem proper, (y) to enforce, cancel
or modify any Lease and (z) generally to execute, do and perform any other
act, deed, matter or thing concerning the Mortgaged Property as Mortgagee
shall deem appropriate as fully as Mortgagor might do.
(b) To the extent permitted under applicable law, the holder of
this Mortgage, in any action to foreclose it, shall be entitled to the
appointment of a receiver. In case of a foreclosure sale, the Real Estate
may be sold, at Mortgagee's election, in one parcel or in more than one
parcel and Mortgagee is specifically empowered, (without being required to do
so, and in its sole and absolute discretion) to cause successive sales of
portions of the Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and
notwithstanding any exculpatory or non-recourse language which may be
contained herein to the contrary, Mortgagee shall be entitled to enjoin such
breach and obtain specific performance of any covenant, agreement, term or
condition and Mortgagee shall have the right to invoke any equitable right or
remedy as though other remedies were not provided for in this Mortgage.
15. RIGHT OF MORTGAGEE TO CREDIT SALE. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof. In lieu of paying cash therefor, Mortgagee may make settlement for
the purchase price by crediting upon the Indebtedness or other sums secured
by this Mortgage the net sales price after deducting therefrom the expenses
of sale and the cost of the action and any other sums which Mortgagee is
authorized to deduct under this Mortgage. In such event, this Mortgage, the
Credit Agreement, the Term Notes, if any, the Revolving Credit Notes, if any,
the Swing Line Notes, if any, the LOC Notes, if any and documents evidencing
expenditures secured hereby may be presented
12
to the person or persons conducting the sale in order that the amount so used
or applied may be credited upon the Indebtedness as having been paid.
16. APPOINTMENT OF RECEIVER. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice
to Mortgagor, unless otherwise required by applicable law, and without regard
to the adequacy or inadequacy of the Mortgaged Property or any other
collateral as security for the Indebtedness and Obligations or the interest
of Mortgagor therein, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers or other manager of the
Mortgaged Property, and Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor (except as may be
required by law). Any such receiver or receivers shall have all the usual
powers and duties of receivers in like or similar cases and all the powers
and duties of Mortgagee in case of entry as provided in this Mortgage,
including, without limitation and to the extent permitted by law, the right
to enter into leases of all or any part of the Mortgaged Property, and shall
continue as such and exercise all such powers until the date of confirmation
of sale of the Mortgaged Property unless such receivership is sooner
terminated.
17. EXTENSION, RELEASE, ETC. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not then
or theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of
the terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed
at any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall
not reduce the amount of the lien of this Mortgage until the lien amount
shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien
of this Mortgage subject to the rights of any
13
tenants of the Mortgaged Property. The failure to make any such tenants
parties defendant to any such foreclosure proceeding and to foreclose their
rights will not be asserted by Mortgagor as a defense to any proceeding
instituted by Mortgagee to collect the Indebtedness or to foreclose the lien
of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.
18. SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE. (a) It is
the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"CODE") of the State in which the Mortgaged Property is located. If an Event
of Default shall occur and be continuing under this Mortgage, then in
addition to having any other right or remedy available at law or in equity,
Mortgagee shall have the option of either (i) proceeding under the Code and
exercising such rights and remedies as may be provided to a secured party by
the Code with respect to all or any portion of the Mortgaged Property which
is personal property (including, without limitation, taking possession of and
selling such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property constituting
the Mortgaged Property in accordance with Mortgagee's rights, powers and
remedies with respect to the real property (in which event the default
provisions of the Code shall not apply). If Mortgagee shall elect to proceed
under the Code, then ten days' notice of sale of the personal property shall
be deemed reasonable notice and the reasonable expenses of retaking, holding,
preparing for sale, selling and the like incurred by Mortgagee shall include,
but not be limited to, attorneys' fees and legal expenses. At Mortgagee's
request, Mortgagor shall assemble the personal property and make it available
to Mortgagee at a place designated by Mortgagee which is reasonably
convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) some of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) as to
those fixtures, this Mortgage upon recording or registration in the real
estate records of the proper office shall constitute a financing statement
filed as a "fixture filing" within the meaning of Sections 9-313 and 9-402 of
the Code; (iii) except as otherwise provided, Mortgagor is the record owner
of the Real Estate; and (iv) the mailing addresses of Mortgagor and Mortgagee
are as set forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or
14
more separate security agreements, in form reasonably satisfactory to
Mortgagee, covering all or any part of the Mortgaged Property and will
further execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, any financing statement, affidavit, continuation
statement or certificate or other document as Mortgagee may request in order
to perfect, preserve, maintain, continue or extend the security interest
under and the priority of this Mortgage and such security instrument.
Mortgagor shall from time to time, on request of Mortgagee, deliver to
Mortgagee an inventory in reasonable detail of any of the Mortgaged Property
which constitutes personal property. If Mortgagor shall fail to furnish any
financing or continuation statement within 10 days after request by
Mortgagee, then pursuant to the provisions of the Code, Mortgagor hereby
authorizes Mortgagee, without the signature of Mortgagor, to execute and file
any such financing and continuation statements. The filing of any financing
or continuation statements in the records relating to personal property or
chattels shall not be construed as in any way impairing the right of
Mortgagee to proceed against any personal property encumbered by this
Mortgage as real property, as set forth above. A photocopy of this Mortgage
may be filed as a Financing Statement.
(d) All rights, remedies and obligations granted, created or
otherwise arising hereunder and all representations, warranties and other
provisions hereof shall be construed, and all actions hereunder shall be
performed, in a manner consistent with, and subject to the terms and
provisions of, the Security Agreement. To the extent that the rights granted
hereunder in any item of the Mortgaged Property (other than the Real Estate
and other interests which are exclusively real property interests) conflict
with any rights granted in the same item of Mortgaged Property under the
Security Agreement, the Security Agreement shall prevail.
19. ASSIGNMENT OF RENTS. Mortgagor hereby assigns to Mortgagee
the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Mortgagor grants to Mortgagee the right
to enter the Mortgaged Property for the purpose of collecting the same and to
let the Mortgaged Property or any part thereof, and to apply the Rents on
account of the Indebtedness. The foregoing assignment and grant is present
and absolute and shall continue in effect until the Indebtedness is paid in
full, but Mortgagee hereby waives the right to enter the Mortgaged Property
for the purpose of collecting the Rents and Mortgagor shall be entitled to
collect, receive, use and retain the Rents until the occurrence of an Event
of Default under this Mortgage; such right of Mortgagor to collect, receive,
use and retain the Rents may be revoked by Mortgagee upon the occurrence of
any Event of Default under this Mortgage by giving not less than fifteen
days' written notice of such revocation to Mortgagor; in the event such
notice is given, so long as an Event of Default shall have occurred and be
15
continuing, Mortgagor shall pay over to Mortgagee, or to any receiver
appointed to collect the Rents, any lease security deposits, and shall pay
monthly in advance to Mortgagee, or to any such receiver, the fair and
reasonable rental value as determined by Mortgagee for the use and occupancy
of the Mortgaged Property or of such part thereof as may be in the possession
of Mortgagor or any affiliate of Mortgagor, and upon default in any such
payment Mortgagor and any such affiliate will vacate and surrender the
possession of the Mortgaged Property to Mortgagee or to such receiver, and in
default thereof may be evicted by summary proceedings or otherwise.
Mortgagor shall not accept prepayments of installments of Rent to become due
for a period of more than one month in advance (except for security deposits
and estimated payments of percentage rent, if any).
20. ADDITIONAL RIGHTS. Upon the occurrence of any Event of
Default, Mortgagee may, in its sole discretion and without regard to the
adequacy of its security under this Mortgage, apply all or any part of any
amounts on deposit with Mortgagee under this Mortgage against all or any part
of the Indebtedness, in accordance with the provisions of the Credit
Agreement and the other Loan Documents (as defined therein). Any such
application shall not be construed to cure or waive any Event of Default or
invalidate any act taken by Mortgagee on account of such Event of Default.
21. NOTICES. All notices, requests, demands and other
communications hereunder shall be given in the manner and to the addresses
determined under Section 13.2 of the Credit Agreement.
22. NO ORAL MODIFICATION. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the
date of this Mortgage relating to this Mortgage shall be superior to the
rights of the holder of any intervening or subordinate lien or encumbrance.
23. PARTIAL INVALIDITY. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision hereof, but each
shall be construed as if such invalid, illegal or unenforceable provision had
never been included. Notwithstanding to the contrary anything contained in
this Mortgage or in any provisions of the Indebtedness or Loan Documents, the
obligations of Mortgagor and of any other obligor under the Indebtedness or
Loan Documents shall be subject to the limitation that neither Mortgagee nor
any Lender shall charge, take or receive, nor shall Mortgagor or any other
obligor be obligated to pay to Mortgagee or any Lender, any amounts
constituting interest in excess of the maximum rate permitted by law to be
charged by Mortgagee or any Lender, as the case may be.
24. MORTGAGOR'S WAIVER OF RIGHTS. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws
16
now existing or that may subsequently be enacted providing for (i) any
appraisement before sale of any portion of the Mortgaged Property, (ii) any
extension of the time for the enforcement of the collection of the
Indebtedness or the creation or extension of a period of redemption from any
sale made in collecting such debt and (iii) exemption of the Mortgaged
Property from attachment, levy or sale under execution or exemption from
civil process. To the full extent Mortgagor may do so, Mortgagor agrees that
Mortgagor will not at any time insist upon, plead, claim or take the benefit
or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or
requiring foreclosure of this Mortgage before exercising any other remedy
granted hereunder and Mortgagor, for Mortgagor and its successors and
assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and
releases all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of the
secured indebtedness and marshalling in the event of foreclosure of the liens
hereby created.
25. REMEDIES NOT EXCLUSIVE. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by mortgage, security agreement,
pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement, shall prejudice or in any manner affect
Mortgagee's right to realize upon or enforce any other security now or
hereafter held by Mortgagee, it being agreed that Mortgagee shall be entitled
to enforce this Mortgage and any other security now or hereafter held by
Mortgagee in such order and manner as Mortgagee may determine in its absolute
discretion. No remedy herein conferred upon or reserved to Mortgagee is
intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity
or by statute. Every power or remedy given by any of the Loan Documents to
Mortgagee or to which it may otherwise be entitled, may be exercised,
concurrently or independently, from time to time and as often as may be
deemed expedient by Mortgagee. In no event shall Mortgagee, in the exercise
of the remedies provided in this Mortgage (including, without limitation, in
connection with the assignment of Rents to Mortgagee, or the appointment of a
receiver and the entry of such receiver on to all or any part of the
Mortgaged Property), be deemed a "mortgagee in possession", and Mortgagee
shall not in any way be made liable for any act, either of commission or
omission, in connection with the exercise of such remedies.
17
26. MULTIPLE SECURITY. If (a) the Premises shall consist of one
or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold one or more additional mortgages, liens, deeds of trust or
other security (directly or indirectly) for the Indebtedness upon other
property in the State in which the Premises are located (whether or not such
property is owned by Mortgagor or by others) or (c) both the circumstances
described in clauses (a) and (b) shall be true, then to the fullest extent
permitted by law, Mortgagee may, at its election, commence or consolidate in
a single foreclosure action all foreclosure proceedings against all such
collateral securing the Indebtedness (including the Mortgaged Property),
which action may be brought or consolidated in the courts of any county in
which any of such collateral is located. Mortgagor acknowledges that the
right to maintain a consolidated foreclosure action is a specific inducement
to some or all of the Lenders to make certain loans to and to enter into
certain agreements with Mortgagor, and for Mortgagee to enter into the Credit
Agreement, and Mortgagor expressly and irrevocably waives any objections to
the commencement or consolidation of the foreclosure proceedings in a single
action and any objections to the laying of venue or based on the grounds of
FORUM NON CONVENIENS which it may now or hereafter have. Mortgagor further
agrees that if Mortgagee shall be prosecuting one or more foreclosure or
other proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Indebtedness, or if Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue foreclosure proceedings and exercise its other
remedies granted in this Mortgage against all or any part of the Mortgaged
Property and Mortgagor waives any objections to the commencement or
continuation of a foreclosure of this Mortgage or exercise of any other
remedies hereunder based on such other proceedings or judgments, and waives
any right to seek to dismiss, stay, remove, transfer or consolidate either
any action under this Mortgage or such other proceedings on such basis.
Neither the commencement nor continuation of proceedings to foreclose this
Mortgage nor the exercise of any other rights hereunder nor the recovery of
any judgment by Mortgagee in any such proceedings shall prejudice, limit or
preclude Mortgagee's right to commence or continue one or more foreclosure or
other proceedings or obtain a judgment against any other collateral, (either
in or outside the State in which the Premises are located) which directly or
indirectly secures the Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either
18
such other proceedings or any action under this Mortgage on such basis. It
is expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral which
is the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Indebtedness (directly or indirectly)
in the most economical and least time-consuming manner.
27. EXPENSES; INDEMNIFICATION. Mortgagor agrees (a) to pay or
reimburse Mortgagee for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of,
and any amendment, supplement or modification to, the Credit Agreement and
the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation,
the reasonable fees and disbursements of counsel to Mortgagee, (b) to pay or
reimburse each Lender and the Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under the
Credit Agreement, the other Loan Documents and any such other documents
prepared in connection herewith or therewith, including, without limitation,
the fees and disbursements of counsel (including the allocated fees and
expenses of in-house counsel in lieu of the fees and expenses of outside
counsel) to each Lender and of counsel to the Agent, (c) to pay, indemnify,
and hold each Lender and the 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 similar taxes, if any, which may
be payable or determined to be payable in connection with the execution and
delivery of, 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, the Credit Agreement, the other Loan Documents and any such
other documents, and (d) to pay, indemnify, and hold each Lender and the
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 the Credit
Agreement, the other Loan Documents, the Stock Purchase Agreement, the Stock
Purchase, the Merger or the use of the proceeds of the Loans in connection
with the Stock Purchase, 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 Mortgagor, any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
PROVIDED, that the Mortgagor shall have no obligation hereunder to the Agent
or any Lender with respect to indemnified liabilities arising from (1)
19
the gross negligence or willful misconduct of the Agent or any such Lender or
(2) legal proceedings commenced against the Agent or any such Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
The agreements in this subsection shall survive repayment of the Loans and
all other amounts payable under the Credit Agreement.
28. SUCCESSORS AND ASSIGNS. Except to the extent prohibited in
the Credit Agreement, all covenants of Mortgagor contained in this Mortgage
are imposed solely and exclusively for the benefit of Mortgagee and the
Lenders and their respective successors and assigns, and no other person or
entity shall have standing to require compliance with such covenants or be
deemed, under any circumstances, to be a beneficiary of such covenants, any
or all of which may be freely waived in whole or in part by Mortgagee at any
time if in its sole discretion it deems such waiver advisable. All such
covenants of Mortgagor shall run with the land and bind Mortgagor, the
successors and assigns of Mortgagor (and each of them) and all subsequent
owners, encumbrancers and tenants of the Mortgaged Property, and shall inure
to the benefit of Mortgagee and the Lenders and their respective successors
and assigns. The word "Mortgagor" shall be construed as if it read
"Mortgagors" whenever the sense of this Mortgage so requires and if there
shall be more than one Mortgagor, the obligations of the Mortgagors shall be
joint and several.
29. NO WAIVERS, ETC. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of
this Mortgage shall not be deemed to be a waiver of any of the terms and
provisions hereof, and Mortgagee, notwithstanding any such failure, shall
have the right thereafter to insist upon the strict performance by Mortgagor
of any and all of the terms and provisions of this Mortgage to be performed
by Mortgagor. Mortgagee may release, regardless of consideration and without
the necessity for any notice to or consent by the holder of any subordinate
lien on the Mortgaged Property, any part of the security held for the
obligations secured by this Mortgage without, as to the remainder of the
security, in anywise impairing or affecting the lien of this Mortgage or the
priority of such lien over any subordinate lien.
30. GOVERNING LAW, ETC. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises are
located, except that Mortgagor expressly acknowledges that by their terms the
Term Notes, if any, the Revolving Credit Notes, if any, the Swing Line Notes,
if any, and the LOC Notes, if any, shall be governed and construed in
accordance with the laws of the State of New York, without regard to
principles of conflict of law, and for purposes of consistency, Mortgagor
agrees that in any IN PERSONAM proceeding related to this Mortgage the rights
of the parties to this Mortgage shall also be governed by and construed in
accordance
20
with the laws of the State of New York governing contracts made and to be
performed in that State, without regard to principles of conflict of law.
31. WAIVER OF TRIAL BY JURY. Mortgagor and Mortgagee each
hereby irrevocably and unconditionally waive trial by jury in any action,
claim, suit or proceeding relating to this Mortgage and for any counterclaim
(other than compulsory counterclaims) brought therein. Mortgagor hereby
waives all rights to interpose any counterclaim (other than compulsory
counterclaims) in any suit brought by Mortgagee hereunder and all rights to
have any such suit consolidated with any separate suit, action or proceeding.
32. CERTAIN DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used
in this Mortgage shall be used interchangeably in singular or plural form and
the word "MORTGAGOR" shall mean "each Mortgagor or any subsequent owner or
owners of the Mortgaged Property or any part thereof or interest therein,"
the word "MORTGAGEE" shall mean "Mortgagee or any successor agent under the
Credit Agreement," the words "TERM NOTES, REVOLVING CREDIT NOTES, SWING LINE
NOTES, LOC NOTES" shall mean respectively, "the Term Notes, the Revolving
Credit Notes, the Swing Line Notes, the LOC Notes or any other evidence of
indebtedness secured by this Mortgage," the word "PERSON" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "MORTGAGED
PROPERTY" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns and pronouns shall include the plural and vice versa.
The captions in this Mortgage are for convenience or reference only and in no
way limit or amplify the provisions hereof.
33. RELEASE. (a) Any Mortgaged Property that is permitted to be
sold or otherwise transferred free of the lien of the Security Documents as
provided in the Credit Agreement shall be sold or otherwise transferred, as
the case may be, free and clear of this Mortgage. In connection with any
such sale or transfer, the Mortgagee shall execute and deliver to Mortgagor,
or to such person or persons as Mortgagor shall reasonably designate, a
satisfaction of mortgage and such other documents as Mortgagor may reasonably
request to evidence the release of this Mortgage with respect to such
Mortgaged Property, as well as a release of any collateral assignments or
other Security Documents in favor of Mortgagee that burden such Mortgaged
Property.
(b) In addition, and not in limitation of the foregoing, any
Mortgaged Property (other than the Real Estate) that also constitutes
collateral under any other Security Document shall automatically be released
from this Mortgage in
1
the event that such Mortgaged Property is released from the security interest
created by such other Security Document in accordance with the terms thereof
and of the Credit Agreement.
This Mortgage has been duly executed by Mortgagor on the date
first above written.
WITNESS: S.D. ▇▇▇▇▇▇ COMPANY
------------------- By: ---------------------------
Name:
Title:
[CORPORATE SEAL]
STATE OF NEW YORK ) December ___, 1994
: ss.:
COUNTY OF NEW YORK )
Then personally appeared the above-named ____________________ in
his/her capacity as _______________________________ of S.D. ▇▇▇▇▇▇ Company,
and acknowledged the foregoing instrument to be his/her free act and deed in
his/her said capacity and the free act and deed of said corporation.
Before me,
------------------------------
------------------------------
(Print Name)
Notary Public State of
------------------
My commission expires:
------------------
EXHIBIT C-1 TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF AMENDED AND RESTATED BORROWER SECURITY AGREEMENT]
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of April
__, 1996, made by S.D. ▇▇▇▇▇▇ COMPANY, a Pennsylvania corporation (the
"BORROWER"), in favor of CHEMICAL BANK, as agent (in such capacity, the "AGENT")
for the several banks, financial institutions and other entities (the "LENDERS")
from time to time parties to the Amended and Restated Credit and Guarantee
Agreement, dated as of April __, 1996 (as the same may be amended, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT"), among SDW
Holdings Corporation, a Delaware corporation, the Borrower, the Lenders and the
Agent.
W I T N E S S E T H :
WHEREAS, in connection with the Existing Credit Agreement
(as defined in the Credit Agreement), the Borrower entered into that certain
Security Agreement, dated as of December 20, 1994 (the "EXISTING BORROWER
SECURITY AGREEMENT"), pursuant to which it granted a security interest in
certain of its assets as collateral security for the Obligations (as defined in
the Credit Agreement);
WHEREAS, the Borrower has requested that the Agent and the
Lenders amend and restate the Existing Credit Agreement in the manner provided
in the Credit Agreement; and
WHEREAS, it is a condition precedent to the effectiveness of
the Credit Agreement and to the obligations of the Lenders to make the
Extensions of Credit (as defined in the Credit Agreement) provided for therein
that the Borrower shall have amended and restated the Existing Borrower Security
Agreement in the manner provided for herein;
NOW, THEREFORE, in consideration of the premises contained
herein and to induce the Lenders to amend and restate the Existing Credit
Agreement as provided in the Credit Agreement and to make Extensions of Credit
under the Credit Agreement, the Borrower hereby agrees with the Agent, for the
benefit of the Lenders, to amend and restate and hereby amends and restates the
Existing Borrower Security Agreement to read in its entirety as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as so
defined; the following terms which are defined in the Uniform Commercial Code in
effect in the State of New York on the date hereof are used herein as so
defined: Chattel Paper, Documents, Equipment, Farm Products, General
Intangibles, Instruments, Inventory and Proceeds; and the following terms shall
have the following meanings:
"ACCOUNTS": as defined in the Code as in effect
on the date hereof, PROVIDED that "Accounts" shall not
include any Receivables sold, or any Receivables upon which
a Lien is granted, pursuant to the Receivables Facility or
any Permitted Receivables Financing.
"CODE": the Uniform Commercial Code as from time
to time in effect in the State of New York.
"COLLATERAL": as defined in Section 2; PROVIDED,
that Collateral shall not include any property which is
subject to a Lien permitted under subsection 9.3 of the
Credit Agreement securing indebtedness permitted under
subsection 9.2 of the Credit Agreement to the extent that
the grant of a security interest hereunder would be
prohibited by such Lien or by the terms of such indebtedness
or, as to property acquired after the date hereof, which is
subject to a prohibition on Liens contained in any agreement
entered into after the Closing Date which is not prohibited
by subsection 9.14 of the Credit
2
Agreement, which agreement evidences, governs or is otherwise related
to the financing of such property; PROVIDED, FURTHER, that Collateral
shall not include any property which is subject to a Lien permitted
under subsection 9.3(s) of the Credit Agreement or sold pursuant to
subsection 9.6 (k) of the Credit Agreement, including such Liens and
sales with respect to any such property acquired after the date
hereof.
"COLLATERAL ACCOUNT": any account established to hold money
proceeds, maintained under the sole dominion and control of the Agent,
subject to withdrawal by the Agent for the account of the Lenders as
provided in Section 8.
"CONTRACTS": the Stock Purchase Agreement, the
Merger Agreement, the Receivables Sale Agreement, and all
Rate Protection Agreements entered into by the Borrower, as
each of the foregoing may be amended, supplemented or
otherwise modified from time to time including, in each
case, without limitation, (a) all rights of the Borrower to
receive moneys due and to become due to it thereunder or in
connection therewith, (b) all rights of the Borrower to
damages arising out of, or for, breach or default in respect
thereof and (c) all rights of the Borrower to perform and to
exercise all remedies thereunder.
"COPYRIGHT LICENSE": any agreement, written or oral,
providing for the grant by or to the Borrower of any right under any
Copyright.
"COPYRIGHTS": all of the following to the extent that the
Borrower now or hereafter has any right, title or interest in any
country in the world: (i) all copyrights in all works, whether
published or unpublished, now existing or hereafter created or
acquired, all registrations and recordings thereof, and all
applications in the United States Copyright Office, and (ii) all
renewals thereof.
"MERGER AGREEMENT": the Merger Agreement, dated as of
December 20, 1994 between SDW Acquisition Corporation and the
Borrower.
"PATENT LICENSE": all agreements, whether written
or oral, providing for the grant by the Borrower of any
right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any thereof listed on
SCHEDULE 1 hereto.
"PATENTS": (a) all letters patent of the United
States and all reissues and extensions thereof, including,
without limitation, any thereof referred to in SCHEDULE 1
hereto, and (b) all applications for letters patent of the
United States or any other Country and all divisions,
continuations and continuations-in-part thereof, including,
without limitation, any thereof listed on SCHEDULE 1 hereto.
"SECURITY AGREEMENT": this Amended and Restated
Security Agreement, as amended, supplemented or otherwise
modified from time to time.
"TRADEMARK LICENSE": any agreement, written or oral,
providing for the grant by or to the Borrower of any right to use any
Trademark, including, without limitation, any thereof listed on
SCHEDULE 2 hereto.
"TRADEMARKS": (a) all trademarks, trade names,
corporate names, company names, business names, fictitious
business names, trade dress, trade styles, service marks,
designs, logos and other source or business identifiers, and
the goodwill of the business associated therewith, including
customer lists, license rights, advertising materials and
all other business assets which uniquely reflect the
goodwill of the business, now existing or hereafter adopted
or acquired, all registrations and recordings thereof, and
all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar
office or agency of the United States, or any State thereof,
or any other Country, including, without limitation, any
thereof listed on SCHEDULE 2 hereto, and (b) all renewals
thereof.
"UCC FILING COLLATERAL": as defined in Section 4(b).
3
2. GRANT OF SECURITY INTEREST. As collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Borrower hereby
grants to the Agent for the ratable benefit of the Lenders a security interest
in all of the following property now owned or at any time hereafter acquired by
the Borrower or in which the Borrower now has or at any time in the future may
acquire any right, title or interest (collectively, the "COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Patents;
(x) all Patent Licenses;
(xi) all Timber;
(xii) all Trademarks;
(xiii) all Trademark Licenses; and
(xiv) to the extent not otherwise included, all
Proceeds and products of any and all of the
foregoing;
PROVIDED, HOWEVER, that notwithstanding any of the other provisions set forth in
this Section 2, this Security Agreement shall not constitute an assignment or
pledge of, or a grant of a security interest in or lien on, (a) any Collateral
if such assignment, pledge or grant of a security interest or lien with respect
to such Collateral is prohibited by any applicable Requirement of Law of any
Governmental Authority, (b) any Collateral of the types described in clauses
(iii), (x) and (xii) if such assignment, pledge or grant of a security interest
or lien with respect to such Collateral is prohibited by the terms of the
applicable Contract, Patent License or Trademark License or (c) any Receivables
or Related Security sold, or any Receivables or Related Security upon which a
Lien is granted, pursuant to the Receivables Facility or any Permitted
Receivables Financing.
3. RIGHTS OF AGENT AND LENDERS; LIMITATIONS ON AGENT'S AND
LENDERS' OBLIGATIONS. (A) BORROWER REMAINS LIABLE UNDER ACCOUNTS AND CONTRACTS.
Anything herein to the contrary notwithstanding, the Borrower shall remain
liable under each of the Accounts and Contracts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such Account and
in accordance with and pursuant to the terms and provisions of each such
Contract. Neither the Agent nor any Lender shall have any obligation or
liability under any Account (or any agreement giving rise thereto) or under any
Contract by reason of or arising out of this Security Agreement or the receipt
by the Agent or any such Lender of any payment relating to such Account or
Contract pursuant hereto, nor shall the Agent or any Lender be obligated in any
manner to perform any of the obligations of the Borrower under or pursuant to
any Account (or any agreement giving rise thereto) or under or pursuant to any
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party under any Account
4
(or any agreement giving rise thereto) or under any Contract, to present or file
any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
(b) NOTICE TO CONTRACTING PARTIES. At any time after the
occurrence and during the continuance of an Event of Default, the Agent may in
its own name or in the name of others communicate with account debtors with
respect to Accounts parties to the Contracts to verify with them to its
satisfaction the existence, amount and terms of any Accounts or Contracts.
(c) ANALYSIS OF ACCOUNTS. The Agent shall have the right to
make test verifications of the Accounts in any manner and through any medium
that it reasonably considers advisable, and the Borrower shall furnish all such
assistance and information as the Agent may require in connection with such test
verifications. Upon the Agent's request and at the expense of the Borrower, the
Borrower shall cause independent public accountants or others satisfactory to
the Agent to furnish to the Agent reports showing reconciliations, aging and
test verifications of, and trial balances for, the Accounts. The Agent in its
own name or in the name of others may at any time after the occurrence and
during the continuance of an Event of Default communicate with the obligors on
the Accounts to verify with them to the Agent's satisfaction the existence,
amount and terms of any Accounts.
(d) COLLECTIONS ON ACCOUNTS. The Agent hereby authorizes
the Borrower to collect the Accounts, so long as no Event of Default has
occurred or is continuing. If required by the Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Accounts, when collected by the Borrower, (1) shall be forthwith (and, in any
event, within two Business Days) deposited by the Borrower in the exact form
received, duly indorsed by the Borrower to the Agent if required, in a
Collateral Account maintained under the sole dominion and control of the Agent,
subject to withdrawal by the Agent for the account of the Lenders only as
provided in Section 8(c), and (2) until so turned over, shall be held by the
Borrower in trust for the Agent and the Lenders, segregated from other funds of
the Borrower. Each such deposit of Proceeds of Accounts shall be accompanied by
a report identifying in reasonable detail the nature and source of the payments
included in the deposit.
At any time when an Event of Default has occurred and is
continuing, the Borrower shall, at the request of the Agent, deliver to the
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Accounts, including, without
limitation, all original orders, invoices and shipping receipts.
4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants that:
(a) TITLE; NO OTHER LIENS. Except for the Lien granted to
the Agent for the ratable benefit of the Lenders pursuant to this Security
Agreement and the other Liens permitted to exist on the Collateral pursuant to
the Credit Agreement, the Borrower owns each item of the Collateral free and
clear of any and all Liens or claims of others. No security agreement,
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as may
have been filed in favor of the Agent, for the ratable benefit of the Lenders,
pursuant to this Security Agreement or as may be permitted pursuant to the
Credit Agreement.
(b) PERFECTED FIRST PRIORITY LIENS. Assuming that the
financing statements described on SCHEDULE 3 hereto have been filed, the Liens
granted by the Borrower pursuant to this Security Agreement, constitute
perfected Liens on the Collateral in which a security interest may be perfected
pursuant to Article 9 of the Uniform Commercial Code as in effect in each
relevant jurisdiction (the "UCC FILING COLLATERAL") in favor of the Agent, for
the ratable benefit of the Lenders, which are prior to all other Liens on such
Collateral created by the Borrower and in existence on the date hereof (except
such other Liens as are not prohibited under the Credit Agreement) and which are
enforceable as such against all creditors of and purchasers from the Borrower
(except purchasers of inventory or Timber in the ordinary course of business to
the extent provided in Section 9-307 of the Uniform Commercial Code as in effect
in each relevant jurisdiction), except in each case as enforceability is
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether involved in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing. Upon
completion of the other actions described in Section 20 to perfect a security
interest in the Collateral (other than the UCC Filing Collateral), the Liens
granted pursuant to this Security Agreement with respect to the Collateral
(other than
5
the UCC Filing Collateral) which is the subject of any such applicable actions
will constitute perfected Liens on such Collateral in which a security interest
may be perfected pursuant to applicable law as in effect in each relevant
jurisdiction (to the extent such Liens may be perfected by such applicable
actions under such laws) in favor of the Agent, for the ratable benefit of the
Lenders, which are prior to all other Liens on the Collateral created by the
Borrower and in existence on the date hereof (except such other Liens as are
not prohibited under the Credit Agreement) and which are enforceable as such
against all creditors of and purchasers from the Borrower, as the case may be,
except in each case as enforceability is affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether involved in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(c) ACCOUNTS; GENERAL INTANGIBLES. Subject to Section 5(n),
no amount payable to the Borrower under or in connection with any Account is
evidenced by any Instrument or Chattel Paper which has not been delivered to the
Agent. The places where the Borrower currently keeps its records concerning the
Accounts are listed on SCHEDULE 4 or such other locations as may be specified by
the Borrower to the Agent pursuant to Section 5(l).
(d) INVENTORY AND EQUIPMENT. The Inventory and the
Equipment of the Borrower are kept at the locations listed on SCHEDULE 5 hereto
or such other locations as may be specified by the Borrower to the Agent
pursuant to Section 5(l).
(e) CHIEF EXECUTIVE OFFICE. The Borrower's chief executive
office and chief place of business is located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other locations as may be specified by the Borrower
to the Agent pursuant to Section 5(l).
(f) FARM PRODUCTS. None of the Collateral constitutes, or
is the Proceeds of, Farm Products.
(g) COPYRIGHTS, PATENTS AND TRADEMARKS. The Borrower does
not own any material registered U.S. Copyrights or U.S. Copyright Licenses in
its own name as of the date hereof. SCHEDULE 1 hereto includes all U.S. Patents
and U.S. Patent Licenses owned by the Borrower in its own name as of the date
hereof. SCHEDULE 2 hereto includes all U.S. Trademarks and U.S. Trademark
Licenses owned by the Borrower in its own name as of the date hereof. To the
best of the Borrower's knowledge, each U.S. Patent and U.S. Trademark is valid,
subsisting, unexpired, enforceable and has not been abandoned. Except as set
forth in either such Schedule, none of such U.S. Patents or U.S. Trademarks is
the subject of any licensing or franchise agreement. No holding, decision or
judgment has been rendered by any Governmental Authority which would limit,
cancel or question the validity of any U.S. Patent or U.S. Trademark. No action
or proceeding is pending (i) seeking to limit, cancel or question the validity
of any U.S. Patent or U.S. Trademark, or (ii) which, if adversely determined,
would have a material adverse effect on the value of any U.S. Patent or U.S.
Trademark.
5. COVENANTS. The Borrower covenants and agrees with the
Agent and the Lenders that, from and after the date of this Security Agreement
until this Security Agreement is terminated and the security interests created
hereby are released:
(a) FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS AND CHATTEL
PAPER. At any time and from time to time, upon the written request of the
Agent, and at the sole expense of the Borrower, the Borrower will promptly and
duly execute and deliver such further instruments and documents and take such
further action as the Agent may reasonably request for the purpose of obtaining
or preserving the full benefits of this Security Agreement and of the rights and
powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the Liens created hereby. The Borrower also
hereby authorizes the Agent to file any such financing or continuation statement
without the signature of the Borrower to the extent permitted by applicable law.
A carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral shall be sufficient as a financing
statement for filing in any jurisdiction. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
Instrument or Chattel Paper, such Instrument or, to the extent required under
Section 5(n), Chattel Paper shall be immediately delivered to the Agent, duly
endorsed in a manner satisfactory to the Agent, to be held as Collateral
pursuant to this Security Agreement.
6
(b) INDEMNIFICATION. The Borrower agrees to pay, and to
save the Agent and the Lenders harmless from, any and all liabilities, costs and
expenses (including, without limitation, reasonable legal fees and expenses) (i)
with respect to, or resulting from, any delay in paying, any and all excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral, (ii) with respect to, or resulting from, any
delay in complying with any Requirement of Law applicable to any of the
Collateral or (iii) in connection with any of the transactions contemplated by
this Security Agreement. In any suit, proceeding or action brought by the Agent
or any Lender under any Account or Contract for any sum owing thereunder, or to
enforce any provisions of any Account or Contract, the Borrower will save,
indemnify and keep the Agent and such Lender harmless from and against all
expense, loss or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction or liability whatsoever of the account debtor or obligor
thereunder, arising out of a breach by the Borrower of any obligation thereunder
or arising out of any other agreement, indebtedness or liability at any time
owing to or in favor of such account debtor or obligor or its successors from
the Borrower.
(c) MAINTENANCE OF RECORDS. The Borrower will keep and
maintain at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments received and
all credits granted with respect to the Accounts. The Borrower will ▇▇▇▇ its
books and records pertaining to the Collateral to evidence this Security
Agreement and the security interests granted hereby.
(d) RIGHT OF INSPECTION. The Agent shall at all times have
full and free access during normal business hours and upon reasonable notice to
all the books, correspondence and records of the Borrower, and the Agent and its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and the Borrower agrees to render to the Agent, at the
Borrower's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. Upon reasonable notice to Borrower,
the Agent and, at any time after the occurrence and during the continuation of
an Event of Default, the Lenders and their respective representatives shall also
have the right, during normal business hours to enter into and upon any premises
where any of the Inventory or Equipment is located for the purpose of inspecting
the same, observing its use or otherwise protecting its interests therein.
(e) PAYMENT OF TAXES AND OTHER AMOUNTS. The Borrower will
pay promptly when due all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of its income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for labor,
materials and supplies) against or with respect to the Collateral which have a
reasonable likelihood of adverse determination, except that no such charge need
be paid if (i) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (ii) such proceedings do not involve any material
danger of the sale, forfeiture or loss of any material portion of the Collateral
or any interest therein and (iii) such charge is adequately reserved against on
the Borrower's books in accordance with GAAP.
(f) LIENS ON COLLATERAL. The Borrower will defend the
Collateral against, and will take such other action as is necessary to remove,
any Lien or claim on or to the Collateral, other than the Liens created hereby
and other than as permitted pursuant to the Credit Agreement, and will defend
the right, title and interest of the Agent and the Lenders in and to any of the
Collateral against the claims and demands of all Persons whomsoever.
(g) CERTAIN NOTICES. The Borrower will not fail to deliver
to the Agent a copy of each material demand, notice or document received by it
relating in any way to any Contract or any agreement giving rise to an Account.
(h) LIMITATIONS ON DISCOUNTS AND COMPROMISES OF ACCOUNTS.
Other than in the ordinary course of business as generally conducted by the
Borrower over a period of time, the Borrower will not compromise, compound or
settle the Accounts for less than the full amount thereof, or release, wholly or
partially, any Person liable for the payment thereof, except in each case as
permitted under the Credit Agreement.
(i) MAINTENANCE OF INSURANCE. The Borrower will maintain,
with financially sound and reputable insurance companies (or, to the extent
consistent with prudent business practice, a program of self-insurance),
insurance in at least such amounts as are usually insured against in the same
general area by companies engaged in the same or a similar business (i) insuring
the Inventory and Equipment against loss by fire, explosion, theft and such
other casualties as may be reasonably satisfactory to the Agent and (ii)
insuring the Borrower, the Agent and the Lenders against liability for personal
injury and property damage relating to such Inventory and Equipment. Such
policies shall provide that losses
7
are payable to the Borrower, the Agent and the Lenders as their respective
interests may appear. Any such insurance policies shall (A) contain a breach of
warranty clause in favor of the Agent and the Lenders, (B) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the Agent of
written notice thereof, (C) name the Agent and the Lenders as insured parties
and (D) be reasonably satisfactory in all other respects to the Agent. The
Borrower shall deliver to the Agent a report of a reputable insurance broker
with respect to any such insurance policies during the month of June in each
calendar year and such supplemental reports with respect thereto as the Agent
may from time to time reasonably request.
(j) FURTHER IDENTIFICATION OF COLLATERAL. The Borrower will
furnish to the Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Agent may reasonably request, all in reasonable
detail.
(k) NOTICES. The Borrower will advise the Agent promptly,
in reasonable detail, at its address set forth for notices pursuant to
subsection 13.2 of the Credit Agreement, (i) of any Lien (other than Liens
created hereby or permitted under the Credit Agreement) on, or claim asserted
against, any of the Collateral and (ii) of the occurrence of any other event
which could reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or, with respect to any material portion of
the Collateral, on the Liens created hereunder.
(l) CHANGES IN LOCATIONS, NAME, ETC. The Borrower will not
(i) change the location of its chief executive office/chief place of business
from that specified in Section 4(e) or remove its books and records from the
locations referred to in Section 4(c), (ii) permit any of the Inventory or
Equipment to be kept at a location other than those listed on SCHEDULE 5 hereto
or (iii) change its name, identity or corporate structure to such an extent that
any financing statement filed in favor of the Agent in connection with this
Security Agreement would become seriously misleading, unless in each case it
shall have given the Agent and the Lenders at least 30 days prior written notice
thereof and all filings and other actions to maintain the perfection of the
security interests granted hereby shall have been made.
(m) PATENTS AND TRADEMARKS.
(i) The Borrower (either itself or through licensees)
will, except with respect to any Trademark that the Borrower shall
reasonably determine is of negligible economic value to it, (A) employ such
Trademark with the appropriate notice of registration and (B) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby any Trademark may become invalidated.
(ii) The Borrower will not, except with respect to any
Patent that the Borrower shall reasonably determine is of negligible
economic value to it, do any act, or omit to do any act, whereby any Patent
may become abandoned or dedicated.
(iii) The Borrower will notify the Agent and the Lenders
promptly if it knows, or has reason to know, of any adverse final
determination with respect to any Patent or Trademark (including, without
limitation, any such final determination in any proceeding in the United
States Patent and Trademark Office or any court or tribunal in any country)
regarding the Borrower's ownership of any Patent or Trademark or its right
to register the same or to keep and maintain the same.
(iv) Whenever the Borrower, either by itself or through
any agent, employee, licensee or designee, shall file an application for
the registration of any Patent or Trademark with the United States Patent
and Trademark Office or any similar office or agency in any other country
or any political subdivision thereof, the Borrower shall report such filing
to the Agent and the Lenders within fifteen Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Agent, the Borrower shall execute and deliver any and all agreements,
instruments, documents, and papers as the Agent may request to evidence the
Agent's and the Lenders' security interest in any Patent or Trademark and
the goodwill and general intangibles of the Borrower relating thereto or
represented thereby, and the Borrower hereby constitutes the Agent as its
attorney-in-fact to execute and file all such writings for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed;
such power being coupled with an interest is irrevocable until the
Obligations are paid in full, the Commitments are terminated and no Letter
of Credit remains outstanding.
8
(v) The Borrower will, except with respect to any
Trademark or Patent that the Borrower shall reasonably determine is of
negligible economic value to it, take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Patents and Trademarks, including, without limitation,
filing of applications for renewal, affidavits or declarations of use and
affidavits or declarations of incontestability.
(vi) In the event that any Patent or Trademark included
in the Collateral is infringed, misappropriated or diluted by a third
party, the Borrower shall promptly notify the Agent and the Lenders after
it learns thereof and shall, unless the Borrower shall reasonably determine
that such Patent or Trademark is of negligible economic value to the
Borrower which determination the Borrower shall promptly report to the
Agent and the Lenders, promptly ▇▇▇ for infringement, misappropriation or
dilution, to seek injunctive relief where appropriate and to recover any
and all damages for such infringement, misappropriation or dilution, or
take such other actions as the Borrower shall reasonably deem appropriate
under the circumstances to protect such Patent or Trademark.
(n) CHATTEL PAPER. Unless an Event of Default shall have
occurred and be continuing, the Borrower shall be entitled to retain possession
of all Collateral consisting of Chattel Paper, and shall hold all such Chattel
Paper in trust for the Agent, for the ratable benefit of the Lenders. If an
Event of Default shall have occurred and be continuing, upon the request of the
Agent, such Chattel Paper shall be immediately delivered to the Agent, to be
held as Collateral pursuant to this Agreement. The Borrower shall not permit
any other Person (other than Holdings or a Subsidiary) to possess any such
Collateral at any time.
(o) GOVERNMENT CONTRACTS. The Borrower shall, to the extent
practicable, provide reasonable advance notice to the Agent (i) prior to or, if
such advance notice is not practicable, shall provide notice to the Agent
promptly after, entering into a contract with a Governmental Authority and (ii)
prior to or, if such advance notice is not practicable, shall provide notice to
the Agent promptly after, the sale of goods to a Governmental Authority
resulting in the creation of an Account if such contract or Account, in the
aggregate together with all such contracts then in effect (including any such
contract entered into prior to the Closing Date) and/or Accounts then
outstanding (including any such Accounts arising prior to the Closing Date), but
without duplication, exceed 5% of net sales of the Borrower and its Subsidiaries
for the most recently completed fiscal year, and shall, at the request of the
Agent, provide any notices and make any filings required under the Assignment of
Claims Act in order to grant, maintain and/or perfect the security interest all
such contracts and Accounts granted pursuant to this Security Agreement.
6. AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) POWERS. Subject to Section 8(f), the Borrower hereby
irrevocably constitutes and appoints the Agent and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of the Borrower and
in the name of the Borrower or in its own name, from time to time in the Agent's
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of the
foregoing, the Borrower hereby gives the Agent the power and right, on behalf of
the Borrower, without notice to or assent by the Borrower (except as set forth
below), to do the following:
(i) in the case of any Collateral, at any time when
any Event of Default shall have occurred and is continuing, in the
name of the Borrower or its own name, or otherwise, to take possession
of and indorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Account,
Instrument, General Intangible or Contract or with respect to any
other Collateral and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the Agent for the purpose of collecting any and all
such moneys due under any Account, Instrument, General Intangible or
Contract or with respect to any other Collateral whenever payable;
9
(ii) in each case, to the extent not paid, performed,
discharged or effected by the Borrower as required by this Agreement
or the Credit Agreement, to pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, to effect any repairs
or any insurance called for by the terms of this Security Agreement
and to pay all or any part of the premiums therefor and the costs
thereof; and
(iii) at any time when an Event of Default shall have
occurred and be continuing, (A) to direct any party liable for any
payment under any of the Collateral to make payment of any and all
moneys due or to become due thereunder directly to the Agent or as the
Agent shall direct; (B) to ask or demand for, collect, receive payment
of and receipt for, any and all moneys, claims and other amounts due
or to become due at any time in respect of or arising out of any
Collateral; (C) to sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (D) to commence and prosecute
any suits, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral; (E) to
defend any suit, action or proceeding brought against the Borrower
with respect to any Collateral; (F) to settle, compromise or adjust
any suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the Agent
may deem appropriate; (G) to assign, or grant licenses with respect
to, any Copyright, Patent or Trademark (along with all the goodwill of
the business to which any such Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner,
as the Agent shall in its sole discretion determine; (H) in the
exercise of its rights under this Section 6, to use any and all
Trademarks and Trademark Licenses, if practicable and only to the
extent permitted by agreements relating thereto and applicable laws,
to the extent of the rights of the Borrower therein, and the Borrower
hereby grants a license to the Agent for such purpose and (I)
generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for all
purposes, and to do, at the Agent's option and the Borrower's expense,
at any time, or from time to time, all acts and things which the Agent
deems necessary to protect, preserve or realize upon the Collateral
and the Agent's and the Lenders' Liens thereon and to effect the
intent of this Security Agreement, all as fully and effectively as the
Borrower might do.
The Borrower hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) OTHER POWERS. The Borrower also authorizes the Agent
and the Lenders, at any time and from time to time, to execute, in connection
with the sale provided for in Section 8 hereof, any indorsements, assignments or
other instruments of conveyance or transfer with respect to the Collateral.
(c) NO DUTY ON AGENT OR LENDERS' PART. The powers conferred
on the Agent and the Lenders hereunder are solely to protect the Agent's and the
Lenders' interests in the Collateral and shall not impose any duty upon the
Agent or any Lender to exercise any such powers. The Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Borrower for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
7. PERFORMANCE BY AGENT OF BORROWER OBLIGATIONS. If the
Borrower fails to perform or comply with any of its agreements contained herein
and the Agent, as provided for by the terms of this Security Agreement, shall
itself perform or comply, or otherwise cause performance or compliance, with any
agreement, the expenses of the Agent incurred in connection with such
performance or compliance, together with interest thereon at the rate per annum
set forth in subsection 5.4(c) of the Credit Agreement, shall be payable by the
Borrower to the Agent on demand and shall constitute Obligations secured hereby.
8. REMEDIES. (a) NOTICE TO ACCOUNT DEBTORS AND CONTRACT
PARTIES. Upon the request of the Agent at any time after the occurrence and
during the continuance of an Event of Default, the Borrower shall notify account
debtors on the Accounts and parties to the Contracts that the Accounts and the
Contracts have been assigned to the Agent for the ratable benefit of the Lenders
and that payments in respect thereof shall be made directly to the Agent.
10
(b) PROCEEDS TO BE TURNED OVER TO AGENT. In addition to the
rights of the Agent and the Lenders specified in Section with respect to
payments of Accounts, if an Event of Default shall occur and be continuing, the
Agent may require, by notice to the Borrower that all Proceeds received by the
Borrower consisting of cash, checks and other near-cash items be held by the
Borrower in trust for the Agent and the Lenders, segregated from other funds of
the Borrower, and forthwith upon receipt by the Borrower, be turned over to the
Agent in the exact form received by the Borrower (duly indorsed by the Borrower
to the Agent, if required) and held by the Agent in a Collateral Account
maintained under the sole dominion and control of the Agent. All Proceeds while
held by the Agent in a Collateral Account (or by the Borrower in trust for the
Agent and the Lenders) shall continue to be held as collateral security for all
the Obligations and shall not constitute payment thereof until applied as
provided in Section 8(c).
(c) APPLICATION OF PROCEEDS. At such intervals as may be
agreed upon by the Borrower and the Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Agent's election, the Agent may
apply all or any part of Proceeds held in any Collateral Account in payment of
the Obligations in such order as the Agent may elect and any part of such funds
which the Agent elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the Agent
to the Borrower or to whomsoever may be lawfully entitled to receive the same.
Any balance of such Proceeds remaining after the Obligations shall have been
paid in full, the Commitments shall have been terminated and no Letter of Credit
remains outstanding shall be paid over to the Borrower or to whomsoever may be
lawfully entitled to receive the same.
(d) CODE REMEDIES. If an Event of Default shall occur and
be continuing, the Agent, on behalf of the Lenders may exercise, in addition to
all other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the Code. Without limiting the
generality of the foregoing, the Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon the Borrower or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived to the fullest extent permitted by applicable law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Agent or any Lender shall have the right upon any such public sale or sales,
and, to the fullest extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in the Borrower, which right or equity of
redemption is hereby waived or released to the extent permitted by applicable
law. The Borrower further agrees, at the Agent's request, to assemble the
Collateral and make it available to the Agent at places which the Agent shall
reasonably select, whether at the Borrower's premises or elsewhere. The Agent
shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of the Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as the Agent may elect, and only after such
application and after the payment by the Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Agent account for the surplus, if any, to the Borrower. To the
extent permitted by applicable law, the Borrower waives all claims, damages and
demands it may acquire against the Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
(e) DEFICIENCY. The Borrower shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Obligations and the reasonable fees and
disbursements of any attorneys employed by the Agent or any Lender to collect
such deficiency.
(f) Anything herein to the contrary notwithstanding, the
exercise of remedies or any power of attorney granted hereunder with respect to
Collateral is subject to any applicable Requirement of Law of any Governmental
Authority. No action will be taken by the Agent or any Lender hereunder if such
action will result in a violation of any applicable Requirement of Law of any
Government Authority by any Loan Party.
11
9. LIMITATION ON DUTIES REGARDING PRESERVATION OF
COLLATERAL. The Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
Agent deals with similar property for its own account. Neither the Agent, any
Lender, nor any of their respective directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon all or any part
of the Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Collateral upon the request of the Borrower
or otherwise.
10. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest until this Agreement is terminated and the
security interests created hereby are released.
11. SEVERABILITY. Any provision of this Security 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.
12. SECTION HEADINGS. The section headings used in this
Security Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
13. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of the Agent or any Lender, any right,
remedy, power or privilege hereunder 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.
14. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS. None of
the terms or provisions of this Security Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Borrower and the Agent, PROVIDED that any provision of this Security
Agreement may be waived by facsimile transmission by the Agent. This Security
Agreement shall be binding upon and inure to the benefit of the permitted
successors and permitted assigns of the Borrower, the Agent and the Lenders,
PROVIDED that the Borrower may not assign its rights or obligations under this
Security Agreement without the prior written consent of the Agent and any
purported assignment without such consent shall be null and void.
15. NOTICES. All notices, requests and demands given
hereunder shall be given in accordance with subsection 13.2 of the Credit
Agreement.
16. AUTHORITY OF AGENT. The Borrower acknowledges that the
rights and responsibilities of the Agent under this Security Agreement with
respect to any action taken by the Agent or the exercise or non-exercise by the
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Security Agreement shall, as
between the Agent and the Lenders, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Agent and the Borrower, the Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and the Borrower shall not be under
any obligation, or entitlement, to make any inquiry respecting such authority.
17. INTEGRATION. This Security Agreement represents the
agreement of the Borrower and the Agent with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Agent or any Lender relative to subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents.
18. GOVERNING LAW. THIS SECURITY 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, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
12
19. TERMINATION. (a) This Agreement and the Liens created
hereby shall terminate when all the Obligations shall have been fully paid, when
no Letters of Credit shall remain outstanding and when the Commitments shall
have terminated under the Credit Agreement, at which time the Agent shall
execute and deliver to the Borrower, or to such person or persons as the
Borrower shall reasonably designate, all Uniform Commercial Code termination
statements and similar documents prepared by the Borrower at its expense which
the Borrower shall reasonably request to evidence such termination.
(b) Without limiting the foregoing, all Collateral permitted
to be sold, transferred or otherwise disposed of in accordance with the terms
and provisions of the Credit Agreement shall be sold, transferred or otherwise
disposed of free and clear of the Liens created hereby. In connection with the
foregoing, the Agent shall execute and deliver to the Borrower, or to such
Person or Persons as the Borrower shall reasonably designate, all Uniform
Commercial Code termination statements and similar documents prepared by the
Borrower at its expense which the Borrower shall reasonably request to evidence
the release of the Liens created hereby with respect to any such Collateral.
(c) Any execution and delivery of statements or documents
pursuant to this Section 19 shall be without recourse to or representation or
warranty by the Agent.
20. PERFECTION OF LIENS. The Borrower and the Agent
acknowledge that the Liens created by this Security Agreement are initially
intended to be perfected only by the filing of (a) Uniform Commercial Code
financing statements described on SCHEDULE 3, (b) the filing of the Borrower
Patent and Trademark Security Agreement in the United States Patent and
Trademark Office and (c) the delivery of all Instruments of the Borrower. It is
not intended that any filing will be made in any country other than the United
States of America with respect to the security interest granted in Patents,
Patent Licenses, Trademarks or Trademarks Licenses pursuant to this Security
Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Security
Agreement to be duly executed and delivered as of the date first above written.
S.D. ▇▇▇▇▇▇ COMPANY
By:
-------------------------------------
Title:
SCHEDULES:
Schedule 1 - Patents and Patent Licenses
Schedule 2 - Trademarks and Trademark Licenses
Schedule 3 - Filing Jurisdictions
Schedule 4 - Location of Records
Schedule 5 - Locations of Inventory and Equipment
EXHIBIT D TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF AMENDED AND RESTATED BORROWER PLEDGE AGREEMENT]
AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of April , 1996,
made by S.D. ▇▇▇▇▇▇ COMPANY, a Pennsylvania corporation (the "BORROWER") in
favor of CHEMICAL BANK, as agent (in such capacity, the "AGENT") for the several
banks, financial institutions and other entities (the "LENDERS") from time to
time parties to the Amended and Restated Credit and Guarantee Agreement, dated
as of April , 1996 (as amended, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among SDW Holdings Corporation, a Delaware
Corporation ("HOLDINGS"), the Borrower, the Lenders and the Agent.
W I T N E S S E T H:
WHEREAS, in connection with the Existing Credit Agreement (as defined
in the Credit Agreement), the Borrower entered into that certain Pledge
Agreement, dated as of December 20, 1994 (the "EXISTING PLEDGE AGREEMENT"),
pursuant to which it granted a security interest in certain of its assets as
collateral security for the Obligations (as defined in the Credit Agreement);
WHEREAS, the Borrower has requested that the Agent and the Lenders
amend and restate the Existing Credit Agreement in the manner provided in the
Credit Agreement; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and to the obligations of the Lenders to make the Extensions of
Credit (as defined in the Credit Agreement) provided for therein that the
Borrower shall have amended and restated the Existing Pledge Agreement in the
manner provided for herein;
NOW, THEREFORE, in consideration of the premises contained herein and
to induce the Lenders to amend and restate the Existing Credit Agreement as
provided in the Credit Agreement and to make Extensions of Credit under the
Credit Agreement, the Borrower hereby agrees with the Agent, for the benefit of
the Lenders, to amend and restate and hereby amends and restates the Existing
Pledge Agreement to read in its entirety as follows:
1. DEFINED TERMS. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Amended and Restated Pledge Agreement, as the same
may be amended, modified or otherwise supplemented from time to time.
"CODE": the Uniform Commercial Code from time to time in effect in
the State of New York.
"COLLATERAL": the Pledged Stock issued by the Issuers and all
Proceeds thereof.
"COLLATERAL ACCOUNT": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders as provided in
Section 8.
"DOMESTIC ISSUER": any Issuer that is not a Foreign Issuer.
"FOREIGN ISSUER": any Issuer organized under the laws of any
jurisdiction outside the United States of America.
2
"ISSUERS": the collective reference to the companies identified on
SCHEDULE 1 attached hereto as the issuers of the Pledged Stock;
individually, each an "ISSUER."
"NON-CONSENSUAL LIENS: as defined in Section 4(c).
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 1
hereto, together with all stock certificates, options or rights of any
nature whatsoever that may be issued or granted by any Issuer to the
Borrower while this Agreement is in effect and while such Capital Stock
continues to be subject to the security interest granted pursuant to this
Agreement.
"PROCEEDS": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof of the Pledged Stock and, in any event, shall include,
without limitation, all dividends or other income from the Pledged Stock,
collections thereon or distributions with respect thereto.
"SECURITIES ACT": the Securities Act of 1933, as amended.
(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 and paragraph
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.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Borrower hereby delivers
to the Agent, for the ratable benefit of the Lenders, all the Pledged Stock
issued by the Issuers and hereby grants to Agent, for the ratable benefit of the
Lenders, a first security interest in the Collateral (except for Non-Consensual
Liens), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
3. STOCK POWERS. Concurrently with the delivery to the Agent of each
certificate representing one or more shares of Pledged Stock to the Agent, the
Borrower shall deliver an undated stock power covering such certificate, duly
executed in blank by the Borrower with, if the Agent so requests, signature
guaranteed.
4. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the Capital Stock of each Domestic Issuer
and sixty-five percent of the common stock and one hundred percent of the
preferred stock of each Foreign Issuer held by the Borrower.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) The Borrower is the record and beneficial owner of, and has good
and marketable title to, the Pledged Stock, free of any and all Liens or options
in favor of, or claims of, any other Person, except the security interests
created by this Agreement and non-consensual Liens arising involuntarily by
operation of law to the extent not prohibited by the Credit Agreement
("NON-CONSENSUAL LIENS").
(d) Upon delivery to the Agent of the stock certificates evidencing
the Pledged Stock, the security interest created by this Agreement will
constitute a valid, perfected first priority security interest (subject to
Non-Consensual Liens not prohibited by the Credit Agreement) in the Collateral,
enforceable as such against all creditors of the Borrower and any Persons
purporting to purchase any Collateral from the Borrower, except as affected by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
3
5. COVENANTS. The Borrower covenants and agrees with the Agent and
the Lenders that, from and after the date of this Agreement until this Agreement
is terminated and the security interests created hereby are released:
(a) If the Borrower shall, as a result of its ownership of the Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Borrower shall accept the same as the agent of the Agent and the Lenders,
hold the same in trust for the Agent and the Lenders and deliver the same
forthwith to the Agent in the exact form received, duly indorsed by the Borrower
to the Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by the Borrower and with, if the Agent so
requests, signature guaranteed, to be held by the Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Other than
pursuant to a distribution or transfer of any assets of an Issuer to the
Borrower in a transaction permitted under the Credit Agreement, (i) any sums
paid upon or in respect of the Pledged Stock upon the liquidation or dissolution
of any Issuer shall be paid over to the Agent to be held by it hereunder as
additional collateral security for the Obligations, and (ii) in case any
distribution of capital shall be made on or in respect of the Pledged Stock or
any property shall be distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall be delivered to the Agent to be held by it hereunder as additional
collateral security for the Obligations. If any sums of money or property so
paid or distributed in respect of the Pledged Stock shall be received by the
Borrower, the Borrower shall, until such money or property is paid or delivered
to the Agent, hold such money or property in trust for the Lenders, segregated
from other funds of the Borrower, as additional collateral security for the
Obligations.
(b) Without the prior written consent of the Agent, the Borrower will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
(other than to existing stockholders on a proportionate basis) any stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any Issuer,(ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Collateral other than pursuant to a transaction permitted under the Credit
Agreement,(iii) create, incur or permit to exist any Lien on any of the
Collateral, or any interest therein, except for the security interests created
by this Agreement and Liens permitted by the Credit Agreement (except for
Non-Consensual Liens not prohibited by the Credit Agreement) or (iv) enter into
any agreement or undertaking (other than this Agreement and the other Loan
Documents or, in the case of Collateral other than Pledged Stock, as permitted
by subsection 9.14 of the Credit Agreement) restricting the right or ability of
the Borrower or the Agent to sell, assign or transfer any of the Collateral.
(c) The Borrower shall maintain the security interest created by this
Agreement as a first perfected security interest (subject to Non-Consensual
Liens not prohibited by the Credit Agreement) and shall defend such security
interest against claims and demands of all Persons whomsoever. At any time and
from time to time, upon the written request of the Agent, and at the sole
expense of the Borrower, the Borrower will promptly and duly execute and deliver
such further instruments and documents and take such further actions as the
Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the Agent,
duly endorsed in a manner satisfactory to the Agent, to be held as Collateral
pursuant to this Agreement.
(d) The Borrower shall pay, and hold the Agent and the Lenders
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement.
6. CASH DIVIDENDS; VOTING RIGHTS. Unless an Event of Default shall
have occurred and be continuing and the Agent shall have given notice to the
Borrower of the Agent's intent to exercise its corresponding rights pursuant to
Section 7 below, the Borrower shall be permitted to receive all cash dividends
paid to the extent not prohibited by the Credit Agreement, in respect of the
Pledged Stock and to exercise all voting and corporate rights with respect to
the Pledged Stock; PROVIDED, HOWEVER, that no vote shall be cast or corporate
right exercised or other action taken which, in
4
the Agent's reasonable judgment, would impair the Collateral or which would be
inconsistent with or result in any violation of any provision of the Credit
Agreement, this Agreement or any other Loan Document.
7. RIGHTS OF THE LENDERS AND THE AGENT. (a) All money Proceeds
received by the Agent hereunder shall be held by the Agent for the benefit of
the Lenders in a Collateral Account. All Proceeds while held by the Agent in a
Collateral Account (or by the Borrower in trust for the Agent and the Lenders)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 8(a).
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the Borrower, (i) the
Agent shall have the right to receive any and all cash dividends paid in respect
of the Pledged Stock and make application thereof to the Obligations in such
order as the Agent may determine, and (ii) all shares of the Pledged Stock shall
be registered in the name of the Agent or its nominee, and the Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to such shares of the Pledged Stock at any meeting of shareholders of
any Issuer or otherwise and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options pertaining to such
shares of the Pledged Stock as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Stock upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or upon
the exercise by the Borrower or the Agent of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Agent may determine), all without liability
except to account for property actually received by it, but the Agent shall have
no duty to the Borrower to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
8. REMEDIES. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Borrower or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived to the fullest extent permitted by applicable law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Agent or any Lender or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Agent or any Lender shall have the right upon any such
public sale or sales, and, to the fullest extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Borrower, which right or
equity of redemption is hereby waived or released to the extent permitted by
applicable law. The Agent shall apply any Proceeds from time to time held by it
and the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Agent and the Lenders hereunder, including, without limitation, reasonable
attorneys' fees and disbursements of counsel to the Agent, to the payment in
whole or in part of the Obligations, in such order as the Agent may elect, and
only after such application and after the payment by the Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Agent account for the surplus, if any, to the
Borrower. To the extent permitted by applicable law, the Borrower waives all
claims, damages and demands it may acquire against the Agent or any Lender
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition. The Borrower shall remain liable for any
deficiency
5
if the proceeds of any sale or other disposition of Collateral are insufficient
to pay the Obligations and the fees and disbursements of any attorneys employed
by the Agent or any Lender to collect such deficiency.
9. REGISTRATION RIGHTS; PRIVATE SALES. (a) If the Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 8 hereof, and if in the opinion of the Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the Borrower will cause
the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,(ii)
to use its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Stock, or that portion thereof to be
sold, and (iii) to make all amendments thereto and/or to the related prospectus
which, in the opinion of the Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. The
Borrower agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the Agent shall
designate and to make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
(b) The Borrower recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Borrower acknowledges
and agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(c) The Borrower further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Borrower further agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the Lenders, that
the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Borrower, and the Borrower
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
10. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUER. The
Borrower hereby authorizes and instructs each Issuer to comply with any
instruction received by it from the Agent in writing that (a) states that an
Event of Default has occurred and (b) is otherwise in accordance with the terms
of this Agreement, without any other or further instructions from the Borrower,
and the Borrower agrees that each Issuer shall be fully protected in so
complying.
11. AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. (a) Subject to Section
11(c), the Borrower hereby irrevocably constitutes and appoints the Agent and
any officer or agent of the Agent, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of the Borrower and in the name of the Borrower or in the
Agent's own name, from time to time in the Agent's discretion, for the purpose
of carrying out the terms of this Agreement, to take any and all appropriate
action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, including,
without limitation, any financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Borrower hereby ratifies all that said attorneys shall
lawfully do or cause to be done pursuant to the power of attorney granted in
Section 11(a). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
6
(c) Anything herein to the contrary notwithstanding, the exercise of
remedies or any power of attorney granted hereunder with respect to Pledged
Stock is subject to the provisions of any applicable law, rule or regulation and
to governmental approvals that may be required hereunder. No action will be
taken by the Agent or any Lender hereunder if such action will result in a
violation of any such law, rule or regulation.
12. DUTY OF AGENT. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Agent deals with similar securities and property
for its own account, except that the Agent shall have no obligation to invest
funds held in any Collateral Account and may hold the same as demand deposits.
Neither the Agent, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Borrower or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof.
13. EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the Code, the Borrower authorizes the Agent to file financing statements with
respect to the Collateral without the signature of the Borrower in such form and
in such filing offices as the Agent reasonably determines appropriate to perfect
the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
14. AUTHORITY OF AGENT. The Borrower acknowledges that the rights
and responsibilities of the Agent under this Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, voting right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the Agent
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Borrower, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and neither the Borrower nor any Issuer shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
15. NOTICES. All notices, requests and demands given hereunder shall
be given in accordance with subsection 13.2 of the Credit Agreement.
16. 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.
17. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Borrower and the Agent, PROVIDED that any provision of this Agreement may be
waived by facsimile transmission by the Agent.
(b) No failure to exercise and no delay in exercising, on the part of
the Agent or any Lender, any right, remedy, power or privilege hereunder 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.
(c) The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
18. SECTION HEADINGS. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Borrower, the Agent
and the Lenders, PROVIDED that the Borrower may not assign or transfer
7
any of its rights or obligations under this Agreement without the prior written
consent of the Agent and any purported assignment without such consent shall be
null and void.
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
21. Upon the foreclosure of the capital stock of S.D. ▇▇▇▇▇▇ Finance
Co. ("SDW Finance"), the Agent agrees, and will cause any transferee with
respect to such stock to agree, not to amend or modify the Certificate of
Incorporation or By-Laws of SDW Finance as in effect on the date of such
foreclosure and to cause SDW Finance to comply with the provisions of its
Certificate of Incorporation and By-Laws. The Agent also agrees, and will cause
any transferee to agree, to comply with the provisions of the Subscription and
Shareholder Agreement, dated as of April __, 1996, between SDW Finance and the
Borrower, including, without limitation, Sections 8 and 9 thereof, as if it were
the "Purchaser" thereunder.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
S.D. ▇▇▇▇▇▇ COMPANY
By:
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Title:
SCHEDULES:
Schedule 1 - Description of Pledged Stock
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Amended
and Restated Pledge Agreement dated April , 1996 (as the same may be amended,
supplemented or otherwise modified from time to time, the "PLEDGE AGREEMENT"),
made by S.D. ▇▇▇▇▇▇ Company, a Pennsylvania corporation, for the benefit of
Chemical Bank, as agent for the Lenders referred to in the Pledge Agreement.
The undersigned agrees for the benefit of the Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement.
3. The terms of Section 9(c) of the Pledge Agreement shall apply to
it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
[NAME OF ISSUER]
By:
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Title:
---------------------------------
Address for Notices:
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Telex:
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Fax:
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SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock* Stock Certificate No. No. of Shares
---------------- ------------------- ----------------------- ----------------
-------------------------
* Stock is assumed to be common stock unless otherwise indicated.
EXHIBIT E TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
------------------------------
[FORM OF AMENDED AND RESTATED HOLDINGS PLEDGE AGREEMENT]
AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of April , 1996,
made by SDW HOLDINGS CORPORATION, a Pennsylvania corporation (the "PLEDGOR"), in
favor of CHEMICAL BANK, as agent (in such capacity, the "AGENT") for the several
banks, financial institutions and other entities parties to the Amended and
Restated Credit and Guarantee Agreement, dated as of April , 1996 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"), among the Pledgor, S.D. ▇▇▇▇▇▇ Company, a Pennsylvania corporation
("BORROWER"), the Lenders and the Agent.
W I T N E S S E T H:
WHEREAS, in connection with the Existing Credit Agreement (as defined
in the Credit Agreement), the Pledgor entered into that certain Pledge
Agreement, dated as of December 20, 1994 (the "EXISTING PLEDGE AGREEMENT"),
pursuant to which it granted a security interest in certain of its assets as
collateral security for the Obligations (as defined in the Credit Agreement);
WHEREAS, the Borrower and the Pledgor have requested that the Agent
and the Lenders amend and restate the Existing Credit Agreement in the manner
provided in the Credit Agreement; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and to the obligations of the Lenders to make the Extensions of
Credit (as defined in the Credit Agreement) provided for therein that the
Pledgor shall have amended and restated the Existing Pledge Agreement in the
manner provided for herein;
NOW, THEREFORE, in consideration of the premises contained herein and
to induce the Lenders to amend and restate the Existing Credit Agreement as
provided in the Credit Agreement and to make Extensions of Credit under the
Credit Agreement, the Pledgor hereby agrees with the Agent, for the ratable
benefit of the Lenders, to amend and restate and hereby amends and restates the
Existing Pledge Agreement to read in its entirety as follows:
1. DEFINED TERMS. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Amended and Restated Pledge Agreement, as the same
may be amended, modified or otherwise supplemented from time to time.
"CODE": the Uniform Commercial Code from time to time in effect in
the State of New York.
"COLLATERAL": the Pledged Stock issued by the Borrower and all
Proceeds thereof.
"COLLATERAL ACCOUNT": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders as provided in
Section 8.
"ISSUER": the Borrower.
"NON-CONSENSUAL LIENS: as defined in Section 4(c).
2
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 1
hereto, together with all stock certificates, options or rights of any
nature whatsoever that may be issued or granted by the Issuer to the
Pledgor while this Agreement is in effect and while such Capital Stock
continues to be subject to the security interest granted pursuant to this
Agreement.
"PROCEEDS": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof of the Pledged Stock and, in any event, shall include,
without limitation, all dividends or other income from the Pledged Stock,
collections thereon or distributions with respect thereto.
"SECURITIES ACT": the Securities Act of 1933, as amended.
(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 and paragraph
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.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby delivers to
the Agent, for the ratable benefit of the Lenders, all the Pledged Stock issued
by the Issuer and hereby grants to Agent, for the ratable benefit of the
Lenders, a first security interest in the Collateral (except for Non-Consensual
Liens), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
3. STOCK POWERS. Concurrently with the delivery to the Agent of each
certificate representing one or more shares of Pledged Stock to the Agent, the
Pledgor shall deliver an undated stock power covering such certificate, duly
executed in blank by the Pledgor with, if the Agent so requests, signature
guaranteed.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the Capital Stock of the Issuer.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) The Pledgor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Stock, free of any and all Liens or options
in favor of, or claims of, any other Person, except the security interests
created by this Agreement and non-consensual Liens arising involuntarily by
operation of law to the extent not prohibited by the Credit Agreement
("NON-CONSENSUAL LIENS").
(d) Upon delivery to the Agent of the stock certificates evidencing
the Pledged Stock, the security interest created by this Agreement will
constitute a valid, perfected first priority security interest (subject to
Non-Consensual Liens not prohibited by the Credit Agreement) in the Collateral,
enforceable as such against all creditors of the Pledgor and any Persons
purporting to purchase any Collateral from the Pledgor, except as affected by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
5. COVENANTS. The Pledgor covenants and agrees with the Agent and the
Lenders that, from and after the date of this Agreement until this Agreement is
terminated and the security interests created hereby are released:
(a) If the Pledgor shall, as a result of its ownership of the Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a
3
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgor shall accept the same as the agent of the Agent and the Lenders,
hold the same in trust for the Agent and the Lenders and deliver the same
forthwith to the Agent in the exact form received, duly indorsed by the Pledgor
to the Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by the Pledgor and with, if the Agent so
requests, signature guaranteed, to be held by the Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Other than
pursuant to a distribution or transfer of any assets of the Issuer to the
Pledgor in a transaction permitted under the Credit Agreement, (i) any sums paid
upon or in respect of the Pledged Stock upon the liquidation or dissolution of
the Issuer shall be paid over to the Agent to be held by it hereunder as
additional collateral security for the Obligations, and (ii) in case any
distribution of capital shall be made on or in respect of the Pledged Stock or
any property shall be distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the capital of the
Issuer or pursuant to the reorganization thereof, the property so distributed
shall be delivered to the Agent to be held by it hereunder as additional
collateral security for the Obligations. If any sums of money or property so
paid or distributed in respect of the Pledged Stock shall be received by the
Pledgor, the Pledgor shall, until such money or property is paid or delivered to
the Agent, hold such money or property in trust for the Lenders, segregated from
other funds of the Pledgor, as additional collateral security for the
Obligations.
(b) Without the prior written consent of the Agent, the Pledgor will
not (i) vote to enable, or take any other action to permit, the Issuer to issue
(other than to existing stockholders on a proportionate basis) any stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of the Issuer,(ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Collateral other than pursuant to a transaction permitted under the Credit
Agreement,(iii) create, incur or permit to exist any Lien on any of the
Collateral, or any interest therein, except for the security interests created
by this Agreement and Liens permitted by the Credit Agreement (except for
Non-Consensual Liens not prohibited by the Credit Agreement) or (iv) enter into
any agreement or undertaking (other than this Agreement and the other Loan
Documents) restricting the right or ability of the Pledgor or the Agent to sell,
assign or transfer any of the Collateral.
(c) The Pledgor shall maintain the security interest created by this
Agreement as a first perfected security interest (subject to Non-Consensual
Liens not prohibited by the Credit Agreement) and shall defend such security
interest against claims and demands of all Persons whomsoever. At any time and
from time to time, upon the written request of the Agent, and at the sole
expense of the Pledgor, the Pledgor will promptly and duly execute and deliver
such further instruments and documents and take such further actions as the
Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by any promissory note, other instrument or chattel paper, such
note, instrument or chattel paper shall be immediately delivered to the Agent,
duly endorsed in a manner satisfactory to the Agent, to be held as Collateral
pursuant to this Agreement.
(d) The Pledgor shall pay, and hold the Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
6. CASH DIVIDENDS; VOTING RIGHTS. Unless an Event of Default shall
have occurred and be continuing and the Agent shall have given notice to the
Pledgor of the Agent's intent to exercise its corresponding rights pursuant to
Section 7 below, the Pledgor shall be permitted to receive all cash dividends
paid to the extent not prohibited by the Credit Agreement, in respect of the
Pledged Stock and to exercise all voting and corporate rights with respect to
the Pledged Stock; PROVIDED, HOWEVER, that no vote shall be cast or corporate
right exercised or other action taken which, in the Agent's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
7. RIGHTS OF THE LENDERS AND THE AGENT. (a) All money Proceeds
received by the Agent hereunder shall be held by the Agent for the benefit of
the Lenders in a Collateral Account. All Proceeds while held by the Agent in a
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Collateral Account (or by the Pledgor in trust for the Agent and the Lenders)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 8(a).
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the Pledgor, (i) the
Agent shall have the right to receive any and all cash dividends paid in respect
of the Pledged Stock and make application thereof to the Obligations in such
order as the Agent may determine, and (ii) all shares of the Pledged Stock shall
be registered in the name of the Agent or its nominee, and the Agent or its
nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to such shares of the Pledged Stock at any meeting of shareholders of
the Issuer or otherwise and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options pertaining to such
shares of the Pledged Stock as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Stock upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of the Issuer, or upon
the exercise by the Pledgor or the Agent of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Agent may determine), all without liability
except to account for property actually received by it, but the Agent shall have
no duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
8. REMEDIES. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Obligations in
such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the Code. Without limiting the generality of the
foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Pledgor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived to the fullest extent permitted by applicable law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Agent or any Lender or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Agent or any Lender shall have the right upon any such
public sale or sales, and, to the fullest extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Pledgor, which right or
equity of redemption is hereby waived or released to the extent permitted by
applicable law. The Agent shall apply any Proceeds from time to time held by it
and the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred in respect thereof or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Agent and the Lenders hereunder, including, without limitation, reasonable
attorneys' fees and disbursements of counsel to the Agent, to the payment in
whole or in part of the Obligations, in such order as the Agent may elect, and
only after such application and after the payment by the Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Agent account for the surplus, if any, to the
Pledgor. To the extent permitted by applicable law, the Pledgor waives all
claims, damages and demands it may acquire against the Agent or any Lender
arising out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition. The Pledgor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of Collateral are
insufficient to pay the Obligations and the fees and disbursements of any
attorneys employed by the Agent or any Lender to collect such deficiency.
9. REGISTRATION RIGHTS; PRIVATE SALES. (a) If the Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 8 hereof, and if in the opinion of the Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the Pledgor
5
will cause the Issuer to (i) execute and deliver, and cause the directors and
officers of the Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,(ii)
to use its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Stock, or that portion thereof to be
sold, and (iii) to make all amendments thereto and/or to the related prospectus
which, in the opinion of the Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. The
Pledgor agrees to cause the Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the Agent shall
designate and to make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
(b) The Pledgor recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(c) The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the Lenders, that
the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgor, and the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
10. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUER. The Pledgor
hereby authorizes and instructs the Issuer to comply with any instruction
received by it from the Agent in writing that (a) states that an Event of
Default has occurred and (b) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from the Pledgor, and the
Pledgor agrees that the Issuer shall be fully protected in so complying.
11. AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. (a) Subject to Section
11(c), the Pledgor hereby irrevocably constitutes and appoints the Agent and any
officer or agent of the Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Pledgor and in the name of the Pledgor or in the Agent's own
name, from time to time in the Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney granted in Section
11(a). All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
(c) Anything herein to the contrary notwithstanding, the exercise of
remedies or any power of attorney granted hereunder with respect to Pledged
Stock is subject to the provisions of any applicable law, rule or regulation and
to governmental approvals that may be required hereunder. No action will be
taken by the Agent or any Lender hereunder if such action will result in a
violation of any such law, rule or regulation.
6
12. DUTY OF AGENT. The Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession, under
Section 9-207 of the Code or otherwise, shall be to deal with it in the same
manner as the Agent deals with similar securities and property for its own
account, except that the Agent shall have no obligation to invest funds held in
any Collateral Account and may hold the same as demand deposits. Neither the
Agent, any Lender nor any of their respective directors, officers, employees or
agents shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Pledgor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.
13. EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the Code, the Pledgor authorizes the Agent to file financing statements with
respect to the Collateral without the signature of the Pledgor in such form and
in such filing offices as the Agent reasonably determines appropriate to perfect
the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
14. AUTHORITY OF AGENT. The Pledgor acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and the Pledgor, the Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor the Issuer shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
15. NOTICES. All notices, requests and demands given hereunder shall
be given in accordance with subsection 13.2 of the Credit Agreement.
16. 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.
17. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Agent, PROVIDED that any provision of this Agreement may be
waived by facsimile transmission by the Agent.
(b) No failure to exercise and no delay in exercising, on the part of
the Agent or any Lender, any right, remedy, power or privilege hereunder 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.
(c) The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
18. SECTION HEADINGS. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Pledgor, the Agent and
the Lenders, PROVIDED that the Pledgor may not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
the Agent and any purported assignment without such consent shall be null and
void.
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20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
SDW HOLDINGS CORPORATION
By:
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Title:
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SCHEDULES:
Schedule 1 - Description of Pledged Stock
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Amended
and Restated Pledge Agreement dated April , 1996 (as the same may be amended,
supplemented or otherwise modified from time to time, the "PLEDGE AGREEMENT"),
made by SDW Holdings Corporation, a Pennsylvania corporation, for the benefit of
Chemical Bank, as agent for the Lenders referred to in the Pledge Agreement.
The undersigned agrees for the benefit of the Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement.
3. The terms of Section 9(c) of the Pledge Agreement shall apply to
it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 9 of the Pledge Agreement.
S.D. ▇▇▇▇▇▇ COMPANY
By
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Title
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Address for Notices:
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Telex:
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Fax:
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SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock* Stock Certificate No. No. of Shares
------ --------------- --------------------- -------------
-------------------------
*Stock is assumed to be common stock unless otherwise indicated.
EXHIBIT F TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
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[FORM OF AMENDED AND RESTATED SUBSIDIARIES GUARANTEE]
AMENDED AND RESTATED SUBSIDIARIES GUARANTEE, dated as of April __,
1996, made by each of the corporations that are signatories hereto (the
"GUARANTORS"), in favor of CHEMICAL BANK, as agent (in such capacity, the
"AGENT") for the several banks, financial institutions and other entities (the
"LENDERS") from time to time parties to the Amended and Restated Credit and
Guarantee Agreement, dated as of April __, 1996 (as the same may be amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among SDW Holdings Corporation, a Delaware corporation, S.D. ▇▇▇▇▇▇ Company, a
Pennsylvania corporation (the "BORROWER"), the Lenders and the Agent.
W I T N E S S E T H:
WHEREAS, in connection with the Existing Credit Agreement (as defined
in the Credit Agreement) the Guarantors entered into that certain Subsidiaries
Guarantee dated as of December 20, 1994 (the "EXISTING SUBSIDIARIES GUARANTEE"),
made by the Guarantors in favor of the Agent, pursuant to which the Guarantors
guaranteed the Obligations (as defined in the Credit Agreement);
WHEREAS, the Borrower and the Guarantors have requested that the Agent
and the Lenders amend and restate the Existing Credit Agreement; and
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and to the obligations of the Lenders to make the Extensions of
Credit (as defined in the Credit Agreement) provided for therein that the
Guarantors shall have amended and restated the Existing Subsidiaries Guarantee
in the manner provided for herein;
NOW, THEREFORE, in consideration of the premises contained herein and
to induce the Lenders to amend and restate the Existing Credit Agreement as
provided in the Credit Agreement and to make Extensions of Credit under the
Credit Agreement, each Guarantor hereby agrees with the Agent, for the benefit
of the Lenders, to amend and restate and hereby amends and restates the Existing
Subsidiaries Guarantee to read in its entirety as follows:
1. DEFINED TERMS. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement. For the purposes of this Guarantee, the term "Lender"
shall include any Affiliate of any Lender which has entered into a Rate
Protection Agreement or cash management services agreement with the Borrower.
(b) The words "HEREOF," "HEREIN" and "HEREUNDER" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole and
not to any particular provision of this Guarantee, and section and paragraph
references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. GUARANTEE. (a) Subject to the provisions of Section 2(b), each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Agent and the Lenders, and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the maximum
2
aggregate amount equal to the largest amount that would not render its
obligations hereunder and thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law.
(c) Each Guarantor further agrees to pay any and all reasonable
expenses (including, without limitation, all reasonable fees and disbursements
of counsel) which may be paid or incurred by the Agent or any Lender in
enforcing, or obtaining advice of counsel in respect of, any rights with respect
to, or collecting, any or all of the Obligations and/or enforcing any rights
with respect to, or collecting against, such Guarantor under this Guarantee.
This Guarantee shall remain in full force and effect until the Obligations are
paid in full, the Commitments are terminated and no Letter of Credit remains
outstanding, notwithstanding that from time to time prior thereto the Borrower
may be free from any Obligations.
(d) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Agent or any Lender hereunder.
(e) No payment or payments made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any set-
off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder which
shall, notwithstanding any such payment or payments other than payments made by
such Guarantor in respect of the Obligations or payments received or collected
from such Guarantor in respect of the Obligations, remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder until the
Obligations are paid in full, the Commitments are terminated and no Letter of
Credit remains outstanding.
(f) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Agent or any Lender on account of its
liability hereunder, it will notify the Agent in writing that such payment is
made under this Guarantee for such purpose.
3. RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 5 hereof. The
provisions of this Section shall in no respect limit the obligations and
liabilities of any Guarantor to the Agent and the Lenders, and each Guarantor
shall remain liable to the Agent and the Lenders for the full amount guaranteed
by such Guarantor hereunder.
4. RIGHT OF SET-OFF. Each Guarantor hereby irrevocably authorizes
each Lender at any time and from time to time without notice to such Guarantor
or any other Guarantor, any such notice being expressly waived by each Guarantor
to the extent permitted by applicable law, upon any amount becoming due and
payable by such Guarantor hereunder 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 or agency thereof to or for the credit or the account of such
Guarantor, or any part thereof, whether or not the Agent or any Lender has made
any demand for payment. The Agent and each Lender shall notify such Guarantor
promptly after any such set-off and application made by the Agent or such
Lender, PROVIDED that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Agent and each
Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Agent or such
Lender may have.
5. NO SUBROGATION. Notwithstanding anything to the contrary in this
Agreement, no Guarantor shall be entitled to be subrogated to any of the rights
(whether contractual, under the Bankruptcy Code, including Section 509 thereof,
under common law or otherwise) of any Lender against the Borrower or against any
collateral security or guarantee or right of offset held by any Lender for the
payment of the Obligations nor shall any Guarantor seek or be
3
entitled to seek contribution or reimbursement from the Borrower or any other
Person in respect of payments made by such Guarantor hereunder until all amounts
owing to the Agent and the Lenders by the Borrower on account of the Obligations
are paid in full, the Commitments are terminated and no Letter of Credit remains
outstanding. If any amount shall be paid by to any Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, the Commitments shall not have been terminated or a Letter of
Credit remains outstanding, such amount shall be held by such Guarantor in
trust, segregated from other funds of such Guarantor, and shall, forthwith upon
receipt by such Guarantor, be turned over to the Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the Agent, if
required), to be applied against the Obligations, whether matured or unmatured,
in such order as the Agent may determine. The provisions of this paragraph
shall survive the termination of this Guarantee and the payment in full of the
Obligations, the termination of the Commitments and the cancellation, revocation
or termination of all outstanding Letters of Credit.
6. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF
RIGHTS. Each Guarantor shall, to the fullest extent permitted by applicable
law, remain obligated hereunder notwithstanding that, without any reservation of
rights against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Obligations made by the Agent or
any Lender may be rescinded by such party and any of the Obligations continued,
and the Obligations, or the liability of any other party upon or for any part
thereof, or any collateral security or guarantee therefor or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by the Agent or any Lender, and the Credit Agreement, the other Loan
Documents, any Rate Protection Agreement or cash management services agreement
entered into by the Borrower with any Lender and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Agent (or the Required Lenders, as the
case may be) or, in the case of any such Rate Protection Agreement or cash
management services agreement, the relevant Lender, may deem advisable from time
to time, and any collateral security, guarantee or right of offset at any time
held by the Agent or any Lender for the payment of the Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Agent nor any Lender
shall have any obligation to protect, secure, perfect or insure any Lien at any
time held by it as security for the Obligations or for this Guarantee or any
property subject thereto. When making any demand hereunder against any of the
Guarantors, the Agent or any Lender may, but shall be under no obligation to,
make a similar demand on the Borrower or any other Guarantor or guarantor, and
any failure by the Agent or any Lender to make any such demand or to collect any
payments from the Borrower or any such other Guarantor or guarantor or any
release of the Borrower or such other Guarantor or guarantor shall not relieve
any of the Guarantors in respect of which a demand or collection is not made or
any of the Guarantors not so released of their several obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Agent or any Lender against
any of the Guarantors. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
7. GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives, to
the fullest extent permitted by applicable law, any and all notice of the
creation, renewal, extension or accrual of any of the Obligations and notice of
or proof of reliance by the Agent or any Lender upon this Guarantee or
acceptance of this Guarantee; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon this Guarantee; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the Agent
and the Lenders, on the other, shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guarantee. Each Guarantor waives,
to the fullest extent permitted by applicable law, diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, any
Note, any other Loan Document or any Rate Protection Agreement or any cash
management services agreement entered into by the Borrower with any Lender, any
of the Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Agent or any Lender, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) which may at any time be available to or be
asserted by the Borrower against the Agent or any Lender or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Obligations, or of such
Guarantor under this Guarantee, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against any Guarantor, the Agent and
any Lender may, but shall be under no obligation to, pursue such rights and
4
remedies as it may have against the Borrower or any other Person or against any
collateral security or guarantee for the Obligations or any right of offset with
respect thereto, and any failure by the Agent or any Lender to pursue such other
rights or remedies or to collect any payments from the Borrower or any such
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower or any such
other Person or any such collateral security, guarantee or right of offset,
shall not relieve such Guarantor of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Agent or any Lender against such Guarantor. This
Guarantee shall remain in full force and effect and be binding in accordance
with and to the extent of its terms upon each Guarantor and the successors and
assigns thereof, and shall inure to the benefit of the Agent and the Lenders,
and their respective successors, indorsees, transferees and assigns, until all
the Obligations and the obligations of each Guarantor under this Guarantee shall
have been satisfied by payment in full and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Obligations.
8. REINSTATEMENT. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part thereof,
of any of the Obligations is rescinded or must otherwise be restored or returned
by the Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
9. PAYMENTS. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Agent without set-off or counterclaim in Dollars
at the office of the Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
10. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby represents
and warrants that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged;
(b) it has the corporate power and authority and the legal right to
execute and deliver, and to perform its obligations under, this Guarantee and
the other Loan Documents to which it is a party, and has taken all necessary
corporate action to authorize its execution, delivery and performance of this
Guarantee and the other Loan Documents to which it is a party;
(c) this Guarantee and each of the other Loan Documents to which it is
a party constitutes a legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms, except as affected by bankruptcy,
insolvency, reorganization, moratorium and other similar laws relating to or
affecting the enforcement of creditors' rights generally, general equitable
principles and an implied covenant of good faith and fair dealing;
(d) the execution, delivery and performance by such Guarantor of this
Guarantee or any of the other Loan Documents to which it is a party will not
violate any provision of any Requirement of Law applicable to such Guarantor or
Contractual Obligation of such Guarantor which could reasonably be expected to
have a Material Adverse Effect and will not result in or require the creation or
imposition of any Lien on any of the properties or revenues of such Guarantor
pursuant to any such Requirement of Law or Contractual Obligation of such
Guarantor;
(e) no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any other
Person (including, without limitation, any stockholder or creditor of such
Guarantor) is required in connection with the execution, delivery or performance
by such Guarantor or the validity or enforceability of this Guarantee or any of
the other Loan Documents to which it is a party; and
(f) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of
such Guarantor, threatened by or against such Guarantor or against any of its
properties or revenues (i) with respect to this Guarantee or any of the other
Loan Documents to which it is a party or any
5
of the transactions contemplated hereby or thereby, or (ii) which could
reasonably be expected to have a Material Adverse Effect; and
(g) the representations and warranties contained in subsections 6.8
and 6.11 of the Credit Agreement are true and correct to the extent such
representations and warranties apply to such Guarantor.
Each Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by such Guarantor on the date of
each Extension of Credit to the Borrower under the Credit Agreement on and as of
such date of Extension of Credit as though made hereunder on and as of such
date.
11. COVENANTS. Each Guarantor hereby covenants and agrees with the
Agent and each Lender that, from and after the date of this Guarantee until the
Obligations are paid in full, the Commitments are terminated and no Letter of
Credit remaining outstanding, that such Guarantor will comply with provisions of
Sections 8 and 9 of the Credit Agreement to the extent such provisions apply to
such Guarantor.
12. AUTHORITY OF AGENT. Each Guarantor acknowledges that the rights
and responsibilities of the Agent under this Guarantee with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Guarantee shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and such Guarantor, the Agent shall be conclusively presumed to be acting
as agent for the Lenders with full and valid authority so to act or refrain from
acting, and no Guarantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.
13. 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 shall be deemed to have been duly given or made
when delivered, or three days after being deposited in the mail, postage
prepaid, or one Business Day after being sent by priority overnight mail with a
nationally recognized overnight delivery carrier, or, in the case of facsimile
transmission, when received, addressed as follows, or to such other address as
may be hereafter notified by the respective parties hereto:
(a) if to the Agent, at its address or transmission number for notices
provided in subsection 13.2 of the Credit Agreement; and
(b) if to any Guarantor, at its address or transmission number for
notices set forth under its signature below.
14. COUNTERPARTS. This Guarantee may be executed by one or more of
the Guarantors 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 counterparts of this
Guarantee signed by all the Guarantors shall be lodged with the Agent.
15. SEVERABILITY. Any provision of this Guarantee 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.
16. INTEGRATION. This Guarantee represents the agreement of each
Guarantor with respect to the subject matter hereof and there are no promises,
undertakings, representations or warranties by any Guarantor, the Agent or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein.
17. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None
of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
each Guarantor and the Agent, PROVIDED that any provision of this Guarantee may
be waived by facsimile transmission by the Agent.
6
(b) No failure to exercise and no delay in exercising, on the part of
the Agent or any Lender, any right, remedy, power or privilege hereunder 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.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
18. SECTION HEADINGS. The section headings used in this Guarantee
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
19. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon the
successors and assigns of each Guarantor and shall inure to the benefit of the
Agent and the Lenders and their successors and assigns, PROVIDED that no
Guarantor may assign any of its rights or obligations under this Guarantee
without the consent of the Agent and the Required Lenders.
20. GOVERNING LAW. THIS GUARANTEE 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.
21. TERMINATION. Subject to Section 8, this Guarantee shall remain
in full force and effect and be binding in accordance with and to the extent of
its terms until all Obligations shall have been satisfied by payment in full,
the Commitments shall be terminated and no Letter of Credit is outstanding. A
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Guarantor shall be sold, transferred or otherwise
disposed of in accordance with the terms of the Credit Agreement.
22. SUBMISSION TO JURISDICTION; WAIVERS. Each Guarantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Guarantee 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 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
Guarantor at its address set forth under its signature below or at such
other address of which the Administrative Agent shall have been notified
pursuant to Section 13;
(d) agrees that nothing herein shall affect the right to effect
service or 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 damages.
23. WAIVERS OF JURY TRIAL. EACH GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS GUARANTEE OR ANY OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY AND FOR ANY
COUNTERCLAIM THEREIN.
24. ADDITION OF GUARANTORS. Subsection 8.10(c) of the Credit
Agreement requires that any Subsidiary (other than a Foreign Subsidiary) of the
Borrower created or acquired after the Closing Date become a Guarantor
7
hereunder by executing and delivering a Supplement to this Guarantee in the form
attached hereto as EXHIBIT A. From and after the date any such Subsidiary
executes and delivers a Supplement to this Guarantee in the form attached hereto
as EXHIBIT A to the Agent, such Subsidiary shall be deemed to be a Guarantor for
all purposes under this Guarantee.
8
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
to be duly executed and delivered by its duly authorized officer as of the day
and year first above written.
PRESUMPSCOT WATER POWER CO. SKYLARK, INC.
By By
--------------------------------- ---------------------------------
Title Title
------------------------------- -------------------------------
Address for Notices: Address for Notices:
------------------------------------- -------------------------------------
------------------------------------- -------------------------------------
Telephone: Telephone:
-------------------------- --------------------------
Fax: Fax:
-------------------------------- --------------------------------
EXHIBIT A TO
SUBSIDIARIES GUARANTEE
----------------------
[FORM OF ADDITIONAL SUBSIDIARIES SUPPLEMENT]
SUPPLEMENT, dated _______________ to the Amended and Restated
Subsidiaries Guarantee, dated as of April __, 1996 (as amended, supplemented or
otherwise modified, the "SUBSIDIARIES GUARANTEE"), made by certain subsidiaries
of S.D. ▇▇▇▇▇▇ Company, a Pennsylvania corporation (the "BORROWER"), from time
to time parties thereto (collectively, the "GUARANTORS").
W I T N E S S E T H :
WHEREAS, the Subsidiaries Guarantee provides that any Subsidiary
(other than a Foreign Subsidiary) of the Borrower, although not a Guarantor
thereunder at the time of the initial execution thereof, may become a Guarantor
under the Subsidiaries Guarantee upon the delivery to the Agent of a supplement
in substantially the form of this Supplement; and
WHEREAS, the undersigned was not a Subsidiary on the Closing Date and,
therefore, was not a party to the Subsidiaries Guarantee but now desires to
become a Guarantor thereunder;
NOW, THEREFORE, the undersigned hereby agrees as follows:
The undersigned agrees to be bound by all of the provisions of the
Subsidiaries Guarantee applicable to a Guarantor thereunder and agrees that
it shall, on the date this Supplement is accepted by the Agent, become a
Guarantor, for all purposes of the Subsidiaries Guarantee to the same
extent as if originally a party thereto with the representations and
warranties contained therein being deemed to be made by the undersigned as
of the date hereof. Without limiting the foregoing, subject to the
provisions of Section 2(b) of the Subsidiaries' Guarantee, the undersigned,
jointly and severally with the other Guarantors, unconditionally and
irrevocably, guarantees to the Agent, for the ratable benefit of the
Lenders and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Borrower
when due and payable (whether at the stated maturity, by acceleration or
otherwise) of the Obligations.
Terms defined in the Subsidiaries Guarantee shall have their defined
meanings when used herein.
IN WITNESS WHEREOF, the undersigned has caused this Supplement to be
executed and delivered by a duly authorized officer on the date first above
written.
[INSERT NAME OF SUBSIDIARY]
By:
-------------------------------
Title:
EXHIBIT G TO
CREDIT AND GUARANTEE AGREEMENT
MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
from
[Subsidiary], Mortgagor
to
CHEMICAL BANK,
as Agent, Mortgagee
DATED AS OF DECEMBER __, 1994
After recording, please return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
a partnership which includes
professional corporations
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
EXHIBIT G TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SUBSIDIARY LEASEHOLD MORTGAGE]
[NOTE: THIS FORM IS NOT STATE-LAW SPECIFIC. SPECIFIC PROVISIONS,
SATISFACTORY TO AGENT'S COUNSEL, THAT ARE NECESSARY OR DESIRABLE UNDER THE LAW
OR REAL ESTATE PRACTICE OF ANY PARTICULAR sTATE IN WHICH THIS FORM IS USED WILL
BE ADDED.]
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
(collectively, the "Mortgage"), dated as of __________ is made by [Subsidiary],
a _____________ corporation ("MORTGAGOR"), whose mailing address is
_________________ to CHEMICAL BANK, whose mailing address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as agent (the "AGENT"; in such capacity, together
with its successors and assigns, "MORTGAGEE") for the several banks and other
financial institutions (the "LENDERS") from time to time parties to that
certain Credit and Guarantee Agreement dated as of December ____, 1994 (as the
same may have been and may be further amended, supplemented, restated, replaced
or otherwise modified from time to time, the "CREDIT AGREEMENT") among SDW
Holdings Corporation, a Delaware corporation, the Mortgagee, S. D. ▇▇▇▇▇▇
Company and the Lenders. References to this "MORTGAGE" shall mean this
instrument and any and all renewals, modifications, amendments, supplements,
extensions, consolidations, substitutions, spreaders and replacements of this
instrument.
BACKGROUND
A. Mortgagor has, on the date hereof, become the owner of (i) the
parcel(s) of real property described on Exhibit A attached hereto (the "Fee
Property") and (ii) the leasehold estate in the parcels of real property
described on Exhibit B attached hereto (the "LEASEHOLD PARCELS") created
pursuant to those certain leases described on Exhibit C attached hereto (the
"MORTGAGED LEASES") (the Fee Property and the Leasehold Parcels, together with
all of the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "IMPROVEMENTS"), being collectively referred to as the
"REAL ESTATE").
B. Mortgagor is a direct or indirect wholly-owned subsidiary of
S. D. ▇▇▇▇▇▇ Company (as successor by merger to SDW Acquisition Corporation), a
Pennsylvania corporation (the "PARENT COMPANY").
C. Pursuant to the Credit Agreement, Mortgagor has given that
certain Guarantee dated , 19 (the "GUARANTEE") and is securing
the Guarantee with this Mortgage.
2
D. Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement. References in this Mortgage
to the "DEFAULT RATE" shall mean a rate per annum equal to the ABR plus 2%.
GRANTING CLAUSES
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the
Guarantee and (ii) all interest and fees payable thereon (the items set forth in
clauses (i) and (ii) being referred to collectively as the "INDEBTEDNESS");
and
(b) the performance of all covenants, agreements, obligations and
liabilities of Mortgagor (the "OBLIGATIONS") under or pursuant to the
provisions of the Guarantee and any other document securing payment of the
Indebtedness (the "SECURITY DOCUMENTS") and any amendments, supplements,
extensions, renewals, restatements, replacements or modifications of any
of the foregoing (the Guarantee, the Security Documents and all other
documents and instruments from time to time evidencing, securing or
guaranteeing the payment of the Indebtedness or the performance of the
Obligations, as any of the same may be amended, supplemented, extended,
renewed, restated, replaced or modified from time to time, are
collectively referred to as the "MORTGAGOR OBLIGATION DOCUMENTS");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE WITH
MORTGAGE COVENANTS:
(A) the Real Estate;
(B) the leasehold estate created under and by virtue of the
Mortgaged Leases, any interest in any fee, greater or lesser title to the
Real Estate that Mortgagor may own or hereafter acquire (whether acquired
pursuant to a right or option contained in one or more of the Mortgaged
Leases or otherwise) and all credits, deposits, options, privileges and
rights of Mortgagor under the Mortgaged Leases (including all rights of
use, occupancy and enjoyment) and under any amendments, supplements,
extensions, renewals, restatements, replacements and modifications thereof
(including, without limitation, (i) the right to give consents, (ii) the
right to receive moneys payable to Mortgagor, (iii) the right, if any, to
renew or extend one or more of the Mortgaged Leases for a succeeding term
or terms, (iv) the right, if any, to purchase the Real Estate and (v) the
right to terminate or modify one or more of the Mortgaged Leases); all of
Mortgagor's claims and rights to
3
the payment of damages arising under the Bankruptcy Code (as determined
below) from any rejection of one or more of the Mortgaged Leases by the
lessor thereunder or any other party;
(C) to the extent not included in (A) or (B), all right, title and
interest Mortgagor now has or may hereafter acquire in and to the
Improvements or any part thereof (whether owned in fee by Mortgagor or
held pursuant to one or more of the Mortgaged Leases or otherwise) and all
the estate, right, title, claim or demand whatsoever of Mortgagor, in
possession or expectancy, in and to the Real Estate or any part thereof;
(D) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, timber, timber rights, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to the
Real Estate, and any reversions, remainders, rents, issues, profits and
revenue thereof and all land lying in the bed of any street, road or
avenue, in front of or adjoining the Real Estate to the center line
thereof;
(E) subject to Section 18(d) hereof, all of the fixtures, chattels,
business machines, machinery, apparatus, equipment, furnishings, fittings
and articles of personal property of every kind and nature whatsoever, and
all appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts and
accessories) currently owned or subsequently acquired by Mortgagor and, in
each case, now or subsequently attached to, or contained in or used or
usable in any way in connection with any operation or letting of the Real
Estate (all of the foregoing in this paragraph (D) being referred to as
the "EQUIPMENT");
(F) subject to Section 18(d) hereof, all right, title and interest
of Mortgagor in and to all substitutes and replacements of, and all
additions and improvements to, the Real Estate and the Equipment,
subsequently acquired by or released to Mortgagor or constructed,
assembled or placed by Mortgagor on the Real Estate, immediately upon such
acquisition, release, construction, assembling or placement, including,
without limitation, any and all building materials whether stored at the
Real Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;
(G) subject to Section 18(d) hereof, all right, title and interest
of Mortgagor in, to and under all leases,
4
subleases, underlettings, concession agreements, management agreements,
licenses and other agreements relating to the use or occupancy of the Real
Estate or the Equipment or any part thereof, now existing or subsequently
entered into by Mortgagor and whether written or oral and all guarantees
of any of the foregoing (collectively, as any of the foregoing may be
amended, restated, extended, renewed or modified from time to time, the
"LEASES"), and all rights of Mortgagor in respect of cash and securities
deposited thereunder and the right to receive and collect the revenues,
income, rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the Mortgaged Property (as defined below)
(collectively, the "RENTS");
(H) subject to Section 18(d) hereof, all insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or
Equipment and Mortgagor's interest in and to all unearned premiums
thereunder and all proceeds of any such insurance policies (including
title insurance policies) including the right to collect and receive such
proceeds, subject to the provisions relating to insurance generally set
forth below; and all awards and other compensation, including the interest
payable thereon and the right to collect and receive the same, made to the
present or any subsequent owner of the Real Estate or Equipment for the
taking by eminent domain, condemnation or otherwise, of all or any part of
the Real Estate or any easement or other right therein;
(I) subject to Section 18(d) hereof, all right, title and interest
of Mortgagor in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the ownership,
construction, maintenance, repair, operation, occupancy, sale or financing
of the Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or,
subject to Section 8.10 of the Credit Agreement, any property which is
adjacent or peripheral to the Real Estate, together with the right to
exercise such options and all leases of Equipment (collectively, the
"CONTRACTS"), (ii) all consents, licenses, building permits,
certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Real Estate
or any part thereof (collectively, the "PERMITS") and (iii) all
drawings, plans, specifications and similar or related items relating to
the Real Estate (collectively, the "PLANS");
(J) subject to Section 18(d) hereof, all of Mortgagor's right,
title and interest in any and all monies now or subsequently on deposit
for the payment of real estate taxes or special assessments against the
Real Estate or for the payment of premiums on insurance policies
5
covering the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage; all capital, operating, reserve or
similar accounts held by or on behalf of Mortgagor and related to the
operation of the Mortgaged Property, whether now existing or hereafter
arising and all monies held in any of the foregoing accounts and any
certificates or instruments related to or evidencing such accounts;
(K) subject to Section 18(d) hereof, all accounts resulting from
the sale of timber; and
(L) subject to Section 18(d) hereof, all proceeds, both cash and
noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Mortgagor and described in the foregoing
clauses (A) through (F) are collectively referred to as the "PREMISES", and
those described in the foregoing clauses (A) through (L) are collectively
referred to as the "MORTGAGED PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
TERMS AND CONDITIONS
Mortgagor further represents, warrants, covenants and agrees with
Mortgagee as follows:
1. WARRANTY OF TITLE. (a) Mortgagor warrants that Mortgagor has
good title to the Fee Property in fee simple and good title to the rest of the
Mortgaged Property related to the Fee Property, subject only to the matters
referred to in subsection 9.3 of the Credit Agreement (collectively, the
"PERMITTED ENCUMBRANCES"), and Mortgagor shall warrant, defend and preserve
such title and the lien of the Mortgage thereon against all claims of all
persons and entities. Mortgagor further warrants that it has the right to
mortgage the Mortgaged Property.
(b) Mortgagor warrants (i) that Mortgagor has good title to the
leasehold estate in the Leasehold Parcels pursuant to the Mortgaged Leases and
has a right to mortgage the same, subject only to the matters referred to in
subsection 9.3 of the Credit Agreement (collectively, the "PERMITTED
Encumbrances"), (ii) that the Real Estate is subject to no leases or liens
other than the Mortgaged Leases and this Mortgage nor to any encumbrances,
defects or other matters, subject only to the matters referred to in subsection
9.3 of the Credit Agreement (collectively, the "PERMITTED ENCUMBRANCES"),
(iii) that
6
Mortgagor shall warrant and defend the lien thereon granted or intended to be
granted by this Mortgage against all persons and entities, (iv) that the
Mortgaged Leases are in full force and effect and Mortgagor is the holder of the
lessee's or tenant's interest thereunder, (v) that the Mortgaged Leases have not
been amended, supplemented or otherwise modified, except as may be specifically
described in Exhibit C attached to this Mortgage, (vi) that Mortgagor is not in
default under the Mortgaged Leases, has received no notice of default from any
of the lessors thereunder and knows of no material default by any of the lessors
thereunder, and (vii) that the granting of this Mortgage does not violate the
terms of the Mortgaged Leases nor is any consent of any of the lessors under the
Mortgaged Leases required to be obtained in connection with the granting of this
Mortgage unless such consent has been obtained.
2. PAYMENT OF INDEBTEDNESS. Mortgagor shall pay the Indebtedness
at the times and places and in the manner specified in the Credit Agreement and
shall perform all the Obligations.
3. REQUIREMENTS. (a) To the extent required in the Credit
Agreement, Mortgagor shall promptly comply with, or cause to be complied with,
and conform to all present and future laws, statutes, codes, ordinances, orders,
judgments, decrees, rules, regulations and requirements, and irrespective of the
nature of the work to be done, of each of the United States of America, any
State and any municipality, local government or other political subdivision
thereof and any agency, department, bureau, board, commission or other
instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall not
by act or omission permit any building or other improvement on any premises not
subject to the lien of this Mortgage to rely on the Premises or any part thereof
or any interest therein to fulfill any Legal Requirement, and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used.
4. PAYMENT OF TAXES AND OTHER IMPOSITIONS. (a) To the extent
required in the Credit Agreement, promptly prior to
7
the time when same become delinquent and before any interest or penalties accrue
thereon or attach thereto, Mortgagor shall pay and discharge all taxes of every
kind and nature (including, without limitation, all real and personal property,
income, franchise, withholding, transfer, gains, profits and gross receipts
taxes imposed upon or assessed against the Mortgaged Property), all charges for
any easement or agreement maintained for the benefit of any of the Mortgaged
Property, all general and special assessments, levies, permits, inspection and
license fees, all water and sewer rents and charges and all other public charges
even if unforeseen or extraordinary, imposed upon or assessed against or which
may become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Upon request by Mortgagee, Mortgagor shall deliver to Mortgagee
(i) original or copies of receipted bills and cancelled checks or other
reasonably satisfactory evidence evidencing payment of such Imposition if it is
a real estate tax or other public charge and (ii) evidence acceptable to
Mortgagee showing the payment of any other such Imposition. If by law any
Imposition, at Mortgagor's option, may be paid in installments (whether or not
interest shall accrue on the unpaid balance of such Imposition), Mortgagor may
elect to pay such Imposition in such installments and shall be responsible for
the payment of such installments with interest, if any.
(b) Mortgagor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Mortgage or on any interest
payable thereon for any taxes assessed against the Mortgaged Property or any
part thereof, and shall not claim any deduction from the taxable value of the
Mortgaged Property by reason of this Mortgage.
5. INSURANCE. (a) Mortgagor shall not use or permit the use of
the Mortgaged Property in any manner which would permit any insurer to cancel
any insurance policy, unless replaced prior to or simultaneously with such
cancellation (such that there is no gap in coverage) by another policy
satisfactory to Mortgagee or void coverage required to be maintained by the
Credit Agreement.
(b) In the event of foreclosure of this Mortgage or other transfer
of title to the Mortgaged Property in extinguishment of the Indebtedness, all
right, title and interest of Mortgagor in and to any insurance policies then in
force shall pass to the purchaser or grantee and Mortgagor hereby appoints
Mortgagee its attorney-in-fact, in Mortgagor's name, to assign and transfer all
such policies and proceeds to such purchaser or grantee.
(c) Until an Event of Default shall have occurred and be
continuing, all insurance and eminent domain proceeds shall be payable to
Mortgagor, free and clear of the lien of this
8
Mortgage. All parties having dealings with Mortgagor in connection with
insurance and eminent domain matters shall be entitled to rely on an affidavit
of Mortgagor to the effect that no Event of Default has occurred and is
continuing, absent receipt of written notice from Mortgagee to the contrary.
6. RESTRICTIONS. Mortgagor shall not (i) except for the lien of
this Mortgage and the Permitted Encumbrances, further mortgage, nor otherwise
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to the lien of this Mortgage and whether recourse or
non-recourse, nor (ii) sell, transfer, convey or assign nor permit to be sold
transferred, conveyed or assigned all or any portion of, or any interest in, the
Mortgaged Property, except, in each case, as may be otherwise expressly
permitted under the Credit Agreement. In the event of any such permitted sale,
transfer, conveyance, assignment or other disposition of any part of the
Mortgaged Property, this Mortgage will remain in effect with respect to all of
the remaining Mortgaged Property.
7. MAINTENANCE; UTILITIES. (a) Mortgagor shall maintain or
cause to be maintained all the Improvements in good working order and condition
and shall not commit or suffer any material waste of the Improvements.
(b) Mortgagor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
8. RIGHTS OF TENANTS. This Mortgage is subject to the rights of
any and all tenants of the Mortgaged Property now or hereafter existing and, for
so long as said tenants are not in default under the terms of their respective
leases and shall agree to attorn to Mortgagee (or Mortgagee's designee) upon its
acquisition of title to the Mortgaged Property, Mortgagee shall not disturb the
use or possession by said tenants to all or a portion of the Mortgaged Property,
as described in such tenant's lease. If an Event of Default shall have occurred
and be continuing and Mortgagee elects to foreclose this Mortgage in pursuant to
the Section of this Mortgage entitled "Remedies", so long as said tenants are
not in default under the terms of their respective leases, Mortgagee shall take
no action or fail to take any action, as the case may be, the effect of which
would be to terminate the rights of said tenants under their respective leases;
PROVIDED that if, in order validly to foreclose the lien of this Mortgage such
lease must be terminated, Mortgagee may nevertheless proceed with such
foreclosure but following the completion of such foreclosure shall enter into a
new lease of the Mortgaged Property with such tenant on the same terms and
conditions as those set forth in the then terminated lease.
9
Mortgagor may, in the ordinary course of business and without the consent of
Mortgagee, enter into any new leases or modify, surrender, terminate, extend or
renew any lease now existing or hereafter created upon the Mortgaged Property,
or any portion thereof, without the consent of Mortgagee. Mortgagee agrees to
execute such other and further instruments as may be necessary to effectuate the
terms of this Section.
9. FURTHER ASSURANCES. To further assure Mortgagee's rights under
this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
reasonably required by Mortgagee to confirm the lien of this Mortgage and all
other rights or benefits conferred on Mortgagee.
10. MORTGAGEE'S RIGHT TO PERFORM. If Mortgagor fails to perform
any of the covenants or agreements of Mortgagor after an Event of Default shall
have occurred and be continuing, Mortgagee, without waiving or releasing
Mortgagor from any obligation or default under this Mortgage, with reasonable
efforts to provide simultaneous written notice to Mortgagor, may, at any time
(but shall be under no obligation to) pay or perform the same, and the amount or
cost thereof, with interest at the Default Rate, shall immediately be due from
Mortgagor to Mortgagee and the same shall be secured by this Mortgage and shall
be a lien on the Mortgaged Property prior to any right, title to, interest in or
claim upon the Mortgaged Property attaching subsequent to the lien of this
Mortgage. No payment or advance of money by Mortgagee under this Section shall
be deemed or construed to cure Mortgagor's default or waive any right or remedy
of Mortgagee.
11. MORTGAGOR'S EXISTENCE, ETC. Upon recordation of this
Mortgage in the appropriate office or offices, payment of all mortgage recording
fees and taxes in respect thereof and compliance with the formal requirements of
state law applicable to the recording of real estate mortgages generally, this
Mortgage shall constitute a fully perfected mortgage lien on and security
interest in the Mortgaged Property, subject only to such encumbrances, defects
and exceptions as are expressly permitted under the Credit Agreement.
12. ASBESTOS AND HAZARDOUS WASTE. Mortgagor shall comply with
Environmental Laws to the extent provided in the Credit Agreement. If Mortgagor
shall fail to so comply to the extent required in the Credit Agreement,
Mortgagee may declare an Event of Default and may (but shall not be obligated
to) do whatever is necessary to comply with the applicable Environmental Laws,
and the costs thereof, with interest at the Default Rate, shall be immediately
due from Mortgagor to Mortgagee and the same shall be added to the Indebtedness
and be secured by this
10
Mortgage. If an Event of Default exists, Mortgagor shall give Mortgagee and its
agents and employees access to the Premises to cause such compliance.
13. EVENT OF DEFAULT. (a) The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder; and
(b) a failure to pay when due any sum under the Guarantee shall
constitute an Event of Default hereunder; and
(c) to the extent it would have a Material Adverse Effect (as
defined in the Credit Agreement), a failure of Mortgagor to duly perform and
observe, or a violation or breach of, any other terms, covenants, provisions or
conditions of this Mortgage and the continuation thereof for a 30-day period
after notice shall have been given to Mortgagor by Mortgagee specifying such
default and requiring such default be remedied, shall constitute an Event of
Default hereunder; which period may be extended to the extent required (but no
longer than 180 days) if such default is not susceptible of cure within 30 days
so long as Mortgagor has commenced to cure such default within such 30-day
period and is thereafter diligently prosecuting such cure to completion and so
long as such delay is not likely to have a Material Adverse Effect on either the
Mortgaged Property or Mortgagee's rights under this Mortgage; provided, however,
any such default that can be cured by the payment of money shall be promptly
cured after notice by Mortgagee.
14. REMEDIES.
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Mortgagor
Obligation Documents, or as provided by law, and without limitation, (x) if such
event is an Event of Default specified in clause (i) or (ii) of Section 11(f) of
the Credit Agreement or a failure to pay any sum when due under the Guarantee
with respect to Mortgagor, automatically the Indebtedness immediately shall
become due and payable, and (y) if such event is any other Event of Default
under Section 11 of the Credit Agreement or a failure to pay any sum when due
under the Guarantee, in addition to any other rights and remedies Mortgagee may
have pursuant to the Guarantee or the Credit Agreement, Mortgagee may
immediately take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Mortgagor and in and to the Mortgaged
Property, including, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such manner as
Mortgagee may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of
11
mortgage foreclosure against all or any part of the Mortgaged Property,
(B) institute and maintain an action on the Credit Agreement or the
Guarantee or both, (C) sell all or part of the Mortgaged Property
(Mortgagor expressly granting to Mortgagee the power of sale), or (D) take
such other action at law or in equity for the enforcement of this Mortgage
or any of the Mortgagor Obligation Documents as the law may allow.
Mortgagee may proceed in any such action to final judgment and execution
thereon for all sums due hereunder, together with interest thereon at the
Default Rate and all costs of suit, including, without limitation,
reasonable attorneys' fees and disbursements. Interest at the Default
Rate shall be due on any judgment obtained by Mortgagee from the date of
judgment until actual payment is made of the full amount of the judgment;
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other collateral as security for the
Indebtedness and Obligations enter into and upon the Mortgaged Property
and each and every part thereof and exclude Mortgagor and its agents and
employees therefrom without liability for trespass, damage or otherwise
(Mortgagor hereby agreeing to surrender possession of the Mortgaged
Property to Mortgagee upon demand at any such time) and use, operate,
manage, maintain and control the Mortgaged Property and every part
thereof. Following such entry and taking of possession, Mortgagee shall
be entitled, without limitation, (x) to lease all or any part or parts of
the Mortgaged Property for such periods of time and upon such conditions
as Mortgagee may, in its discretion, deem proper, (y) to enforce, cancel
or modify any Lease and (z) generally to execute, do and perform any other
act, deed, matter or thing concerning the Mortgaged Property as Mortgagee
shall deem appropriate as fully as Mortgagor might do.
(b) To the extent permitted under applicable law, the holder of
this Mortgage, in any action to foreclose it, shall be entitled to the
appointment of a receiver. In case of a foreclosure sale, the Real Estate may
be sold, at Mortgagee's election, in one parcel or in more than one parcel and
Mortgagee is specifically empowered, (without being required to do so, and in
its sole and absolute discretion) to cause successive sales of portions of the
Mortgaged Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding any
exculpatory or non-recourse language which may be contained herein to the
contrary, Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or
12
remedy as though other remedies were not provided for in this Mortgage.
15. RIGHT OF MORTGAGEE TO CREDIT SALE. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof. In lieu of paying cash therefor, Mortgagee may make settlement for the
purchase price by crediting upon the Indebtedness or other sums secured by this
Mortgage the net sales price after deducting therefrom the expenses of sale and
the cost of the action and any other sums which Mortgagee is authorized to
deduct under this Mortgage. In such event, this Mortgage, the Guarantee, the
other Mortgagor Obligation Documents, the Credit Agreement, and documents
evidencing expenditures secured hereby may be presented to the person or persons
conducting the sale in order that the amount so used or applied may be credited
upon the Indebtedness as having been paid.
16. APPOINTMENT OF RECEIVER. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Mortgagee in case of entry as
provided in this Mortgage, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Mortgaged Property, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
17. EXTENSION, RELEASE, ETC. (a) Without affecting the lien
or charge of this Mortgage upon any portion of the Mortgaged Property not then
or theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage
13
shall secure less than all of the principal amount of the Indebtedness, it is
expressly agreed that any repayments of the principal amount of the Indebtedness
shall not reduce the amount of the lien of this Mortgage until the lien amount
shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.
18. SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE. (a) It is
the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"CODE") of the State in which the Mortgaged Property is located. If an Event
of Default shall occur and be continuing under this Mortgage, then in addition
to having any other right or remedy available at law or in equity, Mortgagee
shall have the option of either (i) proceeding under the Code and exercising
such rights and remedies as may be provided to a secured party by the Code with
respect to all or any portion of the Mortgaged Property which is personal
property (including, without limitation, taking possession of and selling such
property) or (ii) treating such property as real property and proceeding with
respect to both the real and personal property constituting the Mortgaged
Property in accordance with Mortgagee's rights, powers and remedies with respect
to the real property (in which event the default provisions of the Code shall
not apply). If Mortgagee shall elect to proceed under the Code, then ten days'
notice of sale of the personal property shall be deemed reasonable notice and
the reasonable expenses of retaking, holding, preparing for sale, selling and
the like incurred by Mortgagee shall include, but not be limited to, attorneys'
fees and legal expenses. At Mortgagee's request, Mortgagor shall assemble the
personal property and make it available to Mortgagee
14
at a place designated by Mortgagee which is reasonably convenient to both
parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) some of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) as to those
fixtures, this Mortgage upon recording or registration in the real estate
records of the proper office shall constitute a financing statement filed as a
"fixture filing" within the meaning of Sections 9-313 and 9-402 of the Code;
(iii) except as otherwise provided, Mortgagor is the record owner of the Real
Estate and the leasehold estate in the Leasehold Parcels; and (iv) the mailing
addresses of Mortgagor and Mortgagee are as set forth on the first page of this
Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form reasonably satisfactory to Mortgagee, covering all or any
part of the Mortgaged Property and will further execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any financing
statement, affidavit, continuation statement or certificate or other document as
Mortgagee may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Mortgage and such
security instrument. Mortgagor shall from time to time, on request of
Mortgagee, deliver to Mortgagee an inventory in reasonable detail of any of the
Mortgaged Property which constitutes personal property. If Mortgagor shall fail
to furnish any financing or continuation statement within 10 days after request
by Mortgagee, then pursuant to the provisions of the Code, Mortgagor hereby
authorizes Mortgagee, without the signature of Mortgagor, to execute and file
any such financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above. A photocopy of this Mortgage may be filed as a Financing
Statement.
(d) All rights, remedies and obligations granted, created or
otherwise arising hereunder and all representations, warranties and other
provisions hereof shall be construed, and all actions hereunder shall be
performed, in a manner consistent with, and subject to the terms and provisions
of, the Security Agreement. To the extent that the rights granted hereunder in
any item of the Mortgaged Property (other than the Real Estate and other
interests which are exclusively real property interests) conflict with any
rights granted in the same item of Mortgaged Property under the Security
Agreement, the Security Agreement shall prevail.
15
19. ASSIGNMENT OF RENTS. Mortgagor hereby assigns to Mortgagee
the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Mortgagor grants to Mortgagee the right to
enter the Mortgaged Property for the purpose of collecting the same and to let
the Mortgaged Property or any part thereof, and to apply the Rents on account of
the Indebtedness. The foregoing assignment and grant is present and absolute
and shall continue in effect until the Indebtedness is paid in full, but
Mortgagee hereby waives the right to enter the Mortgaged Property for the
purpose of collecting the Rents and Mortgagor shall be entitled to collect,
receive, use and retain the Rents until the occurrence of an Event of Default
under this Mortgage; such right of Mortgagor to collect, receive, use and retain
the Rents may be revoked by Mortgagee upon the occurrence of any Event of
Default under this Mortgage by giving not less than fifteen days' written notice
of such revocation to Mortgagor; in the event such notice is given, so long as
an Event of Default shall have occurred and be continuing, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any).
20. ADDITIONAL RIGHTS. Upon the occurrence of any Event of
Default, Mortgagee may, in its sole discretion and without regard to the
adequacy of its security under this Mortgage, apply all or any part of any
amounts on deposit with Mortgagee under this Mortgage against all or any part of
the Indebtedness, in accordance with the provisions of the Credit Agreement, the
Guarantee and the other Mortgagor Obligation Documents (as defined therein).
Any such application shall not be construed to cure or waive any Event of
Default or invalidate any act taken by Mortgagee on account of such Event of
Default.
21. NOTICES. All notices, requests, demands and other
communications hereunder shall be given in care of the Parent Company in the
manner and to the addresses determined under Section 13.2 of the Credit
Agreement.
22. NO ORAL MODIFICATION. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate lien or encumbrance.
16
23. PARTIAL INVALIDITY. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage
or in any provisions of the Indebtedness or Mortgagor Obligation Documents, the
obligations of Mortgagor and of any other obligor under the Indebtedness or
Mortgagor Obligation Documents shall be subject to the limitation that neither
Mortgagee nor any Lender shall charge, take or receive, nor shall Mortgagor or
any other obligor be obligated to pay to Mortgagee or any Lender, any amounts
constituting interest in excess of the maximum rate permitted by law to be
charged by Mortgagee or any Lender, as the case may be.
24. MORTGAGOR'S WAIVER OF RIGHTS. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshalling in the event of foreclosure of the liens hereby created.
25. REMEDIES NOT EXCLUSIVE. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Mortgagor Obligation Documents or other agreement or any laws now or hereafter
in force, notwithstanding some or all of the Indebtedness and Obligations may
now or hereafter be otherwise secured, whether by mortgage, security agreement,
pledge, lien, assignment or otherwise. Neither the acceptance of this Mortgage
nor its enforcement, shall prejudice or in any manner affect Mortgagee's right
to realize upon or enforce any other security now or hereafter held by
Mortgagee, it being agreed that Mortgagee shall be entitled to enforce this
Mortgage and any other security now
17
or hereafter held by Mortgagee in such order and manner as Mortgagee may
determine in its absolute discretion. No remedy herein conferred upon or
reserved to Mortgagee is intended to be exclusive of any other remedy herein or
by law provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. Every power or remedy given by any of the
Mortgagor Obligation Documents to Mortgagee or to which it may otherwise be
entitled, may be exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by Mortgagee. In no event shall Mortgagee,
in the exercise of the remedies provided in this Mortgage (including, without
limitation, in connection with the assignment of Rents to Mortgagee, or the
appointment of a receiver and the entry of such receiver on to all or any part
of the Mortgaged Property), be deemed a "mortgagee in possession," and Mortgagee
shall not in any way be made liable for any act, either of commission or
omission, in connection with the exercise of such remedies.
26. MULTIPLE SECURITY. If (a) the Premises shall consist of one
or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold one or more additional mortgages, liens, deeds of trust or other
security (directly or indirectly) for the Indebtedness upon other property in
the State in which the Premises are located (whether or not such property is
owned by Mortgagor or by others) or (c) both the circumstances described in
clauses (a) and (b) shall be true, then to the fullest extent permitted by law,
Mortgagee may, at its election, commence or consolidate in a single foreclosure
action all foreclosure proceedings against all such collateral securing the
Indebtedness (including the Mortgaged Property), which action may be brought or
consolidated in the courts of any county in which any of such collateral is
located. Mortgagor acknowledges that the right to maintain a consolidated
foreclosure action is a specific inducement to some or all of the Lenders to
make certain loans to and to enter into certain agreements with Mortgagor, and
for Mortgagee to enter into the Guarantee, and Mortgagor expressly and
irrevocably waives any objections to the commencement or consolidation of the
foreclosure proceedings in a single action and any objections to the laying of
venue or based on the grounds of FORUM NON CONVENIENS which it may now or
hereafter have. Mortgagor further agrees that if Mortgagee shall be prosecuting
one or more foreclosure or other proceedings against a portion of the Mortgaged
Property or against any collateral other than the Mortgaged Property, which
collateral directly or indirectly secures the Indebtedness, or if Mortgagee
shall have obtained a judgment of foreclosure and sale or similar judgment
against such collateral, then, whether or not such proceedings are being
maintained or judgments were obtained in or outside the State in which the
Premises are located, Mortgagee may commence or continue foreclosure proceedings
and exercise its other remedies
18
granted in this Mortgage against all or any part of the Mortgaged Property and
Mortgagor waives any objections to the commencement or continuation of a
foreclosure of this Mortgage or exercise of any other remedies hereunder based
on such other proceedings or judgments, and waives any right to seek to dismiss,
stay, remove, transfer or consolidate either any action under this Mortgage or
such other proceedings on such basis. Neither the commencement nor continuation
of proceedings to foreclose this Mortgage nor the exercise of any other rights
hereunder nor the recovery of any judgment by Mortgagee in any such proceedings
shall prejudice, limit or preclude Mortgagee's right to commence or continue one
or more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Premises are located)
which directly or indirectly secures the Indebtedness, and Mortgagor expressly
waives any objections to the commencement of, continuation of, or entry of a
judgment in such other proceedings or exercise of any remedies in such
proceedings based upon any action or judgment connected to this Mortgage, and
Mortgagor also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any action under this Mortgage on
such basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Mortgagee may, at its election, cause the sale of all
collateral which is the subject of a single foreclosure action at either a
single sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the parties to
dispose of and administer all collateral securing the Indebtedness (directly or
indirectly) in the most economical and least time-consuming manner.
27. EXPENSES; INDEMNIFICATION. Mortgagor agrees (a) to pay or
reimburse Mortgagee for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, the Guarantee and the other
Mortgagor Obligation Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to Mortgagee, (b) to pay or
reimburse each Lender and the Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under the Credit
Agreement, the Guarantee, the other Mortgagor Obligation Documents and any such
other documents prepared in connection herewith or therewith, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel in lieu of the fees and expenses of outside
counsel) to each Lender and of counsel to the Agent, (c) to pay, indemnify, and
hold each Lender and the 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 similar taxes, if any, which may be payable or
determined to be payable in connection with the
19
execution and delivery of, 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, the Credit Agreement, the Guarantee, the
other Mortgagor Obligation Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and the 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 the Credit Agreement, the Guarantee, the other Mortgagor
Obligation Documents, the Stock Purchase Agreement, the Stock Purchase, the
Merger or the use of the proceeds of the Loans in connection with the Stock
Purchase, 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 Mortgagor, any
of its Subsidiaries or any of the Properties (all the foregoing in this clause
(d), collectively, the "indemnified liabilities"), PROVIDED, that the
Mortgagor shall have no obligation hereunder to the Agent or any Lender with
respect to indemnified liabilities arising from (1) the gross negligence or
willful misconduct of the Agent or any such Lender or (2) legal proceedings
commenced against the Agent or any such Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
under the Credit Agreement and the Guarantee.
28. SUCCESSORS AND ASSIGNS. Except to the extent prohibited in
the Credit Agreement, all covenants of Mortgagor contained in this Mortgage are
imposed solely and exclusively for the benefit of Mortgagee and the Lenders and
their respective successors and assigns, and no other person or entity shall
have standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor
shall run with the land and bind Mortgagor, the successors and assigns of
Mortgagor (and each of them) and all subsequent owners, encumbrancers and
tenants of the Mortgaged Property, and shall inure to the benefit of Mortgagee
and the Lenders and their respective successors and assigns. The word
"Mortgagor" shall be construed as if it read "Mortgagors" whenever the sense of
this Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.
29. NO WAIVERS, ETC. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a
20
waiver of any of the terms and provisions hereof, and Mortgagee, notwithstanding
any such failure, shall have the right thereafter to insist upon the strict
performance by Mortgagor of any and all of the terms and provisions of this
Mortgage to be performed by Mortgagor. Mortgagee may release, regardless of
consideration and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Mortgaged Property, any part of the
security held for the obligations secured by this Mortgage without, as to the
remainder of the security, in anywise impairing or affecting the lien of this
Mortgage or the priority of such lien over any subordinate lien.
30. GOVERNING LAW, ETC. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises are
located, except that Mortgagor expressly acknowledges that by their terms the
Guarantee and the Credit Agreement shall be governed and construed in accordance
with the laws of the State of New York, without regard to principles of conflict
of law, and for purposes of consistency, Mortgagor agrees that in any IN
PERSONAM proceeding related to this Mortgage the rights of the parties to this
Mortgage shall also be governed by and construed in accordance with the laws of
the State of New York governing contracts made and to be performed in that
State, without regard to principles of conflict of law.
31. WAIVER OF TRIAL BY JURY. Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim, suit
or proceeding relating to this Mortgage and for any counterclaim (other than
compulsory counterclaims) brought therein. Mortgagor hereby waives all rights
to interpose any counterclaim (other than compulsory counterclaims) in any suit
brought by Mortgagee hereunder and all rights to have any such suit consolidated
with any separate suit, action or proceeding.
32. CERTAIN DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "MORTGAGOR" shall mean "each Mortgagor or any subsequent owner or owners
of the Mortgaged Property or any part thereof or interest therein," the word
"MORTGAGEE" shall mean "Mortgagee or any successor agent under the Credit
Agreement," the word "PERSON" shall include any individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, or other entity, and the words "MORTGAGED PROPERTY" shall include
any portion of the Mortgaged Property or interest therein. Whenever the context
may require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.
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33. RELEASE. (a) Any Mortgaged Property that is permitted to be
sold or otherwise transferred free of the lien of the Security Documents as
provided in the Credit Agreement shall be sold or otherwise transferred, as the
case may be, free and clear of this Mortgage. In connection with any such sale
or transfer, the Mortgagee shall execute and deliver to Mortgagor, or to such
person or persons as Mortgagor shall reasonably designate, a satisfaction of
mortgage and such other documents as Mortgagor may reasonably request to
evidence the release of this Mortgage with respect to such Mortgaged Property,
as well as a release of any collateral assignments or other Security Documents
in favor of Mortgagee that burden such Mortgaged Property.
(b) In addition, and not in limitation of the foregoing, any
Mortgaged Property (other than the Real Estate) that also constitutes collateral
under any other Security Document shall automatically be released from this
Mortgage in the event that such Mortgaged Property is released from the security
interest created by such other Security Document in accordance with the terms
thereof and of the Credit Agreement.
34. MORTGAGED LEASE PROVISIONS. (a) To the extent failure to do
so would have a Material Adverse Effect (as defined in the Credit Agreement),
Mortgagor will pay or cause to be paid all rent and other charges required under
the Mortgaged Leases as and when the same are due and will promptly and
faithfully observe, abide by, discharge and perform, or cause to be kept,
observed, discharged and performed, all other material terms, obligations,
covenants, conditions, agreements, indemnities, representations, warranties or
liabilities of the Mortgaged Leases on the part of the lessee thereunder to be
kept, observed, discharged and performed, and will not without the express
written consent of Mortgagee (i) in any manner, cancel, terminate or surrender,
or permit the cancellation, termination or surrender of any of the Mortgaged
Leases, in whole or in part, (ii) either orally or in writing, modify, amend or
permit any modification or amendment of any of the terms thereof in any material
respect or (iii) permit the subordination thereof to any mortgage; and any
attempt on the part of Mortgagor to do any of the foregoing without such written
consent of Mortgagee shall be null and void and of no effect and shall
constitute an Event of Default hereunder.
(b) To the extent failure to do so would have a Material Adverse
Effect (as defined in the Credit Agreement), Mortgagor will do, or cause to be
done, all things necessary to preserve and keep unimpaired all material rights
of Mortgagor as lessee under the Mortgaged Leases, and to prevent any default
under the Mortgaged Leases, or any termination, surrender, cancellation,
forfeiture, subordination or impairment thereof. In the event of the failure of
Mortgagor to make any payment required to be made by the lessee pursuant to the
provisions of the Mortgaged Leases or to observe, abide by, discharge or
perform, or cause to be observed, kept, discharged or performed,
22
any of the material terms, obligations, covenants, conditions, agreements,
indemnities, representations, warranties or liabilities of the Mortgaged Leases
on the part of lessee thereunder to be observed, kept, discharged and performed,
Mortgagor does hereby authorize and irrevocably appoint and constitute Mortgagee
as its true and lawful attorney-in-fact, which appointment is coupled with an
interest, in its name, place and stead, to take any and all actions deemed
necessary or desirable by Mortgagee to perform and comply with all the
obligations of Mortgagor under the Mortgaged Leases, to do and take, but without
any obligation so to do, any action which Mortgagee deems necessary or desirable
to prevent or cure any default by Mortgagor under the Mortgaged Leases, to enter
into and upon the Premises or any part thereof to such extent and as often as
Mortgagee, in its sole discretion, deems necessary or desirable in order to
prevent or cure any default of Mortgagor pursuant thereto, to the end that the
rights of Mortgagor in and to the leasehold estate created by the Mortgaged
Leases shall be kept unimpaired and free from default, and all sums so expended
by Mortgagee, with interest thereon at the Default Rate from the date of each
such expenditure, shall be paid by Mortgagor to Mortgagee promptly upon demand
by Mortgagee. Mortgagor shall, within five (5) business days after written
request by Mortgagee, execute and deliver to Mortgagee, or to any person
designated by Mortgagee, such further instruments, agreements, powers,
assignments, conveyances or the like as may be necessary to complete or perfect
the interest, rights or powers of Mortgagee pursuant to this paragraph (b).
(c) If any action or proceeding shall be instituted to evict
Mortgagor or to recover possession of any Leasehold Parcel or any part thereof
or interest therein or any action or proceeding otherwise affecting any of the
Mortgaged Leases or this Mortgage shall be instituted, then Mortgagor will,
immediately upon service thereof on or to Mortgagor, deliver to Mortgagee a true
and complete copy of each petition, summons, complaint, notice of motion, order
to show cause and of all other provisions, pleadings, and papers, however
designated, served in any such action or proceeding.
(d) Mortgagor covenants and agrees that unless Mortgagee shall
otherwise expressly consent in writing, the fee title to the property demised by
the Mortgaged Leases and the leasehold estate and/or any subleasehold estate
shall not merge but shall always remain separate and distinct, notwithstanding
the union of said estates either in Mortgagor or a third party by purchase or
otherwise; and in case Mortgagor acquires the fee title or any other estate,
title or interest in and to any Leasehold Parcel, the lien of this Mortgage
shall, without further conveyance, simultaneously with such acquisition, be
spread to cover and attach to such acquired estate and as so spread and attached
shall be prior to the lien of any mortgage placed on the acquired estate
subsequent to the date of this Mortgage.
1
(e) No release or forbearance of any of Mortgagor's obligations
under the Mortgaged Leases, pursuant to the Mortgaged Leases, or otherwise,
shall release Mortgagor from any of its obligations under this Mortgage,
including its obligation with respect to the payment of rent as provided for in
the Mortgaged Leases and the performance of all of the terms, provisions,
covenants, conditions and agreements contained in the Mortgaged Leases, to be
kept, performed and completed by the lessee therein.
This Mortgage has been duly executed by Mortgagor on the date first
above written.
WITNESS: [Subsidiary]
By:
------------------------- -----------------------------
Name:
Title:
[CORPORATE SEAL]
STATE OF NEW YORK ) December ___, 1994
: ss.:
COUNTY OF NEW YORK )
Then personally appeared the above-named _________________________
_______________ in his/her capacity as __________________________________ of
[Subsidiary], and acknowledged the foregoing instrument to be his/her free act
and deed in his/her said capacity and the free act and deed of said corporation.
Before me,
-------------------------------
-------------------------------
(Print Name)
Notary Public State of
-------------------
My commission expires:
-------------------
EXHIBIT A
Description of the Premises
[Attach Legal Description of all parcels]
4
EXHIBIT B
Description of the Premises
[Attach Legal Description of all parcels]
5
EXHIBIT C
Description of the Leases
[Attach Legal Description of all leases]
EXHIBIT H TO
CREDIT AND GUARANTEE AGREEMENT
MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
from
[Subsidiary], Mortgagor
to
CHEMICAL BANK,
as Agent, Mortgagee
DATED AS OF DECEMBER __, 1994
After recording, please return to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
a partnership which includes
professional corporations
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
EXHIBIT H TO
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SUBSIDIARY FEE MORTGAGE]
[NOTE: THIS FORM IS NOT STATE-LAW SPECIFIC. SPECIFIC PROVISIONS,
SATISFACTORY TO AGENT'S COUNSEL, THAT ARE NECESSARY OR DESIRABLE UNDER THE LAW
OR REAL ESTATE PRACTICE OF ANY PARTICULAR STATE IN WHICH THIS FORM IS USED WILL
BE ADDED.]
THIS MORTGAGE, SECURITY AGREEMENT AND FINANCING STATEMENT
(collectively, the "Mortgage"), dated as of __________ is made by
______________________, a _____________ corporation ("MORTGAGOR"), whose mailing
address is _________________ to CHEMICAL BANK, whose mailing address is ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as agent (the "AGENT"; in such capacity,
together with its successors and assigns, "MORTGAGEE") for the several banks and
other financial institutions (the "LENDERS") from time to time parties to that
certain Credit and Guarantee Agreement dated as of December ____, 1994 (as the
same may have been and may be further amended, supplemented, restated, replaced
or otherwise modified from time to time, the "CREDIT AGREEMENT") among SDW
Holdings Corporation, a Delaware corporation, S.D. ▇▇▇▇▇▇ Company, the Mortgagor
and the Lenders. References to this "MORTGAGE" shall mean this instrument and
any and all renewals, modifications, amendments, supplements, extensions,
consolidations, substitutions, spreaders and replacements of this instrument.
BACKGROUND
A. Mortgagor is the owner of the parcel(s) of real property
described on Exhibit A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "IMPROVEMENTS"), being collectively referred to as the "REAL
ESTATE").
B. Mortgagor is a direct or indirect wholly-owned subsidiary of S.
D. ▇▇▇▇▇▇ Company (as successor by merger to SDW Acquisition Corporation), a
Pennsylvania corporation (the "PARENT COMPANY").
C. Pursuant to the Credit Agreement, Mortgagor has given that certain
Guarantee dated __________, 19__ (the "GUARANTEE") and is securing the Guarantee
with this Mortgage.
D. Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement. References in this Mortgage
to the "DEFAULT RATE" shall mean a rate per annum equal to the ABR plus 2%.
2
GRANTING CLAUSES
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the repayment of the indebtedness evidenced by the Guarantee
and (ii) all interest and fees payable thereon (the items set forth in
clauses (i) and (ii) being referred collectively as the "INDEBTEDNESS");
and
(b) the performance of all covenants, agreements, obligations and
liabilities of Mortgagor (the "OBLIGATIONS") under or pursuant to the
provisions of the Guarantee and any other document securing payment of the
Indebtedness (the "SECURITY DOCUMENTS") and any amendments, supplements,
extensions, renewals, restatements, replacements or modifications of any of
the foregoing (the Guarantee, the Security Documents and all other
documents and instruments from time to time evidencing, securing or
guaranteeing the payment of the Indebtedness or the performance of the
Obligations, as any of the same may be amended, supplemented, extended,
renewed, restated, replaced or modified from time to time, are collectively
referred to as the "MORTGAGOR OBLIGATION DOCUMENTS");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN, AND
HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE WITH
MORTGAGE COVENANTS:
(A) the Real Estate;
(B) to the extent not included in (A), all the estate, right, title,
claim or demand whatsoever of Mortgagor, in possession or expectancy, in
and to the Real Estate or any part thereof;
(C) all right, title and interest of Mortgagor in, to and under all
easements, rights of way, gores of land, streets, ways, alleys, passages,
sewer rights, waters, water courses, timber, timber rights, water and
riparian rights, development rights, air rights, mineral rights and all
estates, rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to the
Real Estate, and any reversions, remainders, rents, issues, profits and
revenue thereof and all land lying in the bed of any street, road or
avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) subject to Section 18(d) hereof, all of the fixtures, chattels,
business machines, machinery, apparatus, equipment, furnishings, fittings
and articles of personal property of every kind and nature whatsoever, and
all
3
appurtenances and additions thereto and substitutions or replacements
thereof (together with, in each case, attachments, components, parts and
accessories) currently owned or subsequently acquired by Mortgagor and, in
each case, now or subsequently attached to, or contained in or used or
usable in any way in connection with any operation or letting of the Real
Estate (all of the foregoing in this paragraph (D) being referred to as the
"EQUIPMENT");
(E) subject to Section 18(d) hereof, all right, title and interest of
Mortgagor in and to all substitutes and replacements of, and all additions
and improvements to, the Real Estate and the Equipment, subsequently
acquired by or released to Mortgagor or constructed, assembled or placed by
Mortgagor on the Real Estate, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation, any
and all building materials whether stored at the Real Estate or offsite,
and, in each such case, without any further mortgage, conveyance,
assignment or other act by Mortgagor;
(F) subject to Section 18(d) hereof, all right, title and interest of
Mortgagor in, to and under all leases, subleases, underlettings, concession
agreements, management agreements, licenses and other agreements relating
to the use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and whether
written or oral and all guarantees of any of the foregoing (collectively,
as any of the foregoing may be amended, restated, extended, renewed or
modified from time to time, the "LEASES"), and all rights of Mortgagor in
respect of cash and securities deposited thereunder and the right to
receive and collect the revenues, income, rents, issues and profits
thereof, together with all other rents, royalties, issues, profits,
revenue, income and other benefits arising from the use and enjoyment of
the Mortgaged Property (as defined below) (collectively, the "RENTS");
(G) subject to Section 18(d) hereof, all insurance policies now or
subsequently obtained by Mortgagor relating to the Real Estate or Equipment
and Mortgagor's interest in and to all unearned premiums thereunder and all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds, subject
to the provisions relating to insurance generally set forth below; and all
awards and other compensation, including the interest payable thereon and
the right to collect and receive the same, made to the present or any
subsequent owner of the Real Estate or Equipment for the taking by eminent
domain, condemnation or otherwise, of all or any part of the Real Estate or
any easement or other right therein;
4
(H) subject to Section 18(d) hereof, all right, title and interest of
Mortgagor in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the ownership,
construction, maintenance, repair, operation, occupancy, sale or financing
of the Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or,
subject to Section 8.10 of the Credit Agreement, any property which is
adjacent or peripheral to the Real Estate, together with the right to
exercise such options and all leases of Equipment (collectively, the
"CONTRACTS"), (ii) all consents, licenses, building permits, certificates
of occupancy and other governmental approvals relating to construction,
completion, occupancy, use or operation of the Real Estate or any part
thereof (collectively, the "PERMITS") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real Estate
(collectively, the "PLANS");
(I) subject to Section 18(d) hereof, all of Mortgagor's right, title
and interest in any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real Estate
or for the payment of premiums on insurance policies covering the foregoing
property or otherwise on deposit with or held by Mortgagee as provided in
this Mortgage; all capital, operating, reserve or similar accounts held by
or on behalf of Mortgagor and related to the operation of the Mortgaged
Property, whether now existing or hereafter arising and all monies held in
any of the foregoing accounts and any certificates or instruments related
to or evidencing such accounts;
(J) subject to Section 18(d) hereof, all accounts resulting from the
sale of timber; and
(K) subject to Section 18(d) hereof, all proceeds, both cash and
noncash, of the foregoing;
(All of the foregoing property and rights and interests now owned or
held or subsequently acquired by Mortgagor and described in the foregoing
clauses (A) through (E) are collectively referred to as the "PREMISES", and
those described in the foregoing clauses (A) through (K) are collectively
referred to as the "MORTGAGED PROPERTY").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
TERMS AND CONDITIONS
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Mortgagor further represents, warrants, covenants and agrees with
Mortgagee as follows:
1. WARRANTY OF TITLE. Mortgagor warrants that Mortgagor has good
title to the Real Estate in fee simple and good title to the rest of the
Mortgaged Property, subject only to the matters referred to in subsection 9.3 of
the Credit Agreement (collectively, the "PERMITTED ENCUMBRANCES"), and Mortgagor
shall warrant, defend and preserve such title and the lien of the Mortgage
thereon against all claims of all persons and entities. Mortgagor further
warrants that it has the right to mortgage the Mortgaged Property.
2. PAYMENT OF INDEBTEDNESS. Mortgagor shall pay the Indebtedness at
the times and places and in the manner specified in the Guarantee and shall
perform all the Obligations.
3. REQUIREMENTS. (a) To the extent required in the Credit
Agreement, Mortgagor shall promptly comply with, or cause to be complied with,
and conform to all present and future laws, statutes, codes, ordinances, orders,
judgments, decrees, rules, regulations and requirements, and irrespective of the
nature of the work to be done, of each of the United States of America, any
State and any municipality, local government or other political subdivision
thereof and any agency, department, bureau, board, commission or other
instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property. All present and
future laws, statutes, codes, ordinances, orders, judgments, decrees, rules,
regulations and requirements of every Governmental Authority applicable to
Mortgagor or to any of the Mortgaged Property and all covenants, restrictions,
and conditions which now or later may be applicable to any of the Mortgaged
Property are collectively referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, Mortgagor shall not by
act or omission permit any building or other improvement on any premises not
subject to the lien of this Mortgage to rely on the Premises or any part thereof
or any interest therein to fulfill any Legal Requirement, and Mortgagor hereby
assigns to Mortgagee any and all rights to give consent for all or any portion
of the Premises or any interest therein to be so used.
4. PAYMENT OF TAXES AND OTHER IMPOSITIONS. (a) To the extent
required in the Credit Agreement, promptly prior to the time when same become
delinquent and before any interest or penalties accrue thereon or attach
thereto, Mortgagor shall pay and discharge all taxes of every kind and nature
(including,
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without limitation, all real and personal property, income, franchise,
withholding, transfer, gains, profits and gross receipts taxes imposed upon or
assessed against the Mortgaged Property), all charges for any easement or
agreement maintained for the benefit of any of the Mortgaged Property, all
general and special assessments, levies, permits, inspection and license fees,
all water and sewer rents and charges and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Upon request by Mortgagee, Mortgagor shall deliver to Mortgagee
(i) original or copies of receipted bills and cancelled checks or other
reasonably satisfactory evidence evidencing payment of such Imposition if it is
a real estate tax or other public charge and (ii) evidence acceptable to
Mortgagee showing the payment of any other such Imposition. If by law any
Imposition, at Mortgagor's option, may be paid in installments (whether or not
interest shall accrue on the unpaid balance of such Imposition), Mortgagor may
elect to pay such Imposition in such installments and shall be responsible for
the payment of such installments with interest, if any.
(b) Mortgagor shall not claim, demand or be entitled to receive any
credit or credits toward the satisfaction of this Mortgage or on any interest
payable thereon for any taxes assessed against the Mortgaged Property or any
part thereof, and shall not claim any deduction from the taxable value of the
Mortgaged Property by reason of this Mortgage.
5. INSURANCE. (a) Mortgagor shall not use or permit the use of the
Mortgaged Property in any manner which would permit any insurer to cancel any
insurance policy, unless replaced prior to or simultaneously with such
cancellation (such that there is no gap in coverage) by another policy
satisfactory to Mortgagee or void coverage required to be maintained by the
Credit Agreement.
(b) In the event of foreclosure of this Mortgage or other transfer of
title to the Mortgaged Property in extinguishment of the Indebtedness, all
right, title and interest of Mortgagor in and to any insurance policies then in
force shall pass to the purchaser or grantee and Mortgagor hereby appoints
Mortgagee its attorney-in-fact, in Mortgagor's name, to assign and transfer all
such policies and proceeds to such purchaser or grantee.
(c) Until an Event of Default shall have occurred and be continuing,
all insurance and eminent domain proceeds shall be payable to Mortgagor, free
and clear of the lien of this Mortgage. All parties having dealings with
Mortgagor in connection with insurance and eminent domain matters shall be
entitled to rely on an affidavit of Mortgagor to the effect that
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no Event of Default has occurred and is continuing, absent receipt of written
notice from Mortgagee to the contrary.
6. RESTRICTIONS. Mortgagor shall not (i) except for the lien of this
Mortgage and the Permitted Encumbrances, further mortgage, nor otherwise
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to the lien of this Mortgage and whether recourse or
non-recourse, nor (ii) sell, transfer, convey or assign nor permit to be sold
transferred, conveyed or assigned all or any portion of, or any interest in, the
Mortgaged Property, except, in each case, as may be otherwise expressly
permitted under the Credit Agreement. In the event of any such permitted sale,
transfer, conveyance, assignment or other disposition of any part of the
Mortgaged Property, this Mortgage will remain in effect with respect to all of
the remaining Mortgaged Property.
7. MAINTENANCE; UTILITIES. (a) Mortgagor shall maintain or cause to
be maintained all the Improvements in good working order and condition and shall
not commit or suffer any material waste of the Improvements.
(b) Mortgagor shall pay or cause to be paid when due all utility
charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
8. RIGHTS OF TENANTS. This Mortgage is subject to the rights of any
and all tenants of the Mortgaged Property now or hereafter existing and, for so
long as said tenants are not in default under the terms of their respective
leases and shall agree to attorn to Mortgagee (or Mortgagee's designee) upon its
acquisition of title to the Mortgaged Property, Mortgagee shall not disturb the
use or possession by said tenants to all or a portion of the Mortgaged Property,
as described in such tenant's lease. If an Event of Default shall have occurred
and be continuing and Mortgagee elects to foreclose this Mortgage in pursuant to
the Section of this Mortgage entitled "Remedies", so long as said tenants are
not in default under the terms of their respective leases, Mortgagee shall take
no action or fail to take any action, as the case may be, the effect of which
would be to terminate the rights of said tenants under their respective leases;
PROVIDED that if, in order validly to foreclose the lien of this Mortgage such
lease must be terminated, Mortgagee may nevertheless proceed with such
foreclosure but following the completion of such foreclosure shall enter into a
new lease of the Mortgaged Property with such tenant on the same terms and
conditions as those set forth in the then terminated lease. Mortgagor may, in
the ordinary course of business and without the consent of Mortgagee, enter into
any new leases or modify, surrender, terminate, extend or renew any lease now
existing or
8
hereafter created upon the Mortgaged Property, or any portion thereof, without
the consent of Mortgagee. Mortgagee agrees to execute such other and further
instruments as may be necessary to effectuate the terms of this Section.
9. FURTHER ASSURANCES. To further assure Mortgagee's rights under
this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
reasonably required by Mortgagee to confirm the lien of this Mortgage and all
other rights or benefits conferred on Mortgagee.
10. MORTGAGEE'S RIGHT TO PERFORM. If Mortgagor fails to perform any
of the covenants or agreements of Mortgagor after an Event of Default shall have
occurred and be continuing, Mortgagee, without waiving or releasing Mortgagor
from any obligation or default under this Mortgage, with reasonable efforts to
provide simultaneous written notice to Mortgagor, may, at any time (but shall be
under no obligation to) pay or perform the same, and the amount or cost thereof,
with interest at the Default Rate, shall immediately be due from Mortgagor to
Mortgagee and the same shall be secured by this Mortgage and shall be a lien on
the Mortgaged Property prior to any right, title to, interest in or claim upon
the Mortgaged Property attaching subsequent to the lien of this Mortgage. No
payment or advance of money by Mortgagee under this Section shall be deemed or
construed to cure Mortgagor's default or waive any right or remedy of Mortgagee.
11. MORTGAGOR'S EXISTENCE, ETC. Upon recordation of this Mortgage
in the appropriate office or offices, payment of all mortgage recording fees and
taxes in respect thereof and compliance with the formal requirements of state
law applicable to the recording of real estate mortgages generally, this
Mortgage shall constitute a fully perfected mortgage lien on and security
interest in the Mortgaged Property, subject only to such encumbrances, defects
and exceptions as are expressly permitted under the Credit Agreement.
12. ASBESTOS AND HAZARDOUS WASTE. Mortgagor shall comply with
Environmental Laws to the extent provided in the Credit Agreement. If Mortgagor
shall fail to so comply to the extent required in the Credit Agreement,
Mortgagee may declare an Event of Default and may (but shall not be obligated
to) do whatever is necessary to comply with the applicable Environmental Laws,
and the costs thereof, with interest at the Default Rate, shall be immediately
due from Mortgagor to Mortgagee and the same shall be added to the Indebtedness
and be secured by this Mortgage. If an Event of Default exists, Mortgagor shall
give Mortgagee and its agents and employees access to the Premises to cause such
compliance.
9
13. EVENT OF DEFAULT. (a) The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder; and
(b) a failure to pay when due any sum under the Guarantee shall
constitute an Event of Default hereunder; and
(c) to the extent it would have a Material Adverse Effect (as defined
in the Credit Agreement), a failure of Mortgagor to duly perform and observe, or
a violation or breach of, any other terms, covenants, provisions or conditions
of this Mortgage and the continuation thereof for a 30-day period after notice
shall have been given to Mortgagor by Mortgagee specifying such default and
requiring such default be remedied, shall constitute an Event of Default
hereunder; which period may be extended to the extent required (but no longer
than 180 days) if such default is not susceptible of cure within 30 days so long
as Mortgagor has commenced to cure such default within such 30-day period and is
thereafter diligently prosecuting such cure to completion and so long as such
delay is not likely to have a Material Adverse Effect on either the Mortgaged
Property or Mortgagee's rights under this Mortgage; provided, however, any such
default that can be cured by the payment of money shall be promptly cured after
notice by Mortgagee.
14. REMEDIES.
(a) Upon the occurrence of any Event of Default, in addition to any
other rights and remedies Mortgagee may have pursuant to the Mortgagor
Obligation Documents, or as provided by law, and without limitation, (x) if such
event is an Event of Default specified in clause (i) or (ii) of Section 11(f) of
the Credit Agreement or a failure to pay any sum when due under the Guarantee
with respect to Mortgagor, automatically the Indebtedness immediately shall
become due and payable, and (y) if such event is any other Event of Default
under Section 11 of the Credit Agreement or a failure to pay any sum when due
under the Guarantee, in addition to any other rights and remedies Mortgagee may
have pursuant to the Guarantee or the Credit Agreement, Mortgagee may
immediately take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Mortgagor and in and to the Mortgaged
Property, including, but not limited to, the following actions, each of which
may be pursued concurrently or otherwise, at such time and in such manner as
Mortgagee may determine, in its sole discretion, without impairing or otherwise
affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law, (A)
institute and maintain an action of mortgage foreclosure against all or any
part of the Mortgaged Property, (B) institute and maintain an action on the
Credit Agreement or the Guarantee or both, (C) sell all
10
or part of the Mortgaged Property (Mortgagor expressly granting to
Mortgagee the power of sale), or (D) take such other action at law or in
equity for the enforcement of this Mortgage or any of the Mortgagor
Obligation Documents as the law may allow. Mortgagee may proceed in any
such action to final judgment and execution thereon for all sums due
hereunder, together with interest thereon at the Default Rate and all costs
of suit, including, without limitation, reasonable attorneys' fees and
disbursements. Interest at the Default Rate shall be due on any judgment
obtained by Mortgagee from the date of judgment until actual payment is
made of the full amount of the judgment;
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the Mortgaged
Property or any other collateral as security for the Indebtedness and
Obligations enter into and upon the Mortgaged Property and each and every
part thereof and exclude Mortgagor and its agents and employees therefrom
without liability for trespass, damage or otherwise (Mortgagor hereby
agreeing to surrender possession of the Mortgaged Property to Mortgagee
upon demand at any such time) and use, operate, manage, maintain and
control the Mortgaged Property and every part thereof. Following such
entry and taking of possession, Mortgagee shall be entitled, without
limitation, (x) to lease all or any part or parts of the Mortgaged Property
for such periods of time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease and (z)
generally to execute, do and perform any other act, deed, matter or thing
concerning the Mortgaged Property as Mortgagee shall deem appropriate as
fully as Mortgagor might do.
(b) To the extent permitted under applicable law, the holder of this
Mortgage, in any action to foreclose it, shall be entitled to the appointment of
a receiver. In case of a foreclosure sale, the Real Estate may be sold, at
Mortgagee's election, in one parcel or in more than one parcel and Mortgagee is
specifically empowered, (without being required to do so, and in its sole and
absolute discretion) to cause successive sales of portions of the Mortgaged
Property to be held.
(c) In the event of any breach of any of the covenants, agreements,
terms or conditions contained in this Mortgage, and notwithstanding any
exculpatory or non-recourse language which may be contained herein to the
contrary, Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other remedies
were not provided for in this Mortgage.
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15. RIGHT OF MORTGAGEE TO CREDIT SALE. Upon the occurrence of any
sale made under this Mortgage, whether made under the power of sale or by virtue
of judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged Property or any part thereof.
In lieu of paying cash therefor, Mortgagee may make settlement for the purchase
price by crediting upon the Indebtedness or other sums secured by this Mortgage
the net sales price after deducting therefrom the expenses of sale and the cost
of the action and any other sums which Mortgagee is authorized to deduct under
this Mortgage. In such event, this Mortgage, the Guarantee, the Other Mortgagor
Obligation Documents, the Credit Agreement, and documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
16. APPOINTMENT OF RECEIVER. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property, and
Mortgagor hereby irrevocably consents to such appointment and waives notice of
any application therefor (except as may be required by law). Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of Mortgagee in case of entry as
provided in this Mortgage, including, without limitation and to the extent
permitted by law, the right to enter into leases of all or any part of the
Mortgaged Property, and shall continue as such and exercise all such powers
until the date of confirmation of sale of the Mortgaged Property unless such
receivership is sooner terminated.
17. EXTENSION, RELEASE, ETC. (a) Without affecting the lien or
charge of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall not
reduce the amount
12
of the lien of this Mortgage until the lien amount shall equal the principal
amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this Mortgage,
Mortgagor authorizes Mortgagee at its option to foreclose the lien of this
Mortgage subject to the rights of any tenants of the Mortgaged Property. The
failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose the lien of this Mortgage.
(d) Unless expressly provided otherwise, in the event that ownership
of this Mortgage and title to the Mortgaged Property or any estate therein shall
become vested in the same person or entity, this Mortgage shall not merge in
such title but shall continue as a valid lien on the Mortgaged Property for the
amount secured hereby.
18. SECURITY AGREEMENT UNDER UNIFORM COMMERCIAL CODE. (a) It is the
intention of the parties hereto that this Mortgage shall constitute a Security
Agreement within the meaning of the Uniform Commercial Code (the "CODE") of the
State in which the Mortgaged Property is located. If an Event of Default shall
occur and be continuing under this Mortgage, then in addition to having any
other right or remedy available at law or in equity, Mortgagee shall have the
option of either (i) proceeding under the Code and exercising such rights and
remedies as may be provided to a secured party by the Code with respect to all
or any portion of the Mortgaged Property which is personal property (including,
without limitation, taking possession of and selling such property) or (ii)
treating such property as real property and proceeding with respect to both the
real and personal property constituting the Mortgaged Property in accordance
with Mortgagee's rights, powers and remedies with respect to the real property
(in which event the default provisions of the Code shall not apply). If
Mortgagee shall elect to proceed under the Code, then ten days' notice of sale
of the personal property shall be deemed reasonable notice and the reasonable
expenses of retaking, holding, preparing for sale, selling and the like incurred
by Mortgagee shall include, but not be limited to, attorneys' fees and legal
expenses. At Mortgagee's request, Mortgagor shall assemble the personal
property and make it available to Mortgagee at a place designated by Mortgagee
which is reasonably convenient to both parties.
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(b) Mortgagor and Mortgagee agree, to the extent permitted by law,
that: (i) some of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) as to those
fixtures, this Mortgage upon recording or registration in the real estate
records of the proper office shall constitute a financing statement filed as a
"fixture filing" within the meaning of Sections 9-313 and 9-402 of the Code;
(iii) except as otherwise provided, Mortgagor is the record owner of the Real
Estate; and (iv) the mailing addresses of Mortgagor and Mortgagee are as set
forth on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time, shall
execute, acknowledge and deliver to Mortgagee one or more separate security
agreements, in form reasonably satisfactory to Mortgagee, covering all or any
part of the Mortgaged Property and will further execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any financing
statement, affidavit, continuation statement or certificate or other document as
Mortgagee may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Mortgage and such
security instrument. Mortgagor shall from time to time, on request of
Mortgagee, deliver to Mortgagee an inventory in reasonable detail of any of the
Mortgaged Property which constitutes personal property. If Mortgagor shall fail
to furnish any financing or continuation statement within 10 days after request
by Mortgagee, then pursuant to the provisions of the Code, Mortgagor hereby
authorizes Mortgagee, without the signature of Mortgagor, to execute and file
any such financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Mortgagee to proceed
against any personal property encumbered by this Mortgage as real property, as
set forth above. A photocopy of this Mortgage may be filed as a Financing
Statement.
(d) All rights, remedies and obligations granted, created or
otherwise arising hereunder and all representations, warranties and other
provisions hereof shall be construed, and all actions hereunder shall be
performed, in a manner consistent with, and subject to the terms and provisions
of, the Security Agreement. To the extent that the rights granted hereunder in
any item of the Mortgaged Property (other than the Real Estate and other
interests which are exclusively real property interests) conflict with any
rights granted in the same item of Mortgaged Property under the Security
Agreement, the Security Agreement shall prevail.
19. ASSIGNMENT OF RENTS. Mortgagor hereby assigns to Mortgagee the
Rents as further security for the payment of the Indebtedness and performance of
the Obligations, and Mortgagor grants to Mortgagee the right to enter the
Mortgaged Property for
14
the purpose of collecting the same and to let the Mortgaged Property or any part
thereof, and to apply the Rents on account of the Indebtedness. The foregoing
assignment and grant is present and absolute and shall continue in effect until
the Indebtedness is paid in full, but Mortgagee hereby waives the right to enter
the Mortgaged Property for the purpose of collecting the Rents and Mortgagor
shall be entitled to collect, receive, use and retain the Rents until the
occurrence of an Event of Default under this Mortgage; such right of Mortgagor
to collect, receive, use and retain the Rents may be revoked by Mortgagee upon
the occurrence of any Event of Default under this Mortgage by giving not less
than fifteen days' written notice of such revocation to Mortgagor; in the event
such notice is given, so long as an Event of Default shall have occurred and be
continuing, Mortgagor shall pay over to Mortgagee, or to any receiver appointed
to collect the Rents, any lease security deposits, and shall pay monthly in
advance to Mortgagee, or to any such receiver, the fair and reasonable rental
value as determined by Mortgagee for the use and occupancy of the Mortgaged
Property or of such part thereof as may be in the possession of Mortgagor or any
affiliate of Mortgagor, and upon default in any such payment Mortgagor and any
such affiliate will vacate and surrender the possession of the Mortgaged
Property to Mortgagee or to such receiver, and in default thereof may be evicted
by summary proceedings or otherwise. Mortgagor shall not accept prepayments of
installments of Rent to become due for a period of more than one month in
advance (except for security deposits and estimated payments of percentage rent,
if any).
20. ADDITIONAL RIGHTS. Upon the occurrence of any Event of Default,
Mortgagee may, in its sole discretion and without regard to the adequacy of its
security under this Mortgage, apply all or any part of any amounts on deposit
with Mortgagee under this Mortgage against all or any part of the Indebtedness,
in accordance with the provisions of the Credit Agreement, the Guarantee and the
other Mortgagor Obligation Documents. Any such application shall not be
construed to cure or waive any Event of Default or invalidate any act taken by
Mortgagee on account of such Event of Default.
21. NOTICES. All notices, requests, demands and other communications
hereunder shall be given in care of the Parent Company in the manner and to the
addresses determined under Section 13.2 of the Credit Agreement.
22. NO ORAL MODIFICATION. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate lien or encumbrance.
23. PARTIAL INVALIDITY. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect,
15
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, but each shall be construed as if such invalid, illegal or
unenforceable provision had never been included. Notwithstanding to the
contrary anything contained in this Mortgage or in any provisions of the
Indebtedness or Mortgagor Obligation Documents, the obligations of Mortgagor and
of any other obligor under the Indebtedness or Mortgagor Obligation Documents
shall be subject to the limitation that neither Mortgagee nor any Lender shall
charge, take or receive, nor shall Mortgagor or any other obligor be obligated
to pay to Mortgagee or any Lender, any amounts constituting interest in excess
of the maximum rate permitted by law to be charged by Mortgagee or any Lender,
as the case may be.
24. MORTGAGOR'S WAIVER OF RIGHTS. To the fullest extent permitted by
law, Mortgagor waives the benefit of all laws now existing or that may
subsequently be enacted providing for (i) any appraisement before sale of any
portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshalling in the event of foreclosure of the liens hereby created.
25. REMEDIES NOT EXCLUSIVE. Mortgagee shall be entitled to enforce
payment of the Indebtedness and performance of the Obligations and to exercise
all rights and powers under this Mortgage or under any of the other Mortgagor
Obligation Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this Mortgage nor its
enforcement, shall prejudice or in any manner affect Mortgagee's right to
realize upon or enforce any other security now or hereafter held by Mortgagee,
it being agreed that Mortgagee shall be entitled to enforce this Mortgage and
any other security now or hereafter held by Mortgagee in such order and manner
as Mortgagee may determine in its absolute discretion. No remedy herein
conferred upon or reserved to Mortgagee is intended to be
16
exclusive of any other remedy herein or by law provided or permitted, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Mortgagor Obligation Documents to Mortgagee
or to which it may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Mortgagee. In no event shall Mortgagee, in the exercise of the remedies
provided in this Mortgage (including, without limitation, in connection with the
assignment of Rents to Mortgagee, or the appointment of a receiver and the entry
of such receiver on to all or any part of the Mortgaged Property), be deemed a
"mortgagee in possession", and Mortgagee shall not in any way be made liable for
any act, either of commission or omission, in connection with the exercise of
such remedies.
26. MULTIPLE SECURITY. If (a) the Premises shall consist of one or
more parcels, whether or not contiguous and whether or not located in the same
county, or (b) in addition to this Mortgage, Mortgagee shall now or hereafter
hold one or more additional mortgages, liens, deeds of trust or other security
(directly or indirectly) for the Indebtedness upon other property in the State
in which the Premises are located (whether or not such property is owned by
Mortgagor or by others) or (c) both the circumstances described in clauses (a)
and (b) shall be true, then to the fullest extent permitted by law, Mortgagee
may, at its election, commence or consolidate in a single foreclosure action all
foreclosure proceedings against all such collateral securing the Indebtedness
(including the Mortgaged Property), which action may be brought or consolidated
in the courts of any county in which any of such collateral is located.
Mortgagor acknowledges that the right to maintain a consolidated foreclosure
action is a specific inducement to some or all of the Lenders to make certain
loans to and to enter into certain agreements with Mortgagor, and for Mortgagee
to enter into the Guarantee, and Mortgagor expressly and irrevocably waives any
objections to the commencement or consolidation of the foreclosure proceedings
in a single action and any objections to the laying of venue or based on the
grounds of FORUM NON CONVENIENS which it may now or hereafter have. Mortgagor
further agrees that if Mortgagee shall be prosecuting one or more foreclosure or
other proceedings against a portion of the Mortgaged Property or against any
collateral other than the Mortgaged Property, which collateral directly or
indirectly secures the Indebtedness, or if Mortgagee shall have obtained a
judgment of foreclosure and sale or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue foreclosure proceedings and exercise its other remedies
granted in this Mortgage against all or any part of the Mortgaged Property and
Mortgagor waives any objections to the commencement or continuation of a
foreclosure of this Mortgage or exercise of
17
any other remedies hereunder based on such other proceedings or judgments, and
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Mortgage or such other proceedings on such basis.
Neither the commencement nor continuation of proceedings to foreclose this
Mortgage nor the exercise of any other rights hereunder nor the recovery of any
judgment by Mortgagee in any such proceedings shall prejudice, limit or preclude
Mortgagee's right to commence or continue one or more foreclosure or other
proceedings or obtain a judgment against any other collateral, (either in or
outside the State in which the Premises are located) which directly or
indirectly secures the Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other proceedings or any action under this Mortgage on such basis.
It is expressly understood and agreed that to the fullest extent permitted by
law, Mortgagee may, at its election, cause the sale of all collateral which is
the subject of a single foreclosure action at either a single sale or at
multiple sales conducted simultaneously and take such other measures as are
appropriate in order to effect the agreement of the parties to dispose of and
administer all collateral securing the Indebtedness (directly or indirectly) in
the most economical and least time-consuming manner.
27. EXPENSES; INDEMNIFICATION. Mortgagor agrees (a) to pay or
reimburse Mortgagee for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, the Guarantee and the other
Mortgagor Obligation Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to Mortgagee,(b) to pay or
reimburse each Lender and the Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under the
Guarantee, the other Mortgagor Obligation Documents and any such other documents
prepared in connection herewith or therewith, including, without limitation, the
fees and disbursements of counsel (including the allocated fees and expenses of
in-house counsel in lieu of the fees and expenses of outside counsel) to each
Lender and of counsel to the Agent,(c) to pay, indemnify, and hold each Lender
and the 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 similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, 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,
18
the Guarantee, the other Mortgagor Obligation Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the 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 the Credit Agreement, the
Guarantee, the other Mortgagor Obligation Documents, the Stock Purchase
Agreement, the Stock Purchase, the Merger or the use of the proceeds of the
Loans in connection with the Stock Purchase, 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 Mortgagor, any of its Subsidiaries or any of the
Properties (all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), PROVIDED, that the Mortgagor shall have no obligation hereunder
to the Agent or any Lender with respect to indemnified liabilities arising from
(1) the gross negligence or willful misconduct of the Agent or any such Lender
or (2) legal proceedings commenced against the Agent or any such Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
The agreements in this subsection shall survive repayment of the Loans and all
other amounts payable under the Credit Agreement and the Guarantee.
28. SUCCESSORS AND ASSIGNS. Except to the extent prohibited in the
Credit Agreement, all covenants of Mortgagor contained in this Mortgage are
imposed solely and exclusively for the benefit of Mortgagee and the Lenders and
their respective successors and assigns, and no other person or entity shall
have standing to require compliance with such covenants or be deemed, under any
circumstances, to be a beneficiary of such covenants, any or all of which may be
freely waived in whole or in part by Mortgagee at any time if in its sole
discretion it deems such waiver advisable. All such covenants of Mortgagor
shall run with the land and bind Mortgagor, the successors and assigns of
Mortgagor (and each of them) and all subsequent owners, encumbrancers and
tenants of the Mortgaged Property, and shall inure to the benefit of Mortgagee
and the Lenders and their respective successors and assigns. The word
"Mortgagor" shall be construed as if it read "Mortgagors" whenever the sense of
this Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.
29. NO WAIVERS, ETC. Any failure by Mortgagee to insist upon the
strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by
19
Mortgagor. Mortgagee may release, regardless of consideration and without the
necessity for any notice to or consent by the holder of any subordinate lien on
the Mortgaged Property, any part of the security held for the obligations
secured by this Mortgage without, as to the remainder of the security, in
anywise impairing or affecting the lien of this Mortgage or the priority of such
lien over any subordinate lien.
30. GOVERNING LAW, ETC. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises are
located, except that Mortgagor expressly acknowledges that by their terms the
Guarantee and the Credit Agreement shall be governed and construed in accordance
with the laws of the State of New York, without regard to principles of conflict
of law, and for purposes of consistency, Mortgagor agrees that in any IN
PERSONAM proceeding related to this Mortgage the rights of the parties to this
Mortgage shall also be governed by and construed in accordance with the laws of
the State of New York governing contracts made and to be performed in that
State, without regard to principles of conflict of law.
31. WAIVER OF TRIAL BY JURY. Mortgagor and Mortgagee each hereby
irrevocably and unconditionally waive trial by jury in any action, claim, suit
or proceeding relating to this Mortgage and for any counterclaim (other than
compulsory counterclaims) brought therein. Mortgagor hereby waives all rights
to interpose any counterclaim (other than compulsory counterclaims) in any suit
brought by Mortgagee hereunder and all rights to have any such suit consolidated
with any separate suit, action or proceeding.
32. CERTAIN DEFINITIONS. Unless the context clearly indicates a
contrary intent or unless otherwise specifically provided herein, words used in
this Mortgage shall be used interchangeably in singular or plural form and the
word "MORTGAGOR" shall mean "each Mortgagor or any subsequent owner or owners of
the Mortgaged Property or any part thereof or interest therein," the word
"MORTGAGEE" shall mean "Mortgagee or any successor agent under the Credit
Agreement," the word "PERSON" shall include any individual, corporation,
partnership, trust, unincorporated association, government, governmental
authority, or other entity, and the words "MORTGAGED PROPERTY" shall include any
portion of the Mortgaged Property or interest therein. Whenever the context may
require, any pronouns used herein shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural and vice versa. The captions in this Mortgage are for
convenience or reference only and in no way limit or amplify the provisions
hereof.
33. RELEASE. (a) Any Mortgaged Property that is permitted to be sold
or otherwise transferred free of the lien of the Security Documents as provided
in the Credit Agreement shall
1
be sold or otherwise transferred, as the case may be, free and clear of this
Mortgage. In connection with any such sale or transfer, the Mortgagee shall
execute and deliver to Mortgagor, or to such person or persons as Mortgagor
shall reasonably designate, a satisfaction of mortgage and such other documents
as Mortgagor may reasonably request to evidence the release of this Mortgage
with respect to such Mortgaged Property, as well as a release of any collateral
assignments or other Security Documents in favor of Mortgagee that burden such
Mortgaged Property.
(b) In addition, and not in limitation of the foregoing, any
Mortgaged Property (other than the Real Estate) that also constitutes collateral
under any other Security Document shall automatically be released from this
Mortgage in the event that such Mortgaged Property is released from the security
interest created by such other Security Document in accordance with the terms
thereof and of the Credit Agreement.
This Mortgage has been duly executed by Mortgagor on the date first
above written.
WITNESS: [Subsidiary]
By:
------------------------ -------------------------
Name:
Title:
[CORPORATE SEAL]
STATE OF NEW YORK ) December ___, 1994
: ss.:
COUNTY OF NEW YORK )
Then personally appeared the above-named __________________________ in
his/her capacity as __________________________ of _________, and acknowledged
the foregoing instrument to be his/her free act and deed in his/her said
capacity and the free act and deed of said corporation.
Before me,
-------------------------
-------------------------
(Print Name)
Notary Public State of
--------------
My commission expires:
--------------
EXHIBIT A
Description of the Premises
[Attach Legal Description of all parcels]
EXHIBIT I TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF AMENDED AND RESTATED SUBSIDIARY SECURITY AGREEMENT]
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of April __, 1996,
made by _________________________, a _______________ corporation (the
"GRANTOR"), in favor of CHEMICAL BANK, as agent (in such capacity, the "AGENT")
for the several banks, financial institutions and other entities (the "LENDERS")
from time to time parties to the Amended and Restated Credit and Guarantee
Agreement, dated as of April __, 1996 (as the same may be amended, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT") among SDW
Holdings Corporation, a Delaware corporation, S.D. ▇▇▇▇▇▇ Company, a
Pennsylvania corporation (the "BORROWER"), the Lenders and the Agent.
W I T N E S S E T H :
WHEREAS, in connection with the Existing Credit Agreement (as defined
in the Credit Agreement), the Grantor entered into that certain Security
Agreement, dated as of December 20, 1994 (the "EXISTING SUBSIDIARY SECURITY
AGREEMENT"), made by the Grantor in favor of the Agent, pursuant to which the
Grantor granted a security interest in certain of its assets as collateral
security for, among other things, its obligations to the Lenders under the
Subsidiaries Guarantee dated as of December 20, 1994 (the "EXISTING
SUBSIDIARIES' GUARANTEE") to which the Grantor is a party;
WHEREAS, the Borrower and the Grantor have requested that the Agent
and the Lenders amend and restate the Existing Credit Agreement in the manner
provided in the Credit Agreement;
WHEREAS, it is a condition precedent to the effectiveness of the
Credit Agreement and to the obligations of the Lenders to make the Extensions of
Credit (as defined in the Credit Agreement) provided for therein that the
Subsidiaries shall have amended and restated the Existing Subsidiaries
Guarantee;
WHEREAS, in satisfaction of such condition, the Subsidiaries have
entered into an Amended and Restated Subsidiaries Guarantee of even date
herewith (as amended, supplemented or otherwise modified from time to time, the
"GUARANTEE") for the benefit of the Agent and the Lenders; and
WHEREAS, it is a further condition precedent to the effectiveness of
the Credit Agreement and to the obligations of the Lenders to make the
Extensions of Credit provided for therein that the Grantor shall have amended
and restated the Existing Subsidiary Security Agreement in the manner provided
for herein to secure payment and performance of the Grantor's obligations under
the Guarantee;
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to amend and restate the Existing Credit Agreement as
provided in the Credit Agreement and to make Extensions of Credit under the
Credit Agreement, the Grantor hereby agrees with the Agent, for the ratable
benefit of the Lenders, to amend and restate and hereby amends and restates the
Existing Subsidiary Security Agreement to read in its entirety as follows:
1. DEFINED TERMS. Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein are so used as so defined; the
following terms which are defined in the Uniform Commercial Code in effect in
the State of New York on the date hereof are used herein as so defined: Chattel
Paper, Documents, Equipment, Farm Products, General Intangibles, Instruments,
Inventory and Proceeds; and the following terms shall have the following
meanings:
2
["ACCOUNTS": as defined in the Code as in effect on the date
hereof, PROVIDED that "Accounts" shall not include any Receivables
sold, or any Receivables upon which a Lien is granted, pursuant to the
Receivables Facility or any Permitted Receivables Financing.]*
"CODE": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"COLLATERAL": as defined in Section 2; PROVIDED, that Collateral
shall not include any property which is subject to a Lien permitted
under subsection 9.3 of the Credit Agreement securing indebtedness
permitted under subsection 9.2 of the Credit Agreement to the extent
that the grant of a security interest hereunder would be prohibited by
such Lien or by the terms of such indebtedness or, as to property
acquired after the date hereof, which is subject to a prohibition on
Liens contained in any agreement entered into after the Closing Date
which is not prohibited by subsection 9.14 of the Credit Agreement,
which agreement evidences, governs or is otherwise related to the
financing of such property; PROVIDED, FURTHER, that Collateral shall
not include any property which is subject to a Lien permitted under
subsection 9.3(s) of the Credit Agreement or sold pursuant to
subsection 9.6(k) of the Credit Agreement, including such Liens and
sales with respect to any such property acquired after the date
hereof.
"COLLATERAL ACCOUNT": any account established to hold money proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders as provided in
Section 8.
"CONTRACTS": the Receivables Sale Agreement and all Rate
Protection Agreements entered into by the Grantor, as each of the
foregoing may be amended, supplemented or otherwise modified from time
to time including, in each case, without limitation, (a) all rights of
the Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (b) all rights of the Grantor to damages
arising out of, or for, breach or default in respect thereof and (c)
all rights of the Grantor to perform and to exercise all remedies
thereunder.
"COPYRIGHT LICENSE": any agreement, written or oral, providing for
the grant by or to the Grantor of any right under any Copyright.
"COPYRIGHTS": all of the following to the extent that the Grantor now
or hereafter has any right, title or interest in any country in the world:
(i) all copyrights in all works, whether published or unpublished, now
existing or hereafter created or acquired, all registrations and recordings
thereof, and all applications in the United States Copyright Office, and
(ii) all renewals thereof.
"GUARANTEE OBLIGATIONS": as defined in the Subsidiaries Guarantee,
PROVIDED that the maximum amount of the Guarantee Obligations secured
hereunder shall in no event exceed the maximum aggregate amount equal to
the largest amount that would not render its obligations hereunder and
under the other Loan Documents to which it is a party subject to avoidance
as a fraudulent transfer or conveyance under Section 548 of Title 11 of the
United States Code or any applicable provisions of comparable state law.
"PATENT LICENSE": all agreements, whether written or oral,
providing for the grant by the Grantor of any right to manufacture,
use or sell any invention covered by a Patent, including, without
limitation, any thereof listed on SCHEDULE 1 hereto.
"PATENTS": (a) all letters patent of the United States and all
reissues and extensions thereof, including, without limitation, any
thereof referred to in SCHEDULE 1 hereto, and (b) all applications for
letters patent of the United States or any other Country and all
divisions, continuations and continuations-in-part thereof, including,
without limitation, any thereof listed on SCHEDULE 1 hereto.
_______________________________
* To be included in Security Agreement executed by SDW finance Co.
3
"SECURED OBLIGATIONS": (a) the Guarantee Obligations and (b) the
obligations and liabilities of the Grantor (other than the Guarantee
Obligations) under the Loan Documents to which it is a party.
"SECURITY AGREEMENT": this Amended and Restated Security
Agreement, as amended, supplemented or otherwise modified from time to
time.
"TRADEMARK LICENSE": any agreement, written or oral, providing for
the grant by or to the Grantor of any right to use any Trademark,
including, without limitation, any thereof listed on SCHEDULE 2 hereto.
"TRADEMARKS": (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade dress,
trade styles, service marks, designs, logos and other source or
business identifiers, and the goodwill of the business associated
therewith, including customer lists, license rights, advertising
materials and all other business assets which uniquely reflect the
goodwill of the business, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, or any State thereof, or any other Country, including,
without limitation, any thereof listed on SCHEDULE 2 hereto, and (b)
all renewals thereof.
"UCC FILING COLLATERAL": as defined in Section 4(b).
2. GRANT OF SECURITY INTEREST. As collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Secured Obligations, the Grantor hereby
grants to the Agent for the ratable benefit of the Lenders a security interest
in all of the following property now owned or at any time hereafter acquired by
the Grantor or in which the Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the "COLLATERAL"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Documents;
(v) all Equipment;
(vi) all General Intangibles;
(vii) all Instruments;
(viii) all Inventory;
(ix) all Patents;
(x) all Patent Licenses;
(xi) all Timber;
(xii) all Trademarks;
(xiii) all Trademark Licenses; and
4
(xiv) to the extent not otherwise included, all
Proceeds and products of any and all of the foregoing;
PROVIDED, HOWEVER, that notwithstanding any of the other provisions set forth in
this Section 2, this Security Agreement shall not constitute an assignment or
pledge of, or a grant of a security interest in or lien on, (a) any Collateral
if such assignment, pledge or grant of a security interest or lien with respect
to such Collateral is prohibited by any applicable Requirement of Law of any
Governmental Authority or[,] (b) any Collateral of the types described in
clauses (iii), (x) and (xii) if such assignment, pledge or grant of a security
interest or lien with respect to such Collateral is prohibited by the terms of
the applicable Contract, Patent License or Trademark License [or (c) any
Receivables or Related Security sold, or any Receivables or Related Security
upon which a Lien is granted, pursuant to the Receivables Facility or any
Permitted Receivables Financing.](1)
3. RIGHTS OF AGENT AND LENDERS; LIMITATIONS ON AGENT'S AND LENDERS'
OBLIGATIONS. (a) GRANTOR REMAINS LIABLE UNDER ACCOUNTS AND CONTRACTS. Anything
herein to the contrary notwithstanding, the Grantor shall remain liable under
each of the Accounts and Contracts to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to each such Account and in
accordance with and pursuant to the terms and provisions of each such Contract.
Neither the Agent nor any Lender shall have any obligation or liability under
any Account (or any agreement giving rise thereto) or under any Contract by
reason of or arising out of this Security Agreement or the receipt by the Agent
or any such Lender of any payment relating to such Account or Contract pursuant
hereto, nor shall the Agent or any Lender be obligated in any manner to perform
any of the obligations of the Grantor under or pursuant to any Account (or any
agreement giving rise thereto) or under or pursuant to any Contract, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Account (or any agreement giving rise thereto) or under any Contract, to
present or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it or to
which it may be entitled at any time or times.
(b) NOTICE TO CONTRACTING PARTIES. At any time after the occurrence
and during the continuance of an Event of Default, the Agent may in its own name
or in the name of others communicate with account debtors with respect to
Accounts or parties to the Contracts to verify with them to its satisfaction the
existence, amount and terms of any Accounts or Contracts.
(c)ANALYSIS OF ACCOUNTS. The Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and the Grantor shall furnish all such
assistance and information as the Agent may require in connection with such test
verifications. Upon the Agent's request and at the expense of the Grantor, the
Grantor shall cause independent public accountants or others satisfactory to the
Agent to furnish to the Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts. The Agent in its own
name or in the name of others may at any time after the occurrence and during
the continuance of an Event of Default communicate with the obligors on the
Accounts to verify with them to the Agent's satisfaction the existence, amount
and terms of any Accounts.
(d) COLLECTIONS ON ACCOUNTS. (a) The Agent hereby authorizes the
Grantor to collect the Accounts so long as no Event of Default has occurred and
is continuing. If required by the Agent at any time after the occurrence and
during the continuance of an Event of Default, any payments of Accounts, when
collected by the Grantor, (1) shall be forthwith (and, in any event, within two
Business Days) deposited by the Grantor in the exact form received, duly
indorsed by the Grantor to the Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders only as provided in
Section 8(c) hereof, and (2) until so turned over, shall be held by the Grantor
in trust for the Agent and the Lenders, segregated from other funds of the
Grantor. Each such deposit of Proceeds of Accounts shall be accompanied by a
report identifying in reasonable detail the nature and source of the payments
included in the deposit. At anytime when an Event of Default has occurred and
is continuing, the Grantor shall deliver to the Agent
-----------------------------
(1) To be included in Security Agreement executed by SDW Finance Co.
5
all original and other documents evidencing, and relating to, the agreements
and transactions which gave rise to the Accounts, including, without
limitation, all original orders, invoices and shipping receipts.
4. REPRESENTATIONS AND WARRANTIES. The Grantor hereby represents and
warrants that:
(a) TITLE; NO OTHER LIENS. Except for the Lien granted to the
Agent for the ratable benefit of the Lenders pursuant to this Security
Agreement and the other Liens permitted to exist on the Collateral
pursuant to the Credit Agreement, the Grantor, owns each item of the
Collateral free and clear of any and all Liens or claims of others.
No security agreement, financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record
in any public office, except such as may have been filed in favor of
the Agent, for the ratable benefit of the Lenders, pursuant to this
Security Agreement or as may be permitted pursuant to the Credit
Agreement.
(b) PERFECTED FIRST PRIORITY LIENS. Assuming that the financing
statements described on SCHEDULE 3 hereto have been filed, the Liens
granted by the Grantor pursuant to this Security Agreement constitute
perfected Liens on the Collateral in which a security interest may be
perfected pursuant to Article 9 of the Uniform Commercial Code as in
effect in each relevant jurisdiction (the "UCC FILING COLLATERAL") in
favor of the Agent, for the ratable benefit of the Lenders, which are
prior to all other Liens on such Collateral created by the Grantor and
in existence on the date hereof (except such other Liens as are not
prohibited under the Credit Agreement) and which are enforceable as
such against all creditors of and purchasers from the Grantor (except
purchasers of inventory or Timber in the ordinary course of business
to the extent provided in Section 9-307 of the Uniform Commercial Code
as in effect in each relevant jurisdiction), except in each case as
enforceability is affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general equitable
principles (whether involved in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing. Upon completion
of the other actions described in Section 20 to perfect a security
interest in the Collateral (other than the UCC Filing Collateral), the
Liens granted pursuant to this Security Agreement with respect to the
Collateral (other than the UCC Filing Collateral) which is the subject
of any applicable such action, will constitute perfected Liens on such
Collateral in which a security interest may be perfected pursuant to
applicable law as in effect in each relevant jurisdiction (to the
extent such Liens may be perfected by such applicable actions under
such laws) in favor of the Agent, for the ratable benefit of the
Lenders, which are prior to all other Liens on the Collateral created
by the Grantor and in existence on the date hereof (except such other
Liens as are not prohibited under the Credit Agreement) and which are
enforceable as such against all creditors of and purchasers from the
Grantor, except in each case as enforceability is affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether involved in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
(c) ACCOUNTS; GENERAL INTANGIBLES. Subject to Section 5(n), no
amount payable to the Grantor under or in connection with any Account
is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Agent. The places where the Grantor currently keeps
its records concerning the Accounts are listed on SCHEDULE 4 or such
other locations as may be specified by the Borrower to the Agent
pursuant to Section 5(l).
(d) INVENTORY AND EQUIPMENT. The Inventory and the Equipment of
the Grantor are kept at the locations listed on SCHEDULE 5 hereto or
such other locations as may be specified by the Grantor to the Agent
pursuant to Section 5(l).
(e) CHIEF EXECUTIVE OFFICE. The Grantor's chief executive office
and chief place of business is located at ____________________________
or such other locations as may be specified by the Borrower to the
Agent pursuant to Section 5(l).
6
(f) FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
(g) COPYRIGHTS, PATENTS AND TRADEMARKS. The Grantor does not own
any material registered U.S. Copyrights or U.S. Copyright Licenses in
its own name as of the date hereof. SCHEDULE 1 hereto includes all
U.S. Patents and U.S. Patent Licenses owned by the Grantor in its own
name as of the date hereof. SCHEDULE 2 hereto includes all U.S.
Trademarks and U.S. Trademark Licenses owned by the Grantor in its own
name as of the date hereof. To the best of the Grantor's knowledge,
each U.S. Patent and U.S. Trademark is valid, subsisting, unexpired,
enforceable and has not been abandoned. Except as set forth in either
such Schedule, none of such U.S. Patents or U.S. Trademarks is the
subject of any licensing or franchise agreement. No holding, decision
or judgment has been rendered by any Governmental Authority which
would limit, cancel or question the validity of any U.S. Patent or
U.S. Trademark. No action or proceeding is pending (i) seeking to
limit, cancel or question the validity of any U.S. Patent or U.S.
Trademark, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any U.S. Patent or U.S.
Trademark.
5. COVENANTS. The Grantor covenants and agrees with the Agent and the
Lenders that, from and after the date of this Security Agreement until this
Security Agreement is terminated and the security interests created hereby are
released:
(a) FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS AND CHATTEL
PAPER. At any time and from time to time, upon the written request of
the Agent, and at the sole expense of the Grantor, the Grantor will
promptly and duly execute and deliver such further instruments and
documents and take such further action as the Agent may reasonably
request for the purpose of obtaining or preserving the full benefits
of this Security Agreement and of the rights and powers herein
granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code in effect in
any jurisdiction with respect to the Liens created hereby. The
Grantor also hereby authorizes the Agent to file any such financing or
continuation statement without the signature of the Grantor to the
extent permitted by applicable law. A carbon, photographic or other
reproduction of this Security Agreement or any financing statement
covering the Collateral shall be sufficient as a financing statement
for filing in any jurisdiction. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by
any Instrument or Chattel Paper, such Instrument or, to the extent
required under Section 5(n), Chattel Paper shall be immediately
delivered to the Agent, duly endorsed in a manner satisfactory to the
Agent, to be held as Collateral pursuant to this Security Agreement.
(b) INDEMNIFICATION. The Grantor agrees to pay, and to save the
Agent and the Lenders harmless from, any and all liabilities, costs
and expenses (including, without limitation, reasonable legal fees and
expenses) (i) with respect to, or resulting from, any delay in paying,
any and all excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral, (ii)
with respect to, or resulting from, any delay in complying with any
Requirement of Law applicable to any of the Collateral or (iii) in
connection with any of the transactions contemplated by this Security
Agreement. In any suit, proceeding or action brought by the Agent or
any Lender under any Account or Contract for any sum owing thereunder,
or to enforce any provisions of any Account or Contract, the Grantor
will save, indemnify and keep the Agent and such Lender harmless from
and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction or liability
whatsoever of the account debtor or obligor thereunder, arising out of
a breach by the Grantor of any obligation thereunder or arising out of
any other agreement, indebtedness or liability at any time owing to or
in favor of such account debtor or obligor or its successors from the
Grantor.
(c) MAINTENANCE OF RECORDS. The Grantor will keep and maintain
at its own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Accounts. The
Grantor will
7
▇▇▇▇ its books and records pertaining to the Collateral to evidence this
Security Agreement and the security interests granted hereby.
(d) RIGHT OF INSPECTION. The Agent shall at all times have full
and free access during normal business hours and upon reasonable
notice to all the books, correspondence and records of the Grantor,
and the Agent and its representatives may examine the same, take
extracts therefrom and make photocopies thereof, and the Grantor
agrees to render to the Agent, at the Grantor's cost and expense, such
clerical and other assistance as may be reasonably requested with
regard thereto. Upon reasonable notice to Grantor, the Agent and, at
any time after the occurrence and during the continuation of an Event
of Default, the Lenders and their respective representatives shall
also have the right, during normal business hours to enter into and
upon any premises where any of the Inventory or Equipment is located
for the purpose of inspecting the same, observing its use or otherwise
protecting its interests therein.
(e) PAYMENT OF TAXES AND OTHER AMOUNTS. The Grantor will pay
promptly when due all taxes, assessments and governmental charges or
levies imposed upon the Collateral or in respect of its income or
profits therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies) against
or with respect to the Collateral which have a reasonable likelihood
of adverse determination, except that no such charge need be paid if
(i) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (ii) such proceedings do not involve any
material danger of the sale, forfeiture or loss of any material
portion of the Collateral or any interest therein and (iii) such
charge is adequately reserved against on the Grantor's books in
accordance with GAAP.
(f) LIENS ON COLLATERAL. The Grantor will defend the Collateral
against, and will take such other action as is necessary to remove,
any Lien or claim on or to the Collateral, other than the Liens
created hereby and other than as permitted pursuant to the Credit
Agreement, and will defend the right, title and interest of the Agent
and the Lenders in and to any of the Collateral against the claims and
demands of all Persons whomsoever.
(g) CERTAIN NOTICES. The Grantor will not fail to deliver to the
Agent a copy of each material demand, notice or document received by
it relating in any way to any Contract or any agreement giving rise to
an Account.
(h) LIMITATIONS ON DISCOUNTS AND COMPROMISES OF ACCOUNTS. Other
than in the ordinary course of business as generally conducted by the
Grantor over a period of time, the Grantor will not compromise,
compound or settle the Accounts for less than the full amount thereof,
or release, wholly or partially, any Person liable for the payment
thereof, except in each case as permitted under the Credit Agreement.
(i) MAINTENANCE OF INSURANCE. The Grantor will maintain, with
financially sound and reputable insurance companies (or, to the extent
consistent with prudent business practice, a program of self-insurance),
insurance in at least such amounts as are usually insured against in the
same general area by companies engaged in the same or a similar business
(i) insuring the Inventory and Equipment against loss by fire,
explosion, theft and such other casualties as may be reasonably
satisfactory to the Agent and (ii) insuring the Grantor, the Agent and
the Lenders against liability for personal injury and property damage
relating to such Inventory and Equipment. Such policies shall provide
that losses are payable to the Grantor, the Agent and the Lenders as
their respective interests may appear. Any such insurance policies
shall (A) contain a breach of warranty clause in favor of the Agent and
the Lenders, (B) provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be effective until
at least 30 days after receipt by the Agent of written notice thereof,
(C) name the Agent and the Lenders as insured parties and (D) be
reasonably satisfactory in all other respects to the Agent. The Grantor
shall deliver to the Agent a report of a reputable insurance broker with
respect to any such insurance policies during the month
8
of June in each calendar year and such supplemental reports with respect
thereto as the Agent may from time to time reasonably request.
(j) FURTHER IDENTIFICATION OF COLLATERAL. The Grantor will
furnish to the Agent from time to time statements and schedules
further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
(k) NOTICES. The Grantor will advise the Agent promptly, in
reasonable detail, at its address set forth for notices pursuant to
subsection 13.2 of the Credit Agreement, (i) of any Lien (other than
Liens created hereby or permitted under the Credit Agreement) on, or
claim asserted against, any of the Collateral and (ii) of the
occurrence of any other event which could reasonably be expected to
have a material adverse effect on the aggregate value of the
Collateral or, with respect to any material portion of the Collateral,
on the Liens created hereunder.
(l) CHANGES IN LOCATIONS, NAME, ETC. The Grantor will not (i)
change the location of its chief executive office/chief place of
business from that specified in Section 4(e) or remove its books and
records from the locations referred to in Section 4(c), (ii) permit
any of the Inventory or Equipment to be kept at a location other than
those listed on SCHEDULE 5 hereto or (iii) change its name, identity
or corporate structure to such an extent that any financing statement
filed in favor of the Agent in connection with this Security Agreement
would become seriously misleading, unless in each case it shall have
given the Agent and the Lenders at least 30 days prior written notice
thereof and all filings and other actions to maintain the perfection
of the security interests granted hereby shall have been made.
(m) PATENTS AND TRADEMARKS.
(i)The Grantor (either itself or through licensees) will, except
with respect to any Trademark that the Grantor shall reasonably
determine is of negligible economic value to it, (A) employ such
Trademark with the appropriate notice of registration and (B) not (and
not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any Trademark may become
invalidated.
(ii) The Grantor will not, except with respect to any Patent that
the Grantor shall reasonably determine is of negligible economic value
to it, do any act, or omit to do any act, whereby any Patent may
become abandoned or dedicated.
(iii)The Grantor will notify the Agent and the Lenders promptly if
it knows, or has reason to know, of any adverse final determination
with respect to any Patent or Trademark (including, without
limitation, any such final determination in any proceeding in the
United States Patent and Trademark Office or any court or tribunal in
any country) regarding the Grantor's ownership of any Patent or
Trademark or its right to register the same or to keep and maintain
the same.
(iv)Whenever the Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent
and Trademark Office or any similar office or agency in any other
country or any political subdivision thereof, the Grantor shall report
such filing to the Agent and the Lenders within fifteen Business Days
after the last day of the fiscal quarter in which such filing occurs.
Upon request of the Agent, the Grantor shall execute and deliver any
and all agreements, instruments, documents, and papers as the Agent
may request to evidence the Agent's and the Lenders' security interest
in any Patent or Trademark and the goodwill and general intangibles of
the Grantor relating thereto or represented thereby, and the Grantor
hereby constitutes the Agent as its attorney-in-fact to execute and
file all such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power being coupled
with an interest is
9
irrevocable until the Secured Obligations are paid in full, the
Commitments are terminated and no Letter of Credit remain outstanding.
(v)The Grantor will, except with respect to any Trademark or
Patent that the Grantor shall reasonably determine is of negligible
economic value to it, take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United
States Patent and Trademark Office, or any similar office or agency in
any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration)
and to maintain each registration of the Patents and Trademarks,
including, without limitation, filing of applications for renewal,
affidavits or declarations of use and affidavits or declarations of
incontestability.
(vi)In the event that any Patent or Trademark included in the
Collateral is infringed, misappropriated or diluted by a third party,
the Grantor shall promptly notify the Agent and the Lenders after it
learns thereof and shall, unless the Grantor shall reasonably
determine that such Patent or Trademark is of negligible economic
value to the Grantor which determination the Grantor shall promptly
report to the Agent and the Lenders, promptly ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution, or take such other actions as the
Grantor shall reasonably deem appropriate under the circumstances to
protect such Patent or Trademark.
(n) CHATTEL PAPER. Unless an Event of Default shall have occurred and
be continuing, the Grantor shall be entitled to retain possession of all
Collateral consisting of Chattel Paper, and shall hold all such Chattel
Paper in trust for the Agent, for the ratable benefit of the Lenders. If
an Event of Default shall have occurred and be continuing, upon the request
of the Agent, such Chattel Paper shall be immediately delivered to the
Agent, to be held as Collateral pursuant to this Agreement. The Grantor
shall not permit any other Person (other than Holdings or a Subsidiary) to
possess any such Collateral at any time.
(o) GOVERNMENT CONTRACTS. The Grantor shall, to the extent
practicable, provide reasonable advance notice to the Agent prior to or, if
such advance notice is not practicable, shall provide notice to the Agent
promptly after, entering into a contract with a Governmental Authority or
prior to or, if such advance notice is not practicable, shall provide
notice to the Agent promptly after, the sale of goods to a Governmental
Authority resulting in the creation of an Account if such contract or
Account, in the aggregate together with all such contracts then in effect
(including any such contract entered into prior to the Closing Date) and/or
Accounts then outstanding (including any such Accounts arising prior to the
Closing Date), but without duplication, exceed 5% of net sales of the
Borrower and its Subsidiaries for the most recently completed fiscal year,
and shall, at the request of the Agent, provide any notices and make any
filings required under the Assignment of Claims Act in order to grant,
maintain and/or perfect the security interest all such contracts and
Accounts granted pursuant to this Security Agreement.
6. AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) POWERS. Subject to Section 8(f), the Grantor hereby irrevocably
constitutes and appoints the Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Grantor and in the
name of the Grantor or in its own name, from time to time in the Agent's
discretion, for the purpose of carrying out the terms of this Security
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Security Agreement, and, without limiting the generality of the
foregoing, the Grantor hereby gives the Agent the power and right, on behalf of
the Grantor, without notice to or assent by the Grantor (except as set forth
below), to do the following:
(i)in the case of any Collateral, at any time when any Event of
Default shall have occurred and is continuing, in the name of the
Grantor or its own name, or otherwise, to take possession of and
indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Account,
Instrument, General Intangible or Contract or with
10
respect to any other Collateral and to file any claim or to take
any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Agent for the purpose of
collecting any and all such moneys due under any Account,
Instrument, General Intangible or Contract or with respect to any
other Collateral whenever payable;
(ii)in each case, to the extent not paid, performed, discharged or
effected by the Grantor as required by this Agreement or the Credit
Agreement, to pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, to effect any repairs or any
insurance called for by the terms of this Security Agreement and to
pay all or any part of the premiums therefor and the costs thereof;
and
(iii)at any time when an Event of Default shall have occurred and be
continuing, (A) to direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Agent or as the Agent shall
direct; (B) to ask or demand for, collect, receive payment of and
receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;
(C) to sign and indorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection
with any of the Collateral; (D) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (E) to defend
any suit, action or proceeding brought against the Grantor with
respect to any Collateral; (F) to settle, compromise or adjust any
suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the Agent
may deem appropriate; (G) to assign, or grant licenses with respect
to, any Copyright, Patent or Trademark (along with all the goodwill of
the business to which any such Trademark pertains), throughout the
world for such term or terms, on such conditions, and in such manner,
as the Agent shall in its sole discretion determine; (H) in the
exercise of its rights under this Section 6, to use any and all
Trademarks and Trademark Licenses, if practicable and only to the
extent permitted by agreements relating thereto and applicable laws,
to the extent of the rights of the Grantor therein, and the Grantor
hereby grants a license to the Agent for such purpose and (I)
generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though the Agent were the absolute owner thereof for all
purposes, and to do, at the Agent's option and the Grantor's expense,
at any time, or from time to time, all acts and things which the Agent
deems necessary to protect, preserve or realize upon the Collateral
and the Agent's and the Lenders' Liens thereon and to effect the
intent of this Security Agreement, all as fully and effectively as the
Grantor might do.
The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable.
(b) OTHER POWERS. The Grantor also authorizes the Agent and the
Lenders, at any time and from time to time, to execute, in connection with the
sale provided for in Section 8 hereof, any indorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
(c) NO DUTY ON AGENT OR LENDERS' PART. The powers conferred on the
Agent and the Lenders hereunder are solely to protect the Agent's and the
Lenders' interests in the Collateral and shall not impose any duty upon the
Agent or any Lender to exercise any such powers. The Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result of
the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Grantor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
7. PERFORMANCE BY AGENT OF COMPANY'S SECURED OBLIGATIONS. If the
Grantor fails to perform or comply with any of its agreements contained herein
and the Agent, as provided for by the terms of this Security Agreement, shall
itself perform or comply, or otherwise cause performance or compliance, with any
agreement, the expenses of the Agent incurred in connection with such
performance or compliance, together with interest thereon at
11
the rate per annum set forth in subsection 5.4(c) of the Credit Agreement,
shall be payable by the Grantor to the Agent on demand and shall constitute
Secured Obligations secured hereby.
8. REMEDIES. (a) NOTICE TO ACCOUNT DEBTORS AND CONTRACT PARTIES.
Upon the request of the Agent at any time after the occurrence and during the
continuance of an Event of Default, the Grantor shall notify account debtors on
the Accounts and parties to the Contracts that the Accounts and the Contracts
have been assigned to the Agent for the ratable benefit of the Lenders and that
payments in respect thereof shall be made directly to the Agent.
(b) PROCEEDS TO BE TURNED OVER TO AGENT. In addition to the rights of
the Agent and the Lenders specified in Section 3 with respect to payments of
Accounts, if an Event of Default shall occur and be continuing, the Agent may
require, by notice to the Grantor that all Proceeds received by the Grantor
consisting of cash, checks and other near-cash items be held by the Grantor in
trust for the Agent and the Lenders, segregated from other funds of the Grantor,
and forthwith upon receipt by the Grantor, be turned over to the Agent in the
exact form received by the Grantor (duly indorsed by the Grantor to the Agent,
if required) and held by the Agent in a Collateral Account maintained under the
sole dominion and control of the Agent. All Proceeds while held by the Agent in
a Collateral Account (or by the Grantor in trust for the Agent and the Lenders)
shall continue to be held as collateral security for all the Secured Obligations
and shall not constitute payment thereof until applied as provided in Section
8(c).
(c) APPLICATION OF PROCEEDS. At such intervals as may be agreed upon
by the Grantor and the Agent, or, if an Event of Default shall have occurred and
be continuing, at any time at the Agent's election, the Agent may apply all or
any part of Proceeds held in any Collateral Account in payment of the Secured
Obligations in such order as the Agent may elect and any part of such funds
which the Agent elects not so to apply and deems not required as collateral
security for the Secured Obligations shall be paid over from time to time by the
Agent to the Grantor or to whomsoever may be lawfully entitled to receive the
same. Any balance of such Proceeds remaining after the Secured Obligations
shall have been paid in full, the Commitments shall have been terminated and no
Letter of Credit remains outstanding shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive the same.
(d) CODE REMEDIES. If an Event of Default shall occur and be
continuing, the Agent, on behalf of the Lenders may exercise, in addition to all
other rights and remedies granted to them in this Agreement and in any other
instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon the
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived to the fullest extent permitted by
applicable law), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Agent or any Lender or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as it
may deem best, for cash or on credit or for future delivery without assumption
of any credit risk. The Agent or any Lender shall have the right upon any such
public sale or sales, and, to the fullest extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in the Grantor, which right or
equity of redemption is hereby waived or released to the extent permitted by
applicable law. The Grantor further agrees, at the Agent's request, to assemble
the Collateral and make it available to the Agent at places which the Agent
shall reasonably select, whether at the Grantor's premises or elsewhere. The
Agent shall apply the net proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or safekeeping
of any of the Collateral or in any way relating to the Collateral or the rights
of the Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in part
of the Secured Obligations, in such order as the Agent may elect, and only after
such application and after the payment by the Agent of any other amount required
by any provision of law, including, without limitation, Section 9-504(1)(c) of
the Code, need the Agent account for the surplus, if any, to the Grantor. To
the extent permitted by applicable law, the Grantor waives all claims, damages
and demands it may acquire against the Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a
12
proposed sale or other disposition of Collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
(e) DEFICIENCY. The Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Secured Obligations and the reasonable fees and disbursements of any
attorneys employed by the Agent or any Lender to collect such deficiency.
(f) Anything herein to the contrary notwithstanding, the exercise of
remedies or any power of attorney granted hereunder with respect to Collateral
is subject to any applicable Requirement of Law of any Governmental Authority.
No action will be taken by the Agent or any Lender hereunder if such action will
result in a violation of any applicable Requirement of Law of any Governmental
Authority by any Loan Party.
9. LIMITATION ON DUTIES REGARDING PRESERVATION OF COLLATERAL. The
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the
Code or otherwise, shall be to deal with it in the same manner as the Agent
deals with similar property for its own account. Neither the Agent, any Lender,
nor any of their respective directors, officers, employees or agents shall be
liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of the Grantor or
otherwise.
10. POWERS COUPLED WITH AN INTEREST. All authorizations and agencies
herein contained with respect to the Collateral are irrevocable and powers
coupled with an interest until this Agreement is terminated and the security
interests created hereby are released.
11. SEVERABILITY. Any provision of this Security 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.
12. SECTION HEADINGS. The Section headings used in this Security
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder 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.
14. WAIVERS AND AMENDMENTS; SUCCESSORS AND ASSIGNS. None of the terms
or provisions of this Security Agreement may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Grantor and
the Agent, PROVIDED that any provision of this Security Agreement may be waived
by facsimile transmission by the Agent. This Security Agreement shall be
binding upon and inure to the benefit of the permitted successors and permitted
assigns of the Grantor, the Agent and the Lenders, PROVIDED that the Grantor may
not assign its rights or obligations under this Security Agreement without the
prior written consent of the Agent and any purported assignment without such
consent shall be null and void.
15. NOTICES. All notices, requests and demands to or upon the Agent
or the Grantor 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 when delivered, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (i) in the case of the Agent, at its address or transmission
number for notices specified in subsection 13.2 of the Credit Agreement and (ii)
in the case of the Grantor, at its address or transmission number for notices
set forth under its signature below.
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16. AUTHORITY OF AGENT. The Grantor acknowledges that the rights and
responsibilities of the Agent under this Security Agreement with respect to any
action taken by the Agent or the exercise or non-exercise by the Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Security Agreement shall, as between the Agent
and the Lenders, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Agent and the Grantor, the Agent shall be conclusively presumed
to be acting as agent for the Lenders with full and valid authority so to act or
refrain from acting, and the Grantor shall not be under any obligation, or
entitlement, to make any inquiry respecting such authority.
17. INTEGRATION. This Security Agreement represents the agreement of
the Grantor and the Agent with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties by the Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
18. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND SECURED
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
19. TERMINATION. (a) This Agreement and the Liens created hereby
shall terminate when all the Secured Obligations shall have been fully paid,
when no Letter of Credit shall remain outstanding and when the Commitments shall
have terminated under the Credit Agreement, at which time the Agent shall
execute and deliver to the Grantor, or to such person or persons as the Grantor
shall reasonably designate, all Uniform Commercial Code termination statements
and similar documents prepared by the Grantor at its expense which the Grantor
shall reasonably request to evidence such termination.
(b) Without limiting the foregoing, all Collateral permitted to be
sold, transferred or otherwise disposed of in accordance with the terms and
provisions of the Credit Agreement shall be sold, transferred or otherwise
disposed of free and clear of the Liens created hereby. In connection with the
foregoing, the Agent shall execute and deliver to the Grantor, or to such Person
or Persons as the Grantor shall reasonably designate, all Uniform Commercial
Code termination statements and similar documents prepared by the Grantor at its
expense which the Grantor shall reasonably request to evidence the release of
the Liens created hereby with respect to any such Collateral.
(c) Any execution and delivery of statements or documents pursuant to
this Section 19 shall be without recourse to or representation or warranty by
the Agent.
20. PERFECTION OF LIENS. The Grantor and the Agent acknowledge that
the Liens created by this Security Agreement are initially intended to be
perfected only by the filing of (a) Uniform Commercial Code financing statements
described on SCHEDULE 3, (b) the filing of a Patent and Trademark Security
Agreement in the United States Patent and Trademark Office and (c) the delivery
of all Instruments of the Grantor. It is not intended that any filing will be
made in any country other than the United States of America with respect to the
security interest granted in Patents, Patent Licenses, Trademarks or Trademark
Licenses pursuant to this Security Agreement.
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IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to
be duly executed and delivered as of the date first above written.
[NAME OF GRANTOR]
By:
---------------------------
Title:
Address for Notices:
SCHEDULES:
Schedule 1 - Patents and Patent Licenses
Schedule 2 - Trademarks and Trademark Licenses
Schedule 3 - Filing Jurisdictions
Schedule 4 - Location of Records
Schedule 5 - Locations of Inventory and Equipment
EXHIBIT J TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF AMENDED AND RESTATED SUBSIDIARY PLEDGE AGREEMENT]
AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of April , 1996,
made by __________________, a _________ corporation (the "PLEDGOR"), in favor of
CHEMICAL BANK, as Agent (in such capacity, the "AGENT") for the several banks,
financial institutions and other entities (the "Lenders") from time to time
parties to the Amended and Restated Credit and Guarantee Agreement, dated as of
April , 1996 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among SDW Holdings Corporation, a Delaware
Corporation ("HOLDINGS"), S.D. ▇▇▇▇▇▇ Company, a Pennsylvania corporation (the
"BORROWER"), the Lenders and the Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make loans to, and to issue or participate in letters of credit issued
for the account of, the Borrower upon the terms and subject to the conditions
set forth therein;
WHEREAS, in accordance with subsection 8.10(c) of the Credit
Agreement, the Pledgor is a party to the Subsidiaries Guarantee (as defined in
the Credit Agreement) pursuant to which the Pledgor has guaranteed the payment
and performance of the Obligations (as defined in the Credit Agreement); and
WHEREAS, in accordance with subsection 8.10(c) of the Credit
Agreement, the Pledgor is required to execute and deliver this Pledge Agreement
to secure payment and performance of the Pledgor's obligations under the
Subsidiaries Guarantee.
NOW, THEREFORE, in consideration of the premises and to induce the
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective Extensions of Credit, under the Credit
Agreement, the Pledgor hereby agrees with the Agent, for the ratable benefit of
the Lenders, as follows:
1. DEFINED TERMS. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Pledge Agreement, as the same may be amended,
modified or otherwise supplemented from time to time.
"CODE": the Uniform Commercial Code from time to time in effect in
the State of New York.
"COLLATERAL": the Pledged Stock and all Proceeds thereof.
"COLLATERAL ACCOUNT": any account established to hold money Proceeds,
maintained under the sole dominion and control of the Agent, subject to
withdrawal by the Agent for the account of the Lenders as provided in
Section 8.
"DOMESTIC ISSUER": any Issuer that is not a Foreign Issuer.
"FOREIGN ISSUER": any Issuer organized under the laws of any
jurisdiction outside the United States of America.
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"GUARANTEE OBLIGATIONS": as defined in the Subsidiaries Guarantee,
PROVIDED that the maximum amount of Guarantee Obligations secured hereunder
shall in no event exceed the maximum aggregate amount equal to the largest
amount that would not render its obligations hereunder and under the other
Loan Documents to which it is a party subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States
Code or any applicable provisions of comparable state law guaranteed by the
Pledgor under applicable federal and state laws relating to the insolvency
of debtors.
"ISSUERS": the collective reference to the companies identified on
SCHEDULE 1 attached hereto as the issuers of the Pledged Stock;
individually, each an "ISSUER."
"NON-CONSENSUAL LIENS: as defined in Section 4(c).
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 1
hereto, together with all stock certificates, options or rights of any
nature whatsoever that may be issued or granted by any Issuer to the
Pledgor while this Agreement is in effect and while such Capital Stock
continues to be subject to the security interest granted pursuant to this
Agreement.
"PROCEEDS": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof of the Pledged Stock and, in any event, shall include,
without limitation, all dividends or other income from the Pledged Stock,
collections thereon or distributions with respect thereto.
"SECURED OBLIGATIONS": (a) the Guarantee Obligations and (b) all
obligations and liabilities of the Pledgor (other than Guarantee
Obligations) under the Loan Documents to which it is a party.
"SECURITIES ACT": the Securities Act of 1933, as amended.
(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 and paragraph
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.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby delivers
to the Agent, for the ratable benefit of the Lenders, all the Pledged Stock and
hereby grants to Agent, for the ratable benefit of the Lenders, a first security
interest in the Collateral (except for Non-Consensual Liens), as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Secured
Obligations.
3. STOCK POWERS. Concurrently with the delivery to the Agent of each
certificate representing one or more shares of Pledged Stock to the Agent, the
Pledgor shall deliver an undated stock power covering such certificate, duly
executed in blank by the Pledgor with, if the Agent so requests, signature
guaranteed.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and
warrants that:
(a) The shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the Capital Stock of each Domestic Issuer
and sixty-five percent of the common stock and one hundred percent of the
preferred stock of each Foreign Issuer held by the Pledgor.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) The Pledgor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Stock, free of any and all Liens or options
in favor of, or claims of, any other Person, except the security
3
interests created by this Agreement and non-consensual Liens arising
involuntarily by operation of law to the extent not prohibited by the Credit
Agreement ("NON-CONSENSUAL LIENS").
(d) Upon delivery to the Agent of the stock certificates evidencing
the Pledged Stock, the security interest created by this Agreement will
constitute a valid, perfected first priority security interest (subject to
Non-Consensual Liens not prohibited by the Credit Agreement) in the Collateral,
enforceable as such against all creditors of the Pledgor and any Persons
purporting to purchase any Collateral from the Pledgor, except as affected by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
5. COVENANTS. The Pledgor covenants and agrees with the Agent and
the Lenders that, from and after the date of this Agreement until this Agreement
is terminated and the security interests created hereby are released:
(a) If the Pledgor shall, as a result of its ownership of the Pledged
Stock, become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a stock dividend or
a distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights, whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect thereof,
the Pledgor shall accept the same as the agent of the Agent and the Lenders,
hold the same in trust for the Agent and the Lenders and deliver the same
forthwith to the Agent in the exact form received, duly indorsed by the Pledgor
to the Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by the Pledgor and with, if the Agent so
requests, signature guaranteed, to be held by the Agent, subject to the terms
hereof, as additional collateral security for the Secured Obligations. Other
than pursuant to a distribution or transfer of any assets of an Issuer to the
Pledgor in a transaction permitted under the Credit Agreement, (i) any sums paid
upon or in respect of the Pledged Stock upon the liquidation or dissolution of
any Issuer shall be paid over to the Agent to be held by it hereunder as
additional collateral security for the Secured Obligations, and (ii) in case any
distribution of capital shall be made on or in respect of the Pledged Stock or
any property shall be distributed upon or with respect to the Pledged Stock
pursuant to the recapitalization or reclassification of the capital of any
Issuer or pursuant to the reorganization thereof, the property so distributed
shall be delivered to the Agent to be held by it hereunder as additional
collateral security for the Secured Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Stock shall be
received by the Pledgor, the Pledgor shall, until such money or property is paid
or delivered to the Agent, hold such money or property in trust for the Lenders,
segregated from other funds of the Pledgor, as additional collateral security
for the Secured Obligations.
(b) Without the prior written consent of the Agent, the Pledgor will
not (i) vote to enable, or take any other action to permit, any Issuer to issue
(other than to existing stockholders on a proportionate basis) any stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any Issuer,(ii) sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect to, the
Collateral other than pursuant to a transaction permitted under the Credit
Agreement,(iii) create, incur or permit to exist any Lien on any of the
Collateral, or any interest therein, except for the security interests created
by this Agreement and Liens permitted by the Credit Agreement (except for
Non-Consensual Liens not prohibited by the Credit Agreement) or (iv) enter into
any agreement or undertaking (other than this Agreement and the other Loan
Documents or, in the case of Collateral other than Pledged Stock, as permitted
by subsection 9.14 of the Credit Agreement) restricting the right or ability of
the Pledgor or the Agent to sell, assign or transfer any of the Collateral.
(c) The Pledgor shall maintain the security interest created by this
Agreement as a first perfected security interest (subject to Non-Consensual
Liens not prohibited by the Credit Agreement) and shall defend such security
interest against claims and demands of all Persons whomsoever. At any time and
from time to time, upon the written request of the Agent, and at the sole
expense of the Pledgor, the Pledgor will promptly and duly execute and deliver
such further instruments and documents and take such further actions as the
Agent may reasonably request for the purposes of obtaining or preserving the
full benefits of this Agreement and of the rights and powers herein granted. If
any amount payable under or in connection with any of the Collateral shall be or
become evidenced by
4
any promissory note, other instrument or chattel paper, such note, instrument or
chattel paper shall be immediately delivered to the Agent, duly endorsed in a
manner satisfactory to the Agent, to be held as Collateral pursuant to this
Agreement.
(d) The Pledgor shall pay, and hold the Agent and the Lenders harmless
from, any and all liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may be payable or
determined to be payable with respect to any of the Collateral or in connection
with any of the transactions contemplated by this Agreement.
6. CASH DIVIDENDS; VOTING RIGHTS. Unless an Event of Default shall
have occurred and be continuing and the Agent shall have given notice to the
Pledgor of the Agent's intent to exercise its corresponding rights pursuant to
Section below, the Pledgor shall be permitted to receive all cash dividends paid
to the extent not prohibited by the Credit Agreement, in respect of the Pledged
Stock and to exercise all voting and corporate rights with respect to the
Pledged Stock; PROVIDED, HOWEVER, that no vote shall be cast or corporate right
exercised or other action taken which, in the Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
7. RIGHTS OF THE LENDERS AND THE AGENT. (a) All money Proceeds
received by the Agent hereunder shall be held by the Agent for the benefit of
the Lenders in a Collateral Account. All Proceeds while held by the Agent in a
Collateral Account (or by the Pledgor in trust for the Agent and the Lenders)
shall continue to be held as collateral security for all the Secured Obligations
and shall not constitute payment thereof until applied as provided in Section
8(a).
(b) If an Event of Default shall occur and be continuing and the Agent
shall give notice of its intent to exercise such rights to the Pledgor, (i) the
Agent shall have the right to receive any and all cash dividends paid in respect
of the Pledged Stock and make application thereof to the Secured Obligations in
such order as the Agent may determine, and (ii) all shares of the Pledged Stock
shall be registered in the name of the Agent or its nominee, and the Agent or
its nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to such shares of the Pledged Stock at any meeting of shareholders of
any Issuer or otherwise and (B) any and all rights of conversion, exchange,
subscription and any other rights, privileges or options pertaining to such
shares of the Pledged Stock as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Pledged Stock upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or upon
the exercise by the Pledgor or the Agent of any right, privilege or option
pertaining to such shares of the Pledged Stock, and in connection therewith, the
right to deposit and deliver any and all of the Pledged Stock with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Agent may determine), all without liability
except to account for property actually received by it, but the Agent shall have
no duty to the Pledgor to exercise any such right, privilege or option and shall
not be responsible for any failure to do so or delay in so doing.
8. REMEDIES. (a) If an Event of Default shall have occurred and be
continuing, at any time at the Agent's election, the Agent may apply all or any
part of Proceeds held in any Collateral Account in payment of the Secured
Obligations in such order as the Agent may elect.
(b) If an Event of Default shall have occurred and be continuing, the
Agent, on behalf of the Lenders, may exercise, in addition to all other rights
and remedies granted in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the Code. Without limiting the generality of
the foregoing, the Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Pledgor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived to the fullest extent permitted by applicable law), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, assign, give option
or options to purchase or otherwise dispose of and deliver the Collateral or any
part thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, in the over-the-counter market, at any
exchange, broker's board or office of the Agent or any Lender or elsewhere upon
such terms and conditions as it may deem advisable and at such prices as it may
deem best, for cash or on credit or for
5
future delivery without assumption of any credit risk. The Agent or any Lender
shall have the right upon any such public sale or sales, and, to the fullest
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Pledgor, which right or equity of redemption is hereby waived
or released to the extent permitted by applicable law. The Agent shall apply
any Proceeds from time to time held by it and the net proceeds of any such
collection, recovery, receipt, appropriation, realization or sale, after
deducting all reasonable costs and expenses of every kind incurred in respect
thereof or incidental to the care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of the Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements of counsel to the Agent, to the payment in whole or in part of the
Secured Obligations, in such order as the Agent may elect, and only after such
application and after the payment by the Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
Code, need the Agent account for the surplus, if any, to the Pledgor. To the
extent permitted by applicable law, the Pledgor waives all claims, damages and
demands it may acquire against the Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition. The Pledgor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of Collateral are insufficient to pay the
Secured Obligations and the fees and disbursements of any attorneys employed by
the Agent or any Lender to collect such deficiency.
9. REGISTRATION RIGHTS; PRIVATE SALES. (a) If the Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section hereof, and if in the opinion of the Agent it is necessary or
advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the Pledgor will cause
the Issuer thereof to (i) execute and deliver, and cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Agent, necessary or advisable to register the Pledged Stock, or
that portion thereof to be sold, under the provisions of the Securities Act,(ii)
to use its best efforts to cause the registration statement relating thereto to
become effective and to remain effective for a period of one year from the date
of the first public offering of the Pledged Stock, or that portion thereof to be
sold, and (iii) to make all amendments thereto and/or to the related prospectus
which, in the opinion of the Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto. The
Pledgor agrees to cause such Issuer to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the Agent shall
designate and to make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
(b) The Pledgor recognizes that the Agent may be unable to effect a
public sale of any or all the Pledged Stock, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws or
otherwise, and may be compelled to resort to one or more private sales thereof
to a restricted group of purchasers which will be obliged to agree, among other
things, to acquire such securities for their own account for investment and not
with a view to the distribution or resale thereof. The Pledgor acknowledges and
agrees that any such private sale may result in prices and other terms less
favorable than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(c) The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section will cause irreparable injury to the Agent and the Lenders, that
the Agent and the Lenders have no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Pledgor, and the Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
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10. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUER. The Pledgor
hereby authorizes and instructs each Issuer to comply with any instruction
received by it from the Agent in writing that (a) states that an Event of
Default has occurred and (b) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from the Pledgor, and the
Pledgor agrees that each Issuer shall be fully protected in so complying.
11. AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT. (a) Subject to Section
11(c), the Pledgor hereby irrevocably constitutes and appoints the Agent and any
officer or agent of the Agent, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of the Pledgor and in the name of the Pledgor or in the Agent's own
name, from time to time in the Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including, without
limitation, any financing statements, endorsements, assignments or other
instruments of transfer.
(b) The Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney granted in
Section 11(d). All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
(c) Anything herein to the contrary notwithstanding, the exercise of
remedies or any power of attorney granted hereunder with respect to Pledged
Stock is subject to the provisions of any applicable law, rule or regulation and
to governmental approvals that may be required hereunder. No action will be
taken by the Agent or any Lender hereunder if such action will result in a
violation of any such law, rule or regulation.
12. DUTY OF AGENT. The Agent's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Agent deals with similar securities and property
for its own account, except that the Agent shall have no obligation to invest
funds held in any Collateral Account and may hold the same as demand deposits.
Neither the Agent, any Lender nor any of their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Pledgor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof.
13. EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the Code, the Pledgor authorizes the Agent to file financing statements with
respect to the Collateral without the signature of the Pledgor in such form and
in such filing offices as the Agent reasonably determines appropriate to perfect
the security interests of the Agent under this Agreement. A carbon,
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
14. AUTHORITY OF AGENT. The Pledgor acknowledges that the rights and
responsibilities of the Agent under this Agreement with respect to any action
taken by the Agent or the exercise or non-exercise by the Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and the Pledgor, the Agent shall be conclusively presumed to be acting as
agent for the Lenders with full and valid authority so to act or refrain from
acting, and neither the Pledgor nor any Issuer shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
15. NOTICES. All notices, requests and demands to or upon the Agent
or the Pledgor 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 when delivered, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (i) to the Agent at its address or transmission number for
notices specified in subsection 13.2 of the Credit Agreement and (ii) if to the
Pledgor, at its address or transmission number for notices set forth under its
signature below.
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16. 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.
17. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None
of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the Agent, PROVIDED that any provision of this Agreement may be
waived by facsimile transmission by the Agent.
(b) No failure to exercise and no delay in exercising, on the part of
the Agent or any Lender, any right, remedy, power or privilege hereunder 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.
(c) The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
18. SECTION HEADINGS. The section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
19. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Pledgor, the Agent and
the Lenders, PROVIDED that the Pledgor may not assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
the Agent and any purported assignment without such consent shall be null and
void.
8
20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
21. TERMINATION. (a) This Agreement and the Liens created hereby
shall terminate when all the Secured Obligations shall have been fully paid,
when no Letter of Credit shall remain outstanding and when the Commitments shall
have terminated under the Credit Agreement, at which time the Agent shall
execute and deliver to the Grantor, or to such person or persons as the Grantor
shall reasonably designate, all Uniform Commercial Code termination statements
and similar documents prepared by the Grantor at its expense which the Grantor
shall reasonably request to evidence such termination.
(b) Without limiting the foregoing, all Collateral permitted to be
sold, transferred or otherwise disposed of in accordance with the terms and
provisions of the Credit Agreement shall be sold, transferred or otherwise
disposed of free and clear of the Liens created hereby. In connection with the
foregoing, the Agent shall execute and deliver to the Grantor, or to such Person
or Persons as the Grantor shall reasonably designate, all Uniform Commercial
Code termination statements and similar documents prepared by the Grantor at its
expense which the Grantor shall reasonably request to evidence the release of
the Liens created hereby with respect to any such Collateral.
(c) Any execution and delivery of statements or documents pursuant to
this Section 21 shall be without recourse to or representation or warranty by
the Agent.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
[NAME OF PLEDGOR]
By
--------------------------------
Title
-----------------------------
Address for Notices:
SCHEDULES:
Schedule 1 - Description of Pledged Stock
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Amended
and Restated Pledge Agreement dated April , 1996 (as the same may be amended,
supplemented or otherwise modified from time to time, the "PLEDGE AGREEMENT"),
made by [Name of Pledgor], a Pennsylvania corporation, for the benefit of
Chemical Bank, as agent for the Lenders referred to in the Pledge Agreement.
The undersigned agrees for the benefit of the Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Pledge Agreement
and will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the Agent promptly in writing of the
occurrence of any of the events described in Section 5(a) of the Pledge
Agreement.
3. The terms of Section 9(c) of the Pledge Agreement shall apply to
it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
under or pursuant to or arising out of Section of the Pledge Agreement.
[NAME OF ISSUER]
By:
-----------------------------------
Title:
--------------------------------
Address for Notices:
---------------------------------------
---------------------------------------
Telex:
--------------------------------
Fax:
----------------------------------
SCHEDULE 1
TO PLEDGE AGREEMENT
DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock* Stock Certificate No. No. of Shares
----------------- ----------------- ------------------------ ----------------
-----------------------------
* Stock is assumed to be common stock unless otherwise indicated.
EXHIBIT K TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE]
SWING LINE LOAN PARTICIPATION CERTIFICATE
[Name of Lender]
--------------------
--------------------
--------------------
Dear Sirs:
Pursuant to subsection [( )] of the Amended and Restated Credit
and Guarantee Agreement, dated as of April __, 1996 (as amended, supplemented or
herwise modified from time to time, the "CREDIT AGREEMENT"), among SDW
Holdings Corporation, a Delaware corporation, S.D. ▇▇▇▇▇▇ Company, a
Pennsylvania corporation, the several banks, financial institutions and other
entities from time to time parties thereto (the "LENDERS"), and Chemical Bank,
as agent for the Lenders, the undersigned, as Swing Line Lender under the Credit
Agreement, hereby acknowledges receipt from you on the date hereof of
___________ DOLLARS ($____________) as payment for the purchase of a
participating interest in the following Swing Line Loan (as defined in the
Credit Agreement):
Date of Swing Line Loan:
-----------------------
Principal Amount of Swing Line Loan
Participating Interest: $ -----------------------
Very truly yours,
CHEMICAL BANK
By:
---------------------
Title:
EXHIBIT L TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF TRANCHE A TERM NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT REFERRED
TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY
THE AGENT PURSUANT TO THE TERMS OF SUCH AMENDED AND RESTATED CREDIT AND
GUARANTEE AGREEMENT.
TRANCHE A TERM NOTE
$______ New York, New York
[Closing Date]
FOR VALUE RECEIVED, the undersigned, S.D. ▇▇▇▇▇▇ COMPANY, a
Pennsylvania corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of ____________________(the "LENDER") at the office of Chemical
Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America and in immediately available funds, the principal
amount of ________________ DOLLARS ($______), or, if less, the unpaid principal
amount of the Tranche A Term Loan made by the Lender pursuant to subsection 2.1
of the Credit Agreement (as defined below). The principal amount of the Tranche
A Term Loan made by the Lender shall be paid in the amounts and on the dates
specified in subsection 2.3 of the Credit Agreement. The Borrower further
agrees to pay interest in like money at such office on the unpaid principal
amount of the Tranche A Term Loan made by the Lender from time to time
outstanding at the rates and on the dates specified in subsections 5.2 and 5.4
of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Tranche A Term Loan made by the Lender and the date and amount of each payment
or prepayment of principal with respect thereto, each conversion of all or a
portion thereof to another Type, each continuation of all or a portion thereof
as the same Type and, in the case of Eurodollar Loans, the length of each
Interest Period and the Eurodollar Rate with respect thereto. Each such
endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed, PROVIDED that the failure to make any such endorsement (or
any error therein) shall not affect the obligation of the Borrower to repay the
Tranche A Term Loan (with applicable interest) in accordance with the terms of
the Credit Agreement.
This Note (a) is one of the Tranche A Term Notes referred to in the
Amended and Restated Credit and Guarantee Agreement, dated as of the date hereof
(as the same may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among SDW Holdings Corporation, a Delaware
corporation, the Borrower, the Lender, the other banks, financial institutions
and other entities from time to time parties thereto and Chemical Bank, as
agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms and
conditions upon which the security interests and each guarantee were granted and
the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
S.D. ▇▇▇▇▇▇ COMPANY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Schedule A
TO TRANCHE A TERM NOTE
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
------------------------------------------------------------------------------------------------------------------------
Amount of ABR
Amount of Loans Converted Unpaid Principal
Amount of ABR Amount Converted Principal of ABR to Eurodollar Balance of ABR Notation Made
Date Loans to ABR Loans Loans Repaid Loans Loans By
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Schedule B
TO TRANCHE A TERM NOTE
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
--------------------------------------------------------------------------------------------------------------------------------
Amount Unpaid
Converted to or Interest Period Amount of Amount of Principal
Amount of Continued as and Eurodollar Principal of Eurodollar Balance of
Eurodollar Eurodollar Rate with Eurodollar Loans Loans Converted Eurodollar Notation Made
Date Loans Loans Respect Thereto Repaid to ABR Loans Loans By
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------------
EXHIBIT M TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
------------------------------
[FORM OF TRANCHE B TERM NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT REFERRED
TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY
THE AGENT PURSUANT TO THE TERMS OF SUCH AMENDED AND RESTATED CREDIT AND
GUARANTEE AGREEMENT.
TRANCHE B TERM NOTE
$ New York, New York
-------- [Effective Date]
FOR VALUE RECEIVED, the undersigned, S.D. ▇▇▇▇▇▇ COMPANY, a
Pennsylvania corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of (the "LENDER") at the office of
Chemical Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful
money of the United States of America and in immediately available funds, the
principal amount of DOLLARS ($ ), or, if less,
the unpaid principal amount of the Tranche B Term Loan made by the Lender
pursuant to subsection 2.1 of the Credit Agreement (as defined below). The
principal amount of the Tranche B Term Loan made by the Lender shall be paid in
the amounts and on the dates specified in subsection 2.4 of the Credit
Agreement. The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount of the Tranche B Term Loan made by the
Lender from time to time outstanding at the rates and on the dates specified in
subsections 5.2 and 5.4 of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Tranche B Term Loan made by the Lender and the date and amount of each payment
or prepayment of principal with respect thereto, each conversion of all or a
portion thereof to another Type, each continuation of all or a portion thereof
as the same Type and, in the case of Eurodollar Loans, the length of each
Interest Period and the Eurodollar Rate with respect thereto. Each such
endorsement shall constitute PRIMA FACIE evidence of the accuracy of the
information endorsed, PROVIDED that the failure to make any such endorsement (or
any error therein) shall not affect the obligation of the Borrower to repay the
Tranche B Term Loan (with applicable interest) in accordance with the terms of
the Credit Agreement.
This Note (a) is one of the Tranche B Term Notes referred to in the
Amended and Restated Credit and Guarantee Agreement, dated as of the date hereof
(as the same may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among SDW Holdings Corporation, a Delaware
corporation, the Borrower, the Lender, the other banks, financial institutions
and other entities from time to time parties thereto and Chemical Bank, as
agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms and
conditions upon which the security interests and each guarantee were granted and
the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
S.D. ▇▇▇▇▇▇ COMPANY
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Schedule A
to Tranche B Term Note
----------------------
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
------------------------------------------------------------------------------------------------------------------------------
Amount of ABR Loans
Amount of Amount Converted to Amount of Principal of Converted to Eurodollar Unpaid Principal Notation
Date ABR Loans ABR Loans ABR Loans Repaid Loans Balance of ABR Loans Made By
------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
Schedule B
to Tranche B Term Note
----------------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Interest Period and
Amount Converted Eurodollar Rate Amount of Principal Amount of Eurodollar Unpaid Principal
Amount of to or Continued as with Respect of Eurodollar Loans Loans Converted to Balance of Notation
Date Eurodollar Loans Eurodollar Loans Thereto Repaid ABR Loans Eurodollar Loans Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
EXHIBIT N TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF REVOLVING CREDIT NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT REFERRED
TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY
THE AGENT PURSUANT TO THE TERMS OF SUCH AMENDED AND RESTATED CREDIT AND
GUARANTEE AGREEMENT.
REVOLVING CREDIT NOTE
$______ New York, New York
[Effective Date]
FOR VALUE RECEIVED, the undersigned, S.D. ▇▇▇▇▇▇ COMPANY, a
Pennsylvania corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of ________________ (the "LENDER") at the office of Chemical
Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America and in immediately available funds, on the
Termination Date the principal amount of ________________ DOLLARS ($________),
or, if less, the aggregate unpaid principal amount of all Revolving Credit
Loans made by the Lender to the Borrower pursuant to subsection 3.1 of the
Credit Agreement (as defined below). The Borrower further agrees to pay
interest in like money at such office on the unpaid principal amount of
Revolving Credit Loans made by the Lender from time to time outstanding at the
rates and on the dates specified in subsections 5.2 and 5.4 of the Credit
Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made by the Lender and the date and amount of each payment
or prepayment of principal thereof, each conversion of all or a portion thereof
to another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period and the
Eurodollar Rate with respect thereto. Each such endorsement shall constitute
PRIMA FACIE evidence of the accuracy of the information endorsed, PROVIDED that
the failure to make any such endorsement shall not affect the obligation of the
Borrower to repay Revolving Credit Loans (with applicable interest) in
accordance with the terms of the Credit Agreement.
This Note (a) is one of the Revolving Credit Notes referred to in the
Amended and Restated Credit and Guarantee Agreement, dated as of the date hereof
(as the same may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among SDW Holdings Corporation, a Delaware
corporation, the Borrower, the Lender, the other banks, financial institutions
and other entities from time to time parties thereto and Chemical Bank, as
agent, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Note is secured and guaranteed as provided in the
Loan Documents. Reference is hereby made to the Loan Documents for a
description of the properties and assets in which a security interest has been
granted, the nature and extent of the security and the guarantees, the terms and
conditions upon which the security interests and each guarantee were granted and
the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
S.D. ▇▇▇▇▇▇ COMPANY
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Schedule A
TO REVOLVING CREDIT NOTE
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
----------------------------------------------------------------------------------------------------------------------------------
Amount Amount of ABR Loans
Converted to Amount of Principal of Converted to Unpaid Principal Notation Made
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans Balance of ABR Loans By
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
Schedule B
TO REVOLVING CREDIT NOTE
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
-----------------------------------------------------------------------------------------------------------------------------------
Amount Interest Period and Amount of Amount of
Converted to or Eurodollar Rate Principal Eurodollar Loans Unpaid Principal
Amount of Continued as with Respect of Eurodollar Converted to ABR Balance of Notation
Date Eurodollar Loans Eurodollar Loans Thereto Loans Repaid Loans Eurodollar Loans Made By
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
EXHIBIT O TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF SWING LINE NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT REFERRED
TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY
THE AGENT PURSUANT TO THE TERMS OF SUCH AMENDED AND RESTATED CREDIT AND
GUARANTEE AGREEMENT.
SWING LINE NOTE
New York, New York
$___________________ [Effective Date]
FOR VALUE RECEIVED, the undersigned, S.D. ▇▇▇▇▇▇ COMPANY, a
Pennsylvania corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of __ ___________ (the "SWING LINE LENDER"), at its offices
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the
United States of America and in immediately available funds on the Termination
Date, the principal amount of _______________ DOLLARS ($____________) or, if
less, the aggregate unpaid principal amount of the Swing Line Loans made by the
Swing Line Lender to the Borrower pursuant to subsection 3.6 of the Credit
Agreement (as defined below). The Borrower further agrees to pay interest in
like money at said office on the unpaid principal amount of Swing Line Loans
from time to time outstanding at the rates and on the dates specified in
subsections 5.2 and 5.4 of the Credit Agreement.
The Swing Line Lender is authorized to endorse the date and the amount
of each Swing Line Loan made by the Swing Line Lender to the Borrower pursuant
to subsection 3.6 of the Credit Agreement and the date and amount of each
payment or prepayment of principal thereof on SCHEDULE A annexed hereto and made
a part hereof and any such recordation shall constitute PRIMA FACIE evidence of
the accuracy of the information so endorsed, PROVIDED, that any failure by the
Swing Line Lender to make such endorsement shall not affect the obligation of
the Borrower to repay the Swing Line Loans (with applicable interest) in
accordance with the terms of the Credit Agreement.
This Note (a) is the Swing Line Note referred to in the Amended and
Restated Credit and Guarantee Agreement, dated as of April __, 1996 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT", among SDW Holdings Corporation, a Delaware corporation, the
Borrower, the Lender, the other banks, other financial institutions and other
entities from time to time parties thereto (the "LENDERS"), and Chemical Bank,
as agent for the Lenders, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. This Note is secured and guaranteed
as provided in the Loan Documents. Reference is hereby made to the Loan
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and the
guarantees, the terms and conditions upon which the security interests and each
guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
S.D. ▇▇▇▇▇▇ COMPANY
By:
---------------------------------
Title:
Schedule I to
Swing Line Note
---------------
LOANS AND REPAYMENTS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Unpaid
Amount of Swing Amount of Swing Principal Balance of
Line Loans Line Loans Swing Line Loans
Made Repaid Notation Made By
Date
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Irrevocable Standby Letter of Credit No. T-____
December 20, 1994
BENEFICIARY
▇▇▇▇▇ Paper Company
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen:
At the request and for the account of SDW Acquisition Corporation, a
Pennsylvania corporation (the "BUYER"), and S.D. ▇▇▇▇▇▇ Company, a Pennsylvania
corporation (together with its successors, the "COMPANY"), Chemical Bank (the
"ISSUING BANK") hereby establishes in favor of ▇▇▇▇▇ Paper Company, a
Pennsylvania corporation ("▇▇▇▇▇" and, together with its successors as provided
herein, the "BENEFICIARY"), as direct or indirect obligor with respect to the
obligations identified on SCHEDULE 1 attached hereto and made a part hereof (the
"SUPPORTED OBLIGATIONS"), this Irrevocable Standby Letter of Credit Number T-___
under which an aggregate amount not to exceed USD$170,484,931.59 is available
to be drawn in accordance with the terms hereof (as reduced from time to time in
accordance with the terms hereof, the "STATED AMOUNT") effective immediately and
expiring on the Expiration Date (as hereinafter defined). This Irrevocable
Standby Letter of Credit is transferable in its entirety but not in part only to
a permitted successor of ▇▇▇▇▇ as obligor with respect to each Supported
Obligation covered by this Irrevocable Standby Letter of Credit (a "TRANSFEREE")
upon delivery to the Issuing Bank of written notice, in the form of ANNEX A
attached hereto (a "TRANSFER NOTICE"), appropriately completed and executed by
an Authorized Officer (as hereinafter defined), together with the original of
this Irrevocable Standby Letter of Credit and payment of the Issuing Bank's
reasonable administrative expenses relating to such transfer. Upon any such
2
transfer of this Irrevocable Standby Letter of Credit to a Transferee, all
references herein to "▇▇▇▇▇" or the "Beneficiary" shall thereafter mean and
refer to such Transferee.
The Stated Amount shall be irrevocably reduced from time to time,
without amendment of this Irrevocable Standby Letter of Credit, upon receipt by
the Issuing Bank of a Certificate in the form of ANNEX B attached hereto,
appropriately completed, executed by an Authorized Officer of the Beneficiary.
From and after October 8, 1998, the Stated Amount shall also reduce
automatically on each date set forth on SCHEDULE 2 attached hereto to the amount
set forth opposite such date on such Schedule to the extent the Stated Amount
has not been reduced on or prior to such date pursuant to the immediately
preceding sentence to an amount equal to or less than the Stated Amount set
forth opposite such date.
Funds under this Irrevocable Standby Letter of Credit will be made
available to the Beneficiary against receipt by the Issuing Bank of (a)
Beneficiary's sight draft(s) in the form of ANNEX C attached hereto (a "SIGHT
DRAFT") and (b) Beneficiary's drawing certificate(s) in the form of ANNEX D or
ANNEX E attached hereto, as the case may be (a "DRAWING CERTIFICATE"), each
appropriately completed and executed by an Authorized Officer of the
Beneficiary. Presentation of such documents shall be made to the Issuing Bank
at (i) its office located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Standby Letter of Credit Department or (ii) at any
other office of the Issuing Bank in the Borough of Manhattan, The City of New
York which may be designated by the Issuing Bank by written notice delivered to
the Notice Address (as hereinafter defined) of the Beneficiary (such office of
the Issuing Bank being herein called the "ISSUING BANK'S OFFICE"). Customer
inquiry numbers are: (▇▇▇) ▇▇▇-▇▇▇▇ and (▇▇▇) ▇▇▇-▇▇▇▇.
More than one draw may be made hereunder, but no more than one draw
may be made hereunder in respect of any particular Supported Obligation
identified by title on SCHEDULE 1 attached hereto. Each drawing honored by the
Issuing Bank under this Irrevocable Standby Letter of Credit shall PRO TANTO
automatically reduce the Stated Amount of this Letter of Credit by the amount of
such drawing. In no event shall the aggregate amount of all drawings made
hereunder exceed the aggregate amount available of USD$170,484,931.59.
The Issuing Bank hereby agrees with the Beneficiary that if documents
are presented to the Issuing Bank under this Irrevocable Standby Letter of
Credit at the Issuing Bank's Office at or prior to 11:00 A.M, New York City
time, on a Business Day, and provided that such documents presented conform to
the terms and conditions of this Irrevocable Standby Letter of Credit,
3
payment shall be effected by the Issuing Bank in immediately available funds not
later than 3:00 P.M., New York City time, on the second succeeding Business Day.
If documents are presented to the Issuing Bank under this Irrevocable Standby
Letter of Credit at the Issuing Bank's Office after 11:00 A.M, New York City
time, on a Business Day, and provided that such documents presented conform to
the terms and conditions of this Irrevocable Standby Letter of Credit, payment
shall be effected by the Issuing Bank in immediately available funds not later
than 3:00 P.M., New York City time, on the third succeeding Business Day. If
documents are presented to the Issuing Bank under this Irrevocable Standby
Letter of Credit which do not conform to the terms and conditions of this
Irrevocable Standby Letter of Credit, the Issuing Bank shall give telephonic
notice to the Beneficiary to the Notice Address of the Beneficiary (as promptly
as reasonably possible but in no event after the time payment would otherwise
have been due hereunder) stating the reason payment was not effected in
accordance with the terms and conditions of this Irrevocable Standby Letter of
Credit and that the Issuing Bank will upon the Beneficiary's instructions hold
any Sight Draft and Drawing Certificate at the disposal of the Beneficiary or
return the same to the Beneficiary. Upon receipt of any such notice, the
Beneficiary may attempt to correct any such non-conforming documents at any time
prior to the close of business on the Expiration Date.
This Irrevocable Standby Letter of Credit shall expire at the close of
business of the Issuing Bank at the Issuing Bank's Office on December 20, 1995
(the "EXPIRATION DATE"); PROVIDED, HOWEVER, that it is a condition of this
Irrevocable Standby Letter of Credit that the Expiration Date shall be
automatically extended for an additional period of one year from the present or
each future Expiration Date unless the Issuing Bank sends written notice (a
"NON-RENEWAL NOTICE") to the Beneficiary, properly addressed to the Notice
Address of the Beneficiary at least 45 days prior to the then scheduled
Expiration Date, that the Issuing Bank elects not to renew this Irrevocable
Standby Letter of Credit for such additional period, which notice (a) shall be
sent (i) by hand delivery or nationally recognized overnight delivery service
and (ii) by telecopy transmission and (b) shall be effective when sent, PROVIDED
FURTHER that in no event shall this Irrevocable Standby Letter of Credit be
extended beyond December 20, 2001 (the Issuing Bank agrees to send written
notice to the Beneficiary, properly addressed to the Notice Address of the
Beneficiary at least 45 days prior to such final Expiration Date, of such final
Expiration Date, but the failure to provide any such notice shall not extend the
Expiration Date beyond December 20, 2001), and PROVIDED FURTHER that if the
Expiration Date would otherwise occur on a date that is not a Business Day, the
Expiration Date shall automatically be extended to the next Business Day. No
4
Sight Draft or Drawing Certificate payment hereunder shall be made if such
documents are presented later than the close of business on the Expiration Date.
The Stated Amount shall automatically be reduced to zero at the close of
business on the Expiration Date.
The following terms, as used herein, have the following meanings:
"Authorized Officer" means the Chairman of the Board, the President,
any Vice President, the Treasurer or any Assistant Treasurer of the
Beneficiary.
"Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or
required by law to close.
"Notice Address" means the following address or such other address as
the Beneficiary shall designate in writing to the Issuing Bank:
▇▇▇▇▇ Paper Company
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer's Office
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
with a separate copy of any written notice (other than a Non-
Renewal Notice) to the above address to the attention of the
General Counsel.
This Irrevocable Standby Letter of Credit sets forth in full the
Issuing Bank's undertaking, and such undertaking shall not in any way be
modified, amended, amplified or limited by reference to any document, instrument
or agreement referred to herein, except SCHEDULES 1 and 2 and ANNEXES A, B, C, D
and E referred to herein, and any such reference shall not be deemed to
incorporate by reference any document, instrument or agreement except for such
Schedule and Annexes.
5
This Irrevocable Standby Letter of Credit is subject to and governed
by the Uniform Customs and Practice for Documentary Credits (1993 Revision)
International Chamber of Commerce Publication No. 500 and to the extent not
inconsistent therewith, the laws of the State of New York, including, without
limitation, the Uniform Commercial Code as in effect in the State of New York.
Very truly yours,
CHEMICAL BANK
By:
-------------------------------
Title:
Authorized Officer
Date: December 20, 1994
SCHEDULE 1 TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER T-_______
OBLIGATIONS
TITLE DESCRIPTION INITIAL MAXIMUM DRAW
Muskegon ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ $368,688
5.75% Pollution Control Revenue
Bonds (▇▇▇▇▇ Paper Company
Project) Series B; Lease
Purchase Agreement dated as of
March 1, 1977 between County of
Muskegon, Michigan and ▇▇▇▇▇
Paper Company; Garantee Agreement
dated as of March 1, 1977 by ▇▇▇▇▇
Paper Company in favor of
The Fidelity Bank, as Trustee.
Muskegon ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 9-3/8% $1,379,688
Pollution Control Revenue Bonds
(▇▇▇▇▇ Paper Company Project)
Series C; Lease Purchase Agreement
dated as of November 1, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ Paper Company;
Guarantee Agreement dated as of
November 1, 1980 by ▇▇▇▇▇ Paper
Company in favor of The
Fidelity Bank, as Trustee.
2
Skowhegan ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 8.40% $30,480,000
Solid Waste Disposal Revenue Bonds
(S.D. ▇▇▇▇▇▇ Company Project) 1990
Series A; Loan Agreement dated as
of October 1, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and S.D. ▇▇▇▇▇▇
Company; Guaranty Agreement dated
as of October 1, 1990 by ▇▇▇▇▇
Paper Company in favor of Fidelity
Bank, National Association, as Trustee.
Skowhegan ▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 8.10% $12,198,600
Pollution Control Revenue Refunding
Bonds (▇▇▇▇▇ Paper Company Project)
1990 Series B; Loan Agreement dated
as of October 1, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇ Paper
Company.
Skowhegan ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 5.90%
Pollution Control Revenue Refunding
Bonds Series 1993 (▇▇▇▇▇ Paper
Company Project); Loan Agreement
dated as of November 1, ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and
▇▇▇▇▇ Paper Company.
Westbrook 1973 City of Westbrook, Maine 5-3/4% $13,395,750
Environmental Improvement Revenue
Bonds (▇▇▇▇▇ Paper Company Project)
Series A of 1973; Construction,
Financing and Installment Sale
Agreement dated as of June 15, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
and ▇▇▇▇▇ Paper Company.
▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 6% Pollution
Control Revenue Bonds (▇▇▇▇▇ Paper
Company Project) Series A of 1977;
Construction, Financing and Installment
Sale Agreement dated as of April 1, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and
▇▇▇▇▇ Paper Company.
▇▇▇▇▇▇▇▇▇ 1980 City of Westbrook, Maine 9-3/8% $1,103,750
Industrial Development Revenue Bonds
(▇▇▇▇▇ Paper Company Project) 1980
Series A; Construction, Financing and
Installment Sale Agreement dated as
of November 1, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ and ▇▇▇▇▇ Paper Company.
▇▇▇▇▇▇▇▇▇ Lease Agreement dated $1,478,000
Feedwater Lease December 14, 1981 among The
Connecticut Bank and Trust Company,
as Trustee, General Electric Credit
Corporation and ▇▇▇▇▇ Paper Company.
▇▇▇▇▇▇▇▇▇ Biomass The following transaction $115,272,628
Obligations documents:
a) Refinancing Participation
Agreement dated as of December 15,
1986 among ▇▇▇▇▇ Paper Company, as
Purchaser, General Electric Credit
Corporation, as Owner Participant,
and The Connecticut Bank and Trust
Company, National Association, as
Owner Trustee.
4
b) Power Sales Agreement dated as of
January 1, 1982 between The
Connecticut Bank and Trust Company,
Owner Trustee, as Seller, and
▇▇▇▇▇ Paper Company, as Purchaser,
as amended by the First Amendment
dated as of December 15, 1986 to
Power Sales Agreement dated as of
January 1, 1982 between The
Connecticut Bank and Trust Company,
National Association, Owner Trustee,
as Seller, and ▇▇▇▇▇ Paper Company,
as Purchaser.
c) Operating Agreement dated as of
January 1, 1982 between The
Connecticut Bank and Trust Company,
as Owner Trustee, and ▇▇▇▇▇ Paper
Company, as Operator, as amended by
the First Amendment dated as of
December 15, 1986 to Operating
Agreement dated as of January
1, 1982 between The Connecticut
Bank and Trust Company, National
Association, as Owner Trustee,
and ▇▇▇▇▇ Paper Company, as Operator.
5
d) Ground Lease Agreement dated as of
January 1, 1982 between ▇▇▇▇▇ Paper
Company, as Lessor, and The
Connecticut Bank and Trust Company,
Owner Trustee, as Lessee, as amended
by the First Amendment dated as of
December 15, 1986 to Ground Lease
Agreement dated as of January 1, 1982
between ▇▇▇▇▇ Paper Company and The
Connecticut Bank and Trust Company,
National Association, Owner Trustee.
e) Facilities Agreement dated as of
January 1, 1982 between ▇▇▇▇▇ Paper
Company and The Connecticut Bank
and Trust Company, as Owner Trustee,
as amended by the First Amendment
dated as of December 15, 1986 to
Facilities Agreement dated as of
January 1, 1982 between ▇▇▇▇▇
Paper Company and The Connecticut
Bank and Trust Company, National
Association, as Owner Trustee.
6
f) Tax Indemnification Agreement dated
as of January 1, 1982 among General
Electric Credit Corporation, The
Connecticut Bank and Trust Company,
National Association, as Trustee,
and ▇▇▇▇▇ Paper Company, as amended
by the Amendment dated as of November
25, 1986 to the Tax Indemnification
Agreement dated as of January 1, 1982
among General Electric Credit
Corporation, Owner Participant, The
Connecticut Bank and Trust Company,
National Association, as Trustee, and
▇▇▇▇▇ Paper Company.
g) Indenture and Security Agreement dated
as of December 15, 1986 among The
Connecticut Bank and Trust Company,
National Association, as ▇▇▇▇▇▇▇▇▇
Owner Trustee and ▇▇▇▇▇▇▇ Owner
Trustee, ▇▇▇▇▇ Paper Company, and
The Bank of New York, as Indenture
Trustee.
SCHEDULE 2 TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER T-______
SCHEDULED REDUCTIONS
--------------------
Reduction Date Reduced Stated Amount
-------------- -----------------------
October 8, 1998 $167,975,238.00
April 9, 1999 $164,149,733.00
October 8, 1999 $158,420,379.00
April 8, 2000 $154,473,884.00
October 8, 2000 $149,995,831.00
April 9, 2001 $145,412,387.00
October 8, 2001 $139,379,790.00
ANNEX A TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER T-______
NOTICE OF TRANSFER
[Date]
Chemical Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Standby Letter of Credit Department
The undersigned, [Name of Beneficiary], by its Authorized Officer,
does hereby certify that:
1. This notice is delivered pursuant to Irrevocable Standby
Letter of Credit No. T- , dated December __, 1994 (the "LETTER OF
CREDIT"), issued by Chemical Bank (the "ISSUING BANK"). All terms used
herein which are defined in the Letter of Credit shall have the meanings
given in the Letter of Credit.
2. For value received, the undersigned hereby irrevocably
transfers to:
(Name of Transferee)
(Address)
(Payment Information)
all rights of the undersigned to draw under the Letter of Credit.
3. Such Transferee is a permitted successor of ▇▇▇▇▇ with
respect to each Supported Obligation covered by the Letter of Credit and
outstanding on the date hereof. Such Transferee confirms and agrees, for
the benefit of the Company, that it has assumed all of ▇▇▇▇▇'▇ obligations
under Sections 6.3(b)(iii) and 6.3(f) of the Stock Purchase Agreement dated
as of October 8, 1994, among the Beneficiary, Sappi Limited and the Buyer
with respect to letters of credit and any related Assignment and Assumption
Agreements or Assumption Agreement, as the case may be, with respect to
each of such Supported Obligations.
4. By this transfer, all rights of the undersigned in the
Letter of Credit are transferred to the transferee named above (the
"TRANSFEREE") and the Transferee shall have the sole rights as Beneficiary
thereof, including
2
sole rights relating to any amendments, including increases or extensions
thereof, whether now existing or hereafter made. All amendments are to be
advised directly to the Transferee without necessity of any consent of or
notice to the undersigned.
5. The advice of the Letter of Credit is returned herewith, and
the undersigned hereby requests that the Issuing Bank endorse the transfer
on the reverse thereof, and forward it directly to the Transferee with its
customary notice of transfer.
6. Enclosed is an amount in cash equal to, or an official or
certified check in the amount of, $________ in payment of reasonable
administrative expenses related to such transfer.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the _____ day of _____, __________.
[NAME OF BENEFICIARY], as Beneficiary
By:
--------------------------------
Title:
Authorized Officer
[NAME OF TRANSFEREE], as Transferee
By:
--------------------------------
Title:
Authorized Officer
SIGNATURES AUTHENTICATED:
---------------------------
(Bank)
---------------------------
(Authorized Signature)
ANNEX B TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER T-_____
CERTIFICATE FOR REDUCTION IN STATED AMOUNT
-------------------------------------------
[Date]
Chemical Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Standby Letter of Credit Department
The undersigned, [Name of Beneficiary], by its Authorized Officer,
does hereby certify that:
1. This certificate is delivered pursuant to Irrevocable
Standby Letter of Credit No. T-_____________, dated
December __, 1994 (the "LETTER OF CREDIT"), issued by Chemical Bank (the
"ISSUING BANK"). All terms used herein which are defined in the Letter of
Credit shall have the meanings given in the Letter of Credit.
2. The present Stated Amount of the Letter of Credit
is $______.
3. The present Stated Amount of the Letter of Credit is hereby
reduced by $_________, and the Stated Amount, after giving effect to such
reduction, of the Letter of Credit is $____________.
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the _____ day of ____________, ____________.
[NAME OF BENEFICIARY], as Beneficiary
By:
-------------------------------
Title:
Authorized Officer
ANNEX C TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER T-______
SIGHT DRAFT
(PLACE)
(DATE)
AT SIGHT, PAY TO THE ORDER OF [NAME OF BENEFICIARY] (THE BENEFICIARY),
THE SUM OF _____________________________________________________________
UNITED STATES DOLLARS _____________________________.
DRAWN UNDER CHEMICAL BANK, LETTER OF CREDIT NUMBER T-_________, DATED
DECEMBER ____, 1994.
----------------------------------
----------------------------------
----------------------------------
(NAME AND TITLE)
AUTHORIZED OFFICER
DRAWN ON:
CHEMICAL BANK
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ROOM ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
ATTENTION: STANDBY LETTER OF CREDIT DEPARTMENT
ANNEX D TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER T-______
DRAWING CERTIFICATE
-------------------
[Date]
Chemical Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Standby Letter of Credit Department
The undersigned, [Name of Beneficiary], by its Authorized Officer,
does hereby certify that:
1. This certificate is delivered pursuant to Irrevocable Standby
letter of Credit No. T-________, dated December ___, 1994 (the "LETTER OF
CREDIT"), issued by Chemical Bank (the "ISSUING BANK"). All terms used herein
which are defined in the Letter of Credit shall have the meanings given in the
Letter of Credit.
2. The undersigned is the Beneficiary of the Letter of Credit.
3. The date on which this Certificate is being presented is not
later than the Expiration Date.
4. The amount for which demand for payment is made pursuant to this
Certificate does not exceed the Stated Amount of the Letter of Credit as in
effect on the date hereof.
5. The title(s) (as shown on SCHEDULE 1 to the Letter of Credit) of
the Supported Obligations in respect of which this demand for payment is made
(the "SUBJECT OBLIGATIONS") is/are as follows:
[fill in]
6. The amount for which demand for payment is made in respect of any
Subject Obligation does not exceed the Initial Maximum Draw amount with respect
to such Subject Obligation set forth in SCHEDULE 1 to the Letter of Credit. The
aggregate amount for which demand for payment is made in respect of the Subject
Obligations does not exceed an amount equal to the sum of (a) if any of the
Subject Obligations are Supported Obligations other than the ▇▇▇▇▇▇▇▇▇ Feedwater
Lease and the ▇▇▇▇▇▇▇▇▇ Biomass Obligations referred to in SCHEDULE 1 to the
letter of
2
Credit (i) the then unpaid principal amount of such Subject Obligations [and
amounts paid in respect of the principal or premium, if any, of such Subject
Obligations within 100 days prior to events referred to in Alternative 2 or 3 of
Paragraph 7 of ANNEX D to the Letter of Credit], (ii) interest for a period of
one year on the principal amount of such Subject Obligations and, if such
Subject Obligations are not now subject to optional redemption, the additional
period, if any, to the first optional redemption date, if any, and (iii) the
maximum premium, if any, hereafter payable upon optional redemption of such
Subject Obligations, (b) if the Subject Obligations include the ▇▇▇▇▇▇▇▇▇
Biomass Obligations referred to in SCHEDULE 1 to the Letter of Credit, the
greater of (i) all payments required to be made by the Beneficiary on or after
the date hereof under Section 3.02 of the Power Sales Agreement referred to in
SCHEDULE 1 to the Letter of Credit [and amounts paid in respect thereof within
100 days prior to the events referred to in Alternative 2 or 3 of Paragraph 7 of
ANNEX D to the Letter of Credit*] or (ii) Stipulated Loss Value (as defined in
such Power Sales Agreement) as of the date hereof [and amounts paid in respect
thereof within 100 days prior to the events referred to in Alternative 2 or 3 of
Paragraph 7 of ANNEX D to the Letter of Credit*] and (c) if the Subject
Obligations include the ▇▇▇▇▇▇▇▇▇ Feedwater Lease referred to in SCHEDULE 1 to
the Letter of Credit, the greater of (i) all payments required to be made by the
Beneficiary on or after the date hereof under Section 2 of such ▇▇▇▇▇▇▇▇▇
Feedwater Lease [and amounts paid in respect thereof within 100 days prior to
the events referred to in Alternative 2 or 3 of Paragraph 7 of ANNEX D to the
Letter of Credit*] or (ii) Stipulated Loss Value (as defined in such ▇▇▇▇▇▇▇▇▇
Feedwater Lease) as of the date hereof [and amounts paid in respect thereof
within 100 days prior to the events referred to in Alternative 2 or 3 of
Paragraph 7 of ANNEX D to the Letter of Credit*].
7. [Alternative 1] The Company has failed to make a payment or
otherwise perform obligations assumed by it in respect of each Supported
Obligation included in the Subject Obligations. With respect to each such
Supported Obligation, (a) the Company is not contesting the applicability of the
payment in respect of such Supported Obligation diligently by appropriate
proceedings instituted in good faith, (b) the principal of such Supported
Obligation has been accelerated or (c) the Company has failed to make a
scheduled payment in respect of such Supported Obligation.**
--------------------
* May be included if Alternative 2 or 3 of Paragraph 7 is applicable.
** Include appropriate Alternative.
3
7. [Alternative 2] The Company (a) has commenced a voluntary case
seeking relief with respect to itself or its debts under any bankruptcy,
insolvency or similar law, or has sought the appointment of a trustee, receiver
or similar official with respect to it or any substantial part of its property
or (b) has made a general assignment for the benefit of creditors, (c) has
failed generally to pay its debts as they become due or (d) has taken any
corporate action to authorize any of the foregoing.**
7. [Alternative 3] An involuntary case has been commenced against
the Company seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or similar law or seeking the
appointment of a trustee, receiver or similar official with respect to it or any
substantial part of its property.**
8. [Alternative 1] By virtue of the prompt application by the
Beneficiary of the payment demanded pursuant to this Certificate, each Supported
Obligation included in the Subject Obligations will be redeemed or defeased.
The Beneficiary hereby represents and warrants that it will promptly apply the
proceeds of the payment demanded pursuant to this certificate to the payment in
full or defeasance of each Supported Obligation included in the Subject
Obligations, and that the undersigned can so apply such proceeds without legal
restriction (including any such restriction which may, under applicable law,
arise out of the occurrence of any of the events described in Alternatives 2 and
3 of Paragraph 7 of ANNEX D of the Letter of Credit substituting the Beneficiary
for the Company therein).**
8. [Alternative 2] The Beneficiary hereby represents and warrants
that it will arrange for the maintenance and investment of the proceeds of the
payment demanded pursuant to this Certificate in short term U.S. government
securities or other investments satisfactory to the Company in a segregated
account as collateral from which payment of each Supported Obligation included
in the Subject Obligations can and will be made as and when due without legal
restriction (including any such restriction which may, under applicable law as
currently in effect, arise out of the occurrence of any of the types of events
described in Alternatives 2 and 3 of Paragraph 7 of ANNEX D of the Letter of
Credit substituting the Beneficiary for the Company therein).**
9. [Optional: In order to facilitate application of the proceeds of
the payment demanded pursuant to this Certificate, the Beneficiary hereby
requests that such proceeds be paid by wire transfer of immediately available
funds to the payee of each Supported Obligation included in the Subject
4
Obligations as follows (with confirmation of such transfer to be made to the
Beneficiary at its Notice Address):
[Specify Amount, Bank, Account Number and Reference Information for
each wire transfer.]]
10. If the Subject Obligations include Supported Obligations other
than the ▇▇▇▇▇▇▇▇▇ Biomass Obligations and the ▇▇▇▇▇▇▇▇▇ Feedwater Lease
referred to in SCHEDULE 1 to the Letter of Credit, the Beneficiary hereby agrees
that it shall (i) hold the Buyer and the Company harmless with respect to
obligations to make payments of principal and interest on such Supported
Obligations included in the Subject Obligations to the extent of the payment
demanded pursuant to this Certificate and (ii) hold any excess of such drawing
over the payments or principal and interest on such Supported Obligations made
with the proceeds of such payment (and any earnings on such excess) in a
segregated account, with such proceeds to be invested in short term U.S.
government securities or other investments satisfactory to the Company, as
collateral solely to secure payments of principal, interest and premium (if any)
on the Supported Obligations and the payment of fees, costs and other expenses
incurred by the Beneficiary in connection therewith.
11. If the Supported Obligations included in the Subject Obligations
include the ▇▇▇▇▇▇▇▇▇ Biomass Obligations or the ▇▇▇▇▇▇▇▇▇ Feedwater Lease
referred to in SCHEDULE 1 to the Letter of Credit, the Beneficiary hereby agrees
that it shall hold the Company harmless from the obligations to make payments
under such Supported Obligations to the extent of the payment demanded pursuant
to this Certificate, and shall hold any excess of such payment over the payments
under such Supported Obligations (and any earnings on such excess) in a
segregated account, with such proceeds to be invested in short term U.S.
government securities or other investments satisfactory to the Company, as
collateral solely to secure payments when due under such Supported Obligations,
and the payment of fees, costs and other expenses incurred by the Beneficiary in
connection therewith.
IN WITNESS WHEREOF, the undersigned has executed this certificate this
_______ day of __________, ____________.
[NAME OF BENEFICIARY], as
Beneficiary
By
----------------------------
Title:
Authorized Officer
ANNEX E TO IRREVOCABLE
STANDBY LETTER OF CREDIT NUMBER T-______
DRAWING CERTIFICATE
--------------------
[Date]
Chemical Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Standby Letter of Credit Department
The undersigned, [Name of Beneficiary], by its Authorized Officer,
does hereby certify that:
1. This certificate is delivered pursuant to Irrevocable Standby
letter of Credit No. T-_______, dated December ___, 1994 (the "LETTER OF
CREDIT"), issued by Chemical Bank (the "ISSUING BANK"). All terms used
herein which are defined in the Letter of Credit shall have the meanings
given in the Letter of Credit.
2. The undersigned is the Beneficiary of the Letter of Credit.
3. The date on which this Certificate is being presented is not
later than the Expiration Date.
4. The amount for which demand for payment is made pursuant to this
Certificate does not exceed the Stated Amount of the Letter of Credit as in
effect on the date hereof.
5. (a) (i) The Beneficiary has received a Non-Renewal Notice from
the Issuing Bank pursuant to the Letter of Credit or (ii) the date on which
this Certificate is being presented is 45 days or less prior to December
20, 2001 and (b) the Beneficiary has not received a substitute letter of
credit in the form of the Letter of Credit (or in such other form as may be
satisfactory to Beneficiary) and otherwise satisfying the applicable
requirements of Section 6.3 of the Stock Purchase Agreement dated as of
October 8, 1994, among the Beneficiary, Sappi Limited and the Buyer.
6. The payment demanded pursuant to this Certificate is
$___________. The amount for which demand for payment is made in respect
of any Supported Obligation does not exceed the Initial Maximum Draw amount
with respect to such Supported Obligation set forth in SCHEDULE 1 to the
Letter of Credit.
2
The aggregate amount for which demand for payment is made in respect of the
Supported Obligations does not exceed an amount equal to the sum of (a) with
respect to Supported Obligations other than the ▇▇▇▇▇▇▇▇▇ Feedwater Lease and
the ▇▇▇▇▇▇▇▇▇ Biomass Obligations referred to in SCHEDULE 1 to the letter of
Credit (i) the then unpaid principal amount of such Supported Obligations [and
amounts paid in respect of the principal or premium, if any, of such Supported
Obligation within 100 days prior to events referred to in Alternative 2 or 3 of
Paragraph 7 of ANNEX D to the Letter of Credit***], (ii) interest for a period
of one year on the principal amount of such Supported Obligations and, if such
Supported Obligations are not now subject to optional redemption, the additional
period, if any, to the first optional redemption date, if any, and (iii) the
maximum premium, if any, hereafter payable upon optional redemption of such
Supported Obligations, (b) with respect to the ▇▇▇▇▇▇▇▇▇ Biomass Obligations
referred to in SCHEDULE 1 to the Letter of Credit, the greater of (i) all
payments required to be made by the Beneficiary on or after the date hereof
under Section 3.02 of the Power Sales Agreement referred to in SCHEDULE 1 to the
Letter of Credit [and amounts paid in respect thereof within 100 days prior to
the events referred to in Alternative 2 or 3 of Paragraph 7 of ANNEX D to
the Letter of Credit***] or (ii) Stipulated Loss Value (as defined in such Power
Sales Agreement) as of the date hereof [and amounts paid in respect thereof
within 100 days prior to the events referred to in Alternative 2 or 3 of
Paragraph 7 of ANNEX D to the Letter of Credit***] and (c) with respect to the
▇▇▇▇▇▇▇▇▇ Feedwater Lease referred to in SCHEDULE 1 to the Letter of Credit, the
greater of (i) all payments required to be made by the Beneficiary on or after
the date hereof under Section 2 of such ▇▇▇▇▇▇▇▇▇ Feedwater Lease [and amounts
paid in respect thereof within 100 days prior to the events referred to in
Alternative 2 or 3 of Paragraph 7 of ANNEX D to
--------------------
*** May be included if Alternative 2 or 3 of Paragraph 7 is applicable.
3
the Letter of Credit***] or (ii) Stipulated Loss Value (as defined in such
▇▇▇▇▇▇▇▇▇ Feedwater Lease) as of the date hereof [and amounts paid in respect
thereof within 100 days prior to the events referred to in Alternative 2 or 3
of Paragraph 7 of ANNEX D to the Letter of Credit***].
IN WITNESS WHEREOF, the undersigned has executed this certificate this
day of __________, __________.
[NAME OF BENEFICIARY], as
Beneficiary
By
------------------------------
Title:
Authorized Officer
EXHIBIT Q TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF LOC NOTE]
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS AND
PROVISIONS OF THE AMENDED AND RESTATED CREDIT AND GUARANTEE AGREEMENT REFERRED
TO BELOW. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER MAINTAINED BY
THE AGENT PURSUANT TO THE TERMS OF SUCH AMENDED AND RESTATED CREDIT AND
GUARANTEE AGREEMENT.
LOC NOTE
$_______ New York, New York
[Date of LOC Loan]
FOR VALUE RECEIVED, the undersigned, S.D. ▇▇▇▇▇▇ COMPANY, a
Pennsylvania corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of _______________ (the "LENDER") at the office of Chemical
Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of
the United States of America and in immediately available funds, the principal
amount of _______________ DOLLARS ($_________), or, if less, the unpaid
principal amount of the LOC Loan made by the Lender on the date hereof pursuant
to subsection 4.5(c) of the Credit Agreement (as defined below). The principal
amount of the LOC Loan made by the Lender shall be paid in the amounts and on
the dates specified in the Amortization Schedule attached hereto as ANNEX A.
The Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount of the LOC Loan made by the Lender from time to time
outstanding at the rates and on the dates specified in subsections 5.2 and 5.4
of the Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the LOC
Loan made by the Lender and the date and amount of each payment or prepayment of
principal with respect thereto, each conversion of all or a portion thereof to
another Type, each continuation of all or a portion thereof as the same Type
and, in the case of Eurodollar Loans, the length of each Interest Period and the
Eurodollar Rate with respect thereto. Each such endorsement shall constitute
PRIMA FACIE evidence of the accuracy of the information endorsed, PROVIDED that
the failure to make any such endorsement (or any error therein) shall not affect
the obligation of the Borrower to repay the LOC Loan (with applicable interest)
in accordance with the terms of the Credit Agreement.
This Note (a) is one of the LOC Notes referred to in the Amended and
Restated Credit and Guarantee Agreement, dated as of April __, 1996 (as the same
may be amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among SDW Holdings Corporation, a Delaware corporation, the
Borrower, the Lender, the other banks, financial institutions and other entities
from time to time parties thereto and Chemical Bank, as agent, (b) is subject to
the provisions of the Credit Agreement and (c) is subject to optional and
mandatory prepayment in whole or in part as provided in the Credit Agreement.
This Note is secured and guaranteed as provided in the Loan Documents.
Reference is hereby made to the Loan Documents for a description of the
properties and assets in which a security interest has been granted, the nature
and extent of the security and the guarantees, the terms and conditions upon
which the security interests and each guarantee were granted and the rights of
the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
S.D. ▇▇▇▇▇▇ COMPANY
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Annex A
to LOC Note
AMORTIZATION SCHEDULE
[Insert the dates on which payments would have been due on the Supported
Obligation(s) in respect of which the LOC Loans are made under the agreements
governing such Supported Obligations and the amounts due on such dates under
such agreements assuming that such Supported Obligation(s) had remained
outstanding until the maturity thereof.]
Schedule A
to LOC Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
----------------------------------------------------------------------------------------------------------------------
Amount of
ABR Loans
Amount of Converted to
Amount Converted Principal of Eurodollar Unpaid Principal Notation
Date Amount of ABR Loans to ABR Loans ABR Loans Repaid Loans Balance of ABR Loans Made By
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Schedule B
to LOC Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
------------------------------------------------------------------------------------------------------------------------------------
Interest Unpaid
Period and Principal
Amount Converted Eurodollar Rate Amount of Principal Amount of Eurodollar Balance of
Amount of to or Continued as with Respect of Eurodollar Loans Loans Converted to Eurodollar Notation
Date Eurodollar Loans Eurodollar Rate Thereto Repaid ABR Loans Loans Made By
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
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EXHIBIT R TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF BORROWING CERTIFICATE]
BORROWING CERTIFICATE
Pursuant to subsections 7.1(f), 7.1(g), 7.1(h) and 7.1(m) of the Amended
and Restated Credit and Guarantee Agreement, dated as of April __, 1996 (as the
same may be amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among SDW Holdings Corporation, a Delaware corporation,
S.D. ▇▇▇▇▇▇ Company, a Pennsylvania corporation (the "BORROWER"), the several
banks, financial institutions and other entities from time to time parties
thereto (the "LENDERS") and Chemical Bank, as agent for the Lenders, the
undersigned, ____________________ of the Borrower, hereby certifies as follows:
1. The representations and warranties of the Borrower set forth in the
Credit Agreement and each of the other Loan Documents to which it is a
party or which are contained in any certificate, document or financial or
other statement furnished pursuant to or in connection with the Credit
Agreement or any Loan Document are true and correct on and as of the date
hereof with the same effect as if made on the date hereof, except for
representations and warranties expressly stated to relate to a specific
earlier date, in which case such representations and warranties are true
and correct as of such earlier date;
2. No Default or Event of Default has occurred and is continuing as
of the date hereof or will occur after giving effect to the making of the
Loans and the issuance of the Letters of Credit requested to be made and/or
issued on the date hereof or the consummation of each of the transactions
contemplated by the Loan Documents; and
3. _________________ is and at all times since _____________ __,
19__, has been the duly elected and qualified [Assistant] Secretary of the
Borrower and the signature set forth on the signature line for such officer
below is such officer's true and genuine signature;
and the undersigned [Assistant] Secretary of the Borrower hereby certifies as
follows:
4. There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against the Borrower or any of its Subsidiaries,
nor has any other event occurred affecting or threatening the corporate
existence of the Borrower or any of its Subsidiaries;
5. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Pennsylvania;
6. (a) Attached hereto as EXHIBIT A is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Borrower on
__________ __, 19__; such resolutions have not in any way been amended,
modified, revoked or rescinded and have been in full force and effect since
their adoption to and including the date hereof and are now in full force
and effect; such resolutions are the only corporate proceedings of the
Borrower now in force relating to or affecting the matters referred to
therein;
(b) attached hereto as EXHIBIT B is a true and complete copy of
the By-laws of the Borrower as in effect at all times since __________ __,
19__, to and including the date hereof; and
(c) attached hereto as EXHIBIT C is a true and complete copy of
the Certificate of Incorporation of the Borrower as in effect at all times
since __________ __, 19__, to and including the date hereof; and
2
7. The following persons are now duly elected and qualified officers
of the Borrower, holding the offices indicated next to their respective
names below, and such officers have held such offices with the Borrower at
all times since __________ __, 19__, to and including the date hereof, and
the signatures appearing opposite their respective names below are the true
and genuine signatures of such officers, and each of such officers is duly
authorized to execute and deliver on behalf of the Borrower, the Credit
Agreement and the other Loan Documents to which it is a party and any
certificate or other document to be delivered by the Borrower pursuant to
the Credit Agreement or any such Loan Document:
Name Office Signature
---- ------ ---------
[ ] [ ]
------------------
[ ] [ ]
------------------
Unless otherwise defined herein, capitalized terms which are defined
in the Credit Agreement and used herein are so used as so defined.
IN WITNESS WHEREOF, the undersigned have hereunto set our names and
affixed the corporate seal.
S.D. ▇▇▇▇▇▇ COMPANY S.D. ▇▇▇▇▇▇ COMPANY
By: By:
----------------------- ------------------------
Name: Name:
Title: Title: [Assistant] Secretary
Date: [ ] (CORPORATE SEAL)
EXHIBIT T TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit and Guarantee
Agreement, dated as of April , 1996 (as amended, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"), among SDW Holdings
Corporation, a Delaware corporation, S.D. ▇▇▇▇▇▇ Company, a Pennsylvania
corporation (the "BORROWER"), the several banks, financial institutions and
other entities from time to time parties thereto (the "LENDERS") and Chemical
Bank, as agent for the Lenders (in such capacity, the "AGENT"). Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
(the "ASSIGNOR") and (the "ASSIGNEE") agree as
------------ ------------
follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below) (but not prior to the registration of the
information contained herein in the Register pursuant to subsection 13.6(e) of
the Credit Agreement), a ___% interest (the "ASSIGNED INTEREST") in and to the
Assignor's rights and obligations under the Credit Agreement with respect to
those credit facilities contained in the Credit Agreement as are set forth on
SCHEDULE 1 (individually, an "ASSIGNED FACILITY"; collectively, the "ASSIGNED
FACILITIES"), in a principal amount for each Assigned Facility as set forth on
SCHEDULE 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) (i) requests that the
Agent, upon request by the Assignee, (a) exchange any attached Notes for a new
Note or Notes payable to the Assignee or, (b) if the Assignor does not hold any
Notes, issue a new Note or Notes payable to the Assignee and (ii) if (A) the
Assignor has retained any interest in the Assigned Facility and (B) the Assignor
holds any Notes, requests that the Agent exchange the attached Notes for a new
Note or Notes payable to the Assignor, in each case in amounts which reflect the
assignment being made hereby (and after giving effect to any other assignments
which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to subsection 6.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement, the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto; (d) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be a party to and
bound by the provisions of the Credit Agreement and will perform in accordance
with its terms all the obligations which by the terms of the Credit Agreement
are required to be
2
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligations pursuant to subsection
5.10(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be
__________, 19__ (the "EFFECTIVE DATE"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to the Credit Agreement, effective as of
the Effective Date (which shall not, unless otherwise agreed to by the Agent, be
earlier than five Business Days after the date of such acceptance and recording
by the Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignee whether such amounts have accrued prior to the Effective Date or accrue
subsequent to the Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Agent for periods prior to the
Effective Date or with respect to the making of this assignment directly between
themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and under
the other Loan Documents and shall be bound by the provisions thereof and (b)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
8. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on SCHEDULE 1 hereto.
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
Re: Assignment and Acceptance relating to the Amended and Restated Credit and
Guarantee Agreement, dated as of April __, 1996, among SDW Holdings Corporation,
a Delaware corporation, S.D. ▇▇▇▇▇▇ Company, a Pennsylvania corporation (the
"BORROWER"), the several banks and other financial institutions from time to
time parties thereto (the "LENDERS") and Chemical Bank, as agent for the Lenders
(in such capacity, (the "AGENT").
--------------------------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned(1)
----------------- ------------------- ------------------------------
$ %
------- -------
The terms set forth above are hereby agreed to by:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By By
--------------------------------- -----------------------------------
Name: Name:
Title: Title:
Accepted: Consented To:
CHEMICAL BANK, as Agent S.D. ▇▇▇▇▇▇ COMPANY
By By
-------------------------------- -----------------------------------
Name: Name:
Title: Title:
--------------------
1. Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
EXHIBIT U TO
AMENDED AND RESTATED
CREDIT AND GUARANTEE AGREEMENT
[FORM OF CONFIDENTIALITY LETTER]
[Prospective Transferee Letterhead]
[Date]
S.D. ▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Chemical Bank, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
[Name of Lender]
[Address]
Attention: [ ]
Dear Sirs:
Reference is made to the Amended and Restated Credit and Guarantee
Agreement, dated as of April __, 1996 (as the same may be amended, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT"), among SDW
Holdings Corporation, a Delaware corporation, S.D. ▇▇▇▇▇▇ Company, a
Pennsylvania corporation, the several banks, financial institutions and other
entities from time to time parties thereto (the "LENDERS"), and Chemical Bank,
as agent for the Lenders (the "AGENT"). Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein are so used as so defined.
The undersigned, , is considering a purchase of Loans and/or
Commitments or a participating interest in such Loans and/or Commitments under
the Credit Agreement. In connection with its consideration of such purchase,
the undersigned is to be provided copies of the Credit Agreement and certain
other Loan Documents and certain financial information concerning the Borrower
and its Affiliates (the Credit Agreement, such other Loan Documents and such
financial information, together the "INFORMATION"). Prior to receiving any such
information, the undersigned is required by subsection 13.6(f) of the Credit
Agreement to execute and deliver this Letter.
The undersigned hereby agrees to keep confidential (and cause its
employees, officers, directors, agents, attorneys, accountants and other
professional advisors to keep confidential) the Information; PROVIDED that
nothing herein shall prevent the undersigned from disclosing any such
information (i) to the Agent or any Lender, (ii) to any Transferee or
prospective Transferee which agrees to comply with the provisions of subsection
13.15 of the Credit Agreement, (iii) on a need-to-know basis to its employees,
officers, directors, agents, attorneys, accountants and other professional
advisors (each of which shall be instructed to hold the same in confidence),
(iv) upon the request or demand of any Governmental Authority (including,
without limitation, the National Association of Insurance Commissioners) having
jurisdiction over the undersigned, (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 (vii) in connection with the exercise of any remedy under
the Loan Documents.
In the event the undersigned does not purchase Loans and/or
Commitments or a participants interest in such Loans and/or Commitments under
the Credit Agreement, at the Borrower's, the Agent's or the Lender identified
above's request, the undersigned agrees to return (and to cause its employees,
officers, agents, attorneys, accountants and
2
other professional advisors to return) to the Borrower, the Agent or such
Lender, as the case may be, all written Information provided in connection
therewith and all copies thereof, extracts therefrom and analyses and other
materials based thereon, except that the undersigned shall be permitted to
disclose details of the Information (i) to the extent contemplated hereby and
(ii) to the extent the Borrower and the Agent shall have consented to such
disclosure in writing.
The undersigned further agrees that it will use the Information only
in connection with its evaluation of becoming a possible Loan Participant or
Assignee under the Credit Agreement.
The undertakings contained herein are for the benefit of each of you.
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 WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES
THEREOF.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered as of the date first above written.
[PROSPECTIVE TRANSFEREE]
By:
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Title: