Exhibit 10(a)
EXECUTION VERSION
FINANCING AGREEMENT
DATED AS OF OCTOBER 8, 2003
BY AND AMONG
SOLUTIA INC. AND
SOLUTIA BUSINESS ENTERPRISES, INC.,
AS BORROWERS,
CERTAIN SUBSIDIARIES OF SOLUTIA INC. LISTED AS A GUARANTOR
ON THE SIGNATURE PAGES HERETO,
AS GUARANTORS,
THE LENDERS FROM TIME TO TIME PARTY HERETO,
AS LENDERS,
ABLECO FINANCE LLC,
AS COLLATERAL AGENT,
▇▇▇▇▇ FARGO FOOTHILL, INC.,
AS ADMINISTRATIVE AGENT AND AS JOINT LEAD ARRANGER,
AND
CONGRESS FINANCIAL CORPORATION (CENTRAL),
AS DOCUMENTATION AGENT AND AS JOINT LEAD ARRANGER
EXECUTION VERSION
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS; CERTAIN TERMS............................................................................1
Section 1.01 Definitions........................................................................1
Section 1.02 Terms Generally...................................................................33
Section 1.03 Accounting and Other Terms........................................................33
Section 1.04 Time References...................................................................33
ARTICLE II THE LOANS...........................................................................................34
Section 2.01 Commitments.......................................................................34
Section 2.02 Making the Loans..................................................................35
Section 2.03 Repayment of Loans; Evidence of Debt..............................................38
Section 2.04 Interest..........................................................................39
Section 2.05 Reduction of Commitment; Prepayment of Loans......................................39
Section 2.06 Fees..............................................................................45
Section 2.07 Securitization....................................................................45
Section 2.08 Taxes.............................................................................46
ARTICLE III LETTER OF CREDIT ACCOMMODATIONS....................................................................48
Section 3.01 Letter of Credit Guaranty.........................................................48
Section 3.02 Participations....................................................................51
Section 3.03 Letter of Credit Accommodations...................................................52
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION...............................................................53
Section 4.01 Audit and Collateral Monitoring Fees..............................................53
Section 4.02 Payments; Computations and Statements.............................................53
Section 4.03 Sharing of Payments, Etc..........................................................54
Section 4.04 Apportionment of Payments.........................................................55
Section 4.05 Increased Costs and Reduced Return................................................56
Section 4.06 Joint and Several Liability of the Borrowers......................................58
ARTICLE V CONDITIONS TO LOANS..................................................................................59
Section 5.01 Conditions Precedent to Effectiveness.............................................59
Section 5.02 Conditions Precedent to All Loans and Letter of Credit
Accommodations....................................................................65
ARTICLE VI REPRESENTATIONS AND WARRANTIES......................................................................66
Section 6.01 Representations and Warranties....................................................66
ARTICLE VII COVENANTS OF THE LOAN PARTIES......................................................................75
Section 7.01 Affirmative Covenants.............................................................75
Section 7.02 Negative Covenants................................................................88
Section 7.03 Financial Covenants...............................................................95
ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS AND OTHER COLLATERAL................................99
Section 8.01 Collection of Accounts; Management of Collateral..................................99
Section 8.02 Collateral Custodian.............................................................102
Section 8.03 Collateral Reporting.............................................................102
Section 8.04 Accounts Covenants...............................................................103
Section 8.05 Inventory Covenants..............................................................104
ARTICLE IX EVENTS OF DEFAULT..................................................................................105
Section 9.01 Events of Default................................................................105
ARTICLE X AGENTS..............................................................................................109
Section 10.01 Appointment......................................................................109
Section 10.02 Nature of Duties.................................................................110
Section 10.03 Rights, Exculpation, Etc.........................................................110
Section 10.04 Reliance.........................................................................111
Section 10.05 Indemnification..................................................................111
Section 10.06 Agents Individually..............................................................111
Section 10.07 Successor Agent..................................................................112
Section 10.08 Collateral Matters...............................................................112
Section 10.09 Agency for Perfection............................................................113
ARTICLE XI GUARANTY...........................................................................................114
Section 11.01 Guaranty.........................................................................114
Section 11.02 Guaranty Absolute................................................................114
Section 11.03 Waiver...........................................................................115
Section 11.04 Continuing Guaranty; Assignments.................................................116
Section 11.05 Subrogation......................................................................116
ARTICLE XII MISCELLANEOUS.....................................................................................117
Section 12.01 Notices, Etc.....................................................................117
Section 12.02 Amendments, Etc..................................................................118
Section 12.03 No Waiver; Remedies, Etc.........................................................119
Section 12.04 Expenses; Taxes; Attorneys' Fees.................................................119
Section 12.05 Right of Set-off.................................................................120
Section 12.06 Severability.....................................................................121
Section 12.07 Assignments and Participations...................................................121
Section 12.08 Counterparts.....................................................................124
Section 12.09 GOVERNING LAW....................................................................124
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE............................124
Section 12.11 WAIVER OF JURY TRIAL, ETC........................................................125
Section 12.12 Consent by the Agents and Lenders................................................126
Section 12.13 No Party Deemed Drafter..........................................................126
Section 12.14 Reinstatement; Certain Payments..................................................126
Section 12.15 Indemnification..................................................................126
Section 12.16 Parent as Agent for Borrowers....................................................127
Section 12.17 Records..........................................................................128
Section 12.18 Binding Effect...................................................................128
Section 12.19 Interest.........................................................................128
Section 12.20 Confidentiality..................................................................129
Section 12.21 Integration......................................................................130
Section 12.22 Intercreditor Agreement..........................................................130
Section 12.23 Dutch Security Agreement.........................................................130
SCHEDULE AND EXHIBITS
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Schedule 1.01(A) Lenders and Lenders' Commitments
Schedule 1.01(B) Cash Restructuring Charges
Schedule 3.01 Existing Letters of Credit
Schedule 6.01(e) Subsidiaries
Schedule 6.01(f) Litigation; Commercial Tort Claims
Schedule 6.01(i) ERISA
Schedule 6.01(l) Nature of Business
Schedule 6.01(o) Real Property
Schedule 6.01(q) Operating Lease Obligations
Schedule 6.01(r) Environmental Matters
Schedule 6.01(s) Insurance
Schedule 6.01(u) Bank Accounts
Schedule 6.01(v) Intellectual Property
Schedule 6.01(w) Material Contracts
Schedule 6.01(y) Employee and Labor Matters
Schedule 6.01(aa) Name; Jurisdiction of Organization; Organizational ID Number; Chief
Place of Business; Chief Executive Office; FEIN
Schedule 6.01(bb) Collateral Locations
Schedule 7.01(s) Post-Closing Delivery
Schedule 7.02(a) Existing Liens
Schedule 7.02(b) Existing Indebtedness
Schedule 7.02(c)(i) Permitted Dispositions
Schedule 7.02(e) Existing Investments
Schedule 7.02(k) Limitations on Dividends and Other Payment Restrictions
Schedule 7.03 Designated Business Segments
Schedule 8.01 Cash Management Banks and Cash Management Accounts
Exhibit A Form of Guaranty
Exhibit B Form of Security Agreement
Exhibit C Form of Pledge Agreement
Exhibit D Form of Notice of Borrowing
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Intercompany Subordination Agreement
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Landlord Waiver
Exhibit J Form of Contribution Agreement
FINANCING AGREEMENT
Financing Agreement, dated as of October 8, 2003, by and
among Solutia Inc., a Delaware corporation (the "Parent"), and Solutia
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Business Enterprises, Inc., a New York corporation ("Solutia Business" and
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together with the Parent, each a "Borrower" and collectively, the
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"Borrowers"), each subsidiary of the Parent listed as a "Guarantor" on the
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signature pages hereto (each a "Guarantor" and collectively, the
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"Guarantors"), the lenders from time to time party hereto (each a "Lender"
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and collectively, the "Lenders"), Ableco Finance LLC, a Delaware limited
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liability company ("Ableco"), as collateral agent for the Lenders (in such
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capacity, the "Collateral Agent"), ▇▇▇▇▇ Fargo Foothill, Inc., a California
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corporation ("Foothill"), as administrative agent for the Lenders (in such
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capacity, the "Administrative Agent"), and Congress Financial Corporation
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(Central), an Illinois corporation ("Congress"), as documentation agent for
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the Lenders (in such capacity, the "Documentation Agent" and together with
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the Collateral Agent and the Administrative Agent, each an "Agent" and
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collectively, the "Agents").
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RECITALS
The Borrowers have asked the Lenders to extend credit to
the Borrowers consisting of three separate revolving credit facilities in an
aggregate principal amount for all such facilities not to exceed
$350,000,000 at any time outstanding. The revolving A credit facility will
include a $150,000,000 subfacility for the issuance of letters of credit.
The proceeds of the loans made under the revolving credit facilities shall
be used to refinance existing indebtedness of the Borrowers and the
Guarantors, for general working capital purposes of the Borrowers and the
Guarantors and to pay fees and expenses related to this Agreement. The
letters of credit shall be used to support the Parent's obligations under
the Astaris Guaranty (as hereinafter defined) and for general corporate and
working capital purposes. The Lenders are severally, and not jointly,
willing to extend such credit to the Borrowers subject to the terms and
conditions hereinafter set forth.
In consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
Section 1.01 Definitions. As used in this Agreement, the
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following terms shall have the respective meanings indicated below, such
meanings to be applicable equally to both the singular and plural forms of
such terms:
"Ableco" has the meaning specified therefor in the
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preamble hereto.
"Account Debtor" means each debtor, customer or obligor in
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any way obligated on or in connection with any Account.
"Accounts" means, as to each Loan Party, all present and
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future rights of such Loan Party to payment of a monetary obligation,
whether or not earned by performance, (a) for
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property that has been or is to be sold, leased, assigned, or otherwise
disposed of, (b) for services rendered or to be rendered, or (c) for a
secondary obligation incurred or to be incurred.
"Action" has the meaning specified therefor in Section
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12.12.
"Administrative Agent" has the meaning specified therefor
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in the preamble hereto.
"Administrative Agent's Account" means an account at a
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bank designated by the Administrative Agent from time to time as the account
into which the Loan Parties shall make all payments to the Administrative
Agent for the benefit of the Agents and the Lenders under this Agreement and
the other Loan Documents.
"Administrative Borrower" has the meaning specified
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therefor in Section 12.16.
"Affiliate" means, with respect to any Person, any other
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Person that directly or indirectly through one or more intermediaries,
controls, 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 (i) vote 10% or more of the Capital Stock
having ordinary voting power for the election of directors of such Person or
(ii) direct or cause the direction of the management and policies of such
Person whether by contract or otherwise. Notwithstanding anything herein to
the contrary, in no event shall any Agent or any Lender be considered an
"Affiliate" of any Loan Party.
"After Acquired Property" has the meaning specified
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therefor in Section 7.01(n).
"Agent" and "Agents" have the respective meanings
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specified therefor in the preamble hereto.
"Agent Advances" has the meaning specified therefor in
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Section 10.08(a).
"Agreement" means this Financing Agreement, including all
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amendments, modifications and supplements and any exhibits or schedules to
any of the foregoing, and shall refer to the Agreement as the same may be in
effect at the time such reference becomes operative.
"Assignment and Acceptance" means an assignment and
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acceptance entered into by an assigning Lender and an assignee, and accepted
by the Collateral Agent, in accordance with Section 12.07 hereof and
substantially in the form of Exhibit H hereto or such other form acceptable
to the Collateral Agent.
"Astaris" means Astaris LLC, a Delaware limited liability
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company.
"Astaris Agent" means Bank of America, N.A., in its capacity
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as administrative agent for the Astaris Lenders.
"Astaris Credit Agreement" means the Five Year Credit
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Agreement, dated as of September 14, 2000, among Astaris, the Astaris
Lenders and the Astaris Agent.
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"Astaris Guaranty" means the Guaranty Agreement, dated
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September 14, 2000, made by the Parent in favor of Astaris, the Astaris
Lenders and the Astaris Agent.
"Astaris Lenders" means the lenders from time to time
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party to the Astaris Credit Agreement.
"Authorized Officer" means, with respect to any Person,
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the chief executive officer, chief financial officer, president, treasurer,
assistant treasurer, controller or assistant controller of such Person.
"Availability" means, at any time, an amount equal to the
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sum of (i) difference between (a) the lesser of (I) the Borrowing Base and
(II) the Total Revolving A Credit Commitment and (b) the sum of (I) the
aggregate outstanding principal amount of all Revolving A Loans and (II) all
Letter of Credit Obligations, and (ii) the amount of cash of the Loan
Parties deposited in a bank account subject to a Cash Management Agreement
or a Concentration Account Agreement.
"Bailee's Letter" means a letter in form and substance
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reasonably acceptable to the Collateral Agent and the Administrative Agent
and executed by any Person (other than a Loan Party) that is in possession
of any Collateral on behalf of such Loan Party pursuant to which such Person
acknowledges the Lien of the Collateral Agent for the benefit of the Agents
and the Lenders with respect thereto.
"Bankruptcy Code" means the United States Bankruptcy Code
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(11 U.S.C. Section 101, et seq.), as amended, and any successor statute.
"Board" means the Board of Governors of the Federal
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Reserve System of the United States.
"Board of Directors" means, with respect to any Person,
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the board of directors (or comparable managers) of such Person or any
committee thereof duly authorized to act on behalf of the board.
"Book Value" means, with respect to any Inventory of any
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Person, the lower of (i) cost (as reflected in the general ledger of such
Person before customary reserves established by such Person in good faith
and in accordance with GAAP) and (ii) market value, in each case, determined
in accordance with GAAP calculated on a first-in first-out basis.
"Borrower" and "Borrowers" have the respective meanings
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specified therefor in the preamble hereto.
"Borrowing Base" means, at any time, the difference
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between (i) the sum of (A) up to 85% of the value of the Net Amount of
Eligible Accounts at such time less the amount, if any, of the Dilution
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Reserve plus (B) the sum of up to (x) 60% of the Book Value of the Eligible
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Inventory constituting finished goods at such time plus (y) 40% of the Book
Value of the Eligible Inventory constituting raw materials at such time plus
(z) the lesser of (i) 30% of the Book Value of the Eligible Inventory
constituting the Designated Chemicals at such time and (ii) $10,000,000 and
(ii) such reserves as the Administrative Agent or the Documentation Agent
may deem appropriate
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in the exercise of their business judgment made in good faith and exercised
reasonably based upon the lending practices of the Administrative Agent or
the Documentation Agent consistent with the general practices in the
commercial finance industry.
"Borrowing Base Certificate" means a certificate signed by
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an Authorized Officer of the Administrative Borrower and setting forth the
calculation of the Borrowing Base in compliance with Section 7.01(a)(vi),
substantially in the form of Exhibit E.
"Business Day" means any day other than a Saturday, Sunday
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or other day on which commercial banks in New York City are authorized or
required to close.
"Capital Expenditures" means, with respect to any Person
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for any period, the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should
be included in "property, plant and equipment" or in a similar fixed asset
account on its balance sheet, whether such expenditures are paid in cash or
financed and including all Capitalized Lease Obligations paid or payable
during such period; provided, that the term "Capital Expenditure" shall not
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include (a) expenditures made in connection with the replacement,
substitution or restoration of assets or the purchase of any other assets
used or useful in the business of such Person (i) to the extent financed
from insurance proceeds paid on account of the loss of or damage to the
assets of any such Person or its Subsidiaries or (ii) with awards of
compensation arising from the taking by eminent domain or condemnation of
the assets of any such Person or its Subsidiaries, and (b) the purchase
price of equipment that is purchased simultaneously with the trade-in of
existing equipment to the extent that the gross amount of such purchase
price is reduced by the credit granted by the seller of such equipment for
the equipment being traded in at such time.
"Capital Guideline" means any law, rule, regulation,
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policy, guideline or directive (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) of any
central bank or Governmental Authority (i) regarding capital adequacy,
capital ratios, capital requirements, the calculation of a bank's capital or
similar matters, or (ii) affecting the amount of capital required to be
obtained or maintained by any Lender, any Person controlling any Lender, or
the L/C Issuer or the manner in which any Lender, any Person controlling any
Lender, or the L/C Issuer allocates capital to any of its contingent
liabilities (including letters of credit), advances, acceptances,
commitments, assets or liabilities.
"Capital Stock" means (i) with respect to any Person that
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is a corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate
stock, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership or other equity interests of such Person.
"Capitalized Lease" means, with respect to any Person, any
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lease of real or personal property by such Person as lessee which is (i)
required under GAAP to be capitalized on the balance sheet of such Person or
(ii) a transaction of a type commonly known as a "synthetic lease" (i.e., a
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lease transaction that is treated as an operating lease for accounting
purposes but with respect to which payments of rent are intended to be
treated as payments of principal and interest on a loan for Federal income
tax purposes); provided that, the term Capitalized Lease shall not include
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the Headquarters Lease.
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"Capitalized Lease Obligations" means, with respect to any
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Person, obligations of such Person and its Subsidiaries under Capitalized
Leases, and, for purposes hereof, the amount of any such obligation shall be
the capitalized amount thereof determined in accordance with GAAP.
"Cash Management Accounts" means those bank accounts of
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each Loan Party listed on Schedule 8.01 that are maintained at one or more
Cash Management Banks listed on Schedule 8.01.
"Cash Management Agreements" means those certain cash
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management service agreements, in form and substance satisfactory to the
Administrative Agent, each of which is among the applicable Loan Party, the
Administrative Agent and one of the Cash Management Banks.
"Cash Management Bank" has the meaning specified therefor
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in Section 8.01(a).
"Change of Control" means each occurrence of any of the
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following:
(a) the acquisition, directly or indirectly, by
any person or group (within the meaning of Section 13(d)(3) of the Exchange
Act) of beneficial ownership of more than 33% of the aggregate outstanding
voting power of the Capital Stock of the Parent;
(b) the Parent shall cease to have beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 100% of the aggregate voting power of the Capital Stock of
each other Loan Party, Solutia Europe, Solutia Dutch Newco and the
Subsidiaries of Solutia Dutch Newco, free and clear of all Liens (other than
any Liens granted under the Loan Documents and Permitted Liens), except to
the extent resulting from a transaction specifically permitted under Section
7.02(c);
(c) (i) any Loan Party consolidates or
amalgamates with or merges into another entity or conveys, transfers or
leases all or substantially all of its property and assets to another
Person, or (ii) any entity consolidates or amalgamates with or merges into
any Loan Party in a transaction pursuant to which the outstanding voting
Capital Stock of such Loan Party is reclassified or changed into or
exchanged for cash, securities or other property, other than (A) any such
transaction described in this clause (ii) in which either (x) in the case of
any such transaction involving the Parent, no person or group (within the
meaning of Section 13(d)(3) of the Exchange Act) has, directly or
indirectly, acquired beneficial ownership of more than 33% of the aggregate
outstanding voting Capital Stock of the Parent or (y) in the case of any
such transaction involving a Loan Party other than the Parent, Solutia
Europe, Solutia Dutch Newco and the Subsidiaries of Solutia Dutch Newco, the
Parent has beneficial ownership, directly or indirectly, of 100% of the
aggregate voting power of all Capital Stock of the resulting, surviving or
transferee entity and (B) to the extent resulting from a transaction
specifically permitted under Section 7.02(c); or
(d) the occurrence of a "Change of Control" (or
any similar defined term or concept) under, and as defined in, the 1997
Indenture, the 2009 Note Indenture or the Euro Indenture, to the extent the
Parent or any of its Subsidiaries have any outstanding obligations under the
applicable Indenture.
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"Collateral" means all of the property and assets and all
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interests therein and proceeds thereof now owned or hereafter acquired by
any Person upon which a Lien is granted or purported to be granted by such
Person as security for all or any part of the Obligations.
"Collateral Agent" has the meaning specified therefor in
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the preamble hereto.
"Collections" means all cash, checks, notes, instruments
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and other items of payment (including insurance proceeds, proceeds of cash
sales, rental proceeds and tax refunds) of the Loan Parties.
"Concentration Account" means the bank accounts of the
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Loan Parties designated as the "Concentration Accounts" on Schedule 8.01
maintained at the Concentration Account Banks, into which cash received in
the Cash Management Accounts is wired as provided in Section 8.01.
"Concentration Account Agreement" means a control
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agreement among any Loan Party, the Concentration Account Banks and the
Administrative Agent, in form and substance satisfactory to the Collateral
Agent and the Administrative Agent, applicable to the Concentration Account.
"Concentration Account Banks" means each of the banks
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identified on Schedule 8.01 as a "Concentration Account Bank", or such other
Person or Persons as the Administrative Borrower (with the prior written
consent of the Administrative Agent) may designate from time to time.
"Congress" has the meaning specified therefor in the
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preamble hereto.
"Consolidated EBITDA" means, with respect to any Person
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for any period, the Consolidated Net Income of such Person and its
Subsidiaries for such period, plus (i) without duplication, the sum of the
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following amounts of such Person and its Subsidiaries for such period to the
extent deducted in determining Consolidated Net Income of such Person for
such period: (A) Consolidated Net Interest Expense, (B) income tax expense,
(C) depreciation expense, and (D) amortization expense.
"Consolidated Net Income" means, with respect to any
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Person for any period, the net income (loss) of such Person and its
Subsidiaries for such period, determined on a consolidated basis and in
accordance with GAAP, but excluding from the determination of Consolidated
Net Income (without duplication) (a) any extraordinary or non recurring
gains or non-cash losses or gains or losses from Dispositions, (b) non-cash
restructuring charges, (c) the cash charges set forth on Schedule 1.01(B) to
the extent that (i) the aggregate amount of such cash charges do not exceed
$102,000,000 and (ii) the aggregate amount of such cash charges do not
exceed $10,000,000 in 2003, $83,000,000 in 2004, and $38,000,000 in 2005,
(d) effects of discontinued operations and (e) interest income excluding
income from joint ventures.
"Consolidated Net Interest Expense" means, with respect to
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any Person for any period, gross interest expense of such Person and its
Subsidiaries for such period determined on a consolidated basis and in
accordance with GAAP (including, without limitation, interest expense paid
to Affiliates of such Person), less (i) the sum of (A) interest income for
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such period and
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(B) gains for such period on Hedging Agreements excluding commodity,
currency and equity Hedging Agreements (to the extent not included in
interest income above and to the extent not deducted in the calculation of
gross interest expense), plus (ii) the sum of (A) losses for such period on
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Hedging Agreements excluding commodity, currency and equity Hedging
Agreements (to the extent not included in gross interest expense) and (B)
the upfront costs or fees for such period associated with Hedging Agreements
(to the extent not included in gross interest expense), in each case,
determined on a consolidated basis and in accordance with GAAP.
"Contingent Obligation" means, with respect to any Person,
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any obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly
or indirectly, including, without limitation, (i) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of a primary obligor, (ii) the
obligation to make take-or-pay or similar payments, if required, regardless
of nonperformance by any other party or parties to an agreement, (iii) any
obligation of such Person, whether or not contingent, (A) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (B) to advance or supply funds (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, (C) to purchase property, assets,
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 (D) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
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include (x) customary indemnification obligations which are (I) provided in
the ordinary course to the directors, officers, employees, agents,
independent contractors or service providers of the Parent or any of its
Subsidiaries or (II) in connection with the sale or disposition of property,
(y) indemnification obligations given in the Indentures, and (z) any product
warranties extended in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms
of the instrument evidencing such Contingent Obligation) or, if not stated
or determinable, the maximum reasonably anticipated liability with respect
thereto (assuming such Person is required to perform thereunder), as
determined by such Person in good faith.
"Contribution Agreement" means the Contribution Agreement,
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dated as of the Effective Date, among the Loan Parties, substantially in the
form of Exhibit J.
"Current Value" has the meaning specified therefor in
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Section 7.01(n).
"Default" means an event which, with the giving of notice
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or the lapse of time or both, would constitute an Event of Default.
"Designated A Business Segment" means the business segment
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of the Parent and its Subsidiaries described on Part A of Schedule 7.03.
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"Designated B Business Segment" means the business segment
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of the Parent and its Subsidiaries described on Part B of Schedule 7.03.
"Designated Business" means the line of business of the
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Parent and Solutia Europe identified as the "Designated Business" in Part A
of Schedule 7.02(c)(i).
"Designated Business Disposition" has the meaning
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specified therefor in Section 7.02(c)(i).
"Designated Chemicals" means Acrylonitrite, Cyclohexane,
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Adiponitrile and Nylon Salt to the extent such chemicals are classified as
work-in-process in the books and records of the Loan Parties and saleable in
their current form in the ordinary course of business.
"Designated Disposition" means the Designated Business
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Disposition and the Designated Subsidiaries Disposition.
"Designated Subsidiaries" means the Foreign Subsidiaries
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identified as the "Designated Subsidiaries" in Part B of Schedule
7.02(c)(i).
"Designated Subsidiaries Disposition" has the meaning
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specified therefor in Section 7.02(c)(i).
"Dilution" means, as of any date of determination, a
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percentage, based upon the experience of the immediately prior 12-month
period, that is the result of dividing the Dollar amount of (a) bad debt
write-downs, discounts, advertising allowances, credits, or other dilutive
items with respect to the Accounts during such period, by (b) the Loan
Parties' gross ▇▇▇▇▇▇▇▇ during such period.
"Dilution Reserve" means, as of any date of determination,
----------------
an amount sufficient to reduce the advance rate against Eligible Accounts by
one percentage point for each percentage point by which Dilution is in
excess of 5.0%.
"Disposition" means (i) any transaction, or series of
-----------
related transactions, pursuant to which any Person or any of its
Subsidiaries sells, assigns, transfers or otherwise disposes of any property
or assets (whether now owned or hereafter acquired) to any other Person, in
each case, whether or not the consideration therefor consists of cash,
securities or other assets owned by the acquiring Person, excluding any
---------
sales of Inventory in the ordinary course of business on ordinary business
terms, and (ii) to the extent not included in clause (i) above, any "Asset
Sale" as such term is defined in the 2009 Note Indenture to the extent the
Parent or any of its Subsidiaries have any outstanding obligations under
such Indenture.
"Documentation Agent" has the meaning specified therefor
-------------------
in the preamble hereto.
"Dollar," "Dollars" and the symbol "$" each means lawful
------ ------- -
money of the United States of America.
- 8 -
"Domestic Subsidiary" means any Subsidiary of a Loan Party
-------------------
that is organized under the laws of the United States or any state thereof.
"Dutch Security Agreement" has the meaning specified
------------------------
therefor in Section 12.23.
"Effective Date" means the date, on or before October 8,
--------------
2003, on which all of the conditions precedent set forth in Section 5.01 are
satisfied or waived and the initial Loans are made and/or the initial
Letters of Credit are issued.
"Eligible Accounts" means the Accounts of a Loan Party
-----------------
which are, and at all times continue to be, acceptable to the Administrative
Agent in the exercise of its business judgment made in good faith and
exercised reasonably based upon lending practices of the Administrative
Agent consistent with the general practices in the commercial finance
industry. Eligible Accounts shall be calculated net of customer deposits and
unapplied cash remitted to any of the Loan Parties. In general, an Account
may be deemed to be eligible if: (i) delivery of the merchandise or the
rendition of the services has been completed with respect to such Account;
(ii) no return, rejection, repossession or dispute has occurred with respect
to such Account, the Account Debtor has not asserted any setoff, defense or
counterclaim with respect to such Account, and there has not occurred any
extension of the time for payment with respect to such Account without the
consent of the Administrative Agent, provided that, in the case of any
--------
dispute, setoff, defense or counterclaim with respect to an Account, the
portion of such Account not subject to such dispute, setoff, defense or
counterclaim will not be ineligible solely by reason of this clause (ii);
(iii) such Account is lawfully owned by a Loan Party free and clear of any
Lien other than in favor of the Collateral Agent for the benefit of the
Agents and the Lenders and in favor of the 2009 Note Trustee for the benefit
of the 2009 Note Holders and otherwise continues to be in full conformity
with all representations and warranties made by a Loan Party to the Agents
and the Lenders with respect thereto in the Loan Documents; (iv) such
Account is unconditionally payable in Dollars within 90 days from the
invoice date and is not evidenced by a promissory note, chattel paper or any
other instrument or other document; (v) no more than 60 days have elapsed
from the invoice due date and no more than 90 days have elapsed from the
invoice date with respect to such Account; (vi) such Account is not due from
an Affiliate of a Loan Party; (vii) such Account does not constitute an
obligation of the United States or any other Governmental Authority (unless
all steps required by the Administrative Agent in connection therewith,
including notice to the United States Government under the Federal
Assignment of Claims Act or any action under any state statute comparable to
the Federal Assignment of Claims Act, have been duly taken in a manner
satisfactory to the Administrative Agent); (viii) the Account Debtor (or the
applicable office of the Account Debtor) with respect to such Account is
located in the United States, unless such Account is supported by a letter
of credit or other similar obligation satisfactory to the Administrative
Agent; (ix) the Account Debtor with respect to such Account is not also a
supplier to or creditor of a Loan Party, unless such Account Debtor has
executed a no-offset letter satisfactory to the Administrative Agent; (x)
not more than 25% of the aggregate amount of all Accounts of the Account
Debtor with respect to such Account have remained unpaid 60 days past the
invoice due date or 90 days past the invoice date or are otherwise not
Eligible Accounts; (xi) the Account Debtor with respect to such Account (A)
has not filed a petition for bankruptcy or any other relief under the
Bankruptcy Code or any other law relating to bankruptcy, insolvency,
reorganization or relief of debtors, made an assignment for the benefit of
creditors, had filed against it any petition or other application for
- 9 -
relief under the Bankruptcy Code or any such other law, (B) has not failed,
suspended business operations, become insolvent or called a meeting of its
creditors for the purpose of obtaining any financial concession or
accommodation or (C) has not had or suffered to be appointed a receiver or a
trustee for all or a significant portion of its assets or affairs; (xii)
such Accounts are not subject to collection by an outside claims processor;
(xiii) the otherwise Eligible Accounts of any Account Debtor do not exceed
10% of all Eligible Accounts (unless the Account Debtor is ▇▇▇▇ Industries
Inc. or Mohawk Industries, in either of which cases to the extent that the
otherwise Eligible Accounts of such Account Debtor do not exceed 15% of all
Eligible Accounts), provided, that such percentage as applied to a
--------
particular Account Debtor and its Affiliates are subject to change by the
Administrative Agent in its reasonable business judgment (based upon its
lending practices) if the creditworthiness of such Account Debtor
deteriorates; (xiv) such Account does not arise in a transaction wherein
goods are placed on consignment or are sold pursuant to a guaranteed sale, a
sale or return, a sale on approval, a ▇▇▇▇ and hold, or any other terms by
reason of which the payment by the Account Debtor may be conditional; (xv)
such Account is not from an Account Debtor that is located in a state or
jurisdiction (e.g., New Jersey, Minnesota, and West Virginia) that requires,
as a condition to access to the courts of such jurisdiction, that a creditor
qualify to transact business, file a business activities report or other
report or form, or take one or more other actions, unless the applicable
Loan Party has so qualified, filed such reports or forms, or taken such
actions (and, in each case, paid any required fees or other charges), except
to the extent such Loan Party may qualify subsequently as a foreign entity
authorized to transact business in such state or jurisdiction and gain
access to such courts, without incurring any cost or penalty viewed by the
Administrative Agent to be significant in amount, and such later
qualification cures any access to such courts to enforce payment of such
Account; (xvi) such Accounts with respect to which (A) the goods giving rise
to such Accounts have been shipped and billed to the Account Debtor or (B)
the services giving rise to such Account have been performed and billed to
the Account Debtor; (xvii) such Accounts do not represent a right to receive
progress payments and other advance ▇▇▇▇▇▇▇▇ that are due prior to the
completion of performance by the applicable Loan Party of the subject
contract for goods or services; and (xviii) the Administrative Agent is, and
continues to be, satisfied with the credit standing of the Account Debtor in
relation to the amount of credit extended and the Administrative Agent
believes, in its discretion, that the prospect of collection of such Account
is not impaired for any reason.
"Eligible Inventory" means all finished goods, raw
------------------
materials, work-in-process constituting the Designated Chemicals Inventory
of a Loan Party that meets all of the following specifications, provided
--------
that such specifications may be fixed and revised from time to time by the
Administrative Agent in the exercise of its business judgment made in good
faith and exercised reasonably based upon lending practices of the
Administrative Agent consistent with the general practices in the commercial
finance industry: (i) such Inventory is lawfully owned by a Loan Party free
and clear of any existing Lien other than in favor of the Collateral Agent
for the benefit of the Agents and the Lenders and in favor of the 2009 Note
Trustee for the benefit of the 2009 Note Holders and otherwise continues to
be in full conformity with all representations and warranties made by a Loan
Party to the Agents and the Lenders with respect thereto in the Loan
Documents; (ii) such Inventory is not held on consignment and may be
lawfully sold; (iii) a Loan Party has the right to grant Liens on such
Inventory; (iv) such Inventory arose or was acquired in the ordinary course
of the business of a Loan Party and does not represent damaged, obsolete or
unsaleable goods; (v) no Account or document of title has been created or
issued with respect to
- 10 -
such Inventory; (vi) such Inventory is located in one of the locations in
one of the continental United States that is either owned by a Loan Party or
listed on Schedule 6.01(bb) and such location has Inventory with an
aggregate Book Value of at least $100,000 or such other locations in the
continental United States as the Collateral Agent and the Administrative
Agent may approve in writing from time to time; (vii) such Inventory does
not consist of goods returned or rejected by a Loan Party's customers (other
than goods that are undamaged and resalable in the normal course of
business); (viii) such Inventory is not in-transit (except between locations
specified on Schedule 6.01(bb); (ix) such Inventory does not consist of
goods that are slow moving, work-in-process (other than the Designated
Chemicals), supplies or goods that constitute spare parts, packaging and
shipping materials, ▇▇▇▇ and hold goods or defective goods; (x) in the case
of raw materials used in the manufacture of finished goods, such raw
materials have been acquired by the Loan Parties during the previous twelve
months; (xi) if such Inventory consists of finished goods Inventory sold
under a licensed trademark or if such Inventory contains or uses a medium
subject to a copyright (A) the Collateral Agent shall have entered into a
waiver letter, in form and substance satisfactory to the Administrative
Agent and the Collateral Agent, with the licensor with respect to the rights
of the Collateral Agent to use the licensed trademark or copyright to sell
or otherwise dispose of such Inventory or (B) the Administrative Agent and
the Collateral Agent shall otherwise be satisfied, in their sole discretion,
that the Collateral Agent has rights to sell or dispose of such Inventory;
and (xii) such Inventory is and at all times shall continue to be acceptable
to the Administrative Agent.
"Employee Plan" means an employee benefit plan (other than
-------------
a Multiemployer Plan) covered by Title IV of ERISA and maintained (or that
was maintained at any time during the six (6) calendar years preceding the
date of any borrowing hereunder) for employees of any Loan Party or any of
its ERISA Affiliates or was contributed to or was required to be contributed
to by a Loan Party or any of its ERISA Affiliates.
"Environmental Actions" means any complaint, summons,
---------------------
citation, notice of violation, directive, order, claim, litigation,
investigation, judicial or administrative proceeding, judgment, letter or
other written communication from any Person or Governmental Authority
involving violations of Environmental Laws or Releases of Hazardous
Materials (i) from any assets, properties or businesses owned or operated by
any Loan Party or any of its Subsidiaries or any corporate predecessor; or
(ii) onto any facilities which received Hazardous Materials generated by any
Loan Party or any of its Subsidiaries or any corporate predecessor.
"Environmental Laws" means the Comprehensive Environmental
------------------
Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq.,
------
as amended; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C.
----
6901 et seq., as amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq.,
---
as amended; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended;
---
the Occupational Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq., as
----
amended; Toxic Substances Control Act ("TSCA"), 15 U.S.C. 2601 et seq., as
----
amended; Hazardous Materials Transportation Act, 49 U.S.C. 5101 et seq., as
amended; the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"),
-----
7 U.S.C. 136-136y et seq., as amended; the Emergency Planning and Community
Right-to-Know Act of 1986 (Title III of ▇▇▇▇ or "EPCRA"); 42 U.S.C. 11001,
-----
et seq., as amended, and any other foreign, federal, state, local or
municipal laws, statutes, regulations, guidance documents, rules having the
force of law or
- 11 -
ordinances imposing liability or establishing standards of conduct for the
Release or Handling of Hazardous Materials and the protection of the health,
safety and the environment.
"Environmental Liabilities and Costs" means any monetary
-----------------------------------
obligations, losses, liabilities (including strict liability), damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all reasonable out-of-pocket fees, disbursements and expenses of
counsel, out-of-pocket expert and consulting fees and out-of-pocket costs
for environmental site assessments, remedial investigation and feasibility
studies), fines, penalties, sanctions and interest incurred as a result of
any Environmental Action brought by any Governmental Authority, Person or
any third party which relate to any violations of Environmental Laws,
Handling of Hazardous Materials, Remedial Actions, Releases or threatened
Releases of Hazardous Materials from or onto (i) any property presently or
formerly owned by any Loan Party or any of its Subsidiaries or a corporate
predecessor, or (ii) any facility that received Hazardous Materials that
were generated or Handled by any Loan Party or any of its Subsidiaries or a
corporate predecessor.
"Environmental Lien" means any Lien in favor of any
------------------
Governmental Authority for Environmental Liabilities and Costs.
"Environmental Permits" means any permits, licenses,
---------------------
certificates, exemptions, authorizations, registrations or approvals
required by any Governmental Authority or under Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act
-----
of 1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case, as in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means, with respect to any Person, any
---------------
trade or business (whether or not incorporated) which is a member of a group
of which such Person is a member and which would be deemed to be a
"controlled group" within the meaning of Sections 414(b), (c), (m) and (o)
of the Internal Revenue Code.
"Euro" or "(euro)" means the single currency of
---- ------
participating member states of the European Union.
"Euro Indenture" means the Fiscal Agency Agreement, dated
--------------
as of February 11, 2000, by and between Solutia Europe, as issuer, the
Parent, as guarantor, Kredietbank S.A. Luxenbourgeoise, as fiscal agent and
KBC Bank NV, as paying agent, as the same may be amended, restated or
otherwise modified in accordance with the terms hereof.
"Euro Notes" means, collectively, the 6.25% Notes of
----------
Solutia Europe in the original aggregate principal amount of 200,000,000
Euros issued pursuant to the Euro Indenture, as the same may from time to
time be amended, restated or otherwise modified in accordance with the terms
hereof.
"Event of Default" means any of the events set forth in
----------------
Section 9.01.
- 12 -
"Exchange Act" means the Securities Exchange Act of 1934,
------------
as amended.
"Excluded Material Contracts" means the Material Contracts
---------------------------
identified on Schedule 6.01(w) as the "Excluded Material Contracts".
"Existing Agent" means Citibank, N.A., as administrative
--------------
agent under the Existing Credit Facility.
"Existing Credit Facility" means the Second Amended and
------------------------
Restated Credit Agreement, dated as of July 25, 2002, among the Parent, as
borrower, the Existing Lenders, Bank of America, N.A., as syndication agent,
the Existing Agent and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and Banc of America
Securities LLC, as co-lead arrangers and co-book managers, as amended to
date.
"Existing Lenders" means the lenders party to the Existing
----------------
Credit Facility.
"Existing Non-Sharing Secured Parties" means,
------------------------------------
collectively, the Existing Non-Sharing Secured Party Collateral Agent, the
Existing Lenders (including any affiliate of an Existing Lender that shall
have entered into a hedging agreement giving rise to a Hedging Obligation
(as defined in the Existing Credit Agreement)), the Astaris Lenders, the
Existing Agent and the Astaris Agent.
"Existing Non-Sharing Secured Party Collateral Agent"
---------------------------------------------------
means Citibank, N.A., as collateral agent for the Existing Non-Sharing
Secured Parties.
"Existing Sharing Secured Parties" means, collectively,
--------------------------------
the Existing Non-Sharing Secured Party Collateral Agent, the Existing
Sharing Secured Party Collateral Trustee, the Existing Non-Sharing Secured
Parties and the 2009 Note Holders, the 2009 Note Trustee, and the applicable
agents and trustees under, and holders of, the 1997 Debentures and the Euro
Notes.
"Existing Sharing Secured Party Collateral Trustee" means
-------------------------------------------------
HSBC Bank USA, a New York banking corporation and trust company, as
collateral trustee for the Existing Sharing Secured Parties.
"Existing Sharing Security Documents" means the "Sharing
-----------------------------------
Security Documents", as such term is defined in the Existing Credit
Agreement.
"Extraordinary Receipts" means any cash received by the
----------------------
Parent or any of its Subsidiaries not in the ordinary course of business
(and not consisting of proceeds described in Section 2.05(c)(iii)),
including, without limitation, (i) foreign, United States, state or local
tax refunds, (ii) pension plan reversions, (iii) proceeds of insurance, (iv)
judgments, proceeds of settlements or other consideration of any kind in
connection with any cause of action, (v) condemnation awards (and payments
in lieu thereof), (vi) indemnity payments and (vii) any purchase price
adjustment received in connection with any purchase agreement.
"Facility" means each parcel of real property identified
--------
as a "Facility" on Schedule 6.01(o) that is owned by a Loan Party on the
Effective Date, including, without
- 13 -
limitation, the land on which such facility is located, all buildings and
other improvements thereon, all fixtures located at or used in connection
with such facility, all whether now or hereafter existing.
"Federal Funds Rate" means, for any period, a fluctuating
------------------
interest rate per annum equal to, for each day during such period, 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 such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" means the Fee Letter, dated as of the
----------
Effective Date, addressed to the Collateral Agent.
"Field Survey and Audit" means a field survey and audit of
----------------------
the Loan Parties and an appraisal of the Collateral performed by auditors,
examiners and/or appraisers selected by the Agents, at the sole cost and
expense of the Borrowers.
"Final Maturity Date" means October 8, 2006, or such
-------------------
earlier date on which the Loans shall become due and payable in accordance
with the terms of this Agreement and the other Loan Documents.
"Financial Statements" means (i) the audited consolidated
--------------------
balance sheet of the Parent and its Subsidiaries for the Fiscal Year ended
December 31, 2002, and the related consolidated statement of operations,
shareholders' equity and cash flows for the Fiscal Year then ended, and (ii)
the unaudited consolidated balance sheet of the Parent and its Subsidiaries
for the eight months ended August 31, 2003, and the related consolidated
statement of operations, shareholder's equity and cash flows for the eight
months then ended.
"Fiscal Year" means the fiscal year of the Parent and its
-----------
Subsidiaries ending on December 31 of each year.
"Fixed Charge Coverage Ratio" means, with respect to any
---------------------------
Person for any period, the ratio of (i) the difference between (A)
Consolidated EBITDA of such Person and its Subsidiaries for such period, and
(B) Capital Expenditures (excluding the interest portion of Capital Lease
Obligations included in Capital Expenditures) made by such Person and its
Subsidiaries during such period, to (ii) the sum of (A) all principal of
Indebtedness of such Person and its Subsidiaries scheduled to be paid or
prepaid during such period to the extent there is an equivalent permanent
reduction in the commitments thereunder, plus (B) Consolidated Net Interest
----
Expense of such Person and its Subsidiaries for such period, plus (C) income
----
taxes paid or payable by such Person and its Subsidiaries during such
period, plus (D) cash dividends or distributions paid by such Person and its
----
Subsidiaries (other than, in the case of any Loan Party, dividends or
distributions paid by such Loan Party to any other Loan Party) during such
period. In determining the Fixed Charge Coverage Ratio for a particular
period (w) pro forma effect will be given to: (1) the incurrence, repayment
or retirement of any Indebtedness by such Person and its Subsidiaries since
the first day of such period as if such Indebtedness were incurred, repaid
or
- 14 -
retired on the first day of such period and (2) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any property or assets acquired or disposed of by such Person
and its Subsidiaries since the first day of such period, as if such
acquisition or disposition occurred on the first day of such period; (x)
interest on Indebtedness bearing a floating interest rate will be computed
as if the rate at the time of computation had been the applicable rate for
the entire period; (y) if such Indebtedness bears, at the option of such
Person and its Subsidiaries, a fixed or floating rate of interest, interest
thereon will be computed by applying, at the option of such Person, either
the fixed or floating rate; and (z) the amount of Indebtedness under a
revolving credit facility will be computed based upon the average daily
balance of such Indebtedness during such period.
"Foothill" has the meaning specified therefor in the
--------
preamble hereto.
"Foreign Subsidiary" means any Subsidiary of a Loan Party
------------------
that is not a Domestic Subsidiary.
"GAAP" means generally accepted accounting principles in
----
effect from time to time in the United States, applied on a basis consistent
with that used by the Parent in the Financial Statements, provided that for
--------
the purpose of Section 7.03 hereof and the definitions used therein, "GAAP"
shall mean generally accepted accounting principles in effect on the date
hereof and consistent with those used in the preparation of the Financial
Statements, provided, further, that if there occurs after the date of this
-------- -------
Agreement any change in GAAP that affects in any respect the calculation of
any covenant contained in Section 7.03 hereof, the Collateral Agent and the
Administrative Borrower shall negotiate in good faith amendments to the
provisions of this Agreement that relate to the calculation of such covenant
with the intent of having the respective positions of the Lenders and the
Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 7.03 hereof shall
be calculated as if no such change in GAAP has occurred.
"Governmental Authority" means any nation or government,
----------------------
any Federal, state, city, town, municipality, county, local or other
political subdivision thereof or thereto and any department, commission,
board, bureau, instrumentality, agency or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guaranteed Obligations" has the meaning specified
----------------------
therefor in Section 11.01.
"Guarantor" means (i) each Subsidiary of the Parent listed
---------
as a "Guarantor" on the signature pages hereto, and (ii) each other Person
which guarantees, pursuant to Section 7.01(b) or otherwise, all or any part
of the Obligations.
"Guaranty" means (i) the guaranty of each Guarantor party
--------
hereto contained in ARTICLE XI hereof, and (ii) each guaranty substantially
in the form of Exhibit A, made by any other Guarantor in favor of the Agents
and the Lenders pursuant to Section 7.01(b) or otherwise.
- 15 -
"Handle" means any manner of generating, accumulating,
------
storing, treating, disposing of, transporting, transferring, labeling,
handling, manufacturing or using, as any of such terms may further be
defined in any Environmental Law, any Hazardous Materials.
"Hazardous Material" means (a) any element, compound or
------------------
chemical that is defined or regulated as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
hazardous waste or special waste under Environmental Laws or which is
present in the environment in such quantity or state that it contravenes any
Environmental Law; (b) petroleum and its refined products; (c)
polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste
characteristic, including, without limitation, corrosivity, ignitability,
toxicity or reactivity as well as any radioactive or explosive materials;
and (e) any asbestos containing materials.
"Headquarters Lease" means the lease of the Parent of its
------------------
corporate worldwide headquarters located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Hedging Agreement" means any interest rate, foreign
-----------------
currency, commodity or equity swap, collar, cap, floor or forward rate
agreement, or other agreement or arrangement designed to protect against
fluctuations in interest rates or currency, commodity or equity values
(including, without limitation, any option with respect to any of the
foregoing and any combination of the foregoing agreements or arrangements),
and any confirmation executed in connection with any such agreement or
arrangement.
"Highest Lawful Rate" means, with respect to any Agent or
-------------------
any Lender, the maximum non-usurious interest rate, if any, that at any time
or from time to time may be contracted for, taken, reserved, charged or
received on the Obligations under laws applicable to such Agent or such
Lender which are currently in effect or, to the extent allowed by law, under
such applicable laws which may hereafter be in effect and which allow a
higher maximum non-usurious interest rate than applicable laws now allow.
"Indebtedness" means, with respect to any Person, without
------------
duplication, (i) all indebtedness of such Person for borrowed money; (ii)
all obligations of such Person for the deferred purchase price of property
or services (other than trade payables or other accounts payable incurred in
the ordinary course of such Person's business and not outstanding for more
than 90 days after the date such payable was created); (iii) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments or upon which interest payments are customarily made; (iv) all
reimbursement, payment or other obligations and liabilities of such Person
created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person, even
though the rights and remedies of the lessor, seller and/or lender
thereunder may be limited to repossession or sale of such property; (v) all
Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters
of credit, acceptances and similar facilities; (vii) all obligations and
liabilities, calculated on a basis satisfactory to the Collateral Agent and
in accordance with accepted practice, of such Person under Hedging
Agreements; (viii) all Contingent Obligations; and (ix) all obligations
referred to in clauses (i) through (viii) of this definition of another
Person secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) a Lien upon
- 16 -
property owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness. The Indebtedness of any
Person shall include the Indebtedness of any partnership of or joint venture
in which such Person is a general partner or a joint venturer to the extent
such Person is liable for such Indebtedness.
"Indemnified Matters" has the meaning specified therefor
-------------------
in Section 12.15.
"Indemnitees" has the meaning specified therefor in
-----------
Section 12.15.
"Indenture Deficit" has the meaning specified therefor in
-----------------
Section 2.01(c).
"Indentures" means, collectively, the Euro Indenture, the
----------
1997 Indenture and the 2009 Note Indenture.
"Insolvency Proceeding" means any proceeding commenced by
---------------------
or against any Person under any provision of the Bankruptcy Code or under
any other bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, or extensions
generally with creditors, or proceedings seeking reorganization,
arrangement, or other similar relief.
"Intercompany Subordination Agreement" means an
------------------------------------
Intercompany Subordination Agreement made by the Loan Parties and certain
Subsidiaries of the Loan Parties in favor of the Collateral Agent, for the
benefit of the Agents and the Lenders, substantially in the form of Exhibit
G.
"Internal Revenue Code" means the Internal Revenue Code of
---------------------
1986, as amended, (or any successor statute thereto) and the regulations
thereunder.
"Inventory" means, with respect to any Person, all goods
---------
and merchandise of such Person, including, without limitation, all raw
materials, work-in-process, packaging, supplies, materials and finished
goods of every nature used or usable in connection with the shipping,
storing, advertising or sale of such goods and merchandise, whether now
owned or hereafter acquired, and all such other property the sale or other
disposition of which would give rise to an Account or cash.
"Landlord Waiver" means a letter, substantially in the
---------------
form of Exhibit I and in any event in form and substance reasonably
acceptable to the Collateral Agent and the Administrative Agent and executed
by a landlord or mortgagee in respect of Collateral of the Loan Parties
located at any leased premises of the Loan Parties, pursuant to which such
landlord or mortgagee, as the case may be, among other things, waives or
subordinates any Lien such landlord or mortgagee may have in respect of any
Collateral.
"L/C Issuer" means ▇▇▇▇▇ Fargo Bank, National Association,
----------
or such other bank as the Administrative Agent may select in its sole and
absolute discretion.
"L/C Subfacility" means that portion of the Total
---------------
Revolving A Credit Commitment equal to $150,000,000.
- 17 -
"Lease" means any lease of real property to which any Loan
-----
Party or any of its Subsidiaries is a party as lessor or lessee.
"Lender" and "Lenders" have the respective meanings
------ -------
specified therefor in the preamble hereto.
"Letter of Credit Accommodations" has the meaning
-------------------------------
specified therefor in Section 3.01(a).
"Letter of Credit Application" has the meaning specified
----------------------------
therefor in Section 3.01(a).
"Letter of Credit Collateral Account" means a deposit
-----------------------------------
account (which may be non-interest bearing and may contain funds of the
Administrative Agent) with a bank acceptable to the Administrative Agent,
which account shall be under the sole dominion and control of the Collateral
Agent or the Administrative Agent and subject to a perfected, first priority
security interest in favor of the Collateral Agent or the Administrative
Agent, for the benefit of the Agents and the Lenders.
"Letter of Credit Fees" have the meaning specified
---------------------
therefor in Section 3.03(b)(i).
"Letter of Credit Guaranty" means one or more guaranties,
-------------------------
indemnities, participations or arrangements by the Administrative Agent in
favor of the L/C Issuer pursuant to which the Administrative Agent
guarantees or otherwise is liable for the Borrowers' obligations to the L/C
Issuer or guarantees or relates to the Borrowers' obligations to the L/C
Issuer under a reimbursement agreement, Letter of Credit Application or
other document in respect of any Letter of Credit Accommodation.
"Letter of Credit Obligations" means, at any time and
----------------------------
without duplication, the sum of (i) the Reimbursement Obligations at such
time, plus (ii) all amounts for which the Administrative Agent may be liable
with respect to Letter of Credit Accommodations outstanding at such time,
plus (iii) all amounts for which the Administrative Agent may be liable to
the L/C Issuer pursuant to any Letter of Credit Guaranty.
"Liabilities" has the meaning specified therefor in
-----------
Section 2.07.
"Lien" means any mortgage, deed of trust, pledge, lien
----
(statutory or otherwise), security interest, charge or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any
Capitalized Lease and any assignment, deposit arrangement or financing lease
intended as, or having the effect of, security.
"Loan" and "Revolving Loan" means any loan made by an
---- --------------
Agent or a Lender to the Borrowers pursuant to ARTICLE II hereof, and
includes, without limitation, the Revolving A Loans, the Revolving B Loans
and the Revolving C Loans.
"Loan Account" means an account maintained hereunder by
------------
the Administrative Agent on its books of account at the Payment Office, and
with respect to the Borrowers, in which
- 18 -
the Borrowers will be charged with all Loans made to, and all other
Obligations incurred by, the Borrowers, and may include sub-accounts for
each of the Revolving A Loans, the Revolving B Loans and the Revolving C
Loans.
"Loan Document" means this Agreement, any Guaranty, any
-------------
Security Agreement, any Pledge Agreement, any Mortgage, any Cash Management
Agreement, any Concentration Account Agreement, the Contribution Agreement,
the Intercompany Subordination Agreement, the 2009 Note Subordination
Agreements, the Fee Letter, any Letter of Credit Application and any other
agreement, instrument, and other document executed and delivered pursuant
hereto or thereto or otherwise evidencing or securing any Loan, any Letter
of Credit Obligation or any other Obligation.
"Loan Party" means any Borrower and any Guarantor.
----------
"Material Adverse Effect" means a material adverse effect
-----------------------
on any of (i) the operations, business, assets, properties or condition
(financial or otherwise) of any Borrower or of the Loan Parties taken as a
whole or of the Designated A Business Segment or the Designated B Business
Segment, (ii) the ability of any Loan Party to perform any of its
obligations under any Loan Document to which it is a party, (iii) the
legality, validity or enforceability of this Agreement or any other Loan
Document, (iv) the rights and remedies of any Agent or any Lender under any
Loan Document, or (v) the validity, perfection or priority of a Lien in
favor of the Collateral Agent for the benefit of the Agents and the Lenders
on any of the Collateral with an aggregate fair market value in excess of
$1,000,000.
"Material Contract" means, (i) with respect to any Loan
-----------------
Party, (A) each contract or agreement to which such Loan Party or any of its
Domestic Subsidiaries is a party involving aggregate consideration payable
to or by such Loan Party or such Domestic Subsidiary of $10,000,000 or more
(other than purchase orders in the ordinary course of the business of such
Loan Party or such Domestic Subsidiary and other than contracts that by
their terms may be terminated by such Loan Party or Domestic Subsidiary in
the ordinary course of its business upon less than 60 days' notice without
penalty or premium) and (B) all other contracts or agreements material to
the business, operations, condition (financial or otherwise), performance or
properties of the Loan Parties and their Domestic Subsidiaries taken as a
whole, and (ii) the Euro Indenture, the Euro Notes and the other contracts
or agreements related thereto. Notwithstanding the foregoing, the term
"Material Contract" shall not include any contract or agreement identified
as a "Excluded Material Contract" on Schedule 6.01(w) or any other contract,
agreement or other arrangement that is acceptable to the Collateral Agent
and the Administrative Agent in their sole discretion.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any
-------
successor thereto.
"Mortgage" means a mortgage (including, without
--------
limitation, a leasehold mortgage), deed of trust or deed to secure debt, in
form and substance reasonably satisfactory to the Collateral Agent, made by
a Loan Party in favor of the Collateral Agent for the benefit of the Agents
and the Lenders, securing the Obligations and delivered to the Collateral
Agent pursuant to Section 5.01(d), Section 7.01(b), Section 7.01(n) or
otherwise.
- 19 -
"Most Recent Senior Lien Limit Certificate" has the meaning
-----------------------------------------
specified therefor in Section 7.01(r).
"Multiemployer Plan" means a "multiemployer plan" as
------------------
defined in Section 4001(a)(3) of ERISA to which any Loan Party or any of its
ERISA Affiliates has contributed to, or has been obligated to contribute, at
any time during the preceding six (6) years.
"New Lending Office" has the meaning specified therefor in
------------------
Section 2.08(d).
"Net Amount of Eligible Accounts" means the aggregate
-------------------------------
unpaid invoice amount of Eligible Accounts less, without duplication, sales,
excise or similar taxes, returns, discounts, chargebacks, claims, advance
payments, credits and allowances of any nature at any time issued, owing,
granted, outstanding, available or claimed with respect to such Eligible
Accounts.
"Net Cash Proceeds" means, (i) with respect to any
-----------------
Disposition by any Person or any of its Subsidiaries, the amount of cash
received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred
consideration) by or on behalf of such Person or such Subsidiary, in
connection therewith after deducting therefrom only (A) the amount of any
Indebtedness secured by any Lien permitted by Section 7.02(a) on any asset
(other than Indebtedness assumed by the purchaser of such asset) which is
required to be, and is, repaid in connection with such Disposition (other
than Indebtedness under this Agreement), (B) expenses related thereto
incurred by such Person or such Subsidiary in connection therewith, (C)
transfer taxes paid to any taxing authorities by such Person or such
Subsidiary in connection therewith, (D) net income taxes to be paid in
connection with such Disposition (after taking into account any tax credits
or deductions directly arising from or as a result of such Disposition and
any tax sharing arrangements), and (E) any reserves for adjustments in
respect of the sale price of such assets and for future liabilities
established in accordance with GAAP and (ii) with respect to the issuance or
incurrence of any Indebtedness by any Person or any of its Subsidiaries, or
the sale or issuance by any Person or any of its Subsidiaries of any shares
of its Capital Stock, the aggregate amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through
the payment or disposition of deferred consideration) by or on behalf of
such Person or such Subsidiary in connection therewith, after deducting
therefrom only (A) expenses related thereto incurred by such Person or such
Subsidiary in connection therewith, (B) transfer taxes paid by such Person
or such Subsidiary in connection therewith and (C) net income taxes to be
paid in connection therewith (after taking into account any tax credits or
deductions and any tax sharing arrangements); in the case of each of clauses
(i) and (ii) above, to the extent, but only to the extent, that the amounts
so deducted are (x) actually paid to a Person that, except in the case of
out-of-pocket expenses, is not an Affiliate of such Person or any of its
Subsidiaries and (y) properly attributable to such transaction or to the
asset that is the subject thereof.
"1997 Debentures" means, collectively, the 7.375%
---------------
debentures of the Parent due 2027 and the 6.72% debentures of the Parent due
2037, each issued pursuant to the 1997 Indenture, as the same may from time
to time be amended, restated or otherwise modified in accordance with the
terms hereof.
- 20 -
"1997 Indenture" means the Indenture, dated as of October
--------------
1, 1997, by and between the Parent and the 1997 Trustee, as the same may
from time to time be amended, restated or otherwise modified in accordance
with the terms hereof.
"1997 Trustee" means JPMorgan Chase Bank, formerly known
------------
as The Chase Manhattan Bank, a New York banking corporation, as trustee for
the holders of the 1997 Debentures pursuant to the 1997 Indenture, together
with its permitted successors and assigns.
"Non-U.S. Lender" has the meaning specified therefor in
---------------
Section 2.08(d).
"Notice of Borrowing" has the meaning specified therefor
-------------------
in Section 2.02(a).
"Obligations" means all present and future indebtedness,
-----------
obligations, and liabilities of each Loan Party to the Agents and the
Lenders, whether or not the right of payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured, unsecured, and whether or
not such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letter of Credit
Accommodations, or any other document made, delivered or given in connection
herewith or therewith. Without limiting the generality of the foregoing, the
Obligations of each Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest (including, without limitation, all
interest that accrues after the commencement of any Insolvency Proceeding of
any Loan Party, whether or not a claim for post-filing interest is allowed
in such proceeding), charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by such Person under
the Loan Documents, and (b) the obligation of such Person to reimburse any
amount in respect of any of the foregoing that any Agent or any Lender (in
its sole discretion) may elect to pay or advance on behalf of such Person.
"Operating Lease Obligations" means all obligations for
---------------------------
the payment of rent for any real or personal property under leases or
agreements to lease (including the Headquarters Lease), other than
Capitalized Lease Obligations.
"Other Taxes" has the meaning specified therefor in
-----------
Section 2.08(b).
"Paid in Full" means (i) the Total Revolving Credit
------------
Commitment shall have been terminated, (ii) all principal of the Loans,
interest thereon and all other Obligations shall have been paid in full in
cash or otherwise satisfied in a manner acceptable to the Agents and the
Lenders in their sole discretion, and (iii) the Administrative Agent shall
have received cash collateral (or, at the Administrative Agent's option, a
letter of credit issued for the account of the relevant Borrower and at such
Borrower's expense, in form and substance reasonably satisfactory to the
Administrative Agent, by an issuer reasonably acceptable to the
Administrative Agent and payable to the Administrative Agent as beneficiary)
in such amounts as the Administrative Agent determines are reasonably
necessary to secure the Administrative Agent and the Lenders from loss,
cost, damage or expense, including reasonable attorneys' fees and expenses,
in connection with any Contingent Obligations, including any Letter of
Credit Obligations and checks or other payments provisionally credited to
the Obligations and/or as to which the Administrative Agent
- 21 -
or any Lender has not yet received final payment in full and in cash. All
Letter of Credit Accommodations shall be cash collateralized (or supported
by a letter of credit as described in the preceding sentence) by an amount
equal to one hundred five percent (105%) of the amount of the Letter of
Credit Accommodations then existing plus the aggregate amount of any Letter
of Credit Fees payable in connection therewith through the end of the latest
expiration date of any such Letter of Credit Accommodation.
"Parallel Debt" has the meaning specified therefor in
-------------
Section 12.23.
"Parent" has the meaning specified therefor in the
------
preamble hereto.
"Participant Register" has the meaning specified therefor
--------------------
in Section 12.07(b)(v).
"Payment Office" means the Administrative Agent's office
--------------
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
or at such other office or offices of the Administrative Agent as may be
designated in writing from time to time by the Administrative Agent to the
other Agents and the Administrative Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or
----
any successor thereto.
"Permitted Indebtedness" means:
----------------------
(a) any Indebtedness owing to any Agent and any
Lender under this Agreement and/or the other Loan Documents;
(b) any Indebtedness listed on Schedule 7.02(b),
and the extension of maturity, refinancing or modification of the terms
thereof; provided, however, that (i) such extension, refinancing or
-------- -------
modification is pursuant to terms that are not less favorable to the Loan
Parties and the Lenders than the terms of the Indebtedness being extended,
refinanced or modified, other than with respect to the rate of interest
which shall not be greater than the then applicable market rate of interest
that is appropriate for such Indebtedness at the time of such refinancing,
and (ii) after giving effect to such extension, refinancing or modification,
the principal amount of such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification;
(c) Indebtedness evidenced by Capitalized Lease
Obligations entered into in order to finance Capital Expenditures made by
the Loan Parties in accordance with the provisions of Section 7.02(g), which
Indebtedness, when aggregated with the principal amount of all Indebtedness
incurred under this clause (c) and clause (d) of this definition, does not
exceed $5,000,000 at any time outstanding;
(d) Indebtedness secured by a Lien permitted by
clause (e) of the definition of "Permitted Lien";
(e) Indebtedness permitted under Section 7.02(e);
- 22 -
(f) Indebtedness evidenced by the 2009 Notes and
unsecured Indebtedness evidenced by the 1997 Debentures, and the extension
of maturity, refinancing or modification of the terms thereof; provided,
--------
however, that (i) such extension, refinancing or modification is pursuant to
-------
terms that are not less favorable to the Loan Parties and the Lenders than
the terms governing such Indebtedness being extended, refinanced or
modified, other than with respect to the rate of interest which shall not be
greater than the then applicable market rate of interest that is appropriate
for such Indebtedness at the time of such refinancing, (ii) after giving
effect to such extension, refinancing or modification, the principal amount
of such Indebtedness is not greater than the amount of Indebtedness
outstanding immediately prior to such extension, refinancing or
modification, and (iii) in the case of any of the 1997 Debentures, on and
after August 15, 2004, the holders of any such debentures shall have no
right to require the Parent or any of its Subsidiaries to purchase any such
debentures on a date prior to a date after the Final Maturity Date that is
acceptable to the Collateral Agent in its sole discretion;
(g) unsecured Indebtedness evidenced by the Euro
Notes;
(h) the following intercompany Indebtedness: (i)
Indebtedness of any Loan Party to any other Loan Party, to the extent such
Indebtedness is (A) evidenced by a promissory note or other written
agreement or instrument, each with terms and provisions acceptable to the
Collateral Agent, (B) pledged to the Collateral Agent pursuant to the Pledge
Agreement, and (C) subject to the Intercompany Subordination Agreement or
such other subordination provisions acceptable to the Collateral Agent; (ii)
Indebtedness of any Foreign Subsidiary to any other Foreign Subsidiary;
(iii) Indebtedness of any Domestic Subsidiary that is not a Loan Party to
any other Domestic Subsidiary that is not a Loan Party to the extent that
the aggregate principal amount of such Indebtedness outstanding at any time
does not exceed $1,000,000; and (iv) unsecured Indebtedness of (x) any Loan
Party owing to any Foreign Subsidiary resulting from loans or advances made
by a Foreign Subsidiary to a Loan Party and (y) any Loan Party owing to any
Domestic Subsidiary that is not a Loan Party resulting from loans and
advances made by a Domestic Subsidiary that is not a Loan Party to a Loan
Party, in each case, to the extent (A) such Indebtedness is subject to the
Intercompany Subordination Agreement or such other subordination provisions
acceptable to the Collateral Agent and (B) no payments are required
thereunder or otherwise made by any such Loan Party to any such Subsidiary;
(i) unsecured Indebtedness under any Hedging
Agreement of any Loan Party or any Foreign Subsidiary entered into in the
ordinary course of business and not for speculative purposes;
(j) Indebtedness related to bank overdrafts or
similar extensions of credit made available to any Foreign Subsidiary to the
extent the aggregate principal amount of such Indebtedness outstanding at
any time does not exceed $1,000,000 and no such amount is outstanding for
more than 3 consecutive Business Days;
(k) Indebtedness of the Parent under the Astaris
Guaranty, as in effect on the date hereof (after giving effect to any
amendment thereto on or prior to the Effective Date);
(l) other than the Letter of Credit
Accommodations, (x) letters of credit that are set forth on Schedule 3.01
and which are outstanding on the Effective Date and (y) letter of
- 23 -
credit that are issued after the Effective Date, in an aggregate stated
amount for all such letters of credit under this subclause (y) not in excess
of $10,000,000 outstanding at any time; and
(m) other unsecured Indebtedness of the Loan
Parties in an aggregate principal amount outstanding at any time not
exceeding $1,000,000.
"Permitted Investments" means (i) marketable direct
---------------------
obligations issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case, maturing within six months from
the date of acquisition thereof; (ii) commercial paper, maturing not more
than 270 days after the date of issue rated P-1 by Moody's or A-1 by
Standard & Poor's; (iii) certificates of deposit maturing not more than 270
days after the date of issue, issued by commercial banking institutions and
money market or demand deposit accounts maintained at commercial banking
institutions, each of which is a member of the Federal Reserve System and
has a combined capital and surplus and undivided profits of not less than
$500,000,000; (iv) repurchase agreements having maturities of not more than
90 days from the date of acquisition which are entered into with major money
center banks included in the commercial banking institutions described in
clause (iii) above and which are secured by readily marketable direct
obligations of the United States Government or any agency thereof, (v) money
market accounts maintained with mutual funds having assets in excess of
$2,500,000,000; and (vi) tax exempt securities rated A or better by Moody's
or A+ or better by Standard & Poor's.
"Permitted Liens" means:
---------------
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental
charges the payment of which is not required under Section 7.01(c);
(c) (i) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and other similar Liens arising in
the ordinary course of business and securing obligations (other than
Indebtedness for borrowed money) that are not overdue by more than 30 days
or are being contested in good faith and by appropriate proceedings promptly
initiated and diligently conducted, and a reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor and (ii) the Specified Mechanics Lien;
(d) Liens described on Schedule 7.02(a), but not
the extension of coverage thereof to other property or the extension of
maturity, refinancing or other modification of the terms thereof or the
increase of the Indebtedness secured thereby;
(e) (i) purchase money Liens on equipment
acquired or held by any Loan Party or any of its Subsidiaries in the
ordinary course of its business to secure the purchase price of such
equipment or Indebtedness incurred solely for the purpose of financing the
acquisition of such equipment or (ii) Liens existing on such equipment at
the time of its acquisition; provided, however, that (A) no such Lien shall
-------- -------
extend to or cover any other property of any Loan Party or any of its
Subsidiaries and (B) the aggregate principal amount of Indebtedness secured
by any or all such Liens shall not exceed at any one time outstanding
$5,000,000;
- 24 -
(f) deposits and pledges of cash securing (i)
obligations incurred in respect of workers' compensation, unemployment
insurance or other forms of governmental insurance or benefits, (ii) the
performance of bids, tenders, leases, contracts (other than for the payment
of money) and statutory obligations, (iii) obligations on surety or appeal
bonds, but only to the extent such deposits or pledges are incurred or
otherwise arise in the ordinary course of business and secure obligations
not past due, (iv) obligations to any utility company or other Person in a
similar line of business made in the ordinary course of business and
securing obligations not past due, or (v) (x) the letters of credit
identified on Schedule 3.01 and (y) the letters of credit described in
subclause (l)(y) of the definition of Permitted Indebtedness;
(g) (i) easements, zoning restrictions and
similar encumbrances on real property and minor irregularities in the title
thereto that do not (x) secure obligations for the payment of money or (y)
materially impair the value of such property or its use by any Loan Party or
any of its Subsidiaries in the normal conduct of such Person's business, or
(ii) Liens of Landlords arising under real property leases of any Loan Party
or any of its Subsidiaries to the extent (x) the real property subject to
such Liens is subject to a Landlord Waiver to the extent required pursuant
to Section 7.01(m), and (y) such Liens arise in the ordinary course of
business and do not secure any past due obligation for the payment of money;
(h) Liens securing Indebtedness permitted by
subsection (c) of the definition of Permitted Indebtedness;
(i) Liens on the Collateral (excluding the
Principal Properties whether or not such Principal Properties constitute
Collateral granted in favor of the 2009 Note Trustee, for the benefit of the
2009 Note Holders, to secure the Indebtedness evidenced by the 2009 Notes,
provided that such Liens are subordinated pursuant to the 2009 Note
--------
Subordination Agreement to the Lien of the Collateral Agent, for the benefit
of the Agents and the Lenders, securing the Obligations;
(j) customary Liens for the fees, costs and
expenses of trustees and escrow agents pursuant to any indenture, escrow
agreement or similar agreement establishing a trust or escrow arrangement;
and
(k) Liens not otherwise permitted under clauses
(a) through (j) above to the extent such Liens (x) do not secure liabilities
or other obligations of the Loan Parties in an aggregate amount exceeding
$1,000,000 and (y) do not extend to any Accounts, Inventory, Principal
Properties or the Capital Stock or the Indebtedness of any "Restricted
Subsidiary" (as such term is defined in the 1997 Indenture or the Euro
Indenture).
"Person" means an individual, corporation, limited
------
liability company, partnership, association, joint-stock company, trust,
unincorporated organization, joint venture or other enterprise or entity or
Governmental Authority.
"Plan" means any Employee Plan or Multiemployer Plan.
----
"Pledge Agreement" means (i) a Pledge and Security
----------------
Agreement made by a Loan Party in favor of the Collateral Agent for the
benefit of the Agents and the Lenders, substantially in the form of Exhibit
C, securing the Obligations and delivered to the Collateral Agent, and (ii)
- 25 -
any pledge agreement or similar agreement or instrument made by a Loan Party
or Solutia Dutch Newco in favor of the Collateral Agent for the benefit of
the Agents and the Lenders, providing for the pledge by such Loan Party or
Solutia Dutch Newco of all of the non-voting Capital Stock and 65% of the
voting Capital Stock of any Foreign Subsidiary in accordance with the
requirements of law of a foreign jurisdiction.
"Post-Default Rate" means a rate of interest per annum
-----------------
equal to the rate of interest otherwise in effect from time to time pursuant
to the terms of this Agreement plus 3.0%, or, if a rate of interest is not
otherwise in effect, the greater of (i) the Reference Rate plus 12.125% and
(ii) 16.375%.
"Principal Properties" means the "Principal Properties" as
--------------------
defined in the 1997 Indenture or the Euro Indenture and which are identified
as a "Principal Property" on Schedule 6.01(o).
"Pro Rata Share" means:
--------------
(a) with respect to a Lender's obligation to make
Revolving A Loans and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's
Revolving A Credit Commitment, by (ii) the Total Revolving A Credit
Commitment, provided, that, if the Total Revolving A Credit Commitment has
--------
been reduced to zero, the numerator shall be the aggregate unpaid principal
amount of such Lender's Revolving A Loans and its interest in the Letter of
Credit Obligations and the denominator shall be the aggregate unpaid
principal amount of all Revolving A Loans and Letter of Credit Obligations,
(b) with respect to a Lender's obligation to make
Revolving B Loans and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's
Revolving B Credit Commitment, by (ii) the Total Revolving B Credit
Commitment, provided, that, if the Total Revolving B Credit Commitment has
--------
been reduced to zero, the numerator shall be the aggregate unpaid principal
amount of such Lender's Revolving B Loans and the denominator shall be the
aggregate unpaid principal amount of all Revolving B Loans,
(c) with respect to a Lender's obligation to make
Revolving C Loans and receive payments of interest, fees, and principal with
respect thereto, the percentage obtained by dividing (i) such Lender's
Revolving C Credit Commitment, by (ii) the Total Revolving C Credit
Commitment, provided, that, if the Total Revolving C Credit Commitment has
--------
been reduced to zero, the numerator shall be the aggregate unpaid principal
amount of such Lender's Revolving C Loans and the denominator shall be the
aggregate unpaid principal amount of all Revolving C Loans, and
(d) with respect to all other matters (including,
without limitation, the indemnification obligations arising under Section
10.05), the percentage obtained by dividing (i) the sum of such Lender's
Revolving A Credit Commitment, Revolving B Credit Commitment and Revolving C
Credit Commitment, by (ii) the sum of the Total Revolving A Credit
Commitment, the Total Revolving B Credit Commitment and the Total Revolving
C Credit Commitment, provided, that, if any of such Lender's Revolving A
--------
Credit Commitment, Revolving
- 26 -
B Credit Commitment or Revolving C Credit Commitment shall have been reduced
to zero, such Lender's Revolving A Credit Commitment, Revolving B Credit
Commitment or Revolving C Credit Commitment, as the case may be, shall be
deemed to be the aggregate unpaid principal amount of such Lender's
Revolving A Loans, Revolving B Loans or Revolving C Loans, as the case may
be (including Agent Advances), and its interest in the Letter of Credit
Obligations and if any of the Total Revolving A Credit Commitment, Total
Revolving B Credit Commitment or Total Revolving C Credit Commitment shall
have been reduced to zero, the Total Revolving A Credit Commitment, Total
Revolving B Credit Commitment or Total Revolving C Credit Commitment, as the
case may be, shall be deemed to be the aggregate unpaid principal amount of
all Revolving A Loans, Revolving B Loans and Revolving C Loans (including
Agent Advances) and Letter of Credit Obligations.
"Rating Agencies" has the meaning specified therefor in
---------------
Section 2.07.
"Receivables" means all of the following now owned or
-----------
hereafter arising or acquired property of each Loan Party: (i) all Accounts;
(ii) all interest, fees, late charges, penalties, collection fees and other
amounts due or to become due or otherwise payable in connection with any
Account; (iii) all payment intangibles of such Loan Party; (iv) letters of
credit, indemnities, guarantees, security or other deposits and proceeds
thereof issued payable to any Loan Party or otherwise in favor of or
delivered to any Loan Party in connection with any Account; or (v) all other
accounts, contract rights, chattel paper, instruments, notes, general
intangibles and other forms of obligations owing to any Loan Party, whether
from the sale and lease of goods or other property, licensing of any
property (including intellectual property or other general intangibles),
rendition of services or from loans or advances by any Loan Party or to or
for the benefit of any third person (including loans or advances to any
Affiliates or Subsidiaries of any Loan Party) or otherwise associated with
any Accounts, Inventory or general intangibles of any Loan Party (including,
without limitation, choses in action, causes of action, tax refunds, tax
refund claims, any funds which may become payable to any Loan Party in
connection with the termination of any Plan or other employee benefit plan
and any other amounts payable to any Loan Party from any Plan or other
employee benefit plan, rights and claims against carriers and shippers,
rights to indemnification, business interruption insurance and proceeds
thereof, casualty or any similar types of insurance and any proceeds thereof
and proceeds of insurance covering the lives of employees on which any Loan
Party is a beneficiary).
"Reference Bank" means JPMorgan Chase Bank, its successors
--------------
or any other commercial bank designated by the Administrative Agent to the
Administrative Borrower from time to time.
"Reference Rate" means the rate of interest publicly
--------------
announced by the Reference Bank in New York, New York from time to time as
its reference rate, base rate or prime rate. The reference rate, base rate
or prime rate is determined from time to time by the Reference Bank as a
means of pricing some loans to its borrowers and neither is tied to any
external rate of interest or index nor necessarily reflects the lowest rate
of interest actually charged by the Reference Bank to any particular class
or category of customers. Each change in the Reference Rate shall be
effective from and including the date such change is publicly announced as
being effective.
- 27 -
"Register" has the meaning specified therefor in Section
--------
12.07(b)(ii).
"Registered Loan" has the meaning specified therefor in
---------------
Section 12.07(b)(ii).
"Regulation T", "Regulation U" and "Regulation X" mean,
------------ ------------ ------------
respectively, Regulations T, U and X of the Board or any successor, as the
same may be amended or supplemented from time to time.
"Reimbursement Obligations" means the obligation of each
-------------------------
Borrower to reimburse the Administrative Agent or any Lender for amounts
payable by the Administrative Agent or any Lender under a Letter of Credit
Guaranty in respect of any drawing made under any letter of credit issued in
connection therewith, together with interest thereon as provided in Section
2.04.
"Release" means any spilling, leaking, pumping, pouring,
-------
emitting, emptying, discharging, injecting, escaping, leaching, seeping,
migrating, dumping or disposing of any Hazardous Material (including the
abandonment or discarding of barrels, containers and other closed
receptacles containing any Hazardous Material) into the indoor or outdoor
environment, including, without limitation, the movement of Hazardous
Materials through or in the ambient air, soil, surface or ground water, or
property.
"Remedial Action" means all actions taken to (i) clean up,
---------------
remove, remediate, contain, treat, monitor, assess, evaluate or in any other
way address Hazardous Materials in the indoor or outdoor environment; (ii)
prevent or minimize a Release or threatened Release of Hazardous Materials
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; (iii) perform pre-remedial
studies and investigations and post-remedial operation and maintenance
activities; or (iv) perform any other actions authorized by 42 U.S.C.
Section 9601.
"Reportable Event" means an event described in Section
----------------
4043 of ERISA (other than an event not subject to the provision for 30-day
notice to the PBGC under the regulations promulgated under such Section).
"Required A Lenders" means the Revolving A Lenders whose
------------------
Pro Rata Share (as defined under clause (a) of such definition) of the
Revolving A Credit Commitments aggregate at least 51%.
"Required B/C Lenders" means (i) the Revolving B Lenders
--------------------
whose Pro Rata Share (as defined under clause (b) of such definition) of the
Revolving B Credit Commitments aggregate at least 51% and (ii) the Revolving
C Lenders whose Pro Rata Share (as defined under clause (c) of such
definition) of the Revolving C Credit Commitments aggregate at least 51%.
"Required Lenders" means the Required A Lenders and the
----------------
Required B/C Lenders.
"Revolving A Credit Commitment" means, with respect to
-----------------------------
each Lender, the commitment of such Lender to make Revolving A Loans to the
Borrowers in the amount set
- 28 -
forth opposite such Lender's name in Schedule 1.01(A) hereto, as such amount
may be terminated or reduced from time to time in accordance with the terms
of this Agreement.
"Revolving A Loan" means a loan made by a Lender to the
----------------
Borrowers pursuant to Section 2.01(a)(i).
"Revolving A Lender" means a Lender with a Revolving A
------------------
Credit Commitment, a Revolving A Loan or a Letter of Credit Obligation.
"Revolving B Credit Commitment" means, with respect to
-----------------------------
each Lender, the commitment of such Lender to make Revolving B Loans to the
Borrowers in the amount set forth opposite such Lender's name in Schedule
1.01(A) hereto, as such amount may be terminated or reduced from time to
time in accordance with the terms of this Agreement.
"Revolving B Loan" means a loan made by a Lender to the
----------------
Borrowers pursuant to Section 2.01(a)(ii).
"Revolving B Lender" means a Lender with a Revolving B
------------------
Credit Commitment or a Revolving B Loan.
"Revolving C Credit Commitment" means, with respect to
-----------------------------
each Lender, the commitment of such Lender to make Revolving C Loans to the
Borrowers in the amount set forth opposite such Lender's name in Schedule
1.01(A) hereto, as such amount may be terminated or reduced from time to
time in accordance with the terms of this Agreement.
"Revolving C Loan" means a loan made by a Lender to the
----------------
Borrowers pursuant to Section 2.01(a)(iii).
"Revolving C Lender" means a Lender with a Revolving C
------------------
Credit Commitment or a Revolving C Loan.
"Revolving Credit Commitment" means, with respect to each
---------------------------
Lender, such Lender's Revolving A Loan Commitment, Revolving B Loan
Commitment and Revolving C Loan Commitment.
"Revolving Loan Lenders" means, collectively, the
----------------------
Revolving A Lenders, the Revolving B Lenders and the Revolving C Lenders.
"SEC" means the Securities and Exchange Commission or any
---
other similar or successor agency of the Federal government administering
the Securities Act.
"Securities Act" means the Securities Act of 1933, as
--------------
amended, or any similar Federal statute, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect from time to time.
"Securitization" has the meaning specified therefor in
--------------
Section 2.07.
"Securitization Parties" has the meaning specified
----------------------
therefor in Section 2.07.
- 29 -
"Security Agreement" means a Security Agreement made by a
------------------
Loan Party in favor of the Collateral Agent for the benefit of the Agents
and the Lenders, substantially in the form of Exhibit B, securing the
Obligations and delivered to the Collateral Agent.
"Senior Lien Limit" has the meaning specified therefor in
-----------------
Section 5.01(d)(xvii), which amount on the Effective Date is equal to
$269,100,000.
"Settlement Agreement" means the Global Settlement
--------------------
Agreement (and the related settlement agreements), among the Parent, the
Retiree Representatives named therein and Pharmacia Corporation, a Delaware
corporation and successor by merger to Monsanto Corporation, a Delaware
corporation, which agreement was entered into and approved by each of the
United States District Court for the Northern District of Alabama (Southern
Division) in the matter entitled ▇▇▇▇▇▇▇, et al. v. Monsanto Company, et al.
(Civil Action No. 01-C-1407-S) and the Circuit Court of Etowah County,
Alabama in the matter entitled ▇▇▇▇▇▇▇▇▇, et al. v. Monsanto Company, et al.
(Civil Action No. CV-01-832 (Etowah County) and related and consolidated
cases) on September 9, 2003 and September 12, 2003, respectively.
"Settlement Period" has the meaning specified therefor in
-----------------
Section 2.02(d)(i).
"Significant Subsidiary" means each Subsidiary of the
----------------------
Parent that:
(a) accounted for at least 5% of consolidated
revenues of the Parent and its Subsidiaries or 5% of consolidated earnings
of the Parent and its Subsidiaries before interest and taxes, in each case
for the fiscal quarter of the Parent ending on the last day of the last
fiscal quarter of the Parent immediately preceding the date as of which any
such determination is made;
(b) has assets which represent at least 5% of the
consolidated assets of the Parent and its Subsidiaries as at the last day of
the last fiscal quarter of the Parent immediately preceding the date as of
which any such determination is made; or
(c) is a Loan Party.
"Solutia Business Concentration Account" means the
--------------------------------------
depository account identified as the "Solutia Business Concentration
Account" on Schedule 8.01.
"Solutia Europe" means Solutia Europe SA/NV, a Belgium
--------------
limited liability company.
"Solutia UK Holdings" means Solutia UK Holdings Ltd., a
-------------------
company organized under the laws of England and Wales.
"Solutia Dutch Newco" means Solchem Netherlands C.V.
-------------------
"Specified Mechanics Lien" means the mechanic's and
------------------------
materialman's lien of Fluor Enterprises, Inc., f/k/a Fluor ▇▇▇▇▇▇, Inc.
referred to in the Final Judgment (including the Settlement Agreement and
Mutual Release) entered in the case entitled Fluor Enterprises, Inc., f/k/a/
Fluor ▇▇▇▇▇▇, Inc. v. Solutia, Inc., Civil Action No G-01-074, in the United
States District
- 30 -
Court for the Southern District of Texas, Galveston Division, securing
Indebtedness on the Effective Date in a principal amount not exceeding
$10,000,000 plus accrued interest.
"Standard & Poor's" means Standard & Poor's Ratings
-----------------
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. and any successor
thereto.
"Subsidiary" means, with respect to any Person at any
----------
date, any corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity
(i) the accounts of which would be consolidated with those of such Person in
such Person's consolidated financial statements if such financial statements
were prepared in accordance with GAAP or (ii) of which more than 50% of (A)
the outstanding Capital Stock having (in the absence of contingencies)
ordinary voting power to elect a majority of the board of directors or other
managing body of such Person, (B) in the case of a partnership or limited
liability company, the interest in the capital or profits of such
partnership or limited liability company or (C) in the case of a trust,
estate, association, joint venture or other entity, the beneficial interest
in such trust, estate, association or other entity business is, at the time
of determination, owned or controlled directly or indirectly through one or
more intermediaries, by such Person.
"Termination Event" means (i) a Reportable Event with
-----------------
respect to any Employee Plan, (ii) any event that causes any Loan Party or
any of its ERISA Affiliates to incur liability under Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
4971 or 4975 of the Internal Revenue Code, (iii) the filing of a notice of
intent to terminate an Employee Plan or the treatment of an Employee Plan
amendment as a termination under Section 4041 of ERISA, (iv) the institution
of proceedings by the PBGC to terminate an Employee Plan, or (v) any other
event or condition which might constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer,
any Employee Plan.
"Title Insurance Policy" means a mortgagee's loan policy,
----------------------
in form and substance reasonably satisfactory to the Collateral Agent,
together with all endorsements made from time to time thereto, issued by or
on behalf of a title insurance company satisfactory to the Collateral Agent,
insuring the Lien created by a Mortgage in an amount and on terms
satisfactory to the Collateral Agent, delivered to the Collateral Agent.
"Transferee" has the meaning specified therefor in Section
----------
2.08(a).
"Total Revolving A Credit Commitment" means the sum of the
-----------------------------------
amounts of the Lenders' Revolving A Credit Commitments.
"Total Revolving B Credit Commitment" means the sum of the
-----------------------------------
amounts of the Lenders' Revolving B Credit Commitments.
"Total Revolving C Credit Commitment" means the sum of the
-----------------------------------
amounts of the Lenders' Revolving C Credit Commitments.
- 31 -
"Total Revolving Credit Commitment" means the sum of the
---------------------------------
Total Revolving A Credit Commitment, the Total Revolving B Credit Commitment
and the Total Revolving C Credit Commitment.
"2009 Note Holders" means the Persons from time to time
-----------------
holding the 2009 Notes and bound by the 2009 Note Subordination Agreement.
"2009 Note Indenture" means the Indenture, dated as of
-------------------
July 9, 2002, as amended by the Supplemental Indenture, dated as of July 25,
2002, the Second Supplemental Indenture, dated as of October 24, 2002, and
the Third Supplemental Indenture, dated as of the Effective Date, by and
among the Parent, as successor in interest to SOI Funding Corp., the
subsidiary guarantors signatory thereto, and the 2009 Note Trustee, as the
same may from time to time be further amended, restated or otherwise
modified in accordance with the terms hereof.
"2009 Note Security Documents" means the Amended, Restated
----------------------------
and Novated Junior Security Agreement, dated as of the Effective Date, among
the Loan Parties, the Collateral Agent and the 2009 Note Trustee, and any
other agreement, document or instrument pursuant to which any Loan Party
grants a Lien in favor of the 2009 Note Trustee, in each case, in form and
substance satisfactory to the Collateral Agent and the Administrative Agent,
as the same may from time to time be amended, restated or otherwise modified
in accordance with the terms hereof.
"2009 Note Subordination Agreement" means the Amended,
---------------------------------
Restated and Novated Junior Intercreditor Agreement, dated as of the
Effective Date, among the Collateral Agent, on behalf of the Agents and the
Lenders, the 2009 Note Trustee, on behalf of the 2009 Note Holders, and the
Loan Parties, and in form and substance satisfactory to the Collateral Agent
and the Administrative Agent.
"2009 Note Trustee" means HSBC Bank USA, a New York
-----------------
banking corporation, as trustee for the 2009 Note Holders pursuant to the
2009 Note Indenture, together with its permitted successors and assigns.
"2009 Notes" means, collectively, the 11.25% Senior
----------
Secured Notes of the Parent in the original aggregate principal amount of
$223,000,000 issued pursuant to the 2009 Note Indenture, as the same may
from time to time be amended, restated or otherwise modified in accordance
with the terms hereof.
"UCB Sale" means the sale by the Parent and its
--------
Subsidiaries of their resins, additives and adhesives businesses to UCB
S.A., which sale was consummated on January 31, 2003.
"Uniform Commercial Code" has the meaning specified
-----------------------
therefor in Section 1.03.
"Unused Line Fee" has the meaning specified therefor in
---------------
Section 2.06(b).
"WARN" has the meaning specified therefor in Section
----
6.01(y).
- 32 -
Section 1.02 Terms Generally. The definitions of terms
---------------
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires
otherwise, (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to
any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to
refer to Articles and Sections of, and Exhibits and Schedules to, this
Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any right or interest in or
to assets and properties of any kind whatsoever, whether real, personal or
mixed and whether tangible or intangible. References in this Agreement to
"determination" by any Agent include good faith estimates by such Agent (in
the case of quantitative determinations) and good faith beliefs by such
Agent (in the case of qualitative determinations).
Section 1.03 Accounting and Other Terms. Unless otherwise
--------------------------
expressly provided herein, each accounting term used herein shall have the
meaning given it under GAAP applied on a basis consistent with those used in
preparing the Financial Statements. All terms used in this Agreement which
are defined in Article 8 or Article 9 of the Uniform Commercial Code as in
effect from time to time in the State of New York (the "Uniform Commercial
------------------
Code") and which are not otherwise defined herein shall have the same
----
meanings herein as set forth therein, provided that terms used herein which
--------
are defined in the Uniform Commercial Code as in effect in the State of New
York on the date hereof shall continue to have the same meaning
notwithstanding any replacement or amendment of such statute except as any
Agent may otherwise determine.
Section 1.04 Time References. Unless otherwise indicated
---------------
herein, all references to time of day refer to Eastern Standard Time or
Eastern daylight saving time, as in effect in New York City on such day. For
purposes of the computation of a period of time from a specified date to a
later specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding"; provided, however,
-------- -------
that with respect to a computation of fees or interest payable to any Agent,
any Lender or the L/C Issuer, such period shall in any event consist of at
least one full day.
- 33 -
ARTICLE II
THE LOANS
Section 2.01 Commitments. (a) Subject to the terms and
-----------
conditions and relying upon the representations and warranties herein set
forth:
(i) each Revolving A Loan Lender
severally agrees to make Revolving A Loans to the Borrowers at any time and
from time to time from the Effective Date to the Final Maturity Date, or
until the earlier reduction of its Revolving A Credit Commitment to zero in
accordance with the terms hereof, in an aggregate principal amount of
Revolving A Loans at any time outstanding not to exceed the amount of such
Lender's Revolving A Credit Commitment;
(ii) each Revolving B Loan Lender
severally agrees to make Revolving B Loans to the Borrowers at any time and
from time to time from the Effective Date to the Final Maturity Date, or
until the earlier reduction of its Revolving B Credit Commitment to zero in
accordance with the terms hereof, in an aggregate principal amount of
Revolving B Loans at any time outstanding not to exceed the amount of such
Lender's Revolving B Credit Commitment; and
(iii) each Revolving C Loan Lender
severally agrees to make Revolving C Loans to the Borrowers at any time and
from time to time from the Effective Date to the Final Maturity Date, or
until the earlier reduction of its Revolving C Credit Commitment to zero in
accordance with the terms hereof, in an aggregate principal amount of
Revolving C Loans at any time outstanding not to exceed the amount of such
Lender's Revolving C Credit Commitment.
(b) Notwithstanding the foregoing,
(i) the aggregate principal amount of
Revolving A Loans outstanding at any time to the Borrowers shall not exceed
the difference between (A) the lesser of (x) the Total Revolving A Credit
Commitment and (y) the then current Borrowing Base and (B) the aggregate
Letter of Credit Obligations;
(ii) the aggregate principal amount of
Revolving B Loans outstanding at any time to the Borrowers shall not exceed
the Total Revolving B Credit Commitment;
(iii) the aggregate principal amount of
Revolving C Loans outstanding at any time to the Borrowers shall not exceed
the Total Revolving C Credit Commitment;
(iv) (A) the Revolving A Loans and the
Revolving B Loans shall be available only at such times as the Total
Revolving C Credit Commitment is fully utilized and (B) the Revolving A
Loans shall be available only at such times as each of the Total Revolving B
Credit Commitment and the Total Revolving C Credit Commitment is fully
utilized;
- 34 -
(v) each of the Revolving A Credit
Commitment, the Revolving B Credit Commitment and the Revolving C Credit
Commitment shall automatically and permanently be reduced to zero on the
Final Maturity Date; and
(vi) within the foregoing limits, the
Borrowers may borrow, repay and reborrow Revolving Loans, on or after the
Effective Date and prior to the Final Maturity Date, subject to the terms,
provisions and limitations set forth herein.
(c) The Lenders shall have no obligation to make
any Revolving Loans if, either immediately before or after giving effect to
such Revolving Loans, the aggregate amount of the Revolving Loans plus the
Letter of Credit Obligations exceeds or will exceed either (i) the amount of
Indebtedness permitted to be incurred under clauses (i) and (xvi) of the
second paragraph of Sections 4.09 of the 2009 Note Indenture or (ii) an
amount equal to the amount of Indebtedness secured by the Collateral (giving
effect to the terms of the Loan Documents) the incurrence of which would
cause the granting of an equal and ratable Lien in favor of the 2009 Note
Trustee for the benefit of the 2009 Note Holders, the 1997 Trustee for the
benefit of the holders of the 1997 Debentures and/or with any agent under
the Euro Indenture for the benefit of the holders of the Euro Notes (the
amount of any such excess over the lesser of clauses (i) and (ii) is
hereafter referred to as the "Indenture Deficit").
-----------------
Section 2.02 Making the Loans. The Administrative Borrower
----------------
shall give the Administrative Agent prior telephonic notice (immediately
confirmed in writing, in substantially the form of Exhibit D hereto (a
"Notice of Borrowing")), not later than 12:00 noon (New York City time) on
-------------------
the date which is five (5) Business Days prior to the date of the proposed
Loan (or such shorter period as the Administrative Agent is willing to
accommodate from time to time, but in no event later than 1:00 p.m. (New
York City time) on the borrowing date of the proposed Loan, it being
understood that so long as Foothill acts as the Administrative Agent and the
amount of the proposed Loan does not exceed $10,000,000, Foothill, acting as
the Administrative Agent, may make such proposed Loan on the Business Day of
the borrowing request). Such Notice of Borrowing shall be irrevocable and
shall specify (i) the principal amount of the proposed Loan, which, in the
case of the Revolving B Loans and the Revolving C Loans, shall fully utilize
the Total Revolving B Credit Commitment and the Total Revolving C Credit
Commitment on the Effective Date, (ii) the use of the proceeds of such
proposed Loan, (iii) the proposed borrowing date, which must be a Business
Day, and (iv) whether the Loan is a Revolving A Loan, Revolving B Loan or
Revolving C Loan or a combination thereof. The Administrative Agent and the
Lenders may act without liability upon the basis of written, telecopied or
telephonic notice believed by the Administrative Agent in good faith to be
from the Administrative Borrower (or from any Authorized Officer thereof
designated in writing purportedly from the Administrative Borrower to the
Administrative Agent). Each Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of any such telephonic Notice of
Borrowing. The Administrative Agent and each Lender shall be entitled to
rely conclusively on any Authorized Officer's authority to request a Loan on
behalf of the Borrowers until the Administrative Agent receives written
notice to the contrary. The Administrative Agent and the Lenders shall have
no duty to verify the authenticity of the signature appearing on any written
Notice of Borrowing.
- 35 -
(b) Each Notice of Borrowing pursuant to this
Section 2.02 shall be irrevocable and the Borrowers shall be bound to make a
borrowing in accordance therewith. Each Revolving Loan shall be made in a
minimum amount of $100,000 and shall be in an integral multiple of $100,000.
(c) (i) Except as otherwise provided in this
subsection 2.02(c), all Loans under this Agreement shall be made by the
Lenders simultaneously and proportionately to their Pro Rata Shares of the
applicable Revolving Credit Commitment, it being understood that no Lender
shall be responsible for any default by any other Lender in that other
Lender's obligations to make a Loan requested hereunder, nor shall the
Revolving Credit Commitment of any Lender be increased or decreased as a
result of the default by any other Lender in that other Lender's obligation
to make a Loan requested hereunder, and each Lender shall be obligated to
make the Loans required to be made by it by the terms of this Agreement
regardless of the failure by any other Lender.
(ii) Notwithstanding any other provision
of this Agreement, and in order to reduce the number of fund transfers among
the Borrowers, the Agents and the Lenders, the Borrowers, the Agents and the
Lenders agree that the Administrative Agent may (but shall not be obligated
to), and the Borrowers and the Lenders hereby irrevocably authorize the
Administrative Agent to, fund, on behalf of the Revolving A Lenders,
Revolving A Loans pursuant to Section 2.01, subject to the procedures for
settlement set forth in subsection 2.02(d); provided, however, that (a) the
-------- -------
Administrative Agent shall in no event fund any such Revolving A Loans if
the Administrative Agent shall have received written notice from the
Collateral Agent or the Required Lenders on the Business Day prior to the
date of the proposed Revolving A Loan that one or more of the conditions
precedent contained in Section 5.02 will not be satisfied at the time of the
proposed Revolving A Loan, and (b) the Administrative Agent shall not
otherwise be required to determine that, or take notice whether, the
conditions precedent in Section 5.02 have been satisfied. If the
Administrative Borrower gives a Notice of Borrowing requesting a Revolving A
Loan and the Administrative Agent elects not to fund such Revolving A Loan
on behalf of the Revolving A Lenders, then promptly after receipt of the
Notice of Borrowing requesting such Revolving A Loan, the Administrative
Agent shall notify each Revolving A Lender of the specifics of the requested
Revolving A Loan and that it will not fund the requested Revolving A Loan on
behalf of the Revolving A Lenders. If the Administrative Agent notifies the
Revolving A Lenders that it will not fund a requested Revolving A Loan on
behalf of the Revolving A Lenders, each Revolving A Lender shall make its
Pro Rata Share of the Revolving A Loan available to the Administrative
Agent, in immediately available funds, in the Administrative Agent's Account
no later than 3:00 p.m. (New York City time) (provided that the
Administrative Agent requests payment from such Revolving A Lender not later
than 1:00 p.m. (New York City time)) on the date of the proposed Revolving A
Loan. The Administrative Agent will make the proceeds of such Revolving A
Loans available to the Borrowers on the day of the proposed Revolving A Loan
by causing an amount, in immediately available funds, equal to the proceeds
of all such Revolving A Loans received by the Administrative Agent in the
Administrative Agent's Account or the amount funded by the Administrative
Agent on behalf of the Revolving A Lenders to be deposited in an account
designated by the Administrative Borrower.
(iii) If the Administrative Agent has
notified the Revolving A Lenders that the Administrative Agent, on behalf of
such Revolving A Lenders, will not fund a
- 36 -
particular Revolving A Loan pursuant to subsection 2.02(c)(ii), the
Administrative Agent may assume that each such Revolving A Lender has made
such amount available to the Administrative Agent on such day and the
Administrative Agent, in its sole discretion, may, but shall not be
obligated to, cause a corresponding amount to be made available to the
Borrowers on such day. If the Administrative Agent makes such corresponding
amount available to the Borrowers and such corresponding amount is not in
fact made available to the Administrative Agent by any such Revolving A
Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Revolving A Lender together with
interest thereon, for each day from the date such payment was due until the
date such amount is paid to the Administrative Agent, at the Federal Funds
Rate for three Business Days and thereafter at the Reference Rate. During
the period in which such Revolving A Lender has not paid such corresponding
amount to the Administrative Agent, notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, the amount so
advanced by the Administrative Agent to the Borrowers shall, for all
purposes hereof, be a Revolving A Loan made by the Administrative Agent for
its own account. Upon any such failure, the Borrowers shall, upon demand by
the Administrative Agent, repay such amount to the Administrative Agent for
its own account.
(iv) Nothing in this subsection 2.02(c)
shall be deemed to relieve any Lender from its obligations to fulfill its
Revolving Credit Commitment hereunder or to prejudice any rights that the
Agents or the Borrowers may have against any Lender as a result of any
default by such Lender hereunder.
(d) With respect to all periods for which the
Administrative Agent has funded Revolving A Loans pursuant to subsection
2.02(c), on Friday of each week, or if the applicable Friday is not a
Business Day, then on the following Business Day, or such shorter period as
the Administrative Agent may from time to time select (any such week or
shorter period being herein called a "Settlement Period"), the
-----------------
Administrative Agent shall notify each Revolving A Lender of the unpaid
principal amount of the Revolving A Loans outstanding as of the last day of
each such Settlement Period. In the event that such amount is greater than
the unpaid principal amount of the Revolving A Loans outstanding on the last
day of the Settlement Period immediately preceding such Settlement Period
(or, if there has been no preceding Settlement Period, the amount of the
Revolving A Loans made on the date of such Revolving A Lender's initial
funding), each Revolving A Lender shall promptly (and in any event not later
than 2:00 p.m. (New York City time) if the Administrative Agent requests
payment from such Lender not later than 12:00 noon (New York City time) on
such day) make available to the Administrative Agent its Pro Rata Share of
the difference in immediately available funds. In the event that such amount
is less than such unpaid principal amount, the Administrative Agent shall
promptly pay over to each Revolving A Lender its Pro Rata Share of the
difference in immediately available funds. In addition, if the
Administrative Agent shall so request at any time when a Default or an Event
of Default shall have occurred and be continuing, or any other event shall
have occurred as a result of which the Administrative Agent shall determine
that it is desirable to present claims against the Borrowers for repayment,
each Revolving A Lender shall promptly remit to the Administrative Agent or,
as the case may be, the Administrative Agent shall promptly remit to each
Revolving A Lender, sufficient funds to adjust the interests of the
Revolving A Lenders in the then outstanding Revolving A Loans to such an
extent that, after giving effect to such adjustment, each such Revolving A
Lender's interest in the then outstanding Revolving A Loans will be equal to
its Pro
- 37 -
Rata Share thereof. The obligations of the Administrative Agent and each
Revolving A Lender under this subsection 2.02(d) shall be absolute and
unconditional. Each Revolving A Lender shall only be entitled to receive
interest on its Pro Rata Share of the Revolving A Loans which have been
funded by such Revolving A Lender.
(ii) In the event that any Revolving A
Lender fails to make any payment required to be made by it pursuant to
subsection 2.02(d)(i), the Administrative Agent shall be entitled to recover
such corresponding amount on demand from such Revolving A Lender together
with interest thereon, for each day from the date such payment was due until
the date such amount is paid to the Administrative Agent, at the Federal
Funds Rate for three Business Days and thereafter at the Reference Rate.
During the period in which such Revolving A Lender has not paid such
corresponding amount to the Administrative Agent, notwithstanding anything
to the contrary contained in this Agreement or any other Loan Document, the
amount so advanced by the Administrative Agent to the Borrowers shall, for
all purposes hereof, be a Revolving A Loan made by the Administrative Agent
for its own account. Upon any such failure by a Revolving A Lender to pay
the Administrative Agent, the Borrowers shall, upon demand by the
Administrative Agent, repay such amount to the Administrative Agent for its
own account. Nothing in this subsection 2.02(d)(ii) shall be deemed to
relieve any Revolving A Lender from its obligation to fulfill its Revolving
A Credit Commitment hereunder or to prejudice any rights that the
Administrative Agent or the Borrowers may have against any Revolving A
Lender as a result of any default by such Revolving A Lender hereunder.
Section 2.03 Repayment of Loans; Evidence of Debt. (a) The
------------------------------------
outstanding principal of all Revolving Loans shall be due and payable on the
Final Maturity Date.
(b) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the Indebtedness of the
Borrowers to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such
Lender from time to time hereunder.
(c) The Administrative Agent shall maintain
accounts in which it shall record (i) the amount of each Loan made
hereunder, (ii) the amount of any principal or interest due and payable or
to become due and payable from the Borrowers to each Lender hereunder and
(iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained
pursuant to paragraph (b) or (c) of this Section shall be prima facie
----- -----
evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative Agent to
--------
maintain such accounts or any error therein shall not in any manner affect
the obligation of the Borrowers to repay the Loans in accordance with the
terms of this Agreement.
(e) Any Lender may request that Loans made by it
be evidenced by a promissory note. In such event, the Borrowers shall
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) in a form furnished by the Collateral Agent and
reasonably acceptable to the Administrative Borrower. Thereafter, the Loans
evidenced by such promissory
- 38 -
note and interest thereon shall at all times (including after assignment
pursuant to Section 12.07) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered
assigns).
Section 2.04 Interest. (a) Revolving Loans.
-------- ---------------
(i) Each Revolving A Loan shall bear
interest on the principal amount thereof from time to time outstanding, from
the date of such Loan until such principal amount becomes due, at a rate per
annum equal to the greater of (i) the Reference Rate plus 2.00% and (ii)
6.25%.
(ii) Each Revolving B Loan and Revolving
C Loan shall bear interest on the principal amount thereof from time to time
outstanding, from the date of such Loan until such principal amount becomes
due, at a rate per annum equal to the greater of (i) the Reference Rate plus
9.125% and (ii) 13.375%.
(b) Default Interest. To the extent permitted by
----------------
law, upon the occurrence and during the continuance of an Event of Default,
the principal of, and all accrued and unpaid interest on, all Loans, fees,
indemnities, outstanding Reimbursement Obligations or any other Obligations
of the Loan Parties under this Agreement and the other Loan Documents, shall
bear interest, from the date such Event of Default occurred until the date
such Event of Default is cured or waived in writing in accordance herewith,
at a rate per annum equal at all times to the Post-Default Rate.
(c) Interest Payment. Interest on each Loan shall
----------------
be payable monthly, in arrears, on the first day of each month, commencing
on the first day of the month following the month in which such Loan is made
and at maturity (whether upon demand, by acceleration or otherwise).
Interest at the Post-Default Rate shall be payable on demand. Each Borrower
hereby authorizes the Administrative Agent to, and the Administrative Agent
may, from time to time, charge the Loan Account pursuant to Section 4.02
with the amount of any interest payment due hereunder.
(d) General. All interest shall be computed on
-------
the basis of a year of 360 days for the actual number of days, including the
first day but excluding the last day, elapsed.
Section 2.05 Reduction of Commitment; Prepayment of Loans.
--------------------------------------------
(a) Reduction of Commitments.
------------------------
(i) Each of the Total Revolving A Credit
Commitment, the Total Revolving B Credit Commitment and the Total Revolving
C Credit Commitment shall terminate on the Final Maturity Date. In addition,
the Total Revolving B Credit Commitment shall be permanently reduced by
$833,333 on the first day of each calendar month commencing on April 1,
2004. The Borrowers may, without premium or penalty, reduce:
(A) the Total Revolving A
Credit Commitment to an amount (which may be zero) not less than the sum of
(I) the aggregate unpaid principal amount of all Revolving A Loans then
outstanding, (II) the aggregate principal amount of all Revolving
- 39 -
A Loans not yet made as to which a Notice of Borrowing has been given by the
Administrative Borrower under Section 2.02, (III) the Letter of Credit
Obligations at such time, and (IV) the stated amount of all Letter of Credit
Accommodations not yet issued as to which a request has been made and not
withdrawn,
(B) the Total Revolving B
Credit Commitment to an amount (which may be zero) not less than the sum of
(I) the aggregate unpaid principal amount of all Revolving B Loans then
outstanding and (II) the aggregate principal amount of all Revolving B Loans
not yet made as to which a Notice of Borrowing has been given by the
Administrative Borrower under Section 2.02,
(C) the Total Revolving C
Credit Commitment to an amount (which may be zero) not less than the sum of
(I) the aggregate unpaid principal amount of all Revolving C Loans then
outstanding and (II) the aggregate principal amount of all Revolving C Loans
not yet made as to which a Notice of Borrowing has been given by the
Administrative Borrower under Section 2.02.
(ii) Each such voluntary reduction shall
be in an amount which is an integral multiple of $10,000,000 (unless the
applicable Revolving Credit Commitment in effect immediately prior to such
reduction is less than $10,000,000), shall be made by providing not less
than five (5) Business Days' prior written notice to the Administrative
Agent and the Collateral Agent and shall be irrevocable, which notice shall
specify whether such reduction shall be applied to the Total Revolving A
Credit Commitment, the Total Revolving B Credit Commitment or the Total
Revolving C Credit Commitment, or a combination thereof. Once reduced, the
applicable Revolving Credit Commitment may not be increased. Each such
reduction of the Total Revolving A Credit Commitment, the Total Revolving B
Credit Commitment or the Total Revolving C Credit Commitment shall reduce
the applicable Revolving Credit Commitment of each Lender holding such
commitment proportionately in accordance with its Pro Rata Share thereof.
(iii) Unless otherwise agreed by all
Revolving B Lenders (in the case of clause (A)) or all Revolving C Lenders
(in the case of clause (B)), upon (A) any prepayment (whether pursuant to an
optional, scheduled or mandatory prepayment) of the Revolving B Loans, the
Total Revolving B Credit Commitment shall be permanently reduced by an
amount equal to the amount of such prepayment, and (B) any prepayment
(whether pursuant to an optional, scheduled or mandatory prepayment) of the
Revolving C Loans, the Total Revolving C Credit Commitment shall be
permanently reduced by an amount equal to the amount of such prepayment. In
addition, if the Parent or any of its Subsidiaries have an obligation to
make an "Asset Sale Offer" (as such term is defined in the 2009 Note
Indenture) in connection with any Disposition giving rise to a mandatory
prepayment described in Section 2.05(c)(iii) or Section 2.05(c)(vii), the
Total Revolving A Credit Commitment, the Total Revolving B Credit Commitment
and/or the Total Revolving C Credit Commitment, as applicable, shall be
permanently reduced on a date that is 5 Business Days prior to the date the
Parent or any of its Subsidiaries would be required to make such offer (or
on January 9, 2004 in the case of Section 2.05(c)(vii)), in an amount
corresponding to the applicable Loan or Loans being prepaid and in an amount
necessary to eliminate the obligation of the Parent or any of its
Subsidiaries to make any such Asset Sale Offer. Each reduction of the Total
Revolving A Credit
- 40 -
Commitment, the Total Revolving B Credit Commitment or the Total Revolving C
Credit Commitment shall reduce the applicable Revolving Credit Commitment of
each Lender holding such commitment proportionately in accordance with its
Pro Rata Share thereof.
(b) Optional Prepayment.
-------------------
(i) Revolving A Loans. The Borrowers
-----------------
may, at any time, prepay without penalty or premium the principal of any
Revolving A Loan, in whole or in part.
(ii) Revolving B Loans and Revolving C
---------------------------------
Loans. The Borrowers may, upon at least five (5) Business Days' prior
-----
written notice to the Administrative Agent and the Collateral Agent, prepay
without penalty or premium the principal of any Revolving B Loan or
Revolving C Loan, in whole or in part; provided, that, notwithstanding the
--------
foregoing, except in connection with the repayment in full of all of the
Obligations, the Borrowers may not voluntarily prepay all or any portion of
the Revolving B Loans or the Revolving C Loans if (A) immediately after
giving effect to such prepayment, Availability would be less than
$10,000,000 or (B) immediately before or immediately after giving effect to
such prepayment, an Event of Default shall have occurred and be continuing.
(iii) Prepayment In Full. The Borrowers
------------------
may, upon at least five (5) Business Days prior written notice to the
Administrative Agent and the Collateral Agent, terminate this Agreement by
paying to the Administrative Agent, in cash, the Obligations (including
either (A) providing cash collateral to be held by the Administrative Agent
in an amount equal to 105% of the aggregate undrawn amount of all
outstanding Letter of Credit Accommodations or (B) causing the original
Letter of Credit Accommodations to be returned to the Administrative Agent),
in full. If the Administrative Borrower has sent a notice of termination
pursuant to this clause (iii), then the Lenders' obligations to extend
credit hereunder shall terminate and the Borrowers shall be obligated to
repay the Obligations (including either (A) providing cash collateral to be
held by the Administrative Agent in an amount equal to 105% of the aggregate
undrawn amount of all outstanding Letter of Credit Accommodations or (B)
causing the original Letter of Credit Accommodations to be returned to the
Administrative Agent), in full, on the date set forth as the date of
termination of this Agreement in such notice.
(c) Mandatory Prepayment.
--------------------
(i) (A) The Borrowers will, at any time,
immediately prepay the Revolving A Loans when the aggregate principal amount
of all Revolving A Loans plus the outstanding amount of all Letter of Credit
Obligations exceeds the Borrowing Base, to the full extent of any such
excess. On each day that any Revolving A Loans or Letter of Credit
Obligations are outstanding, the Borrowers shall hereby be deemed to
represent and warrant to the Agents and the Lenders that the Borrowing Base
calculated as of such day equals or exceeds the aggregate principal amount
of all Revolving A Loans and Letter of Credit Obligations outstanding on
such day.
(B) If at any time after the
Borrowers have complied with the first sentence of paragraph (A) of this
Section 2.05(c)(i), the aggregate Letter of Credit Obligations is greater
than the then current Borrowing Base, the Borrowers shall provide cash
- 41 -
collateral to the Administrative Agent in an amount equal to 105% of such
excess, which cash collateral shall be deposited in the Letter of Credit
Collateral Account and, provided that no Event of Default shall have
--------
occurred and be continuing, returned to the Borrowers, at such time as the
aggregate Letter of Credit Obligations plus the aggregate principal amount
of all outstanding Revolving A Loans no longer exceeds the then current
Borrowing Base.
(ii) The Administrative Agent shall on
each Business Day apply all funds transferred to or deposited in the
Administrative Agent's Account, to the payment, in whole or in part, of the
outstanding principal amount of the Revolving A Loans; provided, that, (A)
--------
such funds shall be applied to the outstanding principal amount of the
Revolving B Loans and/or the Revolving C Loans (x) in the absence of a
continuing Event of Default, to the extent such application is specifically
provided for in Section 2.05(d), and (y) during the existence of an Event of
Default, in accordance with Section 4.04(b), and (B) if no Revolving A Loans
remain outstanding after the application of such funds to repay any
outstanding Revolving A Loans, such funds are not required to be applied to
the Revolving B Loans and the Revolving C Loans pursuant to clause (A) of
this proviso and no Event of Default has occurred and is continuing, the
remaining funds received in the Administrative Agent's Account shall, within
two (2) Business Days, be returned by the Administrative Agent to the
Borrowers.
(iii) Immediately upon any Disposition
by any Loan Party or its Subsidiaries, the Borrowers shall prepay the
Revolving Loans in an amount equal to 100% of the Net Cash Proceeds received
by such Person in connection with such Disposition. Nothing contained in
this subsection (iii) shall permit any Loan Party or any of its Subsidiaries
to make a Disposition of any property other than in accordance with Section
7.02(c). Any payments required to be made under this subsection (iii) shall
be applied as set forth in Section 2.05(d).
(iv) Immediately upon the sale or
issuance by any Loan Party or any of its Subsidiaries of any shares of its
Capital Stock (other than common stock of the Parent issued in respect of
the Loan Parties' benefit and compensation plans for their directors,
officers or employees where the Loan Parties receive no Net Cash Proceeds
from such issuance), the Borrowers shall prepay the outstanding amount of
the Revolving Loans in an amount equal to 100% of the Net Cash Proceeds
received by such Person in connection therewith. The provisions of this
subsection (iv) shall not be deemed to be implied consent to any such
issuance or sale otherwise prohibited by the terms and conditions of this
Agreement. Any payments required to be made under this subsection (iv) shall
be applied as set forth in Section 2.05(d).
(v) Upon the receipt by any Loan Party
or any of its Subsidiaries of any Extraordinary Receipts, the Borrowers
shall prepay the outstanding principal of the Revolving Loans in an amount
equal to 100% of such Extraordinary Receipts, net of any reasonable expenses
incurred in collecting such Extraordinary Receipts. Any payments required to
be made under this subsection (v) shall be applied as set forth in Section
2.05(d).
(vi) If on any day an Indenture Deficit
exists, the Borrowers shall pay to the Administrative Agent an amount equal
to such Indenture Deficit to be applied to the outstanding principal of the
Revolving Loans which payment shall be made (x) immediately as a result of
an Indenture Deficit pursuant to an event described under Section 2.01(c)(i)
and
- 42 -
(y) at the election of the Collateral Agent, as a result of an Indenture
Deficit pursuant to an event described under Section 2.01(c)(ii). Any
payments required to be made under this subsection (vi) shall be applied as
set forth in Section 2.05(d).
(vii) On or prior to January 15, 2004,
the Borrowers shall prepay the outstanding principal amount of the Revolving
Loans in an amount, if any, which will eliminate any obligation of the
Parent and its Subsidiaries to make an "Asset Sale Offer" (as such term is
defined in the 2009 Note Indenture) in respect of the UCB Sale. Any payments
required to be made under this subsection (vii) shall be applied as set
forth in Section 2.05(d).
(viii) If the Parent or any of its
Subsidiaries receive a return of any cash collateral pledged by it to
support letters of credit or other similar credit instruments, the Borrowers
shall prepay the outstanding principal amount of the Revolving Loans in an
amount equal 100% of such cash. Any payments required to be made under this
subsection (viii) shall be applied as set forth in Section 2.05(d).
(ix) If any Loan Party shall make any
prepayment on any intercompany note to any Subsidiary of the Parent that is
not a Loan Party, or if the Parent shall make, or permit to be made, any
payments to repurchase any Class B Shares of Capital Stock of Solutia
Management, the Borrowers shall prepay the outstanding principal amount of
the Revolving Loans in an amount equal to ten times the amount of such
payment. Any payments required to be made under this subsection (ix) shall
be applied as set forth in Section 2.05(d).
(x) Notwithstanding the foregoing, (A)
in connection with a Disposition under Section 2.05(c)(iii) or receipt of
insurance proceeds or condemnation awards pursuant to Section 2.05(c)(v), up
to $5,000,000 in the aggregate in any 12-month period of the Net Cash
Proceeds from such Disposition and Extraordinary Receipts from such
insurance proceeds or condemnation awards, as the case may be, received by
any Loan Party or any of its Subsidiaries in connection therewith shall not
be required to be applied to the prepayment of the Revolving Loans on such
date to the extent such proceeds are used to replace, repair or restore the
properties or assets used in such Loan Party's or any of its Subsidiaries'
business in respect of which such Net Cash Proceeds or Extraordinary
Receipts, as the case may be, were paid, provided that, (x) no Default or
--------
Event of Default has occurred and is continuing on the date such Person
receives such Net Cash Proceeds or such Extraordinary Receipts, (y) the
Administrative Borrower delivers a certificate to the Agents within 5 days
after such Disposition or 10 days after the date of such loss, destruction
or taking, as the case may be, stating that such proceeds shall be used to
replace, repair or restore any such properties or assets to be used in such
Loan Party's or any of its Subsidiaries' business within a period specified
in such certificate not to exceed 90 days after the receipt of such proceeds
(which certificate shall set forth estimates of the proceeds to be so
expended) and (z) such proceeds are deposited in an account subject to the
sole dominion of the Administrative Agent; and if all or any portion of such
proceeds not so applied to the prepayment of the Revolving Loans are not
used in accordance with the preceding sentence within the period specified
in the relevant certificate furnished pursuant hereto or there shall occur a
Default or Event of Default, such remaining portion shall be applied to the
Revolving Loans as required by Section 2.05(c)(iii) or Section 2.05(c)(v),
as applicable, on the last day of such specified period or immediately, in
the case of a Default or Event of Default; and (B) the Borrowers shall not
be required to make a prepayment under Section 2.05(c)(iii), Section
- 43 -
2.05(c)(iv) or Section 2.05(c)(v) (other than with respect to (I) any
Designated Disposition, or (II) any event described in Section 2.05(c)(iii)
or Section 2.05(c)(v) for which the Revolving A Loans would be required to
be prepaid under Section 2.05(d) in the absence of this clause (B), in the
case of this clause (II), to the extent of the required prepayment to the
Revolving A Loans), unless the aggregate amount of Net Cash Proceeds
received as a result of the events described in such Sections exceeds
$2,500,000 and any such required prepayment under such Sections shall be
limited to the Net Cash Proceeds and Extraordinary Receipts, net of any
reasonable expenses incurred in connection with such Extraordinary Receipts,
exceeding $2,500,000.
(d) Application of Payments. If at any time in
-----------------------
the absence of a continuing Event of Default, the prepayments required under
Section 2.05(c) shall be applied as follows:
(i) the proceeds from any prepayment
pursuant to any Disposition of any Account or Inventory or any insurance
policy or condemnation award with respect to Inventory or any event
described in Section 2.05(c)(viii), shall be applied to the Revolving A
Loans until paid in full;
(ii) the proceeds from any prepayment
pursuant a Disposition of all or substantially all of the assets or Capital
Stock of any Person or any insurance which Disposition or proceeds of
insurance includes both (x) Accounts or Inventory and (y) other assets (in
each case, other than from the proceeds of any Designated Disposition),
shall be applied as follows: (A) an amount equal to the book value of such
Accounts and Inventory, or, if greater, the amount of Revolving A Loans or
Letter of Credit Accommodations supported by such assets determined using
the effective advance rate under the Borrowing Base against such Accounts
and Inventory (determined at the time of such Disposition or event resulting
in such insurance proceeds) shall be applied to the Revolving A Loans until
paid in full, and (B) the remaining proceeds shall be applied first, to the
Revolving C Loans until paid in full, second, to the Revolving B Loans until
paid in full, and third, to the Revolving A Loans until paid in full;
(iii) the proceeds from any prepayment
pursuant to a Designated Disposition, shall be applied as follows: (A) an
amount equal to the product of (x) 75% and (y) the excess of (I) the
proceeds of such Disposition over (II) the book value of any Accounts and
Inventory included in the Borrowing Base and in such Disposition, or, if
greater, an amount equal to the amount of the Revolving A Loans or Letter of
Credit Accommodations supported by such assets determined using the
effective advance rate under the Borrowing Base against the Accounts and
Inventory (determined at time of such Disposition), shall be applied first,
to the Revolving C Loans until paid in full, second, to the Revolving B
Loans until paid in full, and, third, to the Revolving A Loans until paid in
full; and (B) the remaining proceeds shall be applied to the Revolving A
Loans until paid in full;
(iv) the proceeds from any prepayment
event set forth in Section 2.05(c)(iii) (other than with respect to
Dispositions described in paragraphs (i), (ii) or (iii) above), Section
2.05(c)(iv) or Section 2.05(c)(v) (other than proceeds from any insurance
policy or condemnation award with respect to Inventory) shall be applied
first, to the Revolving C Loans until paid in full, second, to the Revolving
B Loans until paid in full, and, third, to the Revolving A Loans until paid
in full; and
- 44 -
(v) the proceeds from any prepayment
event set forth in Section 2.05(c)(vi), Section 2.05(c)(vii) or Section
2.05(c)(ix) shall be applied first, to the Revolving A Loans until paid in
full, second, to the Revolving C Loans until paid in full, and, third, to
the Revolving B Loans until paid in full.
(e) Asset Sale Offer. In the case of clauses
----------------
(d)(i), (d)(ii), (d)(iii) and (d)(iv) (with respect to Dispositions) of
Section 2.05(d), if after giving effect to such application of proceeds (and
any corresponding reduction in the Total Revolving A Credit Commitment, the
Total Revolving B Credit Commitment or the Total Revolving C Credit
Commitment pursuant to Section 2.05(a)(iii)), the Parent or any of its
Subsidiaries shall have an obligation to make an "Asset Sale Offer" (as such
term is defined in the 2009 Note Indenture) in connection with the events
giving rise to the mandatory prepayments described in such clauses, the
application of proceeds to the applicable Revolving Loans shall be increased
by the amount necessary to eliminate the obligation of the Parent and its
Subsidiaries to make any such Asset Sale Offer.
(f) Availability Requirements. Notwithstanding
-------------------------
anything to the contrary contained herein, if Availability would be less
than $10,000,000 immediately after giving effect to any prepayment of the
Revolving B Loans or the Revolving C Loans pursuant to Section 2.05(d)(ii)
or Section 2.05(d)(iv), no such prepayment of the Revolving B Loans or the
Revolving C Loans shall be made and such amounts shall be applied to the
repayment of the Revolving A Loans and, if no Revolving A Loans remain
outstanding and in the absence of a continuing Event of Default, the
Administrative Agent shall return such amounts to the Borrowers within two
(2) Business Days.
(g) Cumulative Prepayments. Except as otherwise
----------------------
expressly provided in this Section 2.05, payments with respect to any
subsection of this Section 2.05 are in addition to payments made or required
to be made under any other subsection of this Section 2.05.
Section 2.06 Fees.
----
(a) Fee Letter. From and after the Effective Date
----------
and until the Final Maturity Date, the Borrowers shall pay to the
Administrative Agent, for the account of the Agents and the Lenders, in
accordance with a written agreement among the Agents and the Lenders, the
fees specified in the Fee Letter, at the times specified for payment
therein.
(b) Unused Line Fee. From and after the Effective
---------------
Date and until the Final Maturity Date, the Borrowers shall pay to the
Administrative Agent for the account of the Lenders, in accordance with a
written agreement among the Agents and the Lenders, an unused line fee (the
"Unused Line Fee"), which shall accrue at the rate per annum of 0.75% on the
---------------
excess, if any, of the Total Revolving Credit Commitment over the sum of the
average principal amount of all Revolving Loans and Letter of Credit
Obligations outstanding from time to time and shall be payable monthly in
arrears on the first day of each month commencing November 1, 2003.
Section 2.07 Securitization. The Loan Parties hereby
--------------
acknowledge that the Lenders and their Affiliates may sell or securitize the
Loans (a "Securitization") through the pledge of the Loans as collateral
--------------
security for loans to the Lenders or their Affiliates or through the sale of
the Loans or the issuance of direct or indirect interests in the Loans,
which loans to
- 45 -
the Lenders or their Affiliates or direct or indirect interests will be
rated by ▇▇▇▇▇'▇, Standard & Poor's or one or more other rating agencies
(the "Rating Agencies"). The Loan Parties shall cooperate with the Lenders
---------------
and their Affiliates to effect the Securitization including, without
limitation, by (a) amending this Agreement and the other Loan Documents, and
executing such additional documents, as reasonably requested by the Lenders
in connection with the Securitization, provided that (i) any such amendment
-------- ----
or additional documentation does not impose material additional costs on the
Loan Parties and (ii) any such amendment or additional documentation does
not materially adversely affect the rights, or materially increase the
obligations, of the Loan Parties under the Loan Documents or change or
affect in a manner adverse to the Loan Parties the financial terms of the
Loans, (b) providing such information as may be reasonably requested by the
Lenders in connection with the rating of the Loans or the Securitization,
and (c) providing in connection with any rating of the Loans a certificate
(i) agreeing to indemnify the Lenders and their Affiliates, any of the
Rating Agencies, or any party providing credit support or otherwise
participating in the Securitization (collectively, the "Securitization
--------------
Parties") for any losses, claims, damages or liabilities (the "Liabilities")
------- -----------
to which the Lenders, their Affiliates or such Securitization Parties may
become subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained
in any Loan Document or in any writing delivered by or on behalf of any Loan
Party to the Lenders in connection with any Loan Document or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, and such indemnity shall survive any transfer by the
Lenders or their successors or assigns of the Loans and (ii) agreeing to
reimburse the Lenders and their Affiliates for any legal or other expenses
reasonably incurred by such Persons in connection with defending the
Liabilities.
Section 2.08 Taxes. Any and all payments by any Loan Party
-----
hereunder or under any other Loan Document shall be made free and clear of
and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding (i) taxes imposed on (or measured by) the net
---------
income of any Lender, any Agent or the L/C Issuer (or any transferee or
assignee thereof, including a participation holder (any such entity, a
"Transferee")) by the United States of America or by the jurisdiction in
----------
which such Lender, such Agent or the L/C Issuer is organized or has its
principal lending office or (ii) any branch profits taxes imposed by the
United States of America (all such nonexcluded taxes, levies, imposts,
deductions, charges withholdings and liabilities, collectively or
individually, "Taxes"). If any Loan Party shall be required to deduct any
-----
Taxes from or in respect of any sum payable hereunder to any Lender, any
Agent or the L/C Issuer (or any Transferee), (A) the sum payable shall be
increased by the amount (an "additional amount") necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 2.08) such Lender, such Agent or
the L/C Issuer (or such Transferee) shall receive an amount equal to the sum
it would have received had no such deductions been made, (B) such Loan Party
shall make such deductions and (C) such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, each Loan Party agrees to pay to
the relevant Governmental Authority in accordance with applicable law any
present or future stamp or documentary taxes or
- 46 -
any other excise or property taxes, charges or similar levies that arise
from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the Letter of
Credit Accommodations or any other Loan Document ("Other Taxes"). Each Loan
-----------
Party shall deliver to each Lender, each Agent and the L/C Issuer official
receipts in respect of any Taxes or Other Taxes payable hereunder promptly
after payment of such Taxes or Other Taxes.
(c) The Loan Parties hereby, jointly and
severally, indemnify and agree to hold each Lender, each Agent and the L/C
Issuer harmless from and against Taxes and Other Taxes (including, without
limitation, Taxes and Other Taxes imposed on any amounts payable under this
Section 2.08) paid by such Lender, such Agent or the L/C Issuer (or such
Transferee), whether or not such Taxes or Other Taxes were correctly or
legally asserted. Such indemnification shall be paid within 10 days from the
date on which any such Lender, any such Agent or the L/C Issuer makes
written demand therefor specifying in reasonable detail the nature and
amount of such Taxes or Other Taxes.
(d) Each Lender (or Transferee) that is organized
under the laws of a jurisdiction other than the United States, any State
thereof or the District of Columbia (a "Non-U.S. Lender") shall deliver to
---------------
the Administrative Borrower and the Agents two properly completed and duly
executed copies of either U.S. Internal Revenue Service Form W-8BEN or Form
W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Internal
Revenue Code with respect to payments of "portfolio interest", a Form
W-8BEN, or any subsequent versions thereof or successors thereto (and, if
such Non-U.S. Lender delivers a Form W-8, a certificate representing that
such Non-U.S. Lender is not a bank for purposes of Section 881(c) of the
Internal Revenue Code, is not a 10-percent shareholder (within the meaning
of Section 871(h)(3)(B) of the Internal Revenue Code) of any Borrower and is
not a controlled foreign corporation related to a Borrower (within the
meaning of Section 864(d)(4) of the Internal Revenue Code)), in each case
claiming complete exemption from U.S. Federal withholding tax on payments by
the Loan Parties under this Agreement. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement
(or, in the case of a Transferee that is a participation holder, on or
before the date such participation holder becomes a Transferee hereunder)
and on or before the date, if any, such Non-U.S. Lender changes its
applicable lending office by designating a different lending office (a "New
---
Lending Office"). In addition, each Non-U.S. Lender shall deliver such forms
--------------
within 20 days after receipt of a written request therefor from the
Administrative Borrower or any Agent. Notwithstanding any other provision of
this Section 2.08, a Non-U.S. Lender shall not be required to deliver after
the date hereof any form pursuant to this Section 2.08 that such Non-U.S.
Lender is not legally able to deliver.
(e) The Loan Parties shall not be required to
indemnify any Non-U.S. Lender, or pay any additional amounts to any Non-U.S.
Lender, in respect of United States Federal withholding tax pursuant to this
Agreement to the extent that (i) the obligation to withhold amounts with
respect to United States Federal withholding tax existed on the date such
Non-U.S. Lender became a party to this Agreement (or, in the case of a
Transferee that is a participation holder, on the date such participation
holder became a Transferee hereunder) or, with respect to payments to a New
Lending Office, the date such Non-U.S. Lender designated such New Lending
Office with respect to a Loan; provided, however, that this clause (i) shall
-------- -------
not apply to the extent the indemnity
- 47 -
payment or additional amounts any Transferee, or any Lender (or Transferee)
through a New Lending Office, would be entitled to receive (without regard
to this clause (i)) do not exceed the indemnity payment or additional
amounts that the Person making the assignment, participation or transfer to
such Transferee, or such Lender (or Transferee) making the designation of
such New Lending Office, would have been entitled to receive in the absence
of such assignment, participation, transfer or designation, (ii) the
obligation to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Lender to comply with the provisions of paragraph
(d) above or (iii) the obligation to pay such additional amounts does not
result from a change in applicable tax law (including, without limitation,
applicable judicial decisions, statutes, regulations or other administrative
interpretations) occurring after the date hereof.
(f) Any Lender, any Agent or the L/C Issuer (or
Transferee) claiming any indemnity payment or additional payment amounts
payable pursuant to this Section 2.08 shall (subject to legal and regulatory
restrictions) file any certificate or document reasonably requested in
writing by the Administrative Borrower or change the jurisdiction of its
applicable lending office if the making of such a filing or change would
avoid the need for or reduce the amount of any such indemnity payment or
additional amount which may thereafter accrue, would not require such
Lender, such Agent or the L/C Issuer (or Transferee) to disclose any
information such Lender, such Agent or the L/C Issuer (or Transferee) deems
confidential and would not, in the sole determination of such Lender, such
Agent or the L/C Issuer (or Transferee), be otherwise disadvantageous to
such Lender, such Agent or the L/C Issuer (or Transferee).
(g) If any Lender, any Agent or the L/C Issuer
(or a Transferee) shall become aware that it is entitled to claim a refund
from a Governmental Authority in respect of Taxes or Other Taxes with
respect to which any Loan Party has paid additional amounts, pursuant to
this Section 2.08, it shall promptly notify the Administrative Borrower of
the availability of such refund claim and shall, within 30 days after
receipt of a request by the Administrative Borrower, make a claim to such
Governmental Authority for such refund at the Loan Parties' expense. If any
Lender, any Agent or the L/C Issuer (or Transferee) receives a refund
(including pursuant to a claim for refund made pursuant to the preceding
sentence) in respect of any Taxes or Other Taxes with respect to which any
Loan Party has paid additional amounts pursuant to this Section 2.08, it
shall within 30 days from the date of such receipt pay over such refund to
the Administrative Borrower, net of all out-of-pocket expenses of such
Lender, such Agent or the L/C Issuer (or Transferee).
(h) The obligations of the Loan Parties under
this Section 2.08 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
ARTICLE III
LETTER OF CREDIT ACCOMMODATIONS
Section 3.01 Letter of Credit Guaranty.
-------------------------
(a) In order to assist the Borrowers in
establishing or opening letters of credit (each, a "Letter of Credit
----------------
Accommodation"), which shall not have expiration dates later than
-------------
- 48 -
the Final Maturity Date, with the L/C issuer, the Borrowers have requested
the Administrative Agent to join in the applications for such Letter of
Credit Accommodations and/or guarantee payment or performance of such Letter
of Credit Accommodations and any drafts thereunder through the issuance of a
Letter of Credit Guaranty, thereby lending the Administrative Agent's credit
to that of the Borrowers, and the Administrative Agent has agreed to do so.
These arrangements shall be coordinated by the Administrative Agent, subject
to the terms and conditions set forth below. The Administrative Agent shall
not be required to be the issuer of any Letter of Credit Accommodation. The
Borrowers will be the account parties for the application of each Letter of
Credit Accommodation, which shall be in form and substance satisfactory to
the Administrative Agent and the L/C Issuer or on a computer transmission
system approved by the Administrative Agent and the L/C Issuer, or such
other written form or computer transmission system as may from time to time
be approved by the Administrative Agent and the L/C Issuer, and shall be
duly completed in a manner and at a time reasonably acceptable to the
Administrative Agent, together with such other certificates, agreements,
documents and other papers and information as the Administrative Agent and
the L/C Issuer may reasonably request, which shall include, without
limitation, the requested date of issuance and the name and address of the
beneficiary (the "Letter of Credit Application"). In the event of any
----------------------------
conflict between the terms of any Letter of Credit Application and this
Agreement, for purposes of this Agreement, the terms of this Agreement shall
control.
(b) The aggregate Letter of Credit Obligations
shall not at any time exceed lowest of (i) the difference between (A) the
Total Revolving A Credit Commitment and (B) the aggregate principal amount
of all Revolving A Loans then outstanding, (ii) the difference between (A)
the Borrowing Base and (B) the aggregate principal amount of all Revolving A
Loans then outstanding, and (iii) the L/C Subfacility. In addition, the
terms and conditions of all Letter of Credit Accommodations and all changes
or modifications thereof by the Borrowers and/or the L/C Issuer shall in all
respects be subject to the prior approval of the Administrative Agent in its
reasonable business judgment; provided, however, that (i) the expiry date of
-------- -------
all Letter of Credit Accommodations shall be no later than the Final
Maturity Date and (ii) the Letter of Credit Accommodations and all
documentation connection therewith shall be in form and substance reasonably
satisfactory to the Administrative Agent and the L/C Issuer.
(c) If the Administrative Agent is obligated to
advance funds under a Letter of Credit Guaranty or in connection with a
Letter of Credit Accommodation, the Administrative Agent may immediately
reimburse such disbursement by charging the Loan Account as set forth below.
In the event that the Administrative Agent does not charge the Loan Account,
the Borrowers shall, upon demand by the Administrative Agent, immediately
reimburse such disbursement to the Administrative Agent by paying to it an
amount equal to such disbursement not later than 12:00 noon (New York City
time) on the date that such disbursement is made, if the Borrowers (or the
Administrative Borrower on behalf of the Borrowers) shall have received
written or telephone notice of such disbursement prior to 11:00 a.m. (New
York City time) on such date, or, if such notice has not been received by
the Borrowers (or the Administrative Borrower on behalf of the Borrowers)
prior to such time on such date, then no later than 12:00 noon (New York
City time) on the Business Day that the Borrowers (or the Administrative
Borrower on behalf of the Borrowers) receives such notice, if such notice is
received prior to 11:00 a.m. (New York City time) on the date of receipt. In
the absence of such reimbursement, the Administrative Agent shall have the
right, without notice to the Borrowers, to charge the Loan Account with the
amount of
- 49 -
such disbursement and the Administrative Agent shall have the right, without
notice to the Borrowers, to charge the Loan Account with the amount of any
and all other Indebtedness, liabilities and obligations of any kind
(including indemnification for breakage costs, capital adequacy and reserve
requirement charges) incurred by the Administrative Agent or the Revolving A
Lenders under the Letter of Credit Guaranty or incurred by the L/C Issuer
with respect to a Letter of Credit Accommodation at the earlier of (i)
payment by the Administrative Agent or the Revolving A Lenders under the
Letter of Credit Guaranty or (ii) the occurrence of any Default or Event of
Default. Any amount charged to the Loan Account shall be deemed a Revolving
A Loan hereunder made by the Revolving A Lenders to the Borrowers, funded by
the Administrative Agent on behalf of the Revolving A Lenders and subject to
Section 2.02. Any charges, fees, commissions, costs and expenses charged to
the Administrative Agent for the Borrowers' account by the L/C Issuer in
connection with or arising out of Letter of Credit Accommodations or
transactions relating thereto will be charged to the Loan Account in full
when charged to or paid by the Administrative Agent and, when charged, shall
be conclusive on the Borrowers absent manifest error. Each of the Revolving
A Lenders and the Borrowers agree that the Administrative Agent shall have
the right to make such charges regardless of whether any Default or Event of
Default shall have occurred and be continuing or whether any of the
conditions precedent in Section 5.02 have been satisfied. If any such
reimbursement of disbursements made by the Administrative Agent is not made
by the Administrative Agent by charging the Loan Account and the Borrowers
(or the Administrative Borrower on behalf of the Borrowers) request and are
entitled to obtain a Revolving A Loan to reimburse such disbursements on the
date such reimbursement is due, such reimbursement shall be made no later
than the time that the Administrative Agent makes the proceeds of the
Revolving A Loan available to the Borrowers.
(d) The Borrowers understand that the Letter of
Credit Guaranties may require the Administrative Agent and/or the Lenders to
indemnify the L/C Issuer for certain costs or liabilities arising out of
claims by the Borrowers against such L/C Issuer. The Borrowers
unconditionally and jointly and severally indemnify each Agent and each
Lender and holds each Agent and each Lender harmless from any and all loss,
claim or liability incurred by any Agent or any Lender arising from any
transaction or occurrences relating to Letter of Credit Accommodations, any
drafts or acceptances thereunder, the Collateral relating thereof, and all
Obligations in respect thereto, including any such loss or claim due to any
action taken by the L/C Issuer, other than for any such loss, claim or
liability arising out of the gross negligence or willful misconduct of the
L/C Issuer, any Agent or any Lender as determined by a final judgment of a
court of competent jurisdiction. The Borrowers further agree to jointly and
severally hold each Agent and each Lender harmless from any errors of
omission, negligence or misconduct by the L/C Issuer. The Borrowers agree to
be bound by the L/C Issuer's regulations and interpretations of any Letter
of Credit Accommodation that is the subject of a Letter of Credit Guaranty
and opened to or for the Borrowers' account or by the Administrative Agent's
interpretations of any Letter of Credit Accommodation issued for the
Borrowers' account, even though such interpretation may be different from
the Borrowers' own, and the Borrowers understand and agree that the Lenders,
the Agents and the L/C Issuer shall not be liable for any error, negligence,
or mistake, whether of omission or commission, in following the Borrowers'
instructions or those contained in the Letter of Credit Accommodation or any
modifications, amendments, or supplements thereto. The Borrowers'
unconditional obligations to each Agent, each Lender and the L/C Issuer with
respect to Letter of Credit Accommodations hereunder shall not be modified
or diminished for any reason or in any manner whatsoever, other than as a
result of such Agent's, such Lender's or the L/C Issuer's
- 50 -
gross negligence or willful misconduct as determined by a final judgment of
a court of competent jurisdiction. The Borrowers agree that any charges
incurred by the Administrative Agent or the L/C Issuer for the Borrowers'
account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer
under the Letter of Credit Guaranty, the Administrative Agent or the
Revolving A Lenders, as the case may be, shall, without prejudice to their
rights under this Agreement (including that such unreimbursed amounts shall
constitute Revolving A Loans hereunder), acquire by subrogation, any rights,
remedies, duties or obligations granted or undertaken by the Borrowers in
favor of the L/C Issuer in any application for Letter of Credit
Accommodations, any standing agreement relating to Letter of Credit
Accommodations or otherwise, all of which shall be deemed to have been
granted to the Administrative Agent and the Revolving A Lenders and apply in
all respects to the Administrative Agent and the Revolving A Lenders and
shall be in addition to any rights, remedies, duties or obligations
contained herein.
Section 3.02 Participations.
--------------
(a) Immediately upon issuance by the L/C Issuer
of any Letter of Credit Accommodation pursuant to this Agreement, each
Revolving A Lender shall be deemed to have irrevocably and unconditionally
purchased and received from the Administrative Agent, without recourse or
warranty, an undivided interest and participation, to the extent of such
Revolving A Lender's Pro Rata Share, in all obligations of the
Administrative Agent in such Letter of Credit Accommodation including,
without limitation, all Reimbursement Obligations of the Borrowers with
respect thereto pursuant to the Letter of Credit Guaranty or otherwise.
(b) In the event that the Administrative Agent
makes any payment in respect of the Letter of Credit Guaranty and the
Borrowers shall not have repaid such amounts to the Administrative Agent,
the Administrative Agent shall charge the Loan Account in the amount of the
Reimbursement Obligation, in accordance with Section 3.01(c) and Section
4.02 of this Agreement.
(c) The obligations of a Revolving A Lender to
make payments to the Administrative Agent for the account of the
Administrative Agent, the Revolving A Lenders or the L/C Issuer with respect
to a Letter of Credit Accommodation shall be irrevocable, without any
qualification or exception whatsoever and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or
enforceability of this Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff,
defense or other right which the Borrowers or any other Loan Party may have
at any time against a beneficiary named in such Letter of Credit
Accommodation or any transferee of such Letter of Credit Accommodation (or
any Person for whom any such transferee may be acting), any Agent, any
Lender, or any other Person, whether in connection with this Agreement, such
Letter of Credit Accommodation, the transactions contemplated herein or any
unrelated transactions (including
- 51 -
any underlying transactions between the Borrowers or any other Loan Party or
any other party and the beneficiary named in such Letter of Credit
Accommodation;
(iii) any draft, certificate or any
other document presented under such Letter of Credit Accommodation proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Loan Documents;
(v) any failure by any Agent to provide
any notices required pursuant to his Agreement relating to such Letter of
Credit Accommodation;
(vi) any payment by the L/C Issuer under
such Letter of Credit Accommodation against presentation of a draft or
certificate which does not comply with the terms of such Letter of Credit
Accommodation; or
(vii) the occurrence of any Default or
Event of Default.
Section 3.03 Letter of Credit Accommodations.
-------------------------------
(a) The Administrative Borrower may, upon
reasonable notice in advance of such issuance but, in any event, not later
than 12:00 noon, New York City time, at least two (2) Business Days in
advance of the issuance thereof (except that no advance notice shall be
required in the case of Letter of Credit Accommodations to be issued on the
Effective Date), request the Administrative Agent to assist the Borrowers in
establishing or opening a Letter of Credit by delivering to the
Administrative Agent, with a copy to the L/C Issuer, a Letter of Credit
Application, together with any necessary related documents. The
Administrative Agent shall not provide support, pursuant to the Letter of
Credit Guaranty, if the Administrative Agent shall have received written
notice from the Collateral Agent or the Required Lenders on the Business Day
immediately preceding the proposed issuance date for such Letter of Credit
that one or more of the conditions precedent in Section 5.02 will not have
been satisfied on such date, and the Administrative Agent shall not
otherwise be required to determine that, or take notice whether, the
conditions precedent set forth in Section 5.02 have been satisfied.
(b) (i) The Borrowers shall pay to the
Administrative Agent for the account of the Lenders in accordance with a
written agreement among the Agents and the Lenders (A) for any Letter of
Credit Accommodation issued hereunder, a non-refundable fee equal to 6.00%
per annum of the stated amount of such Letter of Credit Accommodation,
payable, annually in advance, on the date such Letter of Credit
Accommodation is issued and (B) for any amendment to an existing Letter of
Credit Accommodation that increases the stated amount of such Letter of
Credit Accommodation, a non-refundable fee equal to 6.00% per annum of the
increase in the stated amount of such Letter of Credit Accommodation,
payable on the date of such increase (the "Letter of Credit Fees"), except
---------------------
that (x) the Administrative Agent may, and upon the written direction of the
Required A Lenders shall, require the Borrowers to pay the Administrative
Agent such Letter of Credit Fee, at a rate equal to 3.0% plus the per annum
rate otherwise applicable thereto on such daily outstanding balance for: (I)
the period from and after the date of termination hereof until all
Obligations shall have been Paid in Full (notwithstanding entry of a
judgment
- 52 -
against any Borrower) and (II) the period from and after the date of the
occurrence of an Event of Default for so long as such Event of Default is
continuing as determined by the Collateral Agent and the Administrative
Agent, and (y) the Borrowers shall not be obligated to pay any Letter of
Credit Fees for any Letter of Credit Accommodation issued during the 90-day
period after the Effective Date to replace a letter of credit of the
Borrowers supported by a Letter of Credit Accommodation issued on the
Effective Date for the benefit of the Existing Agent, except for such Letter
of Credit Fees that accrue during the period after the original expiration
date of such Letter of Credit Accommodation issued for the benefit of the
Existing Agent.
(ii) L/C Issuer Charges. The Borrowers
------------------
shall pay to the Administrative Agent any and all customary charges assessed
by the L/C Issuer in connection with the issuance, administration,
amendment, payment or cancellation of Letter of Credit Accommodations.
(c) Charges to the Loan Account. The Borrowers
---------------------------
hereby authorize the Administrative Agent to, and the Administrative Agent
may, from time to time, charge the Loan Account pursuant to Section 3.01(c)
and Section 4.02 of this Agreement with the amount of any Letter of Credit
Accommodation fees or charges due under this Section 3.03.
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 Audit and Collateral Monitoring Fees. The
------------------------------------
Borrowers acknowledge that pursuant to Section 7.01(f), representatives of
the Agents may visit any or all of the Loan Parties and/or conduct audits,
inspections, valuations and/or field examinations of any or all of the Loan
Parties at any time and from time to time in a manner so as not to unduly
disrupt the business of the Loan Parties. The Borrowers agree to pay (a)
$1,500 per day per examiner plus the examiner's out-of-pocket costs and
reasonable expenses incurred in connection with all such visits, audits,
inspections, valuations and field examinations and (b) the cost of all
visits, audits, inspections, valuations and field examinations conducted by
a third party on behalf of the Agents; provided, that, in the absence of a
--------
Default or Event of Default, the Borrowers shall not be obligated to pay for
more than (x) four financial audits in any 12 month period, (y) four
inventory appraisals and one real property and fixed assets appraisal in any
12 month period, and (z) one enterprise valuation in any 12 month period,
and, after the occurrence and during the continuance of a Default or Event
of Default, the Borrowers shall pay for all audits, appraisals and
enterprise valuations.
Section 4.02 Payments; Computations and Statements. (a)
-------------------------------------
The Borrowers will make each payment under this Agreement not later than
12:00 noon on the day when due, in lawful money of the United States of
America and in immediately available funds, to the Administrative Agent's
Account. All payments received by the Administrative Agent after 12:00 noon
on any Business Day will be credited to the Loan Account on the next
succeeding Business Day. All payments shall be made by the Borrowers without
set-off, counterclaim, deduction or other defense to the Agents and the
Lenders. Except as provided in Section 2.02(c), after receipt, the
Administrative Agent will promptly thereafter cause to be distributed like
funds relating to the payment of principal ratably to the Lenders in
accordance with their Pro Rata Shares and like
- 53 -
funds relating to the payment of any other amount payable to any Lender to
such Lender, in each case to be applied in accordance with the terms of this
Agreement, provided that the Administrative Agent will cause to be
--------
distributed all interest and fees received from or for the account of the
Borrowers not less than once each month and in any event promptly after
receipt thereof. The Lenders and the Borrowers hereby authorize the
Administrative Agent to, and the Administrative Agent may, from time to
time, charge the Loan Account of the Borrowers with any amount due and
payable by the Borrowers under any Loan Document. Each of the Lenders and
the Borrowers agrees that the Administrative Agent shall have the right to
make such charges whether or not any Default or Event of Default shall have
occurred and be continuing or whether any of the conditions precedent in
Section 5.02 have been satisfied. Any amount charged to the Loan Account of
the Borrowers shall be deemed a Revolving A Loan hereunder made by the
Revolving A Lenders to the Borrowers, funded by the Administrative Agent on
behalf of the Lenders and subject to Section 2.02(c). The Lenders and the
Borrowers confirm that any charges which the Administrative Agent may so
make to the Loan Account of the Borrowers as herein provided will be made as
an accommodation to the Borrowers and solely at the Administrative Agent's
discretion, provided that the Administrative Agent shall from time to time
--------
upon the request of the Collateral Agent (to the extent there exists no
Event of Default and such charge does not exceed the then current
Availability) or the Documentation Agent, charge the Loan Account of the
Borrowers with any amount due and payable under any Loan Document. Whenever
any payment to be made under any such Loan Document shall be stated to be
due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall in such case
be included in the computation of interest or fees, as the case may be. All
computations of fees shall be made by the Administrative Agent on the basis
of a year of 360 days for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such fees are
payable. Each determination by the Administrative Agent of an interest rate
or fees hereunder shall be conclusive and binding for all purposes in the
absence of manifest error.
(b) The Administrative Agent shall provide the
Administrative Borrower, promptly after the end of each calendar month, a
summary statement (in the form from time to time used by the Administrative
Agent) of the opening and closing daily balances in the Loan Account of the
Borrowers during such month, the amounts and dates of all Loans made to the
Borrowers during such month, the amounts and dates of all payments on
account of the Loans to the Borrowers during such month and the Loans to
which such payments were applied, the amount of interest accrued on the
Loans to the Borrowers during such month, any Letter of Credit
Accommodations issued by the L/C Issuer for the account of the Borrowers
during such month, specifying the face amount thereof, the amount of charges
to the Loan Account and/or Loans made to the Borrowers during such month to
reimburse the Lenders for drawings made under Letter of Credit
Accommodations, and the amount and nature of any charges to the Loan Account
made during such month on account of fees, commissions, expenses and other
Obligations. All entries on any such statement shall be presumed to be
correct and, thirty (30) days after the same is sent, shall be final and
conclusive absent manifest error.
Section 4.03 Sharing of Payments, Etc. Except as provided
-------------------------
in Section 2.02(c), if any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of any Obligation in excess of its share of payments
in accordance with the terms of this Agreement, such Lender shall forthwith
purchase from the
- 54 -
other Lenders such participations in such similar obligations held by them
as shall be necessary to cause such purchasing Lender to share the excess
payment with the other Lenders in accordance with and to the extent required
by the terms of this Agreement; provided, however, that if all or any
-------- -------
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender
shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (a) the amount of such Lender's required
repayment to (b) the total amount so recovered from the purchasing Lender of
any interest or other amount paid by the purchasing Lender in respect of the
total amount so recovered). The Borrowers agree that any Lender so
purchasing a participation from another Lender pursuant to this Section 4.03
may, to the fullest extent permitted by law, exercise all of its rights
(including the Lender's right of set-off) with respect to such participation
as fully as if such Lender were the direct creditor of the Borrowers in the
amount of such participation.
Section 4.04 Apportionment of Payments. Subject to Section
-------------------------
2.02(c) and to the written agreement among the Agents and the Lenders:
(a) All payments of principal and interest in
respect of outstanding Loans, all payments in respect of the Letter of
Credit Obligations, all payments of fees (other than the fees set forth in
Section 2.06 hereof and the Fee Letter, Letter of Credit Fees provided for
in Section 3.03(b) and the audit and collateral monitoring fee provided for
in Section 4.01, in each case, to the extent set forth in a written
agreement among the Agents and the Lenders) and all other payments in
respect of any other Obligations, shall be allocated by the Administrative
Agent among such of the Lenders as are entitled thereto, in proportion to
their respective Pro Rata Shares or otherwise as provided herein or, in
respect of payments not made on account of Loans or Letter of Credit
Obligations, as designated by the Person making payment when the payment is
made.
(b) After the occurrence and during the
continuance of an Event of Default, the Administrative Agent may, and upon
the direction of the Documentation Agent or the Required A Lenders shall,
apply all payments in respect of any Obligations and all proceeds of the
Collateral: (i) first, ratably to pay the Obligations in respect of any fees
-----
(including any fees or charges assessed by the L/C Issuer), expense
reimbursements, indemnities and other amounts then due to the Agents or the
L/C Issuer until paid in full; (ii) second, ratably to pay the Obligations
------
in respect of any fees (including Letter of Credit Fees payable to the
Revolving A Lenders), expense reimbursements and indemnities then due to the
Revolving A Lenders until paid in full; (iii) third, ratably to pay interest
-----
due in respect of the Agent Advances until paid in full; (iv) fourth,
------
ratably to pay principal of the Agent Advances until paid in full; (v)
fifth, ratably to pay interest due in respect of the Revolving A Loans and
-----
Letter of Credit Obligations until paid in full; (vi) sixth, ratably to pay
-----
principal of the Revolving A Loans and Letter of Credit Obligations (or, to
the extent such Letter of Credit Obligations are contingent, to provide cash
collateral in an amount equal to 105% of such Letter of Credit Obligations)
until paid in full; (vii) seventh, ratably to pay the Obligations in respect
-------
of any fees, expense reimbursements and indemnities then due to the
Revolving B Lenders and Revolving C Lenders until paid in full; (viii)
eighth, ratably to pay interest due in respect of the Revolving B Loans and
------
the Revolving C Loans until paid in full; (ix) ninth, ratably to pay
-----
principal of the Revolving B Loans and the Revolving C Loans until paid in
full; and (x) tenth, to the ratable payment of all other Obligations then
-----
due and payable.
- 55 -
(c) In each instance, so long as no Event of
Default has occurred and is continuing, Section 4.04(b) shall not be deemed
to apply to any payment by the Borrowers specified by the Administrative
Borrower to the Administrative Agent to be for the payment of the principal
of or interest on the Revolving B Loans or the Revolving C Loans or other
related Obligations then due and payable under any provision of this
Agreement or the payment of all or part of the principal of the Revolving B
Loans or the Revolving C Loans in accordance with the terms and conditions
of Section 2.05(d).
(d) For purposes of Section 4.04(b) (other than
clause (x) of Section 4.04(b)), "paid in full" means payment of all amounts
owing under the Loan Documents according to the terms thereof, including
loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense
reimbursements, except to the extent that default or overdue interest (but
not any other interest), loan fees, service fees, professional fees, expense
reimbursements, or other fees and expenses, each arising from or related to
a default are disallowed in any Insolvency Proceeding, and, for purposes of
clause (x) of Section 4.04(b), "paid in full" means payment of all amounts
owing under the Loan Documents according to the terms thereof, including
loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any Insolvency
Proceeding), default interest, interest on interest, and expense
reimbursements, whether or not any of the foregoing would be or is allowed
or disallowed in whole or in part in any Insolvency Proceeding
Section 4.05 Increased Costs and Reduced Return. (a) If
----------------------------------
any Lender, any Agent or the L/C Issuer shall have determined that the
adoption or implementation of, or any change in, any law, rule, treaty or
regulation, or any policy, guideline or directive of, or any change in, the
interpretation or administration thereof by, any court, central bank or
other administrative or Governmental Authority, or compliance by any Lender,
any Agent or the L/C Issuer or any Person controlling any such Lender, any
such Agent or the L/C Issuer with any directive of, or guideline from, any
central bank or other Governmental Authority or the introduction of, or
change in, any accounting principles applicable to any Lender, any Agent or
the L/C Issuer or any Person controlling any such Lender, any such Agent or
the L/C Issuer (in each case, whether or not having the force of law), shall
(i) subject any Lender, any Agent or the L/C Issuer, or any Person
controlling any such Lender, any such Agent or the L/C Issuer to any tax,
duty or other charge with respect to this Agreement or any Loan made by such
Lender or such Agent or any Letter of Credit Accommodation issued by the L/C
Issuer, or change the basis of taxation of payments to any Lender, any Agent
or the L/C Issuer or any Person controlling any such Lender, any such Agent
or the L/C Issuer of any amounts payable hereunder (except for taxes on the
overall net income of any Lender, any Agent or the L/C Issuer or any Person
controlling any such Lender, any such Agent or the L/C Issuer), (ii) impose,
modify or deem applicable any reserve, special deposit or similar
requirement against any Loan, any Letter of Credit Accommodation or against
assets of or held by, or deposits with or for the account of, or credit
extended by, any Lender, any Agent or the L/C Issuer or any Person
controlling any such Lender, any such Agent or the L/C Issuer or (iii)
impose on any Lender, any Agent or the L/C Issuer or any Person controlling
any such Lender, any such Agent or the L/C Issuer any other condition
regarding this Agreement or any Loan or Letter of Credit Accommodation, and
the result of any event referred to in clauses (i), (ii) or (iii) above
shall be to increase the cost to any Lender, any Agent or the L/C Issuer of
making any Loan, issuing, guaranteeing or
- 56 -
participating in any Letter of Credit Accommodation, or agreeing to make any
Loan or issue, guaranty or participate in any Letter of Credit
Accommodation, or to reduce any amount received or receivable by any Lender,
any Agent or the L/C Issuer hereunder, then, upon demand by any such Lender,
any such Agent or the L/C Issuer, the Borrowers shall pay to such Lender,
such Agent or the L/C Issuer such additional amounts as will compensate such
Lender, such Agent or the L/C Issuer for such increased costs or reductions
in amount; provided, that the Borrowers shall not be required to compensate
--------
any Lender, any Agent or the L/C Issuer for any amounts incurred more than
180 days prior to the date such Person notifies the Administrative Borrower
that it intends to claim such compensation therefor.
(b) If any Lender, any Agent or the L/C Issuer
shall have determined that any Capital Guideline or the adoption or
implementation of, or any change in, any Capital Guideline by the
Governmental Authority charged with the interpretation or administration
thereof, or compliance by any Lender, any Agent or the L/C Issuer or any
Person controlling such Lender, such Agent or the L/C Issuer with any
Capital Guideline or with any request or directive of any such Governmental
Authority with respect to any Capital Guideline, or the implementation of,
or any change in, any applicable accounting principles (in each case,
whether or not having the force of law), either (i) affects or would affect
the amount of capital required or expected to be maintained by any Lender,
any Agent or the L/C Issuer or any Person controlling such Lender, such
Agent or the L/C Issuer, and any Lender, any Agent or the L/C Issuer
determines that the amount of such capital is increased as a direct or
indirect consequence of any Loans made or maintained, Letter of Credit
Accommodations issued or any guaranty or participation with respect thereto,
any Lender's, any Agent's or the L/C Issuer's or any such other controlling
Person's other obligations hereunder, or (ii) has or would have the effect
of reducing the rate of return on any Lender's, any Agent's or the L/C
Issuer's any such other controlling Person's capital to a level below that
which such Lender, such Agent or the L/C Issuer or such controlling Person
could have achieved but for such circumstances as a consequence of any Loans
made or maintained, Letter of Credit Accommodations issued, or any guaranty
or participation with respect thereto or any agreement to make Loans, to
issue Letter of Credit Accommodations or such Lender's, such Agent's or the
L/C Issuer's or such other controlling Person's other obligations hereunder
(in each case, taking into consideration, such Lender's, such Agent's or the
L/C Issuer's or such other controlling Person's policies with respect to
capital adequacy), then, upon demand by any Lender, any Agent or the L/C
Issuer, the Borrowers shall pay to such Lender, such Agent or the L/C Issuer
from time to time such additional amounts as will compensate such Lender,
such Agent or the L/C Issuer for such cost of maintaining such increased
capital or such reduction in the rate of return on such Lender's, such
Agent's or the L/C Issuer's or such other controlling Person's capital;
provided, that the Borrowers shall not be required to compensate any Lender,
--------
any Agent or the L/C Issuer for any amounts incurred more than 180 days
prior to the date such Person notifies the Administrative Borrower that it
intends to claim such compensation therefor.
(c) All amounts payable under this Section 4.05
shall bear interest from the date that is ten (10) days after the date of
demand by any Lender, any Agent or the L/C Issuer until payment in full to
such Lender, such Agent or the L/C Issuer at the Reference Rate. A
certificate of such Lender, such Agent or the L/C Issuer claiming
compensation under this Section 4.05, specifying the event herein above
described and the nature of such event shall be submitted by such Lender,
such Agent or the L/C Issuer to the Administrative Borrower, setting forth
the additional amount due and an explanation of the calculation thereof, and
such Lender's, such
- 57 -
Agent's or the L/C Issuer's reasons for invoking the provisions of this
Section 4.05, and shall be final and conclusive absent manifest error.
Section 4.06 Joint and Several Liability of the Borrowers.
--------------------------------------------
(a) Notwithstanding anything in this Agreement or any other Loan Document to
the contrary, each of the Borrowers hereby accepts joint and several
liability hereunder and under the other Loan Documents in consideration of
the financial accommodations to be provided by the Agents and the Lenders
under this Agreement and the other Loan Documents, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in consideration of
the undertakings of the other Borrower to accept joint and several liability
for the Obligations. Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as
a co-debtor, joint and several liability with the other Borrower, with
respect to the payment and performance of all of the Obligations (including,
without limitation, any Obligations arising under this Section 4.06), it
being the intention of the parties hereto that all of the Obligations shall
be the joint and several obligations of each of the Borrowers without
preferences or distinction among them. If and to the extent that any of the
Borrowers shall fail to make any payment with respect to any of the
Obligations as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each such event, the other
Borrower will make such payment with respect to, or perform, such
Obligation. Subject to the terms and conditions hereof, the Obligations of
each of the Borrowers under the provisions of this Section 4.06 constitute
the absolute and unconditional, full recourse Obligations of each of the
Borrowers, enforceable against each such Person to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement, the other Loan Documents or any other
circumstances whatsoever.
(b) The provisions of this Section 4.06 are made
for the benefit of the Agents, the Lenders and their successors and assigns,
and may be enforced by them from time to time against any or all of the
Borrowers as often as occasion therefor may arise and without requirement on
the part of the Agents, the Lenders or such successors or assigns first to
marshal any of its or their claims or to exercise any of its or their rights
against any other Borrower or to exhaust any remedies available to it or
them against any other Borrower or to resort to any other source or means of
obtaining payment of any of the Obligations hereunder or to elect any other
remedy. The provisions of this Section 4.06 shall remain in effect until all
of the Obligations shall have been paid in full or otherwise fully
satisfied.
(c) Each of the Borrowers hereby agrees that it
will not enforce any of its rights of contribution or subrogation against
the other Borrower with respect to any liability incurred by it hereunder or
under any of the other Loan Documents, any payments made by it to the Agents
or the Lenders with respect to any of the Obligations or any Collateral,
until such time as all of the Obligations have been paid in full in cash.
Any claim which any Borrower may have against any other Borrower with
respect to any payments to the Agents or the Lenders hereunder or under any
other Loan Documents are hereby expressly made subordinate and junior in
right of payment, without limitation as to any increases in the Obligations
arising hereunder or thereunder, to the prior payment in full in cash of the
Obligations.
- 58 -
ARTICLE V
CONDITIONS TO LOANS
Section 5.01 Conditions Precedent to Effectiveness. This
-------------------------------------
Agreement shall become effective as of the Business Day (the "Effective
---------
Date") when each of the following conditions precedent shall have been
----
satisfied in a manner satisfactory to the Administrative Agent and the
Collateral Agent:
(a) Payment of Fees, Etc. The Borrowers shall
---------------------
have paid on or before the date of this Agreement all fees, costs, expenses
and taxes then payable pursuant to Section 2.06, the Fee Letter and Section
12.04.
(b) Representations and Warranties; No Event of
-------------------------------------------
Default. The following statements shall be true and correct: (i) the
-------
representations and warranties contained in ARTICLE VI and in each other
Loan Document, certificate or other writing delivered to any Agent, any
Lender or the L/C Issuer pursuant hereto or thereto on or prior to the
Effective Date are true and correct on and as of the Effective Date as
though made on and as of such date and (ii) no Default or Event of Default
shall have occurred and be continuing on the Effective Date or would result
from this Agreement or the other Loan Documents becoming effective in
accordance with its or their respective terms.
(c) Legality. The making of the initial Loans or
--------
the issuance of any Letter of Credit Accommodations shall not contravene any
law, rule or regulation applicable to any Agent, any Lender or the L/C
Issuer.
(d) Delivery of Documents. The Collateral Agent
---------------------
shall have received on or before the Effective Date the following, each in
form and substance satisfactory to the Collateral Agent and, unless
indicated otherwise, dated the Effective Date:
(i) a Security Agreement, duly executed
by each Loan Party (which shall include a grant of a Lien on all of the
Parent's equity interest in Astaris LLC, Flexsys America LP, and on all of
the Loan Parties' other joint venture, partnership or limited liability
company interests or other similar interests of such Loan Party in Persons
that are not its Subsidiaries directly owned by such Loan Party, in each
case to the extent such Lien may be granted under Section 9-408 of the
Uniform Commercial Code);
(ii) (A) a Pledge Agreement, duly
executed by each Loan Party, together with the original stock certificates
representing (x) all of the Capital Stock of such Loan Party's directly
owned Domestic Subsidiaries and (y) all of the non-voting Capital Stock and
65% of the voting Capital Stock of such Loan Party's directly owned Foreign
Subsidiaries (other than Vianova Resins Canada Inc., Solutia Colombia Ltd.,
Solutia GOM India Coatings Materials Pty. Ltd. and Solutia China Ltd.), and
all intercompany promissory notes evidencing Indebtedness owing to such Loan
Parties (other than in the case of the intercompany convertible bond made by
Solutia Europe to Solutia Investments LLC and Monchem International, Inc.,
which shall be limited to 65% of the interest of Solutia Investments LLC and
Monchem International, Inc. in such convertible bond), accompanied by
undated stock powers executed in
- 59 -
blank and other proper instruments of transfer, and (B) Pledge Agreements,
duly executed by (I) Monchem International, Inc. in respect of its pledge of
all of the non-voting Capital Stock and 65% of the voting Capital Stock of
each of Solutia Europe and Solutia Dutch Newco, and (II) Solutia Dutch Newco
in respect of its hypothetication of all of the non-voting Capital Stock and
65% of the voting Capital Stock of Solutia UK Holdings, which, in the case
of clauses (I) and (II) above complies with the requirements of law of
Belgium and England and Wales, respectively, in each case, to the extent
that the granting of such Lien pursuant to such Pledge Agreement may be
effected without requiring that such Lien be granted to, and shared equally
and ratably with, the 2009 Note Trustee, for the benefit of the 2009 Note
Holders (other than a junior and subordinate Lien pursuant to the 2009 Note
Subordination Agreement), the 1997 Trustee, for the benefit of the holders
of the 1997 Debentures and/or with any agent under the Euro Indenture, for
the benefit of the holders of the Euro Notes;
(iii) a Mortgage, duly executed by the
applicable Loan Party, with respect to each Facility (which Facilities shall
include, among others, the properties located at Martinsville, Virginia,
Indian Orchard (Springfield), Massachusetts, Trenton, Michigan and Chocolate
Bayou (Alvin), Texas), to the extent that the granting of such Mortgage may
be effected without requiring that such Mortgage be granted to, and shared
equally and ratably with, the 2009 Note Trustee, for the benefit of the 2009
Note Holders (other than a junior and subordinate Lien pursuant to the 2009
Note Subordination Agreement), the 1997 Trustee, for the benefit of the
holders of the 1997 Debentures and/or with any agent under the Euro
Indenture, for the benefit of the holders of the Euro Notes;
(iv) evidence of the recording of each
Mortgage in such office or offices as may be necessary or, in the opinion of
the Collateral Agent, desirable to perfect the Lien purported to be created
thereby or to otherwise protect the rights of the Collateral Agent and the
Lenders thereunder;
(v) a Title Insurance Policy with
respect to each Principal Property constituting a Facility, dated as of the
Effective Date;
(vi) a survey of each Facility that is a
Principal Property subject to a Mortgage, in form and substance satisfactory
to the Collateral Agent;
(vii) appropriate financing statements
on Form UCC-1 (or similar Financing Statements or filings in any foreign
jurisdiction) duly filed in such office or offices as may be necessary or,
in the opinion of the Collateral Agent, desirable to perfect the security
interests purported to be created by each Security Agreement, each Pledge
Agreement and each Mortgage;
(viii) certified copies of request for
copies of information, listing all effective financing statements which name
as debtor any Loan Party and which are filed in the offices referred to in
paragraph (vii) above, together with copies of such financing statements (or
similar filings in any foreign jurisdiction), none of which, except as
otherwise agreed in writing by the Collateral Agent, shall cover any of the
Collateral (other than Liens in favor of the 2009 Note Trustee for the
benefit of the 2009 Note Holders) and the results of searches for any
- 60 -
tax Lien and judgment Lien filed against such Person or its property, which
results, except as otherwise agreed to in writing by the Collateral Agent,
shall not show any such Liens;
(ix) a copy of the resolutions of each
Loan Party, certified as of the Effective Date by a Secretary or an
Assistant Secretary thereof, authorizing (A) the borrowings hereunder and
the transactions contemplated by the Loan Documents to which such Loan Party
is or will be a party, and (B) the execution, delivery and performance by
such Loan Party of each Loan Document to which such Loan Party is or will be
a party and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith;
(x) a certificate of a Secretary or an
Assistant Secretary of each Loan Party, certifying the names and true
signatures of the representatives of such Loan Party authorized to sign each
Loan Document to which such Loan Party is or will be a party and the other
documents to be executed and delivered by such Loan Party in connection
herewith and therewith, together with evidence of the incumbency of such
authorized officers;
(xi) a certificate of the appropriate
official(s) of the state or other applicable jurisdiction of organization
and each state of foreign qualification of each Loan Party certifying as to
the subsistence in good standing of, and the payment of taxes by, such Loan
Party in such states or other applicable jurisdiction and certified as of a
recent date not more than 30 days prior to the Effective Date, together, if
requested by the Collateral Agent, with confirmation by telephone or
telecopy (where available) on the Effective Date from such official(s) as to
such matters; provided, that, tax payment certifications shall be limited to
--------
each Loan Party's state of organization and any state or other jurisdiction
where any Loan Party owns any Principal Properties or has any other material
properties or assets or conducts any material business or operations;
(xii) a true and complete copy of the
charter, certificate of formation, certificate of limited partnership or
other publicly filed organizational document of each Loan Party and Solutia
Europe, Solutia UK Holdings and Solutia Dutch Newco certified as of a recent
date not more than 30 days prior to the Effective Date by an appropriate
official of the state or other applicable jurisdiction of organization of
such Loan Party which shall set forth the same complete name of such Person
as is set forth herein and the organizational number of such Person, if an
organizational number is issued in such jurisdiction;
(xiii) a copy of the charter and
by-laws, limited liability company agreement, operating agreement, agreement
of limited partnership or other organizational document of each Loan Party,
together with all amendments thereto, certified as of the Effective Date by
a Secretary or an Assistant Secretary of such Loan Party;
(xiv) (A) an opinion of ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, counsel to the Loan Parties, substantially in the form of
Exhibit F, (B) an opinion of local counsel to the applicable Loan Parties,
in the local jurisdictions where the Facilities are located and (C) an
opinion of Belgium, Dutch and English counsel to the applicable Loan Parties
in respect of the Pledge Agreements to be executed and delivered pursuant to
Section 5.01(d)(ii)(B), in each case as to such other matters as the
Collateral Agent may reasonably request;
- 61 -
(xv) a certificate of an Authorized
Officer of each Loan Party, certifying as to the matters set forth in
subsection (b) of this Section 5.01;
(xvi) a copy of the Financial Statements
and the financial projections described in Section 6.01(g)(ii) hereof,
certified as of the Effective Date as true and correct by an Authorized
Officer of the Parent, which certification, in the case of the financial
projections, shall certify that such projections have been prepared on a
reasonable basis and in good faith and are based on assumptions believed by
the Borrowers to be reasonable at the time made and from the best
information then available to the Borrowers;
(xvii) a certificate of the chief
financial officer of the Parent certifying (A) that the incurrence of the
Indebtedness evidenced by this Agreement and the granting of the Liens in
favor of the Collateral Agent to secure such Indebtedness shall not require
the grant of an equal and ratable Lien in favor of the 2009 Note Trustee for
the benefit of the 2009 Note Holders, the 1997 Trustee for the benefit of
the holders of the 1997 Debentures and/or with any agent under the Euro
Indenture for the benefit of the holders of the Euro Notes and (B) as to,
and setting forth, the calculation of "Consolidated Net Tangible Assets"
under each of the 2009 Note Indenture, the 1997 Indenture and the Euro
Indenture, and indicating the aggregate amount of Indebtedness that may be
secured by a Lien on the property of the Parent and its Subsidiaries without
requiring that such Lien be shared equally and ratably with the security
issued in connection with the 2009 Note Indenture, the 1997 Indenture and
the Euro Indenture (the "Senior Lien Limit"), which amount on the Effective
-----------------
Date shall not be less than $269,100,000;
(xviii) evidence of the insurance
coverage required by Section 7.01(h) and the terms of each Security
Agreement and each Mortgage, in each case, where requested by the Collateral
Agent, with such endorsements as to the named insureds or loss payees
thereunder as the Collateral Agent may request and providing that such
policy may be terminated or canceled (by the insurer or the insured
thereunder) only upon 30 days' prior written notice to the Collateral Agent
and each such named insured or loss payee, together with evidence of the
payment of all premiums due in respect thereof for such period as the
Collateral Agent may request;
(xix) a certificate of a Secretary or an
Assistant Secretary of the Administrative Borrower, certifying the names and
true signatures of the persons that are authorized to provide Notices of
Borrowing and all other notices under this Agreement and the other Loan
Documents;
(xx) a Landlord Waiver, in form and
substance satisfactory to the Collateral Agent and the Administrative Agent
and which may be included as a provision contained in the relevant Lease,
executed by each landlord with respect to each of the Leases set forth on
Schedule 6.01(o) as may be required by the Collateral Agent and the
Administrative Agent;
(xxi) a Bailee Letter, in form and
substance satisfactory to the Collateral Agent and the Administrative Agent,
executed by each Person who possesses
- 62 -
Inventory of any Loan Party as may be required by the Collateral Agent and
the Administrative Agent;
(xxii) copies of the Settlement
Agreement, 2009 Note Indenture, 2009 Note Security Documents, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and the Euro Indenture, Astaris Credit Agreement, Astaris Guaranty and the
other Material Contracts as in effect on the Effective Date, certified as
true and correct copies thereof by an Authorized Officer of the
Administrative Borrower, together with a certificate of an Authorized
Officer of the Administrative Borrower stating that such agreements remain
in full force and effect, except as provided to the Agents, have not been
otherwise amended or modified, and that none of the Loan Parties is in
breach or default in any of its obligations under such agreements in any
material respects;
(xxiii) a termination and release
agreement with respect to the Existing Credit Facility and all related
documents, duly executed by the Parent, the Existing Agent and the Existing
Non-Sharing Secured Party Collateral Agent, on behalf of itself and the
Existing Non-Sharing Secured Parties, in each case, together with a
satisfaction of mortgage filed by the Existing Non-Sharing Secured Party
Collateral Agent, on behalf of the Existing Non-Sharing Secured Parties, on
each Facility and UCC-3 termination statements for all UCC-1 financing
statements filed by the Existing Non-Sharing Secured Party Collateral Agent,
on behalf of the Existing Non-Sharing Secured Parties, and covering any
portion of the Collateral;
(xxiv) a written direction, duly
executed by the Existing Non-Sharing Secured Party Collateral Agent,
directing the Existing Sharing Secured Party Collateral Trustee to release
the Liens in favor of the Existing Sharing Secured Party Collateral Trustee,
on behalf of the Existing Sharing Secured Parties, together with a release
agreement with respect to the Existing Sharing Security Documents, duly
executed by the Parent and the Existing Sharing Secured Party Collateral
Trustee terminating and releasing all Liens against any Loan Party in favor
of the Existing Sharing Secured Party Collateral Trustee, on behalf of the
Existing Sharing Secured Parties, and a satisfaction of mortgage for each
mortgage filed by the Existing Sharing Secured Party Collateral Trustee, on
behalf of the Existing Sharing Secured Parties, on each Facility and UCC-3
termination statements for all UCC-1 financing statements filed by the
Existing Sharing Secured Party Collateral Trustee, on behalf of the Existing
Sharing Secured Parties, and covering any portion of the Collateral;
(xxv) the 2009 Note Subordination
Agreement, duly executed by the Agents, the 2009 Note Trustee and the Loan
Parties;
(xxvi) the Concentration Account
Agreement, duly executed by the Concentration Account Bank and the Loan
Parties;
(xxvii) such Cash Management Agreements
and depository account, blocked account, lockbox account and similar
agreements and other documents, each in form and substance satisfactory to
the Collateral Agent and the Administrative Agent, as the Collateral Agent
and the Administrative Agent may request with respect to the Loan Parties'
cash management system;
- 63 -
(xxviii) the Contribution Agreement,
duly executed by each Loan Party;
(xxix) the Intercompany Subordination
Agreement, duly executed by each Loan Party and its Subsidiaries;
(xxx) replacements of each of the 2009
Note Security Documents, in each case in form and substance satisfactory to
the Collateral Agent and the Administrative Agent; and
(xxxi) such other agreements,
instruments, approvals, opinions and other documents, each satisfactory to
the Collateral Agent in form and substance, as the Collateral Agent may
reasonably request.
(e) Material Adverse Effect. The Collateral Agent
-----------------------
shall have determined, in its sole judgment, that, except as disclosed in
the Parent's public filings with the SEC prior to the Effective Date, no
event or development shall have occurred since June 30, 2003 which could
have a Material Adverse Effect.
(f) Approvals. All consents, authorizations and
---------
approvals of, and filings and registrations with, and all other actions in
respect of, any Governmental Authority or other Person required in
connection with the making of the Loans shall have been obtained and shall
be in full force and effect.
(g) Proceedings; Receipt of Documents. All
---------------------------------
proceedings in connection with the making of the initial Loans or the
issuance of the initial Letter of Credit Accommodations and the other
transactions contemplated by this Agreement and the other Loan Documents,
and all documents incidental hereto and thereto, shall be satisfactory to
the Collateral Agent and its counsel, and the Collateral Agent and such
counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as the Collateral
Agent or such counsel may reasonably request.
(h) Due Diligence. The Agents shall have
-------------
completed their business, legal and collateral due diligence with respect to
each Loan Party and the results thereof shall be acceptable to the
Administrative Agent and the Collateral Agent, in their sole and absolute
discretion. Without limiting the foregoing, the Administrative Agent and the
Collateral Agent shall have received a Field Survey and Audit, dated not
earlier than 30 days prior to the Effective Date, and such Field Survey and
Audit and the results thereof shall be acceptable to the Administrative
Agent and the Collateral Agent, in their sole and absolute discretion.
(i) Availability. After giving effect to all
------------
Loans to be made on the Effective Date and the Letter of Credit
Accommodations to be issued on the Effective Date, (i) the Availability
shall not be less than $50,000,000 (calculated without giving effect to any
cash of any Loan Party unless such cash has been delivered to the
Administrative Agent) and (ii) all liabilities of the Loan Parties shall be
in accordance with recent historical standards. The Administrative Borrower
shall deliver to the Collateral Agent a certificate of the chief financial
officer of the Administrative Borrower certifying as to the matters set
forth in clauses (i) and (ii) above and containing the calculation of
Availability.
- 64 -
Section 5.02 Conditions Precedent to All Loans and Letter
--------------------------------------------
of Credit Accommodations. The obligation of any Agent or any Lender to make
------------------------
any Loan or of the Administrative Agent to assist the Borrowers in
establishing or opening any Letter of Credit Accommodation on or after the
Effective Date is subject to the fulfillment, in a manner satisfactory to
the Administrative Agent, of each of the following conditions precedent:
(a) Payment of Fees, Etc. The Borrowers shall
---------------------
have paid all fees, costs, expenses and taxes then payable by the Borrowers
pursuant to this Agreement and the other Loan Documents, including, without
limitation, Section 2.06 and Section 12.04 hereof and the Fee Letter.
(b) Representations and Warranties; No Event of
-------------------------------------------
Default. The following statements shall be true and correct, and the
-------
submission by the Administrative Borrower to the Administrative Agent of a
Notice of Borrowing with respect to each such Loan, and the Borrowers'
acceptance of the proceeds of such Loan, and the issuance of each Letter of
Credit Accommodation, shall each be deemed to be a representation and
warranty by each Loan Party on the date of such Loan or the date of issuance
of such Letter of Credit Accommodation that: (i) the representations and
warranties contained in ARTICLE VI and in each other Loan Document,
certificate or other writing delivered to any Agent or any Lender pursuant
hereto or thereto on or prior to the date of such Loan or such Letter of
Credit Accommodation are true and correct on and as of such date as though
made on and as of such date, (ii) at the time of and after giving effect to
the making of such Loan and the application of the proceeds thereof or at
the time of issuance of such Letter of Credit Accommodation, no Default or
Event of Default has occurred and is continuing or would result from the
making of the Loan to be made, or the issuance of such Letter of Credit
Accommodation to be issued, on such date and (iii) the conditions set forth
in this Section 5.02 have been satisfied as of the date of such request.
(c) Legality. The making of such Loan or the
--------
issuance of such Letter of Credit Accommodation shall not contravene any
law, rule or regulation applicable to any Agent, any Lender or the L/C
Issuer.
(d) Notices. The Administrative Agent shall have
-------
received a Notice of Borrowing pursuant to Section 2.02 hereof.
(e) Delivery of Documents. The Administrative
---------------------
Agent and the Collateral Agent shall have received such other agreements,
instruments, approvals, opinions and other documents, each in form and
substance satisfactory to such Agents, as any such Agent may reasonably
request.
(f) Proceedings; Receipt of Documents. All
---------------------------------
proceedings in connection with the making of such Loan or the issuance of
such Letter of Credit Accommodation and the other transactions contemplated
by this Agreement and the other Loan Documents, and all documents incidental
hereto and thereto, shall be satisfactory to the Administrative Agent and
the Collateral Agent and their counsel, and the Administrative Agent and the
Collateral Agent and such counsel shall have received all such information
and such counterpart originals or certified or other copies of such
documents, in form and substance satisfactory to the Administrative Agent
and the Collateral Agent, as such Agents or such counsel may reasonably
request.
- 65 -
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 Representations and Warranties. Each Loan
------------------------------
Party hereby represents and warrants to the Agents, the Lenders and the L/C
Issuer as follows:
(a) Organization, Good Standing, Etc. Each Loan
---------------------------------
Party (i) is a corporation, limited liability company or limited partnership
duly organized, validly existing and in good standing under the laws of the
state, province or other applicable jurisdiction of its organization, (ii)
has all requisite power and authority to conduct its business as now
conducted and as presently contemplated and, in the case of the Borrowers,
to make the borrowings hereunder, and to execute and deliver each Loan
Document to which it is a party, and to consummate the transactions
contemplated thereby, and (iii) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary except to the extent that the failure to be so
qualified could reasonably be expected to have a Material Adverse Effect.
(b) Authorization, Etc. The execution, delivery
-------------------
and performance by each Loan Party of each Loan Document to which it is or
will be a party, (i) have been duly authorized by all necessary action, (ii)
do not and will not contravene its charter or by-laws, its limited liability
company or operating agreement or its certificate of partnership or
partnership agreement, as applicable, or any applicable law or any
contractual restriction binding on or otherwise affecting it or any of its
properties (including, without limitation, the 2009 Note Indenture, the 1997
Indenture or the Euro Indenture), (iii) do not and will not result in or
require the creation of any Lien (other than pursuant to any Loan Document
and the 2009 Note Indenture) upon or with respect to any of its material
properties, and (iv) do not and will not result in any material default,
noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal
of any material permit, license, authorization or approval applicable to its
operations or any of its properties.
(c) Governmental Approvals. No authorization or
----------------------
approval or other action by, and no notice to or filing with, any
Governmental Authority is required in connection with the due execution,
delivery and performance by any Loan Party of any Loan Document to which it
is or will be a party.
(d) Enforceability of Loan Documents. This
--------------------------------
Agreement is, and each other Loan Document to which any Loan Party is or
will be a party, when delivered hereunder, will be, a legal, valid and
binding obligation of such Person, enforceable against such Person in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws.
(e) Subsidiaries. Schedule 6.01(e) is a complete
------------
and correct description of the name, jurisdiction of incorporation and
ownership of the outstanding Capital Stock of the Subsidiaries of the Parent
in existence on the date hereof. All of the issued and outstanding shares of
Capital Stock of such Subsidiaries have been validly issued and are fully
paid and nonassessable, and the holders thereof are not entitled to any
preemptive, first refusal or other similar rights. Except as indicated on
such Schedule, on the Effective Date all such Capital Stock
- 66 -
is owned by the Parent or one or more of its wholly-owned Subsidiaries, free
and clear of all Liens. Except as set forth on Schedule 6.01(e), there are
no outstanding debt or equity securities of the Parent or any of its
Subsidiaries and no outstanding obligations of the Parent or any of its
Subsidiaries convertible into or exchangeable for, or warrants, options or
other rights for the purchase or acquisition from the Parent or any of its
Subsidiaries, or other obligations of any Subsidiary to issue, directly or
indirectly, any shares of Capital Stock of any Subsidiary of the Parent.
Schedule 6.01(e) identifies, as of the Effective Date, each Significant
Subsidiary and each "Restricted Subsidiary" as such term is defined under
each of the Euro Indenture, the 1997 Indenture and the 2009 Note Indenture.
(f) Litigation; Commercial Tort Claims. Except as
----------------------------------
set forth in Schedule 6.01(f), (i) there is no pending or, to the best
knowledge of any Loan Party, threatened action, suit or proceeding affecting
any Loan Party or its properties before any court or other Governmental
Authority or any arbitrator that (A) if adversely determined, could
reasonably be expected to have a Material Adverse Effect or (B) relates to
this Agreement or any other Loan Document or any transaction contemplated
hereby or thereby and (ii) as of the Effective Date, none of the Loan
Parties holds any commercial tort claims in respect of which a claim has
been filed in a court of law or a written notice by an attorney has been
given to a potential defendant.
(g) Financial Condition.
-------------------
(i) The Financial Statements, copies of
which have been delivered to each Agent and each Lender, fairly present, in
all material respects, the consolidated financial condition of the Parent
and its Subsidiaries as at the respective dates thereof and the consolidated
results of operations of the Parent and its Subsidiaries for the fiscal
periods ended on such respective dates, all in accordance with GAAP, other
than with respect to interim Financial Statements, year end audit
adjustments and the absence of footnotes and since June 30, 2003 no event or
development has occurred that has had or could have a Material Adverse
Effect, except as disclosed in the Parent's public filings with the SEC
prior to the Effective Date.
(ii) The Parent has heretofore furnished
to each Agent and each Lender (A) projected monthly balance sheets, income
statements and statements of cash flows of the Parent and its Subsidiaries
for the period from October 2003 through October 2004, and (B) projected
annual balance sheets, income statements and statements of cash flows of the
Parent and its Subsidiaries for the Fiscal Years ending in 2004 through
2005, which projected financial statements shall be updated from time to
time pursuant Section 7.01(a)(vii). Such projections, as so updated, shall
be believed by the Parent at the time furnished to be reasonable, shall have
been prepared on a reasonable basis and in good faith by the Parent, and
shall have been based on assumptions believed by the Parent to be reasonable
at the time made and upon the best information then reasonably available to
the Parent, and the Parent shall not be aware of any facts or information
that would lead it to believe that such projections, as so updated, are
incorrect or misleading in any material respect.
(h) Compliance with Law, Etc. No Loan Party is in
-------------------------
violation of its organizational documents, any material law, rule,
regulation, judgment or order of any Governmental Authority applicable to it
or any of its property or assets, or any material term of the 2009 Note
Indenture, the 1997 Indenture, the Euro Indenture or any other Material
Contract
- 67 -
binding on or otherwise affecting it or any of its properties, and no
Default or Event of Default has occurred and is continuing.
(i) ERISA. Except as set forth on Schedule
-----
6.01(i), (i) each Employee Plan is in compliance in all material respects
with ERISA and the Internal Revenue Code, (ii) no Termination Event has
occurred nor is reasonably expected to occur with respect to any Employee
Plan, (iii) the most recent annual report (Form 5500 Series) with respect to
each Employee Plan, including any required Schedule B (Actuarial
Information) thereto, copies of which have been filed with the Internal
Revenue Service and delivered to the Agents, is complete and correct in all
material respects and fairly presents the funding status of such Employee
Plan, and since the date of such report there has been no material adverse
change in such funding status, (iv) copies of each agreement entered into
with the PBGC, the U.S. Department of Labor or the Internal Revenue Service
with respect to any Employee Plan have been delivered to the Agents, (v) no
Employee Plan had an accumulated or waived funding deficiency or permitted
decrease which would create a deficiency in its funding standard account or
has applied for an extension of any amortization period within the meaning
of Section 412 of the Internal Revenue Code at any time during the previous
60 months, and (vi) no Lien imposed under the Internal Revenue Code or ERISA
exists or is likely to arise on account of any Employee Plan within the
meaning of Section 412 of the Internal Revenue Code or Section 4068 of
ERISA. Except as set forth on Schedule 6.01(i), no Loan Party or any of its
ERISA Affiliates has incurred any withdrawal liability in excess of
$1,000,000 under ERISA with respect to any Multiemployer Plan, or is aware
of any facts indicating that it or any of its ERISA Affiliates may in the
future incur any such withdrawal liability. No Loan Party or any of its
ERISA Affiliates or any fiduciary of any Employee Plan has (A) engaged in a
nonexempt prohibited transaction described in Sections 406 of ERISA or 4975
of the Internal Revenue Code, (B) failed to pay any required installment or
other payment required under Section 412 of the Internal Revenue Code on or
before the due date for such required installment or payment, (C) engaged in
a transaction within the meaning of Section 4069 of ERISA or (D) incurred
any liability to the PBGC which remains outstanding other than the payment
of premiums, and there are no premium payments which have become due which
are unpaid. Except as set forth on Schedule 6.01(i), there are no pending
or, to the best knowledge of any Loan Party, threatened claims, actions,
proceedings or lawsuits (other than claims for benefits in the normal
course) asserted or instituted against (x) any Employee Plan or its assets,
(y) any fiduciary with respect to any Employee Plan, or (z) any Loan Party
or any of its ERISA Affiliates with respect to any Employee Plan. Except as
set forth on Schedule 6.01(i) and except as required by Section 4980B of the
Internal Revenue Code, no Loan Party or any of its ERISA Affiliates
maintains an employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of any Loan Party
or any of its ERISA Affiliates or coverage after a participant's termination
of employment.
(j) Taxes, Etc. All Federal and foreign and all
-----------
material state and local tax returns and other material reports required by
applicable law to be filed by any Loan Party have been filed, or extensions
have been obtained, and all taxes, assessments and other governmental
charges imposed upon any Loan Party or any property of any Loan Party and
which have become due and payable on or prior to the date hereof have been
paid, except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting
- 68 -
from the non-payment thereof and with respect to which adequate reserves
have been set aside for the payment thereof in accordance with GAAP.
(k) Regulations T, U and X. No Loan Party is or
----------------------
will be engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation T, U
or X), and no proceeds of any Loan will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock.
(l) Nature of Business. No Loan Party is engaged
------------------
in any business other than as described in the Parent's Form 10-K filed on
March 6, 2003 with the SEC. With respect to the Domestic Subsidiaries that
are not a Loan Party, (i) except as otherwise set forth in Schedule 6.01(l),
no such Domestic Subsidiary conducts any business or engages in any
operations, and (ii) except as otherwise set forth in Schedule 6.0(l), the
aggregate book value of their assets and properties is not greater than
$1,000,000, the aggregate amount of their liabilities (other than
liabilities evidenced by intercompany promissory notes and environmental
liabilities set forth on Schedule 6.01(r)) is not greater than $1,000,000
and the aggregate amount of their revenues for the four fiscal quarters
ending immediately prior to the Effective Date is zero.
(m) Adverse Agreements, Etc. No Loan Party is a
------------------------
party to any agreement or instrument, or subject to any charter, limited
liability company agreement, partnership agreement or other corporate,
partnership or limited liability company restriction or any judgment, order,
regulation, ruling or other requirement of a court or other Governmental
Authority, which has, or in the future could reasonably be expected to have,
a Material Adverse Effect.
(n) Permits, Etc. Each Loan Party has, and is in
-------------
compliance with, all permits, licenses, authorizations, approvals,
entitlements and accreditations required for such Person lawfully to own,
lease, manage or operate, or to acquire, each business currently owned,
leased, managed or operated, or to be acquired, by such Person, which if not
obtained, could reasonably be expected to have a Material Adverse Effect. No
condition exists or event has occurred which, results in, or with the giving
of notice or lapse of time or both, would result in, the suspension,
revocation, impairment, forfeiture or non-renewal of any such permit,
license, authorization, approval, entitlement or accreditation, and there is
no claim that any thereof is not in full force and effect, except, to the
extent any such condition, event or claim could not reasonably be expected
to have a Material Adverse Effect.
(o) Properties. (i) Each Loan Party has good and
----------
marketable title to, valid leasehold interests in, or valid licenses to use,
all property and assets material to its business, free and clear of all
Liens, except Permitted Liens. All such properties and assets are in good
working order and condition, ordinary wear and tear excepted.
(ii) Schedule 6.01(o) sets forth a
complete and accurate list, as of the Effective Date, of the location, by
state and street address, of all real property of each Loan Party with (A) a
Current Value in excess of $1,000,000 in the case of a fee interest, or (B)
requiring the payment of annual rent exceeding in the aggregate $100,000 in
the case of leasehold interest. As of the Effective Date, each Loan Party
has valid leasehold interests in the Leases described on Schedule 6.01(o) to
which it is a party. Schedule 6.01(o) sets forth with
- 69 -
respect to each such Lease, the commencement date, termination date, renewal
options (if any) and annual base rents. Each such Lease is valid and
enforceable in accordance with its terms in all material respects and is in
full force and effect. No consent or approval of any landlord or other third
party in connection with any such Lease is necessary for any Loan Party to
enter into and execute the Loan Documents to which it is a party, except as
set forth on Schedule 6.01(o). To the best knowledge of any Loan Party, no
other party to any such Lease is in default of its material obligations
thereunder, and no Loan Party (or any other party to any such Lease) has at
any time delivered or received any notice of default which remains uncured
under any such Lease and, as of the Effective Date, no event has occurred
which, with the giving of notice or the passage of time or both, would
constitute a default under any such Lease.
(p) Full Disclosure. Each Loan Party has
---------------
disclosed to the Agents all agreements, instruments and corporate or other
restrictions to which it is subject, and all other matters known to it,
that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. None of the other reports, financial
statements, certificates or other information furnished by or on behalf of
any Loan Party to the Agents in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which it was made, not misleading;
provided that, with respect to projected financial information, each Loan
--------
Party represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time. There is no
contingent liability or fact that could reasonably be expected to have a
Material Adverse Effect which has not been set forth in a footnote included
in the Financial Statements or a Schedule hereto.
(q) Operating Lease Obligations. On the Effective
---------------------------
Date, none of the Loan Parties has any Operating Lease Obligations with
annual payments in excess of $100,000 other than the Operating Lease
Obligations set forth on Schedule 6.01(q).
(r) Environmental Matters.
---------------------
(i) except as set forth on Part A of
Schedule 6.01(r), each Loan Party's businesses, Facilities, operations,
properties and assets are in material compliance with all Environmental Laws
applicable thereto;
(ii) except as set forth on Part A of
Schedule 6.01(r), each Loan Party has obtained and is in compliance with all
material Environmental Permits necessary to operate, use or occupy all of
such Loan Party's businesses, Facilities, operations, properties and assets;
(iii) except as set forth on Part A of
Schedule 6.01(r), each Loan Party has obtained and is in compliance with all
material Environmental Permits necessary to operate, use or occupy all of
such Loan Party's businesses, Facilities, operations, properties and assets;
(iv) except as set forth on Part A of
Schedule 6.01(r), each Loan Party is in material compliance with all
applicable writs, orders, consent decrees, judgments, and
- 70 -
injunctions by any Governmental Authority, and all decrees, informational
requests or demands issued pursuant to any Environmental Laws, and any Loan
Party's failure to comply has not resulted in any Governmental Authority
seeking to enforce the terms and conditions of said writ, order, consent
decrees, judgments and injunctions;
(v) there are no Environmental Liens
associated or, to the best knowledge of each Loan Party, threatened to be
associated with any Loan Parties' businesses, Facilities, operations,
properties and assets;
(vi) all representations, including,
without limitation, applications, warranty statements and accompanying
materials provided in support of such representations, provided by any Loan
Party to obtain insurance, are truthful and complete in all respects, and
the Loan Parties have done nothing to prejudice their rights to obtain the
benefits of their insurance by failing to comply with any of the provisions,
conditions or requirements of their policies of insurance;
(vii) except as set forth on Part B of
Schedule 6.01(r), there has been no Release at any of the properties
currently or previously owned or operated by any Loan Party or a corporate
predecessor that may result in any Environmental Liabilities and Costs in
excess of $100,000 related to any individual property;
(viii) except as set forth on Part B of
Schedule 6.01(r), there have been no Releases at any disposal or treatment
facility which received Hazardous Materials Handled by any Loan Party or any
corporate predecessor that resulted in any Environmental Liabilities and
Costs in excess of $100,000 at any individual facility;
(ix) except as set forth on Schedule
6.01(f) and Part B of Schedule 6.01(r), no Environmental Action has been
asserted against any Loan Party or any corporate predecessor nor does any
Loan Party have knowledge or notice of any threatened or pending
Environmental Action against any Loan Party or any corporate predecessor
that may result in Environmental Liabilities and Costs in excess of
$100,000;
(x) except as set forth on Schedule
6.01(f) and Part B of Schedule 6.01(r), no Environmental Action has been
asserted against any facilities that may have received Hazardous Materials
Handled by any Loan Party or any corporate predecessor that resulted in
Environmental Liabilities and Costs in excess of $100,000;
(xi) except as set forth on Part B of
Schedule 6.01(r), no property now or formerly owned or operated by a Loan
Party has been used as a treatment, storage or disposal site by a Loan Party
for any Hazardous Material that may result in Environmental Liabilities and
Costs in excess of $100,000;
(xii) no Loan Party has failed to report
to the proper Governmental Authority any Release which is required to be so
reported by any Environmental Laws;
(xiii) except as set forth on Part A of
Schedule 6.01(r), no Loan Party has received any written notification
pursuant to any Environmental Laws that (A) any
- 71 -
work, repairs, construction or Capital Expenditures are required to be made
in respect as a condition of continued compliance with any Environmental Law
or Environmental Permit or (B) any Environmental Permit referred to above is
about to be reviewed, made, subject to limitations or conditions, revoked,
withdrawn or terminated;
(xiv) except as set forth on Part A of
Schedule 6.01(r), no Governmental Authority has asserted any monetary
obligations, losses, liabilities, damages or costs and expenses incurred as
a result of any Remedial Action performed or to be performed at any of the
Facilities currently operated by the Loan Parties, that have not been
reimbursed or otherwise paid;
(xv) the Environmental Liabilities and
Costs set forth on Part B of Schedule 6.01(r) have been calculated in
accordance with Generally Accepted Accounting Principles;
(xvi) based upon the best information
available to the Loan Parties on the Effective Date, the Loan Parties have a
good faith belief that they will not exceed by ten percent (10%) any of the
annual or aggregate Environmental Liabilities and Costs for each of the
"Operating Facilities" set forth on Part B of Schedule 6.01(r); and
(xvii) based upon the best information
available to the Loan Parties on the Effective Date, the Loan Parties have a
good faith belief that they will not exceed by ten percent (10%) any of the
annual or aggregate Environmental Liabilities and Costs for all of
"Non-Operating Facilities and Superfund Sites" as set forth on Part B of
Schedule 6.01(r).
(s) Insurance. Each Loan Party keeps its property
---------
adequately insured and maintains (i) insurance to such extent and against
such risks, including fire, as is customary for companies in the same or
similar businesses, (ii) workmen's compensation insurance in the amount
required by applicable law, (iii) public liability insurance, which shall
include product liability insurance, in the amount customary with companies
in the same or similar business against claims for personal injury or death
on properties owned, occupied or controlled by it, and (iv) such other
insurance as may be required by law or as may be reasonably required by the
Collateral Agent (including, without limitation, against larceny,
embezzlement or other criminal misappropriation). Schedule 6.01(s) sets
forth a list of all insurance maintained by each Loan Party on the Effective
Date.
(t) Use of Proceeds. The proceeds of the Loans
---------------
shall be used to (i) refinance existing indebtedness of the Borrowers in the
principal amount of up to $116,000,000, (ii) pay fees and expenses in
connection with the transactions contemplated hereby, and (iii) fund working
capital of the Borrowers. The Letter of Credit Accommodations will be used
to support the Loan Parties' obligations under the Astaris Guaranty and for
other general corporate and working capital purposes.
(u) Location of Bank Accounts. Schedule 6.01(u)
-------------------------
sets forth a complete and accurate list as of the Effective Date of all
deposit, checking and other bank accounts, all securities and other accounts
maintained with any broker dealer and all other similar accounts maintained
by
- 72 -
each Loan Party, together with a description thereof (i.e., the bank or
----
broker dealer at which such deposit or other account is maintained and the
account number and the purpose thereof).
(v) Intellectual Property. Except as set forth on
---------------------
Schedule 6.01(v), each Loan Party owns or licenses or otherwise has the
right to use all licenses, service marks, tradenames, patents, patent
applications, trademarks, trademark applications, copyrights, copyright
applications and other intellectual property rights that are necessary for
the operation of its business, without infringement or conflict with the
rights of any other Person with respect thereto, except for such
infringements and conflicts which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. Set forth on
Schedule 6.01(v) is a complete and accurate list as of the Effective Date of
all such licenses (other than such licenses having a value of less than
$1,000,000 or involving aggregate consideration payable by or to any Loan
Party which is less than $1,000,000), tradenames, patents, patent
applications, registered trademarks and service marks, trademark and service
▇▇▇▇ applications, registered copyrights, copyright applications, internet
domain names and other intellectual property rights of each Loan Party, in
each case, to the extent such intellectual property rights or other rights
are necessary for the operation of its business. No slogan or other
advertising device, product, process, method, substance, part or other
material now employed by any Loan Party infringes upon or conflicts with any
rights owned by any other Person, and no claim or litigation regarding any
of the foregoing is pending or threatened, except for such infringements and
conflicts which could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
(w) Material Contracts. Set forth on Schedule
------------------
6.01(w) is a complete and accurate list as of the Effective Date of all
Material Contracts of each Loan Party, showing the parties and subject
matter thereof and amendments and modifications thereto. As of the Effective
Date, each such Material Contract (i) is in full force and effect and is
binding upon and enforceable against each Loan Party that is a party thereto
and, to the best knowledge of such Loan Party, all other parties thereto in
accordance with its terms, (ii) has not been otherwise amended or modified,
and (iii) is not in default due to the action of any Loan Party or, to the
best knowledge of any Loan Party, any other party thereto.
(x) Holding Company and Investment Company Acts.
-------------------------------------------
None of the Loan Parties is (i) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935, as
amended, or (ii) an "investment company" or an "affiliated person" or
"promoter" of, or "principal underwriter" of or for, an "investment
company", as such terms are defined in the Investment Company Act of 1940,
as amended.
(y) Employee and Labor Matters. Except as set
--------------------------
forth on Schedule 6.01(y), there is (i) no unfair labor practice complaint
pending or, to the best knowledge of any Loan Party, threatened against any
Loan Party before any Governmental Authority and no grievance that would be
material to the business of any Loan Party or arbitration proceeding pending
or, to the best knowledge of any Loan Party, threatened against any Loan
Party which arises out of or under any collective bargaining agreement, (ii)
no strike, labor dispute, slowdown, stoppage or similar action or grievance
pending or, to the best knowledge of any Loan Party, threatened against any
Loan Party (that would be material to the business of any Loan Party) or
(iii) to the best knowledge of any Loan Party, no union representation
question existing with respect to the employees of any
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Loan Party and no union organizing activity taking place with respect to any
of the employees of any Loan Party. Except as set forth on Schedule 6.01(y),
no Loan Party or any of its ERISA Affiliates has incurred any liability or
obligation under the Worker Adjustment and Retraining Notification Act
("WARN") or similar state or foreign law, which remains unpaid or
----
unsatisfied. Except as set forth on Schedule 6.01(y), the hours worked and
payments made to employees of any Loan Party have not been in violation of
the Fair Labor Standards Act or any other applicable legal requirements
other than violations of immaterial obligations of any Loan Party resulting
in immaterial liabilities incurred by any Loan Party. All material payments
due from any Loan Party on account of wages and employee health and welfare
insurance and other benefits have been paid or accrued as a liability on the
books of such Loan Party.
(z) Customers and Suppliers. There exists no
-----------------------
actual or threatened termination, cancellation or limitation of, or
modification to or change in, the business relationship between (i) any Loan
Party, on the one hand, and any customer or any group thereof, on the other
hand, whose agreements with any Loan Party are individually or in the
aggregate material to the business or operations of such Loan Party, or (ii)
any Loan Party, on the one hand, and any material supplier thereof, on the
other hand, which, in any such case, could reasonably be expected to have a
Material Adverse Effect; and there exists no present state of facts or
circumstances that could give rise to or result in any such termination,
cancellation, limitation, modification or change.
(aa) Name; Jurisdiction of Organization;
-----------------------------------
Organizational ID Number; Chief Place of Business; Chief Executive Office;
--------------------------------------------------------------------------
FEIN. Schedule 6.01(aa) sets forth a complete and accurate list as of the
----
date hereof of (i) the exact legal name of each Loan Party, (ii) the
jurisdiction of organization of each Loan Party, (iii) the organizational
identification number of each Loan Party (or indicates that such Loan Party
has no organizational identification number), (iv) each place of business of
each Loan Party, (v) the chief executive office of each Loan Party and (vi)
the federal employer identification number of each Loan Party.
(bb) Locations of Collateral. There is no
-----------------------
location at which any Loan Party has any Collateral (except for Inventory in
transit) with an aggregate Book Value in excess of $500,000 other than (i)
those locations listed on Schedule 6.01(bb) and (ii) any other locations
approved in writing by the Collateral Agent (and, with respect to Inventory,
the Administrative Agent) from time to time. Schedule 6.01(bb) hereto
contains a true, correct and complete list, as of the Effective Date, of the
legal names and addresses of each warehouse at which Collateral of each Loan
Party is stored. None of the receipts received by any Loan Party from any
warehouse states that the goods covered thereby are to be delivered to
bearer or to the order of a named Person or to a named Person and such named
Person's assigns.
(cc) Security Interests. (i) Each Security
------------------
Agreement creates in favor of the Collateral Agent, for the benefit of the
Agents and the Lenders, a legal, valid and enforceable security interest in
the Collateral secured thereby. Upon the filing of the UCC-1 financing
statements described in Section 5.01(d)(vii) and the recording of the
Collateral Assignments for Security referred to in each Security Agreement
in the United States Patent and Trademark Office and the United States
Copyright Office, as applicable, such security interests in and Liens on the
Collateral granted thereby shall be perfected, first priority security
interests to the extent a security interest may be perfected by filing UCC-1
financing statements or collateral assignments for
- 74 -
security (subject in priority to Permitted Liens), and no further recordings
or filings are or will be required in connection with the creation,
perfection or enforcement of such security interests and Liens, other than
(A) the filing of continuation statements in accordance with applicable law,
(B) the recording of the Collateral Assignments for Security pursuant to
each Security Agreement in the United States Patent and Trademark Office and
the United States Copyright Office, as applicable, with respect to
after-acquired U.S. patent and trademark applications and registrations and
U.S. copyrights and (C) the recordation of appropriate evidence of the
security interest in the appropriate foreign registry with respect to all
foreign intellectual property.
(dd) 2009 Note Indenture. All Obligations,
-------------------
including, without limitation, those to pay principal of and interest on the
Revolving Loans and the Letter of Credit Obligations and fees and expenses
in connection therewith, constitute Indebtedness (as defined in the 2009
Note Indenture) which the Parent and its Subsidiaries are permitted to incur
pursuant to clauses (i) and (xvi) of the second paragraph of Sections 4.09
of the 2009 Note Indenture (or are not otherwise prohibited by the 2009 Note
Indenture), and this Agreement and the other Loan Documents constitute the
Credit Facility (as defined in the 2009 Note Indenture). Other than the
Indebtedness incurred by the Parent and its Subsidiaries under the Existing
Credit Facility, which is being refinanced with the initial proceeds of the
Revolving Loans, the Parent and its Subsidiaries have incurred no other
Indebtedness under clauses (i) and (xvi) of the second paragraph of Section
4.09 of the 2009 Note Indenture.
(ee) Schedules. All of the information which is
---------
required to be scheduled to this Agreement is set forth on the Schedules
attached hereto, is correct and accurate and does not omit to state any
information material thereto.
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
Section 7.01 Affirmative Covenants. So long as any
---------------------
principal of or interest on any Loan, Letter of Credit Obligation or any
other Obligation (whether or not due), other than indemnification
obligations for which no claim has been asserted, shall remain unpaid or any
Lender shall have any Revolving Credit Commitment hereunder, each Loan Party
will, unless the Required Lenders shall otherwise consent in writing:
(a) Reporting Requirements. Furnish to each Agent
----------------------
and each Lender:
(i) upon the earlier of (A) the public
filing with the SEC of the Parent's SEC Form 10-Q and (B) 45 days after the
end of each fiscal quarter of the Parent and its Subsidiaries, commencing
with the first fiscal quarter of the Parent and its Subsidiaries ending
after the Effective Date, consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and retained
earnings and consolidated and consolidating statements of cash flows of the
Parent and its Subsidiaries and of the Designated A Business Segment and the
Designated B Business Segment, each as at the end of such quarter, and for
the period commencing at the end of the immediately preceding Fiscal Year
and ending with the end of such quarter, setting forth in each case in
comparative form the figures for the corresponding date or period of the
immediately preceding Fiscal Year, all in reasonable detail and certified by
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an Authorized Officer of the Parent as fairly presenting, in all material
respects, the financial position of the Parent and its Subsidiaries and of
the Designated A Business Segment and the Designated B Business Segment,
each as of the end of such quarter and the results of operations and cash
flows of the Parent and its Subsidiaries and of the Designated A Business
Segment and the Designated B Business Segment for such quarter, in
accordance with GAAP applied in a manner consistent with that of the most
recent audited financial statements of the Parent and its Subsidiaries
furnished to the Agents and the Lenders, subject to normal year-end audit
adjustments and the absence of footnotes;
(ii) upon the earlier of (A) the public
filing with the SEC of the Parent's SEC Form 10-K and (B) 90 days after the
end of each Fiscal Year of the Parent and its Subsidiaries, consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating
statements of cash flows of the Parent and its Subsidiaries and of the
Designated A Business Segment and the Designated B Business Segment, each as
at the end of such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the immediately preceding Fiscal Year,
all in reasonable detail and prepared in accordance with GAAP, and in the
case of the Parent and its Subsidiaries, accompanied by a report and an
unqualified opinion, prepared in accordance with generally accepted auditing
standards, of independent certified public accountants of recognized
standing selected by the Parent and satisfactory to the Administrative Agent
and the Collateral Agent (which opinion shall be without (A) a "going
concern" or like qualification or exception, (B) any qualification or
exception as to the scope of such audit, or (C) any qualification which
relates to the treatment or classification of any item and which, as a
condition to the removal of such qualification, would require an adjustment
to such item, the effect of which would be to cause any noncompliance with
the provisions of Section 7.03), together with a written statement of such
accountants (1) to the effect that, in making the examination necessary for
their certification of such financial statements, they have not obtained any
knowledge of the existence of an Event of Default or a Default and (2) if
such accountants shall have obtained any knowledge of the existence of an
Event of Default or such Default, describing the nature thereof;
(iii) as soon as available, and in any
event within 30 days after the end of each fiscal month of the Parent and
its Subsidiaries commencing with the first fiscal month of the Parent and
its Subsidiaries ending after the Effective Date, internally prepared
consolidated and consolidating balance sheets, consolidated and
consolidating statements of operations and retained earnings and
consolidated and consolidating statements of cash flows as at the end of
such fiscal month, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such fiscal
month, all in reasonable detail and certified by an Authorized Officer of
the Parent as fairly presenting, in all material respects, the financial
position of the Parent and its Subsidiaries and of the Designated A Business
Segment and the Designated B Business Segment, each as at the end of such
fiscal month and the results of operations, retained earnings and cash flows
of the Parent and its Subsidiaries and of the Designated A Business Segment
and the Designated B Business Segment, each for such fiscal month, in
accordance with GAAP applied in a manner consistent with that of the most
recent audited financial statements furnished to the Agents and the Lenders,
subject to normal quarterly or year-end adjustments, including audit
adjustments (which include restructuring actions, pension and other
post-employment benefit true-ups, asset impairment or manufacturing facility
shut-down charges, environmental remediation reserve true-ups, incentive
compensation
- 76 -
accruals, significant litigation activity and gains and losses on
significant asset dispositions and divestitures) and the absence of
footnotes;
(iv) simultaneously with the delivery of
the financial statements of the Parent and its Subsidiaries required by (A)
clauses (i), (ii) and (iii) of this Section 7.01(a), a certificate of an
Authorized Officer of the Parent (I) stating that such Authorized Officer
has reviewed the provisions of this Agreement and the other Loan Documents
and has made or caused to be made under his or her supervision a review of
the condition and operations of the Parent and its Subsidiaries during the
period covered by such financial statements with a view to determining
whether the Parent and its Subsidiaries were in compliance with all of the
provisions of this Agreement and such Loan Documents at the times such
compliance is required hereby and thereby, and that such review has not
disclosed, and such Authorized Officer has no knowledge of, the existence
during such period of an Event of Default or Default or, if an Event of
Default or Default existed, describing the nature and period of existence
thereof and the action which the Parent and its Subsidiaries propose to take
or have taken with respect thereto, and (II) attaching a schedule showing
the calculations specified in Section 7.03; and (B) clauses (i) and (ii) of
this Section 7.01(a), a certificate of the Chief Financial Officer or
Treasurer of the Parent certifying as to, and setting forth, the calculation
of "Consolidated Net Tangible Assets" under each of the 2009 Note Indenture,
the 1997 Indenture and the Euro Indenture indicating the aggregate amount of
the Indebtedness that may be secured by property of the Parent and its
Subsidiaries without requiring that such security be shared equally and
ratably with the security issued under the 2009 Note Indenture, the 1997
Indenture and the Euro Indenture;
(v) as soon as available and in any
event within 10 days after the end of each fiscal month of the Parent and
its Subsidiaries commencing with the first fiscal month of the Parent and
its Subsidiaries ending after the Effective Date, (A) reports as required by
Section 8.03(a)(ii), in form and detail satisfactory to the Agents and
certified by an Authorized Officer of the Administrative Borrower as being
accurate and complete, (B) a discussion of any reduction of the federal net
operating losses of the Parent and its Subsidiaries, as a result of any
dividends or other distributions from the Foreign Subsidiaries to the Loan
Parties or any Domestic Subsidiaries during such month, and (C) a report on
any United States taxes (including, without limitation, real estate or
excise taxes) due and payable during such period and evidence of payment of
any such taxes;
(vi) as soon as available and in any
event within 3 Business Days after the end of each week commencing with the
first week ending after the Effective Date, a Borrowing Base Certificate,
current as of the close of business on the Friday of the immediately
preceding week, supported by schedules showing the derivation thereof and
containing such detail and other information as any Agent may request from
time to time, provided that (A) the Borrowing Base set forth in the
--------
Borrowing Base Certificate shall be effective from and including the date
such Borrowing Base Certificate is duly received by the Agents but not
including the date on which a subsequent Borrowing Base Certificate is
received by the Agents, unless the Administrative Agent disputes the
eligibility of any property included in the calculation of the Borrowing
Base or the valuation thereof by notice of such dispute to the
Administrative Borrower and (B) in the event of any dispute about the
eligibility of any property included in the calculation of the Borrowing
Base or the valuation thereof, the Administrative Agent's good faith
judgment shall control;
- 77 -
(vii) as soon as available and in any
event not later than 45 days prior to the end of each Fiscal Year, financial
projections, supplementing and superseding the financial projections
referred to in Section 6.01(g)(ii), prepared on a monthly basis and
otherwise in form and substance satisfactory to the Agents, for the
immediately succeeding Fiscal Year for the Parent and its Subsidiaries and
for the Designated A Business Segment and the Designated B Business Segment,
such financial projections to be reasonable, to be prepared on a reasonable
basis and in good faith, and to be based on assumptions believed by the
Parent to be reasonable at the time made and from the best information then
available to the Parent;
(viii) promptly after submission to any
Governmental Authority, all documents and information furnished to such
Governmental Authority in connection with any investigation of any Loan
Party (unless, in the written opinion of counsel of such Loan Party, such
disclosure would be unlawful) other than routine or non-material inquiries
by such Governmental Authority;
(ix) as soon as possible, and in any
event within 3 Business Days after the occurrence of an Event of Default or
Default or the occurrence of any event or development that could reasonably
be expected to have a Material Adverse Effect, the written statement of an
Authorized Officer of the Administrative Borrower setting forth the details
of such Event of Default or Default or such other event or development and
the action which the affected Loan Party proposes to take with respect
thereto;
(x) (A) as soon as possible and in any
event within 15 days after any Loan Party or any ERISA Affiliate thereof
knows or has reason to know that (1) any Reportable Event with respect to
any Employee Plan has occurred, (2) any other Termination Event with respect
to any Employee Plan has occurred, or (3) an accumulated funding deficiency
has been incurred or an application has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard
(including installment payments) or an extension of any amortization period
under Section 412 of the Internal Revenue Code with respect to an Employee
Plan, a statement of an Authorized Officer of the Administrative Borrower
setting forth the details of such occurrence and the action, if any, which
such Loan Party or such ERISA Affiliate proposes to take with respect
thereto, (B) promptly and in any event within three days after receipt
thereof by any Loan Party or any ERISA Affiliate thereof from the PBGC,
copies of each notice received by any Loan Party or any ERISA Affiliate
thereof of the PBGC's intention to terminate any Plan or to have a trustee
appointed to administer any Plan, (C) promptly and in any event within 10
days after the filing thereof with the Internal Revenue Service if requested
by any Agent, copies of each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) with respect to each Employee Plan and
Multiemployer Plan, (D) promptly and in any event within 10 days after any
Loan Party or any ERISA Affiliate thereof knows or has reason to know that a
required installment within the meaning of Section 412 of the Internal
Revenue Code has not been made when due with respect to an Employee Plan,
(E) promptly and in any event within 3 days after receipt thereof by any
Loan Party or any ERISA Affiliate thereof from a sponsor of a Multiemployer
Plan or from the PBGC, a copy of each notice received by any Loan Party or
any ERISA Affiliate thereof concerning the imposition or amount of
withdrawal liability under Section 4202 of ERISA or indicating that such
Multiemployer Plan may enter reorganization status under Section 4241 of
ERISA, and (F) promptly and in any event within 10 days after any Loan Party
or any ERISA Affiliate thereof
- 78 -
sends notice of a plant closing or mass layoff (as defined in WARN) to
employees, copies of each such notice sent by such Loan Party or such ERISA
Affiliate thereof;
(xi) promptly after the commencement
thereof but in any event not later than 5 Business Days after service of
process with respect thereto on, or the obtaining of knowledge thereof by,
any Loan Party, notice of each action, suit or proceeding before any court
or other Governmental Authority or other regulatory body or any arbitrator
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect;
(xii) as soon as possible and in any
event within 5 Business Days after execution, receipt or delivery thereof,
copies of any material notices that any Loan Party executes or receives in
connection with any Material Contract;
(xiii) as soon as possible and in any
event within 5 Business Days after execution, receipt or delivery thereof,
copies of any material notices that any Loan Party executes or receives in
connection with any Designated Disposition or the sale or other Disposition
of the Capital Stock of, or all or substantially all of the assets of, any
Loan Party;
(xiv) promptly, and in any event within
5 Business Days after the sending or filing thereof, copies of all
statements, reports and other information any Loan Party sends to any
holders of its Indebtedness (including, without limitation, any 2009 Note
Holder, any holder of the 1997 Debentures or the Euro Notes and any agent or
trustee in connection therewith) or its securities or files with the SEC or
any national (domestic or foreign) securities exchange, except filings on
SEC Form S-8;
(xv) promptly, and in any event within 5
Business Days upon receipt thereof, copies of all financial reports
(including, without limitation, management letters), if any, submitted to
any Loan Party by its auditors in connection with any annual or interim
audit of the books thereof;
(xvi) not less than 10 Business Days
prior to the occurrence of an "Asset Sale Offer Trigger Date" (as such term
is defined in the 2009 Note Indenture), written notice to the Collateral
Agent describing the events requiring the making of an "Asset Sale Offer"
(as such term is defined in the 2009 Note Indenture), setting forth the
Asset Sale Offer Trigger Date and the amount of "Excess Proceeds" (as such
term is defined the 2009 Note Indenture) subject to such "Asset Sale Offer";
(xvii) not later than Friday of every
other calendar week, an updated 13 week cash flow projection, supplementing
and superseding the most recent cash flow projections delivered hereunder,
with a comparison of budget to actual and an explanation of any changes
thereto, together with appropriate supporting details and a statement of
underlying assumptions, such projections to be prepared on a reasonable
basis and in good faith and to be based on assumptions believed by the
Parent to be reasonable at the time made and from the best information then
available to the Parent; and
(xviii) promptly upon request, such
other information concerning the condition or operations, financial or
otherwise, of any Loan Party as any Agent may from time to time may
reasonably request.
- 79 -
(b) Additional Guaranties and Collateral
------------------------------------
Security. Cause:
--------
(i) each Domestic Subsidiary of any Loan
Party not in existence on the Effective Date, to execute and deliver to the
Collateral Agent promptly and in any event within 10 Business Days after the
formation, acquisition or change in status thereof (A) a Guaranty
guaranteeing the Obligations, (B) a Security Agreement, (C) if such Domestic
Subsidiary has any Subsidiaries, a Pledge Agreement together with (x)
certificates evidencing all of the Capital Stock of any Person directly
owned by such Subsidiary (other than a Foreign Subsidiary) and, in the case
of a directly owned Foreign Subsidiary, all of the non-voting Capital Stock
and 65% of the voting Capital Stock of such Foreign Subsidiary, (y) undated
stock powers executed in blank with signature guaranteed, and (z) such
opinion of counsel and such approving certificate of such Subsidiary as the
Collateral Agent may reasonably request in respect of complying with any
legend on any such certificate or any other matter relating to such shares,
(D) one or more Mortgages creating on the real property of such Subsidiary a
perfected, first priority Lien (except as to priority solely in respect of
any Permitted Lien) on such real property, a Title Insurance Policy covering
such real property, a current ALTA survey thereof and a surveyor's
certificate, each in form and substance satisfactory to the Collateral
Agent, together with such other agreements, instruments and documents as the
Collateral Agent may require whether comparable to the documents required
under Section 7.01(n) or otherwise, and (E) such other agreements,
instruments, approvals, legal opinions or other documents reasonably
requested by the Collateral Agent in order to create, perfect, establish the
first priority of or otherwise protect any Lien purported to be covered by
any such Security Agreement, Pledge Agreement, or Mortgage or otherwise to
effect the intent that such Subsidiary shall become bound by all of the
terms, covenants and agreements contained in the Loan Documents and that all
property and assets of such Subsidiary shall become Collateral for the
Obligations, in each case, only to the extent that taking any such action
may be effected without requiring that a Lien be granted to, and shared
equally and ratably with, the 2009 Note Trustee, for the benefit of the 2009
Note Holders (other than a junior and subordinate Lien pursuant to the 2009
Note Subordination Agreement), the 1997 Trustee, for the benefit of the
holders of the 1997 Debentures and/or any agent under the Euro Indenture,
for the benefit of the holders of the Euro Notes; and
(ii) each owner of the Capital Stock of
any such Subsidiary to execute and deliver promptly and in any event within
10 Business Days after the formation or acquisition of such Subsidiary a
Pledge Agreement, together with (A) certificates evidencing, (x) in the case
such Subsidiary is a directly owned Domestic Subsidiary, all of the Capital
Stock of such Subsidiary, (y) in the case such Subsidiary is a directly
owned Foreign Subsidiary, all of the non-voting Capital Stock and 65% of the
voting Capital Stock of such Subsidiary, (B) undated stock powers or other
appropriate instruments of assignment executed in blank with signature
guaranteed, (C) such opinion of counsel and such approving certificate of
such Subsidiary as the Collateral Agent may reasonably request in respect of
complying with any legend on any such certificate or any other matter
relating to such shares and (D) such other agreements, instruments,
approvals, legal opinions or other documents requested by the Collateral
Agent, in each case, only to the extent that taking any such action may be
effected without requiring that a Lien be granted to, and shared equally and
ratably with, the 2009 Note Trustee, for the benefit of the 2009 Note
Holders (other than a junior and subordinate Lien pursuant to the 2009 Note
Subordination Agreement), the 1997 Trustee for the benefit of the holders of
the 1997
- 80 -
Debentures and/or any agent under the Euro Indenture, for the benefit of the
holders of the Euro Notes.
(c) Compliance with Laws, Etc. Comply, and cause
--------------------------
each of its Subsidiaries to comply, in all material respects with all
applicable material laws, rules, regulations and orders (including, without
limitation, all Environmental Laws), such compliance to include, without
limitation, (i) paying before the same become delinquent all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or upon any of its properties, and (ii) paying all lawful
claims which if unpaid might become a Lien or charge upon any of its
properties, except to the extent contested in good faith by proper
proceedings which stay the imposition of any penalty, fine or Lien resulting
from the non-payment thereof and with respect to which adequate reserves
have been set aside for the payment thereof in accordance with GAAP, other
than, in the case of clauses (i) and (ii) above, taxes, assessments and
governmental charges and levies and other claims the aggregate amount of
which does not at any time exceed $1,000,000.
(d) Preservation of Existence, Etc. Maintain and
-------------------------------
preserve, and cause each of its Significant Subsidiaries to maintain and
preserve, its existence, rights and privileges, and become or remain, and
cause each of its Subsidiaries to become or remain, duly qualified and in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its material business
makes such qualification necessary.
(e) Keeping of Records and Books of Account.
---------------------------------------
Keep, and cause each of its Subsidiaries to keep, adequate records and books
of account, with complete entries made to permit the preparation of
financial statements in accordance with GAAP.
(f) Inspection Rights. Permit, and cause each of
-----------------
its Subsidiaries to permit, the agents and representatives of any Agent at
any time and from time to time during normal business hours, at the expense
of the Borrowers, to examine and make copies of and abstracts from its
records and books of account, to visit and inspect its properties, to verify
materials, leases, notes, accounts receivable, deposit accounts and its
other assets, to conduct audits, physical counts, valuations, appraisals,
Phase I Environmental Site Assessments (and, after the occurrence and during
the continuance of an Event of Default, if requested by the Collateral Agent
based upon the results of any such Phase I Environmental Site Assessment, a
Phase II Environmental Site Assessment) or examinations and to discuss its
affairs, finances and accounts with any of its directors, officers,
managerial employees, independent accountants or any of its other
representatives. In furtherance of the foregoing, each Loan Party hereby
authorizes its independent accountants, and the independent accountants of
each of its Subsidiaries, to discuss the affairs, finances and accounts of
such Person (independently or together with representatives of such Person)
with the agents and representatives of any Agent in accordance with this
Section 7.01(f).
(g) Maintenance of Properties, Etc. Maintain and
-------------------------------
preserve, and cause each of its Subsidiaries to maintain and preserve, all
of its properties which are necessary or used in the proper conduct of its
business in good working order and condition, ordinary wear and tear
excepted, and comply, and cause each of its Subsidiaries to comply, at all
times with the provisions of all material leases to which it is a party as
lessee or under which it occupies property, so as to prevent any loss or
forfeiture thereof or thereunder.
- 81 -
(h) Maintenance of Insurance. Maintain, and cause
------------------------
each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations (including, without
limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real
properties leased or owned by it) and business, in such amounts and covering
such risks as is required by any Governmental Authority having jurisdiction
with respect thereto or as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated and
in any event in amount, adequacy and scope reasonably satisfactory to the
Collateral Agent, and shall not be less than the amount, adequacy and scope
than the insurance maintained by the Parent and its Subsidiaries on the
Effective Date. All policies covering the Collateral are to be made payable
to the Collateral Agent for the benefit of the Agents and the Lenders, as
its interests may appear, in case of loss, under a standard non-contributory
"lender" or "secured party" clause. All certificates of insurance are to be
delivered to the Collateral Agent and the policies are to be premium
prepaid, with the loss payable and additional insured endorsement in favor
of the Collateral Agent and such other Persons as the Collateral Agent may
designate from time to time, and shall provide for not less than 30 days'
prior written notice to the Collateral Agent of the exercise of any right of
cancellation. If any Loan Party or any of its Subsidiaries fails to maintain
such insurance, the Collateral Agent may arrange for such insurance, but at
the Borrowers' expense and without any responsibility on the Collateral
Agent's part for obtaining the insurance, the solvency of the insurance
companies, the adequacy of the coverage, or the collection of claims. Upon
the occurrence and during the continuance of an Event of Default, the
Collateral Agent shall have the sole right, in the name of the Lenders, any
Loan Party and its Subsidiaries, to file claims under any insurance
policies, to receive, receipt and give acquittance for any payments that may
be payable thereunder, and to execute any and all endorsements, receipts,
releases, assignments, reassignments or other documents that may be
necessary to effect the collection, compromise or settlement of any claims
under any such insurance policies.
(i) Obtaining of Permits, Etc. Obtain, maintain
--------------------------
and preserve, and cause each of its Subsidiaries to obtain, maintain and
preserve, and take all necessary action to timely renew, all permits,
licenses, authorizations, approvals, entitlements and accreditations which
are necessary in the proper conduct of its business.
(j) Environmental. (i) Keep any property either
-------------
owned or operated by it or any of its Subsidiaries free of any Environmental
Liens; (ii) comply, and cause each of its Subsidiaries to comply, in all
material respects with Environmental Laws and provide to the Collateral
Agent any documentation of such compliance which the Collateral Agent may
reasonably request; (iii) provide the Agents written notice within ten (10)
days of any Release of a Hazardous Material in excess of any reportable
quantity from or onto property owned or operated by it or any of its
Subsidiaries and take any Remedial Actions required under Environmental
Laws; (iv) promptly, and in any event before any Governmental Authority
exercises its statutory right to file an Environmental Lien, pay or
reimburse any monetary obligations, losses, liabilities, damages or costs
and expenses incurred by any Governmental Authority as a result of any
Remedial Action performed at the Facilities operated by any Loan Party; (v)
provide the Collateral Agent prompt written notice if the Loan Parties will
exceed by ten percent (10%) any of the annual or aggregate Environmental
Liabilities and Costs for each of the "Operating Facilities" set forth on
Part B of Schedule 6.01(r); (vi) provide the Collateral Agent prompt written
notice if the Loan Parties will exceed by ten percent (10%) any of the
annual or aggregate Environmental Liabilities and Costs
- 82 -
for all of "Non-Operating Facilities and Superfund Sites" as set forth on
Part B of Schedule 6.01(r); (vii) provide the Agents with written notice
within ten (10) days of the receipt of any of the following: (A) notice that
an Environmental Lien has been filed against any property of any Loan Party
or any of its Subsidiaries; (B) commencement of any Environmental Action
(other than notices of violation or citations that are provided for in (C))
or notice that an Environmental Action (other than notices of violation or
citations that are provided for in (C)) will be filed against any Loan Party
or any of its Subsidiaries; (C) notice of a violation, citation or other
administrative order which could cause any of the Loan Parties to incur more
than $500,000 individually or $3,000,000 in the aggregate; and (D) written
or oral notification that a Governmental Authority has incurred over
$100,000 in monetary obligations, losses, liabilities, damages or costs and
expenses as a result of any Remedial Action performed at any Facility
operated by the Loan Parties; (viii) defend, indemnify and hold harmless the
Agents and the Lenders and their transferees, and their respective
employees, agents, officers and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs or
expenses (including, without limitation, attorney and consultant fees,
investigation and laboratory fees, court costs and litigation expenses)
arising out of (A) the Handling, presence, disposal, Release or threatened
Release of any Hazardous Materials on, under, in, originating or emanating
from any property at any time owned or operated by any Loan Party or any of
its Subsidiaries (or its predecessors in interest or title), (B) any
personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to the presence, Handling, or Release of
such Hazardous Materials, (C) any request for information, investigation,
lawsuit brought or threatened, settlement reached or order by a Governmental
Authority relating to the presence, Handling, or Release of such Hazardous
Materials, (D) any violation of any Environmental Law and/or (E) any
Environmental Action filed against any Agent or any Lender; (ix) maintain
and preserve all Environmental Permits necessary to operate, use or occupy
each of the Loan Parties' material businesses, Facilities, operations,
properties and assets; (x) maintain and comply with all financial assurance
requirements under RCRA and any similar Environmental Law, as specifically
set forth but not limited to 40 C.F.R. 264 and 265, necessary to operate,
use or occupy each of the Loan Parties' businesses, Facilities, operations,
properties and assets; (xi) comply with all applicable writs, orders,
consent decrees, judgments, injunctions, written communications by any
Governmental Authority, decrees, informational requests or demands issued
pursuant to, or arising under, any Environmental Laws; (xii) provide the
Collateral Agent with prompt written notice in the event the Loan Parties is
required to spend more than $500,000 individually or $3,000,000 in the
aggregate to comply with any Environmental Laws that have been promulgated
and enacted by a Governmental Authority throughout the term of this
Agreement; and (xiii) file and submit truthful and complete representations,
including, without limitation, applications, warranty statements and
accompanying materials provided in support of such representations,
submitted by the Loan Parties to obtain insurance.
Without limiting the generality of the foregoing, whenever
the Agents reasonably determine that there is non-compliance, or any
condition which requires any action by or on behalf of any Loan Party in
order to avoid any material non-compliance, with any Environmental Law which
could result in the imposition of substantial fines or penalties or
otherwise materially and adversely affect the business, assets or prospects
of the Loan Parties on a consolidated basis, the Loan Parties shall, at the
Collateral Agent's request and Borrowers' expense: (i) cause an independent
environmental engineer acceptable to the Collateral Agent to conduct such
assessments, investigations or tests of the site where any Loan Party's
non-compliance or alleged
- 83 -
non-compliance with such Environmental Laws has occurred as to such
non-compliance and prepare and deliver to the Collateral Agent a report as
to such non-compliance setting forth the results of such tests, a proposed
plan for responding to any environmental problems described therein, and an
estimate of the costs thereof and (ii) provide to the Collateral Agent a
supplemental report of such engineer whenever the scope of such
non-compliance, or the applicable Loan Party's response thereto or the
estimated costs thereof, shall change in any material respect.
The Loan Parties acknowledge and agree that neither the
Loan Documents or the actions of any Agent or any Lender pursuant thereto
shall operate or be deemed (i) to place upon any Agent or any Lender any
responsibility for the operation, control, care, service, management,
maintenance or repair of property or facilities of the Loan Parties (except
in cases where an Agent or Lender has taken possession or control of any
property, either through foreclosure or alternative legal means) or (ii) to
make any Agent or any Lender the "owner" or "operator" of any property or
facilities of the Loan Parties or a "responsible party" within the meaning
of applicable Environmental Laws. The indemnification provisions of this
Section 7.01(j) shall survive the repayment of the Obligations and discharge
of any Liens granted under the Loan Documents.
(k) Further Assurances. Take such action and
------------------
execute, acknowledge and deliver, and cause each of its Subsidiaries to take
such action and execute, acknowledge and deliver, at its sole cost and
expense, such agreements, instruments or other documents as the
Administrative Agent or the Collateral Agent may reasonably require from
time to time in order (i) to carry out more effectively the purposes of this
Agreement and the other Loan Documents, (ii) to subject to valid and
perfected, first priority Liens any of the Collateral or any other property
of any Loan Party and its Domestic Subsidiaries, but, in the case of the
Capital Stock of a directly owned Foreign Subsidiary, such Liens shall be
limited to all of the non-voting Capital Stock and 65% of the voting Capital
Stock of such Foreign Subsidiary, (iii) to establish and maintain the
validity and effectiveness of any of the Loan Documents and the validity,
perfection and priority of the Liens intended to be created thereby, and
(iv) to better assure, convey, grant, assign, transfer and confirm unto each
Agent, each Lender and the L/C Issuer the rights now or hereafter intended
to be granted to it under this Agreement or any other Loan Document. In
furtherance of the foregoing, to the maximum extent permitted by applicable
law, each Loan Party (i) authorizes the Administrative Agent and the
Collateral Agent to execute any such agreements, instruments or other
documents in such Loan Party's name and to file such agreements, instruments
or other documents in any appropriate filing office, (ii) authorizes the
Collateral Agent to file any financing statement required hereunder or under
any other Loan Document, and any continuation statement or amendment with
respect thereto, in any appropriate filing office without the signature of
such Loan Party (including, without limitation, any such financing
statements that indicate the Collateral as "all assets" or words of similar
import), and (iii) ratifies the filing of any financing statement, and any
continuation statement or amendment with respect thereto, filed without the
signature of such Loan Party prior to the date hereof. Any Loan Party that
commences an Insolvency Proceeding under Chapter 11 of the Bankruptcy Code,
shall commence such Insolvency Proceeding in the United States Bankruptcy
Court for the Southern District of New York.
(l) Change in Collateral; Collateral Records. (i)
----------------------------------------
Give the Collateral Agent not less than 10 Business Days' prior written
notice of any change in the location of any Collateral
- 84 -
with a book value in excess of $1,000,000 (when aggregated with all other
Collateral at the same location), and, in the case of the relocation of
Equipment for purposes of repairs in the ordinary course of business, prompt
(but in any event no more than 5 Business Days') written notice after such
relocation of Equipment with a book value in excess of $5,000,000 (when
aggregated with all other Collateral at the same location), in each case,
other than to locations set forth on Schedule 6.01(bb) and with respect to
which the Collateral Agent has filed financing statements and otherwise
fully perfected its Liens thereon, (ii) advise the Collateral Agent
promptly, in sufficient detail, of any material adverse change relating to
the type, quantity or quality of the Collateral or the Lien granted thereon,
and (iii) execute and deliver, and cause each of its Domestic Subsidiaries
to execute and deliver, to the Administrative Agent or the Collateral Agent
for the benefit of the Agents and the Lenders from time to time, solely for
convenience in maintaining a record of Collateral, such written statements
and schedules as the Administrative Agent or the Collateral Agent may
reasonably require, designating, identifying or describing the Collateral.
(m) Landlord Waivers; Collateral Access
-----------------------------------
Agreements. (i) At any time any Collateral with a book value in excess of
----------
$500,000 (when aggregated with all other Collateral at the same location) is
located on any real property of a Loan Party (whether such real property is
now existing or acquired after the Effective Date) which is not owned by a
Loan Party, use commercially reasonable efforts to obtain a Landlord Waiver;
provided, that in the event the Loan Parties are unable to obtain any such
--------
Landlord Waiver the Administrative Agent may, in its reasonable discretion,
establish such reserves to the Borrowing Base as it deems necessary with
respect to any such Collateral; and
(ii) Use commercially reasonable efforts
to obtain Bailee Letters or similar collateral access agreements, in form
and substance satisfactory to the Administrative Agent and the Collateral
Agent, providing access to Collateral located on any premises not owned by a
Loan Party in order to remove such Collateral from such premises during an
Event of Default; provided, that in the event the Loan Parties are unable to
--------
obtain any such written access agreements, the Administrative Agent may, in
its reasonable discretion, establish such reserves to the Borrowing Base as
it deems necessary with respect to any such Collateral; provided, further,
-------- -------
that the Loan Parties may consign Inventory to a third party, whether or not
such third party has entered into a Bailee Letter, with an aggregate Book
Value of all such consigned Inventory not at any time exceeding $1,000,000.
(n) After Acquired Real Property. Upon the
----------------------------
acquisition by it or any of its Domestic Subsidiaries after the date hereof
of any interest (whether fee or leasehold) in any real property (wherever
located) (each such interest being an "After Acquired Property") (x) with a
-----------------------
Current Value in excess of $5,000,000 in the case of a fee interest, or (y)
requiring the payment of annual rent exceeding in the aggregate $2,500,000
in the case of a leasehold interest, immediately so notify the Collateral
Agent, setting forth with specificity a description of the interest
acquired, the location of the real property, any structures or improvements
thereon and either an appraisal or such Loan Party's good-faith estimate of
the current value of such real property (the "Current Value"). The
-------------
Collateral Agent shall notify such Loan Party whether it intends to require
a Mortgage and the other documents referred to below or in the case of
leasehold, a leasehold Mortgage or Landlord Waiver (pursuant to Section
7.01(m)). Upon receipt of such notice requesting a Mortgage, the Person
which has acquired such After Acquired Property shall immediately furnish to
the Collateral Agent the following, each in form and substance satisfactory
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to the Collateral Agent: (i) a Mortgage with respect to such real property
and related assets located at the After Acquired Property, each duly
executed by such Person and in recordable form, (ii) evidence of the
recording of the Mortgage referred to in clause (i) above in such office or
offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to create and perfect a valid and enforceable first priority lien
on the property purported to be covered thereby or to otherwise protect the
rights of the Agents and the Lenders thereunder, (iii) a Title Insurance
Policy, (iv) a survey of such real property, certified to the Collateral
Agent and to the issuer of the Title Insurance Policy by a licensed
professional surveyor reasonably satisfactory to the Collateral Agent, (v)
Phase I Environmental Site Assessments with respect to such real property,
certified to the Collateral Agent by a company reasonably satisfactory to
the Collateral Agent, (vi) in the case of a leasehold interest, a certified
copy of the lease between the landlord and such Person with respect to such
real property in which such Person has a leasehold interest, and the
certificate of occupancy with respect thereto, (vii) in the case of a
leasehold interest, an attornment and nondisturbance agreement between the
landlord (and any fee mortgagee) with respect to such real property and the
Collateral Agent, and (viii) such other documents or instruments (including
guarantees and opinions of counsel) as the Collateral Agent may reasonably
require. The Borrowers shall pay all fees and expenses, including reasonable
attorneys' fees and expenses, and all title insurance charges and premiums,
in connection with each Loan Party's obligations under this Section 7.01(n).
(o) Fiscal Year. Cause the Fiscal Year of the
-----------
Parent and its Subsidiaries to end on December 31 of each calendar year
unless the Administrative Agent and the Collateral Agent consent to a change
in such Fiscal Year (and appropriate related changes to this Agreement).
(p) Borrowing Base. Maintain all Revolving A
--------------
Loans and Letter of Credit Obligations in compliance with the then current
Borrowing Base.
(q) Use of Proceeds. Use the proceeds of the
---------------
Loans and the Letters of Credit Accommodations in accordance with Section
6.01(t).
(r) Senior Lien Limit. If, following the delivery
-----------------
of the most recent certificate required by Section 7.01(a)(iv)(B) (such
certificate, the "Most Recent Senior Lien Limit Certificate"), the aggregate
-----------------------------------------
amount of Obligations that may be secured by a Lien on the property and
assets of the Parent and its Subsidiaries without requiring that such Lien
be shared equally and ratably with a Lien which may be granted under the
2009 Note Indenture, the 1997 Indenture and the Euro Indenture, shall exceed
by more than $5,000,000 the Senior Lien Limit in effect on the later of the
Effective Date and the date on which the certificate required by Section
7.01(a)(iv)(B) for the period immediately prior to the period covered by the
Most Recent Senior Lien Limit Certificate shall have been delivered, the
Collateral Agent, at its option, may require the applicable Loan Parties to
execute and deliver such supplements to the applicable Mortgages, Pledge
Agreement or other Loan Documents, and take such other actions as shall be
necessary to modify the Senior Lien Limit set forth in such Mortgages,
Pledge Agreement or other Loan Documents so that the aggregate amount of
Obligations entitled to the benefits of the Liens of the Collateral Agent
created therein is equal to the then applicable Senior Lien Limit.
- 86 -
(s) Post-Closing Deliveries. Cause the following
-----------------------
to occur:
(i) within 60 days after the Effective
Date (or such longer period as may be agreed upon by the Collateral Agent in
its sole discretion), delivery of an ALTA survey or such other survey, in
form and substance acceptable to the Collateral Agent in its sole
discretion, exercised reasonably and, in each case, a surveyor's certificate
for each of the Principal Properties (other than the Principal Property
located at Martinsville, Virginia),
(ii) within 30 days after the Effective
Date (or such longer period as may be agreed upon by the Collateral Agent in
its sole discretion), delivery of a Title Insurance Policy with respect to
each Facility that is not a Principal Property, in each case, in form and
substance satisfactory to the Collateral Agent,
(iii) within the periods set forth in
Schedule 7.01(s), delivery of charters or other publicly filed
organizational documents of the Subsidiaries of the Parent set forth on such
Schedule and delivery of good standing certificates and tax payment
certificates set forth in Schedule 7.01(s),
(iv) within 10 Business Days after the
Effective Date, delivery of projected annual balance sheets, income
statements and statements of cash flows of the Parent and its Subsidiaries
for the Fiscal Year ending in 2006, which shall be in form and substance
satisfactory to the Collateral Agent.
(v) within 5 Business Days after the
Effective Date, delivery of a pledge agreement under the laws of The
Netherlands made by Solutia Dutch Newco pledging 65% of the interest of
Solutia Netherlands Holding B.V. and such other documents as the Collateral
Agent may request in its sole discretion, exercised reasonably, each in form
and substance satisfactory to the Collateral Agent,
(vi) within 10 Business Days after the
Effective Date, delivery of joinder agreements to the Intercompany
Subordination Agreement, joining each of the Subsidiaries of the Parent to
which any Loan Party owes indebtedness that is not a party to such agreement
on the Effective Date,
(vii) within 30 days after the Effective
Date take all necessary action that is within the control of the Loan
Parties to, and otherwise continue to use best efforts to, cause the
perfection of the Liens of the Collateral Agent in the intellectual property
of the Loan Parties in the foreign jurisdictions where such intellectual
property is subject to the Liens of the 2009 Note Holders,
(viii) on or prior to October 20, 2003,
delivery of satisfactory evidence that Citibank, N.A. has been directed
solely to transfer funds in the Concentration Account to the Administrative
Agent's Account, and
(ix) use best efforts to cause the
delivery of Landlord Waivers and Bailee Letters executed by the landlord or
bailee, respectively, to the extent such waivers or letters were not
delivered on or prior to the Effective Date.
- 87 -
Section 7.02 Negative Covenants. So long as any principal
------------------
of or interest on any Loan, Letter of Credit Obligation or any other
Obligation (whether or not due), other than indemnification obligations for
which no claim has been asserted, shall remain unpaid or any Lender shall
have any Revolving Credit Commitment hereunder, each Loan Party shall not,
unless the Required Lenders shall otherwise consent in writing:
(a) Liens, Etc. Create, incur, assume or suffer
-----------
to exist, or permit any of its Subsidiaries to create, incur, assume or
suffer to exist, any Lien upon or with respect to any of its properties,
whether now owned or hereafter acquired; file or suffer to exist under the
Uniform Commercial Code or any similar law or statute of any jurisdiction, a
financing statement (or the equivalent thereof) that names it or any of its
Subsidiaries as debtor; sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement
(or the equivalent thereof); sell any of its property or assets subject to
an understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of Accounts) with recourse to it or any
of its Subsidiaries or assign or otherwise transfer, or permit any of its
Subsidiaries to assign or otherwise transfer, any account or other right to
receive income; other than, as to all of the above, Permitted Liens;
provided, that, no Liens (other than a Permitted Lien that is an inchoate
--------
Lien securing obligations for the payment of money not overdue or not
otherwise due and payable) shall be permitted on any assets included in the
Borrowing Base other than the Liens of the Collateral Agent for the benefit
of the Agents and the Lenders and Liens in favor of the 2009 Note Trustee,
for benefit of the 2009 Note Holders.
(b) Indebtedness. Create, incur, assume,
------------
guarantee or suffer to exist, or otherwise become or remain liable with
respect to, or permit any of its Subsidiaries to create, incur, assume,
guarantee or suffer to exist or otherwise become or remain liable with
respect to, any Indebtedness other than Permitted Indebtedness.
(c) Fundamental Changes; Dispositions. Wind-up,
---------------------------------
liquidate or dissolve, or merge, consolidate or amalgamate with any Person,
or convey, sell, lease or sublease, transfer or otherwise dispose of,
whether in one transaction or a series of related transactions, all or any
part of its business, property or assets, whether now owned or hereafter
acquired (or agree to do any of the foregoing), or purchase or otherwise
acquire, whether in one transaction or a series of related transactions, all
or substantially all of the assets of any Person (or any division thereof)
(or agree to do any of the foregoing), or permit any of its Subsidiaries to
do any of the foregoing; provided, however, that:
-------- -------
(i) any Loan Party and its Subsidiaries
may (A) sell Inventory in the ordinary course of business, (B) dispose of
obsolete or worn-out equipment or equipment no longer used in the ordinary
course of business, (C) sell or otherwise dispose of other property or
assets for cash in an aggregate amount not less than the fair market value
of such property or assets, (D) enter into licensing arrangements entered
into in the ordinary course of business, (E) sell or otherwise dispose of
its properties or assets to any Loan Party; (F) sell or otherwise dispose of
the Capital Stock or all or substantially all of the assets of the
Designated Subsidiaries to a third party (the "Designated Subsidiaries
-----------------------
Disposition"); (G) sell or otherwise dispose of their properties and assets
-----------
related to the Designated Business of such Persons to a third party (the
"Designated Business Disposition"); (H) in the case of any Domestic
-------------------------------
Subsidiary that is not a Loan Party, sell or otherwise dispose of its
properties or assets; and (I) sell or otherwise dispose
- 88 -
of the assets described on Part C of Schedule 7.02(c)(i); provided that the
--------
Net Cash Proceeds of such Dispositions (x) in the case of clauses (B) and
(C) above, do not exceed $5,000,000 in the aggregate in any 12-month period,
(y) in the case of clause (H) above, do not exceed $50,000 in the aggregate
in any 12-month period, and (z) in all cases, are paid to the Administrative
Agent for the benefit of the Lenders pursuant to the terms of Section
2.05(c); provided, further, that other than parcels of real property
-------- -------
constituting an immaterial portion of any Principal Property and set forth
on Part C of Schedule 7.02(c)(i), no Loan Party may sell or otherwise
dispose of any Principal Property;
(ii) any wholly-owned Domestic
Subsidiary of any Guarantor may be merged into such Guarantor or another
wholly-owned Domestic Subsidiary of such Guarantor, or may be consolidated
or amalgamated with another wholly-owned Domestic Subsidiary of such
Guarantor, so long as (A) no other provision of this Agreement would be
violated thereby, (B) such Guarantor gives the Agents at least 60 days'
prior written notice of such merger, consolidation or amalgamation, (C) no
Default or Event of Default shall have occurred and be continuing either
before or after giving effect to such transaction, (D) the Agents' and the
Lenders' rights in any Collateral, including, without limitation, the
existence, perfection and priority of any Lien thereon, are not adversely
affected by such merger, consolidation or amalgamation, and (E) the
surviving Domestic Subsidiary, if any, to the extent such Domestic
Subsidiary is a Significant Subsidiary, is joined as a Loan Party hereunder
and is a party to a Guaranty and a Security Agreement and the Capital Stock
of such Domestic Subsidiary is the subject of a Pledge Agreement, in each
case, which is in full force and effect on the date of and immediately after
giving effect to such merger, consolidation or amalgamation;
(iii) any Foreign Subsidiary (other than
Solutia Europe and Solutia Dutch Newco and it Subsidiaries organized in the
United Kingdom) (x) may be merged into any other Foreign Subsidiary, or may
be consolidated or amalgamated with another Foreign Subsidiary, so long as
(A) no other provision of this Agreement would be violated thereby, (B) no
Default or Event of Default shall have occurred and be continuing either
before or after giving effect to such transaction, and (C) to the extent
such Foreign Subsidiary is owned by a Loan Party, all of the non-voting
Capital Stock and 65% of the voting Capital Stock of the surviving Foreign
Subsidiary is the subject of a Pledge Agreement, which is in full force and
effect on the date of and immediately after giving effect to such merger,
consolidation or amalgamation, or (y) may sell or otherwise dispose of, all
or any part of its business, property or assets, whether now owned or
hereafter acquired, to any other Foreign Subsidiary so long as (A) no other
provision of this Agreement would be violated thereby, and (B) no Default or
Event of Default shall have occurred and be continuing either before or
after giving effect to such transaction;
(iv) any Subsidiary that is not a
Significant Subsidiary may wind-up its business and operations, liquidate or
dissolve so long as (A) no other provision of this Agreement would be
violated thereby, and (B) no Default or Event of Default shall have occurred
and be continuing either before or after giving effect to such transaction;
and
(v) any Subsidiary of Solutia Dutch
Newco organized in the United Kingdom (x) may be merged into any other
Foreign Subsidiary of Solutia Dutch Newco organized in the United Kingdom
and wholly owned, directly or indirectly, by Solutia Dutch
- 89 -
Newco, or may be consolidated or amalgamated with another Foreign Subsidiary
of Solutia Dutch Newco organized in the United Kingdom and wholly owned,
directly or indirectly, by Solutia Dutch Newco, so long as (A) no other
provision of this Agreement would be violated thereby, (B) no Default or
Event of Default shall have occurred and be continuing either before or
after giving effect to such transaction, and (C) to the extent such Foreign
Subsidiary is owned by a Loan Party or Solutia Dutch Newco, all of the
non-voting Capital Stock and 65% of the voting Capital Stock of the
surviving Foreign Subsidiary is the subject of a Pledge Agreement, which is
in full force and effect on the date of and immediately after giving effect
to such merger, consolidation or amalgamation, or (y) may sell or otherwise
dispose of, all or any part of its business, property or assets, whether now
owned or hereafter acquired, to any other Foreign Subsidiary of Solutia
Dutch Newco organized in the United Kingdom and wholly owned, directly or
indirectly, by Solutia Dutch Newco so long as (A) no other provision of this
Agreement would be violated thereby, and (B) no Default or Event of Default
shall have occurred and be continuing either before or after giving effect
to such transaction.
(d) Change in Nature of Business. Make, or permit
----------------------------
any of its Subsidiaries to make, any change in the nature of its business as
described in Section 6.01(l).
(e) Loans, Advances, Investments, Etc. Make or
----------------------------------
commit or agree to make any loan, advance, guarantee of obligations, other
extension of credit or capital contributions to, or hold or invest in or
commit or agree to hold or invest in, or purchase or otherwise acquire or
commit or agree to purchase or otherwise acquire any shares of the Capital
Stock, bonds, notes, debentures or other securities of, or make or commit or
agree to make any other investment in, any other Person, or purchase or own
any futures contract or otherwise become liable for the purchase or sale of
currency or other commodities at a future date in the nature of a futures
contract, or permit any of its Subsidiaries to do any of the foregoing,
except for:
(i) investments existing on the date
hereof, as set forth on Schedule 7.02(e) hereto, but not any increase in the
amount thereof as set forth in such Schedule or any other modification of
the terms thereof,
(ii) loans and advances by such
Subsidiaries to any Loan Party,
(iii) loans, advances and other
extensions of credit, capital contributions or investments by any Loan Party
to its Domestic Subsidiaries that are not Loan Parties, made in the ordinary
course of business and not exceeding in the aggregate for all Loan Parties
at any one time outstanding $1,000,000,
(iv) Permitted Investments,
(v) Hedging Agreements entered into in
the ordinary course of business and not for speculative purposes,
(vi) loans and advances to employees of
the Loan Parties in the ordinary course of business and not exceeding in the
aggregate amount at any one time outstanding $500,000,
- 90 -
(vii) investments received in connection
with an Insolvency Proceeding of any supplier, customer or other Person
having an obligation in favor of any Loan Party as a result of a settlement
of delinquent obligations of, or other disputes with, such customer,
supplier or such other Person arising in the ordinary course of business,
(viii) investments not constituting
loans or advances by any Loan Party in any other Loan Party,
(ix) investments permitted under clause
(h) of the definition of "Permitted Indebtedness",
(x) investments in deposit accounts in
the ordinary course of business,
(xi) security deposits required by
utility companies or other Persons in a similar line of business made in the
ordinary course of business,
(xii) loans and advances to the Loan
Parties' employees to purchase shares of the Parent's common stock solely in
connection with the employee stock purchase program of the Loan Parties to
the extent (A) the aggregate loans and advances made by the Parent and its
Subsidiaries for such investments in any Fiscal Year does not, when
aggregated with the aggregate amount of investments made pursuant to clause
(xiv) below during any such Fiscal Year, exceed $3,000,000, (B) both
immediately before and after the making of any such loans and advances, no
Default or Event of Default has occurred or is continuing, and (C)
immediately after the making of any such loans and advances Availability
exceeds $20,000,000,
(xiii) investments in respect of
payments made pursuant to the Astaris Guaranty in an aggregate amount equal
to and made with the proceeds of draws under, the Letter of Credit
Accommodation issued on the Effective Date to support the Astaris Guaranty,
and
(xiv) investments by Solutia Greater
China, Inc. and Solutia Chemical Co. Ltd. Suzhou into Solutia Therminol Co.
Ltd. Suzhou, provided, that (A) the aggregate amount of such investments
--------
does not, when aggregated with the aggregate amount of loans and advances
made pursuant to clause (xii) above during any such Fiscal Year, exceed
$3,000,000, (B) both immediately before and after the making of any such
investment, no Default or Event of Default has occurred or is continuing,
and (C) immediately after the making of any such investment Availability
exceeds $20,000,000.
(f) Lease Obligations. Create, incur or suffer to
-----------------
exist, or permit any of its Subsidiaries to create, incur or suffer to
exist, any obligations as lessee (i) for the payment of rent for any real or
personal property in connection with any sale and leaseback transaction, or
(ii) for the payment of rent for any real or personal property under leases
or agreements to lease other than (A) Capitalized Lease Obligations which
would not cause the aggregate amount of all obligations under Capitalized
Leases entered into after the Effective Date owing by all Loan Parties and
their Subsidiaries in any Fiscal Year to exceed the amounts set forth in
subsection (g) of this Section 7.02, and (B) Operating Lease Obligations
which would not cause the aggregate amount of all
- 91 -
Operating Lease Obligations with respect to leases entered into after the
Effective Date owing by all Loan Parties and their Subsidiaries in any
Fiscal Year to exceed $5,000,000.
(g) Capital Expenditures. Make or commit or agree
--------------------
to make, or permit any of its Subsidiaries to make or commit or agree to
make, any Capital Expenditure (by purchase or Capitalized Lease) that would
cause the aggregate amount of all Capital Expenditures made by the Loan
Parties and their Subsidiaries to exceed $84,000,000 in Fiscal Year 2003,
$72,200,000 in Fiscal Year 2004, and $96,000,000 in Fiscal Year 2005,
provided that, upon receipt of the financial projections required to be
--------
delivered to the Lenders pursuant to Section 7.01(a)(vii) for Fiscal Year
--------------------
2006, Parent, on the one hand, and the Administrative Agent and the
Collateral Agent, on the other hand, shall negotiate in good faith to
determine the maximum amount of Capital Expenditures for Fiscal Year 2006
and, in the event that Parent, on the one hand, and the Administrative
Agent, the Collateral Agent and the Required Lenders, on the other hand, are
unable to agree upon such maximum amount, the maximum amount of Capital
Expenditures for Fiscal Year 2006 shall not exceed $96,000,000.
(h) Restricted Payments. (i) Declare or pay any
-------------------
dividend or other distribution, direct or indirect, on account of any
Capital Stock of any Loan Party or any of its Subsidiaries, now or hereafter
outstanding, (ii) make any repurchase, redemption, retirement, defeasance,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any Capital Stock of any Loan Party or any direct or
indirect parent of any Loan Party, now or hereafter outstanding, (iii) make
any payment to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights for the purchase or acquisition of shares
of any class of Capital Stock of any Loan Party, now or hereafter
outstanding, (iv) return any Capital Stock to any shareholders or other
equity holders of any Loan Party or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (v) pay any
management fees or any other fees or expenses (including the reimbursement
thereof by any Loan Party or any of its Subsidiaries) pursuant to any
management, consulting or other services agreement to any of the
shareholders or other equityholders of any Loan Party or any of its
Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates
of any Loan Party; provided, however, (A) dividends or other distribution
-------- -------
may be made by any Loan Party to the Parent and by any Subsidiary of a Loan
Party to any Loan Party, (B) the Parent may pay dividends in the form of
common Capital Stock, (C) Solutia Europe may repurchase the Capital Stock of
CPFilms Vertriebs GmBH to the extent (I) the aggregate purchase price of all
such purchases does not exceed (euro)150,000, and (II) both before and after
giving effect to such transaction, no Default or Event of Default shall have
occurred and be continuing, (D) Solutia Management may pay dividends to
holders of its Class B Capital Stock in an aggregate amount not to exceed
$10,500 per year, and (E) subject to the requirements of Section
2.05(c)(ix), the Parent may repurchase the Class B shares of Capital Stock
of Solutia Management for an aggregate consideration not exceeding
$1,500,000.
(i) Federal Reserve Regulations. Permit any Loan
---------------------------
or the proceeds of any Loan under this Agreement to be used for any purpose
that would cause such Loan to be a margin loan under the provisions of
Regulation T, U or X of the Board.
(j) Transactions with Affiliates. Enter into,
----------------------------
renew, extend or be a party to, or permit any of its Subsidiaries to enter
into, renew, extend or be a party to, any transaction or
- 92 -
series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) with any Affiliate, except (i) in the
ordinary course of business in a manner and to an extent consistent with
past practice and necessary or desirable for the prudent operation of its
business, for fair consideration and on terms no less favorable to it or its
Subsidiaries than would be obtainable in a comparable arm's length
transaction with a Person that is not an Affiliate thereof, (ii)
transactions with another Loan Party, and (iii) transactions permitted by
Section 7.02(e).
(k) Limitations on Dividends and Other Payment
------------------------------------------
Restrictions Affecting Subsidiaries. Create or otherwise cause, incur,
-----------------------------------
assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
any Loan Party (i) to pay dividends or to make any other distribution on any
shares of Capital Stock of such Subsidiary owned by any Loan Party or any of
its Subsidiaries, (ii) to pay or prepay or to subordinate any Indebtedness
owed to any Loan Party or any of its Subsidiaries, (iii) to make loans or
advances to any Loan Party or any of its Subsidiaries or (iv) to transfer
any of its property or assets to any Loan Party or any of its Subsidiaries,
or permit any of its Subsidiaries to do any of the foregoing; provided,
--------
however, that nothing in any of clauses (i) through (iv) of this Section
-------
7.02(k) shall prohibit or restrict compliance with:
(A) this Agreement and the other Loan
Documents;
(B) any agreements in effect on the date
of this Agreement and described on Schedule 7.02(k);
(C) any applicable law, rule or
regulation (including, without limitation, applicable currency control laws
and applicable state corporate statutes restricting the payment of dividends
in certain circumstances);
(D) in the case of clause (iv) any
agreement setting forth customary restrictions on the subletting, assignment
or transfer of any property or asset that is a lease, license, conveyance or
contract of similar property or assets; or
(E) in the case of clause (iv) any
agreement, instrument or other document evidencing a Permitted Lien from
restricting on customary terms the transfer of any property or assets
subject thereto.
(l) Limitation on Issuance of Capital Stock.
---------------------------------------
Issue or sell or enter into any agreement or arrangement for the issuance
and sale of, or permit any of its Subsidiaries to issue or sell or enter
into any agreement or arrangement for the issuance and sale of, any shares
of its Capital Stock, any securities convertible into or exchangeable for
its Capital Stock or any warrants, other than issuances of common Capital
Stock of the Parent or warrants or options to acquire any such common
Capital Stock (including such common Capital Stock of the Parent or
issuances of warrants for common Capital Stock of the Parent to the Parent's
pension plans, issuances of options or other securities solely exercisable
or convertible into the Parent's common Capital Stock to the Loan Parties'
employees or directors in accordance with the existing benefit plans of the
Loan Parties or issuances of warrants for the Parent's common Capital Stock
to Pharmacia Corporation
- 93 -
pursuant to the Settlement Agreement) to the extent such issuances are not
effected pursuant to a transaction prohibited by Section 7.02(m)(iv).
(m) Modifications of Indebtedness, Organizational
---------------------------------------------
Documents and Certain Other Agreements; Etc. (i) Amend, modify or otherwise
--------------------------------------------
change (or permit the amendment, modification or other change in any manner
of) any of the provisions of any of its or its Subsidiaries' Indebtedness or
of any instrument or agreement (including, without limitation, any purchase
agreement, indenture, loan agreement, guaranty or security agreement)
relating to any such Indebtedness if such amendment, modification or change
would shorten the final maturity or average life to maturity of, or require
any payment to be made earlier than the date originally scheduled on, such
Indebtedness, would increase the interest rate applicable to such
Indebtedness, would change the subordination provision, if any, of such
Indebtedness, or would otherwise be adverse to the Agents or the Lenders or
the issuer of such Indebtedness in any respect, provided that, in the case
--------
of the 2009 Note Indenture, the 2009 Notes, the 1997 Indenture, the 1997
Debentures, the Euro Indenture, the Euro Notes and the Astaris Guaranty, no
amendment, modification or change shall be made to any of such documents,
except as otherwise permitted under the definition of Permitted
Indebtedness, (ii) except for the Obligations and intercompany indebtedness
between or among Loan Parties or between or among non-Loan Parties, make any
voluntary or optional payment, prepayment, redemption, defeasance, sinking
fund payment or other acquisition for value of any of its or its
Subsidiaries' Indebtedness (including, without limitation, by way of
depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness when
due), or refund, refinance, replace or exchange any other Indebtedness for
any such Indebtedness (except to the extent any such optional payment,
prepayment, redemption, defeasance, sinking fund payment, acquisition,
refund, refinancing, replacement or exchange is otherwise expressly
permitted by the definition of Permitted Indebtedness), or, make any
payment, prepayment, redemption, defeasance, sinking fund payment or
repurchase of any outstanding Indebtedness as a result of any issuance and
sale of debt or equity securities or similar event, (iii) except as
permitted by Section 7.02(c), amend, modify or otherwise change its name,
jurisdiction of organization, organizational identification number or FEIN
or (iv) amend, modify or otherwise change its certificate of incorporation
or bylaws (or other similar organizational documents), including, without
limitation, by the filing or modification of any certificate of designation,
or any agreement or arrangement entered into by it, with respect to any of
its Capital Stock (including any shareholders' agreement), or enter into any
new agreement with respect to any of its Capital Stock, except any such
amendments, modifications or changes or any such new agreements or
arrangements pursuant to this clause (iv) that either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(n) Investment Company Act of 1940. Engage in any
------------------------------
business, enter into any transaction, use any securities or take any other
action or permit any of its Subsidiaries to do any of the foregoing, that
would cause it or any of its Subsidiaries to become subject to the
registration requirements of the Investment Company Act of 1940, as amended,
by virtue of being an "investment company" or a company "controlled" by an
"investment company" not entitled to an exemption within the meaning of such
Act.
(o) Compromise of Accounts. Compromise or adjust
----------------------
any Account (or extend the time of payment thereof) or grant any discounts,
allowances or credits or permit any of
- 94 -
its Subsidiaries to do so other than in the ordinary course of its business;
provided during the existence of an Event of Default, no such compromises,
--------
adjustments or grants may be given, except as otherwise agreed to by the
Administrative Agent, provided, however, in no event shall all such
-------- -------
discounts, allowances and credits exceed $1,000,000 and no such extension of
the time for payment extend beyond 30 days from the original due date
thereof.
(p) ERISA. (i) Engage, or permit any ERISA
-----
Affiliate to engage, in any transaction described in Section 4069 of ERISA;
(ii) engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction described in Section 406 of ERISA or 4975 of the Internal
Revenue Code for which a statutory or class exemption is not available or a
private exemption has not previously been obtained from the U.S. Department
of Labor; (iii) adopt or permit any ERISA Affiliate to adopt any employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to employees after termination of employment other than as
required by Section 601 of ERISA or applicable law; (iv) fail to make any
contribution or payment in excess of $1,000,000 to any Multiemployer Plan
which it or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto; or (v)
fail, or permit any ERISA Affiliate to fail, to pay any required installment
or any other payment required under Section 412 of the Internal Revenue Code
on or before the due date for such installment or other payment.
(q) Environmental. Permit the Handling or Release
-------------
of Hazardous Materials at any property owned or leased by it or any of its
Subsidiaries, except in compliance in all material respects with
Environmental Laws and so long as such Handling or Release disposal of
Hazardous Materials does not result in a Material Adverse Effect.
(r) Certain Agreements. Agree to any material
------------------
amendment or other material change to or material waiver of any of its
rights under any Material Contract.
Section 7.03 Financial Covenants. So long as any principal
-------------------
of or interest on any Loan, Letter of Credit Obligation or any other
Obligation (whether or not due), other than indemnification obligations for
which no claim has been asserted, shall remain unpaid or any Lender shall
have any Revolving Credit Commitment hereunder, each Loan Party shall not,
unless the Required Lenders shall otherwise consent in writing:
(a) Consolidated EBITDA. Permit Consolidated
-------------------
EBITDA of the Parent and its Subsidiaries at the end of each twelve month
period ended on a date set forth below to be less than the amount
corresponding to such period set forth below:
Twelve-Month Period Ended Consolidated EBITDA
------------------------- -------------------
October 31, 2003 $101,700,000
November 30, 2003 $108,100,000
December 31, 2003 $98,700,000
- 95 -
January 31, 2004 $93,600,000
February 28, 2004 $101,700,000
March 31, 2004 $103,600,000
April 30, 2004 $109,500,000
May 31, 2004 $112,000,000
June 30, 2004 $114,300,000
July 31, 2004 $115,000,000
August 31, 2004 $122,800,000
September 30, 2004 $134,000,000
October 31, 2004 $141,700,000
November 30, 2004 $142,200,000
December 31, 2004 $146,200,000
January 31, 2005 $146,700,000
February 28, 2005 $147,900,00
March 31, 2005 $145,500,000
April 30, 2005 $152,400,000
May 31, 2005 $155,000,000
June 30, 2005 $157,600,000
July 31, 2005 $160,900,000
August 31, 2005 $164,400,000
September 30, 2005 $168,000,000
October 31, 2005 $171,600,000
November 30, 2005 $175,400,000
December 31, 2005 $180,600,000
- 96 -
provided that, upon receipt of the financial projections required to be
--------
delivered to the Lenders pursuant to Section 7.01(a)(vii) for Fiscal Year
--------------------
2006, Parent, on the one hand, and the Administrative Agent and the
Collateral Agent, on the other hand, shall negotiate in good faith to
determine the minimum Consolidated EBITDA for each twelve-month period
ending at the end of each month in Fiscal Year 2006 and, in the event that
Parent, on the one hand, and the Administrative Agent, the Collateral Agent
and the Required Lenders, on the other hand, are unable to agree upon the
minimum Consolidated EBITDA for each such period, the minimum Consolidated
EBITDA for each twelve-month period ending at the end of each month in
Fiscal Year 2006 shall be the same as the minimum Consolidated EBITDA for
each corresponding twelve-month period in Fiscal Year 2005.
(b) Designated A Business Segment. Permit
-----------------------------
Consolidated EBITDA of the Designated A Business Segment at the end of each
twelve month period ended on a date set forth in Part A of Schedule 7.03 to
be less than the amount corresponding to such period set forth in Part A of
Schedule 7.03.
(c) Designated B Business Segment. Permit
-----------------------------
Consolidated EBITDA of the Designated B Business Segment at the end of each
twelve month period ended on a date set forth in Part B of Schedule 7.03 to
be less than the amount corresponding to such period set forth in Part B of
Schedule 7.03.
(d) Fixed Charge Coverage Ratio. Permit the Fixed
---------------------------
Charge Coverage Ratio of the Parent and its Subsidiaries at the end of each
twelve-month period ended on the date set forth below to be less than the
ratio set forth opposite such date:
Twelve-Month Period Ended Fixed Charge Coverage Ratio
------------------------- ---------------------------
October 31, 2003 0.25 to 1.0
November 30, 2003 0.28 to 1.0
December 31, 2003 0.18 to 1.0
January 31, 2004 0.41 to 1.0
February 28, 2004 0.44 to 1.0
March 31, 2004 0.41 to 1.0
April 30, 2004 0.42 to 1.0
May 31, 2004 0.39 to 1.0
June 30, 2004 0.37 to 1.0
July 31, 2004 0.35 to 1.0
- 97 -
August 31, 2004 0.42 to 1.0
September 30, 2004 0.50 to 1.0
October 31, 2004 0.56 to 1.0
November 30, 2004 0.57 to 1.0
December 31, 2004 0.60 to 1.0
January 31, 2005 0.59 to 1.0
February 28, 2005 0.58 to 1.0
March 31, 2005 0.54 to 1.0
April 30, 2005 0.58 to 1.0
May 31, 2005 0.58 to 1.0
June 30, 2005 0.58 to 1.0
July 31, 2005 0.58 to 1.0
August 31, 2005 0.58 to 1.0
September 30, 2005 0.58 to 1.0
October 31, 2005 0.58 to 1.0
November 30, 2005 0.58 to 1.0
December 31, 2005 0.59 to 1.0
provided that, upon receipt of the financial projections required to be
--------
delivered to the Lenders pursuant to Section 7.01(a)(vii) for Fiscal Year
--------------------
2006, Parent, on the one hand, and the Administrative Agent and the
Collateral Agent, on the other hand, shall negotiate in good faith to
determine the minimum Fixed Charge Coverage Ratio for each twelve-month
period ending at the end of each month in Fiscal Year 2006 and, in the event
that Parent, on the one hand, and the Administrative Agent, the Collateral
Agent and the Required Lenders, on the other hand, are unable to agree upon
the minimum ratio for each such period, the minimum Fixed Charge Coverage
Ratio for each twelve-month period ending at the end of each month in Fiscal
Year 2006 shall be the same as the ratio for each corresponding twelve-month
period in Fiscal Year 2005.
- 98 -
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS AND OTHER COLLATERAL
Section 8.01 Collection of Accounts; Management of
-------------------------------------
Collateral. The Loan Parties shall (i) establish and maintain cash
----------
management services of a type and on terms satisfactory to the
Administrative Agent at one or more of the banks set forth on Schedule 8.01
(each a "Cash Management Bank"), and shall take such reasonable steps to
--------------------
enforce, collect and receive all amounts owing on the Accounts of the Loan
Parties or any of their Domestic Subsidiaries, and (ii) deposit or cause to
be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all proceeds in respect of any Collateral
and all Collections and other amounts received by any Loan Party (including
payments made by the Account Debtors directly to any Loan Party) into a Cash
Management Account (other than an operating/check disbursement account) or
the Concentration Accounts. On the Effective Date, the Loan Parties shall
deliver to the Administrative Agent (x) a Cash Management Agreement with
respect to each Cash Management Account and (y) a Concentration Account
Agreement with respect to each Concentration Account. Each Cash Management
Bank shall have irrevocable directions to send all funds on deposit in the
applicable Cash Management Accounts (other than operating/check disbursement
accounts) by electronic funds transfer (including, but not limited to, ACH
transfers) on each Business Day to the applicable Concentration Account at
such Cash Management Bank, or, in the case of the accounts at Bank of
America, N.A., directly to the Solutia Business Concentration Account, it
being understood that the operating/check disbursement accounts of the Loan
Parties identified on Schedule 8.01 shall be subject to a Cash Management
Agreement, but shall not be subject to such irrevocable directions until the
Administrative Agent shall have provided notice to such Cash Management Bank
as described in the Cash Management Agreements. Notwithstanding the
foregoing, promptly upon the request of Administrative Agent, each Loan
Party shall deliver a Cash Management Agreement to the Administrative Agent
with respect to any Cash Management Account identified by the Administrative
Agent.
(b) The Concentration Account Banks shall have
irrevocable directions to send all funds received in the applicable
Concentration Account into the Solutia Business Concentration Account by
electronic funds transfer (including, but not limited to, ACH transfers);
provided, that, in the case of the Concentration Account at Citibank, N.A.,
--------
the Loan Parties shall direct such bank to transfer the funds in its
Concentration Accounts at the end of each Business Day to the Solutia
Business Concentration Account, and all funds received in the Solutia
Business Concentration Account shall be subject to irrevocable directions to
be sent by electronic funds transfer (including, but not limited to, ACH
transfers) to the Administrative Agent's Account to be credited to the
Administrative Agent's Account for application at the end of each Business
Day on which such funds are received in the Administrative Agent's Account
in accordance with Section 2.05(c)(ii) to reduce the then principal balance
of the Revolving Loans, conditional upon final payment to the Administrative
Agent. The Administrative Agent shall charge the Loan Account on the last
day of each month with 2 Business Days of "clearance" or "float" at the rate
applicable to the Revolving A Loans set forth in Section 2.04(a)(i) for all
Collections that are received by the Administrative Agent (regardless of
whether forwarded by a Cash Management Bank to the Administrative Agent,
whether provisionally applied to reduce the Obligations under the Loan
- 99 -
Documents, or otherwise), for the account of the Agents and the Lenders, in
accordance with a written agreement among the Agents and the Lenders. This
across-the-board 2 Business Days clearance or float charge on all
Collections is acknowledged by the parties to constitute an integral aspect
of the pricing of the Lenders' financing of the Borrowers, and shall apply
irrespective of the characterization of whether receipts are owned by the
Borrowers or the Lenders, and whether or not there are any outstanding
Revolving Loans, the effect of such clearance or float charge being the
equivalent of charging interest on such funds in the Concentration Account
through the completion of a period ending 2 Business Days after the receipt
thereof. No checks, drafts or other instruments received by the
Administrative Agent shall constitute final payment to the Administrative
Agent unless and until such checks, drafts or instruments have actually been
collected.
(c) So long as no Default or Event of Default has
occurred and is continuing, the Administrative Borrower may amend Schedule
8.01 to add or replace a Cash Management Account Bank or Cash Management
Account; provided, however, that (i) such prospective Cash Management Bank
-------- -------
shall be reasonably satisfactory to the Administrative Agent and the
Administrative Agent shall have consented in writing in advance to the
opening of such Cash Management Account with the prospective Cash Management
Bank, and (ii) prior to the time of the opening of such Cash Management
Account, each Loan Party and such prospective Cash Management Bank shall
have executed and delivered to the Administrative Agent a Cash Management
Agreement. Each Loan Party shall close any of its Cash Management Accounts
(and establish replacement cash management accounts in accordance with the
foregoing sentence) promptly and in any event within 30 days of notice from
the Administrative Agent that the creditworthiness of any Cash Management
Bank is no longer acceptable in the Administrative Agent's reasonable
judgment, or as promptly as practicable and in any event within 60 days of
notice from the Administrative Agent that the operating performance, funds
transfer, or availability procedures or performance of the Cash Management
Bank with respect to Cash Management Accounts or the Administrative Agent's
liability under any Cash Management Agreement with such Cash Management Bank
is no longer acceptable in the Administrative Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash
collateral accounts, with all cash, checks and similar items of payment in
such accounts securing payment of the Obligations, and in which the Loan
Parties are hereby deemed to have granted a Lien to the Administrative Agent
for the benefit of the Agents and the Lenders. All checks, drafts, notes,
money orders, acceptances, cash and other evidences of Indebtedness received
directly by any Loan Party as proceeds of any Collateral shall be held by
such Loan Party in trust for the Agents and the Lenders and upon receipt be
deposited by such Loan Party in original form and no later than the next
Business Day after receipt thereof into the Concentration Accounts or the
Solutia Business Concentration Account, as applicable; provided, however,
-------- -------
all Net Cash Proceeds or cash received directly by such Loan Party pursuant
to an event described in Section 2.05(c)(iii) or Section 2.05(c)(iv) or (v),
shall be held by such Loan Party in trust for the Agents and the Lenders and
upon receipt be deposited by the Loan Party in original form and no later
than the next Business Day after receipt thereof into the Administrative
Agent's Account. A Loan Party shall not commingle such collections with such
Loan Party's own funds or the funds of any Subsidiary or Affiliate of such
Loan Party or with the proceeds of any assets not included in the
Collateral.
- 100 -
(e) After the occurrence and during the
continuance of an Event of Default, the Collateral Agent may send a notice
of assignment and/or notice of the Lenders' security interest to any and all
Account Debtors or third parties holding or otherwise concerned with any of
the Collateral, and thereafter the Collateral Agent shall have the sole
right to collect the Accounts and/or take possession of the Collateral and
the books and records relating thereto. The Loan Parties shall not, without
prior written consent of the Collateral Agent, grant any extension of time
of payment of any Account, compromise or settle any Account for less than
the full amount thereof, release, in whole or in part, any Person or
property liable for the payment thereof, or allow any credit or discount
whatsoever thereon, except, in the absence of a continuing Event of Default,
as permitted by Section 7.02(o).
(f) Each Loan Party hereby appoints each Agent or
its designee on behalf of such Agent as the Loan Parties' attorney-in-fact
with power exercisable during the continuance of an Event of Default to
endorse any Loan Party's name upon any notes, acceptances, checks, drafts,
money orders or other evidences of payment relating to the Accounts, to sign
any Loan Party's name on any invoice or ▇▇▇▇ of lading relating to any of
the Accounts, drafts against Account Debtors with respect to Accounts,
assignments and verifications of Accounts and notices to Account Debtors
with respect to Accounts, to send verification of Accounts, and to notify
the Postal Service authorities to change the address for delivery of mail
addressed to any Loan Party to such address as such Agent may designate and
to do all other acts and things necessary to carry out this Agreement. All
acts of said attorney or designee are hereby ratified and approved, and said
attorney or designee shall not be liable for any acts of omission or
commission (other than acts of omission or commission constituting gross
negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction), or for any error of judgment or mistake of
fact or law; this power being coupled with an interest is irrevocable until
all of the Loans, Letter of Credit Obligations and other Obligations under
the Loan Documents are Paid in Full and all of the Loan Documents are
terminated.
(g) Nothing herein contained shall be construed
to constitute any Agent as agent of any Loan Party for any purpose
whatsoever, and the Agents shall not be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the
Collateral wherever the same may be located and regardless of the cause
thereof (other than from acts of omission or commission constituting gross
negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction). The Agents shall not, under any
circumstance or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or
payment of any of the Accounts or any instrument received in payment thereof
or for any damage resulting therefrom (other than acts of omission or
commission constituting gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction). The Agents, by
anything herein or in any assignment or otherwise, do not assume any of the
obligations under any contract or agreement assigned to any Agent and shall
not be responsible in any way for the performance by any Loan Party of any
of the terms and conditions thereof.
(h) If any Account includes a charge for any tax
payable to any Governmental Authority, each Agent is hereby authorized (but
in no event obligated) in its discretion to pay the amount thereof to the
proper taxing authority for the Loan Parties' account and to charge the Loan
Parties therefor. The Borrowers shall notify the Administrative Agent if any
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Account includes any taxes due to any such Governmental Authority and, in
the absence of such notice, the Administrative Agent shall have the right to
retain the full proceeds of such Account and shall not be liable for any
taxes that may be due by reason of the sale and delivery creating such
Account.
(i) Notwithstanding any other terms set forth in
the Loan Documents, the rights and remedies of the Agents and the Lenders
herein provided, and the obligations of the Loan Parties set forth herein,
are cumulative of, may be exercised singly or concurrently with, and are not
exclusive of, any other rights, remedies or obligations set forth in any
other Loan Document or as provided by law.
Section 8.02 Collateral Custodian. Upon the occurrence and
--------------------
during the continuance of any Default or Event of Default, the Collateral
Agent may at any time and from time to time employ and maintain on the
premises of any Loan Party a custodian selected by the Collateral Agent who
shall have full authority to do all acts necessary to protect the Agents'
and the Lenders' interests. Each Loan Party hereby agrees to, and to cause
its Subsidiaries to, cooperate with any such custodian and to do whatever
the Collateral Agent may reasonably request to preserve the Collateral. All
costs and expenses incurred by the Collateral Agent by reason of the
employment of the custodian shall be the responsibility of the Borrowers and
charged to the Loan Account.
Section 8.03 Collateral Reporting.
--------------------
(a) The Borrowers shall provide the
Administrative Agent and the Documentation Agent with the following
documents in a form satisfactory to the Administrative Agent and the
Documentation Agent:
(i) on a regular basis as required by
the Administrative Agent or the Documentation Agent, schedules of sales
made, credits issued and cash received;
(ii) as soon as possible after the end
of each fiscal month (but in any event within ten (10) days after the end
thereof), on a monthly basis or more frequently as the Administrative Agent
or the Documentation Agent may request: (A) perpetual inventory reports, (B)
inventory reports by location and category (and including the amounts of
Inventory and the value thereof at any leased locations and at premises of
warehouses, processors or other third parties), (C) agings of Accounts
(together with a reconciliation to the previous month's aging and general
ledger), (D) agings of accounts payable (and including information
indicating the amounts owing to owners and lessors of leased premises,
warehouses, processors and other third parties from time to time in
possession of any Collateral) and (E) a report setting forth all issued and
outstanding letters of credit;
(iii) upon the Administrative Agent's or
the Documentation Agent's request, (A) copies of customer statements,
purchase orders, sales invoices, credit memos, remittance advices and
reports, and copies of deposit slips and bank statements, (B) copies of
shipping and delivery documents, and (C) copies of purchase orders, invoices
and delivery documents for Inventory and Equipment acquired by any Borrower
or Guarantor; and
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(iv) such other reports as to the
portion of the Collateral comprised of Inventory, Accounts and Receivables
as the Administrative Agent or the Documentation Agent shall reasonably
request from time to time.
(b) If any Loan Party's records or reports of the
Collateral are prepared or maintained by an accounting service, contractor,
shipper or other agent, such Loan Party hereby irrevocably authorizes such
service, contractor, shipper or agent to deliver such records, reports, and
related documents to the Administrative Agent and the Documentation Agent
and to follow the Administrative Agent's or the Documentation Agent's
instructions with respect to further services at any time that an Event of
Default has occurred and is continuing.
Section 8.04 Accounts Covenants.
------------------
(a) The Borrowers shall notify the Administrative
Agent and the Documentation Agent promptly of: (i) any material delay in any
Loan Party's performance of any of its material obligations to any Account
Debtor or the assertion of any material claims, offsets, defenses or
counterclaims by any Account Debtor, or any material disputes with Account
Debtors, or any settlement, adjustment or compromise thereof, (ii) all
material adverse information known to any Borrower or Guarantor relating to
the financial condition of any Account Debtor to the extent the aggregate
outstanding amount of Accounts of such Account Debtor exceeds $1,000,000 and
(iii) any event or circumstance which, to the best of any Loan Party's
knowledge, would cause the Administrative Agent to consider any then
existing Accounts as no longer constituting Eligible Accounts. No credit,
discount, allowance or extension or agreement for any of the foregoing shall
be granted to any Account Debtor without the Administrative Agent's consent,
except in the ordinary course of a Loan Party's business in accordance with
practices and policies previously disclosed in writing to the Administrative
Agent and the Documentation Agent. Subject to Section 7.02(o), as long as no
Event of Default has occurred and is continuing, Loan Parties may settle,
adjust or compromise any claim, offset, counterclaim or dispute with any
Account Debtor. At any time that an Event of Default has occurred and is
continuing, the Administrative Agent shall, at its option, have the
exclusive right to settle, adjust or compromise any claim, offset,
counterclaim or dispute with Account Debtors or grant any credits, discounts
or allowances.
(b) With respect to each Account: (i) the amounts
shown on any invoice delivered to the Administrative Agent or the
Documentation Agent or schedule thereof delivered to the Administrative
Agent or the Documentation Agent shall be true and complete, (ii) no
payments shall be made thereon except payments immediately delivered to the
Administrative Agent pursuant to the terms of this Agreement, (iii) no
credit, discount, allowance or extension or agreement for any of the
foregoing shall be granted to any Account Debtor except as reported to the
Administrative Agent and the Documentation Agent in accordance with this
Agreement and except for credits, discounts, allowances or extensions made
or given in the ordinary course of each Loan Party's business in accordance
with practices and policies previously disclosed to the Administrative Agent
and the Documentation Agent, (iv) there shall be no setoffs, deductions,
contras, defenses, counterclaims or disputes existing or asserted with
respect thereto except as reported to the Administrative Agent and the
Documentation Agent in accordance with the terms of this Agreement, (v) none
of the transactions giving rise thereto will violate any applicable foreign,
Federal, state or local laws or regulations, all documentation relating
thereto will be legally
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sufficient under such laws and regulations and all such documentation will
be legally enforceable in accordance with its terms.
(c) The Administrative Agent shall have the right
at any time or times, in the Administrative Agent's name or in the name of a
nominee of the Administrative Agent, to verify the validity, amount or any
other matter relating to any Receivables, Inventory or Accounts, by mail,
telephone, facsimile transmission or otherwise.
Section 8.05 Inventory Covenants. With respect to the
-------------------
Inventory: (a) each Loan Party shall at all times maintain inventory records
reasonably satisfactory to the Administrative Agent and the Documentation
Agent, keeping correct and accurate records itemizing and describing the
kind, type, quality and quantity of Inventory, such Loan Party's cost
therefor and daily withdrawals therefrom and additions thereto; (b) Loan
Parties shall conduct a physical count of the Inventory at any time the
Administrative Agent or the Documentation Agent may request on or after an
Event of Default, and promptly following such physical inventory shall
supply the Administrative Agent and the Documentation Agent with a report in
the form and with such specificity as may be satisfactory to the
Administrative Agent or the Documentation Agent concerning such physical
count; (c) Loan Parties shall not remove any Inventory from the locations
set forth or permitted herein, without the prior written consent of the
Administrative Agent and the Collateral Agent, except for sales of Inventory
in the ordinary course of its business and except to move Inventory directly
from one location set forth or permitted herein to another such location and
except for Inventory shipped from the manufacturer thereof to such Loan
Party which is in transit to the locations set forth or permitted herein;
(d) upon the Administrative Agent's or the Documentation Agent's request,
the Borrowers shall, at their expense, but at any time or times as the
Administrative Agent or the Documentation Agent may request on or after an
Event of Default, deliver or cause to be delivered to the Administrative
Agent and the Documentation Agent written appraisals as to the Inventory in
form, scope and methodology acceptable to the Administrative Agent and the
Documentation Agent and by an appraiser acceptable to the Administrative
Agent and the Documentation Agent, addressed to Agents and Lenders and upon
which Agents and Lenders are expressly permitted to rely; (e) the Loan
Parties shall produce, use, store and maintain the Inventory with all
reasonable care and caution and in accordance with applicable standards of
any insurance and in conformity with applicable laws (including the
requirements of the Federal Fair Labor Standards Act of 1938, as amended and
all rules, regulations and orders related thereto); (f) none of the
Inventory or other Collateral constitutes farm products or the proceeds
thereof; (g) each Loan Party assumes all responsibility and liability
arising from or relating to the production, use, sale or other disposition
of the Inventory; (h) the Loan Parties shall not sell Inventory to any
customer on approval, or any other basis which entitles the customer to
return or may obligate any Loan Party to repurchase such Inventory; (i) the
Loan Parties shall keep the Inventory in good and marketable condition; and
(j) the Loan Parties shall not, without prior written notice to the
Administrative Agent and the Documentation Agent or the specific
identification of such Inventory in a report with respect thereto provided
by the Administrative Borrower to the Administrative Agent and the
Documentation Agent pursuant to Section 8.03(a) hereof, acquire or accept
any Inventory on consignment or approval.
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ARTICLE IX
EVENTS OF DEFAULT
Section 9.01 Events of Default. If any of the following
-----------------
Events of Default shall occur and be continuing:
(a) any Borrower shall fail to pay any principal
of or interest on any Loan, any Reimbursement Obligation, any Agent Advance
or any fee, indemnity or other amount payable under this Agreement or any
other Loan Document when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise);
(b) any representation or warranty made or deemed
made by or on behalf of any Loan Party or by any officer of the foregoing
under or in connection with any Loan Document or under or in connection with
any report, certificate, or other document delivered to any Agent, any
Lender or the L/C Issuer pursuant to any Loan Document shall have been
incorrect in any material respect when made or deemed made;
(c) any Loan Party shall fail to perform or
comply with any covenant or agreement contained in (i) clauses (b), (c),
(d), (f), (h), (j), (k), (l), (m), (n), (o), (p), (q) or (r) of Section
7.01, Section 7.02 or Section 7.03 or ARTICLE VIII, or any Loan Party shall
fail to perform or comply with any covenant or agreement contained in any
Security Agreement to which it is a party, any Pledge Agreement to which it
is a party, or any Mortgage to which it is a party, (ii) clauses (e), (g),
and (i) of Section 7.01 and such failure, if capable of being remedied,
shall remain unremedied for 5 days, after the earlier of the date a senior
officer of any Loan Party shall become aware of such failure and the date
written notice of such default shall have been given by any Agent to such
Loan Party, (iii) clauses (a)(i), (a)(ii), (a)(iii), (a)(iv) or (a)(vii) of
Section 7.01 and such failure shall remain unremedied for 5 days, (iv)
clauses (a)(v), (a)(x), (a)(xvii) and (a)(xviii) of Section 7.01 and such
failure shall remain unremedied for 3 days, and (v) clauses (a)(vi),
(a)(viii), (a)(ix), (a)(xi), (a)(xii), (a)(xiii), (a)(xiv), (a)(xv) and
(a)(xvi) of Section 7.01 and such failure shall remain unremedied for 1 day;
(d) any Loan Party shall fail to perform or
comply with any other term, covenant or agreement contained in any Loan
Document to be performed or observed by it and, except as set forth in
subsections (a), (b) and (c) of this Section 9.01, such failure, if capable
of being remedied, shall remain unremedied for 15 days after the earlier of
the date a senior officer of any Loan Party becomes aware of such failure
and the date written notice of such default shall have been given by any
Agent to such Loan Party;
(e) the Parent or any of its Significant
Subsidiaries shall fail to pay any principal of or interest on any of its
Indebtedness in excess of $5,000,000 (excluding Indebtedness evidenced by
this Agreement and excluding the Excluded Material Contracts), or any
interest or premium thereon, when due (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise) and such failure
shall continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or any other default
under any agreement or instrument relating to any such Indebtedness, or any
other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument,
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if the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled required prepayment), redeemed, purchased or
defeased or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case, prior to the stated
maturity thereof;
(f) the Parent or any of its Significant
Subsidiaries (i) shall institute any proceeding or voluntary case seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or
other similar official for any such Person or for any substantial part of
its property, (ii) shall be generally not paying its debts as such debts
become due or shall admit in writing its inability to pay its debts
generally, (iii) shall make a general assignment for the benefit of
creditors, or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (f);
(g) any proceeding shall be instituted against
the Parent or any of its Significant Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for any such Person or for any
substantial part of its property, and either such proceeding shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought
in such proceeding (including, without limitation, the entry of an order for
relief against any such Person or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of
its property) shall occur;
(h) any provision of any Loan Document shall at
any time for any reason (other than pursuant to the express terms thereof)
cease to be valid and binding on or enforceable against any Loan Party
intended to be a party thereto, or the validity or enforceability thereof
shall be contested by any party thereto, or a proceeding shall be commenced
by any Loan Party or any Governmental Authority having jurisdiction over any
of them, seeking to establish the invalidity or unenforceability thereof, or
any Loan Party shall deny in writing that it has any liability or obligation
purported to be created under any Loan Document;
(i) any Security Agreement, any Pledge Agreement,
any Mortgage or any other security document, after delivery thereof pursuant
hereto, shall for any reason fail or cease to create a valid and perfected
and, except to the extent permitted by the terms hereof or thereof, first
priority Lien in favor of the Collateral Agent for the benefit of the
Lenders on any Collateral purported to be covered thereby;
(j) on or after August 15, 2004, the holders of
any of the 1997 Debentures shall have a right to require the Parent or any
of its Subsidiaries to purchase any such debentures on a date prior to a
date after the Final Maturity Date that is acceptable to the Collateral
Agent in its sole discretion;
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(k) one or more judgments or orders for the
payment of money exceeding $5,000,000 in the aggregate shall be rendered
against the Parent or any of its Significant Subsidiaries and remain
unsatisfied and either (i) enforcement proceedings shall have been commenced
by any creditor upon any such judgment or order, or (ii) there shall be a
period of 15 consecutive days after entry thereof during which a stay of
enforcement of any such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that any such judgment
-------- -------
or order shall not give rise to an Event of Default under this subsection
(k) if and for so long as (A) the amount of such judgment or order is
covered by a valid and binding policy of insurance between the defendant and
the insurer covering full payment thereof (less any retention) and (B) such
insurer has been notified, and has not disputed the claim made for payment,
of the amount of such judgment or order;
(l) the Parent or any of its Significant
Subsidiaries is enjoined, restrained or in any way prevented by the order of
any court or any Governmental Authority from conducting all or any material
part of its business for more than fifteen (15) consecutive days which could
reasonably be expected to have a Material Adverse Effect;
(m) any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy,
or other casualty which causes, for more than fifteen (15) consecutive days,
the cessation or substantial curtailment of revenue producing activities at
any facility of any Loan Party, if any such event or circumstance could
reasonably be expected to have a Material Adverse Effect;
(n) any cessation of a substantial part of the
business of the Parent or any of its Significant Subsidiaries for a period
which materially and adversely affects the ability of such Person to
continue its business on a profitable basis which could reasonably be
expected to have a Material Adverse Effect;
(o) the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Parent or any of its Significant Subsidiaries, if such loss, suspension,
revocation or failure to renew could reasonably be expected to have a
Material Adverse Effect;
(p) the indictment, or the written threatened
indictment of the Parent or any of its Significant Subsidiaries under any
criminal statute, or commencement or written threatened commencement of
criminal or civil proceedings against any Loan Party, pursuant to which
statute or proceedings the penalties or remedies sought or available include
forfeiture to any Governmental Authority of any material portion of the
property of such Person;
(q) any Loan Party or any of its ERISA Affiliates
shall have made a complete or partial withdrawal from a Multiemployer Plan,
and, as a result of such complete or partial withdrawal, any Loan Party or
any of its ERISA Affiliates incurs a withdrawal liability in an annual
amount exceeding $5,000,000; or a Multiemployer Plan enters reorganization
status under Section 4241 of ERISA, and, as a result thereof any Loan
Party's or any of its ERISA Affiliates' annual contribution requirements
with respect to such Multiemployer Plan increases in an annual amount
exceeding $5,000,000;
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(r) (i) any Termination Event with respect to any
Employee Plan shall have occurred which results in uninsured or unreimbursed
liability, after exhausting all appeals (but not including payment of
benefits by the PBGC) exceeding $5,000,000 or (ii) any of the events under
(iii), (iv) or (v) of the definition of "Temination Event" which could
reasonably be expected to result in a Material Adverse Effect; provided
--------
that, with respect to both clause (i) and (ii), such Termination Event (if
correctable) shall not have been corrected;
(s) the Parent or any of its Significant
Subsidiaries shall be liable for any Environmental Liabilities and Costs the
payment of which has a Material Adverse Effect;
(t) a Change of Control shall have occurred;
(u) an event or development occurs which could
reasonably be expected to have a Material Adverse Effect;
(v) an "Event of Default" (or any similar defined
term or concept) under, and as defined in, any of the 2009 Note Indenture,
the 2009 Notes, the 1997 Indenture, the 1997 Debentures, the Euro Notes or
the Euro Indenture, shall exist; or
(w) the holder of the Specified Mechanics Lien
shall have exercised remedies or commenced any enforcement action in respect
of such Specified Mechanics Lien and the obligations secured by such lien
shall not have been satisfied in full or such action shall not otherwise be
stayed or be covered by insurance covering the full payment thereof;
then, and in any such event, the Collateral Agent may, and
shall at the request of the Required Lenders, by notice to the
Administrative Borrower, (i) terminate or reduce all Revolving Credit
Commitments, whereupon all Revolving Credit Commitments shall immediately be
so terminated or reduced, (ii) declare all or any portion of the Loans then
outstanding to be due and payable, whereupon all or such portion of the
aggregate principal of all Loans and Reimbursement Obligations, all accrued
and unpaid interest thereon, all fees and all other amounts payable under
this Agreement and the other Loan Documents shall become due and payable
immediately, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by each Loan Party and (iii)
exercise any and all of its other rights and remedies under applicable law,
hereunder and under the other Loan Documents; provided, however, that upon
-------- -------
the occurrence of any Event of Default described in subsection (f) or (g) of
this Section 9.01, without any notice to any Loan Party or any other Person
or any act by any Agent or any Lender, all Revolving Credit Commitments
shall automatically terminate and all Loans and Reimbursement Obligations
then outstanding, together with all accrued and unpaid interest thereon, all
fees and all other amounts due under this Agreement and the other Loan
Documents shall become due and payable automatically and immediately,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived by each Loan Party. Upon demand by the Administrative Agent
after the occurrence and during the continuation of any Event of Default,
the Borrowers shall deposit with the Administrative Agent with respect to
each Letter of Credit Accommodation then outstanding cash in an amount equal
to 105% of the greatest amount for which such Letter of Credit Accommodation
may be drawn. Such deposits shall be held by the Administrative Agent in the
Letter of Credit Collateral Account as security for, and to provide for the
payment of, the Letter of Credit Obligations.
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ARTICLE X
AGENTS
Section 10.01 Appointment. Each Lender (and each
-----------
subsequent maker of any Loan by its making thereof) hereby irrevocably
appoints and authorizes the Administrative Agent, the Documentation Agent
and the Collateral Agent to perform the duties of each such Agent as set
forth in this Agreement including: (i) in the case of the Administrative
Agent, to receive on behalf of each Lender any payment of principal of or
interest on the Loans outstanding hereunder and all other amounts accrued
hereunder for the account of the Lenders and paid to such Agent, and,
subject to Section 2.02(c), to distribute promptly to each Lender its Pro
Rata Share of all payments so received; (ii) to distribute to each Lender
copies of all material notices and agreements received by such Agent and not
required to be delivered to each Lender pursuant to the terms of this
Agreement, provided that the Agents shall not have any liability to the
--------
Lenders for any Agent's inadvertent failure to distribute any such notices
or agreements to the Lenders; (iii) in the case of the Administrative Agent
and the Collateral Agent, to maintain, in accordance with its customary
business practices, ledgers and records reflecting the status of the
Obligations, the Loans, and related matters and to maintain, in accordance
with its customary business practices, ledgers and records reflecting the
status of the Collateral and related matters; (iv) in the case of the
Administrative Agent and the Collateral Agent, to execute or file any and
all financing or similar statements or notices, amendments, renewals,
supplements, documents, instruments, proofs of claim, notices and other
written agreements with respect to this Agreement or any other Loan
Document; (v) to make the Loans and Agent Advances, for such Agent or on
behalf of the applicable Lenders as provided in this Agreement or any other
Loan Document; (vi) to perform, exercise, and enforce any and all other
rights and remedies of the Lenders with respect to the Loan Parties, the
Obligations, or otherwise related to any of same to the extent reasonably
incidental to the exercise by such Agent of the rights and remedies
specifically authorized to be exercised by such Agent by the terms of this
Agreement or any other Loan Document; (vii) to incur and pay such fees
necessary or appropriate for the performance and fulfillment of its
functions and powers pursuant to this Agreement or any other Loan Document;
and (viii) in the case of the Administrative Agent and the Collateral Agent,
subject to Section 10.03 of this Agreement, to take such action as such
Agent deems appropriate on its behalf to administer the Loans and the Loan
Documents and to exercise such other powers delegated to such Agent by the
terms hereof or the other Loan Documents (including, without limitation, the
power to give or to refuse to give notices, waivers, consents, approvals and
instructions and the power to make or to refuse to make determinations and
calculations) together with such powers as are reasonably incidental thereto
to carry out the purposes hereof and thereof. As to any matters not
expressly provided for by this Agreement and the other Loan Documents
(including, without limitation, enforcement or collection of the Loans), the
Agents shall not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all
Lenders and all makers of Loans; provided, however, that the L/C Issuer
-------- -------
shall not be required to refuse to honor a drawing under any Letter of
Credit Accommodation and the Agents shall not be required to take any action
which, in the reasonable opinion of any Agent, exposes such Agent to
liability or which is contrary to this Agreement or any other Loan Document
or applicable law.
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Section 10.02 Nature of Duties. The Agents shall have no
----------------
duties or responsibilities except those expressly set forth in this
Agreement or in the other Loan Documents. The duties of the Agents shall be
mechanical and administrative in nature. The Agents shall not have by reason
of this Agreement or any other Loan Document a fiduciary relationship in
respect of any Lender. Nothing in this Agreement or any other Loan Document,
express or implied, is intended to or shall be construed to impose upon the
Agents any obligations in respect of this Agreement or any other Loan
Document except as expressly set forth herein or therein. Each Lender shall
make its own independent investigation of the financial condition and
affairs of the Loan Parties in connection with the making and the
continuance of the Loans hereunder and shall make its own appraisal of the
creditworthiness of the Loan Parties and the value of the Collateral, and
the Agents shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into their possession before the
initial Loan hereunder or at any time or times thereafter, provided that,
--------
upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If any
Agent seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender. Each Agent shall promptly notify each Lender any
time that the Required Lenders have instructed such Agent to act or refrain
from acting pursuant hereto.
Section 10.03 Rights, Exculpation, Etc. The Agents and
-------------------------
their directors, officers, agents or employees shall not be liable for any
action taken or omitted to be taken by them under or in connection with this
Agreement or the other Loan Documents, except for their own gross negligence
or willful misconduct as determined by a final judgment of a court of
competent jurisdiction. Without limiting the generality of the foregoing,
the Agents (i) may treat the payee of any Loan as the owner thereof until
the Collateral Agent receives written notice of the assignment or transfer
thereof, pursuant to Section 12.07 hereof, signed by such payee and in form
satisfactory to the Collateral Agent; (ii) may consult with legal counsel
(including, without limitation, counsel to any Agent or counsel to the Loan
Parties), independent public accountants, and other experts selected by any
of them and shall not be liable for any action taken or omitted to be taken
in good faith by any of them in accordance with the advice of such counsel
or experts; (iii) make no warranty or representation to any Lender and shall
not be responsible to any Lender for any statements, certificates,
warranties or representations made in or in connection with this Agreement
or the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of
any Person, the existence or possible existence of any Default or Event of
Default, or to inspect the Collateral or other property (including, without
limitation, the books and records) of any Person; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall not be deemed to have made any
representation or warranty regarding the existence, value or collectibility
of the Collateral, the existence, priority or perfection of the Collateral
Agent's Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall the Agents be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the
Collateral. The Agents shall not be liable for any apportionment or
distribution of payments
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made in good faith pursuant to Section 4.04, and if any such apportionment
or distribution is subsequently determined to have been made in error the
sole recourse of any Lender to whom payment was due but not made, shall be
to recover from other Lenders any payment in excess of the amount which they
are determined to be entitled. The Agents may at any time request
instructions from the Lenders with respect to any actions or approvals which
by the terms of this Agreement or of any of the other Loan Documents the
Agents are permitted or required to take or to grant, and if such
instructions are promptly requested, the Agents shall be absolutely entitled
to refrain from taking any action or to withhold any approval under any of
the Loan Documents until they shall have received such instructions from the
Required Lenders. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against any Agent as a result of such Agent
acting or refraining from acting under this Agreement or any of the other
Loan Documents in accordance with the instructions of the Required Lenders.
Section 10.04 Reliance. Each Agent shall be entitled to
--------
rely upon any written notices, statements, certificates, orders or other
documents or any telephone message believed by it in good faith to be
genuine and correct and to have been signed, sent or made by the proper
Person, and with respect to all matters pertaining to this Agreement or any
of the other Loan Documents and its duties hereunder or thereunder, upon
advice of counsel selected by it.
Section 10.05 Indemnification. To the extent that any
---------------
Agent or the L/C Issuer is not reimbursed and indemnified by any Loan Party,
the Lenders will reimburse and indemnify such Agent and the L/C Issuer from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against such Agent or the L/C Issuer in any way
relating to or arising out of this Agreement or any of the other Loan
Documents or any action taken or omitted by such Agent or the L/C Issuer
under this Agreement or any of the other Loan Documents, in proportion to
each Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 10.08; provided, however, that no
-------- -------
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements for which there has been a final judicial
determination that such liability resulted from such Agent's or the L/C
Issuer's gross negligence or willful misconduct. The obligations of the
Lenders under this Section 10.05 shall survive the payment in full of the
Loans and the termination of this Agreement.
Section 10.06 Agents Individually. With respect to its Pro
-------------------
Rata Share of each Revolving Credit Commitment and the Total Revolving
Credit Commitment hereunder and the Loans made by it, each Agent shall have
and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for
any other Lender or maker of a Loan. The terms "Lenders", "Required A
Lenders", "Required B/C Lenders", "Required Lenders" or any similar terms
shall, unless the context clearly otherwise indicates, include each Agent in
its individual capacity as a Lender or one of the Required A Lenders, the
Required B/C Lenders or the Required Lenders. Each Agent and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with any Borrower as if it were not acting
as an Agent pursuant hereto without any duty to account to the other
Lenders.
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Section 10.07 Successor Agent. (a) Each Agent may resign
---------------
from the performance of all its functions and duties hereunder and under the
other Loan Documents at any time by giving at least thirty (30) Business
Days' prior written notice to the Administrative Borrower and each Lender.
Such resignation shall take effect upon the acceptance by a successor Agent
of appointment pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the
Required Lenders shall appoint a successor Agent. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement and the
other Loan Documents. After any Agent's resignation hereunder as an Agent,
the provisions of this ARTICLE X shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was an Agent under this
Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so
appointed within said thirty (30) Business Day period, the retiring Agent,
with the consent of the other Agents, shall then appoint a successor Agent
who shall serve as an Agent until such time, if any, as the Required
Lenders, with the consent of the other Agents, appoint a successor Agent as
provided above.
Section 10.08 Collateral Matters.
------------------
(a) Subject to the terms of a separate written
agreement among the Agents and the Lenders, the Administrative Agent, the
Collateral Agent and the Documentation Agent may from time to time make such
disbursements and advances ("Agent Advances") which such Agent, in its sole
--------------
discretion, deems necessary or desirable to preserve, protect, prepare for
sale or lease or dispose of the Collateral or any portion thereof, to
enhance the likelihood or maximize the amount of repayment by the Borrowers
of the Loans, Letter of Credit Obligations and other Obligations or to pay
any other amount chargeable to the Borrowers pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses as
described in Section 12.04. The Agent Advances shall bear interest at the
maximum rate set forth in this Agreement and shall be repayable on demand
and be secured by the Collateral. The Agent Advances shall constitute
Obligations hereunder which may be charged to the Loan Account in accordance
with Section 4.02. Any Agent making an Agent Advance shall notify each
Lender and the Administrative Borrower in writing of each such Agent
Advance, which notice shall include a description of the purpose of such
Agent Advance. Without limitation to its obligations pursuant to Section
10.05, each Lender agrees that it shall make available to the Agent, making
the Agent Advance upon such Agent's demand, in Dollars in immediately
available funds, the amount equal to such Lender's Pro Rata Share of each
such Agent Advance. If such funds are not made available to the Agent making
an Agent Advance by such Lender, such Agent shall be entitled to recover
such funds on demand from such Lender, together with interest thereon for
each day from the date such payment was due until the date such amount is
paid to such Agent, at the Federal Funds Rate for three Business Days and
thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the
Collateral Agent, at its option and in its discretion, to release any Lien
granted to or held by the Collateral Agent upon any
- 112 -
Collateral upon termination of the Total Revolving Credit Commitment and
payment and satisfaction of all Loans, Letter of Credit Obligations, and all
other Obligations which have matured and which the Collateral Agent has been
notified in writing are then due and payable; or constituting property being
sold or disposed of in compliance with the terms of this Agreement and the
other Loan Documents; or constituting property in which the Loan Parties
owned no interest at the time the Lien was granted or at any time
thereafter; or if approved, authorized or ratified in writing by the
requisite Lenders. Upon request by the Collateral Agent at any time, the
Lenders will confirm in writing the Collateral Agent's authority to release
particular types or items of Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Collateral
Agent's authority to act without any specific or further authorization or
consent by the Lenders (as set forth in Section 10.08(b)), each Lender
agrees to confirm in writing, upon request by the Collateral Agent, the
authority to release Collateral conferred upon the Collateral Agent under
Section 10.08(b). Upon receipt by the Collateral Agent of confirmation from
the Lenders of its authority to release any particular item or types of
Collateral, and upon prior written request by any Loan Party, the Collateral
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Liens
granted to the Collateral Agent for the benefit of the Agents and the
Lenders upon such Collateral; provided, however, that (i) the Collateral
-------- -------
Agent shall not be required to execute any such document on terms which, in
the Collateral Agent's opinion, would expose the Collateral Agent to
liability or create any obligations or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release
shall not in any manner discharge, affect or impair the Obligations or any
Lien upon (or obligations of any Loan Party in respect of) all interests in
the Collateral retained by any Loan Party.
(d) The Collateral Agent shall have no obligation
whatsoever to any Lender to assure that the Collateral exists or is owned by
the Loan Parties or is cared for, protected or insured or has been
encumbered or that the Lien granted to the Collateral Agent pursuant to this
Agreement or any other Loan Document has been properly or sufficiently or
lawfully created, perfected, protected or enforced or is entitled to any
particular priority, or to exercise at all or in any particular manner or
under any duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to the
Collateral Agent in this Section 10.08 or in any other Loan Document, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Collateral Agent may act in any
manner it may deem appropriate, in its sole discretion, given the Collateral
Agent's own interest in the Collateral as one of the Lenders and that the
Collateral Agent shall have no duty or liability whatsoever to any other
Lender, except as otherwise provided herein.
Section 10.09 Agency for Perfection. Each Agent and each
---------------------
Lender hereby appoints each other Agent and each other Lender as agent and
bailee for the purpose of perfecting the security interests in and liens
upon the Collateral in assets which, in accordance with Article 9 of the
Uniform Commercial Code, can be perfected only by possession or control (or
where the security interest of a secured party with possession or control
has priority over the security interest of another secured party) and each
Agent and each Lender hereby acknowledges that it holds possession of or
otherwise controls any such Collateral for the benefit of the Agents and the
Lenders as secured party. Should the Administrative Agent or any Lender
obtain
- 113 -
possession or control of any such Collateral, the Administrative Agent or
such Lender shall notify the Collateral Agent thereof, and, promptly upon
the Collateral Agent's request therefor shall deliver such Collateral to the
Collateral Agent or in accordance with the Collateral Agent's instructions.
In addition, the Collateral Agent shall also have the power and authority
hereunder to appoint such other sub-agents as may be necessary or required
under applicable state law or otherwise to perform its duties and enforce
its rights with respect to the collateral and under the Loan Documents. Each
Loan Party by its execution and delivery of this Agreement hereby consents
to the foregoing.
ARTICLE XI
GUARANTY
Section 11.01 Guaranty. Each Guarantor hereby jointly and
--------
severally and unconditionally and irrevocably guarantees the punctual
payment when due, whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise, of all Obligations of the Borrowers now
or hereafter existing under any Loan Document, whether for principal,
interest (including, without limitation, all interest that accrues after the
commencement of any Insolvency Proceeding of any Borrower, whether or not a
claim for post-filing interest is allowed in such proceeding), Letter of
Credit Obligations, fees, commissions, expense reimbursements,
indemnifications or otherwise (such obligations, to the extent not paid by
the Borrowers, being the "Guaranteed Obligations"), and agrees to pay any
----------------------
and all expenses (including reasonable counsel fees and expenses) incurred
by the Agents, the Lenders and the L/C Issuer in enforcing any rights under
the guaranty set forth in this ARTICLE XI. Without limiting the generality
of the foregoing, each Guarantor's liability shall extend to all amounts
that constitute part of the Guaranteed Obligations and would be owed by the
Borrowers to the Agents, the Lenders and the L/C Issuer under any Loan
Document but for the fact that they are unenforceable or not allowable due
to the existence of an Insolvency Proceeding involving any Borrower.
Section 11.02 Guaranty Absolute. Each Guarantor, jointly
-----------------
and severally, guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agents, the Lenders or the
L/C Issuer with respect thereto. Each Guarantor agrees that this ARTICLE XI
constitutes a guaranty of payment when due and not of collection and waives
any right to require that any resort be made by any Agent or any Lender to
any Collateral. The obligations of each Guarantor under this ARTICLE XI are
independent of the Guaranteed Obligations, and a separate action or actions
may be brought and prosecuted against each Guarantor to enforce such
obligations, irrespective of whether any action is brought against any Loan
Party or whether any Loan Party is joined in any such action or actions. The
liability of each Guarantor under this ARTICLE XI shall be irrevocable,
absolute and unconditional irrespective of, and each Guarantor hereby
irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:
(a) any lack of validity or enforceability of any
Loan Document or any agreement or instrument relating thereto;
- 114 -
(b) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or otherwise;
(c) any taking, exchange, release or
non-perfection of any Collateral, or any taking, release or amendment or
waiver of or consent to departure from any other guaranty, for all or any of
the Guaranteed Obligations;
(d) the existence of any claim, set-off, defense
or other right that the Guarantors may have at any time against any Person,
including, without limitation, any Agent, any Lender or the L/C Issuer.
(e) any change, restructuring or termination of
the corporate, limited liability company or partnership structure or
existence of any Loan Party; or
(f) any other circumstance (including, without
limitation, any statute of limitations) or any existence of or reliance on
any representation by the Agents, the Lenders or the L/C Issuer that might
otherwise constitute a defense available to, or a discharge of, any Loan
Party or any other guarantor or surety.
This ARTICLE XI shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Agents, the Lenders, the L/C
Issuer or any other Person upon the insolvency, bankruptcy or reorganization
of any Loan Party or otherwise, all as though such payment had not been
made.
Section 11.03 Waiver. Each Guarantor hereby waives (i)
------
promptness, diligence, (ii) notice of acceptance and any other notice with
respect to any of the Guaranteed Obligations and this ARTICLE XI and any
requirement that the Agents, the Lenders or the L/C Issuer exhaust any right
or take any action against any Loan Party or any other Person or any
Collateral, (iii) any right to compel or direct any Agent, any Lender or the
L/C Issuer to seek payment or recovery of any amounts owed under this
ARTICLE XI from any one particular fund or source or to exhaust any right or
take any action against any other Loan Party or any other Person or any
Collateral, (iv) any requirement that any Agent, any Lender or the L/C
Issuer protect, secure, perfect or insure any security interest or Lien or
any property subject thereto or exhaust any right or take any action against
any Loan Party or any other Person or any Collateral, and (v) any other
defense available to the Guarantors. The Guarantors agree that the Agents,
the Lenders and the L/C Issuer shall have no obligation to ▇▇▇▇▇▇▇▇ any
assets in favor of the Guarantors or against, or in payment of, any or all
of the Obligations. Each Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated herein
and that the waiver set forth in this Section 11.03 is knowingly made in
contemplation of such benefits. Each Guarantor hereby waives any right to
revoke this ARTICLE XI, and acknowledges that this ARTICLE XI is continuing
in nature and applies to all Guaranteed Obligations, whether existing now or
in the future.
- 115 -
Section 11.04 Continuing Guaranty; Assignments. This
--------------------------------
ARTICLE XI is a continuing guaranty and shall (a) remain in full force and
effect until the later of the date on which all of the Guaranteed
Obligations and all other amounts payable under this ARTICLE XI shall have
been Paid in Full in cash and the Final Maturity Date, (b) be binding upon
each Guarantor, its successors and assigns and (c) inure to the benefit of
and be enforceable by the Agents, the Lenders and the L/C Issuer and their
successors, pledgees, transferees and assigns. Without limiting the
generality of the foregoing clause (c), any Lender may pledge, assign or
otherwise transfer all or any portion of its rights and obligations under
this Agreement (including, without limitation, all or any portion of its
Revolving Credit Commitments, its Loans and the Letter of Credit Obligations
owing to it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 12.07.
Section 11.05 Subrogation. No Guarantor will exercise any
-----------
rights that it may now or hereafter acquire against any Loan Party or any
other guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations under this ARTICLE XI,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any claim or remedy of the Agents, the Lenders and the L/C Issuer against
any Loan Party or any other guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Loan Party or any other guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security solely on
account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations and all other amounts payable under this ARTICLE XI
shall have been Paid in Full in cash and the Final Maturity Date shall have
occurred. If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence at any time prior to the later of the date on
which all of the Guaranteed Obligations and all other amounts payable under
this ARTICLE XI shall have been Paid in Full in cash and the Final Maturity
Date, such amount shall be held in trust for the benefit of the Agents, the
Lenders and the L/C Issuer and shall forthwith be paid to the Agents, the
Lenders and the L/C Issuer to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this ARTICLE XI, whether
matured or unmatured, in accordance with the terms of this Agreement, or to
be held as Collateral for any Guaranteed Obligations or other amounts
payable under this ARTICLE XI thereafter arising. If (i) any Guarantor shall
make payment to the Agents, the Lenders and the L/C Issuer of all or any
part of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations
and all other amounts payable under this ARTICLE XI shall be Paid in Full in
cash and (iii) the Final Maturity Date shall have occurred, the Agents, the
Lenders and the L/C Issuer will, at such Guarantor's request and expense,
execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment by such Guarantor.
- 116 -
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices, Etc. All notices and other
-------------
communications provided for hereunder shall be in writing and shall be
mailed, telecopied or delivered, if to any Loan Party, at the following
address:
Solutia Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(courier delivers to: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 63141)
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Winston & ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Post ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Administrative Agent, to it at the following
address:
▇▇▇▇▇ Fargo Foothill, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Business Finance Division Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
- 117 -
and
▇▇▇▇▇ Fargo Foothill, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Business Finance Division Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Documentation Agent, to it at the following address:
Congress Financial Corporation (Central)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Manager
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
if to the Collateral Agent, to it at the following address:
Ableco Finance LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. Genda
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
in each case, with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other parties complying as to delivery with
the terms of this Section 12.01. All such notices and other communications
shall be effective, (i) if mailed, when received or three Business Days
after deposited in the mails, whichever occurs first, (ii) if telecopied,
when transmitted and confirmation received, or (iii) if delivered, upon
delivery, except that notices to any Agent or the L/C Issuer pursuant to
ARTICLE II and ARTICLE III shall not be effective until received by such
Agent or the L/C Issuer, as the case may be.
Section 12.02 Amendments, Etc. No amendment or waiver of
----------------
any provision of this Agreement, and no consent to any departure by any Loan
Party therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders or by the Collateral Agent with
the consent of the Required Lenders, and then such waiver or consent shall
- 118 -
be effective only in the specific instance and for the specific purpose for
which given, provided, however, that no amendment, waiver or consent shall
-------- -------
(i) increase the Revolving A Credit Commitment, the Revolving B Credit
Commitment or the Revolving C Credit Commitment of any Lender, reduce the
principal of, or interest on, the Loans or the Letter of Credit Obligations
payable to any Lender, reduce the amount of any fee payable for the account
of any Lender, or postpone or extend any date fixed for any payment of
principal of, or interest or fees on, the Loans or Letter of Credit
Obligations payable to any Lender, in each case without the written consent
of any Lender affected thereby, (ii) increase the Total Revolving A Credit
Commitment, the Total Revolving B Credit Commitment or the Total Revolving C
Credit Commitment without the written consent of each Lender affected
thereby, (iii) change the percentage of the Revolving Credit Commitments or
of the aggregate unpaid principal amount of the Loans that is required for
the Lenders or any of them to take any action hereunder without the written
consent of each Lender, (iv) amend the definition of "Required A Lenders",
"Required B/C Lenders", "Required Lenders" or "Pro Rata Share" without the
written consent of each Lender, (v) release all or a substantial portion of
the Collateral (except as otherwise provided in this Agreement and the other
Loan Documents), subordinate any Lien granted in favor of the Collateral
Agent for the benefit of the Agents and the Lenders, or release any Borrower
or any Guarantor, in each case, without the written consent of each Lender,
(vi) amend, modify or waive Section 4.04 or this Section 12.02 of this
Agreement without the written consent of each Lender, (vii) amend, modify or
waive Section 2.05(a)(iii) without the written consent of all of the
Revolving B Lenders or all of the Revolving C Lenders, as applicable, or
(vii) amend the definition of "Book Value", "Borrowing Base", "Eligible
Accounts", "Eligible Inventory", "Net Amount of Eligible Accounts" or "Total
Revolving Credit Commitment", without the written consent of each Lender.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless
in writing and signed by an Agent, affect the rights or duties of such Agent
(but not in its capacity as a Lender) under this Agreement or the other Loan
Documents.
Section 12.03 No Waiver; Remedies, Etc. No failure on the
-------------------------
part of any Agent or any Lender to exercise, and no delay in exercising, any
right hereunder or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any right under any
Loan Document preclude any other or further exercise thereof or the exercise
of any other right. The rights and remedies of the Agents and the Lenders
provided herein and in the other Loan Documents are cumulative and are in
addition to, and not exclusive of, any rights or remedies provided by law.
The rights of the Agents and the Lenders under any Loan Document against any
party thereto are not conditional or contingent on any attempt by the Agents
and the Lenders to exercise any of their rights under any other Loan
Document against such party or against any other Person.
Section 12.04 Expenses; Taxes; Attorneys' Fees. The
--------------------------------
Borrowers will pay on demand, all costs and expenses incurred by or on
behalf of each Agent (and, in the case of clauses (b) through (m) below,
each Lender), regardless of whether the transactions contemplated hereby are
consummated, including, without limitation, reasonable fees, costs, client
charges and expenses of counsel for each Agent (and, in the case of clauses
(b) through (m) below, each Lender), accounting, due diligence, periodic
field audits, physical counts, valuations, investigations, searches and
filings, monitoring of assets, appraisals of Collateral, title searches and
reviewing environmental assessments, miscellaneous disbursements,
examination, travel, lodging and meals (subject, in the case of costs and
expenses in connection with visits,
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audits, inspections, valuations and field examinations, to the limitations
set forth in Section 4.01), arising from or relating to: (a) the
negotiation, preparation, execution, delivery, performance and
administration of this Agreement and the other Loan Documents (including,
without limitation, the preparation of any additional Loan Documents
pursuant to Section 7.01(b) or the review of any of the agreements,
instruments and documents referred to in Section 7.01(f)), (b) any requested
amendments, waivers or consents to this Agreement or the other Loan
Documents whether or not such documents become effective or are given, (c)
the preservation and protection of any of the Agents' or the Lenders' rights
under this Agreement or the other Loan Documents, (d) the defense of any
claim or action asserted or brought against any Agent or any Lender by any
Person that arises from or relates to this Agreement, any other Loan
Document, the Agents' or the Lenders' claims against any Loan Party, or any
and all matters in connection therewith, (e) the commencement or defense of,
or intervention or participation in, any court or judicial proceeding
arising from or related to this Agreement or any other Loan Document,
including, without limitation, in connection with any Insolvency Proceeding
related to any Loan Party or the Collateral, including in any adversary
proceeding or contested matter commenced or continued by, on behalf of, or
against any Loan Party or its estate, and any appeal or review thereof, (f)
the filing of any petition, complaint, answer, motion or other pleading by
any Agent or any Lender, or the taking of any action in respect of the
Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking
possession of or liquidation of, any Collateral or other security in
connection with this Agreement or any other Loan Document, (h) any attempt
to enforce any Lien or security interest in any Collateral or other security
in connection with this Agreement or any other Loan Document, (i) any
attempt to collect from any Loan Party, (j) all liabilities and costs
arising from or in connection with the past, present or future operations of
any Loan Party involving any damage to real or personal property or natural
resources or harm or injury alleged to have resulted from any Release of
Hazardous Materials on, upon or into such property, (k) any Environmental
Liabilities and Costs incurred in connection with the investigation,
removal, cleanup and/or remediation of any Hazardous Materials present or
arising out of the operations of any facility of any Loan Party, (l) any
Environmental Liabilities and Costs incurred in connection with any
Environmental Lien, or (m) the receipt by any Agent or any Lender of any
advice from professionals with respect to any of the foregoing. Without
limitation of the foregoing or any other provision of any Loan Document: (x)
the Borrowers agree to pay all stamp, document, transfer, recording or
filing taxes or fees and similar impositions now or hereafter determined by
any Agent or any Lender to be payable in connection with this Agreement or
any other Loan Document, and the Borrowers agree to save each Agent and each
Lender harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay
or delay in paying any such taxes, fees or impositions, (y) the Borrowers
agree to pay all broker fees that may become due in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
and (z) if the Borrowers fail to perform any covenant or agreement contained
herein or in any other Loan Document, any Agent may itself perform or cause
performance of such covenant or agreement, and the expenses of such Agent
incurred in connection therewith shall be reimbursed on demand by the
Borrowers.
Section 12.05 Right of Set-off. Upon the occurrence and during
----------------
the continuance of any Event of Default, any Agent or any Lender may, and is
hereby authorized to, at any time and from time to time, without notice to
any Loan Party (any such notice being
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expressly waived by the Loan Parties) and to the fullest extent permitted by
law, set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other Indebtedness at any
time owing by such Agent or such Lender to or for the credit or the account
of any Loan Party against any and all obligations of the Loan Parties either
now or hereafter existing under any Loan Document, irrespective of whether
or not such Agent or such Lender shall have made any demand hereunder or
thereunder and although such obligations may be contingent or unmatured.
Each Agent and each Lender agrees to notify such Loan Party promptly after
any such set-off and application made by such 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 Agents and the Lenders under this
Section 12.05 are in addition to the other rights and remedies (including,
without limitation, other rights of set-off) which the Agents and the
Lenders may have under this Agreement or any other Loan Documents, in law or
otherwise.
Section 12.06 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 portions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 12.07 Assignments and Participations. (a) This
------------------------------
Agreement and the other Loan Documents shall be binding upon and inure to
the benefit of each Loan Party and each Agent and each Lender and their
respective successors and assigns; provided, however, that none of the Loan
-------- -------
Parties may assign or transfer any of its rights hereunder without the prior
written consent of each Lender and any such assignment without the Lenders'
prior written consent shall be null and void.
(b) Each Lender may, (x) with the written consent
of the Collateral Agent, assign to one or more other lenders or other
entities all or a portion of its rights and obligations under this Agreement
with respect to all or a portion of its Revolving B Commitment and the
Revolving B Loans made by it or its Revolving C Commitment and the Revolving
C Loans made by it and (y) with the written consent of the Collateral Agent
and the Administrative Agent, assign to one or more other lenders or other
entities all or a portion of its rights and obligations under this Agreement
with respect to all or a portion of its Revolving A Credit Commitment, the
Revolving A Loans made by it and its Pro Rata Share of Letter of Credit
Obligations, assign to one or more other lenders or other entities all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Revolving Credit Commitments,
the Loans made by it and its Pro Rata Share of Letter of Credit
Obligations); provided, however, that (i) such assignment is in an amount
-------- -------
which is at least $10,000,000 or a multiple of $500,000 in excess thereof
(or the remainder of such Lender's Revolving Credit Commitment) (except such
minimum amount shall not apply to an assignment by a Lender to an Affiliate
of such Lender or a fund or account managed by such Lender or an Affiliate
of such Lender), (ii) the parties to each such assignment shall execute and
deliver to the Collateral Agent, for its acceptance, an Assignment and
Acceptance, together with any promissory note subject to such assignment and
such parties shall deliver to the Collateral Agent a processing and
recordation fee of $5,000 (except the payment of such fee shall not be
required in connection with an assignment by a Lender to an Affiliate of
such Lender or a fund or account managed by such Lender or an Affiliate of
such Lender), (iii) no written consent of the Collateral Agent shall be
required in connection with any assignment by a Lender to an Affiliate of
such Lender or a fund or account managed by such Lender or an Affiliate
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of such Lender, and (iv) any assignment with respect to the Revolving B
Credit Commitments or the Revolving C Credit Commitments (including, the
Revolving B Loans or the Revolving C Loans), shall be pro rata in respect of
such Lender's Revolving B Credit Commitment and Revolving C Credit
Commitment (except in the case of any assignment by a Lender to an Affiliate
of such Lender or a fund or account managed by such Lender or an Affiliate
of such Lender). The Borrowers and the Agents may continue to deal solely
and directly with an assigning Lender in connection with the interest so
assigned until such Lender and its assignee shall have executed and
delivered to the Administrative Borrower and the Collateral Agent, and the
Collateral Agent shall have accepted, an Assignment and Acceptance. Upon
such execution, delivery and acceptance, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least three Business Days after the delivery thereof to the Collateral
Agent (or such shorter period as shall be agreed to by the Collateral Agent
and the parties to such assignment), (A) the assignee thereunder shall
become a "Lender" hereunder and, in addition to the rights and obligations
hereunder held by it immediately prior to such effective date, have the
rights and obligations hereunder that have been assigned to it pursuant to
such Assignment and Acceptance and (B) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and 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 Lender shall cease to be a party hereto).
(i) By executing and delivering an
Assignment and Acceptance, the assigning Lender and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows: (A) other than as provided in such Assignment and Acceptance, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other Loan Document furnished pursuant
hereto; (B) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Loan Party or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other
Loan Document furnished pursuant hereto; (C) such assignee confirms that it
has received a copy of this Agreement and the other Loan Documents, together
with such other documents and information it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (D) such assignee will, independently and without reliance upon
the assigning Lender, any Agent or any 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 this Agreement
and the other Loan Documents; (E) such assignee appoints and authorizes the
Agents to take such action as agents on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are delegated to
the Agents by the terms hereof and thereof, together with such powers as are
reasonably incidental hereto and thereto; and (F) such assignee agrees that
it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement and the other Loan Documents are required to
be performed by it as a Lender.
(ii) The Collateral Agent shall, on
behalf of the Borrowers, maintain, or cause to be maintained at the Payment
Office, a copy of each Assignment and
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Acceptance delivered to and accepted by it and a register (the "Register")
--------
for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitments of, and principal amount of the Loans (the
"Registered Loans") and Letter of Credit Obligations owing to each Lender
----------------
from time to time. Other than in connection with an assignment by a Lender
to an Affiliate of such Lender or a fund or account managed by such Lender
or an Affiliate of such Lender, the entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the
Administrative Borrower and any Lender at any reasonable time and from time
to time upon reasonable prior notice. In the case of any assignment by a
Lender to an Affiliate of such Lender or a fund or account managed by such
Lender or an Affiliate of such Lender, and which assignment is not recorded
in the Register, the assigning Lender shall maintain a comparable register
to the Register.
(iii) Upon its receipt of an Assignment
and Acceptance executed by an assigning Lender and an assignee, together
with any promissory notes subject to such assignment, the Collateral Agent
shall, if the Collateral Agent consents to such assignment and if such
Assignment and Acceptance has been completed (i) accept such Assignment and
Acceptance and (ii) record the information contained therein in the
Register.
(iv) A Registered Loan (and the
registered note, if any, evidencing the same) may be assigned or sold in
whole or in part only by registration of such assignment or sale on the
Register (and each registered note shall expressly so provide). Any
assignment or sale of all or part of such Registered Loan (and the
registered note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the registered note, if any, evidencing the same duly endorsed
by (or accompanied by a written instrument of assignment or sale duly
executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered
notes in the same aggregate principal amount shall be issued to the
designated assignee(s) or transferee(s). Prior to the registration of
assignment or sale of any Registered Loan (and the registered note, if any,
evidencing the same), the Agents shall treat the Person in whose name such
Registered Loan (and the registered note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the contrary.
(v) In the event that any Lender sells
participations in a Registered Loan, such Lender shall maintain a register
on which it enters the name of all participants in the Registered Loans held
by it (the "Participant Register"). A Registered Loan (and the registered
--------------------
note, if any, evidencing the same) may be participated in whole or in part
only by registration of such participation on the Participant Register (and
each registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may
be effected only by the registration of such participation on the
Participant Register.
(vi) Any foreign Person who purchases or
is assigned or participates in any portion of such Registered Loan shall
provide the Agents and the Lender with a completed Internal Revenue Service
Form W-8BEN (Certificate of Foreign Status) or a
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substantially similar form for such purchaser, participant or any other
affiliate who is a holder of beneficial interests in the Registered Loan.
(c) Each Lender may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of its Revolving Credit Commitments,
the Loans made by it and its Pro Rata Share of the Letter of Credit
Obligations); provided, that (i) such Lender's obligations under this
--------
Agreement (including without limitation, its Revolving Credit Commitments
hereunder) and the other Loan Documents shall remain unchanged; (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, and the Borrowers, the Agents and the other
Lenders 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 (iii) a participant shall not be entitled
to require such Lender to take or omit to take any action hereunder except
(A) action directly effecting an extension of the maturity dates or decrease
in the principal amount of the Loans or Letter of Credit Obligations, (B)
action directly effecting an extension of the due dates or a decrease in the
rate of interest payable on the Loans or the fees payable under this
Agreement, or (C) actions directly effecting a release of all or a
substantial portion of the Collateral or any Loan Party (except as set forth
in Section 10.08 of this Agreement or any other Loan Document). The Loan
Parties agree that each participant shall be entitled to the benefits of
Section 2.07 and Section 4.05 of this Agreement with respect to its
participation in any portion of the Revolving Credit Commitments and the
Loans as if it were a Lender; provided, however, that the amount of any such
-------- -------
benefit shall be limited to the amount that would otherwise be payable to
the Lender selling the participation with respect to the portion of the Loan
in which the participation was so sold.
Section 12.08 Counterparts. This Agreement may be executed
------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same agreement. Delivery
of an executed counterpart of this Agreement by telecopier shall be equally
as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by
telecopier also shall deliver an original executed counterpart of this
Agreement but the failure to deliver an original executed counterpart shall
not affect the validity, enforceability, and binding effect of this
Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER
-------------
LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN
DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS
-------------------------------------------
AND VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
---------
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇ IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK,
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AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY
IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY
HEREBY IRREVOCABLY APPOINTS CT CORPORATION AS ITS AGENT FOR SERVICE OF
PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS
AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE ADMINISTRATIVE
BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01 AND TO CT
CORPORATION AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, SUCH SERVICE TO
BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE AGENTS AND THE LENDERS TO SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT ANY LOAN PARTY HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT
OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY,
--------------------------
EACH AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER,
CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE
FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY
FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND
AGREES THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO
OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT,
IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING INTO THIS
AGREEMENT.
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Section 12.12 Consent by the Agents and Lenders. Except as
---------------------------------
otherwise expressly set forth herein to the contrary, if the consent,
approval, satisfaction, determination, judgment, acceptance or similar
action (an "Action") of any Agent or any Lender shall be permitted or
------
required pursuant to any provision hereof or any provision of any other
agreement to which any Loan Party is a party and to which any Agent or any
Lender has succeeded thereto, such Action shall be required to be in writing
and may be withheld or denied by such Agent or such Lender, in its sole
discretion, with or without any reason, and without being subject to
question or challenge on the grounds that such Action was not taken in good
faith.
Section 12.13 No Party Deemed Drafter. Each of the parties
-----------------------
hereto agrees that no party hereto shall be deemed to be the drafter of this
Agreement.
Section 12.14 Reinstatement; Certain Payments. If any
-------------------------------
claim is ever made upon any Agent, any Lender or the L/C Issuer for
repayment or recovery of any amount or amounts received by such Agent, such
Lender or the L/C Issuer in payment or on account of any of the Obligations,
such Agent, such Lender or the L/C Issuer shall give prompt notice of such
claim to each other Agent and Lender and the Administrative Borrower, and if
such Agent, such Lender or the L/C Issuer repays all or part of such amount
by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such Agent, such Lender or the
L/C Issuer or any of its property, or (ii) any good faith settlement or
compromise of any such claim effected by such Agent, such Lender or the L/C
Issuer with any such claimant, then and in such event each Loan Party agrees
that (A) any such judgment, decree, order, settlement or compromise shall be
binding upon it notwithstanding the cancellation of any Indebtedness
hereunder or under the other Loan Documents or the termination of this
Agreement or the other Loan Documents, and (B) it shall be and remain liable
to such Agent, such Lender or the L/C Issuer hereunder for the amount so
repaid or recovered to the same extent as if such amount had never
originally been received by such Agent, such Lender or the L/C Issuer.
Section 12.15 Indemnification.
---------------
(a) General Indemnity. In addition to each Loan
-----------------
Party's other Obligations under this Agreement, each Loan Party agrees to,
jointly and severally, defend, protect, indemnify and hold harmless each
Agent, each Lender and the L/C Issuer and all of their respective officers,
directors, members, partners, employees, attorneys, consultants and agents
(collectively called the "Indemnitees") from and against any and all losses,
-----------
damages, liabilities, obligations, penalties, fees, reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees, costs
and expenses) incurred by such Indemnitees, whether prior to or from and
after the Effective Date, whether direct, indirect or consequential, as a
result of or arising from or relating to or in connection with any of the
following: (i) the negotiation, preparation, execution or performance or
enforcement of this Agreement, any other Loan Document or of any other
document executed in connection with the transactions contemplated by this
Agreement, (ii) any Agent's or any Lender's furnishing of funds to the
Borrowers or the L/C Issuer's issuing of Letter of Credit Accommodations for
the account of the Borrowers under this Agreement or the other Loan
Documents, including, without limitation, the management of any such Loans
or the Letter of Credit Obligations, (iii) any matter relating to the
financing transactions contemplated by this Agreement or the other Loan
Documents or by any document executed in connection with the transactions
contemplated by this Agreement or the other Loan Documents, or (iv) any
claim,
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litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto (collectively, the
"Indemnified Matters"); provided, however, that the Loan Parties shall not
------------------- -------- -------
have any obligation under this subsection (a) for any Indemnified Matter (x)
to any Indemnitee caused by the gross negligence or willful misconduct of
such Indemnitee, as determined by a final judgment of a court of competent
jurisdiction or (y) to any Lender or its Indemnitees arising directly from
any action solely between or among the Lenders.
(b) Environmental Indemnity. Without limiting
-----------------------
Section 12.15(a) hereof, each Loan Party agrees to, jointly and severally,
defend, indemnify, and hold harmless the Indemnitees against any and all
Environmental Liabilities and Costs and all other claims, demands,
penalties, fines, liability (including strict liability), losses, damages,
costs and expenses (including without limitation, reasonable legal fees and
expenses, consultant fees and laboratory fees), arising out of (i) any
Releases or threatened Releases (x) at any property presently or formerly
owned or operated by any Loan Party or any Subsidiary of any Loan Party, or
any corporate predecessor, or (y) of any Hazardous Materials Handled by any
Loan Party or any Subsidiary of any Loan Party, or any corporate
predecessor; (ii) any violations of Environmental Laws; (iii) any
Environmental Action relating to any Loan Party or any Subsidiary of any
Loan Party, or any corporate predecessor; (iv) any personal injury
(including wrongful death) or property damage (real or personal) arising out
of exposure to Hazardous Materials Handled by any Loan Party or any
Subsidiary of any Loan Party, or any corporate predecessor; and (v) any
breach of any warranty or representation regarding environmental matters
made by the Loan Parties in Section 6.01(r) or the breach of any covenant
made by the Loan Parties in Section 7.01(j). Notwithstanding the foregoing,
the Loan Parties shall not have any obligation to any Indemnitee under this
subsection (b) regarding any and all Environmental Liabilities and Costs and
all other claims, demands, penalties, fines, liabilities, losses, damages,
costs and expenses (including, without limitation, reasonable legal fees and
expenses, consultant fees and laboratory fees) covered hereunder which is
caused by the gross negligence or willful misconduct of such Indemnitee, as
determined by a final judgment of a court of competent jurisdiction.
(c) The indemnification for all of the foregoing
losses, damages, fees, costs and expenses of the Indemnitees are chargeable
against the Loan Account. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in this Section 12.15 may be unenforceable
because it is violative of any law or public policy, each Loan Party shall,
jointly and severally, contribute the maximum portion which it is permitted
to pay and satisfy under applicable law, to the payment and satisfaction of
all Indemnified Matters incurred by the Indemnitees. The indemnities set
forth in this Section 12.15 shall survive the repayment of the Obligations
and discharge of any Liens granted under the Loan Documents.
Section 12.16 Parent as Agent for Borrowers. Each Borrower
-----------------------------
hereby irrevocably appoints the Parent as the borrowing agent and
attorney-in-fact for the Borrowers (the "Administrative Borrower") which
-----------------------
appointment shall remain in full force and effect unless and until the
Agents shall have received prior written notice signed by all of the
Borrowers that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide to the
Agents and receive from the Agents all notices with respect to Loans
obtained for the benefit of any Borrower and all other notices and
instructions under the Loan Documents and (ii) to take such action as the
Administrative
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Borrower deems appropriate on its behalf to obtain Loans and to exercise
such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of the Borrowers in a combined fashion, as more fully
set forth herein, is done solely as an accommodation to the Borrowers in
order to utilize the collective borrowing powers of the Borrowers in the
most efficient and economical manner and at their request, and that neither
the Agents nor the Lenders shall incur liability to the Borrowers as a
result hereof. Each of the Borrowers expects to derive benefit, directly or
indirectly, from the handling of the Loan Account and the Collateral in a
combined fashion since the successful operation of each Borrower is
dependent on the continued successful performance of the integrated group.
To induce the Agents and the Lenders to do so, and in consideration thereof,
each of the Borrowers hereby jointly and severally agrees to indemnify the
Indemnitees and hold the Indemnitees harmless against any and all liability,
expense, loss or claim of damage or injury, made against such Indemnitee by
any of the Borrowers or by any third party whosoever, arising from or
incurred by reason of (a) the handling of the Loan Account and Collateral of
the Borrowers as herein provided, (b) the Agents and the Lenders relying on
any instructions of the Administrative Borrower, or (c) any other action
taken by any Agent or any Lender hereunder or under the other Loan
Documents.
Section 12.17 Records. The unpaid principal of and
-------
interest on the Loans, the interest rate or rates applicable to such unpaid
principal and interest, the duration of such applicability, the Revolving
Credit Commitments, and the accrued and unpaid fees (including, without
limitation, the Unused Line Fee and Letter of Credit Fee) payable pursuant
to the terms hereof and the Fee Letter, shall at all times be ascertained
from the records of the Agents, which shall be conclusive and binding absent
manifest error.
Section 12.18 Binding Effect. This Agreement shall become
--------------
effective when it shall have been executed by each Loan Party, each Agent
and each Lender and when the conditions precedent set forth in Section 5.01
hereof have been satisfied or waived in writing by the Agents, and
thereafter shall be binding upon and inure to the benefit of each Loan
Party, each Agent and each Lender, and their respective successors and
assigns, except that the Loan Parties shall not have the right to assign
their rights hereunder or any interest herein without the prior written
consent of each Lender, and any assignment by any Lender shall be governed
by Section 12.07 hereof.
Section 12.19 Interest. It is the intention of the parties
--------
hereto that each Agent and each Lender shall conform strictly to usury laws
applicable to it. Accordingly, if the transactions contemplated hereby or by
any other Loan Document would be usurious as to any Agent or any Lender
under laws applicable to it (including the laws of the United States of
America and the State of New York or any other jurisdiction whose laws may
be mandatorily applicable to such Agent or such Lender notwithstanding the
other provisions of this Agreement), then, in that event, notwithstanding
anything to the contrary in this Agreement or any other Loan Document or any
agreement entered into in connection with or as security for the
Obligations, it is agreed as follows: (i) the aggregate of all consideration
which constitutes interest under law applicable to any Agent or any Lender
that is contracted for, taken, reserved, charged or received by such Agent
or such Lender under this Agreement or any other Loan Document or agreements
or otherwise in connection with the Obligations shall under no circumstances
exceed the maximum amount allowed by such applicable law, any excess shall
be
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canceled automatically and if theretofore paid shall be credited by such
Agent or such Lender on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be Paid in Full, refunded by such Agent or such Lender, as
applicable, to the Borrowers); and (ii) in the event that the maturity of
the Obligations is accelerated by reason of any Event of Default under this
Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to any Agent or any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically
by such Agent or such Lender, as applicable, as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited by
such Agent or such Lender, as applicable, on the principal amount of the
Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be Paid in Full, refunded by such Agent or
such Lender to the Borrowers). All sums paid or agreed to be paid to any
Agent or any Lender for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by law applicable to such Agent or
such Lender, be amortized, prorated, allocated and spread throughout the
full term of the Loans until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum
amount allowed by such applicable law. If at any time and from time to time
(x) the amount of interest payable to any Agent or any Lender on any date
shall be computed at the Highest Lawful Rate applicable to such Agent or
such Lender pursuant to this Section 12.19 and (y) in respect of any
subsequent interest computation period the amount of interest otherwise
payable to such Agent or such Lender would be less than the amount of
interest payable to such Agent or such Lender computed at the Highest Lawful
Rate applicable to such Agent or such Lender, then the amount of interest
payable to such Agent or such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Agent or such Lender until the total amount of interest
payable to such Agent or such Lender shall equal the total amount of
interest which would have been payable to such Agent or such Lender if the
total amount of interest had been computed without giving effect to this
Section 12.19.
For purposes of this Section 12.19, the term "applicable
law" shall mean that law in effect from time to time and applicable to the
loan transaction between the Borrowers, on the one hand, and the Agents and
the Lenders, on the other, that lawfully permits the charging and collection
of the highest permissible, lawful non-usurious rate of interest on such
loan transaction and this Agreement, including laws of the State of New York
and, to the extent controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations
does not include the right to accelerate any interest that has not accrued
as of the date of acceleration.
Section 12.20 Confidentiality. Each Agent and each Lender
---------------
agrees (on behalf of itself and each of its affiliates, directors, officers,
employees and representatives) to use reasonable precautions to keep
confidential, in accordance with its customary procedures for handling
confidential information of this nature and in accordance with safe and
sound practices of comparable commercial finance companies, any non-public
information supplied to it by the Loan Parties on and after the Effective
Date pursuant to this Agreement or the other Loan Documents which is
identified in writing by the Loan Parties as being confidential at the time
the
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same is delivered to such Person (and which at the time is not, and does not
thereafter become, publicly available or available to such Person from
another source not known to be subject to a confidentiality obligation to
such Person not to disclose such information), provided that nothing herein
--------
shall limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process, (ii) to counsel
for any Agent or any Lender, (iii) to examiners, auditors, accountants or
Securitization Parties, (iv) in connection with any litigation to which any
Agent or any Lender is a party or (v) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant
(or prospective assignee or participant) first agrees, in writing, to be
bound by confidentiality provisions similar in substance to this Section
12.20. Each Agent and each Lender agrees that, upon receipt of a request or
identification of the requirement for disclosure pursuant to clause (iv)
hereof, it will make reasonable efforts to keep the Loan Parties informed of
such request or identification; provided that each Loan Party acknowledges
--------
that (x) each Agent and each Lender may make disclosure as required or
requested by any Governmental Authority or representative thereof and that
each Agent and each Lender may be subject to review by Securitization
Parties or other regulatory agencies and may be required to provide to, or
otherwise make available for review by, the representatives of such parties
or agencies any such non-public information, and (y) the provisions of this
Section 12.20 shall not apply to the federal tax structure or federal tax
treatment of such transactions, and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
Persons, without limitation, the federal tax structure and federal tax
treatment of such transactions (including all written materials related to
such tax structure and tax treatment), the intent of which is to cause the
transactions contemplated hereby not to be treated as having been offered
under conditions of confidentiality for purposes of Section 1.6011-4(b)(3)
(or any successor provision) of the Treasury Regulations promulgated under
Section 6011 of the Internal Revenue Code, and shall be construed in a
manner consistent with such purpose.
Section 12.21 Integration. This Agreement, together with
-----------
the other Loan Documents, reflects the entire understanding of the parties
with respect to the transactions contemplated hereby and shall not be
contradicted or qualified by any other agreement, oral or written, before
the date hereof.
Section 12.22 Intercreditor Agreement. EACH AGENT AND
-----------------------
LENDER HEREBY GRANTS TO THE COLLATERAL AGENT ALL REQUISITE AUTHORITY TO
ENTER INTO OR OTHERWISE BECOME BOUND BY THE 2009 NOTE SUBORDINATION
AGREEMENT AND TO BIND THE AGENTS AND LENDERS THERETO BY THE COLLATERAL
AGENT'S ENTERING INTO OR OTHERWISE BECOMING BOUND THEREBY, AND NO FURTHER
CONSENT OR APPROVAL ON THE PART OF THE AGENTS OR LENDERS IS OR WILL BE
REQUIRED IN CONNECTION WITH THE PERFORMANCE OF THE 2009 NOTE SUBORDINATION
AGREEMENT.
Section 12.23 Dutch Security Agreement. Notwithstanding
------------------------
anything contained in this Agreement and the other Loan Documents and solely
for the purpose of ensuring and preserving the validity and continuity of
the security rights granted and to be granted under or pursuant to the
security agreements governed by the laws of The Netherlands (the "Dutch
-----
Security Agreements"), (i) each of the Loan Parties hereby irrevocably and
-------------------
unconditionally undertakes to pay to the Collateral Agent an amount equal to
the aggregate
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amount of the Principal Obligations as they may exist from time to time (the
payment undertaking of the Loan Parties to the Collateral Agent under this
Section 12.23(a) is referred to as the "Parallel Debt"), and (ii) each of
-------------
the Lenders and the other parties hereto hereby acknowledges and consents to
(x) the undertaking by the relevant Loan Party to the Collateral Agent, in
its individual capacity and not as agent, representative or trustee, amounts
which are equal to and in the currency of the Obligations from time to time
due in accordance with the terms of the Obligations, and (y) the granting of
the security rights contemplated by the Dutch Security Agreements in favor
of the Collateral Agent in its individual capacity as security for its
claims under the Parallel Debt.
(b) The Lenders and the other parties hereto
agree that the Parallel Debt is a claim of the Collateral Agent which is
separate and independent from, and without prejudice to, the claims of the
Lenders in respect of the Obligations, and neither such claim nor the
security rights as contemplated by the Dutch Security Agreements are held
jointly with the Lenders, provided that to the extent any amount is paid to
--------
and received by the Collateral Agent in payment of the Parallel Debt, the
total amount due and payable in respect of the Obligations shall be
decreased as if such amount were received by the Lenders or any of them in
payment of the corresponding Obligations. The Collateral Agent, acting in
its individual capacity, hereby agrees to apply all proceeds that it
receives in connection with any enforcement action taken under or pursuant
to the Dutch Security Agreements or otherwise in satisfaction in whole or in
part of the Parallel Debt, mutatis mutandis, in accordance with the
provisions of this Agreement and the other Loan Documents.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
- 131 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
BORROWERS:
----------
SOLUTIA INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President and Treasurer
Solutia Inc.
SOLUTIA BUSINESS ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
- 1 -
GUARANTORS:
-----------
CPFILMS INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
MONCHEM, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
Monchem, Inc.
MONCHEM INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
Monchem International, Inc.
SOLUTIA INVESTMENTS, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
SOLUTIA SYSTEMS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Name: C. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
Solutia Systems, Inc.
- 2 -
COLLATERAL AGENT AND LENDER:
---------------------------
ABLECO FINANCE LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President and
Chief Credit Officer
- 3 -
DOCUMENTATION AGENT AND LENDER:
------------------------------
CONGRESS FINANCIAL CORPORATION
(CENTRAL)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
- 4 -
ADMINISTRATIVE AGENT AND LENDER:
-------------------------------
▇▇▇▇▇ FARGO FOOTHILL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
- 5 -
LENDERS:
-------
HIGHBRIDGE/▇▇▇▇▇ SPECIAL
OPPORTUNITIES FUND, L.P.
By: Highbridge/▇▇▇▇▇ Capital Management, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Principal
LENDERS:
--------
FORTRESS CREDIT OPPORTUNITIES I LP
By: FORTRESS CREDIT OPPORTUNITIES I
GP LLC, its general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Operating Officer
LENDERS:
--------
UPPER COLUMBIA CAPITAL COMPANY, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
----------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Manager
LENDERS:
--------
TRS THEBE LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
- 6 -