EXHIBIT 10.1
$205,000,000
CREDIT AGREEMENT,
dated as of
March 3, 1998,
among
Tekni-Plex, Inc.,
The Guarantors Party Hereto,
The Lenders Party Hereto,
The LC Issuing Banks Referred to Herein,
and
▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Agent
-------------------------------
▇.▇. ▇▇▇▇▇▇ Securities Inc.,
as Arranger
TABLE OF CONTENTS
Page
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ARTICLE I
Definitions..................................................................1
Section 1.01. Definitions...................................................1
Section 1.02. Accounting Terms and Determinations..........................26
ARTICLE II
The Credits.................................................................26
Section 2.01. Commitments to Lend..........................................26
Section 2.02. Minimum Borrowing Amounts, etc.; Pro rata Borrowings.........28
Section 2.03. Method of Borrowing..........................................28
Section 2.04. Maturity of Loans............................................30
Section 2.05. Interest Rates...............................................30
Section 2.06. Method of Electing Interest Rates............................31
Section 2.07. Fees.........................................................32
Section 2.08. Optional Termination or Reduction of Commitments.............33
Section 2.09. Mandatory Reduction of Commitments...........................33
Section 2.10. Mandatory Repayments.........................................34
Section 2.11. Optional Prepayments.........................................39
Section 2.12. General Provisions as to Payments............................39
Section 2.13. Funding Losses...............................................40
Section 2.14. Computation of Interest and Fees.............................40
Section 2.15. Notes........................................................40
Section 2.16. Letters of Credit............................................42
ARTICLE III
Conditions..................................................................47
Section 3.01. Conditions Precedent to Initial Credit Events................47
Section 3.02. Conditions Precedent to All Credit Events....................52
ARTICLE IV
Representations and Warranties..............................................52
Section 4.01. Corporate Existence and Power................................53
Section 4.02. Corporate and Governmental Authorization; No Contravention...53
Section 4.03. Binding Effect...............................................53
Section 4.04. Financial Information........................................53
Section 4.05. Litigation...................................................54
Section 4.06. Compliance with ERISA........................................54
Section 4.07. Environmental Compliance.....................................54
Section 4.08. Taxes........................................................56
Section 4.09. Subsidiaries.................................................56
Section 4.10. No Regulatory Restrictions on Borrowing......................56
Section 4.11. Full Disclosure..............................................56
Section 4.12. Representations in PureTec Acquisition Documents True and
Correct.................................................57
Section 4.13. Representations of Guarantors................................57
Section 4.14. Intellectual Property........................................57
Section 4.15. Solvency.....................................................57
Section 4.16. Labor Relations..............................................58
Section 4.17. Subordinated Notes; etc......................................58
ARTICLE V
Covenants...................................................................58
Section 5.01. Information..................................................58
Section 5.02. Payment of Obligations.......................................60
Section 5.03. Maintenance of Property; Insurance...........................61
Section 5.04. Conduct of Business and Maintenance of Existence.............61
Section 5.05. Compliance with Laws.........................................62
Section 5.06. Inspection of Property, Books and Records....................62
Section 5.07. Mergers and Sales of Assets..................................62
Section 5.08. Use of Proceeds; Compliance with Margin Regulations..........63
Section 5.09. Negative Pledge..............................................63
Section 5.10. Limitation on Debt...........................................64
Section 5.11. Fixed Charge Coverage Ratio..................................65
Section 5.12. Leverage Ratio...............................................66
Section 5.13. Minimum Consolidated EBITDA..................................67
Section 5.14. Restricted Payments..........................................68
Section 5.15. Investments; Restricted Acquisitions.........................69
Section 5.16. Consolidated Capital Expenditures............................72
Section 5.17. Transactions with Affiliates.................................73
Section 5.18. Limitation on Restrictions Affecting Subsidiaries............73
Section 5.19. Limitation on Issuance of Capital Stock......................74
Section 5.20. Limitation on Voluntary Payments and Modifications of
Indebtedness............................................74
Section 5.21. Limitation on Fixed-Price Contracts..........................75
Section 5.22. End of Fiscal Years; Fiscal Quarters.........................75
Section 5.23. Further Assurances...........................................76
Section 5.24. De Minimis Subsidiaries......................................77
ARTICLE VI
Defaults....................................................................77
Section 6.01. Events of Defaults...........................................77
Section 6.02. Notice of Default............................................80
ARTICLE VII
The Agent...................................................................80
Section 7.01. Appointment and Authorization................................80
Section 7.02. Agent and Affiliates.........................................80
Section 7.03. Action by Agent..............................................80
Section 7.04. Consultation with Experts....................................80
Section 7.05. Liability of Agent...........................................80
Section 7.06. Indemnification..............................................81
Section 7.07. Credit Decision..............................................81
Section 7.08. Successor Agent..............................................81
Section 7.09. Agent's Fee..................................................82
ARTICLE VIII
Change in Circumstances.....................................................82
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair.....82
Section 8.02. Illegality...................................................82
Section 8.03. Increased Cost and Reduced Return............................83
Section 8.04. Taxes........................................................84
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans...86
Section 8.06. Replacement of Lender........................................87
ARTICLE IX
Guaranty....................................................................88
Section 9.01. The Guaranty.................................................88
Section 9.02. Guaranty Unconditional.......................................88
Section 9.03. Discharge Only upon Payment in Full; Reinstatement
in Certain Circumstances................................89
Section 9.04. Waiver by Each Guarantor.....................................89
Section 9.05. Subrogation and Contribution.................................89
Section 9.06. Stay of Acceleration.........................................89
Section 9.07. Limit of Liability...........................................89
Section 9.08. Release upon Sale............................................90
Section 9.09. Additional Guarantors........................................90
ARTICLE X
Miscellaneous...............................................................90
Section 10.01. Notices.....................................................90
Section 10.02. No Waivers..................................................90
Section 10.03. Expenses; Indemnification...................................90
Section 10.04. Sharing of Payments.........................................91
Section 10.05. Amendment or Waiver; etc....................................92
Section 10.06. Benefit of Agreement; Assignments; Participation............93
Section 10.07. Governing Law; Submission to Jurisdiction...................95
Section 10.08. Counterparts; Integration; Effectiveness; Amendment
and Restatement.........................................95
Section 10.9. Confidentiality.............................................95
Section 10.10. Waiver of Jury Trial........................................96
Section 10.11. Register....................................................96
Section 10.12. Survival....................................................96
Schedule 1--Commitments
Schedule 2--Debt to Remain Outstanding
Schedule 3--Subsidiaries
Schedule 4--Existing Liens
Schedule 5--Mortgaged Properties
Schedule 6--Insolvent Subsidiaries/Subsidiaries not in Good Standing
Exhibit A-1--Form of Tranche A Term Note
Exhibit A-2--Form of Tranche B Term Note
Exhibit A-3--Form of Revolving Note
Exhibit A-4--Form of Swingline Note
Exhibit B--Opinion of Counsel for the Borrower
Exhibit C--Assignment and Assumption Agreement
Exhibit D--Form of Security Agreement
Exhibit E--Form of Pledge Agreement
Exhibit F--Forms of Mortgage, Deed of Trust and Deed to Secure Debt
Exhibit G--Form of Solvency Certificate
Exhibit H--Form of Bailee Agreement
CREDIT AGREEMENT, dated as of March 3, 1998, among TEKNI-PLEX, INC.,
the GUARANTORS party hereto, the LENDERS party hereto, the LC ISSUING BANKS
referred to herein and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. The following terms, as used herein, have
the following meanings:
"Additional Debt Incurrence" means the incurrence of any Debt by the
Borrower or any of its Subsidiaries (other than Debt which is permitted under
(x) Section 5.10(f)(ii), the proceeds of which are used, or to be used within
270 days of the issuance thereof, to make Permitted Acquisitions or (y) any
other Section of Section 5.10) to which the Required Lenders have consented.
"Adjusted London Interbank Offered Rate" applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100 of 1%) by dividing (i) the applicable London
Interbank Offered Rate by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
"Administrative Questionnaire" means, with respect to each Lender, an
administrative questionnaire in the form prepared by the Agent, completed by
such Lender and returned to the Agent (with a copy to the Borrower).
"Affected Euro-Dollar Loan" shall have the meaning set forth in Section
2.10(h).
"Affiliate" means with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided that for purposes of Section 5.17, an
Affiliate of the Borrower shall include any Person that directly or indirectly
owns more than 10% of any class of capital stock of the Borrower. A Person shall
be deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" means MGT in its capacity as agent for the Lenders hereunder,
and its successors in such capacity appointed pursuant to Section 7.08.
"Aggregate LC Exposure" means, at any time, the sum, without
duplication, of (i) the aggregate Stated Amount of all Letters of Credit
outstanding at such time and (ii) the aggregate unpaid amount of all LC
Reimbursement Obligations at such time.
"Agreement" means this Credit Agreement, as modified, supplemented or
amended (including any amendment and restatement) from time to time.
"Applicable Base Rate Margin" means a percentage per annum equal to (i)
in the case of Tranche A Term Loans and Revolving Loans maintained as Base Rate
Loans, 1.25%, less the then applicable Reduction Discount, if any, and (ii) in
the case of Tranche B Term Loans maintained as Base Rate Loans, 1.75%, less the
then applicable Reduction Discount, if any.
"Applicable Commitment Fee Percentage" means 1/2 of 1% per annum less
the then applicable Reduction Discount, if any.
"Applicable Euro-Dollar Margin" means a percentage per annum equal to
(i) in the case of Tranche A Term Loans and Revolving Loans maintained as
Euro-Dollar Loans, 2.25%, less the then applicable Reduction Discount, if any,
and (ii) in the case of Tranche B Term Loans maintained as Euro-Dollar Loans,
2.75%, less the then applicable Reduction Discount, if any.
"Applicable Lending Office" means, with respect to any Lender, (i) in
the case of its Base Rate Loans and its participations in Letters of Credit, its
Domestic Lending Office and (ii) in the case of its Euro-Dollar Loans, its
Euro-Dollar Lending Office.
"Applicable Period" shall mean each period which shall commence on a
date on which the financial statements are delivered pursuant to Section 5.01(a)
or (b) (or, in the case of the fourth Fiscal Quarter, the earlier of (x)
delivery, no later than 45 days after the end of such Fiscal Quarter of either
(A) unaudited versions of the financial statements required by Section 5.01(a)
certified by the chief financial officer of the Borrower or (B) a certificate,
signed by the chief financial officer of the Borrower, setting forth in
reasonable detail the calculation of the Leverage Ratio for such Fiscal Quarter
and the other information required under Section 5.01(c) and (y) delivery of the
financial statements pursuant to Section 5.01(a)), as the case may be, and which
shall end on the earlier of (i) the date of actual delivery of the next
financial statements pursuant to Section 5.01(a) or (b) (or, in the case of the
fourth Fiscal Quarter, the delivery of the financial statements or officer's
certificate set forth in the immediately preceding parenthetical), as the case
may be, and (ii) the latest date on which the next financial statements are
required to be delivered pursuant to Section 5.01(a) or (b), as the case may be;
provided that for purposes of the definition of Reduction Discount, no
Applicable Period shall commence on a date occurring prior to the date of
delivery of financial statements pursuant to Section 5.01(b) in respect of the
fiscal quarter ending the Friday closest to June 30, 1998; provided, further, in
the case the Applicable Period commences on the date set forth in clause (x) of
the first parenthetical to this definition, (i) the Borrower's obligation to
deliver the financial statements pursuant to Section 5.01(a) will not be
affected and (ii) to the extent the financial statements delivered pursuant to
Section 5.01(a) and the corresponding statements delivered pursuant to Section
5.01(d) would result in a Reduction Discount different from that established for
such Fiscal Quarter, the Reduction Discount shall be retroactively adjusted to
correspond to the financial statements delivered pursuant to Section 5.01(a).
"Applicable Repayment Percentage" means (i) in respect of an Asset Sale
or Additional Debt Incurrence, 100%, (ii) in respect of an Equity Issuance, 75%
and (iii) in respect of Excess Cash Flow, 75% (provided, that, if on the last
day of any Excess Cash Flow Period (x) no Default or Event of Default then
exists and (y) the Leverage Ratio is less than 4.00 to 1.00, then the Applicable
Repayment Percentage for the Excess Cash Flow for such Excess Cash Flow Period
shall be reduced to 50%).
"Asset Sale" means any sale, lease or other disposition (including any
such transaction effected by way of merger or consolidation) by the Borrower or
any of its Subsidiaries of any asset, including, without limitation, (x) any
sale-leaseback transaction, whether or not involving a capital lease, and (y)
any capital stock or other securities of another Person (but excluding the sale
by such Person of its own capital stock), whether in a single transaction or a
series of related transactions in which the Net Cash Proceeds therefrom are in
excess of $100,000. Notwithstanding the foregoing, the following will not be
deemed to be Asset Sales: (i) dispositions of inventory, cash, Cash Equivalents
and other cash management investments and (ii) dispositions to the Borrower or a
Domestic Subsidiary of the Borrower.
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit C (appropriately
completed).
"Available Domestic JV Basket Amount" shall mean, on any date of
determination, an amount equal to the sum of (i) $15,000,000 minus (ii) the
aggregate amount of Investments made by the Borrower or any of its Domestic
Subsidiaries (other than the respective Domestic Joint Venture), net of Debt
and, without duplication, Capitalized Lease Obligations assigned to, and assumed
by, the respective Domestic Joint Venture in connection therewith), pursuant to
Section 5.15(xiv) after the Initial Borrowing Date, minus (iii) the aggregate
amount of Debt or other obligations (whether absolute, accrued, contingent or
otherwise and whether or not due) of any Domestic Joint Venture for which the
Borrower or any of its Domestic Subsidiaries (other than the respective Domestic
Joint Venture) is liable, minus (iv) all payments made by the Borrower or any of
its Domestic Subsidiaries (other than the respective Domestic Joint Venture) in
respect of Debt or other obligations of the respective Domestic Joint Venture
after the Initial Borrowing Date, plus (v) the amount of any increase to the
Available Domestic JV Basket Amount made after the Initial Borrowing Date in
accordance with the provisions of Section 5.15(xiv). In connection with the
foregoing, it is understood that the acquisition of a Person which has ownership
interests in one or more Domestic Joint Ventures, pursuant to a Permitted
Acquisition effected in accordance with the relevant requirements of this
Agreement shall not be deemed to constitute an Investment pursuant to Section
5.15(xiv) and the Available Domestic JV Basket Amount shall not be reduced as a
result of the payment of consideration owing to effect the Permitted Acquisition
(although the Available Domestic JV Basket Amount would be affected to the
extent preceding clauses (iii) or (iv) apply after the date of such Permitted
Acquisition with respect to the Joint Venture so acquired or to the extent
additional Investments are made in the respective Joint Venture pursuant to
Section 5.15(xiv).
"Available ECF Amount" shall initially mean zero, (x) and shall be
increased on each Excess Cash Payment Date by the amount of Excess Cash Flow
permitted to be retained by the Borrower with respect to the Excess Cash Flow
Period then ended (y) and shall be reduced by (i) Dividends permitted to be paid
pursuant to Section 5.14(z), (ii) Permitted Acquisitions pursuant to Section
5.15(xii) and (iii) Capital Expenditures permitted under Section 5.16(f).
"Bailee Agreement" shall have the meaning provided in Section
3.01(d)(v).
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as amended.
"Base Rate" means, for any day, a rate per annum equal to the higher of
(i) the Prime Rate for such day and (ii) the sum of 1/2 of 1% plus the Federal
Funds Rate for such day.
"Base Rate Borrowing" shall mean a Borrowing of Base Rate Loans.
"Base Rate Loan" means each Loan which bears interest at the Base Rate
as provided Section 2.05(a).
"Borrower" means Tekni-Plex, Inc., a Delaware corporation, and its
successors.
"Borrowing" means a borrowing of one Type of Loan pursuant to a single
Tranche by the Borrower from all Lenders having Commitments of the respective
Tranche on a given date (or resulting from conversions on a given date), having
in the case of Euro-Dollar Loans the same Interest Period, provided that Base
Rate Loans incurred pursuant to Article VIII shall be considered part of the
related Borrowing of Euro-Dollar Loans. A Borrowing is a "Base Rate Borrowing"
if such Borrowing is comprised of Loans maintained as Base Rate Loans or a
"Euro-Dollar Borrowing" if such Borrowing is comprised of Loans maintained as
Euro-Dollar Loans.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other governmental actions to close and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Euro-Dollar Loans, any day which is a Business Day
described in clause (i) above and is also a day for trading by and between banks
in U.S. dollar deposits in the interbank Euro-Dollar market.
"Capital Expenditures" means, for any Person for any period, the
additions to property, plant and equipment and other capital expenditures of
such Person for such period, as the same are or would be set forth in a
consolidated statement of cash flows of such Person for such period.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Capital Stock" of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, any limited or general partnership interest and any limited liability
company membership interest.
"Carryover Amount" shall have the meaning provided in Section 5.16(b) of
this Agreement.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) Dollar denominated time deposits and
certificates of deposit of any commercial bank having, or which is the principal
banking subsidiary of a bank holding company having, a long-term unsecured debt
rating of at least "A" or the equivalent thereof from S&P or "A2" or the
equivalent thereof from ▇▇▇▇▇'▇ with maturities of not more than one year from
the date of acquisition by such Person, (iii) repurchase obligations for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by ▇▇▇▇▇'▇ and in each case maturing not more than one year after the
date of acquisition by such Person, (v) marketable direct obligations issued by
the District of Columbia or any State of the United States or any political
subdivision of any such State or any public instrumentality thereof maturing
within one year from the date of acquisition and, at the time of acquisition,
having one of the two highest ratings obtainable from either S&P or ▇▇▇▇▇'▇ and
(vi) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (v) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time, and regulations promulgated
thereunder.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" means all of the "Collateral" as defined in each of the
Collateral Documents.
"Collateral Agent" shall mean the Agent acting as the collateral agent or
secured party pursuant to the Collateral Documents.
"Collateral Account" means an account in the name and under the control of
the Agent into which there shall be deposited from time to time amounts required
to be delivered to the Agent pursuant to Section 2.10 or 6.01 of this Agreement.
"Collateral Documents" means the Pledge Agreement, the Security Agreement,
the Mortgages, any additional pledges, security agreements or mortgages
delivered pursuant to the Loan Documents and any instruments of assignment or
other instruments or agreements executed pursuant to the foregoing.
"Commitment" means any of the commitments of any Lender, i.e., whether the
Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment or the
Revolving Loan Commitment.
"Commitment Fee" shall have the meaning set forth in Section 2.07(a).
"Consolidated Capital Expenditures" means, for any period, the amount of
Capital Expenditures made during such period by the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis.
"Consolidated Cash Interest Expense" shall mean Consolidated Interest
Expense excluding any non-cash interest expense for such period.
"Consolidated Debt" means, at any date, the consolidated Debt of the
Borrower and its Consolidated Subsidiaries as of such date.
"Consolidated EBITDA" means, for any period, Consolidated Net Income for
such period plus, to the extent deducted in determining Consolidated Net Income
for such period, the aggregate amount of (i) Consolidated Interest Expense, (ii)
income tax expense and (iii) depreciation, amortization and other similar
non-cash charges.
"Consolidated Interest Expense" means, for any period, the interest expense
of the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis, for such period.
"Consolidated Net Income" means, for any period, the net income of the
Borrower and its Consolidated Subsidiaries, determined on a consolidated basis
for such period, adjusted to exclude the effect of any extraordinary or other
non-recurring gain (but not loss).
"Consolidated Net Working Investment" means at any date (i) consolidated
current assets of the Borrower and its Consolidated Subsidiaries (exclusive of
cash and Cash Equivalents) minus (ii) the consolidated current liabilities of
the Borrower and its Consolidated Subsidiaries (exclusive of Debt), all
determined as of such date.
"Consolidated Subsidiary" means, at any date, any Subsidiary or other
entity the accounts of which would be consolidated with those of the Borrower in
its consolidated financial statements if such statements were prepared as of
such date.
"Control Group" means any of any member of the board of directors of the
Borrower as of the date of issuance of the New Senior Subordinated Notes,
Tekni-Plex Partnership, MST/TP Partners, L.P., MST Management, L.P., MST
Partners L.P., any Affiliate of or partner in any of the foregoing (including
any Person receiving common stock of the Borrower upon a distribution by any of
the foregoing partnerships, whether a partner or designated by a partner for
purposes of estate or similar personal planning), or any group if the majority
of the shares of common stock of the Borrower owned by such group are
beneficially owned by any or all of the foregoing and their Related Persons and
Affiliates.
"Credit Event" means the making of any Loan or the issuance of any Letter
of Credit.
"De Minimis Subsidiary" shall mean each Subsidiary of the Borrower existing
on the Initial Borrowing Date to the extent that (i) it holds no capital stock
of any other Subsidiary that is not a De Minimis Subsidiary, (ii) the fair
market value of all assets held by such Subsidiary is less than $250,000 and
(iii) the net income for such Subsidiary for the last 12 months then ended is
less than $250,000.
"Debt" of any Person means, at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee which are capitalized in
accordance with GAAP, (v) all non-contingent obligations (and, for purposes of
Sections 5.09 and the definitions of Material Debt and Material Financial
Obligations, all contingent obligations) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Lien on any asset of such Person, whether
or not such Debt is otherwise an obligation of such Person, (vii) all Guarantees
by such Person of Debt of another Person.
"Debt to be Refinanced" means, collectively, all Debt of the Borrower and
its Subsidiaries (other than (i) the Debt described on Schedule 2 and (ii) Debt
otherwise permitted pursuant to Section 5.10).
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defaulting Lender" means any Lender with respect to which a Lender Default
is in effect.
"Derivatives Obligations" of any Person means all obligations of such
Person in respect of any interest rate swap transaction, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"Dividends" shall have the meaning set forth in Section 5.14.
"Documents" means, collectively, (i) the Loan Documents, (ii) the
Refinancing Documents, (iii) the New Senior Subordinated Note Documents, (iv)
the Existing PST Senior Secured Notes Tender Offer Documents, (v) the PureTec
Acquisition Documents and (vi) the PST Minority Acquisition Documents.
"Dollars" and the sign "$" each means fully transferable lawful money of
the United States.
"Domestic Joint Venture" means any Joint Venture existing under the laws of
the United States or any state thereof.
"Domestic Lending Office" means, as to each Lender, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Domestic Lending Office) or such other
office as such Lender may hereafter designate as its Domestic Lending Office by
notice to the Borrower and the Agent.
"Domestic Subsidiary" means each Subsidiary of the Borrower that is
organized under the laws of the United States or any state thereof.
"Effective Date" shall have the meaning set forth in Section 10.08.
"Eligible Transferee" shall mean and include a commercial bank, investment
company, financial institution, any fund that invests in bank loans or any other
"accredited investor" (as defined in Regulation D of the Securities Act).
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules, judgments,
orders, decrees, plans, injunctions, permits, concessions, grants, franchises,
licenses, agreements and other governmental restrictions relating to the
environment or the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment, including (without limitation) ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or wastes or the
clean-up or other remediation thereof.
"Environmental Liabilities" means all liabilities in connection with or
relating to the business, assets presently or previously owned, leased or
operated, activities (including, without limitation, off-site disposal) or
operations of the Borrower and each Subsidiary, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to matters covered by Environmental Laws.
"Equity Issuance" means the issuance of any Capital Stock by the Borrower
or any of its Subsidiaries (other than equity securities issued to the Borrower
or any of its Subsidiaries by any other Subsidiary of the Borrower).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"Euro-Dollar Borrowing" shall mean a Borrowing of Euro-Dollar Loans.
"Euro-Dollar Lending Office" means, as to each Lender, its office, branch
or affiliate located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as its
Euro-Dollar Lending Office) or such other office, branch or affiliate of such
Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice
to the Borrower and the Agent.
"Euro-Dollar Loan" means each Loan which bears interest at a Euro-Dollar
Rate as provided in Section 2.05(b).
"Euro-Dollar Rate" means a rate of interest determined pursuant to Section
2.05(b) on the basis of a London Interbank Offered Rate.
"Euro-Dollar Reserve Percentage" means, for any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents).
"Events of Default" shall have the meaning set forth in Section 6.01.
"Evergreen Letter of Credit" means a Letter of Credit that is automatically
extended unless the relevant LC Issuing Bank gives notice to the beneficiary
thereof stating that the expiration date of such Letter of Credit will not be
extended.
"Excess Cash Flow" means, for any period the excess (if any) of: (a) the
sum of (i) Consolidated Net Income for such period plus (ii) to the extent
deducted in determining Consolidated Net Income for such period, depreciation,
amortization and other similar noncash charges plus (iii) any increase (or minus
any decrease) during such period in deferred tax liabilities of the Borrower and
its Consolidated Subsidiaries, taken as a whole, for such fiscal period, plus
(iv) any decrease in Consolidated Net Working Investment between the beginning
and the end of such period; minus (b) the sum of (i) an amount equal to
Consolidated Capital Expenditures (excluding Consolidated Capital Expenditures
made pursuant to Section 5.16(c) and (d)) made during such period that are not
financed with Debt (other than Loans) for such period, (ii) any increase in
Consolidated Net Working Investment between the beginning and the end of such
period, (iii) mandatory prepayments and repayments of long-term Debt of the
Borrower and its Consolidated Subsidiaries (other than repayments of (x) Loans,
provided that repayments of Loans shall be deducted in determining Excess Cash
Flow if such payments were (x) required as a result of a Scheduled Repayment
under Section 2.10(b) or (c) or (y) made as a voluntary prepayment (but in the
case of a voluntary repayment of Revolving Loans, only to the extent accompanied
by a voluntary and permanent reduction to the Total Revolving Loan Commitment)
and (y) Debt (other than the Loans) made with proceeds of other Debt or with
proceeds of Asset Sales or equity issuances) during such period, (iv) to the
extent included in Consolidated Net Income for such period, the amount of any
gain or disposition of an asset if such disposition constitutes an Asset Sale
and (v) cash Dividends paid during such period on Qualified Preferred Stock (to
the extent permitted by Section 5.14).
"Excess Cash Flow Period" means, with respect to the repayment required on
each Excess Cash Payment Date, (i) the period from and including the first day
of the first fiscal quarter commencing after the Initial Borrowing Date to and
including the last Business Day of the Borrower's Fiscal Year ending in June,
1999 and (ii) thereafter, the Fiscal Year ended immediately prior to such Excess
Cash Payment Date.
"Excess Cash Payment Date" means each date occurring 95 days after the last
day of each Fiscal Year ended after the Initial Borrowing Date (commencing with
the Fiscal Year ending on the last Friday closest to June 30, 1999).
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time.
"Existing Credit Agreement" means the Credit Agreement, dated as of May 8,
1997, among the Borrower, the guarantors party thereto, the banks party thereto,
the LC issuing banks party thereto and MGT, as agent, as in effect on the
Initial Borrowing Date.
"Existing PST Patent Security Agreement" means the Patent Security
Agreement dated as of November 8, 1993, by PST in favor of First Fidelity Bank,
N.A., Pennsylvania.
"Existing PST Pledge Agreement" means the Pledge Agreement dated as of
November 8, 1993 by PST in favor of First Fidelity Bank, N.A., Pennsylvania.
"Existing PST Security Agreement" means the Security Agreement dated as of
November 8, 1993 by PST in favor of First Fidelity Bank, N.A., Pennsylvania.
"Existing PST Senior Secured Notes" means PST's 11-1/4% Senior Secured
Notes due 2003.
"Existing PST Senior Secured Notes Collateral Documents" means the (i)
Existing PST Security Agreement, (ii) Existing PST Pledge Agreement, (iii)
Existing PST Patent Security Agreement and (iv) Existing PST Trademark Security
Agreement, each as in effect on the Initial Borrowing Date and as the same may
be amended, modified or supplemented from time to time pursuant to the terms
thereof and hereof.
"Existing PST Senior Secured Notes Collateral Documents Amendment" means
the amendments to the Existing PST Senior Secured Notes Collateral Documents in
form and substance satisfactory to the Agent and entered into by the parties to
the respective Existing PST Senior Secured Notes Collateral Documents in
connection with the Existing PST Senior Secured Notes Tender Offer/Consent
Solicitation.
"Existing PST Senior Secured Notes Indenture" means that certain indenture,
dated as of November 8, 1993, between PST and First Fidelity Bank, N.A.,
Pennsylvania, as trustee, as in effect on the Initial Borrowing Date and as the
same may be amended, modified or supplemented from time to time pursuant to the
terms thereof and hereof.
"Existing PST Senior Secured Notes Indenture Supplement" means the
Supplemental Indenture to the Existing PST Senior Secured Notes Indenture in
form and substance satisfactory to the Agent and entered into by the Borrower
and the trustee for the Existing PST Senior Secured Notes in connection with the
Existing PST Senior Secured Notes Tender Offer/Consent Solicitation.
"Existing PST Senior Secured Notes Tender Offer/Consent Solicitation" shall
have the meaning set forth in Section 3.01(d)(v).
"Existing PST Senior Secured Notes Tender Offer Documents" means the
Existing PST Senior Secured Notes Indenture Supplement, the Existing PST Senior
Secured Notes Collateral Documents Amendment and the Existing PST Senior Secured
Notes Tender Offer/Consent Solicitation, as in effect on the Initial Borrowing
Date and as the same may be amended, modified or supplemented from time to time
pursuant to the terms thereof and hereof.
"Existing PST Senior Secured Notes Tender Offer Repurchases" shall have the
meaning set forth in Section 3.01(d)(v).
"Existing PST Trademark Security Agreement" means the Trademark Security
Agreement dated as of November 8, 1993 by PST in favor of First Fidelity Bank,
N.A., Pennsylvania.
"Existing Senior Subordinated Notes" shall mean the 11-1/4% Senior
Subordinated Notes due 2007 of the Borrower issued pursuant to the Existing
Senior Subordinated Notes Indenture.
"Existing Senior Subordinated Notes Indenture" shall mean the Indenture,
dated as of April 1, 1997, between the Borrower, Dolco Packaging Corp. and
Marine Midland Bank, as trustee, pursuant to which the Existing Senior
Subordinated Notes were issued.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (ii) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Agent on such
day from three Federal funds brokers of recognized standing selected by the
Agent.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
"Fiscal Year" means a fiscal year of the Borrower.
"Fixed Charge Coverage Ratio" means, for any period, the ratio of (i) the
remainder of (A) Consolidated EBITDA for such period minus (B) Consolidated
Capital Expenditures for such period to (ii) Consolidated Cash Interest Expense
for such period.
"Foreign Joint Venture" means any Joint Venture of the Borrower and/or its
Subsidiaries other than a Domestic Joint Venture.
"Foreign Subsidiary" means any Subsidiary of the Borrower and/or its
Subsidiaries other than a Domestic Subsidiary.
"Fronting Fee" shall have the meaning provided in Section 2.07(b).
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied on a basis consistent (except for changes concurred in by
the Borrower's independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
to reimburse a bank for amounts drawn under a letter of credit for the purpose
of paying such Debt or (iii) entered into for the purpose of assuring in any
other manner the holder of such Debt or other obligation of the payment thereof
or to protect such holder against loss in respect thereof (in whole or in part);
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The term Guarantee used as a verb
has a corresponding meaning. The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable amount of such Debt or other
obligation in respect of which such Guarantee is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Guaranteed Derivatives Agreement" shall have the meaning provided in the
definition of "Guaranteed Obligations."
"Guaranteed Obligations" shall mean all obligations of the Borrower (i) to
each Lender Party for the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of the principal and interest on
each Note issued by the Borrower to such Lender Party, and Loans made, under
this Agreement and all LC Reimbursement Obligations with respect to Letters of
Credit, together with all other amounts (including, without limitation,
indemnities, fees and interest thereon) of the Borrower owing to such Lender
Party now existing or hereafter incurred under, arising out of or in connection
with the Credit Agreement or any other Loan Document and (ii) to each Lender
Party and each Affiliate of a Lender Party which enters into an agreement with
respect to Derivatives Obligations with the Borrower which agreement is
designated by the Borrower and such Lender Party as a "Guaranteed Derivatives
Agreement," and the full and prompt payment when due (whether by acceleration or
otherwise) of all obligations of the Borrower owing under any such Guaranteed
Derivatives Agreement whether now in existence or hereafter arising.
"Guarantor" means, subject to Section 9.08, each Subsidiary of the Borrower
that has executed this Agreement as a guarantor.
"Hazardous Substance" means any toxic, radioactive, caustic or otherwise
hazardous substance, including petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent elements displaying any of
the foregoing characteristics.
"Indemnitee" has the meaning set forth in Section 10.03(b).
"Information Memorandum" means the confidential descriptive memorandum
dated February 25, 1998 furnished to the Lenders in connection with the
transactions contemplated hereby.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Borrowing of Loans occurs hereunder.
"Initial Directors" shall have the meaning set forth in Section 6.01(m).
"Initial Public Offering" shall mean an initial registered public offering
of the common stock of the Borrower.
"Interest Period" means, with respect to each Euro-Dollar Loan, the period
commencing on the date of borrowing specified in the applicable Notice of
Borrowing or on the date specified in an applicable Notice of Interest Rate
Election and ending one, two, three or six months thereafter, as the Borrower
may elect in such notice; provided that:
(a) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (c)
below, end on the last Business Day of a calendar month; and
(c) any Interest Period for a Borrowing under a Tranche which would
otherwise end after the respective Maturity Date for such Tranche shall end on
the respective Maturity Date for such Tranche.
"Investment" means any investment in any Person, whether by means of share
purchase, capital contribution, loan, Guarantee, time deposit or otherwise (but
not including any demand deposit).
"Joint Venture" means any Person, other than an individual or a
Wholly-Owned Subsidiary of the Borrower, in which the Borrower or a Subsidiary
of the Borrower holds or acquires an ownership interest (whether by way of
capital stock, partnership or limited liability company interest, or other
evidence of ownership).
"LC Fee" shall have the meaning provided in Section 2.07(b).
"LC Indemnitees" has the meaning set forth in Section 2.16(k).
"LC Issuing Bank" means MGT (and any other RL Lender which, at the
Borrower's request, shall have agreed to issue Letters of Credit hereunder and
confirmed such agreement in a notice to the Agent), each in its capacity as an
LC Issuing Bank under the letter of credit facility described in Section 2.16.
"LC Office" means, with respect to any LC Issuing Bank, the office at which
it books any Letter of Credit issued by it.
"LC Payment Date" has the meaning set forth in Section 2.16(g).
"LC Reimbursement Due Date" has the meaning set forth in Section 2.16(h).
"LC Reimbursement Obligations" means, at any time, all obligations of the
Borrower to reimburse the LC Issuing Banks for amounts paid by the LC Issuing
Banks in respect of drawings under Letters of Credit, including any portion of
any such obligations to which a RL Lender has become subrogated pursuant to
Section 2.16(i).
"Lender" means each Person listed on Schedule 1 hereto, as well as any
Person which becomes a Lender pursuant to Section 8.06 or 10.06(b).
"Lender Default" shall mean (i) the refusal (which has not been retracted)
or the failure of a Lender to make available its portion of any Borrowing
(including any Mandatory Borrowing) or to fund its portion of any unreimbursed
payment under Section 2.16(i) or (ii) a Lender having notified in writing the
Borrower and/or the Agent that such Lender does not intend to comply with its
obligations under Section 2.01 or 2.16.
"Lender Parties" means the Lenders, the LC Issuing Banks and the Agent.
"Letter of Credit" means a letter of credit issued hereunder by an LC
Issuing Bank.
"Leverage Ratio" means, at any time, the ratio of (i) (a) Consolidated Debt
at such time less (b) cash and Cash Equivalents held by the Borrower and its
Consolidated Subsidiaries at such time to (ii) Consolidated EBITDA for the then
most recently ended Test Period. For purposes of determining Consolidated EBITDA
at any time during the first four Fiscal Quarters ending after a Fiscal Quarter
in which a Permitted Acquisition has been made, Consolidated EBITDA shall be
increased for any Fiscal Quarter which began prior to such Permitted Acquisition
by the amount of EBITDA which the Borrower (with the consent of the Agent, such
consent not be unreasonably withheld or delayed) shall determine would have been
attributable to the acquired assets for the Fiscal Quarter most recently ended
on or prior to the date of such Permitted Acquisition; provided that for the
Fiscal Quarter in which the Permitted Acquisition has occurred, such increase
shall be prorated to reflect only the days during such Fiscal Quarter prior to
the consummation of the Permitted Acquisition.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has substantially the same practical effect as a
security interest, in respect of such asset. For purposes hereof, the Borrower
or any Subsidiary shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"Loan" means each Tranche A Term Loan, each Tranche B Term Loan, each
Revolving Loan and each Swingline Loan.
"Loan Documents" means this Agreement, the Notes, the Bailee Agreement and
the Collateral Documents.
"London Interbank Offered Rate" applicable to any Interest Period means the
average (rounded upward, if necessary, to the next higher 1/16 of 1%) of the
respective rates per annum at which deposits in dollars are offered to each of
the Reference Lenders in the London interbank market at approximately 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount approximately equal to the principal amount of the Euro-Dollar Loan of
such Reference Lender to which such Interest Period is to apply and for a period
of time comparable to such Interest Period.
"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received by the Borrower or any of its Subsidiaries in connection with one or
more related events under any insurance policy maintained by the Borrower or any
of its Subsidiaries covering losses with respect to tangible real or personal
property or improvements or losses from business interruption or (ii) any award
or other compensation with respect to any condemnation of property (or any
transfer or disposition of property in lieu of condemnation) received by the
Borrower or any of its Subsidiaries, provided that no insurance proceeds, award
or other compensation set forth in preceding clauses (i) and (ii) shall be Major
Casualty Proceeds unless the aggregate amount of such insurance proceeds, award
or other compensation exceeds $2,500,000.
"Majority Lenders" of any Tranche shall mean those Non-Defaulting Lenders
which would constitute the Required Lenders under, and as defined in, this
Agreement if all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Mandatory Borrowing" shall have the meaning set forth in Section 2.01(e).
"Margin Regulations" shall mean Regulations G, T, U and X.
"Margin Stock" shall have the meaning set forth in Regulation U.
"Material Adverse Effect" means (i) any material adverse effect upon the
business, property, assets, liabilities, condition (financial or otherwise), or
prospects of the Borrower or of the Borrower and its Subsidiaries, taken as a
whole, or, for purposes of conditions precedent to be satisfied, and
representations and warranties to be made, on the Initial Borrowing Date, Pure
Tec and its Subsidiaries taken as a whole, (ii) a material adverse effect on the
ability of the Borrower or any other Person to consummate the transactions
contemplated hereby to occur on the Initial Borrowing Date; (iii) a material
adverse effect on the ability of the Borrower or any other Obligor to perform
under this Agreement and the Notes and the other Loan Documents; or (iv) a
material adverse effect on the rights and remedies of the Agent and the Lenders
under this Agreement and the Notes and the other Loan Documents.
"Material Debt" means Debt (except Debt outstanding hereunder) of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, in an aggregate principal or face amount exceeding
$12,500,000.
"Material Financial Obligations" means a principal or face amount of Debt
(other than the Loans and LC Reimbursement Obligations) and/or payment or
collateralization obligations in respect of Derivatives Obligations of the
Borrower and/or one or more of its Subsidiaries, arising in one or more related
or unrelated transactions, exceeding in the aggregate $12,500,000.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the
Tranche A Maturity Date, the Tranche B Maturity Date or the Revolving Loan
Maturity Date, as the case may be.
"Maximum Swingline Amount" means $10,000,000.
"Minimum Borrowing Amount" means (i) for Base Rate Loans (other than
Swingline Loans), $1,000,000, (ii) for Euro-Dollar Loans, $5,000,000 in the case
of the initial Borrowing, and $2,500,000 thereafter and (iii) for Swingline
Loans, $250,000.
"MGT" means ▇▇▇▇▇▇ Guaranty Trust Company of New York in its individual
capacity.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust, deed to secure debt,
amendment to mortgage or amendment to deed of trust, substantially in the
respective form included in Exhibit F hereto between each Obligor party thereto,
as mortgagor or trustor, and the Agent, as mortgagee or beneficiary, entered
into as of the Initial Borrowing Date and relating to the Borrower's and its
Subsidiaries' facilities in the locations listed in Schedule 5 hereto, and any
mortgage, deed of trust, deed to secure debt, amendment to mortgage or amendment
to deed of trust entered into pursuant hereto after the Initial Borrowing Date,
in each case as amended from time to time.
"Multiemployer Plan" means, at any time, an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five plan years made contributions, including for these
purposes any Person which ceased to be a member of the ERISA Group during such
five year period.
"Net Cash Proceeds" means, with respect to any Repayment Event, an amount
equal to the gross cash proceeds received by the Borrower or any of its Domestic
Subsidiaries from or in respect of such Repayment Event (including any cash
proceeds, received as income or other proceeds, of any noncash proceeds of any
Asset Sale, as and when received), less (x) any fees, costs and expenses
reasonably incurred by such Person in respect of such Repayment Event and (y) in
the case of an Asset Sale, (I) the amount of any Debt secured by a Lien on any
asset disposed of in such Asset Sale and discharged from the proceeds thereof
and (II) any incremental taxes actually paid or to be payable by such Person (as
estimated by a senior financial or accounting officer of the Borrower, giving
effect to the overall tax position of the Borrower) in respect of such Asset
Sale.
"New Senior Subordinated Note Documents" means the New Senior Subordinated
Notes Indenture and the New Senior Subordinated Notes, as in effect on the
Initial Borrowing Date and as the same may be amended, modified or supplemented
from time to time pursuant to the terms thereof and hereof.
"New Senior Subordinated Notes" means the Borrower's 9 1/4% Senior
Subordinated Notes due 2008, issued in accordance with the terms of the New
Senior Subordinated Notes Indenture.
"New Senior Subordinated Notes Indenture" means that certain indenture,
dated as of March 1, 1998, between the Borrower, as issuer, and Marine Midland
Bank, as trustee, as in effect on the Initial Borrowing Date and as the same may
be amended, modified or supplemented from time to time pursuant to the terms
thereof and hereof.
"Non-Defaulting Lender" means and includes each Lender other than a
Defaulting Lender.
"Note" means each Tranche A Term Note, each Tranche B Term Note, each
Revolving Note, and the Swingline Note.
"Notice of Borrowing" shall have the meaning set forth in Section 2.03.
"Notice of Interest Rate Election" shall have the meaning set forth in
Section 2.06.
"Obligations" shall mean all amounts owing to the Agent or any Lender by
any Obligor pursuant to the terms of this Agreement or any other Loan Document.
"Obligors" means the Borrower and the Guarantors, and "Obligor" means any
of them.
"Payment Office" shall mean the office of the Agent located at ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Agent may designate
to the Borrower and the Lenders from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" shall have the meaning set forth in Section
5.15(xii).
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means, at any time, an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person which
was at such time a member of the ERISA Group for employees of any Person which
was at such time a member of the ERISA Group.
"Pledge Agreement" means the pledge agreement substantially in the form of
Exhibit E hereto between each Obligor party thereto and the Agent entered into
as of the Closing Date, as amended from time to time.
"Prime Rate" means the rate of interest publicly announced by MGT in New
York City from time to time as its Prime Rate.
"PST" means Plastic, Specialties & Technologies, Inc., a Delaware
corporation.
"PST Minority Acquisition" means the acquisition by PureTec of the
remaining 3% of issued and outstanding capital stock of PST not already owned by
PureTec, in accordance with the terms of the PST Minority Acquisition Documents.
"PST Minority Acquisition Documents" means the Certificate of Ownership and
Merger merging PST Holding, Inc. into PST, as in effect on the Initial Borrowing
Date, and amended and in effect from time to time pursuant to the terms hereof
and thereof.
"PureTec" means PureTec Corporation, a Delaware corporation.
"PureTec Acquisition" means the acquisition by the Borrower of 100% of the
issued and outstanding capital stock of PureTec by way of the merger of P.T.
Holdings, Inc., a Wholly-Owned Subsidiary of the Borrower, with and into
PureTec, with PureTec being the surviving entity of such merger, pursuant to,
and in accordance with, the terms of the PureTec Acquisition Documents.
"PureTec Acquisition Agreement" means the Agreement and Plan of Merger,
dated as of November 11, 1997, among PureTec, PST, the Borrower and P.T.
Holdings, Inc., as in effect on the Initial Borrowing Date, and amended and in
effect from time to time.
"PureTec Acquisition Documents" means the PureTec Acquisition Agreement, as
in effect on the Initial Borrowing Date, and amended and in effect from time to
time pursuant to the terms hereof and thereof.
"Qualified Preferred Stock" of any Person means any preferred stock of such
Person other than preferred stock which, (x) requires any cash payment of
Dividends (other than pursuant to provisions that expressly provide that no such
payment can be made in violation of this Agreement) or (y) by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity of the Obligations (other than pursuant to change of control
provisions similar to those set forth herein, provided that such provisions
expressly provide that no payment can be made on such stock in violation of this
Agreement).
"Quarterly Payment Date" means the last Business Day of each March, June,
September and December occurring after the Initial Borrowing Date.
"Reduction Discount" shall mean initially zero, provided that during any
Applicable Period the Reduction Discount shall be the respective percentage per
annum with respect to (i) Tranche A Term Loans and Revolving Loans, (ii) Tranche
B Term Loans and (iii) Commitment Fees, respectively, as set forth below, but
only if, as of the Test Date with respect to such Applicable Period the Leverage
Ratio for such percentage below is met:
Tranche A Term Loans
and Tranche B Commitment
Leverage Ratio Revolving Loans Term Loans Fees
-------------- --------------- ---------- ----
Equal to or less than 4.50:1.00
but greater than 4.00:1.00 0.25% 0.00% 0.00%
Equal to or less than 4.00:1.00
but greater than 3.50:1.00 0.50% 0.50% 0.00%
Equal to or less than 3.50:1.00
but greater than 3.00:1.00 0.75% 0.50% 0.125%
Equal to or less than 3.00:1.00
but greater than 2.50:1.00 1.00% 0.50% 0.125%
Equal to or less than 2.50:1.00 1.25% 0.50% 0.25%
"Reference Lenders" means the principal London offices of Fleet Bank,
National Association, LaSalle National Bank and MGT, and "Reference Lender"
means any one of such Reference Lenders; provided that upon the resignation of
any Reference Lender, the Agent and the Borrower shall designate a mutually
satisfactory substitute Reference Lender.
"Reference Period" shall have the meaning set forth in Section 5.15(xii) of
this Agreement.
"Refinancing" means and includes the refinancing and repayment in full of
all amounts outstanding under, and the termination of all commitments and
letters of credit in respect of, the Debt to be Refinanced.
"Refinancing Documents" means all documents, instruments and agreements
entered into in connection with the Refinancing.
"Register" shall have the meaning set forth in Section 10.11.
"Regulated Activity" means any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Substance.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Related Persons" of any Person means any other Person directly or
indirectly owning (a) 5% or more of the outstanding common stock of such Person
(or, in the case of a Person that is not a corporation, 5% or more of the equity
in such Person) or (b) 5% or more of the combined voting power of the voting
stock of such Person.
"Release" means any discharge, emission or release, including a Release as
defined in CERCLA at 42 U.S.C. Section 9601(22). The term "Released" has a
corresponding meaning.
"Repayment Event" means (i) any Asset Sale, (ii) any Additional Debt
Incurrence or (iii) any Equity Issuance. The description of any transaction as
falling within the above definition does not affect any limitation on such
transaction imposed by Article 5 of this Agreement.
"Replaced Lender" shall have the meaning set forth in Section 8.06.
"Replacement Lender" shall have the meaning set forth in Section 8.06.
"Required Lenders" means Non-Defaulting Lenders the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or, if after the Total
Revolving Loan Commitment has been terminated, outstanding Revolving Loans and
RL Percentages of outstanding Swingline Loans and the Aggregate LC Exposure)
represents an amount greater than 50% of the sum of (i) the total outstanding
Term Loans of Non-Defaulting Lenders and (ii) the Total Revolving Loan
Commitment less the aggregate Revolving Loan Commitments of Defaulting Lenders
(or, if after the Total Revolving Loan Commitment has been terminated, the then
total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL
Percentages of all Non-Defaulting Lenders of the then total outstanding
Swingline Loans and the Aggregate LC Exposure at such time).
"Restricted Acquisition" means any acquisition, whether in a single
transaction or series of related transactions, by the Borrower or any one or
more Subsidiaries, or any combination thereof, of (i) all or a substantial part
of the assets, all or any substantial part of a going business or division, of
any Person, whether through purchase of assets or securities, by merger or
otherwise, (ii) control of securities of an existing corporation or other Person
having ordinary voting power (apart from rights accruing under special
circumstances) to elect a majority of the board of directors of such corporation
or other Person or (iii) control of a greater than 50% ownership interest in any
existing partnership, joint venture or other Person.
"Restricted Payment" means (i) any dividend or other distribution on any of
the Borrower's or any Subsidiary's Capital Stock (except dividends payable
solely in shares of its common stock or Qualified Preferred Stock) or (ii) any
payment on account of the purchase, redemption, retirement or acquisition of any
of the Borrower's or any Subsidiary's Capital Stock (but not including payments
of principal, premium (if any) or interest made pursuant to the terms of
convertible debt securities prior to conversion); provided that payments in an
aggregate amount not to exceed $10,000,000 in respect of the repurchase of the
Borrower's Capital Stock from employees of the Borrower and its Subsidiaries,
former employees, directors, former directors, limited partners (and not general
partners) of Tekni-Plex Partners L.P., and their estates shall not be Restricted
Payments provided, further, that no more than $5,000,000, in the aggregate, may
be used in respect of such repurchases from limited partners of Tekni-Plex
Partners L.P.
"Retained Asset Sale Proceeds" shall have the meaning provided in Section
2.10(d).
"Revolving Credit Period" means the period from and including the
Initial Borrowing Date to but not including the Revolving Loan Maturity Date.
"Revolving Loan" shall have the meaning provided in Section 2.01(c).
"Revolving Loan Commitment" means, for each Lender, the amount set forth
opposite such Lender's name in Schedule 1 directly below the column entitled
"Revolving Loan Commitment," as the same may be (x) reduced from time to time
pursuant to Sections 2.08, 2.09 and/or 6.01 and (y) adjusted from time to time
as a result of assignments to or from such Lender pursuant to Section 8.06 or
Section 10.06(b).
"Revolving Loan Maturity Date" shall mean March 31, 2004.
"Revolving Note" shall have the meaning set forth in Section 2.15(a).
"RL Lender" means, at any time, each Lender with a Revolving Loan
Commitment or outstanding Revolving Loans at such time.
"RL Percentage" means, at any time with respect to any RL Lender, the
percentage obtained by dividing such RL Lender's Revolving Loan Commitment at
such time by the Total Revolving Loan Commitment at such time, provided that if
the RL Percentage of any RL Lender is to be determined after the Total Revolving
Loan Commitment has been terminated, then the RL Percentages of each RL Lender
shall be determined by dividing such RL Lender's Revolving Loan Commitment as in
effect immediately prior to such termination by the Total Revolving Loan
Commitment in effect immediately prior to such termination.
"S&P" means Standard & Poor's Rating Services.
"Scheduled Repayment" means each Tranche A Scheduled Repayment and each
Tranche B Scheduled Repayment.
"SEC" means the Securities and Exchange Commission or any successor
thereto.
"Secured Creditors" shall have the meaning assigned that term in the
respective Collateral Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" means the security agreement substantially in the form
of Exhibit D hereto between each Obligor party thereto and the Agent entered
into as of the Initial Borrowing Date, as amended from time to time.
"Start Date" shall mean the first day of any Applicable Period.
"Stated Amount" of each Letter of Credit means at any time the maximum
amount available to be drawn thereunder (regardless of whether any conditions
for drawing could then be met).
"Subsidiary" means, as to any Person, any corporation or other entity of
which securities or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) are at the time directly or indirectly owned
by such Person. Unless otherwise specified, "Subsidiary" means a Subsidiary of
the Borrower.
"Supermajority Lenders" of any Tranche shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if (x) all to the Agent outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50%" contained therein
were changed to "66-2/3%."
"Swingline Expiry Date" means the date which is five (5) Business Days
prior to the Revolving Loan Maturity Date.
"Swingline Lender" means MGT in its individual capacity.
"Swingline Loan" shall have the meaning provided in Section 2.01(d).
"Swingline Note" shall have the meaning set forth in Section 2.15(a).
"Taxes" shall have the meaning set forth in Section 8.04(a).
"Term Loan" means each Tranche A Term Loan and each Tranche B Term Loan.
"Term Loan Commitments" shall mean and include Tranche A Term Loan
Commitments and Tranche B Term Loan Commitments.
"Test Date" shall mean, with respect to any Applicable Period, the last day
of the most recent Fiscal Quarter or Fiscal Year, as the case may be, ended
immediately prior to the Start Date with respect to such Applicable Period.
"Test Period" means the four consecutive Fiscal Quarters then last ended
(taken as one accounting period); provided that for any determination of
Consolidated EBITDA on or prior to January 4, 1999, Consolidated EBITDA shall be
calculated on a pro forma basis as if the Transaction had occurred at the
beginning of the relevant Test Period (with such pro forma calculation not to
include pro forma cost savings or synergies except $368,000 relating to the
elimination of PureTec expenses for brokers in connection with potential sales
of certain businesses).
"Total Commitment" means the sum of the Total Term Loan Commitment and the
Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the RL Lenders.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Tranche A Term Loan Commitment and Tranche B Term Loan Commitment.
"Total Tranche A Term Loan Commitment" means the sum of the Tranche A Term
Loan Commitments of each of the Lenders.
"Total Tranche B Term Loan Commitment" means the sum of the Tranche B Term
Loan Commitments of each of the Lenders.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the Total Revolving Loan Commitment then in
effect minus (y) the sum of the aggregate principal amount of all Revolving
Loans and Swingline Loans then outstanding plus the Aggregate LC Exposure at
such time.
"Tranche" means the respective facility and commitments utilized in making
Loans hereunder, with these being four separate Tranches, i.e., Tranche A Term
Loans, Tranche B Term Loans, Revolving Loans and Swingline Loans.
"Tranche A Maturity Date" means March 31, 2004.
"Tranche A Scheduled Repayment" shall have the meaning set forth in Section
2.10(b).
"Tranche A Scheduled Repayment Date" shall have the meaning set forth in
Section 2.10(b).
"Tranche A Term Loan" shall have the meaning provided in Section 2.01(a).
"Tranche A Term Loan Commitment" means, for each Lender, the amount set
forth opposite such Lender's name in Schedule 1 directly below the column
entitled "Tranche A Term Loan Commitment", as the same may be (x) reduced from
time to time pursuant to Sections 2.09 and/or 6.01 and (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant to Section 8.06
or 10.06(b).
"Tranche A Term Note" shall have the meaning set forth in Section 2.15(a).
"Tranche B Maturity Date" means March 31, 2006.
"Tranche B Scheduled Repayment" shall have the meaning set forth in Section
2.10(c).
"Tranche B Scheduled Repayment Date" shall have the meaning set forth in
Section 2.10(c).
"Tranche B Term Loan" shall have the meaning provided in Section 2.01(b).
"Tranche B Term Loan Commitment" means, for each Lender, the amount set
forth opposite such Lender's name on Schedule 1 directly below the column
entitled "Tranche B Term Loan Commitment", as the same may be (x) reduced from
time to time pursuant to Sections 2.09 and/or 6.01 and (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant to Section 8.06
or 10.06(b).
"Tranche B Term Note" shall have the meaning set forth in Section 2.15(a).
"Transaction" means, collectively, (i) the issuance by the Borrower of the
New Senior Subordinated Notes, (ii) the consummation of the Refinancing, (iii)
the consummation of the Existing PST Senior Secured Notes Tender Offer/Consent
Solicitation and the making of the Existing PST Senior Secured Notes Tender
Offer Repurchases pursuant thereto and the amendments to the Existing PST Senior
Secured Notes Indenture and Existing PST Senior Secured Notes Collateral
Documents as contemplated therein, (iv) the consummation of the PST Minority
Acquisition, (v) the consummation of the PureTec Acquisition, (vi) the
incurrence of Loans on the Initial Borrowing Date and (vii) the payment of fees
and expenses owing in connection with the foregoing.
"Transaction Date" shall have the meaning set forth in Section 5.15 (xii)
of this Agreement.
"Type" means the type of Loan determined with regard to the interest option
applicable thereto, i.e. whether a Base Rate Loan or a Eurodollar Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the relevant jurisdiction.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Unutilized Revolving Loan Commitment" means, with respect to any Lender,
at any time, such Lender's Revolving Loan Commitment at such time less the sum
of (x) the aggregate principal amount of all Revolving Loans made by such Lender
then outstanding and (y) such Lender's RL Percentage of the Aggregate LC
Exposure at such time.
"United States" means the United States of America.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose Capital Stock (other than director's qualifying shares) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any partnership, association, joint venture or other entity in
which such Person and/or one or more Wholly-Owned Subsidiaries of such Person
has a 100% equity interest at such time.
Section 1.02. Accounting Terms and Determinations. The definitions in
Section 1.01 shall apply equally to both 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". All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. Except
as otherwise expressly provided herein, (a) any reference in this Agreement to
any Loan Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time provided that, if the Borrower notifies the Agent that the Borrower
wishes to amend any provision hereof to eliminate the effect of any change in
GAAP (or if the Agent notifies the Borrower that the Required Lenders wish to
amend any provision hereof for such purpose), then such provision shall be
applied on the basis of GAAP in effect immediately before the relevant change in
GAAP became effective, until either such notice is withdrawn or such provision
is amended in a manner satisfactory to the Borrower and the Required Lenders.
ARTICLE II
The Credits
Section 2.01. Commitments to Lend. (a) Subject to and upon the terms and
conditions set forth herein, each Lender with a Tranche A Term Loan Commitment
severally agrees to make, on the Initial Borrowing Date, a term loan or term
loans (each, a "Tranche A Term Loan" and, collectively, the "Tranche A Term
Loans") to the Borrower, which Tranche A Term Loans (i) shall be denominated in
Dollars, (ii) shall, at the option of the Borrower, be incurred and maintained
as, and/or converted into, Base Rate Loans or Euro-Dollar Loans, provided that
all Tranche A Term Loans comprising the same Borrowing of Tranche A Term Loans
shall, unless otherwise specifically provided herein, consist of Tranche A Term
Loans of the same Type and (iii) shall be made by each such Lender in that
initial aggregate principal amount as is equal to the Tranche A Term Loan
Commitment of such Lender on the Initial Borrowing Date. Once repaid, Tranche A
Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Lender with a Tranche B Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan or term loans (each, a "Tranche B Term Loan"
and, collectively, the "Tranche B Term Loans") to the Borrower, which Tranche B
Term Loans (i) shall be denominated in Dollars, (ii) shall, at the option of the
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or Euro-Dollar Loans, provided that all Tranche B Term Loans comprising the same
Borrowing of Tranche B Term Loans shall, unless otherwise specifically provided
herein, consist of Tranche B Term Loans of the same Type and (iii) shall be made
by each such Lender in that initial aggregate principal amount as is equal to
the Tranche B Term Loan Commitment of such Lender on the Initial Borrowing Date.
Once repaid, Tranche B Term Loans incurred hereunder may not be reborrowed.
(c) Subject to and upon the terms and conditions set forth herein, each
Lender with a Revolving Loan Commitment severally agrees, at any time and from
time to time during the Revolving Credit Period, to make a revolving loan or
revolving loans (each, a "Revolving Loan" and, collectively, the "Revolving
Loans") to the Borrower, which Revolving Loans (i) shall be denominated in
Dollars, (ii) shall, at the option of the Borrower, be incurred and maintained
as and/or converted into Base Rate Loans or Euro-Dollar Loans, provided, that
all Revolving Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type, (iii)
may be repaid and reborrowed in accordance with the provisions hereof and (iv)
shall not exceed for any Lender at any time outstanding that aggregate principal
amount which, when combined with the sum of (I) the aggregate principal amount
of all other then outstanding Revolving Loans made by such Lender and (II) the
product of (A) such Lender's RL Percentage multiplied by (B) the sum of (x) the
Aggregate LC Exposure (exclusive of LC Reimbursement Obligations which are paid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (y) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Lender at such time.
(d) Subject to and upon the terms and conditions set forth herein, the
Swingline Lender agrees to make at any time and from time to time after the
Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan
or revolving loans to the Borrower (each, a "Swingline Loan" and, collectively,
the "Swingline Loans"), which Swingline Loans (i) shall be made and maintained
as Base Rate Loans, (ii) shall be denominated in Dollars, (iii) may be repaid
and reborrowed in accordance with the provisions hereof, (iv) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding and the
Aggregate LC Exposure (exclusive of LC Reimbursement Obligations which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Swingline Loans) at such time, an amount equal to the
Total Revolving Loan Commitment then in effect and (v) shall not exceed in
aggregate principal amount at any time outstanding the Maximum Swingline Amount.
The Swingline Lender shall not be obligated to make any Swingline Loans at a
time when a Lender Default exists unless the Swingline Lender has entered into
arrangements satisfactory to it and the Borrower to eliminate the Swingline
Lender's risk with respect to the Defaulting Lender's or Lenders' participation
in such Swingline Loans, including by cash collateralizing such Defaulting
Lender's or Lenders' RL Percentage of the outstanding Swingline Loans. The
Swingline Lender will not make a Swingline Loan after it has received written
notice from the Borrower or the Required Lenders stating that a Default exists
until such time as the Swingline Lender shall have received a written notice of
(i) rescission of such notice from the party or parties originally delivering
the same or (ii) a waiver of such Default from the Required Lenders.
(e) On any Business Day, the Swingline Lender may, in its sole discretion,
give notice to the RL Lenders that its outstanding Swingline Loans shall be
funded with a Borrowing of Revolving Loans (provided that each such notice shall
be deemed to have been automatically given upon occurrence of a Default under
Section 6.01(g) or (h) or upon the exercise of any remedies provided in the last
paragraph of Section 6.01), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all RL Lenders pro
rata based on each RL Lender's RL Percentage, and the proceeds thereof shall be
applied directly to repay the Swingline Lender for such outstanding Swingline
Loans. Each such Lender hereby irrevocably agrees to make Base Rate Loans upon
one Business Day's notice pursuant to each Mandatory Borrowing in the amount and
in the manner specified in the preceding sentence and on the date specified in
writing by the Swingline Lender notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) whether any conditions specified in Section 3.02 are
then satisfied, (iii) whether a Default or an Event of Default has occurred and
is continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction
in the Total Revolving Loan Commitment after any such Swingline Loans were made.
In the event that an Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each RL Lender (other than the Swingline Lender) hereby agrees that
it shall forthwith purchase from the Swingline Lender (without recourse or
warranty) such assignment of the outstanding Swingline Loans as shall be
necessary to cause the RL Lenders to share in such Swingline Loans ratably based
upon their respective RL Percentages, provided that all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until the date
the respective assignment is purchased and, to the extent attributable to the
purchased assignment, shall be payable to the RL Lender purchasing same from and
after such date of purchase.
Section 2.02. Minimum Borrowing Amounts, etc.; Pro rata Borrowings. (a) The
aggregate principal amount of each Borrowing of Loans under any Tranche shall
not be less than the respective Minimum Borrowing Amount for such Tranche;
provided that Mandatory Borrowings shall be made in amounts required by Section
2.01(e). More than one Borrowing may occur on the same date, but at no time
shall there be outstanding more than 10 Borrowings of Euro-Dollar Loans.
(b) All Borrowings of Tranche A Term Loans, Tranche B Term Loans and
Revolving Loans under this Agreement shall be incurred from the Lenders pro rata
on the basis of their Tranche A Term Loan Commitments, Tranche B Term Loan
Commitments or Revolving Loan Commitments, as the case may be. It is understood
that no Lender shall be responsible for any default by any other Lender of its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans to be made by it hereunder, regardless of the failure of any
other Lender to make its Loans hereunder.
Section 2.03. Method of Borrowing. (a) Whenever the Borrower desires to
incur Loans hereunder (excluding Borrowings of Swingline Loans and Revolving
Loans incurred pursuant to a Mandatory Borrowing) it shall give the Agent notice
(a "Notice of Borrowing") no later than 11:00 A.M. (New York City time) on (x)
the date of each Base Rate Borrowing and (y) the third Business Day before each
Euro-Dollar Borrowing. Each such Notice of Borrowing shall be given by written
communication (or telephonic communication promptly confirmed in writing) and
shall specify:
(i) the date of such Borrowing (which shall be a Business Day);
(ii) the aggregate principal amount of the Loans to be incurred
pursuant to such Borrowing;
(iii) whether the Loans being incurred pursuant to such Borrowing
shall constitute Tranche A Term Loans, Tranche B Term Loans or
Revolving Loans;
(iv) whether the Loans comprising such Borrowing are to bear
interest initially at the Base Rate or a Euro-Dollar Rate; and
(v) in the case of a Euro-Dollar Borrowing, the duration of the
initial Interest Period applicable thereto, subject to the provisions of
the definition of Interest Period.
(b) Promptly after receiving a Notice of Borrowing, the Agent shall notify
each Lender which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing of the contents thereof and of such Lender's
ratable share of such Borrowing, and such Notice of Borrowing shall not
thereafter be revocable by the Borrower.
(c) (i) Whenever the Borrower desires to incur Swingline Loans hereunder,
it shall give the Swingline Lender not later than 2:00 P.M. (New York City
time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Loan to
be made hereunder. Each such notice shall be irrevocable and shall specify
in each case (x) the date of such Borrowing (which shall be a Business Day)
and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 2.01 (e), with the Borrower irrevocably agreeing, by its incurrence
of any Swingline Loan, to the making of Mandatory Borrowings as set forth
in such Section 2.01(e).
(d) No later than 1:00 P.M. (New York City time) on the date of each
Borrowing (or (x) in the case of Swingline Loans, no later than 2:00 P.M. (New
York City time) on the date specified in Section 2.03 (c)(i) or (y) in the case
of Revolving Loans incurred pursuant to Mandatory Borrowings, no later than
12:00 Noon (New York City time) on the date specified in Section 2.01 (e)), each
Lender with a Commitment of the respective Tranche shall make available its
ratable share of such Borrowing (or, in the case of Swingline Loans, the
Swingline Lender will make available the full amount thereof), in Federal or
other funds immediately available in New York City, to the Agent at its address
specified in or pursuant to Section 10.01. The failure of any Lender to make
available such funds shall not relieve any other Lender of its obligations
hereunder. Unless the Agent determines that any applicable condition specified
in Article 3 has not been satisfied, the Agent will make any funds so received
from the Lenders available to the Borrower in Federal or other funds immediately
available in New York City no later than 2:00 P.M. (or, in the case of Swingline
Loans, 3:00 P.M.) (New York City time) on the date of such Borrowing by credit
to an account of the Borrower at the Agent's aforesaid address or to such other
account of the Borrower in New York City as may have been specified in the
applicable Notice of Borrowing and as shall be reasonably acceptable to the
Agent.
(e) Unless the Agent shall have received notice from a Lender before the
date of any Borrowing that such Lender will not make available to the Agent such
Lender's share of such Borrowing, the Agent may assume that such Lender has made
such share available to the Agent on the date of such Borrowing in accordance
with subsection (d) of this Section, and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have so made such share
available to the Agent, such Lender and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i) if such
amount is repaid by the Borrower, a rate per annum equal to the higher of the
Federal Funds Rate and the interest rate applicable thereto pursuant to Section
2.05 and (ii) if such amount is repaid by such Lender, the Federal Funds Rate.
If such Lender shall repay to the Agent such corresponding amount, the Borrower
shall not be required to repay such amount and the amount so repaid by such
Lender shall constitute such Lender's Loan included in such Borrowing for
purposes of this Agreement.
Section 2.04. Maturity of Loans. Each Loan shall mature, and the principal
amount thereof shall be due and payable (together with interest accrued
thereon), on (x) in the case of Swingline Loans, the Swingline Expiry Date and
(y) in the case of Term Loans and Revolving Loans, the respective Maturity Date.
Section 2.05. Interest Rates. (a) Each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until the earlier of (i) the maturity thereof (whether by
acceleration or otherwise) and (ii) the conversion of such Base Rate Loan into a
Euro-Dollar Loan pursuant to Section 2.06, at a rate per annum equal to the sum
of (x) the Applicable Base Rate Margin plus (y) the Base Rate for such day. Such
interest shall be payable quarterly in arrears on each Quarterly Payment Date
and, with respect to the principal amount of any Base Rate Loan converted to a
Euro-Dollar Loan, on the date such amount is so converted. Any overdue principal
of or interest on any Base Rate Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus the
Applicable Base Rate Margin for such day plus the Base Rate for such day.
(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal
amount thereof, for each day during each Interest Period applicable thereto
until the earlier of (i) the maturity thereof (whether by acceleration or
otherwise) and (ii) the conversion of such Euro-Dollar Loan into a Base Rate
Loan pursuant to Section 2.06 or Article 8, as applicable, at a rate per annum
equal to the sum of (x) the Applicable Euro-Dollar Margin plus (y) the Adjusted
London Interbank Offered Rate applicable to such Interest Period. Such interest
shall be payable (x) on the date of any conversion into a Base Rate Loan
pursuant to Section 2.06 or Article 8, as applicable (on the amount so
converted) and (y) for each Interest Period, on the last day thereof and, if
such Interest Period is longer than three months, at intervals of three months
after the first day thereof.
(c) Any overdue principal of or interest on any Euro-Dollar Loan shall bear
interest, payable on demand, for each day until paid at a rate per annum equal
to the higher of (i) the sum of 2% plus the Applicable Euro-Dollar Margin plus
the Adjusted London Interbank Offered Rate applicable to such Loan on the day
before such payment was due and (ii) the sum of 2% plus the Applicable Base Rate
Margin plus the Base Rate for such day (or, if the circumstances described in
clause (a) or (b) of Section 8.01 shall exist, at a rate per annum equal to the
sum of 2% plus the Applicable Base Rate Margin plus the Base Rate for such day).
(d) The Agent shall determine each interest rate applicable to the Loans
hereunder. The Agent shall promptly notify the Borrower and the participating
Lenders of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
(e) Each Reference Lender agrees to use its best efforts to furnish
quotations to the Agent as contemplated by the definition of London Interbank
Offered Rate. If any Reference Lender does not furnish a timely quotation, the
Agent shall determine the relevant interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Lender or Lenders or, if none
of such quotations is available on a timely basis, the provisions of Section
8.01 shall apply.
Section 2.06. Method of Electing Interest Rates. (a) The Loans included in
each Borrowing shall bear interest initially at the type of rate specified by
the Borrower in the applicable Notice of Borrowing. Thereafter, the Borrower may
from time to time elect to change or continue the type of interest rate borne by
each Borrowing (subject to subsection (d) of this Section and the provisions of
Article 8), as follows:
(i) if such Loans are Base Rate Loans, the Borrower may elect to
convert such Loans to Euro-Dollar Loans as of any Business Day, and
(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to
convert such Loans to Base Rate Loans or elect to continue such Loans as
Euro-Dollar Loans for an additional Interest Period, subject to Section
2.13 if any such conversion is effective on any day other than the last day
of an Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a "Notice of
Interest Rate Election") to the Agent no later than 11:00 A.M. (New York
City time) on the third Business Day before the conversion or continuation
selected in such notice is to be effective. A Notice of Interest Rate
Election may, if it so specifies, apply to only a portion of the aggregate
principal amount of the relevant Borrowing; provided that (i) such portion
shall be allocated ratably among the Loans comprising such Borrowing and
(ii) the portion to which such Notice applies, and the remaining portion to
which it does not apply, shall each be at least equal to the Minimum
Borrowing Amount applicable thereto. If no such notice is timely received
before the end of an Interest Period for any Borrowing of Euro-Dollar
Loans, the Borrower shall be deemed to have elected that such Borrowing of
Euro-Dollar be converted to Base Rate Loans at the end of such Interest
Period.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Borrowing (or portion thereof) to which such notice applies;
(ii) the date on which the conversion or continuation selected in such
notice is to be effective, which shall comply with the applicable clause of
subsection (a) above;
(iii)if the Loans comprising such Borrowing are to be converted, the
new type of Loans and, if the Loans resulting from such conversion are to
be Euro-Dollar Loans, the duration of the next succeeding Interest Period
applicable thereto; and
(iv) if such Loans are to be continued as Euro-Dollar Loans for an
additional Interest Period, the duration of such additional Interest
Period.
Each Interest Period specified in a Notice of Interest Rate Election
shall comply with the provisions of the definition of Interest Period.
(c) Promptly after receiving a Notice of Interest Rate Election from the
Borrower pursuant to subsection (a) above, the Agent shall notify each Lender of
the contents thereof and such notice shall not thereafter be revocable by the
Borrower.
(d) The Borrower shall not be entitled to elect to convert any Loans to, or
continue any Loans for an additional Interest Period as, Euro-Dollar Loans if
(i) the aggregate principal amounts of any Borrowing of Euro-Dollar Loans
created or continued as a result of such election would be less than the Minimum
Borrowing Amount applicable thereto or (ii) a Default shall have occurred and be
continuing when the Borrower delivers notice of such election to the Agent.
Section 2.07. Fees. (a) The Borrower shall pay to the Agent, for the
account of each RL Lender that is a Non-Defaulting Lender, a commitment fee (the
"Commitment Fee") computed at the rate for each day equal to the Applicable
Commitment Fee Percentage on the daily Unutilized Revolving Loan Commitment for
such Lender. The Commitment Fee shall accrue from and including the Effective
Date to but excluding the date on which the Total Revolving Loan Commitment
terminates in its entirety.
(b) The Borrower shall pay to the Agent, for the several account of each RL
Lender that is a Non-Defaulting Lender ratably in proportion to their RL
Percentages, a letter of credit fee (the "LC Fee") for each day computed at a
rate per annum equal to the Applicable Margin for Revolving Loans maintained as
Euro-Dollar Loans on the aggregate Stated Amounts under all Letters of Credit
outstanding at the close of business on such day. The Borrower shall pay to each
LC Issuing Bank a fronting fee (the "Fronting Fee") for each day of 0.25% per
annum on the aggregate Stated Amounts under all Letters of Credit issued by such
LC Issuing Bank and outstanding at the close of business on such day, and other
standard and customary processing charges.
(c) Fees accrued for the several accounts of the Lenders under this Section
shall be payable quarterly in arrears on each Quarterly Payment Date and on the
day on which the Total Revolving Loan Commitment terminates in its entirety.
(d) The Borrower shall pay when due to the Agent, for its own account, such
other fees as have been agreed to in writing by the Borrower and the Agent.
Section 2.08. Optional Termination or Reduction of Commitments. (a) The
Borrower may (without premium or penalty), upon at least three Business Days'
notice to the Agent, terminate or partially reduce the Total Unutilized
Revolving Loan Commitments, provided that (i) each such reduction shall apply
proportionately to permanently reduce the Revolving Loan Commitment of each RL
Lender and (ii) any partial reduction to the Total Unutilized Revolving Loan
Commitment pursuant to this Section 2.08 shall be in an amount of at least
$5,000,000 and, if greater, in integral multiples of $1,000,000. Promptly after
receiving a notice pursuant to this Section, the Agent shall notify each Lender
of the contents thereof.
Section 2.09. Mandatory Reduction of Commitments. (a) The Total Commitment
(and the Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment and
the Revolving Loan Commitment of each Lender) shall terminate in its entirety on
March 31, 1998 unless the Initial Borrowing Date shall have occurred on or prior
to such date.
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, the Total Tranche A Term Loan Commitment (and the Tranche A
Term Loan Commitment of each Bank) shall terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of the Tranche A Term
Loans on such date).
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, the Total Tranche B Term Loan Commitment (and the Tranche B
Term Loan Commitment of each Lender) shall terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of the Tranche B Term
Loans on such date).
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, in the event that any Existing PST Senior Secured Notes
remain outstanding on the Initial Borrowing Date (after giving effect to the
consummation of the Existing PST Senior Secured Notes Tender Offer/Consent
Solicitation), the Total Term Loan Commitment shall be permanently reduced on
such date by an amount equal to the amount which would have been paid to the
holders of such notes had the same been tendered pursuant to the Existing PST
Senior Secured Notes Tender Offer/Consent Solicitation. Each reduction to the
Total Term Loan Commitment as required by this Section 2.09(d) shall be applied
pro rata to reduce the Total Tranche A Term Loan Commitment and the Total
Tranche B Term Loan Commitment based upon the aggregate amount of Term Loan
Commitments of the respective Tranche. The amount of each reduction to the Total
Tranche A Term Loan Commitment and Total Tranche B Term Loan Commitment as
required by this Section 2.09(d) shall be applied pro rata to reduce the then
remaining Scheduled Repayments of the respective Tranche, based upon the then
remaining amount of each Scheduled Repayment of the respective Tranche, after
giving effect to all prior reductions thereto.
(e) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Lender) shall terminate in its entirety on the Revolving Loan
Maturity Date.
(f) In addition to any other mandatory commitment reductions pursuant to
this Section 2.09, on each date after the Initial Borrowing Date upon which a
mandatory prepayment of Term Loans pursuant to Section 2.10(d) through (f),
inclusive, is required (and exceeds in amount the aggregate principal amount of
Term Loans then outstanding) or would be required if Term Loans were then
outstanding, the Total Revolving Loan Commitment shall be permanently reduced by
the amount, if any, by which the amount required to be applied pursuant to said
Sections (determined as if an unlimited amount of Term Loans were actually
outstanding) exceeds the aggregate principal amount of Term Loans then
outstanding.
(g) Each reduction to the Total Tranche A Term Loan Commitment, the Total
Tranche B Term Loan Commitment and the Total Revolving Loan Commitment pursuant
to this Section 2.09 (or pursuant to Section 2.10) shall be applied
proportionately to reduce the Tranche A Term Loan Commitment, the Tranche B Term
Loan Commitment or the Revolving Loan Commitment, as the case may be, of each
Lender with such a Commitment.
Section 2.10. Mandatory Repayments. (a) On any day on which the sum of (i)
the aggregate outstanding principal amount of the Revolving Loans and Swingline
Loans (after giving effect to all other repayments thereof on such date) and
(ii) the Aggregate LC Exposure exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower shall prepay on such date principal of Swingline
Loans and to the extent no Swingline Loans are or remain outstanding, Revolving
Loans, in an amount equal to such excess. If, after giving effect to the
prepayment of all outstanding Swingline Loans and Revolving Loans, the Aggregate
LC Exposure exceeds the Total Revolving Loan Commitment as then in effect, the
Borrower agrees to pay to the Agent an amount in cash and/or Cash Equivalents
equal to such excess (up to the amount of the Aggregate LC Exposure at such
time) and the Agent shall hold such payment as security for the obligations of
the Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance reasonably satisfactory to the Agent, provided that
if the Revolving Loan Commitments shall have been terminated, all other amounts
payable hereunder shall have been paid in full and no Default shall have
occurred and be continuing, the Agent shall from time to time upon the request
of the Borrower return to the Borrower such portion of such amount as the Agent
in its sole discretion determines is no longer needed to provide cover for
Aggregate LC Exposure and related fees and expenses payable under this
Agreement.
(b) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 2.10, on each date set forth below, the Borrower shall
be required to repay that principal amount of Tranche A Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 2.09(d), 2.10(g)
and 2.11, a "Tranche A Scheduled Repayment," and each such date, a "Tranche A
Scheduled Repayment Date"):
Tranche A
Scheduled Repayment Date Amount
------------------------ ------
June 30, 1998 $ 625,000
September 30, 1998 $ 625,000
December 31, 1998 $ 625,000
March 31, 1999 $ 625,000
June 30, 1999 $ 625,000
September 30, 1999 $ 625,000
December 31, 1999 $ 625,000
March 31, 2000 $ 625,000
June 30, 2000 $1,250,000
September 30, 2000 $1,250,000
December 31, 2000 $1,250,000
March 31, 2001 $1,250,000
June 30, 2001 $1,250,000
September 30, 2001 $1,250,000
December 31, 2001 $1,250,000
March 31, 2002 $1,250,000
June 30, 2002 $3,750,000
September 30, 2002 $3,750,000
December 31, 2002 $3,750,000
March 31, 2003 $3,750,000
June 30, 2003 $5,000,000
September 30, 2003 $5,000,000
December 31, 2003 $5,000,000
Tranche A Maturity Date $5,000,000
(c) In addition to any other mandatory repayments pursuant to this Section
2.10, on each date set forth below, the Borrower shall be required to repay that
principal amount of Tranche B Term Loans, to the extent then outstanding, as is
set forth opposite such date (each such repayment, as the same may be reduced as
provided in Sections 2.09(d), 2.10(g) and 2.11, a "Tranche B Scheduled
Repayment," and each such date, a "Tranche B Scheduled Repayment Date"):
Tranche B
Scheduled Repayment Date Amount
------------------------ ------
June 30, 1998 $ 162,500
September 30, 1998 $ 162,500
December 31, 1998 $ 162,500
March 31, 1999 $ 162,500
June 30, 1999 $ 162,500
September 30, 1999 $ 162,500
December 31, 1999 $ 162,500
March 31, 2000 $ 162,500
June 30, 2000 $ 162,500
September 30, 2000 $ 162,500
December 31, 2000 $ 162,500
March 31, 2001 $ 162,500
June 30, 2001 $ 162,500
September 30, 2001 $ 162,500
December 31, 2001 $ 162,500
March 31, 2002 $ 162,500
June 30, 2002 $ 162,500
September 30, 2002 $ 162,500
December 31, 2002 $ 162,500
March 31, 2003 $ 162,500
June 30, 2003 $ 162,500
September 30, 2003 $ 162,500
December 31, 2003 $ 162,500
March 31, 2004 $ 162,500
June 30, 2004 $7,150,000
September 30, 2004 $7,150,000
December 31, 2004 $7,150,000
March 31, 2005 $7,150,000
June 30, 2005 $8,125,000
September 30, 2005 $8,125,000
December 31, 2005 $8,125,000
Tranche B Maturity Date $8,125,000
(d) In addition to any other mandatory repayments pursuant to this
Section 2.10, on each date on or after the Effective Date upon which the
Borrower or any of its Subsidiaries receives any cash proceeds from any
Repayment Event, an amount equal to the Applicable Repayment Percentage of
the Net Cash Proceeds therefrom shall be applied as a mandatory repayment
of principal of Term Loans in accordance with the requirements of Sections
2.10(g) and (h); provided that with respect to (i) the disposition of
obsolete, unused or unnecessary equipment in the ordinary course of
business and (ii) no more than $10,000,000 in the aggregate for any Fiscal
Year and $25,000,000 in the aggregate during the term of this Agreement, in
each case, of Net Cash Proceeds received in connection with any Asset Sale
(other than pursuant to the immediately preceding clause (i)) (or
$100,000,000 in the case of the disposition of certain non-strategic assets
described to the Lenders prior to the Effective Date), the Net Cash
Proceeds, in each case, therefrom (such Net Cash Proceeds actually received
and not used to make repayments described above, the "Retained Asset Sale
Proceeds") shall not be required to be so applied on such date to the
extent no Default then exists and the Borrower delivers a certificate to
the Agent on or prior to such date stating that such Retained Asset Sale
Proceeds shall be used (or contractually committed to be used) for
reinvestment in other assets owned or to be owned by the Borrower or a
Subsidiary of the Borrower within 270-days following the date of such Asset
Sale (which certificate shall set forth the estimates of the proceeds to be
so expended) or to make Permitted Acquisitions in compliance with this
Agreement; provided further, that if all or any portion of the Retained
Asset Sale Proceeds not required to be so applied as provided in the
preceding proviso are not so used or contractually committed to be so used
within such 270-day period (or, to the extent contractually committed to be
so used, such contact expires or terminates without such portion being so
used), such remaining portion of the Net Cash Proceeds shall be applied on
the last day of such 270-day period or, to the extent contractually
committed to be used on the last day of such 270-day period, on any date
thereafter upon which the respective contract expires or terminates without
such portion being so used) as a mandatory repayment of principal of Term
Loans as provided above in this Section 2.10(d) (without regard to the
first proviso herein; (and provided further that any required payment
under this Section 2.10 with Net Cash Proceeds arising from assets which
are subject to the Existing PS&T Secured Senior Notes Indenture shall be
deferred until the provisions of such PS&T Secured Senior Notes Indenture
have been complied with and, to the extent any portion of such Net Cash
Proceeds shall have been required, pursuant to such provision, to be
applied to the redemption of any Existing PST Senior Secured Notes, such
required payment under this Section 2.10 shall be reduced by such portion.
(e) In addition to any other mandatory repayments pursuant to this
Section 2.10, on each Excess Cash Payment Date, an amount equal to the
Applicable Repayment Percentage of Excess Cash Flow for the most recent
Excess Cash Flow Period ending prior to such Excess Cash Payment Date shall
be applied as a mandatory repayment of principal of Term Loans in
accordance with the requirements of Sections 2.10(g) and (h).
(f) In addition to any other mandatory repayments pursuant to this
Section 2.10, within 10 days following each date after the Effective Date
on which the Borrower or any of its Subsidiaries receives any Major
Casualty Proceeds, an amount equal to 100% of such Major Casualty Proceeds
shall be applied as a mandatory repayment of principal of Term Loans in
accordance with the requirements of Sections 2.10(g) and (h); provided that
so long as no Default then exists, such Major Casualty Proceeds shall not
be required to be so applied on such date to the extent the Borrower has
delivered a certificate to the Agent stating that such Major Casualty
Proceeds shall be expended or committed to be expended to replace or
restore the asset or assets in respect of which such payment or award was
made, or to acquire assets of a type permitted pursuant to Section 5.04,
within 270 days following the date of receipt of such Major Casualty
Proceeds. The Major Casualty Proceeds not required to be applied as a
mandatory repayment of Term Loans as provided in the proviso to the
preceding sentence shall be deposited with the Agent in the Collateral
Account whereby such Major Casualty Proceeds shall be disbursed to the
Borrower from time to time as needed to pay actual costs incurred by it in
connection with the replacement or restoration of the respective assets, or
to acquire assets of a type permitted pursuant to Section 5.04, (subject to
reasonable certification requirements as may be established by the Agent),
provided that at any time that a Default has occurred and is continuing,
the Required Lenders may direct the Agent to apply any or all of such Major
Casualty Proceeds then on deposit in the Collateral Account to the
repayment of Term Loans as provided in this Section 2.10(f) (without
regard to the first proviso herein), provided further, that if all or any
portion of such Major Casualty Proceeds not required to be applied to the
repayment of Term Loans pursuant to the proviso in the preceding sentence
are not used or committed to be used within 270 days following the date on
which the Borrower or such Subsidiary received such Major Casualty
Proceeds, such remaining portion of the Major Casualty Proceeds shall be
applied on the last day of such 270 day period as a mandatory repayment of
principal of Term Loans as provided above in this Section 2.10(f) (without
regard to the proviso in the first sentence herein).
(g) Each amount required to be applied as a mandatory repayment of
Term Loans pursuant to Sections 2.10(d) through (f), inclusive, shall be
applied pro rata to each Tranche of Term Loans based upon the then
remaining principal amounts of the respective Tranches (with each Tranche
of Term Loans to be allocated that percentage of the amount to be applied
as is equal to a fraction (expressed as a percentage) the numerator of
which is the then outstanding principal amount of such Tranche of Term
Loans and the denominator of which is equal to the then outstanding
principal amount of all Term Loans); provided that if the amount of the Net
Cash Proceeds in respect of any Repayment Event is less than $2,500,000,
such repayment shall be made upon receipt of proceeds such that, together
with all other such amounts not previously applied, the amount of such Net
Cash Proceeds is equal to at least $2,500,000. The amount of each
repayment of Tranche A Term Loans and Tranche B Term Loans as required by
this Section 2.10(g) shall be applied to reduce the then remaining
Scheduled Repayments of the respective Tranche pro rata based upon the then
remaining principal amounts of the Scheduled Repayments of the respective
Tranche, after giving effect to all prior reductions thereto.
(h) With respect to each repayment of Loans pursuant to this Section
2.10, the Borrower may designate the Types of Loans of the respective
Tranche which are to be repaid and, in the case of Euro-Dollar Loans, the
specific Borrowing or Borrowings of the respective Tranche pursuant to
which made, provided that: (i) repayments of Euro-Dollar Loans pursuant to
this Section 2.10 may only be made on the last day of an Interest Period
applicable thereto unless all Euro-Dollar Loans of the respective Tranche
with Interest Periods ending on such date of required repayment and all
Base Rate Loans of the respective Tranche have been paid in full; (ii) if
any repayment of Euro-Dollar Loans made pursuant to a single Borrowing
shall reduce the outstanding Euro-Dollar Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans comprising a Borrowing shall be applied pro rata
among such Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Agent shall, subject to the above,
make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 2.13.
Notwithstanding the foregoing provisions of this Section 2.10, if at any
time the mandatory repayment of Term Loans pursuant to Sections 2.10(d)
through (f) above would result, after giving effect to the procedures set
forth above, in the Borrower incurring breakage costs under Section 2.13 as
a result of Euro-Dollar Loans being prepaid other than on the last day of
an Interest Period applicable thereto (the "Affected Euro-Dollar Loans"),
then the Borrower may, in its sole discretion and so long as no Default
then exists, initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Euro-Dollar Loans
with the Agent (which deposit must be equal in amount to the amount of
Affected Euro-Dollar Loans not immediately prepaid) to be held as security
for the obligations of the Borrower hereunder in the Collateral Account,
with such cash collateral to be directly applied upon the first occurrence
(or occurrences) thereafter of the last day of an Interest Period
applicable to the relevant Term Loans that are Euro-Dollar Loans (or such
earlier date or dates as shall be requested by the Borrower), to repay an
aggregate principal amount of such Term Loans equal to the Affected Euro-
Dollar Loans not initially repaid pursuant to this sentence. Notwithstanding
anything to the contrary contained in the immediately preceding sentence,
all amounts deposited as cash collateral pursuant to the immediately
preceding sentence shall be held for the sole benefit of the Lenders whose
Term Loans would otherwise have been immediately repaid with the amounts
deposited and upon the taking of any action by the Agent or the Lenders
pursuant to the remedial provisions of Section 6.01, any amounts held as
cash collateral pursuant to this Section 2.10(h) shall, subject to the
requirements of applicable law, be immediately applied to such respective
Tranches of Term Loans.
Section 2.11. Optional Prepayments. (a) The Borrower shall have the
right to prepay the Loans made to it, in whole or in part, without premium
or penalty, at any time and from time to time on the following terms and
conditions: (i) the Borrower shall give the Agent written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
such Loans, whether such Loans are Term Loans, Revolving Loans or Swingline
Loans, the amount of such prepayment and the Types of Loans to be prepaid
and, in the case of Euro-Dollar Loans, the specific Borrowing or Borrowings
pursuant to which made, which notice shall be given by the Borrower prior
to 11:00 A.M. (New York City time) (x) on the date of such prepayment in
the case of Term Loans or Revolving Loans maintained as Base Rate Loans,
(y) on the date of such prepayment in the case of Swingline Loans and (z)
at least three Business Days prior to the date of such prepayment in the
case of Loans maintained as Euro-Dollar Loans; (ii) each prepayment made
pursuant to this Section 2.11 shall be in an aggregate principal amount of
at least $1,000,000 (or $250,000 in the case of Swingline Loans), provided
that no partial prepayment of Euro-Dollar Loans made pursuant to a
Borrowing shall reduce the aggregate principal amount of Euro-Dollar Loans
outstanding pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto; (iii) each prepayment of Loans made
pursuant to a Borrowing pursuant to this Section 2.11 shall be applied pro
rata among such Loans; (iv) each prepayment of Term Loans pursuant to this
Section 2.11 shall be applied to each Tranche of Term Loans on a pro rata
basis (based on the then outstanding principal amount of such Tranche of
Term Loans); (v) each prepayment of Tranche A Term Loans pursuant to this
Section 2.11 shall be applied to reduce the then remaining Tranche A
Scheduled Repayments on a pro rata basis (based on the then remaining
principal amount of each Tranche A Schedule Repayment); and (vi) each
prepayment of Tranche B Term Loans pursuant to this Section 2.11 shall be
applied to reduce the then remaining Tranche B Scheduled Repayments on a
pro rata basis (based on the then remaining principal amount of each
Tranche B Scheduled Repayment).
(b) Promptly after receiving a notice of prepayment of Loans (other
than Swingline Loans) pursuant to this Section, the Agent shall notify each
Lender to receive the proceeds thereof of the contents thereof and of such
Lender's ratable share of such prepayment, and such notice shall not
thereafter be revocable by the Borrower.
Section 2.12. General Provisions as to Payments. (a) Except as
otherwise specifically provided herein, the Borrower shall make each
payment of principal of, and interest on, the Loans and LC Reimbursement
Obligations and each payment of fees hereunder (other than fees payable
directly to the LC Issuing Banks) not later than 1:00 P.M. (New York City
time) on the date when due, in Federal or other funds immediately available
in New York City, to the Agent at its address specified in or pursuant to
Section 10.01. Any payments under this Agreement which are made later than
1:00 P.M. (New York City time) shall be deemed to have been made on the
next succeeding Business Day. The Agent will promptly distribute to each
Lender its ratable share of each such payment received by the Agent for the
account of the Lenders. Whenever any payment of principal of, or interest
on, the Loans or LC Reimbursement Obligations or of fees shall be due on a
day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day, unless, in the case of
payments in respect of Euro-Dollar Loans, such Business Day falls in
another calendar month, in which case the date for payment thereof shall be
the next preceding Business Day. If the date for any payment of principal
is extended by operation of law or otherwise, interest thereon shall be
payable for such extended time.
(b) Unless the Borrower notifies the Agent before the date on which
any payment is due to the Lenders hereunder that the Borrower will not make
such payment in full, the Agent may assume that the Borrower has made such
payment in full to the Agent on such date, and the Agent may, in reliance
on such assumption, cause to be distributed to each Lender on such due date
an amount equal to the amount then due such Lender. If and to the extent
that the Borrower shall not have so made such payment, each Lender shall
repay to the Agent forthwith on demand such amount distributed to such
Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
Section 2.13. Funding Losses. If the Borrower makes any payment of
principal with respect to any Euro-Dollar Loan or any Euro-Dollar Loan is
converted to a different Type of Loan (whether such payment or conversion is
pursuant to Article 2, 6 or 8 or otherwise) on any day other than the last day
of an Interest Period applicable thereto, or the last day of an applicable
period fixed pursuant to Section 2.05(c), or if the Borrower fails to borrow,
prepay, convert or continue any Euro-Dollar Loan after notice has been given
to any Bank in accordance with Section 2.03, 2.06 or 2.11, the Borrower shall
reimburse each Lender within 15 days after demand by such Lender for any
resulting loss or expense incurred by it (or, without duplication, by an
existing or prospective participant in the related Loan), including (without
limitation) any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after such
payment or conversion or failure to borrow, prepay, convert or continue;
provided that such Lender shall have delivered to the Borrower a certificate
as to the amount of such loss or expense and its method of calculation, which
certificate shall be conclusive in the absence of manifest error.
Section 2.14. Computation of Interest and Fees. All interest (other than
interest on Base Rate Loans) and fees shall be computed on the basis of a year
of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day). All interest on Base Rate Loans
shall be computed on the basis of a year of 365 days and paid for the
actual number of days elapsed (including the first day but excluding the
last day).
Section 2.15. Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made to it by each Lender shall be
evidenced (i) if Tranche A Term Loans, by a promissory note duly executed
and delivered by the Borrower substantially in the form of Exhibit A-1 with
blanks appropriately completed in conformity herewith (each, a "Tranche A
Term Note" and, collectively, the "Tranche A Term Notes"), (ii) if Tranche
B Term Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit A-2 with blanks appropriately
completed in conformity herewith (each, a "Tranche B Term Note" and,
collectively, the "Tranche B Term Notes"), (iii) if Revolving Loans, by a
promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit A-3, with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the
"Revolving Notes") and (iv) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit
A-4 with blanks appropriately completed in conformity herewith (the
"Swingline Note").
(b) The Tranche A Term Note issued to each Lender that has a Tranche
A Term Loan Commitment or outstanding Tranche A Term Loans shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, the date of issuance thereof), (iii) be in a stated
principal amount equal to the Tranche A Term Loans made by such Lender on
the Initial Borrowing Date (or, if issued after the Initial Borrowing Date,
be in a stated principal amount equal to the outstanding principal amount
of Tranche A Term Loans of such Lender at such time) and be payable in
Dollars in the outstanding principal amount of Tranche A Term Loans
evidenced thereby, (iv) mature on the Tranche A Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 2.05 in respect
of the Base Rate Loans and Euro-Dollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
2.11 and mandatory repayment as provided in Section 2.10 and (vii) be
entitled to the benefits of this Agreement and the other Loan Documents.
(c) The Tranche B Term Note issued to each Lender that has a Tranche
B Term Loan Commitment or outstanding Tranche B Term Loans shall (i) be
executed by the Borrower, (ii) be payable to the order of such Lender and
be dated the Initial Borrowing Date (or, if issued after the Initial
Borrowing Date, the date of issuance thereof), (iii) be in a stated
principal amount equal to the Tranche B Term Loans made by such Lender on
the Initial Borrowing Date (or, if issued after the Initial Borrowing Date,
be in a stated principal amount equal to the outstanding principal amount
of Tranche B Term Loans of such Bank at such time) and be payable in
Dollars in the outstanding principal amount of Tranche B Term Loans
evidenced thereby, (iv) mature on the Tranche B Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 2.05 in respect
of the Base Rate Loans and Euro-Dollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section
2.11 and mandatory repayment as provided in Section 2.10 and (vii) be
entitled to the benefits of this Agreement and the other Loan Documents.
(d) The Revolving Note issued to each Lender that has a Revolving Loan
Commitment or outstanding Revolving Loans shall (i) be executed by the
Borrower, (ii) be payable to the order of such Lender and be dated the
Initial Borrowing Date (or, if issued after the Initial Borrowing Date, the
date of issuance thereof), (iii) be in a stated principal amount equal to
the Revolving Loan Commitment of such Bank (or, if issued after the
termination thereof, be in a stated principal amount equal to the
outstanding Revolving Loans of such Lender at such time) and be payable in
Dollars in the outstanding principal amount of the Revolving Loans
evidenced thereby, (iv) mature on the Revolving Loan Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 2.05 in
respect of the Base Rate Loans and Euro-Dollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 2.11 and mandatory repayment as provided in Section 2.10 and (vii)
be entitled to the benefits of this Agreement and the other Loan Documents.
(e) The Swingline Note issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the order of the Swingline
Lender and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in
Dollars in the outstanding principal amount of the Swingline Loans
evidenced thereby, (iv) mature on the Swingline Expiry Date, (v) bear
interest as provided in Section 2.05 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 2.11 and mandatory repayment as provided in Section 2.10(a) and
(vii) be entitled to the benefits of this Agreement and the other Loan
Documents.
(f) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the schedule forming a part thereof
the outstanding principal amount of Loans evidenced thereby. Failure to
make any such notation or any error in any such notation or endorsement
shall not affect the Borrower's obligations in respect of such Loans.
Section 2.16. Letters of Credit. (a) Issuance. Each LC Issuing
Bank agrees, on the terms and conditions set forth in this Agreement, to
issue Letters of Credit hereunder at the request of the Borrower from time
to time prior to the date that is 30 days before the Revolving Loan
Maturity Date; provided that, immediately after each such Letter of Credit
is issued and participations therein are sold to the Banks as provided in
this subsection:
(i) the Aggregate LC Exposure shall not exceed $20,000,000; and
(ii) the sum of (i) the Aggregate LC Exposure and (ii) the aggregate
principal amount of all Revolving Loans and Swingline Loans then
outstanding shall not exceed the Total Revolving Loan Commitment as then
in effect.
Whenever an LC Issuing Bank issues a Letter of Credit hereunder, such LC
Issuing Bank shall be deemed, without further action by any party hereto,
to have sold to each other RL Lender, and each such RL Lender shall be
deemed, without further action by any party hereto, to have purchased from
such LC Issuing Bank, without recourse or warranty, a participation in such
Letter of Credit, on the terms specified in this Section, equal to such RL
Lender's RL Percentage thereof.
(b) Notice of Proposed Issuance. With respect to each Letter of Credit, the
Borrower shall give the respective LC Issuing Bank and the Agent at least five
(5) Business Days' prior notice (i) specifying the date such Letter of Credit is
to be issued and (ii) describing the proposed terms of such Letter of Credit and
the nature of the transactions to be supported thereby. Promptly after it
receives such notice, the Agent shall notify each RL Lender of the contents
thereof.
(c) Conditions to Issuance. No LC Issuing Bank shall issue any Letter of
Credit unless:
(i) such Letter of Credit shall be satisfactory in form and substance
to such LC Issuing Bank,
(ii) the Borrower shall have executed and delivered such other
instruments and agreements relating to such Letter of Credit as such LC
Issuing Bank shall have reasonably requested,
(iii) such LC Issuing Bank shall have confirmed with the Agent on the
date of such issuance that the limitations specified in clauses (i) and
(ii) of subsection (a) of this Section will not be exceeded immediately
after such Letter of Credit is issued, and
(iv) such LC Issuing Bank shall not have been notified in writing by
the Borrower, the Required Lenders or the Agent expressly to the effect
that any condition specified in clause (c) or (d) of Section 3.02 is not
satisfied at the time such Letter of Credit is to be issued.
(d) Expiry Dates. No Letter of Credit shall have an expiry date later than
the fifth (5th) Business Day before the Revolving Loan Maturity Date. Subject to
the preceding sentence, each Letter of Credit issued hereunder shall expire on
or before the first anniversary of the date of such issuance; provided that the
expiry date of any Letter of Credit may be extended from time to time (i) at the
Borrower's request for a period not exceeding one year or (ii) in the case of an
Evergreen Letter of Credit, automatically, in each case so long as such
extension is granted (or the last day on which notice can be given to prevent
such extension occurs) no earlier than three (3) months before the then existing
expiry date thereof.
(e) Notice of Proposed Extensions of Expiry Dates. The relevant LC Issuing
Bank shall give the Agent at least three (3) Business Days' notice before such
LC Issuing Bank extends (or allows an automatic extension of) the expiry date of
any Letter of Credit issued by it. Such notice shall identify such Letter of
Credit, the date on which it is to be extended (or the last day on which notice
can be given to prevent such extension) and the date to which it is to be
extended. Promptly after it receives such notice, the Agent shall notify each RL
Lender of the contents thereof. No LC Issuing Bank shall extend (or allow the
extension of) the expiry date of any Letter of Credit if (x) such extension does
not comply with subsection (d) of this Section, (y) such LC Issuing Bank shall
not have confirmed with the Agent on the date of such extension that the
limitations specified in clauses (i) and (ii) of subsection (a) of this Section
will not be exceeded immediately after such Letter of Credit is extended, or (z)
such LC Issuing Bank shall have been notified by the Borrower, the Required
Lenders or the Agent expressly to the effect that any condition specified in
clause (c) or (d) of Section 3.02 is not satisfied at the time of such proposed
extension.
(f) Notice of Actual Issuances and Extensions. Promptly after it issues any
Letter of Credit or extends any Letter of Credit (or allows any Evergreen Letter
of Credit to be extended), the relevant LC Issuing Bank will notify the Agent of
the date, face amount, beneficiary or beneficiaries and expiry date or extended
expiry date of such Letter of Credit. Promptly after it receives such notice,
the Agent shall notify each RL Bank of the contents thereof and the amount of
such RL Lender's participation in such Letter of Credit. Promptly after it
issues any Letter of Credit, the relevant LC Issuing Bank will send a copy of
such Letter of Credit to the Agent.
(g) Drawings. If an LC Issuing Bank receives a demand for payment under any
Letter of Credit issued by it and determines that such demand should be honored,
such LC Issuing Bank shall (i) promptly notify the Borrower and the Agent as to
the amount to be paid by such LC Issuing Bank as a result of such demand and the
date of such payment (an "LC Payment Date") and (ii) make such payment in
accordance with the terms of such Letter of Credit.
(h) Reimbursement by the Borrower. (A) If any amount is drawn under any
Letter of Credit, the Borrower irrevocably and unconditionally agrees to
reimburse the relevant LC Issuing Bank for such amount, together with any and
all reasonable charges and expenses which such LC Issuing Bank may pay or incur
relative to such drawing. Such reimbursement shall be due and payable (the date
on which it is due and payable being an "LC Reimbursement Due Date") by 2:00
P.M. (New York City time) on the relevant LC Payment Date or the date on which
such LC Issuing Bank notifies the Borrower of such drawing, whichever is later;
provided that, if such notice is given after 12:00 Noon (New York City time) on
the later of such dates, such reimbursement shall be due and payable on the next
succeeding Business Day; provided further, that, notwithstanding anything to the
contrary contained above, if, on the relevant LC Payment Date, any Event of
Default shall exist pursuant to Section 6.01(g) or (h) with respect to the
Borrower, such LC Payment Date shall constitute the date upon which such
reimbursement shall be due and payable and notwithstanding anything to the
contrary contained above, if an Event of Default as specified in Section 6.01(g)
or (h) with respect to the Borrower does not exist on the relevant LC Payment
Date but occurs prior to the date which would otherwise constitute the
respective LC Reimbursement Due Date, then the date of the occurrence of such
Default shall instead constitute the respective LC Reimbursement Due Date.
(B) In addition, the Borrower agrees to pay, on the applicable LC
Reimbursement Due Date, interest on each amount drawn under a Letter of Credit,
for each day from and including the LC Payment Date to but excluding such LC
Reimbursement Due Date, at a rate per annum equal to the sum of the Applicable
Base Rate Margin for Revolving Loans plus the Base Rate for such day.
(C) Each payment by the Borrower pursuant to this subsection (h) shall be
made to the relevant LC Issuing Bank in Federal funds or other funds immediately
available to it at its address specified in or pursuant to Section 10.01.
(i) Payments by Lenders. (A) If the Borrower fails to pay any LC
Reimbursement Obligation in full when due, the relevant LC Issuing Bank may
notify the Agent of the unreimbursed amount and request that the RL Lenders
reimburse such LC Issuing Bank for their respective RL Percentages thereof.
Promptly after it receives any such notice, the Agent shall notify each RL
Lender of the unreimbursed amount and such RL Lender's RL Percentage thereof.
Upon receiving such notice from the Agent, each RL Lender shall make available
to such LC Issuing Bank, at its address specified in or pursuant to Section
10.01, an amount equal to such RL Lender's RL Percentage of such unreimbursed
amount, in Federal or other funds immediately available to such LC Issuing Bank,
by 3:00 P.M. (New York time) (i) on the day such RL Lender receives such notice
if it is received at or before 12:00 Noon (New York time) on such day or (ii) on
the next Business Day if such notice is received after 12:00 Noon (New York City
time) on the date of receipt, in each case together with interest on such amount
for each day from and including the relevant LC Payment Date to but excluding
the day such payment is due from such RL Lender at the Federal Funds Rate for
such day. Upon payment in full thereof, such RL Lender shall be subrogated to
the rights of such LC Issuing Bank against the Borrower to the extent of such RL
Lender's RL Percentage of the related LC Reimbursement Obligation (including
interest accrued thereon).
(B) If any RL Lender fails to pay when due any amount to be paid by it
pursuant to clause (A) of this subsection, interest shall accrue on such RL
Lender's obligation to make such payment, for each day from and including the
date such payment became due to but excluding the date such RL Lender makes such
payment, at a rate per annum equal to (x) for each day from the day such payment
is due to the third (3rd) succeeding Business Day, inclusive, the Federal Funds
Rate for such day and (y) for each day thereafter the sum of 2% plus the
Applicable Base Rate Margin for Revolving Loans plus the Base Rate for such day.
(C) If the Borrower shall reimburse any LC Issuing Bank for any drawing
with respect to which any RL Lender shall have made funds available to such LC
Issuing Bank in accordance with clause (A) of this subsection, such LC Issuing
Bank shall promptly upon receipt of such reimbursement distribute to such RL
Lender its RL Percentage thereof, including interest, in Dollars to the extent
received by such LC Issuing Bank.
(j) Exculpatory Provisions. The obligations of the Borrower and the RL
Lenders under this Section shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower or any RL Lender may have or have had against any LC Issuing
Bank, any RL Lender, any beneficiary of any Letter of Credit, the Agent or any
other Person. The Borrower assumes all risks of the acts or omissions of any
beneficiary of any Letter of Credit with respect to the use of such Letter of
Credit by such beneficiary. None of the LC Issuing Banks, the RL Lenders, the
Agent and their respective officers, directors, employees and agents shall be
responsible for, and the obligations of each RL Lender to make payments to each
LC Issuing Bank and of the Borrower to reimburse each LC Issuing Bank for
drawings pursuant to this Section (other than obligations resulting solely from
the gross negligence or willful misconduct of the relevant LC Issuing Bank)
shall not be excused or affected by, among other things, (i) the use which may
be made of any Letter of Credit or any acts or omissions of any beneficiary or
transferee in connection therewith; (ii) the validity, sufficiency or
genuineness of documents presented under any Letter of Credit or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (iii) payment by
any LC Issuing Bank against presentation of documents to it which do not comply
with the terms of the relevant Letter of Credit; or (iv) any dispute between or
among the Borrower, any beneficiary of any Letter of Credit or any other Person
or any claims or defenses whatsoever of the Borrower or any other Person against
any beneficiary of any Letter of Credit. No LC Issuing Bank shall be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit. Any action taken or omitted by the Agent, any LC Issuing Bank or any RL
Lender in connection with any Letter of Credit and the related drafts and
documents, if done without willful misconduct or gross negligence, shall be
binding on the Borrower and shall not place the Agent, any LC Issuing Bank or
any RL Lender under any liability to the Borrower.
(k) Indemnification by Borrower. The Borrower agrees to indemnify and hold
harmless each RL Lender, each LC Issuing Bank and the Agent (collectively, the
"LC Indemnitees") from and against any and all claims, damages, losses,
liabilities, costs or expenses (including, without limitation, the reasonable
fees and disbursements of counsel) which such LC Indemnitee may reasonably incur
(or which may be claimed against such LC Indemnitee by any Person whatsoever) by
reason of or in connection with any execution and delivery or transfer of or
payment or failure to pay under any Letter of Credit or any actual or proposed
use of any Letter of Credit, including any claims, damages, losses, liabilities,
costs or expenses which any LC Issuing Bank may incur by reason of any RL
Lender's failure to comply with its obligations to such LC Issuing Bank
hereunder in connection with any Letter of Credit (but nothing herein contained
shall affect any rights the Borrower may have against such defaulting RL
Lender); provided that the Borrower shall not be required to indemnify any LC
Issuing Bank for any claims, damages, losses, liabilities, costs or expenses to
the extent, but only to the extent, caused by (i) the willful misconduct or
gross negligence of such LC Issuing Bank in determining whether a request
presented under any Letter of Credit issued by it complied with the terms of
such Letter of Credit or (ii) such LC Issuing Bank's failure to pay under any
Letter of Credit issued by it after the presentation to it of a request strictly
complying with the terms and conditions of such Letter of Credit. Nothing in
this subsection is intended to limit the obligations of the Borrower under any
other provision of this Section.
(l) Indemnification by RL Lenders. The RL Lenders shall, ratably in
proportion to their RL Percentages, indemnify each LC Issuing Bank (to the
extent not reimbursed by the Borrower) against any claims, damages, losses,
liabilities, reasonable costs and reasonable expenses (including, without
limitation, reasonable fees and disbursements of counsel) that any such
indemnitee may suffer or incur in connection with this Section or any action
taken or omitted by such indemnitee under this Section; provided that the RL
Lenders shall not be required to indemnify any LC Issuing Bank for any such
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (i) its own gross negligence or willful misconduct,
(ii) its failure to pay under any Letter of Credit issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Letter of Credit or (iii) its liabilities under any Letter of Credit
issued by it in contravention of subsection (c)(iii) of this Section or extended
by it in contravention of clause (y) of the last sentence of subsection (e) of
this Section (to the extent that the limitations referred to therein were in
fact exceeded).
(m) Liability for Damages. Nothing in this Section shall preclude the
Borrower or any RL Lender from asserting against any LC Issuing Bank any claim
for direct (but not consequential) damages suffered by the Borrower or such RL
Lender to the extent, but only to the extent, caused by (A) the willful
misconduct or gross negligence of such LC Issuing Bank in determining whether a
request presented under any Letter of Credit issued by it complied with the
terms thereof or (B) such LC Issuing Bank's failure to pay under any such Letter
of Credit after the presentation to it of a request strictly complying with the
terms and conditions thereof.
(n) Dual Capacities. In its capacity as a Lender, each LC Issuing Bank
shall have the same rights and obligations under this Section as any other
Lender.
(o) Information to be Provided to Agent. The LC Issuing Banks shall furnish
to the Agent upon request such information as the Agent shall reasonably request
in order to calculate (i) the Aggregate LC Exposure existing from time to time
and (ii) the amount of any fee payable for the account of the Lenders under
Section 2.07(b).
ARTICLE III
Conditions
Section 3.01. Conditions Precedent to Initial Credit Events. The obligation
of each Lender to make Loans, and the obligation of each LC Issuing Bank to
issue Letters of Credit, on the Initial Borrowing Date, is subject to the
satisfaction of the following conditions:
(a) On or prior to the Initial Borrowing Date, the Effective Date
shall have occurred;
(b) receipt by the Agent, on or prior to the Initial Borrowing Date,
(i) for the account of each of the Lenders the appropriate Tranche A Term
Note, Tranche B Term Note and/or Revolving Note and (ii) of the Swingline
Note for the account of the Swingline Lender, in each case executed by the
Borrower and in the amount, maturity and as otherwise provided herein;
(c) receipt by the Agent of an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Obligors, substantially in the form of Exhibit B hereto and
covering such additional matters relating to the transactions contemplated
hereby as the Agent may reasonably request;
(d) (i) on the Initial Borrowing Date and contemporaneously with
giving effect to the Loans incurred on the Initial Borrowing Date, the
PureTec Acquisition shall have been consummated in accordance with the
PureTec Acquisition Documents and all applicable laws, and each of the
conditions precedent to the consummation of the PureTec Acquisition shall
have been satisfied and not waived, except with the consent of the Agent;
(ii)(a) on the Initial Borrowing Date and contemporaneously with
giving effect to the Loans incurred on the Initial Borrowing Date, the
total commitments in respect of the Debt to be Refinanced shall have been
terminated, and all loans with respect thereto shall have been repaid in
full, together with interest thereon, all letters of credit issued
thereunder shall have been terminated and all other amounts (including
premiums) owing pursuant to the Debt to be Refinanced shall have been
repaid in full; and
(b) on the Initial Borrowing Date and contemporaneously with giving
effect to the Loans incurred on the Initial Borrowing Date, the creditors
in respect of the Debt to be Refinanced shall have terminated and released
all security interests and Liens on the assets owned by the Obligors; and
the Agent shall have received such releases of security interests in and
Liens on the assets owned by the Obligors as may have been requested by the
Agent, which releases shall be in form and substance reasonably
satisfactory to the Agent; without limiting the foregoing, there shall have
been delivered (i) proper termination statements (Form UCC-3 or the
appropriate equivalent) for filing under the UCC of each jurisdiction where
a financing statement (Form UCC-1 or the appropriate equivalent) was filed
with respect to the Obligors in connection with the security interests
created with respect to the Debt to be Refinanced and the documentation
related thereto, (ii) termination or reassignment of any security interest
in, or Lien on, any patents, trademarks, copyrights, or similar interests
of the Obligors on which filings have been made, (iii) terminations of all
mortgages, leasehold mortgages, deeds of trust and leasehold deeds of trust
created with respect to property of the Obligors, in each case, to secure
the obligations in respect of the Debt to be Refinanced, all of which shall
be in form and substance reasonably satisfactory to the Agent, and (iv) all
collateral owned by the Obligors in the possession of any of the creditors
in respect of the Debt to be Refinanced or any collateral agent or trustee
under any related security document shall have been returned to the
Obligors;
(iii) on or prior to the Initial Borrowing Date, (i) the Borrower
shall have received gross cash proceeds of $200 million from the issuance
of a like principal amount of New Senior Subordinated Notes, (ii) the New
Senior Subordinated Notes shall not be secured by any assets of the
Borrower or any of its Subsidiaries, (iii) the Borrower shall have utilized
the full amount of the net cash proceeds received from the issuance of the
New Senior Subordinated Notes to make payments owing in connection with the
Transaction prior to or contemporaneously with utilizing any proceeds of
the Loans for such purpose and (iv) the issuance of the New Senior
Subordinated Notes shall have been consummated in accordance with the terms
and conditions of the New Senior Subordinated Note Documents and all
applicable laws and each of the conditions precedent to the issuance
thereof shall have been satisfied and not waived, except with the consent
of the Agent, to the satisfaction of the Agent;
(iv) on or prior to the Initial Borrowing Date (i) the PST Minority
Acquisition shall have been consummated in accordance with the PST Minority
Acquisition Documents and all applicable laws, and each of the conditions
precedent to the consummation of the PST Minority Acquisition shall have
been satisfied and not waived, except with the consent of the Agent, to the
satisfaction of the Agent; and (ii) there shall have been delivered to the
Agent true and correct copies of the PST Minority Acquisition Documents and
all of the terms and conditions of such PST Minority Acquisition Documents
shall be in form and substance reasonably satisfactory to the Agent;
(v) on or prior to the Initial Borrowing Date (i) the Borrower and/or
PST shall have consummated a tender offer/consent solicitation with respect
to the outstanding Existing PST Senior Secured Notes (the "Existing PST
Senior Secured Notes Tender Offer/Consent Solicitation"), pursuant to which
the (1) Borrower and/or PST shall offer, subject to the terms and
conditions contained in the Existing PST Senior Secured Notes Tender
Offer/Consent Solicitation, to purchase all of the outstanding Existing PST
Senior Secured Notes at the cash price set forth in the Existing PST Senior
Secured Notes Tender Offer/Consent Solicitation and (2) consents shall be
solicited to a proposed amendment to the Existing PST Senior Secured Notes
Indenture, on terms and conditions satisfactory to the Agent, which
amendment shall provide for the substantial elimination of the financial
and certain operating covenants contained in the Existing PST Senior
Secured Notes Indenture (including, without limitation, limitations on the
incurrence of liens, restricted payments, transactions with affiliates and
indebtedness) and the amendment or elimination of certain other provisions
in the Existing PST Senior Secured Notes Collateral Documents; (ii) all
terms and conditions of the Existing PST Senior Secured Notes Tender
Offer/Consent Solicitation shall be satisfactory to the Agent, and the
period for tendering Existing PST Senior Secured Notes pursuant thereto
shall terminate on or prior to the Initial Borrowing Date; (iii) the
Borrower or PST shall have received sufficient consents to authorize the
execution and delivery of the Existing PST Senior Secured Notes Indenture
Supplement; (iv) PST and the trustee under the Existing PST Senior Secured
Notes Indenture shall have duly executed and delivered the Existing PST
Senior Secured Notes Indenture Supplement (which shall include the Existing
PST Senior Secured Notes Collateral Documents Amendment); (v) the trustee
pursuant to the Existing PST Senior Secured Notes Indenture, as well as any
other agent, sub-agent, collateral agent or custodian which holds any of
the collateral for the Existing PST Senior Secured Notes, shall have
entered into a bailee agreement for the benefit of the Secured Creditors in
substantially the form attached hereto as Exhibit H (the "Bailee
Agreement"); (vi) the Borrower and/or PST shall have repurchased or
committed to repurchase the Existing PST Senior Secured Notes tendered, and
not theretofore withdrawn, pursuant to the Existing PST Senior Secured
Notes Tender Offer/Consent Solicitation (the "Existing PST Senior Secured
Notes Tender Offer Repurchases"); and (vii) the Existing PST Senior Secured
Notes Tender Offer/Consent Solicitation shall have been consummated in
accordance with the Existing PST Senior Secured Notes Tender Offer
Documents and all applicable laws;
(vi) on the Initial Borrowing Date and after giving effect to the
Transaction and the Loans incurred on the Initial Borrowing Date, (A)
neither the Borrower nor any of its Subsidiaries shall have any Debt
outstanding except for (i) Debt created under this Agreement and the other
Loan Documents, (ii) the New Senior Subordinated Notes, (iii) the Existing
Senior Subordinated Notes, (iv) those Existing PST Senior Secured Notes not
purchased pursuant to the Existing PST Senior Secured Notes Tender Offer
Repurchases (which in no event shall have an aggregate principal amount in
excess of $62.499 million) and (v) such other Debt, if any, as shall be
permitted to remain outstanding by the Agent and (B) after giving effect to
the Transaction and the other transactions contemplated hereby there shall
be no default or events of default existing under the Existing Senior
Subordinated Notes and the New Senior Subordinated Notes or arising as a
result of the Transaction and the other transactions contemplated hereby;
and
(vii) on or prior to the Initial Borrowing Date, there shall have been
delivered to the Agent true and correct copies of the Documents and all of
the terms and conditions of the Documents, as well as the structure of the
Transaction, shall be in form and substance reasonably satisfactory to the
Agent;
(e) receipt by the Agent of duly executed counterparts of each of the
Collateral Documents, together with (i) evidence satisfactory to the Agent
of the effectiveness and perfection (to the extent required thereby) of the
Liens contemplated thereby (including the filing of UCC-1's or the
appropriate local equivalent in each jurisdiction as may be necessary to
perfect the security interests created by the Collateral Documents and the
delivery of any promissory notes (duly endorsed in blank) and stock
certificates (accompanied by duly executed and undated stock powers)
comprising the Collateral) or, with respect to the Mortgages, arrangements
satisfactory to the Agent for the prompt recording thereof; (ii) opinions
of local counsel and other counsel to the Obligors and/or the Agent
satisfactory to the Agent, which opinions shall cover such matters incident
to the transactions contemplated herein and in the other Loan Documents as
the Agent may reasonably request and shall be in form and substance
reasonably satisfactory to the Agent; (iii) with respect to each property
subject to a Mortgage (A) policies of title insurance (or irrevocable and
binding commitments, dated and recertified as of the Initial Borrowing
Date, to issue such policies), on forms issued by the American Land Title
Association and otherwise in form and substance reasonably satisfactory to
the Agent and issued by such title insurance company or companies as are
acceptable to the Agent, with all premiums, expenses and fees paid or
caused to be paid by the Borrower, insuring (or committing to insure) the
Liens created under each Mortgage, in such amounts as the Agent shall
request, subject only to Liens permitted under the Loan Documents,
containing such endorsements and affirmative assurances as are satisfactory
to the Agent, and reinsured in amounts and under reinsurance agreements in
form and substance satisfactory to the Agent, and (B) to the extent
required by the Agent, recent "as-built" surveys that comply with the
current Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys and that are otherwise in form and substance satisfactory to the
Agent, provided, with respect to the Shiller Park, Illinois and the
Ridgefield, New Jersey properties recent "as-built" surveys that comply
with the current Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys and that are otherwise in form and substance satisfactory to
the Agent, shall be received by the Agent on or prior to 60 days after the
Effective Date; (iv) such estoppel letters, landlord waiver letters,
non-disturbance letters and similar assurances as may have been requested
by the Agent, which letters shall be in form and substance reasonably
satisfactory to the Agent; and (v) to the extent requested by the Agent,
environmental reports with respect to such properties in form and substance
satisfactory to the Agent;
(f) receipt by the Agent of evidence satisfactory to it of the
insurance coverage required by Section 5.03 and the Collateral Documents;
(g) receipt by the Agent of a certificate substantially in the form of
Exhibit G hereto of the chief operating officer or other senior financial
officer of the Borrower, setting forth the conclusions that, after giving
effect to the Transaction and the incurrence of all the financings
contemplated herein, the Borrower and its Subsidiaries, taken as a whole,
are not insolvent and will not be rendered insolvent by the indebtedness
incurred in connection therewith, and will not be left with unreasonably
small capital with which to engage in their businesses and will not have
incurred debts beyond their ability to pay such debts as they mature;
(h) receipt by the Agent of all documents the Agent may reasonably
request relating to the existence of the Obligors, the corporate authority
for and the validity of the Documents, and any other matters relevant
hereto (including, without limitation, a certificate of incumbency of
officers signing any Loan Documents), all in form and substance
satisfactory to the Agent;
(i) receipt by the Agent of payment in full of all costs, fees,
expenses (including, without limitation, reasonable legal fees and
expenses, title premiums, survey charges and recording taxes and fees) and
other amounts payable for the account of the Lenders or the Agent in the
amounts previously agreed upon to be payable on or before the Initial
Borrowing Date;
(j) there shall not be pending or, to the best of the Borrower's
knowledge, threatened, any action, suit or other proceeding (1) with
respect to which, in the judgment of the Agent, there is a reasonable
possibility of a decision which could reasonably be expected to have a
Material Adverse Effect or (2) which, in the judgment of the Agent, in any
manner draws into question the validity or enforceability of the Loan
Documents;
(k) receipt by the Agent and the Banks of a pro forma consolidated
balance sheet and consolidated statement of operations of the Borrower and
its Consolidated Subsidiaries, which pro forma financial statements shall
be satisfactory to the Agent and demonstrate that the Borrower is in
compliance with the covenants contained in Sections 5.11 to 5.13,
inclusive, after giving effect to all Borrowings and issuances of Letters
of Credit on the Initial Borrowing Date;
(l) nothing shall have occurred (and the Agent shall not have become
aware of any facts or conditions not previously known to it) which the
Agent shall reasonably determine has had, or could reasonably be expected
to have, a Material Adverse Effect;
(m) on or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or
consents in connection with the Transaction and the other transactions
contemplated by the Loan Documents and otherwise referred to herein or
therein shall have been obtained and remain in effect (other than
immaterial approvals and/or consents with respect to the PureTec
Acquisition), and all applicable waiting periods with respect thereto shall
have expired without any action being taken by any competent authority
which restrains, prevents or imposes materially adverse conditions upon,
the consummation of the Transaction or the other transactions contemplated
by the Loan Documents or otherwise referred to herein or therein; and there
shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending
or notified prohibiting or imposing materially adverse conditions upon the
Transaction or the other transactions contemplated by the Loan Documents;
and
(n) on or prior to the Initial Borrowing Date, the Borrower shall have
delivered to the Agent a certificate of its chief operating officer and, if
requested by the Agent, such supporting accountants' certificates and/or
computations as the Agent may reasonably request, establishing that the
entire principal amount of New Senior Subordinated Notes may be issued, and
the aggregate principal amount of Term Loans to be incurred on the Initial
Borrowing Date, plus Revolving Loans in an aggregate principal amount equal
to the Total Revolving Loan Commitment, could be incurred on the Initial
Borrowing Date in compliance with, and pursuant to, clauses (i) and (ii) of
Section 4.04 of the Existing Senior Subordinated Notes Indenture.
Section 3.02. Conditions Precedent to All Credit Events. The obligation of
each Lender to make a Loan (including the Loans made on the Initial Borrowing
Date, but excluding Mandatory Borrowings to be made thereafter, which shall be
made as provided in Section 2.01(e)) on the occasion of any Borrowing, and the
obligation of any LC Issuing Bank to issue (or extend or allow an extension of
the expiry date of) any Letter of Credit, are each subject to the satisfaction
of the following conditions:
(a) receipt by the Agent of a Notice of Borrowing as required by
Section 2.03, or receipt by the relevant LC Issuing Bank of a notice of
proposed issuance or extension as required by Section 2.16(b) or 2.16(e),
as the case may be;
(b) immediately after such Credit Event, the sum of (i) the aggregate
principal amount of Revolving Loans and Swingline Loans then outstanding
plus (ii) the Aggregate LC Exposure, will not exceed the Total Revolving
Loan Commitment;
(c) immediately before and after such Credit Event, no Default shall
have occurred and be continuing; and
(d) the representations and warranties of the Obligors contained in
this Agreement and the other Loan Documents shall be true on and as of the
date of such Credit Event as though such representations and warranties had
been made on the date of such Credit Event.
Each Credit Event hereunder shall be deemed to be a representation and warranty
by the Borrower on the date of such Credit Event as to the facts specified in
clauses (b), (c) and (d) of this Section and by each Obligor, with respect to
itself only, as to the fact specified in clause (d) of the Section.
ARTICLE IV
Representations and Warranties
The Borrower represents and warrants, and each Guarantor represents and
warrants, with respect to itself only, as to the matters set forth in Section
4.13, that:
Section 4.01. Corporate Existence and Power. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, and has all corporate powers and all material
governmental licenses, consents, authorizations and approvals required to carry
on its business as now conducted.
Section 4.02. Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrower of the Loan Documents to
which it is a party are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, and require no action by or in
respect of, or filing with, any governmental body, agency or official (other
than filings which have been made on or prior to the Initial Borrowing Date).
The execution, delivery and performance by the Borrower of the Loan Documents to
which it is a party do not (i) contravene any provision of applicable law or
regulation or of the Borrower's certificate of incorporation or by-laws, (ii)
contravene, or constitute a default under, any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or any Subsidiary,
the consequences of which contravention or default, singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (iii) except
as contemplated by the Collateral Documents, result in the creation or
imposition of any Lien on any asset of the Borrower or any Subsidiary.
Section 4.03. Binding Effect. The Borrower has duly executed and delivered
each of the Loan Documents to which it is a party and each of the Loan Documents
(other than the Notes) to which the Borrower is a party constitutes a valid and
binding agreement of the Borrower and each Note constitutes a valid and binding
obligation of the Borrower, in each case enforceable in accordance with its
terms except (i) as may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally, (ii) as rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability, and (iii) as limited by principles of reasonableness,
good faith and fair dealing.
Section 4.04. Financial Information. (a) (i) The consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries as of June 27, 1997 and the
related consolidated statements of operations, cash flows and stockholders'
equity for the Fiscal Year then ended, reported on by BDO ▇▇▇▇▇▇▇, LLP, a copy
of which has been delivered to each of the Lenders, fairly present, in
conformity with GAAP, the consolidated financial position of the Borrower and
its Consolidated Subsidiaries as of such date and their consolidated results of
operations and cash flows for such Fiscal Year.
(ii) The unaudited consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of September 26, 1997 and the related unaudited
consolidated statements of operations, cash flows and stockholders' equity for
the three months then ended, a copy of which has been delivered to the Lenders,
fairly present, in conformity with GAAP, the consolidated financial position of
the Borrower and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such three-month period.
(b) (i) The consolidated balance sheet of PureTec and its Consolidated
Subsidiaries as of July 31, 1997 and the related consolidated statements of
operations, cash flows and stockholders' equity for the Fiscal Year then ended,
reported on by Deloitte & Touche LLP, a copy of which has been delivered to each
of the Lenders, fairly present, in conformity with GAAP, the consolidated
financial position of PureTec and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such Fiscal
Year.
(ii) The unaudited consolidated balance sheet of PureTec and its
Consolidated Subsidiaries as of October 31, 1997 and the related unaudited
consolidated statements of operations, cash flows and stockholders' equity for
the three (3) months then ended, a copy of which has been delivered to the
Lenders, fairly present, in conformity with GAAP, the consolidated financial
position of PureTec and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such three (3)-month
period.
(c) Since September 26, 1997 there has occurred no Material Adverse
Effect.
Section 4.05. Litigation. There is no action, suit or proceeding pending
against, or to the best of the Borrower's knowledge threatened against or
affecting, the Borrower or any Subsidiary before any court or arbitrator or any
governmental body, agency or official (i) in which there is a reasonable
possibility of an adverse decision which could have a Material Adverse Effect or
(ii) which in any manner draws into question the validity or enforceability of
the Loan Documents.
Section 4.06. Compliance with ERISA. (a) Each member of ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan, or made any amendment
to any Plan, which has resulted or could reasonably be expected to result in the
imposition of a Lien or the posting of a bond or other security under ERISA or
the Internal Revenue Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA.
Section 4.07. Environmental Compliance. (a) Except (x) to the extent
addressed by prior or present remediation activities by the Borrower and its
Subsidiaries or by third parties pursuant to contractual obligations or (y) to
the extent that the Environmental Liabilities of the Borrower and its
Subsidiaries, taken as a whole, that relate to or can reasonably be expected to
result from the matters referred to in clauses (i) through (vii), would not
exceed $10,000,000 for any individual issue arising at or relating to a
particular facility, or $25,000,000 in the aggregate:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been received, no complaint has
been served, no penalty has been assessed and, to the best of the
Borrower's knowledge, no investigation or review is pending or threatened
by any governmental or other entity with respect to any (A) alleged
violation by the Borrower or any Subsidiary of any Environmental Law, (B)
alleged failure by the Borrower or any Subsidiary to have any environmental
permit, certificate, license, approval, registration or authorization
required in connection with the conduct of its business, (C) Regulated
Activity or (D) Release of Hazardous Substances;
(ii) other than Regulated Activity undertaken in compliance with all
applicable Environmental Laws, (A) neither the Borrower nor any Subsidiary
has engaged in any Regulated Activity and (B) no Regulated Activity has
occurred at or on any property now or previously owned, leased or operated
by the Borrower or any Subsidiary during the period of such ownership,
lease or operation by the Borrower or any Subsidiary;
(iii) to the best of the Borrower's knowledge, no polychlorinated
biphenyls, radioactive material, urea formaldehyde, lead, asbestos,
asbestos-containing material or underground storage tank (active or
abandoned) is or has been present at any property now or previously owned,
leased or operated by the Borrower or any Subsidiary during the period of
such ownership, lease or operation by the Borrower or any Subsidiary;
(iv) no Hazardous Substance has been Released (and no written
notification of such Release has been filed) or is present (whether or not
in a reportable or threshold planning quantity) at, on or under any
property now or previously owned, leased or operated by the Borrower or any
Subsidiary during the period of such ownership, lease or operation by the
Borrower or any Subsidiary;
(v) to the best of the Borrower's knowledge, no property now or
previously owned, leased or operated by the Borrower or any Subsidiary or
any property to which the Borrower or any Subsidiary has, directly or
indirectly, transported or arranged for the transportation of any Hazardous
Substances, is listed or, to the best of the Borrower's knowledge, proposed
for listing, on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal, state
or foreign list of sites requiring investigation or clean-up;
(vi) there are no liens under Environmental Laws on any of the real
property or other assets owned or leased by the Borrower or any Subsidiary,
to the best of the Borrower's knowledge no government actions have been
taken or are in process which could subject any of such properties or
assets to such liens, and neither the Borrower nor any Subsidiary would be
required to place any notice or restriction relating to Hazardous
Substances at any property owned by it in any deed to such property; and
(vii) there has been no environmental investigation, study, audit,
test, review or other analysis conducted of which the Borrower has
knowledge in relation to the current or prior business of the Borrower or
any property or facility now or previously owned, leased or operated by the
Borrower or any Subsidiary, access to which has not been provided to the
Lenders at least five (5) days prior to the date hereof.
(b) For purposes of this Section, the terms "Borrower" and "Subsidiary"
shall include any business or business entity (including a corporation) which is
a predecessor, in whole or in part, of the Borrower or any Subsidiary.
Section 4.08. Taxes. The Borrower and its Subsidiaries have filed all
United States Federal income tax returns and all other material tax returns
which are required to be filed by them and have paid all taxes and assessments
payable by it which have become due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves have been provided for on the
financial statements of the Borrower and its Subsidiaries to the extent required
by and in accordance with GAAP.
Section 4.09. Subsidiaries. (a) Each of the Borrower's Subsidiaries is a
corporation or other legal entity duly incorporated or organized, validly
existing and, except as set forth in Schedule 6, in good standing under the laws
of its jurisdiction of organization, and has all corporate or other
organizational powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
(b) Schedule 3 lists all of the Subsidiaries of the Borrower as of the
Initial Borrowing Date (after giving effect to the consummation of the
Transaction, and identifies each De Minimis Subsidiary). Each Domestic
Subsidiary of the Borrower is a Guarantor, and each Guarantor is a direct or
indirect Subsidiary of the Borrower.
Section 4.10. No Regulatory Restrictions on Borrowing. The Borrower is not
(i) an "investment company" within the meaning of the Investment Company Act of
1940, as amended, (ii) a "holding company" or a "subsidiary company" of a
holding company within the meaning of the Public Utility Holding Company Act of
1935, as amended, or (iii) otherwise subject to any regulatory scheme which
restricts its ability to incur debt.
Section 4.11. Full Disclosure. (a) All information heretofore furnished by
the Borrower to the Agent or any Lender for purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Lender will
be, to the best of the Borrower's knowledge, true and accurate in all material
respects on the date as of which such information is stated or certified and not
incomplete by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. The Borrower has, to the best of the
Borrower's knowledge, disclosed to the Lenders in writing any and all facts
which materially and adversely affect, or may affect (to the extent the Borrower
can now reasonably foresee), the business, operations or financial condition of
the Borrower and its Consolidated Subsidiaries, taken as a whole, or the
Obligors' ability to perform their obligations under the Loan Documents.
(b) The projected financial statements set forth in the Information
Memorandum were based on reasonable assumptions and as of their date represented
the best estimate of future performance of the Borrower and its Subsidiaries.
During the period from the respective dates as of which information is stated in
the Information Memorandum to and including the Initial Borrowing Date, to the
best of the Borrower's knowledge, no event has occurred and no condition has
come into existence which would have caused the projected financial statements
therein to be materially misleading.
Section 4.12. Representations in PureTec Acquisition Documents True and
Correct. Each of the representations and warranties of the Borrower contained in
the PureTec Acquisition Documents was true and correct on the date when made
pursuant to the relevant PureTec Acquisition Documents.
Section 4.13. Representations of Guarantors. Each Guarantor is a
corporation duly incorporated, validly existing and, except as set forth in
Schedule 6, in good standing under the laws of the jurisdiction of its
incorporation, and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The execution, delivery and performance by each
Guarantor of the Loan Documents to which it is a party are within such
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action, and require no action by or in respect of, or filing with, any
governmental body, agency or official (other than filings which have been made
on or prior to the Initial Borrowing Date). The execution, delivery and
performance by the Obligors of the Loan Documents to which they are parties do
not (i) contravene any provision of applicable law or regulation or of the
certificate of incorporation or by-laws of such Guarantor, (ii) contravene, or
constitute a default under, any agreement, judgment, injunction, order, decree
or other instrument binding upon such Guarantor the consequences of which
contravention or default, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, or (iii) except as contemplated by
the Collateral Documents, result in the creation or imposition of any Lien on
any asset of such Guarantor. Each Guarantor has duly executed and delivered each
of the Loan Documents to which it is a party and the Loan Documents to which
each Guarantor is a party constitute valid and binding agreements of such
Guarantor, in each case enforceable against such Guarantor in accordance with
their respective terms except (i) as may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally, (ii) as rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability, and (iii) as may be limited by
principles of reasonableness, good faith and fair dealing. Each of the
representations and warranties of each Guarantor contained in the Loan Documents
(other than this Agreement) to which such Guarantor is a party is true and
correct.
Section 4.14. Intellectual Property. The Borrower and each of its
Subsidiaries owns, possesses or holds under valid licenses all patents,
trademarks, service marks, trade names, copyrights, licenses and other
intellectual property rights that are necessary for the operation of their
respective properties and businesses, and neither the Borrower nor any of its
Subsidiaries is in violation of any provision thereof. Neither the Borrower nor
its Subsidiaries has received actual notice of, or knows of any valid basis for,
any claim of infringement of any material license, patent, trademark, trade
name, service ▇▇▇▇, copyright, trade secret or any other intellectual property
right of others, and, to the best knowledge of the Borrower, there is no
infringement or claim of infringement by others of any material license, patent,
trademark, trade name, service ▇▇▇▇, copyright, trade secret or other
intellectual property right of the Borrower and its Subsidiaries.
Section 4.15. Solvency. Subject to Section 9.07 hereof, except as set forth
in Schedule 6, as of the Initial Borrowing Date after giving effect to the
transactions contemplated hereby to occur on the Initial Borrowing Date, and at
all times thereafter: (i) the aggregate fair market value of the assets of each
of the Borrower and each Guarantor will exceed its liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities), (ii) each of
the Borrower and each Guarantor will have sufficient cash flow to enable it to
pay its debts as they mature and (iii) none of the Borrower nor any Guarantor
will have unreasonably small capital for the business in which it is engaged.
Section 4.16. Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against any of them, before
the National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower, threatened against any of them, (ii) no strike, labor dispute,
slowdown or stoppage pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries and (iii) no union representation question existing with
respect to the employees of the Borrower or any of its Subsidiaries, except
(with respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect.
Section 4.17. Subordinated Notes; etc. All Obligations hereunder and under
the other Loan Documents are within the definitions of "Senior Debt" and
"Designated Senior Debt," as the case may be, included in such provisions of the
Existing Senior Subordinated Note Indenture and the New Senior Subordinated
Notes Indenture. This Agreement constitutes the "Credit Agreement" under, and as
defined in, each of the Existing Senior Subordinated Notes Indenture and the New
Senior Subordinated Notes Indenture.
ARTICLE V
Covenants
The Borrower hereby covenants and agrees that, on and after the Effective
Date and until the Total Commitment and all Letters of Credit have terminated
and the Loans, Notes and LC Reimbursement Obligations, together with interest,
fees and all other Obligations (other than indemnities for which no claim for
payment has been made) incurred hereunder and under the other Loan Documents,
are paid in full:
Section 5.01. Information. The Borrower will deliver to each of the
Lenders:
(a) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of the end of such
Fiscal Year and the related consolidated statements of operations,
cash flows and stockholders' equity for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous
Fiscal Year, all audited and reported on in a manner which would be
acceptable to the SEC by BDO ▇▇▇▇▇▇▇, LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year, a consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter, the
related consolidated statement of operations for such Fiscal Quarter
and the related consolidated statements of cash flows for the portion
of the Fiscal Year ended at the end of such Fiscal Quarter, setting
forth in the case of each such statement of cash flows in comparative
form the figures for the corresponding period in the previous Fiscal
Year, all certified (subject to normal year-end adjustments) as to
fairness of presentation and consistency with GAAP by the Borrower's
chief executive officer or chief accounting officer;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above (or any
certificate establishing the Leverage Ratio as described in the
definition of Applicable Period), a certificate of the Borrower's
chief executive officer or chief accounting officer (i) setting forth
in reasonable detail the calculations required to establish whether
the Borrower was in compliance with the requirements of Sections 2.10
and 5.09 through 5.16, inclusive, on the date of such financial
statements, (ii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or
proposes to take with respect thereto and (iii) in respect of the
delivery of the financial statements set forth in clause (a) above,
setting forth the amount of, and calculations required to establish
the amount of, Excess Cash Flow;
(d) simultaneously with the delivery of each set of financial
statements referred to in clause (a) above, a statement of the firm of
independent public accountants which reported on such statements (i)
stating whether anything has come to their attention to cause them to
believe that any Default existed on the date of such statements, and
(ii) confirming the calculations set forth in the officer's
certificate delivered simultaneously therewith pursuant to clause (c)
above;
(e) within five (5) Business Days after any officer of the
Borrower obtains knowledge of any Default, if such Default is then
continuing, a certificate of the Borrower's chief executive officer or
chief accounting officer setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto;
(f) as soon as reasonably practicable after any officer of the
Borrower obtains knowledge thereof, notice of any event or condition
(including, without limitation, any litigation, governmental
investigation or other proceeding) which has had or threatens to have
a Material Adverse Effect and the nature of such Material Adverse
Effect;
(g) promptly after the mailing thereof to the Borrower's
shareholders copies of all financial statements, reports and proxy
statements so mailed;
(h) promptly after the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K,
10-Q and 8-K (or their equivalents) filed by the Borrower with the
SEC;
(i) promptly, if and when any member of the ERISA Group (i) gives
or is required to give notice to the PBGC of any "reportable event"
(as defined in Section 4043 of ERISA) with respect to any Plan which
might reasonably constitute grounds for a termination of such Plan
under Title IV of ERISA, or knows that the plan administrator of any
Plan has given or is required to give notice of any such reportable
event, a copy of the notice of such reportable event given or required
to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any
Multiemployer Plan is in reorganization, is insolvent or has been
terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in
respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding
standard under Section 412 of the Internal Revenue Code, a copy of
such application; (v) gives notice of intent to terminate any Plan
under Section 4041 of ERISA, a copy of such notice and other
information filed with the PBGC; (vi) gives notice of withdrawal from
any Plan pursuant to Section 4063 of ERISA, a copy of such notice or
(vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or makes any amendment to any Plan which has
resulted or could reasonably result in the imposition of a Lien or the
posting of a bond or other security, a certificate of the Borrower's
chief executive officer or chief accounting officer setting forth
details as to such occurrence and the action, if any, which the
Borrower or applicable member of the ERISA Group is required or
proposes to take ( a "Reporting Certificate");
(j) promptly, upon receipt of any complaint, order, citation,
notice or other written communication from any Person with respect to,
or upon the Borrower's obtaining knowledge of, (i) the existence or
alleged existence of a violation of any applicable Environmental Law
or any Environmental Liability in connection with any property now or
previously owned, leased or operated by the Borrower or any of its
Subsidiaries, (ii) any Release of any Hazardous Substance on such
property or any part thereof in a quantity that is reportable under
any applicable Environmental Law, and (iii) any pending or threatened
proceeding for the termination, suspension or non-renewal of any
permit required under any applicable Environmental Law, in each case
(x) which could result in liability or expenses in excess of
$10,000,000 for any individual issue arising at or relating to a
particular facility, or $25,000,000 in the aggregate or (y) which
individually or in the aggregate could have a Material Adverse Effect;
and
(k) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries
(including, without limitation, any Guarantor) as the Agent, at the
request of any Lender, may reasonably request.
Section 5.02. Payment of Obligations. The Borrower will pay and discharge,
and will cause each Subsidiary to pay and discharge, at or before maturity, all
of their respective material obligations and liabilities (including, without
limitation, tax liabilities and claims of materialmen, warehousemen and the like
which if unpaid might by law give rise to a Lien other than inchoate statutory
liens in respect of obligations not yet due and payable), except where the same
are contested in good faith by appropriate proceedings, and will maintain, and
will cause each Subsidiary to maintain, in accordance with GAAP, any appropriate
reserves for the accrual thereof.
Section 5.03. Maintenance of Property; Insurance. (a) The Borrower will
keep, and will cause each Subsidiary to keep, all material property useful and
necessary in its business in good working order and condition, ordinary wear and
tear excepted.
(b) The Borrower will, and will cause each Subsidiary to, maintain (either
in the Borrower's name or in such Subsidiary's own name) with financially sound
and responsible insurance companies, insurance on all their respective
properties in at least such amounts, against at least such risks and with no
greater risk retention as are usually maintained, insured against or retained,
as the case may be, in the same general area by companies of established repute
engaged in the same or a similar business. The Borrower will furnish to the
Lenders, upon request from the Agent, information presented in reasonable detail
as to the insurance so carried.
Section 5.04. Conduct of Business and Maintenance of Existence. The
Borrower and its Subsidiaries will engage in business activities involving the
manufacture and distribution of packaging materials, plastics products and
materials, other disposable products, and related materials and related
businesses, and will preserve, renew and keep in full force and effect their
respective corporate existences and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business; provided
that nothing in this Section shall prohibit:
(i) the merger of a Subsidiary into the Borrower if, after giving
effect thereto, no Default shall have occurred and be continuing;
(ii) the merger or consolidation of a Subsidiary with or into a Person
other than the Borrower if the corporation surviving such consolidation or
merger is a Subsidiary and, after giving effect thereto, no Default shall
have occurred and be continuing;
(iii) the merger or consolidation of the Borrower with or into any
other Person if the corporation surviving such consolidation or merger is
the Borrower and, after giving effect thereto, no Default shall have
occurred and be continuing; or
(iv) the termination of the corporate existence of a Subsidiary if the
Borrower in good faith determines that such termination is in the best
interest of the Borrower and is not materially disadvantageous to the
Lenders.
Notwithstanding anything to the contrary contained above, except with respect to
the merger contemplated by the PureTec Acquisition, at any time while any
Existing PST Senior Secured Notes remain outstanding, neither PST nor any of its
Subsidiaries may be merged or consolidated with, or liquidated into, the
Borrower or any of its Subsidiaries (other than PST and its Subsidiaries). The
Borrower will not, and will not permit any of its Subsidiaries to, engage in any
line or lines of business activity other than those engaged in on the Initial
Borrowing Date and any other line or lines of business activity involving the
manufacture and distribution of packaging materials, plastics products and
materials, other disposable products, and related materials and related
businesses.
Section 5.05. Compliance with Laws. The Borrower will comply, and will
cause each Subsidiary to comply, in all material respects with all applicable
laws, ordinances, rules, regulations, orders and requirements of governmental
authorities (including, without limitation, Environmental Laws and ERISA and the
rules and regulations thereunder), except where the necessity or manner of
compliance therewith is contested in good faith by appropriate proceedings.
Section 5.06. Inspection of Property, Books and Records. The Borrower will
keep, and will cause each Subsidiary to keep, proper books of record and account
in which full and correct entries shall be made of all dealings and transactions
in relation to its business and activities; and will permit, and will cause each
Subsidiary to permit, representatives of any Lender at such Lender's expense to
visit and inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be requested.
Section 5.07. Mergers and Sales of Assets. (a) The Borrower will not, and
will not permit any Subsidiary to, consolidate or merge with or into any other
Person; provided that (i) mergers expressly permitted pursuant to the provisions
of Section 5.04 shall be permitted pursuant to this Section 5.07 and (ii) any
merger of a Subsidiary shall be permitted to the extent such merger constitutes
an Asset Sale permitted by Subsection (b) below.
(b) No Obligor will sell, lease or otherwise transfer, directly or
indirectly, any Collateral or other assets except for (i) dispositions of
inventory, cash, Cash Equivalents and other cash management investments and
obsolete, unused or unnecessary equipment, in each case in the ordinary course
of business, (ii) dispositions to the Borrower or a Wholly-Owned Subsidiary
thereof (excluding dispositions by the Borrower and its Subsidiaries other than
PureTec and its Subsidiaries to PureTec or any of its Subsidiaries) and (iii)
Asset Sales not otherwise permitted hereunder, provided, that (x) the aggregate
Net Cash Proceeds therefrom shall not exceed $10,000,000 in any Fiscal Year and
$25,000,000 in the aggregate during the term of this Agreement (or $100,000,000
in the case of the disposition of certain non-strategic assets described to the
Lenders prior to the Effective Date), (y) any such Asset Sale is for at least
75% in cash or for assets which constitute or are part of businesses which are
related to the business of the Borrower or its Subsidiaries permitted pursuant
to Section 5.04 or which assets consist of the issued and outstanding Capital
Stock of a person the assets of which are principally comprised of such assets
and at fair market value (as determined in good faith by the board of directors
or any member of senior management of the Person selling such assets) and (z)
the Net Cash Proceeds therefrom are applied to repay Term Loans as provided in
Section 2.10(d) or reinvested or used to make Permitted Acquisitions to the
extent permitted by Section 2.10(d).
Section 5.08. Use of Proceeds; Compliance with Margin Regulations. (a) The
proceeds of Term Loans shall be utilized to finance the Transaction and to pay
fees and expenses incurred in connection therewith.
(b) The proceeds of Revolving Loans and Swingline Loans shall be utilized
for the general corporate and working capital purposes of the Borrower and its
Subsidiaries (including to effect Permitted Acquisitions); provided that the
proceeds of Revolving Loans in an aggregate principal amount not to exceed (i)
$50 million may be utilized for the purposes set forth in clause (a) above and
(ii) up to $5 million may be utilized to purchase outstanding Existing PST
Senior Secured Notes.
(c) Neither the making of any Loan hereunder nor the use of the proceeds
thereof, nor the occurrence of any other Credit Event, will violate or be
inconsistent with the provisions of the Margin Regulations. Neither any proceeds
of the Loans nor any Letter of Credit will be used, directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of buying or carrying
any Margin Stock.
Section 5.09. Negative Pledge. Neither the Borrower nor any Subsidiary
will create, assume or suffer to exist any Lien on any asset now owned or
hereafter acquired by it, except:
(a) any Lien of the Borrower and its Subsidiaries in existence on
the Effective Date and listed on Schedule 4;
(b) any Lien on any asset securing Debt in an aggregate principal
amount at any time outstanding not to exceed $10,000,000 incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring, constructing or improving such asset, provided that such
Lien attaches to such asset concurrently with or within 180 days after
the acquisition thereof;
(c) any Lien on any asset of any Person existing at the time such
Person is merged or consolidated with or into the Borrower or a
Subsidiary, or at the time such Person becomes a Subsidiary or at the
time such asset is acquired and not created in contemplation of such
event (and so long as the respective such Lien does not extend to, or
attach to any additional asset, as a result of (or after giving effect
to) the respective merger or consolidation) and if securing Debt, such
Debt is permitted under Section 5.10(b)(y);
(d) any Lien arising out of the refinancing, extension, renewal
or refunding of any Debt secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Debt is not
secured by any additional assets and the amount of such Debt is not
increased (except for the amount of any premium required to be paid
pursuant to the terms of such Debt, plus expenses reasonably incurred
by the issuer of such Debt, in connection with such refinancing,
extension, renewal or refunding);
(e) Liens arising in the ordinary course of its business which
(i) do not secure Debt or Derivatives Obligations and (ii) do not
secure any single obligation or liability (or class of obligations or
liabilities having a common cause) in an amount exceeding $5,000,000;
(f) Liens created by the Collateral Documents;
(g) Permitted Encumbrances (as defined in the Mortgages) and
those Liens permitted to be contested under Section 2.06 of the
Mortgages;
(h) Liens to secure a Debt owed to the Borrower or a Guarantor;
(i) Liens to secure a Debt of a Foreign Subsidiary permitted
under Section 5.10(g);
(j) so long as any existing PST Senior Secured Notes remain
outstanding, Liens on assets of PST securing the Existing PST Senior
Secured Notes pursuant to the terms, and requirements, of the Existing
PST Senior Secured Notes Indenture and the related documentation, in
each case so long as the Agent, on behalf of the Secured Creditors,
maintains a second priority perfected security interest in all assets
secured by such Liens; and
(k) Liens to secure Debt or other obligations in an aggregate
amount at no time exceeding $500,000.
Section 5.10. Limitation on Debt. The Borrower will not, and will not
permit any of its Subsidiaries to, incur or at any time be liable with respect
to any Debt except:
(a) Debt under this Agreement;
(b) Debt of a Person (x) secured by Liens permitted by Section
5.09(b) or (y) existing at the time such Person is merged or
consolidated with or into the Borrower or a Subsidiary, or at the time
such Person becomes a Subsidiary or at the time such asset is
acquired, so long as the principal amount of Debt under this clause
(y) does not exceed $30,000,000 at any time outstanding and was not
incurred in contemplation of such merger, consolidation or asset
acquisition;
(c) Debt of the Borrower owed to a Guarantor, or Debt of a
Guarantor owed to the Borrower or another Guarantor;
(d) Debt of the Borrower, which may be guaranteed by any
Guarantor on a senior subordinated basis to the extent required by the
terms of the Existing Senior Subordinated Notes Indenture, evidenced
by the Existing Senior Subordinated Notes in an aggregate principal
amount not to exceed $75 million (less the amount of principal
repayments thereof after the Initial Borrowing Date);
(e) Debt of PST evidenced by the Existing PST Senior Secured
Notes, if any, not purchased pursuant to the Existing PST Senior
Secured Notes Tender Offer/Consent Solicitation (which in no event
shall exceed $62.499 million in aggregate principal amount)(less the
amount of principal repayments thereof after the Initial Borrowing
Date);
(f) Debt of the Borrower, which may be guaranteed on a senior
subordinated basis by one or more Guarantors to the extent required by
the terms of the New Senior Subordinated Notes Indenture or any
similar indenture described in clause (ii) below, evidenced by (i) the
New Senior Subordinated Notes in an aggregate principal amount not to
exceed $200 million (less the amount of principal repayments thereof
after the Initial Borrowing Date) and (ii) agreements and documents on
terms and provisions which are substantially identical to or more
favorable to the Lenders (in the reasonable judgment of the Agent) to
those set forth in the New Senior Subordinated Notes Documents in an
amount not to exceed $100 million (less the amount of principal
repayments thereof after the date on incurrence thereof);
(g) Debt of a Foreign Subsidiary in an aggregate amount not to
exceed $25,000,000;
(h) Debt of the Borrower and its Subsidiaries not otherwise
permitted by this Section incurred after the Initial Borrowing Date in
an aggregate principal amount at any time outstanding not to exceed
$15,000,000; provided that the aggregate principal amount of Debt
incurred by all Subsidiaries pursuant to this clause (h) shall not
exceed $7,500,000 at any time outstanding;
(i) the Borrower or any Subsidiary may guaranty Debt and other
obligations of its Domestic Subsidiaries or Foreign Subsidiaries
(which guaranty shall be included as an Investment in such Domestic
Subsidiary or Foreign Subsidiary, as applicable) which are permitted
under the provisions of this Agreement; and
(j) Debt of a Foreign Subsidiary owed to a Foreign Subsidiary;
(k) Debt outstanding as of the Effective Date and listed on
Schedule 2, plus any subsequent extensions, renewals or replacements
thereof; and
(1) Debt incurred under the Loan Agreement dated as of October
31, 1997 among PST, Huntington National Bank and PureTec, as amended
from time to time, in an aggregate principal amount outstanding at no
time to exceed $2,250,000, and any subsequent extensions, renewals or
replacements thereof.
Section 5.11. Fixed Charge Coverage Ratio. For any Test Period ending on
the last day of a Fiscal Quarter ending during one of the periods set forth
below, the Fixed Charge Coverage Ratio will not be less than the ratio set
forth below opposite such period:
Period Ratio
------ -----
June 1998 1.00:1
September 1998 0.90:1
December 1998 0.75:1
March 1999 0.70:1
June 1999 0.70:1
September 1999 0.70:1
December 1999 0.75:1
March 2000 0.90:1
June 2000 1.00:1
September 2000 1.10:1
December 2000 1.20:1
March 2001 1.25:1
June 2001 1.30:1
September 2001 1.30:1
December 2001 1.30:1
March 2002 1.30:1
June 2002 1.30:1
September 2002 1.30:1
December 2002 1.30:1
March 2003 1.30:1
June 2003 1.30:1
September 2003 1.30:1
December 2003 1.35:1
March 2004 1.35:1
June 2004 1.40:1
September 2004 1.45:1
December 2004 1.50:1
March 2005 1.50:1
June 2005 1.55:1
September 2005 1.60:1
December 2005 1.65:1
March 2006 1.70:1
Section 5.12. Leverage Ratio. At no time during any period set forth
below shall the Leverage Ratio be greater than the ratio set forth below
opposite such period.
Period Ratio
--------- ------
June 1998 6.50:1
September 1998 6.50:1
December 1998 6.50:1
March 1999 6.50:1
June 1999 6.50:1
September 1999 6.40:1
December 1999 6.25:1
March 2000 6.15:1
June 2000 6.00:1
September 2000 5.90:1
December 2000 5.75:1
March 2001 5.65:1
June 2001 5.50:1
September 2001 5.45:1
December 2001 5.40:1
March 2002 5.30:1
June 2002 5.25:1
September 2002 5.20:1
December 2002 5.15:1
March 2003 5.05:1
June 2003 5.00:1
September 2003 4.90:1
December 2003 4.75:1
March 2004 4.65:1
June 2004 4.50:1
September 2004 4.45:1
December 2004 4.40:1
March 2005 4.30:1
June 2005 4.25:1
September 2005 4.20:1
December 2005 4.15:1
March 2006 4.10:1
Section 5.13. Minimum Consolidated EBITDA. Consolidated EBITDA for
any Test Period ending on the last day of a Fiscal Quarter set forth below
will not be less than the amount set forth opposite such Fiscal Quarter
below:
Fiscal Quarter Ending Amount
--------------------- -----------
June 1998 $61,000,000
September 1998 $62,000,000
December 1998 $63,000,000
March 1999 $64,000,000
June 1999 $65,000,000
September 1999 $65,440,000
December 1999 $66,320,000
March 2000 $67,630,000
June 2000 $69,380,000
September 2000 $70,880,000
December 2000 $72,130,000
March 2001 $73,130,000
June 2001 $73,880,000
September 2001 $74,570,000
December 2001 $75,190,000
March 2002 $75,760,000
June 2002 $76,260,000
September 2002 $76,760,000
December 2002 $77,260,000
March 2003 $77,760,000
June 2003 $78,260,000
September 2003 $78,820,000
December 2003 $79,450,000
March 2004 $80,130,000
June 2004 $80,880,000
September 2004 $81,630,000
December 2004 $82,380,000
March 2005 $83,130,000
June 2005 $83,880,000
September 2005 $84,570,000
December 2005 $85,190,000
March 2006 $85,760,000
Section 5.14. Restricted Payments. Neither the Borrower nor any
Subsidiary will declare or make any Restricted Payment, except that any
Subsidiary of the Borrower (x) may pay cash dividends or other
distributions ("Dividends") to the Borrower or any Wholly-Owned Subsidiary
of the Borrower, (y) if the Subsidiary is not a Wholly-Owned Subsidiary,
may pay cash Dividends to its shareholders generally so long as the
Borrower or any such Subsidiary which owns the equity interest or interests
in the Subsidiary paying such Dividends receives at least its proportionate
share thereof (based on its relative holdings of equity interests in the
Subsidiary paying such Dividends and taking into account the relative
preferences, if any, of the various classes of equity interests in such
Subsidiary) and (z) after an Initial Public Offering, the Borrower may pay
Dividends in an amount not to exceed the lesser of (y) $5,000,000 in any
Fiscal Year and (y) the Available ECF Amount. Notwithstanding anything to
the contrary contained above, payments made to effect the PureTec
Acquisition and the PST Minority Acquisition shall be permitted in
accordance with the terms in the relevant Documents.
Section 5.15. Investments; Restricted Acquisitions. Neither the Borrower
nor any Subsidiary will (a) hold, make or acquire any Investment or (b)
consummate or agree to consummate any Restricted Acquisition except:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary terms;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) the Borrower and its Subsidiaries may enter into agreements
relating to Derivatives Obligations which are determined in good faith by
the Borrower to be non-speculative in nature;
(iv) any Guarantor may make intercompany loans and advances to, and
other Investments in the Borrower or any other Guarantor (and may make
Restricted Acquisitions of any other Guarantor), and the Borrower may
make intercompany loans and advances to, and other Investments in and
Restricted Acquisitions of any Guarantor to the extent not otherwise
prohibited by Section 5.10(c);
(v) any Subsidiary may make Investments and Restricted Acquisitions
to the extent permitted by Section 5.04(ii);
(vi) any Foreign Subsidiary may make any Investment in or Restricted
Acquisition of any other Foreign Subsidiary;
(vii) the Borrower and its Subsidiaries may acquire and own
Investments received in connection with the bankruptcy or reorganization
of suppliers and customers and in settlement of delinquent obligations
of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(viii) the PureTec Acquisition shall be permitted;
(ix) the PST Minority Acquisition shall be permitted;
(x) Consolidated Capital Expenditures by the Borrower and its
Subsidiaries shall be permitted to the extent not in violation of Section
5.16;
(xi) the Borrower and its Subsidiaries may make Investments in and
Restricted Acquisitions of Foreign Subsidiaries and Foreign Joint
Ventures in an amount not to exceed $30,000,000 minus (i) the
aggregate amount of Investments made by the Borrower or any of its
Domestic Subsidiaries, net of Debt and, without duplication,
Capitalized Lease Obligations assigned to, and assumed by, the
respective Foreign Subsidiary or Foreign Joint Venture in connection
therewith pursuant to this Section 5.15(xi) after the Initial
Borrowing Date, minus (ii) the aggregate amount of Debt or other
obligations (whether absolute, accrued, contingent or otherwise and
whether or not due) of any Foreign Subsidiary or Foreign Joint Venture
for which the Borrower or any of its Domestic Subsidiaries is liable,
minus (iii) all payments made by the Borrower or any of its Domestic
Subsidiaries in respect of Debt or other obligations of the respective
Foreign Subsidiary or Foreign Joint Venture after the Initial
Borrowing Date, plus (iv) to the extent the Borrower or one or more
other Obligors (after the respective Investment has been made)
receives a cash return from the respective Foreign Subsidiary or
Foreign Joint Venture of amounts previously invested pursuant to this
clause (xi) (which cash return may be made by way of repayment of
principal in the case of loans and cash equity returns (whether as a
distribution, dividend or redemption) in the case of equity investments),
then the amount of such return of investment shall apply to increase
the available basket hereunder, provided that the aggregate amount of
increases to the available basket hereunder shall not exceed the
amount of returned investment and, in no event, shall the amount of
the increases made to the available basket hereunder in respect of any
Investment exceed the amount previously invested pursuant to this
clause (xi);.
(xii) additional Investments and Restricted Acquisitions provided that
(a) immediately after any such Investment or Restricted Acquisition is
made or acquired (any such Investment or Restricted Acquisition
permitted by this clause (xii), a "Permitted Acquisition") is
consummated or agreed to, the sum, without duplication, of the
aggregate amount expended by the Borrower and its Domestic
Subsidiaries with respect to Permitted Acquisitions (including the
value of Capital Stock of the Borrower used to make Permitted
Acquisitions) after the date hereof does not in the aggregate exceed
the sum of (x) Available ECF Amount, (y) Retained Asset Sale
Proceeds received in connection with Asset Sales to the extent not
reinvested in other assets pursuant to the first proviso in Section
2.10(d) and (z) an additional amount equal to $100,000,000 for all
periods after the Initial Borrowing Date; and
(b) in the case of a Permitted Acquisition, (A) the Person whose
assets, securities or other equity interests are acquired by the
Borrower or its Subsidiaries is engaged in substantially the same line
of business activity as the Borrower and its Subsidiaries or any other
line or lines of business activity involving the manufacture and
distribution of packaging materials, plastic products and materials,
other disposable products, and related materials and related
businesses; (B) immediately after such Permitted Acquisition is
consummated, the Unutilized Revolving Loan Commitment shall not be
less than $20,000,000; (C) if the Permitted Acquisition is structured
as an acquisition of capital stock or other equity interest of another
Person, the Borrower and/or its Domestic Subsidiaries shall own all of
the capital stock or other equity interests of the Person so acquired;
and (D) the Borrower would be in compliance with Sections 5.11 to
5.13, inclusive, after the Fixed Charge Coverage Ratio, Leverage Ratio
and Consolidated EBITDA are each adjusted with respect to such
Permitted Acquisition on the date of consummation or proposed
consummation thereof (the "Transaction Date") as follows: in
calculating Consolidated EBITDA, Consolidated Interest Expense and
Consolidated Capital Expenditures, (1) the incurrence of any Debt
incurred in connection with such Permitted Acquisition and the
application of the proceeds therefrom shall be assumed to have
occurred on the first day of the period of four consecutive Fiscal
Quarters (or other period) for which such amounts are required to be
determined in accordance with the definitions of Fixed Charge Coverage
Ratio and Leverage Ratio (the "Reference Period"), (2) pro forma
effect shall be given to any Permitted Acquisition (including
adjustments to operating results permitted to be made in accordance
with generally accepted accounting principles and any pro forma cost
savings which the Borrower expects to realize and to the inclusion of
which the Agent and, if such expected pro forma cost savings are in
excess of $2,000,000, the Required Lenders, have consented (such
consents not to be unreasonably withheld or delayed)) which occurs
during the Reference Period or subsequent to the Reference Period and
prior to the Transaction Date as if such Permitted Acquisition had
occurred on the first day of the Reference Period, (3) in the
incurrence of any Debt during the Reference Period or subsequent to
the Reference Period and prior to the Transaction Date and the
application of the proceeds therefrom shall be assumed to have
occurred on the first day of such Reference Period and (4)
Consolidated Interest Expense attributable to any Debt (whether
existing or being incurred) bearing a floating interest rate shall be
computed on a pro forma basis as if the rate in effect on the date of
computation had been the applicable rate for the entire period, unless
such Person or any of its Subsidiaries is a party to an interest rate
swap or cap or similar agreement (which shall remain in effect for the
twelve month period after the Transaction Date) which has the effect
of fixing the interest rate on the date of computation, in which case
such rate (whether higher or lower) shall be used.
At least twenty days prior to the closing date for any Permitted
Acquisition (or, in the case of any Permitted Acquisition that occurs within 20
days after the Initial Borrowing Date, within such time as the Borrower and the
Agent agree), the Borrower shall have delivered to the Lenders (i) a compliance
certificate certifying the Borrower's compliance with the provisions of this
Agreement, including, without limitation, Sections 5.11 to 5.13, inclusive,
after giving effect on a pro forma basis to such Permitted Acquisition and (ii)
a report of the chief executive officer or chief accounting officer of the
Borrower, in a form and providing sufficient detail and justification for the
information provided therein, including assumptions, as shall be found to be
reasonable by the Agent in its good faith discretion after completion of
reasonable due diligence, establishing (x) the basis for such certification and
(y) that after giving effect to such Permitted Acquisition and the financing
therefor, the Borrower shall be in compliance at the end of each Fiscal Year
until the Termination Date with the coven ants contained in Sections 5.11 to
5.13, inclusive.
(xiii) the Borrower and its Subsidiaries may acquire and hold debt
and/or other similar non-cash consideration in connection with Asset
Sales permitted pursuant to Section 5.07(b)(iii);
(xiv) so long as no Default or Event of Default exists or would exist
immediately after giving effect to the respective Investment, the Borrower
and its Domestic Subsidiaries shall be permitted to make Investments in any
Domestic Joint Venture on any date in an amount not to exceed the Available
Domestic JV Basket Amount on such date (after giving effect to all prior
and contemporaneous adjustments thereto, except as a result of such
Investment), it being understood and agreed that to the extent the Borrower
or one or more other Obligors (after the respective Investment has been
made) receives a cash return from the respective Joint Venture of amounts
previously invested pursuant to this clause (xiv) (which cash return may be
made by way of repayment of principal in the case of loans and cash equity
returns (whether as a distribution, dividend or redemption) in the case of
equity investments), then the amount of such return of investment shall
apply to increase the Available Domestic JV Basket Amount, provided that
the aggregate amount of increases to the Available Domestic JV Basket
Amount described above shall not exceed the amount of returned investment
and, in no event, shall the amount of the increases made to the Available
Domestic JV Basket Amount in respect of any Investment exceed the amount
previously invested pursuant to this clause (xiv);
(xv) so long as no Default then exists or would result therefrom, in
addition to the Investments permitted pursuant to preceding clauses (i)
through (xiv), the Borrower and its Subsidiaries may make additional
Investments to or in one or more Persons, so long as all such Investments
(determined without regard to any write-downs or write-offs) do not exceed
in aggregate amount $10,000,000 at any time outstanding; and
(xvi) any Investment of the Borrower or any of its Subsidiaries
existing as of the Effective Date.
Section 5.16. Consolidated Capital Expenditures. The Borrower and its
Subsidiaries shall not make any Capital Expenditures after the Initial
Borrowing Date, except as expressly permitted pursuant to the following
clauses:
(a) The Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount thereof, in any Fiscal
Year, does not exceed the amount set forth below for such Fiscal Year:
Fiscal Year Amount
----------- ----------
1998 --
1999 $40,000,000
2000 $30,000,000
2001 $20,000,000
2002 $20,000,000
2003 $22,000,000
2004 $22,000,000
2005 $20,000,000
2006 $20,000,000
(b) In the event that the maximum amount which is permitted to
be expended in respect of Capital Expenditures during any fiscal
period set forth in Section 5.16(a) (without giving effect to this
clause (b)) is not fully expended during such fiscal period, the
maximum amount which may be expended during any succeeding fiscal
period set forth in Section 5.16(a) shall be increased by such
unutilized amount (the "Carryover Amount"), provided that the
Carryover Amount expended in any such subsequent Fiscal Year shall not
exceed $35,000,000.
(c) The Borrower and its Wholly-Owned Subsidiaries may make
additional Consolidated Capital Expenditures constituting Permitted
Acquisitions effected in accordance with the requirements of Section
5.15(xii).
(d) The Borrower and its Subsidiaries may make additional
Capital Expenditures with Retained Asset Sale Proceeds of Asset Sales
to the extent such proceeds are not required to be applied as a
mandatory repayment of Term Loans pursuant to Section 2.10(d) and such
proceeds are reinvested as required by Section 2.10(d).
(e) The Borrower and its Subsidiaries may make additional
Capital Expenditures with Major Casualty Proceeds to the extent such
proceeds are not required to be applied as a mandatory repayment of
Term Loans pursuant to Section 2.10(f) and such proceeds are
reinvested as required by Section 2.10(f).
(f) The Borrower and its Subsidiaries may make additional Capital
Expenditures in an amount not to exceed the Available ECF Amount.
Section 5.17. Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, pay any funds to or for
the account of, make any investment (whether by acquisition of stock or
indebtedness, by loan, advance, transfer of property, guarantee or other
agreement to pay, purchase or service, directly or indirectly, any Debt, or
otherwise) in, lease, sell, transfer or otherwise dispose of any assets,
tangible or intangible, to, or participate in, or effect, any transaction with,
any Affiliate except on an arms-length basis on terms at least as favorable to
the Borrower or such Subsidiary as could have been obtained from a third party
that was not an Affiliate; provided that the foregoing provisions of this
Section shall not prohibit (i) Restricted Payments to the extent permitted by
Section 5.14, (ii) Loans made and other transactions entered into between the
Borrower and its Subsidiaries, or between such Subsidiaries, to the extent
permitted by Sections 5.10 and 5.15, (iii) transactions among the Borrower and
the Guarantors, (iv) transactions among Foreign Subsidiaries or (v) so long as
no Default has occurred and is continuing, payments by the Borrower, not
exceeding $600,000 in the aggregate in any Fiscal Year, required to be made to
Tekni-Plex Partnership or MST Partners L.P. or their respective affiliates or
partners under the terms of existing agreements and notes.
Section 5.18. Limitation on Restrictions Affecting Subsidiaries. Neither
the Borrower nor any of its Subsidiaries will enter into, or suffer to exist,
any agreement with any Person, other than this Agreement or the other Loan
Documents, which prohibits or limits the ability of any Subsidiary to (a) pay
dividends or make other distributions to, or pay any Debt owed to, the Borrower
or any Subsidiary, (b) make loans or advances to the Borrower or any Subsidiary,
(c) transfer any of its properties or assets to the Borrower or any Subsidiary
or (d) create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired (other
than, in the case of clause (c) or (d) above, with respect to assets subject to
consensual Liens permitted under Section 5.09); provided that the foregoing
shall not apply to (i) restrictions existing under or by reason of applicable
law, (ii) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Borrower or a Subsidiary of the Borrower,
(iii) customary provisions restricting assignment of any licensing agreement
entered into by the Borrower or any Subsidiary of the Borrower in the ordinary
course of business, (iv) restrictions in effect on the date of this Agreement
contained in the New Senior Subordinated Notes Indenture, the Existing Senior
Subordinated Notes, or any other Debt existing on the Effective Date (and any
replacement or refinancing of the foregoing so long as such restrictions are no
more restrictive than those relating to the Debt being refinanced), (v)
restrictions applicable to an acquired entity or its assets in effect at the
acquisition thereof by the Borrower or a Subsidiary and not incurred (or
modified) in contemplation of such acquisition and (vi) restrictions in any
agreement or instrument evidencing Debt permitted by Section 5.10(g) or 5.10
(h).
Section 5.19. Limitation on Issuance of Capital Stock. (a) The Borrower
shall not issue (i) any preferred stock (other than Qualified Preferred Stock)
or (ii) any redeemable common stock.
(b) No Subsidiary of the Borrower shall issue, or permit any of their
Subsidiaries to issue, any capital stock (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock, except (i) for transfers and replacements of then outstanding
shares of capital stock, (ii) for stock splits, stock dividends and additional
issuances which do not decrease the percentage ownership of the Borrower or any
of its Subsidiaries in any class of the capital stock of such Subsidiaries and
(iii) to qualify directors to the extent required by applicable law; provided,
the foregoing shall not prohibit Investments and Restricted Acquisitions in
Foreign Joint Ventures and Domestic Joint Ventures permitted pursuant to Section
5.15(xi) and 5.15(xiv), respectively. All capital stock issued in accordance
with this Section 5.19 shall, to the extent required by the Pledge Agreement, be
delivered to the Agent for pledge pursuant to the Pledge Agreement.
Section 5.20. Limitation on Voluntary Payments and Modifications of
Indebtedness. The Borrower will not, and will not permit any of its Subsidiaries
to:
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto or any other Person money or securities before due for the
purpose of paying when due) any New Senior Subordinated Note, any Existing
Senior Subordinated Note or any Existing PST Senior Secured Note, provided
that (x) purchases of Existing PST Senior Secured Notes by the Borrower may
be made pursuant to the Existing PST Senior Secured Notes Tender Offer
Documents or in connection with a disposition of assets requiring such
repurchase under the terms of the Existing PST Senior Secured Note
Indenture, in each case so long as all such notes are immediately canceled
and delivered to the trustee pursuant to the Existing PST Senior Secured
Notes Indenture for cancellation and (y) if the aggregate principal amount
of Existing PST Senior Secured Notes after giving effect to the Existing
PST Senior Secured Notes Tender Offer/Consent Solicitation is less than $5
million, at any time when no Default is in existence (and would not exist
immediately after giving effect to the payments contemplated herein) any
then remaining outstanding Existing PST Senior Secured Notes may be
repurchased, repaid or defeased by the Borrower and/or its Subsidiaries;
(ii) make (or give any notice in respect of) any prepayment or
redemption of New Senior Subordinated Notes, Existing Senior Subordinated
Notes or Existing PST Senior Secured Notes as result of any asset sale,
change of control or similar event (including, without limitation, by way
of depositing with the trustee with respect thereto or any other Person
money or securities before due for the purpose of paying when due any New
Senior Subordinated Note, Existing Senior Subordinated Note or Existing PST
Senior Secured Note; provided that the proviso to preceding clause (i)
shall be equally applicable to this clause (ii); or
(iii) amend or modify, or permit the amendment or modification of, any
provision of any New Senior Subordinated Note Document, the Existing Senior
Subordinated Notes Indenture, the Existing PST Senior Secured Notes
Indenture or any Existing PST Senior Secured Notes Collateral Document,
except (i) if only the respective trustee's consent is required pursuant to
the respective indenture, the consent of the Agent (and not the Required
Lenders) shall be required to permit any of the foregoing, (ii) if consent
of any noteholders is required pursuant to the respective indenture, the
consent of the Required Lenders (not to be unreasonably withheld) shall be
required to permit any of the foregoing and (iii) in the case of the
Existing PST Senior Secured Note Indenture and the Existing PST Senior
Secured Collateral Documents, amendments, restatements and supplements
thereto executed on or before the Initial Borrowing Date as contemplated by
the Documents.
Section 5.21. Limitation on Fixed-Price Contracts. Excluding contracts,
purchase orders and arrangements in respect of which and to the extent the
Borrower or any Subsidiary has entered into non-speculative option, swap or
other hedging arrangements, the Borrower will not, and will not permit any of
its Subsidiaries to, enter into any contract, purchase order or other
arrangement providing for delivery more than twelve months after the effective
date thereof pursuant to which the Borrower or any Subsidiary agrees to
manufacture, produce, supply, sell, distribute or otherwise transfer any
material or product at a fixed price that may not be adjusted to reflect
fluctuations in market conditions and such Person's cost of goods sold if the
aggregate contract price to be paid under all such arrangements during any
fiscal year would exceed 10% of the consolidated net sales of the Borrower and
its Subsidiaries during such year.
Section 5.22. End of Fiscal Years; Fiscal Quarters. The Borrower will, for
financial reporting purposes, cause each of its Fiscal Years to end on the
Friday closest to the last Business Day in June of each year and (ii) each of
its fiscal quarters to end the Friday closest to the last Business Day in each
September, December, March and June; provided that the Borrower may change its
financial reporting periods one time after the Initial Borrowing Date so long as
the Borrower and the Agent agree on new dates (if the Agent deems new test dates
to be appropriate) to test the financial covenants under this Agreement (and
thereafter distribute such revised dates to the Lenders and such covenants shall
be deemed amended to incorporate such revised dates).
Section 5.23. Further Assurances. (a) The Borrower will, and will cause
each of the other Obligors to, at the Borrower's sole cost and expense, do,
execute, acknowledge and deliver all such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment and transfers as the Agent shall
from time to time request, which may be necessary in the reasonable judgment of
the Agent from time to time to assure, perfect, convey, assign and transfer to
the Agent the property and rights conveyed or assigned pursuant to the
Collateral Documents, or which may facilitate the performance of the terms of
the Collateral Documents, or the filing, registering or recording of the
Collateral Documents. Without limiting the foregoing, the Borrower shall use all
reasonable efforts to deliver to the Agent waivers of contractual and statutory
landlord's, landlord's mortgagee's and warehouseman's Liens in form and
substance satisfactory to the Agent under each existing lease, warehouse
agreement or similar agreement to which the Borrower is a party and each
amendment, renewal or extension thereof, and with respect to each new lease to
which the Borrower becomes a party.
(b) All costs and expenses in connection with the grant of any security
interests under the Collateral Documents, including, without limitation,
reasonable legal fees and other reasonable costs and expenses in connection with
the granting, perfecting and maintenance of any security interests under the
Collateral Documents or the preparation, execution, delivery, recordation or
filing of documents and any other acts as the Agent may reasonably request in
connection with the grant of such security interests, shall be paid by the
Borrower promptly upon demand.
(c) The Borrower will not, and will not permit any of its Subsidiaries to,
enter into or become subject to any agreement which would impair their ability
to comply, or which would purport to prohibit them from complying, with the
provisions of this Section.
(d) The Borrower will cause each Domestic Subsidiary acquired, established
or created after the Initial Borrowing Date (i) to become a party to this
Agreement as guarantor by executing a supplement hereto in form and substance
satisfactory to the Agent and (ii) to enter into a Security Agreement and any
other agreements as may be necessary or desirable in order to grant (subject to
and to the extent permitted by restrictions permitted by Section 5.18 hereof,
and subject to Liens permitted by Section 5.09 hereof) perfected first priority
security interests upon all of its assets to secure its obligations hereunder.
In addition, the Borrower will pledge, or cause to be pledged, pursuant to a
Pledge Agreement (or a comparable pledge agreement in form and substance
satisfactory to the Agent), all (or, in the case of a Foreign Subsidiary,
66-2/3%) of the capital stock or other equity interests of such Subsidiary owned
by the Borrower or any Domestic Subsidiary, provided, the capital stock of
Colorite Europe Ltd., an Irish corporation, shall not be pledged unless such
capital stock is owned by an Obligor at any time after six months after the
Effective Date. The Borrower shall cause each such Subsidiary to take such
actions as may be necessary or desirable to effect the foregoing within 30 days
after such Subsidiary is acquired, including, without limitation, causing such
Subsidiary to (x) execute and deliver to the Agent such number of copies as the
Agent may specify of such supplements and Security Agreement and other documents
creating security interests and (y) deliver such certificates, evidences of
corporate action or other documents as the Agent may reasonably request, all in
form and substance satisfactory to the Agent, relating to the satisfaction of
the Borrower's obligations under this Section. Upon compliance by the Borrower
with the provisions of this subsection (d), Schedule 3 shall be deemed to have
been amended to reflect that such Subsidiary is a Guarantor.
Section 5.24. De Minimis Subsidiaries. Notwithstanding anything to the
contrary stated herein, a De Minimis Subsidiary of the Borrower shall not be
required to comply with any of the covenants set forth in this Article V (other
than Section 5.10) or the representations and warranties set forth in Article
IV; provided, however, that the amount of Investments into any De Minimis
Subsidiary shall not exceed $100,000 and the aggregate amount of all Investments
into De Minimis Subsidiaries shall not exceed $1,000,000.
ARTICLE VI
Defaults
Section 6.01. Events of Defaults. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any
Loan or any LC Reimbursement Obligation, or shall fail to pay within
five days of the date when due any interest, fee or other amount
payable by it hereunder;
(b) the Borrower shall fail to observe or perform any covenant
contained in Article 5, other than those contained in Sections 5.01
through 5.06, or any Obligor shall fail to observe or perform any
covenant contained in Section 4(A) or 4(J) of the Security Agreement
or Section 5(B) of the Pledge Agreement;
(c) any Obligor shall fail to observe or perform any covenant or
agreement (other than those covered by clause (a) or (b) above)
contained in the Loan Documents and such default shall continue
unremedied for a period of at least 15 days after the Agent gives
notice thereof to the Borrower at the request of any Lender;
(d) any representation, warranty, certification or statement made
by any Obligor in any Loan Document or in any certificate, financial
statement or other document delivered pursuant to any Loan Document
shall prove to have been incorrect in any material respect when made
(or deemed made);
(e) the Borrower or any Subsidiary shall fail to make one or more
payments in respect of Material Financial Obligations when due or
within any applicable grace period;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt or enables (or, with
the giving of notice or lapse of time or both, would enable) the
holder of such Debt or any Person acting on such holder's behalf to
accelerate the maturity thereof;
(g) the Borrower or any Subsidiary shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts
as they become due, or shall take any corporate action to authorize
any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against the Borrower or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any Subsidiary
under the federal bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $12,500,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to cause a
trustee to be appointed to administer, any Material Plan; or a
condition described in Section 4042(a)(1)-(3) or ERISA shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which causes one or more members of the ERISA
Group to incur a current payment obligation in excess of $12,500,000
and such payment obligation shall continue unsatisfied and unstayed
for a period of 15 days;
(j) judgments or orders for the payment of money exceeding
$12,500,000 in aggregate amount shall be rendered against the Borrower
or any Subsidiary and such judgments or orders shall continue
unsatisfied and unstayed for a period of 30 days;
(k) any Lien created by any of the Collateral Documents shall at
any time fail to constitute a valid and (to the extent required by the
Collateral Documents) perfected Lien prior to all other Liens except
for Permitted Liens (as defined in the Security Agreement) on any
material part of the Collateral purported to be subject thereto,
securing the obligations purported to be secured thereby, with the
priority required by the Loan Documents, or any Obligor shall so
assert in writing;
(l) the Borrower or any Subsidiary of the Borrower incurs after
the date hereof Environmental Liabilities in excess of $25,000,000 in
the aggregate, which Environmental Liabilities would, under GAAP, be
reflected in the financial statements (or the footnotes thereto) of
the Borrower; or
(m) (1) so long as Tekni-Plex Partners, L.P. has not liquidated
or unwound or otherwise distributed its shares of capital stock of the
Borrower, MST/TP Partners, L.P. ceases to be the sole general partner
of Tekni-Plex Partners, L.P.; (2) at any time prior to an Initial
Public Offering, members of the Control Group shall cease to own,
directly or indirectly, more than fifty percent (50%) of the economic
interest in the Borrower; (3) members of the Control Group shall
cease to control directly or indirectly more than fifty percent (50%)
of the shares of capital stock of the Borrower entitled (excluding
stock that is entitled to vote only upon the occurrence of a
contingency that has not yet occurred) to vote in the election of a
majority of the members of the board of directors of the Borrower;
provided that on or after an Initial Public Offering, such voting
stock interest in the Borrower held by members of the Control Group
may be reduced to not less than a thirty percent (30%) voting stock
interest in the Borrower; (4) any person or group of persons (within
the meaning of Section 13 or 14 of the Exchange Act), excluding from
such group any members of the Control Group, shall have acquired after
the date hereof, beneficial ownership (within the meaning of Rule 13d-
3 promulgated by the SEC under said Act) of the lesser of (x) more
than 40% of the outstanding shares of common stock of the Borrower or
(y) a greater voting stock interest in the Borrower than is held by
members of the Control Group; or (5) during any period of twelve
consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period ("Initial Directors") or who
were nominated for election by all of the Initial Directors (other
than any such Initial Directors who shall have died, become
incapacitated or resigned for family, health or other personal reasons
prior to such nomination), shall cease to constitute a majority of the
Borrower's board of directors; or (6) a "change of control" or similar
event shall occur as provided in the Existing Senior Subordinated
Notes Indenture or the New Senior Subordinated Notes Indenture;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Lender to
enforce its claims against any Obligor, except as otherwise specifically
provided for in this Agreement (provided, that if an Event of Default specified
in Section 6.01(g) or (h) shall occur with respect to the Borrower, the result
which would occur upon the giving of written notice by the Agent as specified in
clauses (i) and (ii) below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Fees shall forthwith become due and payable without any other notice
of any kind; (ii) declare the principal of and any accrued interest in respect
of all Loans and all Obligations owing hereunder (including LC Reimbursement
Obligations) to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; (iii) enforce, as Agent, any or all of the
Liens and security interests created pursuant to the Collateral Documents; (iv)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (v) direct the Borrower to pay (and the Borrower hereby agrees upon
receipt of such notice, or upon the occurrence of any Event of Default specified
in Section 6.01(g) or (h) with respect to the Borrower, it will pay) to the
Agent at the Payment Office such additional amounts of cash, to be held as
security for the Borrower's reimbursement obligations in respect of Letters of
Credit then outstanding, as is equal to the Stated Amount of all Letters of
Credit then outstanding; and (vi) apply any cash collateral held in the
Collateral Account pursuant to Section 2.10 in satisfaction of the
Obligations.
Section 6.02. Notice of Default. The Agent shall give notice to the
Borrower under Section 6.01(c) promptly upon being requested to do so by any
Lender and shall thereupon notify all the Lenders thereof.
ARTICLE VII
The Agent
Section 7.01. Appointment and Authorization. Each Lender irrevocably
appoints and authorizes the Agent to enter into and act as its agent in
connection with the Collateral Documents and to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with all such powers as are
reasonably incidental thereto.
Section 7.02. Agent and Affiliates. The Agent shall have the same rights
and powers under the Loan Documents as any other Lender and may exercise or
refrain from exercising the same as though it were not the Agent, and the Agent
and its affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or affiliate of the
Borrower as if it were not the Agent and the terms "Lender" and "Required
Lenders" shall include the Agent in its individual capacity.
Section 7.03. Action by Agent. The obligations of the Agent hereunder are
only those expressly set forth herein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action with respect to
any Default, except as expressly provided in Article 6.
Section 7.04. Consultation with Experts. The Agent may consult with legal
counsel (who may be counsel for any obligor), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
Section 7.05. Liability of Agent. Neither the Agent nor any of its
affiliates or any of their respective directors, officers, agents or employees
shall be liable for any action taken or not taken by it in connection herewith
(i) with the consent or at the request of the Required Lenders (or such
different number of Lenders as any provision hereof expressly requires for such
consent or request) or (ii) in the absence of its own gross negligence or
willful misconduct. Neither the Agent nor any of its affiliates nor any of their
respective directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into or verify (i) any statement, warranty
or representation made in connection with the Loan Documents or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Obligor; (iii) the satisfaction of any condition specified in
Article 3, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness or genuineness of the Loan Documents or any
other instrument or writing furnished in connection herewith. The Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, statement or other writing (which may be a bank wire, telex,
facsimile or similar writing) believed by it to be genuine or to be signed by
the proper party or parties. Without limiting the generality of the foregoing,
the use of the term "agent" or "Agent" in this Agreement with reference to the
Agent is not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable law. Instead, such
term is used merely as a matter of market custom and is intended to create or
reflect only an administrative relationship between independent contracting
parties.
Section 7.06. Indemnification. The Lenders shall, ratably in accordance
with their respective "percentages" as used in determining Required Lenders
(computed without adjustment for Non-Defaulting Lenders and Defaulting Lenders)
indemnify the Agent, its affiliates and their respective directors, officers,
agents and employees (each an "indemnitee") (to the extent not reimbursed by the
Borrower) against any cost, expense (including counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from such
indemnitee's gross negligence or willful misconduct) that such indemnitees may
suffer or incur in connection with the Loan Documents or any action taken or
omitted by such indemnitees thereunder. The agreements in this Section 7.06
should survive the termination of this Agreement and the other Loan Documents
and the payment of all Obligations.
Section 7.07. Credit Decision. Each Lender acknowledges that it has,
independently and without reliance on the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and to make Loans
hereunder. Each Lender also acknowledges that it will, independently and without
reliance on the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under the Loan Documents.
The Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, operations, assets,
property, financial and other condition, prospects or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
Section 7.08. Successor Agent. Subject to the appointment of and acceptance
of appointment by a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Lenders and the Borrower. Upon receipt
of such notice, the Required Lenders shall have the right with, so long as no
Default has occurred and is continuing, the consent of the Borrower (not to be
unreasonably withheld or delayed), to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Lenders within 30 days after
the retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be a commercial
bank organized or licensed under the laws of the United States or of any State
thereof and having a combined capital and surplus of at least $100,000,000. Upon
the acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent resigns as
Agent hereunder, the provisions of this Article shall inure to its benefit as to
actions taken or omitted to be taken by it while it was Agent.
Section 7.09. Agent's Fee. The Borrower shall pay to the Agent, for its own
account, fees in the amounts and at the times previously agreed upon by the
Borrower and the Agent.
ARTICLE VIII
Change in Circumstances
Section 8.01. Basis for Determining Interest Rate Inadequate or
Unfair. If on or before the first day of any Interest Period for any Euro-
Dollar Loan:
(a) The Agent is advised by the Reference Lenders that deposits
in dollars (in the applicable amounts) are not being offered to the
Reference Lenders in the London interbank market for such Interest
Period, or
(b) Lenders holding 50% or more of the aggregate principal
amount of the affected Loans advise the Agent that the Adjusted London
Interbank Offered Rate as determined by the Agent will not adequately
and fairly reflect the cost to such Lenders of funding their Euro-
Dollar Loans for such Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the
Lenders, whereupon until the Agent notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, (i) the
obligations of the Lenders to make Euro-Dollar Loans or to continue or
convert outstanding Loans as or into Euro-Dollar Loans shall be suspended
and (ii) each outstanding Euro-Dollar Loan shall be converted into a Base
Rate Loan on the last day of the then current Interest Period applicable
thereto. Unless the Borrower notifies the Agent at least two (2) Business
Days before the date of any affected Borrowing for which a Notice of
Borrowing has previously been given that it elects not to borrow on such
date, such Borrowing shall instead be made as a Base Rate Borrowing.
Section 8.02. Illegality. If, on or after the date hereof, the adoption of
any applicable law, rule or regulation, or any change in any applicable law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or its Euro-Dollar Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for any Lender (or its Euro-Dollar
Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Lender
shall so notify the Agent, the Agent shall forthwith give notice thereof to the
other Lenders and the Borrower, whereupon until such Lender notifies the
Borrower and the Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Lender to make Euro-Dollar Loans, or to
convert outstanding Loans into Euro-Dollar Loans or continue outstanding Loans
as Euro-Dollar Loans, shall be suspended. Before giving any notice to the Agent
pursuant to this Section, such Lender shall designate a different Euro-Dollar
Lending Office if such designation will avoid the need for giving such notice
and will not, in the judgment of such Lender, be otherwise disadvantageous to
such Lender. If such notice is given, each Euro-Dollar Loan of such Lender then
outstanding shall be converted to a Base Rate Loan either (a) on the last day of
the then current Interest Period applicable to such Euro-Dollar Loan if such
Bank may lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan
to such day or (b) immediately if such Bank shall determine that it may not
lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan to such
day.
Section 8.03. Increased Cost and Reduced Return. (a) If on or after the
date hereof, the adoption of any applicable law, rule or regulation, or any
change in any applicable law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or its Applicable Lending Office) or any
LC Issuing Bank with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency, shall impose,
modify or deem applicable any reserve (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve System, but
excluding with respect to any Euro-Dollar Loan any such requirement included in
an applicable Euro-Dollar Reserve Percentage), special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit (including letters of credit and participations therein)
extended by, any Lender (or its Applicable Lending Office) or any LC Issuing
Bank or shall impose on any Lender (or its Applicable Lending Office) or any LC
Issuing Bank or the London interbank market any other condition affecting its
Euro-Dollar Loans, its Notes or its obligation to make Euro-Dollar Loans or its
obligations hereunder in respect of Letters of Credit and the result of any of
the foregoing is to increase the cost to such Lender (or its Applicable Lending
Office) or such LC Issuing Bank of making or maintaining any Euro-Dollar Loan or
issuing or participating in any Letter of Credit, or to reduce the amount of any
sum received or receivable by such Lender (or its Applicable Lending Office) or
such LC Issuing Bank under this Agreement or under its Note with respect
thereto, by an amount deemed by such Bank or LC Issuing Bank to be material,
then, within 15 days after demand by such Lender or LC Issuing Bank (with a copy
to the Agent), the Borrower shall pay to such Lender or LC Issuing Bank such
additional amount or amounts as will compensate such Lender or LC Issuing Bank
for such increased cost or reduction.
(b) If any Lender shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change in any such law, rule or regulation, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on capital
of such Lender (or its parent) as a consequence of such Lender's obligations
hereunder to a level below that which such Lender (or its parent) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, within 15 days after
demand by such Lender (with a copy to the Agent), the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender (or its
parent) for such reduction.
(c) Each Lender and LC Issuing Bank will promptly notify the Borrower and
the Agent of any event of which it has knowledge, occurring after the date
hereof, which will entitle such Lender or LC Issuing Bank to compensation
pursuant to this Section and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the judgment of such Lender or LC Issuing
Bank, be otherwise disadvantageous to it. A certificate of any Lender or LC
Issuing Bank claiming compensation under this section and setting forth the
additional amount or amounts to be paid to it hereunder and the basis therefor
shall be conclusive in the absence of manifest error; provided that no Lender
shall be required to disclose information that it considers in its sole
discretion to be confidential. In determining such amount, such Lender or LC
Issuing Bank may use any reasonable averaging and attribution methods.
Section 8.04. Taxes. (a) For the purposes of this Section, the following
terms have the following meanings:
"Taxes" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings with respect to
any payment by any Obligor pursuant to this Agreement or under any
Note, and all liabilities with respect thereto, excluding (i) in the
case of each Lender Party, taxes imposed on its net income, and
franchise or similar taxes imposed on it, by a jurisdiction under the
laws of which it is organized or in which its principal executive
office is located or, in which its Applicable Lending Office is
located and (ii) in the case of each Lender, any United States
withholding tax imposed on such payment, but not excluding any portion
of such tax that exceeds the United States withholding tax which would
have been imposed on such a payment to such Bank under the laws and
treaties in effect when such Lender first becomes a party to this
Agreement.
"Other Taxes" means any present or future stamp or documentary
taxes and any other excise or property taxes, or similar charges or
levies, which arise from any payment made pursuant to this Agreement
or under any Note or from the execution, delivery, registration or
enforcement of, or otherwise with respect to, any Loan Document.
(b) Subject to Section 8.04(e), all payments by any Obligor to or for the
account of any Lender Party hereunder or under any Note shall be made without
deduction for any Taxes or Other Taxes; provided that, if any Obligor shall be
required by law to deduct any Taxes or Other Taxes from any such payment, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) such Lender Party receives an amount equal to the sum it
would have received had no such deductions been made, (ii) such Obligor shall
make such deductions, (iii) such Obligor shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law and (iv) such Obligor shall promptly furnish to the Agent, at its address
specified in or pursuant to Section 10.01, to the extent available, the original
or a certified copy of a receipt evidencing payment thereof or any other
document reasonably requested by the Agent.
(c) Subject to Section 8.04(e), Obligors agree to indemnify each Lender
Party for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section) paid by such Lender Party and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be paid within 15 days after such Lender
Party makes demand therefor, which demand shall be accompanied by a statement
providing an explanation of the facts and calculations that form the basis for
such demand. Such statement shall be final, conclusive and binding on the
Obligors absent manifest error.
(d)(i) if a Lender is a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, then each such Lender organized under the laws of a jurisdiction
outside the United States, before it signs and delivers this Agreement in the
case of each Lender listed on the signature pages hereof and before it becomes a
Lender in the case of each other Lender, and, from time to time thereafter,
before any Lender designates a new Euro-Dollar Lending Office which is an
Affiliate or if requested in writing by the Borrower (but only so long as such
Lender remains lawfully able to do so), shall provide each of the Borrower and
the Agent with Internal Revenue Service form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service, certifying that
such Lender is entitled to benefits under an income tax treaty to which the
United States is a party which exempts such Lender from United States
withholding tax or reduces the rate of withholding tax on payments of interest
for the account of such Lender or certifying that the income receivable by it
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the United States or, (ii) if such Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code and which intends to claim
exemption from U.S. Federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of "portfolio interest", then each such
Lender, at such times specified in clause (i) above as are appropriate, shall
provide each of the Borrower and the Agent with a Form W-8, 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 Code, and is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code of the Borrower),
properly completed and duly executed by such non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. Federal withholding tax on payments
of interest by the Borrower under this Agreement and the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide the
Borrower or the Agent with the appropriate form referred to in Section 8.04(d)
(unless such failure is due to a change in treaty, law or regulation occurring
after the date on which such form originally was required to be provided), no
Obligor shall be required to increase any payment to such Lender pursuant to
Section 8.04(b)(i) and such Lender shall not be entitled to indemnification
under Section 8.04(b) or 8.04(c) with respect to Taxes imposed by the United
States; provided that if a Lender that is otherwise exempt from, or subject to a
reduced rate of, withholding tax becomes subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall, at such Lender's
expense, take such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(f) If any Obligor is required to pay additional amounts to or for the
account of any Lender pursuant to this Section as a result of a change in law or
treaty occurring after such Lender first became a party to this Agreement, then
such Lender will, at the Borrower's request and expense, change the jurisdiction
of its Applicable Lending Office if, in the sole judgment of such Lender, such
change (i) will eliminate or reduce any such additional payment which may
thereafter accrue and (ii) is not otherwise disadvantageous to such Lender.
(g) Upon the reasonable request of the Borrower, and at the Borrower's
expense, a Lender Party shall use reasonable efforts to cooperate with the
Borrower with a view to obtain a refund of any Taxes or Other Taxes which were
not correctly or legally imposed and for which the Borrower has indemnified such
Lender Party under this Section 8.04 if obtaining such refund would not, in the
sole judgment of the Lender Party, be disadvantageous to such Lender Party;
provided that nothing in this Section 8.04(g) shall be construed to require any
Lender Party to institute any administrative proceeding (other than the filing
of a claim for any such refund) or judicial proceeding to obtain any such
refund. If a Lender Party shall receive a refund from a taxing authority (as a
result of any error in the imposition of Taxes or Other Taxes by such taxing
authority) of any Taxes or Other Taxes paid by the Borrower pursuant to
subsection 8.04(b) or (c) above, such Lender Party shall promptly pay to the
Borrower the amount so received without interest (other than interest received
from the taxing authority with respect to such refund) and net of out-of-pocket
expenses; provided that such Lender Party shall only be required to pay to the
Borrower such amounts as such Lender Party in its sole discretion, determines
are attributable to Taxes or Other Taxes paid by the Borrower. In the event such
Lender Party or the Agent is required to repay the amount of such refund
(including interest, if any), the Borrower, upon the request of such Lender
Party or the Agent (as the case may be), agrees to promptly return to such
Lender Party or the Agent the amount of such refund and interest, if any (plus
penalties, interest and other charges imposed in connection with the repayment
of such amounts by such Lender Party or the Agent).
(h) Notwithstanding the foregoing, nothing in this Section 8.04 shall be
construed to (i) entitle the Borrower or any other persons to any information
determined by any Lender Party or the Agent, in its sole discretion, to be
confidential or proprietary information of such Lender Party or the Agent, to
any tax or financial information of any Lender Party or the Agent or to inspect
or review any books and records of any Lender Party or the Agent, or (ii)
interfere with the rights of any Lender Party or the Agent to conduct its fiscal
or tax affairs in such manner as it deems fit.
Section 8.05. Base Rate Loans Substituted for Affected Euro-Dollar Loans.
If (i) the obligation of any Lender to make, or to continue or convert
outstanding Loans as or to, Euro-Dollar Loans has been suspended pursuant to
Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03 or
8.04 with respect to its Euro-Dollar Loans, and in any such case the Borrower
shall, by at least five Business Days' prior notice to such Lender, then, unless
and until such Lender notifies the Borrower that the circumstances giving rise
to such suspension or demand for compensation no longer exist, all Loans which
would otherwise be made by such Lender as (or continued as or converted to)
Euro-Dollar Loans shall instead be Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related Euro-Dollar Loans
of the other Lender). If such Lender notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer exist, the principal amount of each such Base Rate Loan shall be
converted into a Euro-Dollar Loan on the first day of the next succeeding
Interest Period applicable to the related Euro-Dollar Loans of the other Lender.
Section 8.06. Replacement of Lender. (x) If any Lender becomes a Defaulting
Lender, (y) upon the occurrence of any event giving rise to the operation of
Section 8.03 or 8.04 with respect to any Lender which results in such Lender
charging to the Borrower increased costs or other compensation in excess of
those being generally charged by the other Lender or any Lender's obligations
are suspended pursuant to Section 8.02 or (z) in the case of a refusal by a
Lender to consent to a proposed change, waiver, discharge or termination with
respect to this Agreement which has been approved by the Required Lenders as
provided in Section 10.05(b), the Borrower shall have the right, if no Default
then exists, to replace such Lender (the "Replaced Lender") with one or more
other Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Lender at the time of such replacement (collectively, the
"Replacement Lender") reasonably acceptable to the Agent, provided that (i) any
replacement pursuant to this Section 8.06 shall be required to comply with the
requirements of Section 10.06(b) and at the time of any replacement pursuant to
this Section 8.06, the Replacement Lender shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 10.06(b) (and with all
fees payable pursuant to said Section 10.06(b) to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans of, and participations in Letters of Credit
by, the Replaced Lender and, in connection therewith, shall pay to (x) the
Replaced Lender in respect thereof an amount equal to the sum of (A) the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Lender, (B) all LC Reimbursement Obligations that have been funded by (and not
reimbursed to) such Replaced Lender, together with all then unpaid interest with
respect thereto at such time and (C) all accrued, but theretofore unpaid fees
owing to the Replaced Lender pursuant to Section 2.07, (y) the respective LC
Issuing Bank an amount equal to such Replaced Lender's RL Percentage of any LC
Reimbursement Obligation (which at such time remains an LC Reimbursement
Obligation) with respect to a Letter of Credit issued by it to the extent such
amount was not theretofore funded by such Replaced Lender and (z) the Swingline
Lender an amount equal to such Replaced Lender's RL Percentage of any Mandatory
Borrowing to the extent such amount was not theretofore funded by such Replaced
Lender, and (ii) all obligations (including, without limitation, all such
amounts, if any, due and owing under Section 2.13) of the Borrower due and owing
to the Replaced Lender (other than those specifically described in clause (i)
above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements, the payment of amounts referred to in
clauses (i) and (ii) above, recordation of the assignment on the Register by the
Agent pursuant to Section 10.11 and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, (x) the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 2.13, 7.06, 8.03, 8.04 and 10.03), which shall survive as
to such Replaced Lender and (y) Schedule I hereto shall be deemed modified to
reflect the changed Commitments (and/or outstanding Term Loans, as the case may
be) resulting from the assignment from the Replaced Lender to the Replacement
Lender.
ARTICLE IX
Guaranty
Section 9.01. The Guaranty. Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably guarantees the full and punctual payment
(whether at stated maturity, upon acceleration or otherwise) of any and all of
the Guaranteed Obligations. Upon failure by the Borrower or any other Guarantor
to pay punctually any such amount, each Guarantor shall forthwith on demand pay
the amount not so paid at the place and in the manner specified in this
Agreement or the other Loan Documents or the respective Guaranteed Derivatives
Agreement. This Guaranty constitutes a guaranty of payment and not of
collection. This Guaranty is a continuing one and shall be deemed ratified and
recertified upon the receipt of any Investment in a Guarantor by the Borrower or
any Subsidiary and all liabilities to which it applies or may apply under the
terms hereof shall be conclusively presumed to have been created in reliance
hereon.
Section 9.02. Guaranty Unconditional. The obligations of each Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any Guaranteed Obligation, by operation of law or otherwise;
(ii) any modification or amendment of or supplement to any Guaranteed
Obligation;
(iii) to the extent permitted by law, any release, impairment,
non-perfection or invalidity of any direct or indirect security for any
Guaranteed Obligation;
(iv) any change in the corporate existence, structure or ownership of
the Borrower or any other Guarantor, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any
other Guarantor or their respective assets or any resulting release or
discharge of any Guaranteed Obligation;
(v) the existence of any claim, set-off or other rights which such
Guarantor may have at any time against the Borrower, any other Guarantor,
the Agent, any LC Issuing Bank, any Lender or any other Person, whether in
connection herewith or any unrelated transactions, provided that nothing
herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any invalidity or unenforceability of all or any part of the
Guaranteed Obligations, or any provision of applicable law or regulation
purporting to prohibit the payment by the Borrower or any other Guarantor
of all or any part of the Guaranteed Obligations; or
(vii) any other act or omission to act or delay of any kind by the
Borrower, any other Guarantor, the Agent, any LC Issuing Bank, any Lender
or any other Person or any other circumstance whatsoever which might, but
for the provisions of this paragraph, constitute a legal or equitable
discharge of the Guarantor's obligations hereunder.
Section 9.03. Discharge Only upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations hereunder shall remain in full force
and effect until the Total Commitment and all Guaranteed Derivatives Agreements
have been terminated, no Note or Letter of Credit remains outstanding and all
Guaranteed Obligations shall have been paid in full. If at any time any amount
paid in respect of the Guaranteed Obligations is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of any
Obligor or otherwise, each Guarantor's obligations hereunder with respect to
such payment shall be reinstated at such time as though such payment had been
due but not made at such time.
Section 9.04. Waiver by Each Guarantor. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Borrower or any other Guarantor or any other Person.
Section 9.05. Subrogation and Contribution. Until all Guaranteed
Obligations shall have been paid in full, each Guarantor agrees not to enforce
or exercise any and all rights to which it may be entitled, by operation of law
or otherwise, upon making any payment hereunder (i) to be subrogated to the
rights of the payee against the Borrower with respect to such payment or against
any direct or indirect security therefor, or otherwise to be reimbursed,
indemnified or exonerated by or for the account of the Borrower in respect
thereof or (ii) to receive any payment, in the nature of contribution or for any
other reason, from any other Guarantor with respect to such payment.
Section 9.06. Stay of Acceleration. If acceleration of the time for payment
of any Guaranteed Obligation is stayed upon insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration shall nonetheless be payable by each Guarantor hereunder forthwith
on demand by the Agent made at the request of the Required Lenders or, after all
Obligations have been repaid in full and the Total Commitment has been
terminated, a majority of the holders of all outstanding obligations under
Guaranteed Derivatives Agreements.
Section 9.07. Limit of Liability. It is the desire and intent of each
Guarantor that this Guaranty shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. If and to the extent that the obligations of each
Guarantor under this Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or transfers,
which laws would determine the solvency of each Guarantor by reference to the
full amount of the Guaranteed Obligations at the time of the execution and
delivery of this Guaranty), then the amount of the Guaranteed Obligations shall
be deemed to be reduced and each Guarantor agrees to pay the maximum amount of
the Guaranteed Obligations which would be permissible under applicable law.
Section 9.08. Release upon Sale. Upon any sale by the Borrower or any of
its Subsidiaries of any Guarantor owned by the Borrower and/or any of its
Subsidiaries, in each case pursuant to a transaction permitted by this
Agreement, such Guarantor shall automatically and without further action by any
Lender or the Agent be released from its obligations as a Guarantor hereunder.
Section 9.09. Additional Guarantors. It is understood and agreed that any
Subsidiary of the Borrowers that is required to execute a counterpart of this
Agreement after the date hereof pursuant to Section 5.23(d) shall promptly
become a Guarantor hereunder by executing a counterpart hereof and delivering
the same to the Agent. It is further understood and agreed that any failure by
any Subsidiary to execute a counterpart of this Agreement as otherwise required
pursuant to the terms hereof shall not affect the obligations of the Borrower or
any other Guarantor.
ARTICLE X
Miscellaneous
Section 10.01. Notices. All notices, requests and other communications to
any party under any Loan Document shall be in writing (including bank wire,
facsimile or similar writing) and shall be given to such party: (a) in the case
of the Borrower or the Agent, at its address or facsimile number set forth on
the signature pages hereof, (b) in the case of any Guarantor, in care of the
Borrower, (c) in the case of any Lender, at its address or facsimile number set
forth in its Administrative Questionnaire or (d) in the case of any party, at
such other address or facsimile number as such party may hereafter specify for
the purpose by notice to the Agent and the Borrower. Each such notice, request
or other communication shall be effective (i) if given by facsimile, when
transmitted to the facsimile number referred to in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered at the address
referred to in this Section; provided that notices to the Agent or any LC
Issuing Bank under Article 2 or Article 8, shall not be effective until
received.
Section 10.02. No Waivers. No failure or delay by any Lender Party in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 10.03. Expenses; Indemnification. (a) The Borrower shall pay (i)
all out-of-pocket expenses of the Agent, including reasonable fees and
disbursements of special counsel for the Agent, in connection with the
preparation and administration of the Loan Documents, any waiver or consent
thereunder or any amendment thereof or any Default or alleged Default thereunder
and (ii) if an Event of Default occurs, all out-of-pocket expenses incurred by
each Lender Party, including (without duplication) the fees and disbursements of
outside counsel and the allocated cost of inside counsel, in connection with
such Event of Default and collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom.
(b) The Borrower agrees to indemnify each Lender Party, its respective
affiliates and the respective directors, officers, agents and employees of the
foregoing (each an "Indemnitee") and hold each Indemnitee harmless from and
against any and all liabilities, losses, damages, costs and expenses of any
kind, including, without limitation, the reasonable fees and disbursements of
counsel, which may be incurred by such Indemnitee in connection with any
investigative, administrative or judicial proceeding (whether or not such
Indemnitee shall be designated a party thereto) brought or threatened relating
to or arising out of the Loan Documents or any actual or proposed use of any
Letter of Credit or any proceeds of Loans hereunder; provided that no Indemnitee
shall have the right to be indemnified hereunder to the extent of such
Indemnitee's own gross negligence or willful misconduct as determined by final
judgment of a court of competent jurisdiction.
(c) The Borrower hereby indemnifies each Indemnitee from and against and
agrees to hold each of them harmless from any and all liabilities, losses,
damages, costs and expenses of any kind (including, without limitation,
reasonable expenses of investigation by engineers, environmental consultants and
similar technical personnel and reasonable fees and disbursements of counsel) of
any Indemnitee arising out of, in respect of or in connection with any and all
Environmental Liabilities. Without limiting the generality of the foregoing, the
Borrower hereby waives all rights for contribution or any other rights of
recovery with respect to liabilities, losses, damages, costs and expenses
arising under or related to Environmental Laws that it might have by statute or
otherwise against any Indemnitee.
(d) To the extent that the undertaking to indemnify, pay or hold harmless
any Indemnitee pursuant to this Section 10.03 may be unenforceable because it is
violative of any law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the indemnified
liabilities which is permissible under applicable law.
Section 10.04. Sharing of Payments. Each of the Lenders agrees that, if it
should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise) which is applicable to the payment of the
principal of, or interest on the Loans, LC Reimbursement Obligations or fees, of
a sum which with respect to the related sum or sums received by other Lenders is
a greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Obligor to such
Lenders in such amount as shall result in a proportional participation by all of
the Lenders in such amount; provided, that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 10.05. Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Loan Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Obligor party thereto and the Required
Lenders, provided that no such change, waiver, discharge or termination shall,
without the consent of each Lender (with Obligations being directly affected in
the case of following clause (i)), (i) extend the final scheduled maturity of
any Loan or Note, or reduce the rate of interest or fees or extend the time of
payment of interest or fees, or reduce the principal amount thereof (except to
the extent repaid in cash) (it being understood that any amendment or
modification to the definitions of "Leverage Ratio" and "Reduction Discount" set
forth in this Agreement or to Section 1.02 may not result in a reduction in any
rate of interest or fees for the purposes of this clause (i) without the consent
of each Lender), (ii) release all or substantially all of the Collateral (except
as expressly provided in the Loan Documents) under all the Collateral Documents,
(iii) amend, modify or waive any provision of this Section 10.05, (iv) reduce
the percentage specified in the definition of Required Lenders (it being
understood that, with the consent of the Required Lenders, additional extensions
of credit pursuant to this Agreement may be included in the determination of the
Required Lenders on substantially the same basis as the extensions of Term Loans
and Revolving Loan Commitments are included on the Effective Date) or (v)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement; provided further, that no such change, waiver,
discharge or termination shall (1) increase the Commitments of any Lender over
the amount thereof then in effect without the consent of such Lender (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total
Commitment shall not constitute an increase of the Commitment of any Lender, and
that an increase in the available portion of any Commitment of any Lender shall
not constitute an increase of the Commitment of such Lender), (2) without the
consent of the Agent, amend, modify or waive any provision of Article 7 or any
other provision as same relates to the rights or obligations of the Agent, (3)
without the consent of the Swingline Lender, amend, modify or waive any
provision relating to the rights or obligations with respect to Swingline Loans
(including, without limitation, the obligations of other RL Lenders to fund
Mandatory Borrowings), (4) without the consent of each LC Issuing Bank, amend,
modify or waive any provision of Section 2.16 or alter its rights or obligations
with respect to Letters of Credit, (5) except in cases where additional
extensions of term loans are being afforded substantially the same treatment
afforded to the Term Loans pursuant to this Agreement as originally in effect,
without the consent of the Majority Lenders of each Tranche which is being
allocated a lesser prepayment, repayment or commitment reduction as a result of
the actions described below (or without the consent of the Majority Lenders of
each Tranche in the case of an amendment to the definition of Majority Lenders),
amend the definition of Majority Lenders or alter the required application of
any prepayments or repayments (or commitment reductions), as between the various
Tranches pursuant to Section 2.10 or 2.11 (excluding Sections 2.10(b) and (c))
(although the Required Lenders may waive, in whole or in part, any such
prepayment, repayment or commitment reduction so long as the application, as
amongst the various Tranches, of any such prepayment, repayment or commitment
reduction which is still required to be made is not altered) or (6) without the
consent of the Supermajority Lenders of the respective Tranche, amend the
definition of Supermajority Lenders or waive or decrease the amount of any
Scheduled Repayment of such affected Tranche.
(b) If, in connection with any proposed change to, waiver, discharge or
termination of any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 10.05(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, the Borrower
shall have the right, so long as all non-consenting Lenders whose individual
consent is required are treated as described below, to replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to Section 8.06 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination, provided, that in any event the Borrower shall not have the right
to replace a Lender solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender) pursuant to the
second proviso to Section 10.05(a).
Section 10.06. Benefit of Agreement; Assignments; Participation. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower, PST or PureTec may not assign or transfer any of its
rights, obligations or interest hereunder without the prior written consent of
the Lenders and, provided further, that, although any Lender may transfer or
grant participations in its rights hereunder, such Lender shall remain a
"Lender" for all purposes hereunder (and may not transfer or assign all or any
portion of its Revolving Loan Commitments and/or outstanding Term Loans
hereunder except as provided in Sections 8.06 and 10.06(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a "Lender"
hereunder and, provided further, that no Lender shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Loan Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default, or of a mandatory
reduction in the Total Commitment, shall not constitute a change in the terms of
such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower, PST or Puretec of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Collateral Documents (except as expressly
provided in the Loan Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Loan Documents (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may (x) assign all or a portion of its Commitments
and related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Obligations) hereunder to its
parent company and/or any Affiliate of such Lender which is at least 50% owned
by such Lender or its parent company or to one or more Lenders (or in the case
of any Lender that is a fund that invests in bank loans, any other fund that
invests in bank loans and is managed by the same investment advisor of such
Lender or by an Affiliate of such investment advisor) or (y) assign all, or if
less than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Lender or assigning Lenders, of such Commitments and related
outstanding Obligations (or, if the Commitments with respect to the relevant
Tranche have terminated, outstanding Obligations) hereunder to one or more
Eligible Transferees (treating any fund that invests in bank loans and any other
fund that invests in bank loans and is managed by the same investment advisor of
such fund or by an Affiliate of such investment advisor as a single Eligible
Transferee), each of which assignees shall become a party to this Agreement as a
Lender by execution of an Assignment and Assumption Agreement, provided that,
(i) at such time Schedule I shall be deemed modified to reflect the Commitments
(or outstanding Term Loans, as the case may be) of such new Lender and of the
existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning
Lender (or receipt of a customary indemnity agreement in the case of lost or
misplaced notes), new Notes will be issued, at the Borrower's expense, to such
new Lender and to the assigning Lender upon the request of such new Lender or
assigning Lender, such new Notes to be in conformity with the requirements of
Section 2.15 (with appropriate modifications) to the extent needed to reflect
the revised Commitments (or outstanding Term Loans, as the case may be), (iii)
the consent of the Agent and, so long as no Default then exists, the Borrower
shall be required in connection with any assignment to an Eligible Transferee
pursuant to clause (y) above (each of which consents shall not be unreasonably
withheld or delayed), (iv) the consent of the Swingline Lender and each LC
Issuing Bank shall be required in connection with any assignment of all or any
portion of the Revolving Loan Commitments (such consents not to be unreasonably
withheld or delayed), (v) the Agent shall receive at the time of each such
assignment, from the assigning or assignee Lender, the payment of a
non-refundable assignment fee of $3,500, and (vi) no such transfer or assignment
will be effective until recorded by the Agent on the Register pursuant to
Section 10.11. To the extent of any assignment pursuant to this Section
10.06(b), the assigning Lender shall be relieved of its obligations hereunder
with respect to its assigned Commitments. At the time of each assignment
pursuant to this Section 10.06(b) to a Person which is not already a Lender
hereunder and which is not a person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for Federal income tax purposes, the
respective assignee Lender shall, to the extent legally entitled to do so,
provide to the Borrower the appropriate Internal Revenue Service Forms described
in Section 8.04(d). To the extent that an assignment of all or any portion of a
Lender's Commitments and related outstanding Obligations pursuant to Section
8.06 or this Section 10.06(b) would, at the time of such assignment, result in
increased costs under Article 8 from those being charged by the respective
assigning Lender prior to such assignment, then the Borrower shall not be
obligated to pay such increased costs (although the Borrower, in accordance with
and pursuant to the other provisions of this Agreement, shall be obligated to
pay any other increased costs of the type described above resulting from changes
after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and, with the
consent of the Agent, any Lender which is a fund may pledge all or any portion
of its Loans or Notes to its trustee in support of its obligations to its
trustee. No pledge pursuant to this clause (c) shall release the transferor
Lender from any of its obligations hereunder.
Section 10.07. Governing Law; Submission to Jurisdiction. This Agreement
and each Note shall be governed by and construed in accordance with the laws of
the State of New York. Each Obligor hereby submits to the nonexclusive
jurisdiction of the United States District Court for the Southern District of
New York and of any New York State court sitting in New York City for purposes
of all legal proceedings arising out of or relating to this Agreement or the
transactions contemplated hereby. Each Obligor irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum.
Section 10.08. Counterparts; Integration; Effectiveness; Amendment and
Restatement. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement constitutes the entire
agreement and understanding among the parties hereto and supersedes any and all
prior agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective on the date (the "Effective
Date") when the Agent has received from each of the parties hereto a counterpart
hereof signed by such party or facsimile or other written confirmation
satisfactory to the Agent confirming that such party has signed a counterpart
hereof. If all of the lenders under the Existing Credit Agreement are or become
Lenders under this Agreement on the Effective Date, then the Existing Credit
Agreement shall be amended and restated in its entirety to be this Agreement,
and should be superseded hereby.
Section 10.9. Confidentiality. Each Lender Party agrees to keep any
information delivered or made available by the Borrower pursuant to or in
connection with this Agreement confidential from anyone other than persons
employed or retained by such Lender Party who are engaged in evaluating,
approving, structuring or administering the credit facility contemplated hereby;
provided that nothing herein shall prevent any Lender Party from disclosing such
information (a) to any other Lender Party, (b) to any other Person if reasonably
incidental to the administration of the credit facility contemplated hereby, (c)
upon the order of any court or administrative agency, (d) upon the request or
demand of any regulatory agency or authority, (e) which had been publicly
disclosed other than as a result of a disclosure by any Lender Party prohibited
by this Agreement, (f) in connection with any litigation to which any Lender
Party or its subsidiaries or Parent may be a party, (g) to the extent necessary
in connection with the exercise of any remedy hereunder, (h) to legal counsel
and independent auditors and (i) subject to obtaining a prior written agreement
for the benefit of the Borrower on terms substantially similar to those
contained in this Section, to any actual or proposed participant in the Loan or
Assignee.
Section 10.10. Waiver of Jury Trial. EACH OBLIGOR AND EACH LENDER PARTY
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 10.11. Register. The Borrower hereby designates the Agent to serve
as the Borrower's agent, solely for the purposes of this Section 10.11, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lenders. Failure to make any such recordation, or any error in such recordation
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Lender, the transfer of the Commitments of such Lender and the
rights to the principal of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Agent with respect to ownership of such Commitments
and Loans and prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall be recorded by the Agent on the
Register only upon the acceptance by the Agent of a properly executed and
delivered Assignment and Assumption Agreement pursuant to Section 10.06(b).
Coincident with the delivery of such an Assignment and Assumption Agreement to
the Agent for acceptance and registration of assignment or transfer of all or
part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Loan, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the assigning or transferor Lender and/or the new Lender. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties under this Section 10.11 except
to the extent of the Agent's gross negligence or willful misconduct.
Section 10.12. Survival. All indemnities set forth herein including,
without limitation, in Sections 2.13, 7.06 and 10.03 and in Article 8 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making and repayment of the Obligations.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
TEKNI-PLEX, INC., as Borrower
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PURETEC CORPORATION
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
OZITE CORPORATION
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PTI PLASTICS, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BURLINGTON RESINS, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PLASTIC SPECIALTIES AND TECHNOLOGIES
INVESTMENTS, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PURETEC APR, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
MULTI CONTAINER RECYCLER, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
COAST RECYCLING NORTH, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DISTRIBUTORS RECYCLING, INC.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
REI DISTRIBUTORS, INC
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
PURE TECH RECYCLING OF CALIFORNIA
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ALUMET SMELTING CORPORATION
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CONCONRE CORP.
By /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK, as Lender,
Agent and LC Issuing Bank
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANKBOSTON, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇
Title: Managing Director
BANK OF AMERICA, NTSA
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Managing Director
CREDIT LYONNAIS, NEW YORK BRANCH
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: First Vice President-
Manager
DEEPROCK & COMPANY
By: ▇▇▇▇▇ ▇▇▇▇▇ Management,
as Investment Advisor
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
FLEET BANK, N. A.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Region Risk Analyst
▇▇▇▇▇▇ FINANCIAL, INC.
By /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇
Title: Vice President
KZH-CRESCENT 2 CORPORATION
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Authorized Agent
LASALLE NATIONAL BANK
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO
(a unit of The Chase Manhattan Bank)
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
PNC BANK, National Association
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
SUMMIT BANK
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President
TORONTO DOMINION (TEXAS), INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL PRIME RATE
INCOME TRUST
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President &
Director
SCHEDULE 1
COMMITMENTS
Tranche Tranche Revolving
A Term Loan B Term Loan Loan
Lender Commitment Commitment Commitment
------ ---------- ---------- ----------
▇▇▇▇▇▇ Guaranty Trust Company of New York $ 6,250,000.00 $28,500,000.00 $11,250,000.00
Summit Bank 6,250,000.00 1,500,000.00 11,250,000.00
Fleet Bank 6,250,000.00 11,250,000.00
LaSalle National Bank 6,250,000.00 11,250,000.00
Toronto Dominion 10,900,000.00
▇▇▇▇▇▇ Financial, Inc. 3,571,428.55 1,500,000.00 6,428,571.45
Bank of America 4,285,714.29 7,714,285.71
BankBoston 4,285,714.29 7,714,285.71
Credit Lyonnais 4,285,714.29 7,714,285.71
GE Capital 4,285,714.29 7,714,285.71
PNC Bank, N.A. 4,285,714.29 7,714,285.71
Octagon Credit Investors 7,200,000.00
KZH Crescent 2 Corp. 7,200,000.00
▇▇▇ ▇▇▇▇▇▇ American 7,200,000.00
Deeprock & Company 1,000,000.00
Total: $50,000,000.00 $65,000,000.00 $90,000,000.00
FORM OF TRANCHE A TERM NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
_______________________ (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of ▇▇▇▇▇▇ Guaranty Trust
Company of New York (the "Agent") located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
on the Tranche A Maturity Date (as defined in the Agreement referred to below)
the principal sum of _______________________________or, if less, the then unpaid
principal amount of all Tranche A Term Loans (as defined in the Agreement) made
by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 2.05 of the Agreement.
This Note is one of the Tranche A Term Notes referred to in
the Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent, (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Tranche A Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________________
Name:
Title:
EXHIBIT ▇-▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇ TERM NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
___________________________________________________________________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the office of ▇▇▇▇▇▇ Guaranty Trust Company of New York
(the "Agent") located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ on the Tranche
B Maturity Date (as defined in the Agreement referred to below) the
principal sum of _____________________________________________________ or, if
less, the then unpaid principal amount of all Tranche B Term Loans (as
defined in the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof
until paid at the rates and at the times provided in Section 2.05 of the
Agreement.
This Note is one of the Tranche B Term Notes referred to in
the Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Tranche B Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________
Name:
Title:
EXHIBIT A-3
FORM OF REVOLVING NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
____________________(the "Lender"), in lawful money of the United States of
America in immediately available funds, at the office of ▇▇▇▇▇▇ Guaranty Trust
Company of New York (the "Agent") located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
on the Revolving Loan Maturity Date (as defined in the Agreement referred to
below) the principal sum of ________________________________________ or, if
less, the then unpaid principal amount of all Revolving Loans (as defined in the
Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 2.05 of the Agreement.
This Note is one of the Revolving Notes referred to in the
Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Revolving Loan Maturity Date, in whole or in
part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________________
Name:
Title:
EXHIBIT A-4
FORM OF SWINGLINE NOTE
New York, New York
March 3, 1998
FOR VALUE RECEIVED, TEKNI-PLEX, INC., a Delaware corporation,
and its successors (the "Borrower"), hereby promises to pay to the order of
_____________________ (the "Swingline Lender"), in lawful money of the United
States of America in immediately available funds, at the office of ▇▇▇▇▇▇
Guaranty Trust Company of New York (the "Agent") located at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ on the Swingline Expiry Date (as defined in the Agreement
referred to below) the principal sum of ___________________________________or,
if less, the then unpaid principal amount of all Swingline Loans (as defined in
the Agreement) made by the Lender pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 2.05 of the Agreement.
This Note is one of the Swingline Notes referred to in the
Credit Agreement, dated as of March 3, 1998, among Tekni-Plex, Inc., the
Guarantors party thereto, the Lenders from time to time party thereto, the LC
Issuing Banks (as defined in the Agreement) from time to time party thereto and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent (as amended, modified or
supplemented from time to time, the "Agreement"), and is entitled to the
benefits thereof and of the other Loan Documents (as defined in the Agreement).
This Note is secured by the Collateral Documents (as defined in the Agreement)
and is entitled to the benefits of the Guaranties (as defined in the Agreement).
As provided in the Agreement, this Note is subject to voluntary prepayment as
per Section 2.11 of the Agreement, and mandatory repayment as per Section 2.10
of the Agreement, prior to the Swingline Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be due and payable in the manner and with the effect
provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
TEKNI-PLEX, INC.
By________________________________
Name:
Title:
SECURITY AGREEMENT
AGREEMENT dated as of March 3, 1998 between TEKNI-PLEX,
INC. (with its successors, the "Borrower" and, together with any other
Person which becomes a Grantor pursuant to Section 3(B), the "Grantors" and
each a "Grantor") and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as
Collateral Agent (with its successor in such capacity, the "Collateral
Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, certain lenders (the "Lenders")
and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent for such Lenders,
are parties to a Credit Agreement of even date herewith (as the same may be
amended from time to time, the "Credit Agreement"); and
WHEREAS, in order to induce said Lenders and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as Agent for such Lenders, to enter
into the Credit Agreement, each Grantor has agreed to grant a continuing
security interest in and to the Collateral (as hereafter defined) to secure
the Grantors' obligations under the Credit Agreement and the obligations of
the Borrower under the Notes issued pursuant thereto;
WHEREAS, the Borrowers may from time to time be party to
one or more agreements with respect to Derivatives Obligations (each such
agreement with respect to Derivatives Obligations with a Derivatives
Creditor (as defined below), a "Derivatives Obligations Agreement") with
any Lender or Lenders or an affiliate of Lender (even if any such Lender
ceases to be a Lender under the Credit Agreement for any reason) and in
each case their subsequent assigns (collectively, the "Derivatives
Creditors" and together with the Lenders, the "Secured Creditors");
NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions
Terms defined in the Credit Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for
therein. The following additional terms, as used herein, have the
following respective meanings:
"Accounts" means all "accounts" (as defined in the UCC)
now owned or hereafter acquired by any Grantor, and shall also
mean and include all accounts receivable, contract rights, book
debts and other obligations or indebtedness owing to any Grantor
arising from the sale, lease or exchange of goods or other
property by it and/or the performance of services by it
(including, without limitation, any such obligation which might be
characterized as an account, contract right or general intangible
under the Uniform Commercial Code in effect in any jurisdiction)
and all of any Grantor's rights in, to and under all purchase
orders for goods, services or other property, and all of any
Grantor's rights to any goods, services or other property
represented by any of the foregoing (including returned or
repossessed goods and an unpaid seller's right of rescission,
replevin, reclamation and rights to stoppage in transit) and all
monies due to or to become due to any Grantor under all contracts
for the sale, lease or exchange of goods or other property and/or
the performance of services by it (whether or not yet earned by
performance on the part of such Grantor), in each case whether now
in existence or hereafter arising or acquired including, without
limitation, the right to receive the proceeds of said purchase
orders and contracts and all collateral security and guarantees of
any kind given by any Person with respect to any of the foregoing.
"Class" shall have the meaning provided in Section 17 of
this Agreement.
"Collateral" has the meaning set forth in Section 3.
"Copyright License" means any agreement now or hereafter
in existence granting to any Grantor, or pursuant to which any
Grantor has granted to any other Person, any right to use, copy,
reproduce, distribute, prepare derivative works based upon,
display or publish any records or other materials on which a
Copyright is in existence or may come into existence.
"Copyrights" means all the following: (i) all copyrights
under the laws of the United States or any other country (whether
or not the underlying works of authorship have been published),
all registrations and recordings thereof, all intellectual
property rights to works of authorship (whether or not published),
and all applications for copyrights under the laws of the United
States or any other country, including, without limitation,
registrations, recordings and applications in the United States
Copyright Office or in any similar office or agency of the United
States, any State thereof or any other country or any political
subdivision thereof, including, without limitation, those
described in Schedule 1 to Exhibit E hereto, (ii) all reissues,
renewals and extensions thereof, (iii) all claims for, and rights
to ▇▇▇ for, past or future infringements of any of the foregoing,
and (iv) all income, royalties, damages and payments now or
hereafter due or payable with respect to any of the foregoing,
including, without limitation, damages and payments for past or
future infringements thereof.
"Copyright Security Agreement" means a Copyright Security
Agreement executed and delivered by a Grantor in favor of the
Collateral Agent, for the benefit of the Lenders, substantially in
the form of Exhibit E hereto, as the same may be amended from time
to time.
"Documents" means all "documents" (as defined in the UCC)
or other receipts covering, evidencing or representing goods, now
owned or hereafter acquired by any Grantor.
"Equipment" means all "equipment" (as defined in the UCC)
now owned or hereafter acquired by any Grantor, including, without
limitation, all motor vehicles, trucks, trailers and Rolling Stock
(including Leased Rolling Stock).
"General Intangibles" means all "general intangibles" (as
defined in the UCC) now owned or hereafter acquired by any
Grantor, including, without limitation, (i) all obligations or
indebtedness owing to any Grantor (other than Accounts) from
whatever source arising, (ii) all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, Trademark Licenses, rights
in intellectual property, goodwill, trade names, brand names,
service marks, trade secrets, permits and licenses, (iii) all
rights or claims in respect of refunds for taxes paid, and (iv)
all rights in respect of any pension plan or similar arrangement
maintained for employees of any member of the ERISA Group.
"Instruments" means all "instruments", "chattel paper" or
"letters of credit" (each as defined in the UCC) evidencing,
representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of, any of the
Accounts, including (but not limited to) promissory notes, drafts,
bills of exchange and trade acceptances, now owned or hereafter
acquired by any Grantor.
"Inventory" means all "inventory" (as defined in the
UCC), now owned or hereafter acquired by any Grantor, wherever
located, and shall also mean and include, without limitation, all
raw materials and other materials and supplies, work-in-process
and finished goods and any products made or processed therefrom
and all substances, if any, commingled therewith or added thereto.
"LC Exposure" means, with respect to any Lender at any
time, an amount equal to its ratable share of the Aggregate LC
Exposure.
"Leased Rolling Stock" has the meaning set forth in
Section 3(A).
"Loan Document Obligations" shall have the meaning
provided in the definition of Secured "Obligations" in this
Section 1.
"Patent License" means any agreement now or hereafter in
existence granting to any Grantor, or pursuant to which any
Grantor has granted to any other Person, any right with respect to
any Patent or any invention now or hereafter in existence, whether
patentable or not, whether a patent or application for patent is
in existence on such invention or not, and whether a patent or
application for patent on such invention may come into existence.
"Patents" means all of the following: (i) all letters
patent and design letters patent of the United States or any other
country and all applications for letters patent and design letters
patent of the United States or any other country, including,
without limitation, applications in the United States Patent and
Trademark Office or in any similar office or agency of the United
States, any State thereof or any other country or any political
subdivision thereof, including, without limitation, those
described in Schedule 1 to Exhibit C hereto, (ii) all reissues,
divisions, continuations, continuations-in-part, renewals and
extensions thereof, (iii) all claims for, and rights to ▇▇▇ for,
past or future infringements of any of the foregoing, and (iv) all
income, royalties, damages and payments now or hereafter due or
payable with respect to any of the foregoing, including, without
limitation, damages and payments for past or future infringements
thereof
"Patent Security Agreement" means the Patent Security
Agreement executed and delivered by each Grantor in favor of the
Collateral Agent, for the benefit of the Lenders, substantially in
the form of Exhibit C hereto, as the same may be amended from time
to time.
"Perfection Certificate" means a certificate
substantially in the form of Exhibit A, completed and supplemented
with the schedules and attachments contemplated thereby to the
satisfaction of the Collateral Agent, and duly executed by the
chief executive officer of each Grantor.
"Permitted Liens" means the Security Interests and the
Liens on the Collateral permitted to be created, to be assumed or
to exist pursuant to Section 5.09 of the Credit Agreement.
"Pledgee" shall have the meaning provided in the Pledge
Agreement.
"PST Collateral" means all Collateral subject to the PST
Documents.
"PST Documents" means the Existing PST Senior Secured
Notes Indenture, the Existing PST Senior Notes Indenture
Supplement, the Existing PST Senior Note Collateral Documents and
the Existing PST Senior Secured Notes Collateral Documents
Amendments.
"Proceeds" means all proceeds of, and all other profits,
products, rents or receipts, in whatever form, arising from the
collection, sale, lease, exchange, assignment, licensing or other
disposition of, or other realization upon, Collateral, including,
without limitation, all claims of each Grantor against third
parties for loss of, damage to or destruction of, or for proceeds
payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral, and any condemnation or
requisition payments with respect to any Collateral, in each case
whether now existing or hereafter arising.
"Requisite Creditors" shall have the meaning provided in
Section 17 of this Agreement.
"Rolling Stock" means all railcars, barges and other
water carrier equipment, and all accessions, appurtenances and
parts installed on and additions thereto, and replacements
thereof, now owned or hereafter acquired by the Company.
"Rolling Stock Leases" has the meaning set forth in
Section 3(A).
"Rolling Stock Revenues" means any monies, revenues,
payments or credits now owned or hereafter acquired by any Grantor
which are generated by or attributable to the Rolling Stock or
Leased Rolling Stock, including, without limitation, railcar hire
payments, mileage allowances, per diem mileage payments, empty
mileage allowances, mileage credits and excess mileage credits, in
each case whether now existing or hereafter arising.
"Secured Obligations" means (i) the full and prompt
payment when due (whether at stated maturity, by acceleration or
otherwise) of all obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities of each Grantor, now
existing or hereafter incurred under any Loan Document to which it
is a party (all such obligations and liabilities under this clause
(i) being herein collectively called the "Loan Document
Obligations"); (ii) the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic
stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities of each Grantor, now existing or hereafter
incurred under, arising out of or in connection with any
Derivatives Obligations Agreement designated by such Grantor and
the related Derivatives Creditor as a "Secured Derivatives
Obligations Agreement", including all obligations, if any, under a
Guaranty in respect of any Derivatives Obligations Agreement (all
such obligations and indebtedness under this clause (ii) being
herein collectively called the "Secured Derivatives Obligations");
(iii) any and all sums advanced by the Collateral Agent in order
to preserve the Collateral or preserve its security interest in
the Collateral in accordance with Section 12; (iv) in the event
of any proceeding for the collection or enforcement of any
indebtedness, obligations, or liabilities of each Grantor referred
to in clauses (i), (ii) and (iii) above after an Event of Default
shall have occurred and be continuing, the reasonable expenses of
re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any
exercise by the Collateral Agent of its rights hereunder, together
with reasonable attorneys' fees and court costs; and (v) all
amounts paid by any Indemnitee as to which such Indemnitee has the
right to reimbursement under Section 12 of this Agreement.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
"Trademark License" means any agreement now or hereafter
in existence granting to any Grantor, or pursuant to which any
Grantor has granted to any other Person, any right to use any
Trademark.
"Trademarks" means all of the following: (i) all
trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade styles, service marks,
logos, brand names, trade dress, prints and labels on which any of
the foregoing have appeared or appear, package and other designs,
and any other source or business identifiers, and general
intangibles of like nature, and the rights in any of the foregoing
which arise under applicable law, (ii) the goodwill of the
business symbolized thereby or associated with each of them, (iii)
all registrations and applications in connection therewith,
including, without limitation, registrations and applications in
the United States Patent and Trademark Office or in any similar
office or agency of the United States, any State thereof or any
other country or any political subdivision thereof, including,
without limitation, those described in Schedule 1 to Exhibit D
hereto, (iv) all reissues, extensions and renewals thereof, (v)
all claims for, and rights to ▇▇▇ for, past or future
infringements of any of the foregoing, and (vi) all income,
royalties, damages and payments now or hereafter due or payable
with respect to any of the foregoing, including, without
limitation, damages and payments for past or future infringements
thereof.
"Trademark Security Agreement" means the Trademark
Security Agreement executed and delivered by each Grantor in favor
of the Collateral Agent, for the benefit of the Lenders,
substantially in the form of Exhibit D hereto, as the same may be
amended from time to time.
"UCC" means the Uniform Commercial Code as in effect on
the date hereof in the State of New York; provided that if by
reason of mandatory provisions of law, the perfection or the
effect of perfection or non-perfection of the Security Interest in
any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than New York, "UCC" means the
Uniform Commercial Code as in effect in such other jurisdiction
for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection.
SECTION 2. Representations and Warranties
Each Grantor represents and warrants as follows:
(A) The Grantors have good and marketable title to all
of the Collateral, free and clear of any Liens other than
Permitted Liens. Each Grantor has taken all actions necessary
under the UCC to perfect its interest in any Accounts purchased or
otherwise acquired by it, as against its assignors and creditors
of its assignors.
(B) No Grantor has performed any acts which would
prevent the Collateral Agent from enforcing any of the terms of
this Agreement or which would limit the Collateral Agent in any
such enforcement other than pursuant to and in accordance with the
PST Documents. Other than financing statements or other similar
or equivalent documents or instruments with respect to the
Security Interests and Permitted Liens and other than documents or
instruments in respect of which a termination statement or other
termination document has been filed, no financing statement,
mortgage, security agreement or similar or equivalent document or
instrument covering all or any part of the Collateral is on file
or of record in any jurisdiction in which such filing or recording
would be effective to perfect a Lien on such Collateral. No
Collateral, other than the PST Collateral, is in the possession of
any Person (other than the Grantors) asserting any claim thereto
or security interest therein, except that the Collateral Agent or
its designee may have possession of Collateral as contemplated
hereby and warehousemen, carriers or other bailees may from time
to time assert claims to or security interests in Collateral in
their possession.
(C) Not less than five Domestic Business Days prior to
the Initial Borrowing Date under the Credit Agreement, the
Grantors shall deliver a Perfection Certificate to the Collateral
Agent. The information set forth therein shall be correct and
complete.
(D) To the extent that the Collateral is subject to the
UCC, the Security Interests constitute valid security interests
under the UCC securing the Secured Obligations. When UCC
financing statements in the form specified in Exhibit A shall have
been filed in the offices specified in the Perfection Certificate,
and this Agreement and any amendments hereto in appropriate form
have been filed in the office of the Secretary of the Interstate
Commerce Commission, with respect to any Rolling Stock, Leased
Rolling Stock or Rolling Stock Leases, the Security Interests
shall constitute perfected security interests in the Collateral
(except Inventory in transit) to the extent that a security
interest therein may be perfected by filing pursuant to the UCC
and the Interstate Commerce Act, prior to all other Liens and
rights of others therein except for the Permitted Liens. When the
Patent Security Agreement and the Trademark Security Agreement
have been filed with the United States Patent and Trademark
Office, the Security Interests shall constitute perfected security
interests in all right, title and interest of the Grantors in
Patents and Trademarks, prior to all other Liens and rights of
others therein except for Permitted Liens. When a Copyright
Security Agreement has been filed with the United States Copyright
Office, the Security Interests shall constitute perfected security
interests in all right, title and interest of the Grantors in
Copyrights, prior to all other Liens and rights of others therein
except for Permitted Liens.
(E) The Inventory and Equipment are insured in
accordance with the requirements of the Credit Agreement.
(F) The Grantors have produced or will produce all
Inventory produced by them in compliance with the applicable
requirements of the Fair Labor Standards Act, as amended.
SECTION 3. The Security Interests
(A) In order to secure the full and punctual payment of
the Secured Obligations in accordance with the terms thereof, and to secure
the performance of all of the obligations of the Grantors hereunder and
under the Credit Agreement, the Grantors hereby grant to the Collateral
Agent for the ratable benefit of the Lenders a continuing security interest
in and to all of the following property of the Grantors, whether now owned
or existing or hereafter acquired or arising and regardless of where
located (all being collectively referred to as the "Collateral"):
(1) Accounts;
(2) Inventory;
(3) General Intangibles;
(4) Documents;
(5) Instruments;
(6) Equipment;
(7) All books and records (including, without
limitation, customer lists, marketing information, credit files,
price lists, operating records, vendor and supplier price lists,
sales literature, computer programs, printouts and other computer
materials and records) of any Grantor pertaining to any of the
Collateral;
(8) All insurance policies;
(9) All right, title, claims and benefits now owned or
hereafter acquired by any Grantor in and to any railcar leases,
subleases, rental agreements and car hire contracts in which any
Grantor shall at any time have any interest, and any right, title,
claim and benefits of any Grantor now owned or hereafter acquired
in and to any management agreement concerning all such leases and
agreements (collectively, "Rolling Stock Leases"); and all right,
title and interest of any Grantor in the railcars and equipment
provided pursuant to any Rolling Stock Leases ("Leased Rolling
Stock"); in each case, including, without limitation, all rights
of any Grantor to receive and apply any Rolling Stock Revenues
attributable to any Leased Rolling Stock or pursuant to any
Rolling Stock Leases;
(10) All rights now owned or hereafter acquired by any
Grantor to receive and collect any Rolling Stock Revenues; and
(11) All Proceeds of all or any of the Collateral
described in Clauses 1 through 10 hereof.
(B) The Borrower will cause any Domestic Subsidiary
acquired after the Effective Date to take appropriate steps to (i) become a
Grantor hereunder and (ii) immediately grant to the Collateral Agent for
the ratable benefit of the Lenders a first priority security interest
(subject to Permitted Liens and to restrictions permitted by Section 5.18
of the Credit Agreement) upon all of its assets as additional security for
the Secured Obligations.
(C) The Security Interests are granted as security only
and shall not subject the Collateral Agent or any Lender to, or transfer or
in any way affect or modify, any obligation or liability of any Grantor
with respect to any of the Collateral or any transaction in connection
therewith.
SECTION 4. Further Assurances; Covenants
(A) No Grantor will change its name, identity or
corporate structure in any manner unless it shall have given the Collateral
Agent not less than 30 days' prior notice thereof and delivered an opinion
of counsel with respect thereto in accordance with Section 4(L). No
Grantor will change the location of (i) its chief executive office or chief
place of business or (ii) the locations where it keeps or holds any
Collateral or any records relating thereto from the applicable location
described in the Perfection Certificate unless it shall have given the
Collateral Agent not less than 30 days' prior notice thereof and delivered
an opinion of counsel with respect thereto in accordance with Section 4(L).
The Grantors shall not in any event change the location of any Collateral
if such change would cause the Security Interests in such Collateral to
lapse or cease to be perfected, it being understood, however, that the
Grantors shall be able to transfer cash to the extent permitted by the
other provisions of this Agreement and the other Loan Documents.
(B) Each Grantor will, from time to time, at its
expense, execute, deliver, file and record any statement, assignment,
instrument, document, agreement or other paper and take any other action,
(including, without limitation, any filings with the United States Patent
and Trademark Office, any filings with the United States Copyright Office,
any filings with the Interstate Commerce Commission, any filings of
financing or continuation statements under the UCC and any filings in, or
agreements governed by the laws of, foreign jurisdictions) that from time
to time may be necessary, or that the Collateral Agent may reasonably
request, in order to create, preserve, perfect, confirm or validate the
Security Interests or to enable the Collateral Agent and the Lenders to
obtain the full benefits of this Agreement, or to enable the Collateral
Agent to exercise and enforce any of its rights, powers and remedies
hereunder with respect to any of the Collateral. To the extent permitted
by applicable law, each Grantor hereby authorizes the Collateral Agent to
execute and file financing statements or continuation statements without
such Grantor's signature appearing thereon. The Grantors agree that a
carbon, photographic, photostatic or other reproduction of this Agreement
or of a financing statement is sufficient as a financing statement. The
Grantors shall pay the costs of, or incidental to, any recording or filing
of any financing or continuation statements concerning the Collateral.
(C) If any Collateral is at any time in the possession
or control of any warehouseman, bailee or any of a Grantor's agents or
processors, such Grantor, if any Event of Default shall have occurred and
be continuing and if requested to do so by the Collateral Agent acting on
the instructions of the Required Lenders, shall notify such warehouseman,
bailee, agent or processor of the Security Interests created hereby and to
hold all such Collateral for the Collateral Agent's account subject to the
Collateral Agent's instructions, subject to the provisions of the PST
Documents.
(D) Each Grantor shall keep full and accurate books and
records relating to the Collateral, and stamp or otherwise ▇▇▇▇ such books
and records in such manner as the Required Lenders may reasonably require
in order to reflect the Security Interests.
(E) Each Grantor will immediately deliver and pledge
each Instrument (other than Instruments subject to the PST Documents to the
Collateral Agent, appropriately endorsed to the Collateral Agent, provided
that so long as no Event of Default shall have occurred and be continuing,
each Grantor may retain for collection in the ordinary course any
Instruments received by it in the ordinary course of business, and the
Collateral Agent shall, promptly upon request of a Grantor, make
appropriate arrangements for making any other Instrument pledged by such
Grantor available to it for purposes of presentation, collection or renewal
(any such arrangement to be effected, to the extent deemed appropriate to
the Collateral Agent, against trust receipt or like document).
(F) Each Grantor shall use all reasonable efforts to
cause to be collected from its account debtors, as and when due, any and
all amounts owing under or on account of each Account (including, without
limitation, Accounts which are delinquent, such Accounts to be collected in
accordance with lawful collection procedures) and shall apply forthwith
upon receipt thereof all such amounts as are so collected to the
outstanding balance of such Account. Subject to the rights of the
Collateral Agent and the Lenders hereunder if an Event of Default shall
have occurred and be continuing, each Grantor may allow in the ordinary
course of business as adjustments to amounts owing under its Accounts (i)
an extension or renewal of the time or times of payment, or settlement for
less than the total unpaid balance, which such Grantor finds appropriate in
accordance with sound business judgment and (ii) a refund or credit due as
a result of returned or damaged merchandise, all in accordance with such
Grantor's ordinary course of business consistent with its or the Borrower's
historical collection practices. The costs and expenses (including,
without limitation, attorney's fees) of collection, whether incurred by the
Grantors or the Collateral Agent, shall be borne by the Grantors.
(G) Upon the occurrence and during the continuance of
any Event of Default, upon request of the Required Lenders through the
Collateral Agent, each Grantor will promptly notify (and each Grantor
hereby authorizes the Collateral Agent so to notify) each account debtor in
respect of any Account or Instrument that such Collateral has been assigned
to the Collateral Agent hereunder, and that any payments due or to become
due in respect of such Collateral are to be made directly to the Collateral
Agent or its designee, unless otherwise subject to the PST Documents.
(H) Each Grantor shall, (i) as soon as practicable after
the date hereof, in the case of Equipment now owned in which a security
interest is perfected by a notation on the certificate of title or similar
evidence of the ownership of such goods and (ii) within 10 days of
acquiring any other similar Equipment, in each case, (a) having a value in
excess of $100,000, or (b) having a value in excess of $50,000, if the
aggregate of all such items owned by the Grantors at any time is greater
than $500,000, deliver to the Collateral Agent any and all certificates of
title, applications for title or similar evidence of ownership of such
Equipment and shall cause the Collateral Agent to be named as lienholder on
any such certificate of title or other evidence of ownership, except to the
extent such Equipment is subject to the PST Documents. Each Grantor shall
promptly inform the Collateral Agent of any additions to or deletions from
the Equipment exceeding $250,000 in the aggregate and shall not permit any
such items to become a fixture to real estate except pursuant to the
Mortgages or an accession to other personal property except such other
property that is Collateral.
(I) Each Grantor shall as soon as practicable after the
date hereof, at its own cost and expense, cause to be plainly, distinctly,
permanently and conspicuously placed, fastened or painted upon each side of
each item of Rolling Stock a legend bearing such words as the Collateral
Agent may request indicating the Lien over and security interest in such
Rolling Stock created hereby in letters not less than one inch in height.
The Grantors may permit the Rolling Stock to be operated within the United
States, but shall not permit the Rolling Stock to be operated outside the
boundaries of the continental United States.
(J) Subject to Section 12, without the prior written
consent of the Required Lenders, no Grantor will (a) sell, lease, exchange,
assign or otherwise dispose of, or grant any option with respect to, any
Collateral, except to the extent permitted by Section 5.07 of the Credit
Agreement, subject to the rights of the Collateral Agent and the Banks
hereunder if an Event of Default shall have occurred and be continuing,
whereupon, in the case of such a sale or exchange, the Security Interests
created hereby in such item (but not in any Proceeds arising from such sale
or exchange) shall cease immediately without any further action on the part
of the Collateral Agent; or (b) create, incur or suffer to exist any Lien
with respect to any Collateral, except for Permitted Liens.
(K) Prior to the Initial Borrowing Date under the Credit
Agreement, each Grantor will cause the Collateral Agent to be named as an
insured party on each insurance policy covering risks relating to any of
its Inventory and Equipment. Each Grantor will deliver to the Collateral
Agent, upon request of the Collateral Agent, the insurance policies for
such insurance or certificates of insurance evidencing such coverage. Each
such insurance policy shall include effective waivers by the insurer of all
claims for insurance premiums against the Collateral Agent or any Lender,
provide for coverage to the Collateral Agent regardless of the breach by
relevant Grantor of any warranty or representation made therein, not be
subject to co-insurance, and provide that no cancellation, termination or
material modification thereof shall be effective until at least 30 days
(or, in the case of non-payment of premiums, at least 10 days) after
receipt by the Collateral Agent of notice thereof.
(L) Each Grantor will, promptly upon request, provide to
the Collateral Agent all information and evidence it may reasonably request
concerning the Collateral to enable the Collateral Agent to enforce the
provisions of this Agreement.
(M) Each Grantor shall notify the Collateral Agent
promptly if it knows, or has reason to know, that any application or
registration relating to any Copyright, Patent or Trademark may become
abandoned. In the event that any Grantor receives notice of or becomes
aware that any right to a Copyright, Copyright License, Patent, Patent
License, Trademark or Trademark License has been infringed, misappropriated
or diluted by a third party, such Grantor shall notify the Collateral Agent
promptly after it learns thereof and shall, unless such Grantor shall
reasonably determine that any such action would be of insufficient economic
value, promptly take such other actions as such Grantor shall reasonably
deem appropriate under the circumstances to protect such Copyright,
Copyright License, Patent, Patent License, Trademark or Trademark License.
Within thirty (30) days after having filed an application for the
registration of any Copyright with the United States Copyright Office or
any Patent or Trademark with the United States Patent and Trademark Office,
or with any similar office or agency in any other country or any political
subdivision thereof, upon request of the Collateral Agent, each Grantor
shall execute and deliver any and all agreements, instruments, documents
and papers the Collateral Agent may request to evidence the Security
Interests in such Copyright, Patent or Trademark and the goodwill and
general intangibles of such Grantor relating thereto or represented
thereby. Each Grantor hereby appoints the Collateral Agent its attorney-
in-fact to execute and file all such writings for the foregoing purposes,
all acts of such attorney being hereby ratified and confirmed; such power,
being coupled with an interest, shall be irrevocable until the Secured
Obligations are paid in full. The Collateral Agent shall provide copies to
each Grantor of any writings in which the Collateral Agent has acted as
attorney-in-fact within 30 days after the execution of such writings.
(N) Not more than four months nor less than 10 days
prior to (i) as to all Collateral, each anniversary of the date hereof
during the term of the Credit Agreement, if requested to do so by the
Collateral Agent acting on the instructions of the Required Lenders, and
(ii) as to the Collateral affected by such action, each date on which it
proposes to take any action contemplated by Section 4(A), each Grantor
shall, at its cost and expense, cause to be delivered to the Lenders an
opinion of counsel, satisfactory to the Collateral Agent, substantially in
the form of Exhibit B to the effect that all financing statements and
amendments or supplements thereto, continuation statements and other
documents required to be recorded or filed in order to perfect and protect
the Security Interests, to the extent such Security Interests can be
perfected by recording or filing, for a period, specified in such opinion,
continuing until a date not earlier than six months from the date of such
opinion, against all creditors of and purchasers from such Grantor have
been filed in each filing office necessary for such purpose and that all
filing fees and taxes, if any, payable in connection with such filings have
been paid in full.
(O) Within five (5) Business Days of entering into,
amending, modifying or terminating any Rolling Stock Lease, each Grantor
will deliver a copy of such Rolling Stock Lease, amendment or modification
or notice of such termination to the Collateral Agent.
(P) From time to time upon request by the Collateral
Agent, each Grantor shall, at its cost and expense, cause to be delivered
to the Lenders an opinion of counsel satisfactory to the Collateral Agent
as to such matters relating to the transactions contemplated hereby as the
Required Lenders may reasonably request.
(Q) This Agreement is made with full recourse to such
Grantor and pursuant to and upon all the warranties, representations,
covenants, and agreements on the part of such Grantor contained herein, in
the Derivatives Obligations Agreements and otherwise in writing in
connection herewith or therewith.
SECTION 5. General Authority
Each Grantor hereby irrevocably appoints the Collateral
Agent its true and lawful attorney, with full power of substitution, in the
name of the Grantors, the Collateral Agent, the Lenders or otherwise, for
the sole use and benefit of the Collateral Agent and the Lenders, but at
such Grantor's expense, to the extent permitted by law to exercise and
subject to the PST Documents, at any time and from time to time while an
Event of Default has occurred and is continuing, all or any of the
following powers with respect to all or any of the Collateral:
i) to demand, ▇▇▇ for, collect, receive and give acquittance for any
and all monies due or to become due thereon or by virtue
thereof,
(ii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or with the same or
the proceeds or avails thereof, as fully and effectually as if
the Collateral Agent were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto;
provided that the Collateral Agent shall give each Grantor not less than
thirty (30) days' prior notice of the time and place of any sale or other
intended disposition of any of the Collateral, except any Collateral which
is perishable or threatens to decline speedily in value or is of a type
customarily sold on a recognized market. The Collateral Agent and each
Grantor agree that such notice constitutes "reasonable notification" within
the meaning of Section 9-504(3) of the UCC.
SECTION 6. Remedies upon Event of Default
(A) If any Event of Default has occurred and is
continuing, the Collateral Agent may exercise on behalf of the Lenders all
rights of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised), and, in addition, the
Collateral Agent may, without being required to give any notice, except as
herein provided or as may be required by mandatory provisions of law, (i)
apply cash, if any, then held by it as Collateral as specified in Section 8
and (ii) if there shall be no such cash or if such cash shall be
insufficient to pay all the Secured Obligations in full, sell the
Collateral or any part thereof at public or private sale, for cash, upon
credit or for future delivery, and at such price or prices as the
Collateral Agent may deem satisfactory. The Collateral Agent or any Lender
may be the purchaser of any or all of the Collateral so sold at any public
sale (or, if the Collateral is of a type customarily sold in a recognized
market or is of a type which is the subject of widely distributed standard
price quotations, at any private sale). Each Grantor will execute and
deliver such documents and take such other action as the Collateral Agent
deems necessary or advisable in order that any such sale may be made in
compliance with law. Upon any such sale the Collateral Agent shall have
the right to deliver, assign and transfer to the purchaser thereof the
Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of any Grantor
which may be waived, and each Grantor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or appraisal
which it has or may have under any law now existing or hereafter adopted.
The notice (if any) of such sale required by Section 5 shall (1) in the
case of a public sale, state the time and place fixed for such sale, and
(2) in the case of a private sale, state the day after which such sale may
be consummated. Any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as the
Collateral Agent may fix in the notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety or in separate parcels, as
the Collateral Agent may determine. The Collateral Agent shall not be
obligated to make any such sale pursuant to any such notice. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be
made at any time or place to which the same may be so adjourned. In the
case of any sale of all or any part of the Collateral on credit or for
future delivery, the Collateral so sold may be retained by the Collateral
Agent until the selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in the case of the failure
of such purchaser to take up and pay for the Collateral so sold and, in the
case of any such failure, such Collateral may again be sold upon like
notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in
equity to foreclose the Security Interests and sell the Collateral, or any
portion thereof, under a judgment or decree of a court or courts of
competent jurisdiction.
(B) For the purpose of enforcing any and all rights and
remedies under this Agreement, if any Event of Default has occurred and is
continuing, the Collateral Agent may (i) require each Grantor to, and each
Grantor agrees that it will, at its expense and upon the request of the
Collateral Agent, forthwith assemble all or any part of the Collateral as
directed by the Collateral Agent and make it available at a place
designated by the Collateral Agent which is, in its opinion, reasonably
convenient to the Collateral Agent and such Grantor, whether at the
premises of such Grantor or otherwise, (ii) to the extent permitted by
applicable law, enter, with or without process of law and without breach of
the peace, any premise where any of the Collateral is or may be located,
and without charge or liability to it seize and remove such Collateral from
such premises, (iii) have access to and use each Grantors' books and
records relating to the Collateral and (iv) prior to the disposition of the
Collateral, store or transfer it without charge in or by means of any
storage or transportation facility owned or leased by the relevant Grantor,
process, repair or recondition it or otherwise prepare it for disposition
in any manner and to the extent the Collateral Agent deems appropriate and,
in connection with such preparation and disposition, use without charge any
trademark, trade name, brand name, copyright, patent or technical process
used by the Borrower. The Collateral Agent may also render any or all of
the Collateral unusable at any Grantor's premises and may dispose of such
Collateral on such premises without liability for rent or costs.
(C) Without limiting the generality of the foregoing, if
any Event of Default has occurred and is continuing,
(i) subject to any outstanding licenses or sublicenses
to or by any Grantor, the Collateral Agent may license or
sublicense, whether general, special or otherwise, and whether on
an exclusive or non-exclusive basis, any Copyrights, Patents or
Trademarks included in the Collateral throughout the world for
such term or terms, on such conditions and in such manner as the
Collateral Agent shall in its sole discretion determine;
(ii) the Collateral Agent may (without assuming any
obligations or liability thereunder), at any time and from time to
time, in its sole discretion, enforce (and shall have the
exclusive right to enforce) against any licensee or sublicensee
all rights and remedies of each Grantor in, to and under any
Copyright Licenses, Patent Licenses or Trademark Licenses and take
or refrain from taking any action under any thereof, and each
Grantor hereby releases the Collateral Agent and each of the
Lenders from, and agrees to hold the Collateral Agent and each of
the Lenders free and harmless from and against any claims and
expenses arising out of, any lawful action so taken or omitted to
be taken with respect thereto; and
(iii) upon request by the Collateral Agent, each
Grantor will execute and deliver to the Collateral Agent a power
of attorney, in form and substance satisfactory to the Collateral
Agent, for the implementation of any lease, assignment, license,
sublicense, grant of option, sale or other disposition of a
Copyright, Patent or Trademark or any action related thereto. In
the event of any such disposition pursuant to this Section, each
Grantor shall supply its know-how and expertise relating to the
manufacture and sale of the products bearing Trademarks or the
products or services made or rendered in connection with Patents,
and its customer lists and other records relating to such Patents
and Trademarks and to the distribution of said products, to the
Collateral Agent.
(D) Notwithstanding anything to the contrary herein,
the exercise of any remedies and the taking of any other action by
the Collateral Agent pursuant to this Agreement shall be subject
to the provisions of the PST Documents, and in no event shall the
Collateral Agent exercise any such remedies or take any such other
action to the extent such exercise or action would conflict with
such provisions.
SECTION 7. Limitation on Duty of Collateral Agent in
Respect of Collateral
Beyond the exercise of reasonable care in the custody
thereof, the Collateral Agent shall have no duty as to any Collateral in
its possession or control or in the possession or control of any agent or
bailee or any income thereon or as to the preservation of rights against
prior parties or any other rights pertaining thereto. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which it accords its own property, and shall
not be liable or responsible for any loss or damage to any of the
Collateral, or for any diminution in the value thereof, by reason of the
act or omission of any warehouseman, carrier, forwarding agency, consignee
or other agent or bailee selected by the Collateral Agent in good faith.
SECTION 8. 8. Application of Proceeds
(A) Upon the occurrence and during
the continuance of an Event of Default, the proceeds of any sale of, or
other realization upon, all or any part of the Collateral shall be applied
by the Collateral Agent in the following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to agents and
counsel for the Collateral Agent, and all expenses, liabilities
and advances incurred or made by the Collateral Agent in
connection therewith, and any other unreimbursed expenses for
which the Collateral Agent or any Lender is to be reimbursed
pursuant to Section 10.03 of the Credit Agreement or Section 12
hereof and unpaid fees owing to the Collateral Agent under the
Credit Agreement;
second, to the ratable payment of unpaid principal of the
Secured Obligations;
third, to the ratable payment of accrued but unpaid
interest on the Secured Obligations in accordance with the
provisions of the Credit Agreement;
fourth, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been paid in
full; and
finally, to payment to the Grantors or their successors
or assigns, or as a court of competent jurisdiction may direct, of
any surplus then remaining from such proceeds.
(B) The Collateral Agent may make distributions hereunder
in cash or in kind or, on a ratable basis, in any combination thereof. The
Collateral Agent shall invest all amounts to be applied to LC Exposures in
Cash Equivalents selected by it and hold such amounts in trust for
application to future drawings under the Letters of Credit notified to it
by the LC Issuing Banks in the order in which such drawings are made. If
the Collateral Agent holds any amounts which were distributable in respect
of LC Exposures after the Letters of Credit have expired and all amounts
payable with respect thereto have been paid, such amounts shall be applied
in the order set forth in subsection (A) above.
(C) In making the determinations and allocations required
by this Section, the Collateral Agent shall have no liability to any of the
Lenders for actions taken in reliance on information supplied by the
Lenders as to the amounts of the Secured Obligations held by them. All
distributions made by the Collateral Agent pursuant to this Section shall
be final, and the Collateral Agent shall have no duty to inquire as to the
application by the Lenders of any amount distributed to them. However, if
at any time the Collateral Agent determines that an allocation or
distribution previously made pursuant to this Section was based on a
mistake of fact (including, without limiting the generality of the
foregoing, mistakes based on any assumption that principal or interest has
been paid by payments which are subsequently recovered from the recipient
thereof through the operation of any bankruptcy, reorganization, insolvency
or other laws or otherwise), the Collateral Agent may in its discretion,
but shall not be obligated to, adjust subsequent allocations and
distributions hereunder so that, on a cumulative basis, the Collateral
Agent and the Lenders receive the distributions to which they would have
been entitled if such mistake of fact had not been made.
(D) All payments required to be made to the (i) Lenders
hereunder shall be made to the Collateral Agent for the account of the
respective Lenders and (ii) Derivatives Creditors hereunder shall be made
to the paying agent under the applicable Derivatives Obligations Agreement
or, in the case of Derivatives Obligations Agreements without a paying
agent, directly to the applicable Derivatives Creditor.
(E) For purposes of applying payments received in
accordance with this Section 8, the Collateral Agent shall be entitled to
rely upon (i) the Agent for a determination (which the Agent agrees to
provide upon request to the Collateral Agent) of the outstanding Loan
Document Obligations and (ii) upon any Derivatives Creditor for a
determination (which each Derivatives Creditor agrees to provide upon
request to the Collateral Agent) of the outstanding Secured Derivatives
Obligations owed to such Derivatives Creditor. Unless it has actual
knowledge (including by way of written notice from a Secured Creditor) to
the contrary, the Agent under the Credit Agreement, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent,
in acting hereunder, shall be entitled to assume that (x) no Loans Document
Obligations other than principal, interest and regularly accruing fees are
owing to any Lender and (y) no Derivatives Obligations Agreements or
Secured Derivatives Obligations with respect thereto are in existence.
(F) Remedies Cumulative. Each and every right, power
and remedy hereby specifically given to the Collateral Agent shall be in
addition to every other right, power and remedy specifically given under
this Agreement, any Derivatives Obligations Agreement or the other Loan
Documents or now or hereafter existing at law or in equity, or by statute
and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by
the Collateral Agent. All such rights, powers and remedies shall be
cumulative and the exercise or the beginning of exercise of one shall not
be deemed a waiver of the right to exercise of any other or others. No
delay or omission of the Collateral Agent in the exercise of any such
right, power or remedy and no renewal or extension of any of the Secured
Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an
acquiescence therein. In the event that the Collateral Agent shall bring
any suit to enforce any of its rights hereunder and shall be entitled to
judgment, then in such suit the Collateral Agent may recover reasonable
expenses, including reasonable attorneys' fees, and the amounts thereof
shall be included in such judgment.
SECTION 9. Existing PST Secured Notes. Notwithstanding
anything to the contrary contained herein (i) so long as any Existing PST
Senior Secured Notes remain outstanding, the Security Interests in any of
the Collateral which has been pledged, or in which a security interest
has been granted, by PST or any of its Subsidiaries to secure the
Existing PST Senior Secured Notes in accordance with the requirements of
the Existing PST Senior Secured Notes Indenture shall be subject to the
prior security interests so created in favor of the holders of the
Existing PST Senior Secured Notes and any application of proceeds
pursuant to Section 8 shall be subject to any prior required application
of proceeds pursuant to the PST Documents, provided that at all times the
security interests created pursuant to the Loan Documents in all
Collateral granted to PST thereunder shall be required to be fully
perfected in accordance with applicable law.
SECTION 10. Concerning the Collateral Agent
The provisions of Article 7 of the Credit Agreement shall
inure to the benefit of the Collateral Agent in respect of this Agreement
and shall be binding upon the parties to the Credit Agreement in such
respect. In furtherance and not in derogation of the rights, privileges
and immunities of the Collateral Agent therein set forth:
(A) The Collateral Agent is authorized to take all such
action as is provided to be taken by it as Collateral Agent
hereunder and all other action reasonably incidental thereto. As
to any matters not expressly provided for herein (including,
without limitation, the timing and methods of realization upon the
Collateral) the Collateral Agent shall act or refrain from acting
in accordance with written instructions from the Required Lenders
or, in the absence of such instructions, in accordance with its
discretion.
(B) The Collateral Agent shall not be responsible for
the existence, genuineness or value of any of the Collateral or
for the validity, perfection, priority or enforceability of the
Security Interests in any of the Collateral, whether impaired by
operation of law or by reason of any action or omission to act on
its part hereunder. The Collateral Agent shall have no duty to
ascertain or inquire as to the performance or observance of any of
the terms of this Agreement by any Grantor.
SECTION 11. 11. Appointment of Co-Collateral Agents
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Collateral Agent may appoint another
bank or trust company or one or more other persons, either to act as co-
agent or co-agents, jointly with the Collateral Agent, or to act as
separate agent or agents on behalf of the Lenders with such power and
authority as may be necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment (which may, in
the discretion of the Collateral Agent, include provisions for the
protection of such co-agent or separate agent similar to the provisions of
Section 10).
SECTION 12. Expenses
In the event that any Grantor fails to comply with the
provisions of the Credit Agreement or this Agreement, such that the value
of any Collateral or the validity, perfection, rank or value of any
Security Interest is thereby diminished or potentially diminished or put at
risk, the Collateral Agent if requested by the Required Lenders may, but
shall not be required to, effect such compliance on behalf of such Grantor,
and such Grantor shall reimburse the Collateral Agent for the costs thereof
on demand. The Grantors jointly and severally agree that all insurance
expenses and all expenses of protecting, storing, warehousing, appraising,
insuring, handling, maintaining and shipping the Collateral, any and all
excise, property, sales and use taxes imposed by any state, federal or
local authority on any of the Collateral, or in respect of periodic
appraisals and inspections of the Collateral to the extent the same may
reasonably be requested by the Required Lenders from time to time, or in
respect of the sale or other disposition thereof shall be borne and paid by
the Grantors; and if the Grantors fail to promptly pay any portion thereof
when due, the Collateral Agent or any Lender may, at its option, but shall
not be required to, pay the same and charge any Grantor's account therefor,
and the Grantors jointly and severally agree to reimburse the Collateral
Agent or such Lender therefor on demand. All sums so paid or incurred by
the Collateral Agent or any Lender for any of the foregoing and any and all
other sums for which any Grantor may become liable hereunder and all costs
and expenses (including attorneys' fees, legal expenses and court costs)
reasonably incurred by the Collateral Agent or any Lender in enforcing or
protecting the Security Interests or any of their rights or remedies under
this Agreement, shall, together with interest thereon until paid at the
rate applicable to Base Rate Loans plus 2%, be additional Secured
Obligations hereunder.
SECTION 13. Termination of Security Interests;
Release of Collateral. (a) After the termination of the Total Commitment
and all Derivatives Obligations Agreements, when no Note or Letter of
Credit is outstanding and when all Loans and other Obligations (other than
contingent indemnity obligations) have been paid in full, this Agreement
shall terminate (provided that all indemnities set forth herein including,
without limitation, in Section 12 hereof shall survive such termination),
and the Collateral Agent, at the request and expense of the relevant
Grantor, will execute and deliver to such Grantor a proper instrument or
instruments (including Uniform Commercial Code termination statements on
form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Grantor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Collateral Agent and as has
not theretofore been sold or otherwise applied or released pursuant to this
Agreement.
(b) The Collateral Agent shall, at the request of the
relevant Grantor evidence the release of any or all of the Collateral
pursuant to Section 4(J) provided that (x) such release is permitted by the
terms of the Credit Agreement (it being agreed for such purposes that a
release will be deemed "permitted by the terms of the Credit Agreement" if
the proposed transaction constitutes an exception to Section 5.07 of the
Credit Agreement) or otherwise has been approved in writing by the Required
Banks and (y) the proceeds of such Collateral are applied as required
pursuant to the Credit Agreement or any consent or waiver with respect
thereto.
(c) At any time that the relevant Grantor desires that
the Collateral Agent take any action to give effect to any release of
Collateral pursuant to clause (x) of the foregoing Section 13(b), it shall
deliver to the Collateral Agent a certificate signed by an authorized
officer describing the Collateral to be sold and the relevant provision of
Section 5.07 of the Credit Agreement on which it is relying to make such
sale. In the event that any part of the Collateral is released as provided
in the preceding paragraph (b), the Collateral Agent, at the request and
expense of such Grantor, will duly release such Collateral and assign,
transfer and deliver to such Grantor or its designee (without recourse and
without any representation or warranty) such of the Collateral as is then
being (or has been) so sold and as may be in the possession of the
Collateral Agent and has not theretofore been released pursuant to this
Agreement. The Collateral Agent shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it as
permitted by this Section 13. Upon any release of Collateral pursuant to
Section 13(a) or (b), none of the Secured Creditors shall have any
continuing right or interest in such Collateral, or the proceeds thereof.
SECTION 14. Notices
All notices, communications and distributions hereunder
shall be given in accordance with Section 10.01 of the Credit Agreement.
SECTION 15. Waivers; Non-Exclusive Remedies
No failure on the part of the Collateral Agent to
exercise, and no delay in exercising and no course of dealing with respect
to, any right under this Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise by the Collateral Agent of any right
under the Credit Agreement or this Agreement preclude any other or further
exercise thereof or the exercise of any other right. The rights in this
Agreement and the Credit Agreement are cumulative and are not exclusive of
any other remedies provided by law.
SECTION 16. Successors and Assigns
This Agreement is for the benefit of the Collateral Agent
and the Lenders and their successors and assigns, and in the event of an
assignment of all or any of the Secured Obligations, the rights hereunder,
to the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Agreement shall be binding on
each Grantor and its successors and assigns.
SECTION 17. Changes in Writing
None of the terms and conditions of this Agreement may be
changed, waived, modified or varied in any manner whatsoever unless in
writing duly signed by the Agent (with the consent of the Required Lenders
or, to the extent required by Section 10.05 of the Credit Agreement, all of
the Lenders) and each Grantor affected thereby (it being understood that
the addition or release of any Grantor hereunder shall not constitute a
change, waiver, modification or variance affecting any Grantor other than
the Borrower and the Grantor so added or released) provided that (i) no
such change, waiver, modification or variance shall be made to Section 8(A)
or this Section 17 without the consent of each Secured Creditor adversely
affected thereby, and (ii) any change, waiver, modification or variance
affecting the rights and benefits of a single Class of Secured Creditors
(and not all Secured Creditors in a like or similar manner) shall require
the written consent of the Requisite Creditors of such Class of Secured
Creditors. For the purpose of this Agreement, the term "Class" shall mean
each class of Secured Creditors, i.e., whether (x) the Lenders as holders
of the Loan Document Obligations or (y) the Derivatives Creditors as
holders of the Secured Derivatives Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Loan Document Obligations, the Required Banks and
(y) with respect to the Secured Derivatives Obligations, the holders of at
least a majority of all obligations outstanding from time to time under the
Derivatives Obligations Agreements.
SECTION 18. New York Law
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise required
by mandatory provisions of law and except to the extent that remedies
provided by the laws of any jurisdiction other than New York are governed
by the laws of such jurisdiction.
SECTION 19. Severability
If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the
other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Collateral
Agent and the Lenders in order to carry out the intentions of the parties
hereto as nearly as may be possible; and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not
affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 20. Counterparts
This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of
the day and year first above written.
Tekni-Plex, Inc.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
OZITE CORPORATION
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
PTI PLASTICS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
PLASTIC SPECIALTIES AND TECHNOLOGIES, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
BURLINGTON RESINS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
PURE TECH APR, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
MULTI CONTAINER RECYCLER, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
COAST RECYCLING NORTH, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
DISTRIBUTERS RECYCLING, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
REI DISTRIBUTORS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
PURE TECH RECYCLING OF CALIFORNIA
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
ALUMET SMELTING CORPORATION
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
CONCONRE CORP.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
_________________________________
Title: CEO
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________________
Title: Vice President
EXHIBIT A
TO SECURITY
AGREEMENT
PERFECTION CERTIFICATE
The undersigned, the chief executive officers and chief
legal officers of Tekni-Plex, Inc., a Delaware corporation (the "Borrower")
and Dolco Packaging Corp., a Delaware corporation (together with the
Borrower, the "Grantors" and each "Grantor"), hereby certify with reference
to the Security Agreement dated as of March 3, 1998 between the Grantors
and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Collateral Agent (terms
defined therein being used herein as therein defined), to the Collateral
Agent and each Lender as follows:
1. Names. (a) The exact corporate name of each Grantor
as it appears in its certificate of incorporation is as follows:
(b) Set forth below is each other corporate name each
Grantor has had since its organization, together with the date of the
relevant change:
(c) Except as set forth in Schedule 1, no Grantor has
changed its identity or corporate structure in any way within the past five
years. To the extent that any Grantor has changed its identity or
corporate structure within the past 5 years pursuant to a merger,
consolidation, acquisition or other change in form, Schedule 1 sets forth
the information required by paragraphs 1, 2 and 3 hereof as to each
acquiree or constituent party to such merger or consolidation, unless such
acquiree or constituent party was (i) transitory in nature, (ii) held no
assets (other than on a temporary basis for the sole purpose of
consummating such acquisition, merger or consolidation) and (iii) conducted
no activities. No such change in form has occurred with respect to any
Grantor since _______.
[Changes in identity or corporate structure would include
mergers, consolidations and acquisitions, as well as any change in the
form, nature or jurisdiction of corporate organization. If any such change
has occurred, include in Schedule 1 the information required by paragraphs
1, 2 and 3 of this certificate as to each acquiree or constituent party to
a merger or consolidation.]
(d) The following is a list of all other names
(including trade names or similar appellations) used by each Grantor or any
of its divisions or other business units at any time during the past five
years:
2. Current Locations. (a) The chief executive office
of each Grantor is located at the following address:
Mailing
Address County State
(b) The following are all the locations where each Grantor
maintains any books or records relating to any Accounts:
Mailing
Name Address County State
(c) The following are all the places of business of each
Grantor not identified above:
Mailing
Name Address County State
(d) The following are all the locations where each Grantor
maintains any Inventory not identified above:
Mailing
Name Address County State
(e) The following are the names and addresses of all Persons
other than the Grantors which have possession of any of the Inventory of any
Grantor:
Mailing
Name Address County State
3. Prior Locations. (a) Set forth below is the information
required by subparagraphs (a), (b) and (c) of paragraph 2 with respect to
each location or place of business maintained by each Grantor at any time
during the past five years:
(b) Set forth below is the information required by
subparagraphs (d) and (e) of paragraph 2 with respect to each location or
bailee where or with whom Inventory has been lodged at any time during the
past four months:
4. Unusual Transactions. Except as set forth in
Schedule 4, all Accounts have been originated by a Grantor and all
Inventory and Equipment has been acquired by a Grantor in the ordinary
course of its business.
5. File Search Reports. Attached hereto as Schedule
5(A) is a true copy of a file search report from the Uniform Commercial
Code filing officer in each jurisdiction identified in paragraph 2 or 3
above with respect to each name set forth in paragraph 1 above. Attached
hereto as Schedule 5(B) is a true copy of each financing statement or other
filing identified in such file search reports.
6. UCC Filings. A duly signed financing statement on
Form UCC-1 in substantially the form of Schedule 6(A) hereto has been duly
filed in the Uniform Commercial Code filing office in each jurisdiction
identified in paragraph 2 hereof. Attached hereto as Schedule 6(B) is a
true copy of each such filing duly acknowledged by the filing officer.
7. Schedule of Filings. Attached hereto as Schedule 7
is a schedule setting forth filing information with respect to the filings
described in paragraph 6 above.
8. Filing Fees. All filing fees and taxes payable in
connection with the filings described in paragraph 6 above have been paid.
IN WITNESS WHEREOF, we have hereunto set our hands this [ ]
day of [ ], 1998.
----------------------------
Title:
----------------------------
Title:
SCHEDULE 6(A)
Description of Collateral
All accounts, chattel paper, contract rights, general
intangibles, inventory, equipment and documents, now owned or hereafter
acquired, wherever located, and all proceeds thereof.
SCHEDULE 7
SCHEDULE OF FILINGS
Debtor Filing Officer File Number Date of Filing1
[TO BE PROVIDED BY BORROWER]
____________
1 Indicate lapse date, if other than fifth anniversary.
EXHIBIT B
TO SECURITY
AGREEMENT
1. The Security Agreement creates a valid security interest,
for the benefit of the Secured Creditors, in all of each Grantor's right,
title and interest in the Collateral to the extent that the Uniform
Commercial Code (the "UCC") is applicable to the creation of a security
interest therein and, to the extent provided in Section 9-306 of the UCC,
all proceeds thereof.
2. The filing of the financing statements described as
items ________ in the offices designated in Schedule A are the only
filings, recordings and registrations necessary to perfect, publish notice
of and preserve the security interest in the Collateral covered by the UCC
(the "UCC Collateral") created by the Security Agreement to the extent such
security interest may be perfected by filing under the UCC, and no further
filing or recording of any document or instrument or other action will be
required so to perfect and preserve such security interest, except that (i)
continuation statements relating to said financing statements must be filed
within ______________ [state time period] and (ii) additional filings may
be necessary with respect to the UCC Collateral if any Grantor changes its
name, identity or corporate structure or the jurisdiction in which its
places of business or the UCC Collateral are located.
3. The Liens and security interests created by the Security
Agreement on or in the UCC Collateral will validly secure the payment of
all future advances pursuant to the Credit Agreement, whether or not at the
time such advances are made an Event of Default or other event not within
the control of the Lenders has relieved or may relieve the Lenders from
their obligations to make such advances, and are perfected to the extent
set forth in paragraph 2 above with respect to such future advances.
EXHIBIT C
TO SECURITY
AGREEMENT
PATENT SECURITY AGREEMENT
(PATENT APPLICATIONS AND PATENT LICENSES)
WHEREAS, Tekni-Plex, Inc., a Delaware corporation (herein
referred to as "Grantor") owns the Patents (as defined in the Security
Agreement referred to below) (including design patents and applications
for patents) listed on Schedule 1 annexed hereto, and is a party to the
Patent Licenses (as defined in the Security Agreement referred to below)
identified in Schedule 1 annexed hereto;
WHEREAS, Grantor, certain lenders and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Agent for such lenders, are parties to a
Credit Agreement of even date herewith (as the same may be amended and in
effect from time to time among said parties and such lenders (the
"Lenders") as may from time to time be parties thereto, the "Credit
Agreement");
WHEREAS, pursuant to the terms of the Security Agreement
of even date herewith (as said Agreement may be amended and in effect from
time to time, the "Security Agreement") between Grantor, other grantors
party thereto and ▇▇▇▇▇▇ Guaranty Trust Company of New York, as Collateral
Agent for the secured parties referred to therein (in such capacity,
together with its successors in such capacity, "Grantee"), Grantor has
granted to Grantee for the benefit of such secured parties a continuing
security interest in substantially all the assets of Grantor, including all
right, title and interest of Grantor in, to and under the Patent Collateral
(as defined herein) whether now owned or existing or hereafter acquired or
arising, to secure the Secured Obligations (as defined in the Security
Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor does
hereby grant to Grantee a continuing security interest in all of Grantor's
right, title and interest in, to and under the following (all of the
following items or types of property being herein collectively referred to
as the "Patent Collateral"), whether now owned or existing or hereafter
acquired or arising:
(i) each Patent (including each design patent and patent
application), including, without limitation, each Patent
(including each design patent and patent application) referred to
in Schedule 1 annexed hereto;
(ii) each Patent License, including, without limitation,
each Patent License identified in Schedule 1 annexed hereto; and
(iii) all proceeds of and revenues from the foregoing,
including, without limitation, all proceeds of and revenues from
any claim by Grantor against third parties for past, present or
future infringement of any Patent (including any design patent),
including, without limitation, any Patent referred to in Schedule
1 annexed hereto (including, without limitation, any such Patent
issuing from any application referred to in Schedule 1 annexed
hereto), and all rights and benefits of Grantor under any Patent
License, including, without limitation, any Patent License
identified in Schedule 1 annexed hereto.
Grantor hereby irrevocably constitutes and appoints
Grantee and any officer or agent thereof, with full power of substitution,
as its true and lawful attorney-in-fact with full power and authority in
the name of Grantor or in its name, from time to time, in Grantee's
discretion, so long as any Event of Default (as defined in the Credit
Agreement) has occurred and is continuing, to take with respect to the
Patent Collateral any and all appropriate action which Grantor might take
with respect to the Patent Collateral and to execute any and all documents
and instruments which may be necessary or desirable to carry out the terms
of this Patent Security Agreement and to accomplish the purposes hereof.
Except to the extent not prohibited in the Security
Agreement, Grantor agrees not to sell, license, exchange, assign or
otherwise transfer or dispose of, or grant any rights with respect to, or
mortgage or otherwise encumber, any of the foregoing Patent Collateral.
This security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and
remedies of Grantee with respect to the security interest in the Patent
Collateral made and granted hereby are more fully set forth in the Security
Agreement, the terms and provisions of which are incorporated by reference
herein as if fully set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Patent
Security Agreement to be duly executed by its officer thereunto duly
authorized as of the ____ day of ____________, 19__.
Tekni-Plex, Inc.
By:_________________________________
Title:
Acknowledged:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By:_________________________________
Title:
SCHEDULE 1
TO PATENT
SECURITY AGREEMENT
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, ______________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY, that
_________________________, _______________ of [NAME OF COMPANY], personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such _________________, appeared before me this day in person
and acknowledged that (s)he signed, executed and delivered the said
instrument as her/his own free and voluntary act and as the free and
voluntary act of said Company, for the uses and purposes therein set forth
being duly authorized so to do.
GIVEN under my hand and Notarial Seal this ___ day of
_______________, 19__.
[Seal]
-----------------------------
Signature of notary public
My Commission expires __________
SCHEDULE 1
TO PATENT
SECURITY AGREEMENT
PATENTS
A. U.S. Patents and Design Patents
Patent Patent No. Issue Date
------ ---------- ----------
Plastic Foam Overwrap Tray 5,503,858 2/4/96
Molded Plastic Overwrap Tray 5,393,539 2/28/95
Molded Plastic Overwrap Tray 5,018,623 5/28/91
Hinged Container for Protecting 4,375,262 1/3/81
Lightbulbs
Egg Carton Container 5,494,164 2/27/97
Trays for Holding Food Products 5,597,073 1/28/97
Food Tray (Design) D360,808 8/1/95
Method for Blending Diverse Blowing 5,423,607 6/13/95
Agents
Food Tray (Design) D358,965 6/6/95
Four Cell Food Tray (Design) D353,765 12/27/94
Packaging Tray with Thick, 5,265,756 11/20/93
Curvilinear Perimeter Edges
Method for Forming an Opening in a 5,256,356 10/26/93
Container
Spring-Oriented Rotary Shear Key for 5,162,123 11/10/92
Use in a Mold
Mold Containing an Adjustable Key 5,085,571 2/4/92
Food Container (Design) D322,757 12/31/91
Egg Carton (Design) D308,822 6/26/90
Blowing Agent for Expandable 4,923,654 5/8/90
Polymeric Foams
Produce Container (Design) D307,387 4/24/90
Snaplock Thermoformed Container 4,915,251 4/10/90
Egg Carton (Design) D306,138 2/20/90
Method for Die Cutting Plastic Foam 4,856,393 8/15/89
Packaging Container (Design) D296,192 6/14/88
Molding Apparatus Having a Vented 4,419,068 12/6/83
Female Mold Member for Forming Foamed
Egg Cartons
Foam Egg Carton 4,382,536 5/10/83
Bowl and Cover Assembly 4,341,324 7/27/82
Egg Carton (Design) D256,667 9/2/80
Shear Molding of Reinforced Latch 4,155,692 5/22/79
Shear Molding of Reinforced Latch 4,108,941 8/22/78
B. Patents Pending
Patent Serial No. Filing Date
Apparatus and Method for Blending 421128 4/12/95
Diverse Blowing Agents
Vented Bowl and Cover Assembly 660980 6/12/96
EXHIBIT D
TO SECURITY
AGREEMENT
TRADEMARK SECURITY AGREEMENT
(TRADEMARKS, TRADEMARK REGISTRATIONS, TRADEMARK
APPLICATIONS AND TRADEMARK LICENSES)
WHEREAS, Tekni-Plex, Inc., a Delaware corporation (herein
referred to as "Grantor"), owns the Trademarks (as defined in the Security
Agreement referred to below) listed on Schedule 1 annexed hereto, and is a
party to the Trademark Licenses (as defined in the Security Agreement
referred to below) identified in Schedule 1 annexed hereto;
WHEREAS, Grantor, certain Lenders and ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Agent for such Lenders, are parties to a Credit
Agreement of even date herewith (as the same may be amended and in effect from
time to time among said parties and such lenders (the "Lenders") as may from
time to time be parties thereto, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Security Agreement of
even date herewith (as said Agreement may be amended and in effect from time to
time, the "Security Agreement") between Grantor and ▇▇▇▇▇▇ Guaranty Trust
Company of New York as Collateral Agent for the secured parties referred to
therein (in such capacity, together with its successors in such capacity,
"Grantee"), Grantor has granted to Grantee for the benefit of such secured
parties a security interest in substantially all the assets of Grantor,
including all right, title and interest of Grantor in, to and under the
Trademark Collateral (as defined herein), whether now owned or existing or
hereafter acquired or arising, to secure the Secured Obligations (as defined in
the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor does hereby
grant to Grantee a continuing security interest in all of Grantor's right, title
and interest in, to and under the following (all of the following items or types
of property being herein collectively referred to as the "Trademark
Collateral"), whether now owned or existing or hereafter acquired or arising:
(i) each Trademark, including, without limitation, each
Trademark application referred to in Schedule 1 annexed hereto, and all
of the goodwill of the business connected with the use of, or
symbolized by, each such Trademark;
(ii) each Trademark License, including, without limitation, each
Trademark License identified in Schedule 1 annexed hereto, and all of
the goodwill of the business connected with the use of, or symbolized
by, each Trademark licensed pursuant thereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by
Grantor against third parties for past, present or future unfair
competition with, or violation of intellectual property rights in
connection with or injury to, or infringement or dilution of, any
Trademark, including, without limitation, any Trademark referred to in
Schedule 1 hereto, and all rights and benefits of Grantor under any
Trademark License, including, without limitation, any Trademark License
identified in Schedule 1 hereto, or for injury to the goodwill
associated with any of the foregoing.
Grantor hereby irrevocably constitutes and appoints Grantee
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full power and authority in the name of Grantor
or in its name, from time to time, in Grantee's discretion, so long as any Event
of Default (as defined in the Credit Agreement) has occurred and is continuing,
to take with respect to the Trademark Collateral any and all appropriate action
which Grantor might take with respect to the Trademark Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Trademark Security Agreement and to accomplish the
purposes hereof.
Except to the extent not prohibited in the Security Agreement,
Grantor agrees not to sell, license, exchange, assign or otherwise transfer or
dispose of, or grant any rights with respect to, or mortgage or otherwise
encumber, any of the foregoing Trademark Collateral.
This security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Trademark Collateral
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Trademark Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of __________, 19__.
Tekni-Plex, Inc.
By:___________________________
Title:
Acknowledged:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By:_________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
I, ______________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY, that
_________________________, _______________ of [NAME OF COMPANY], personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such _________________, appeared before me this day in person and
acknowledged that (s)he signed, executed and delivered the said instrument as
her/his own free and voluntary act and as the free and voluntary act of said
Company, for the uses and purposes therein set forth being duly authorized so to
do.
GIVEN under my hand and Notarial Seal this ___ day of
_______________, 19__.
[Seal]
-----------------------------
Signature of notary public
My Commission expires __________
Schedule 1
to Trademark Security Agreement
Page 2
Schedule 1
TO TRADEMARK
SECURITY AGREEMENT
U.S. TRADEMARKS AND TRADEMARK REGISTRATIONS2
A. U.S. Trademarks and Trademark Registrations
▇▇▇▇ Reg. No. Reg. Date
FRANGISEAL 1,965,749 4/2/96
TEKNISEAL 1,316,952 1/29/85
TEKNI PLEX and Design 1,316,950 1/29/85
FOAMSEAL 926,056 12/28/71
SARASEAL 921,959 10/12/71
KRAFTSEAL 913,546 6/8/71
SOLVSEAL 913,545 6/8/71
VAPOSEAL S 913,544 6/8/71
VINYLSEAL 909,590 3/9/71
DURAPREG 750,589 6/4/63
VAPOSEAL 647,209 6/15/57
BLACKOL 638,066 12/4/56
POUCH PAK 613,180 9/27/55
KOOL-PAK 1,245,310 7/12/83
B. U.S. Trademark Applications
▇▇▇▇ Application No. Filing Date
TEKNIFLEX 75/154,629 8/22/96
SUNNY DAY 74-715,751 8/15/95
(Notice of Allowance - 8/7/96; Notice of Allowance withdrawn - 8/7/96)
Schedule E
Page 3
Schedule E
COPYRIGHT SECURITY AGREEMENT
(COPYRIGHTS, COPYRIGHT REGISTRATIONS, COPYRIGHT
APPLICATIONS AND COPYRIGHT LICENSES)
WHEREAS, _______________, a [__________] corporation (herein
referred to as "Grantor") owns the Copyrights (as defined in the Security
Agreement referred to below) listed on Schedule 1 annexed hereto, and is a party
to the Copyright Licenses (as defined in the Security Agreement referred to
below) identified in Schedule 1 annexed hereto;
WHEREAS, Grantor, [Tekni-Plex, Inc.,] certain banks and ▇▇▇▇▇▇
Guaranty Trust Company of New York, as Agent for such lenders, are parties to a
Credit Agreement of even date herewith (as the same may be amended and in effect
from time to time among said parties and such banks (the "Banks") as may from
time to time be parties thereto, the "Credit Agreement");
WHEREAS, pursuant to the terms of the Security Agreement of
even date herewith (as said Agreement may be amended and in effect from time to
time, the "Security Agreement") between Grantor and ▇▇▇▇▇▇ Guaranty Trust
Company of New York, as Collateral Agent for the secured parties referred to
therein (in such capacity, together with its successors in such capacity, the
"Grantee"), Grantor has granted to Grantee for the benefit of such secured
parties a security interest in substantially all the assets of the Grantor,
including all right, title and interest of Grantor in, to and under the
Copyright Collateral (as defined herein), whether now owned or existing or
hereafter acquired or arising, to secure the Secured Obligations (as defined in
the Security Agreement);
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Grantor does hereby
grant to Grantee a continuing security interest in all of Grantor's right, title
and interest in, to and under the following (all of the following items or types
of property being herein collectively referred to as the "Copyright
Collateral"), whether now owned or existing or hereafter acquired or arising:
(i) each Copyright, including, without limitation, each
Copyright referred to in Schedule 1 annexed hereto;
(ii) each Copyright License, including, without limitation, each
Copyright License identified in Schedule 1 annexed hereto; and
(iii) all proceeds of and revenues from the foregoing, including,
without limitation, all proceeds of and revenues from any claim by
Grantor against third parties for past, present or future infringement
of any Copyright, including, without limitation, any Copyright referred
to in Schedule 1 annexed hereto, and all rights and benefits of Grantor
under any Copyright License, including, without limitation, any
Copyright License identified in Schedule 1 annexed hereto.
Grantor hereby irrevocably constitutes and appoints Grantee
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full power and authority in the name of Grantor
or in its name, from time to time, in Grantee's discretion, so long as any Event
of Default (as defined in the Credit Agreement) has occurred and is continuing,
to take with respect to the Copyright Collateral any and all appropriate action
which Grantor might take with respect to the Copyright Collateral and to execute
any and all documents and instruments which may be necessary or desirable to
carry out the terms of this Copyright Security Agreement and to accomplish the
purposes hereof.
Except to the extent not prohibited in the Security Agreement,
Grantor agrees not to sell, license, exchange, assign or otherwise transfer or
dispose of, or grant any rights with respect to, or mortgage or otherwise
encumber, any of the foregoing Copyright Collateral.
This security interest is granted in conjunction with the
security interests granted to Grantee pursuant to the Security Agreement.
Grantor does hereby further acknowledge and affirm that the rights and remedies
of Grantee with respect to the security interest in the Copyright Collateral
made and granted hereby are more fully set forth in the Security Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.
IN WITNESS WHEREOF, Grantor has caused this Copyright Security
Agreement to be duly executed by its officer thereunto duly authorized as of the
____ day of _______, 19__.
[COMPANY]
By:___________________________
Title:
Acknowledged:
▇▇▇▇▇▇ GUARANTY TRUST
COMPANY OF NEW YORK,
as Agent
By:_________________________
Title:
Schedule E
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
I, ______________________, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY, that
_________________________, _______________ of [NAME OF COMPANY], personally
known to me to be the same person whose name is subscribed to the foregoing
instrument as such _________________, appeared before me this day in person and
acknowledged that (s)he signed, executed and delivered the said instrument as
her/his own free and voluntary act and as the free and voluntary act of said
Company, for the uses and purposes therein set forth being duly authorized so to
do.
GIVEN under my hand and Notarial Seal this ___ day of
_______________, 19__.
[Seal]
-----------------------------
Signature of notary public
My Commission expires __________
Schedule 1
TO COPYRIGHT
SECURITY AGREEMENT
COPYRIGHTS AND COPYRIGHT REGISTRATION
Registration No. Reg. Date Title
COPYRIGHT APPLICATIONS
Serial No. Date Filed Title
COPYRIGHT LICENSES
Name of Parties Date of Subject
Agreement Licensor/Licensee Agreement Matter
PURETEC CORPORATION
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO
2 To be updated.
EXHIBIT E
[CONFORMED AS EXECUTED]
PLEDGE AGREEMENT
AGREEMENT dated as of March 3, 1998 between TEKNI-PLEX, INC.
(with its successors, the "Borrower", and, together with any other Person which
becomes a Grantor pursuant to Section 3(B), the "Grantors" and each a "Grantor")
and ▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK, as Agent (with its successors in
such capacity, the "Pledgee").
W I T N E S S E T H :
WHEREAS, the Borrower, certain guarantors (the "Guarantors"),
certain lenders (the "Lenders") and ▇▇▇▇▇▇ Guaranty Trust Company of New York,
as Agent for such Lenders, are parties to a Credit Agreement of even date
herewith (as the same may be amended from time to time, the "Credit Agreement");
and
WHEREAS, in order to induce said Lenders and ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Agent for such Lenders, to enter into the Credit
Agreement, each Grantor has agreed to grant a continuing security interest in
and to the Collateral (as hereafter defined) to secure its obligations under the
Credit Agreement and the obligations of the Borrower under the Notes issued
pursuant thereto;
WHEREAS, the Borrower may from time to time be a party to one
or more agreements with respect to Derivatives Obligations (each such agreement
with respect to Derivatives Obligations with a Derivatives Creditor (as defined
below), a "Derivatives Obligations Agreement") with any Lender or Lenders or an
affiliate of a Lender (even if any such Lender ceases to be a Lender under the
Credit Agreement for any reason) and in each case their subsequent assigns
(collectively, the "Derivatives Creditors" and together with the Lenders and the
Agent, the "Creditors");
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
Terms defined in the Credit Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for
therein. The following additional terms, as used herein, have the following
respective meanings:
"Class" has the meaning assigned to such term in Section 21.
"Collateral" has the meaning assigned to such term in Section
3(A).
"Issuer" means (i) each of the Subsidiaries listed on Schedule
I hereto and (ii) any other Person which becomes a Domestic Subsidiary after the
date of this Agreement.
"Pledged Instruments" means (i) all intercompany notes listed
on Schedule I hereto and (ii) any instrument required to be pledged to the
Pledgee pursuant to Section 3(B).
"Pledged Securities" means the Pledged Instruments and the
Pledged Stock.
"Pledged Stock" means (i) the Subsidiaries Shares and (ii) any
other capital stock required to be pledged to the Pledgee pursuant to Section
3(B).
"PST Collateral" means all Collateral subject to the PST
Documents.
"PST Documents" means the Existing PST Senior Secured Notes
Indenture, the Existing PST Senior Secured Notes Indenture Supplement, the
Existing PST Senior Notes Collateral Documents and the Existing PST Senior
Secured Notes Collateral Documents Amendments.
"Requisite Creditors" has the meaning ascribed to such term in
Section 21.
"Secured Obligations" means (i) the full and prompt payment
when due (whether at stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of
each Grantor, now existing or hereafter incurred under any Loan Document to
which it is a party (all such obligations and liabilities under this clause
(i) being herein collectively called the "Loan Document Obligations");
(ii) the full and prompt payment when due (whether at the stated maturity,
by acceleration or otherwise) of all obligations (including obligations
which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities of each Grantor, now existing or
hereafter incurred under, arising out of or in connection with any
Derivatives Obligations Agreement designated by such Grantor and the
related Derivatives Creditor as a "Secured Derivatives Obligations
Agreement", including all obligations, if any, under a Guaranty in respect
of any Derivatives Obligations Agreement (all such obligations and
indebtedness under this clause (ii) being herein collectively called the
"Secured Derivatives Obligations"); (iii) any and all sums advanced by the
Pledgee order to preserve the Collateral or preserve its security interest
in the Collateral in accordance with Section 11; (iv) in the event of any
proceeding for the collection or enforcement of any indebtedness,
obligations, or liabilities of each Grantor referred to in clauses (i),
(ii) and (iii) above after an Event of Default shall have occurred and be
continuing, the reasonable expenses of re-taking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Pledgee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and (v) all
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 11 of this Agreement.
"Security Interests" means the security interests in the
Collateral granted hereunder securing the Secured Obligations.
"Subsidiaries Shares" means all shares of capital stock of the
Subsidiaries listed on Schedule I hereto.
Unless otherwise defined herein, or unless the context
otherwise requires, all terms used herein which are defined in the New York
Uniform Commercial Code as in effect on the date hereof shall have the meanings
therein stated.
Section 2. Representations and Warranties.
Each Grantor represents and warrants as follows:
(A) Title to Pledged Securities. The Grantors own all of the
Pledged Securities, free and clear of any Liens other than the Security
Interests. The Pledged Stock includes all of the issued and outstanding capital
stock of each Issuer owned by the Grantors. All of the Pledged Stock has been
duly authorized and validly issued, and is fully paid and non-assessable, and
is subject to no options to purchase or similar rights of any Person. No
Grantor is or will become a party to or otherwise bound by any agreement, other
than this Agreement, which restricts in any manner the rights of any present or
future holder of any of the Pledged Securities with respect thereto.
(B) Validity, Perfection and Priority of Security Interests.
Upon the delivery of the Pledged Instruments and certificates representing the
Pledged Stock to the Pledgee in accordance with Section 4 hereof, the Pledgee
will have valid and perfected security interests in the Collateral subject to
no prior Lien (except with respect to any outstanding Existing PST Senior
Secured Notes). No registration, recordation or filing with any governmental
body, agency or official is required in connection with the execution or
delivery of this Agreement or necessary for the validity or enforceability
hereof or for the perfection or enforcement of the Security Interests. Neither
the Borrower nor any of its Subsidiaries has performed or, subject to
bankruptcy, insolvency, reorganization and other laws relating to the rights or
relief of debtors, will perform any acts which might prevent the Pledgee from
enforcing any of the terms and conditions of this Agreement or which would
limit the Pledgee in any such enforcement.
(C) UCC Filing Locations. The chief executive office of the
Borrower and each of the Guarantors is located at its address set forth on the
signature pages of the Credit Agreement. Under the Uniform Commercial Code as
in effect in the State in which such office is located, no local filing is
required to perfect a security interest in collateral consisting of general
intangibles.
Section 3. The Security Interests.
In order to secure the full and punctual payment of the
Secured Obligations in accordance with the terms thereof, and to secure the
performance of all the obligations of the Grantors hereunder:
(A) Each Grantor hereby assigns and pledges to and with the
Pledgee for the benefit of the Lenders and grants to the Pledgee for the
benefit of the Lenders security interests in the Pledged Securities, and all of
its rights and privileges with respect to the Pledged Securities, and all
income and profits thereon, and all interest, dividends and other payments and
distributions with respect thereto, and all proceeds of the foregoing (the
"Collateral"). Contemporaneously with the execution and delivery hereof, the
Borrower is delivering the intercompany notes constituting the Pledged
Instruments and certificates representing the Subsidiaries Shares in pledge
hereunder other than any such Pledged Instruments or certificates subject to
the PST Documents.
(B) In the event that any Person becomes an Issuer, or any
Issuer at any time issues any additional or substitute shares of capital stock
of any class to a Grantor, or issues any substitute note, or owes any other
Debt to a Grantor evidenced by an instrument, the relevant Grantor will,
subject to the provisions of the PST Documents, immediately pledge and deposit
with the Pledgee certificates representing all such shares and such note or an
instrument evidencing such other Debt as additional security for the Secured
Obligations. All such shares, notes and instruments constitute Pledged
Securities and are subject to all provisions of this Agreement.
(C) The Security Interests are granted as security only and
shall not subject the Pledgee or any Lender to, or transfer or in any way
affect or modify, any obligation or liability of the Borrower or any of its
Subsidiaries with respect to any of the Collateral or any transaction in
connection therewith.
Section 4. Delivery of Pledged Securities.
All Pledged Instruments required to be delivered hereunder
shall be delivered to the Pledgee by the Grantors pursuant hereto endorsed to
the order of the Pledgee, and accompanied by any required transfer tax stamps,
all in form and substance satisfactory to the Pledgee. All certificates
representing Pledged Stock delivered to the Pledgee by the Grantors pursuant
hereto shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed instruments of transfer or assignment in blank,
with signatures appropriately guaranteed, and accompanied by any required
transfer tax stamps, all in form and substance satisfactory to the Pledgee.
Section 5. Further Assurances.
(A) Each Grantor agrees that it will, at its expense and in
such manner and form as the Pledgee may reasonably require, execute, deliver,
file and record any financing statement, specific assignment or other paper and
take any other action that may be necessary or desirable, or that the Pledgee
may request, in order to create, preserve, perfect or validate any Security
Interest or to enable the Pledgee to exercise and enforce its rights hereunder
with respect to any of the Collateral. To the extent permitted by applicable
law, each Grantor hereby authorizes the Pledgee to execute and file, in the
name of the Borrower or otherwise, Uniform Commercial Code financing statements
(which may be carbon, photographic, photostatic or other reproductions of this
Agreement or of a financing statement relating to this Agreement) which the
Pledgee in its sole discretion may deem necessary or appropriate to further
perfect the Security Interests.
(B) Each Grantor agrees that it will not change (i) its name,
identity or corporate structure in any manner or (ii) the location of its chief
executive office unless it shall have given the Pledgee not less than 30 days'
prior notice thereof.
Section 6. Record Ownership of Pledged Stock.
The Pledgee may at any time or from time to time during the
continuance of an Event of Default, in its sole discretion, cause any or all of
the Pledged Stock to be transferred of record into the name of the Pledgee or
its nominee, subject to the provisions of the PST Documents. Each Grantor will
promptly give to the Pledgee copies of any notices or other communications
received by it with respect to Pledged Stock registered in its name, and the
Pledgee will promptly give to the Borrower copies of any notices and
communications received by the Pledgee with respect to Pledged Stock registered
in the name of the Pledgee or its nominee.
Section 7. Right to Receive Distributions on Collateral.
During the continuance of any Event of Default, the Pledgee
shall, subject to the provisions of the PST Documents, have the right to receive
and to retain as Collateral hereunder all dividends, interest and other payments
and distributions made upon or with respect to the Collateral, and each Grantor
shall take all such action as the Pledgee may deem necessary or appropriate to
give effect to such right. All such dividends, interest and other payments and
distributions which are received by a Grantor shall be received in trust for the
benefit of the Pledgee and the Lenders (but, unless an Event of Default shall
have occurred and be continuing, may be used by such Grantor as permitted by the
other provisions of this Agreement and the other Loan Documents). If the Pledgee
so directs during the continuance of an Event of Default, such dividends,
interest and other payments and distributions shall be segregated from other
funds of such Grantor and shall, forthwith upon demand by the Pledgee during the
continuance of an Event of Default, be paid over to the Pledgee as Collateral in
the same form as received (with any necessary endorsement). After all Events of
Default have been cured, the Pledgee's right to retain dividends, interest and
other payments and distributions under this Section 7 shall cease, and the
Pledgee shall pay over to such Grantor any such Collateral retained by it during
the continuance of an Event of Default.
Section 8. Right to Vote Pledged Stock.
Unless an Event of Default shall have occurred and be
continuing, each Grantor shall, subject to the provisions of the PST Documents,
have the right, from time to time, to vote and to give consents, ratifications
and waivers with respect to the Pledged Stock, and the Pledgee shall, upon
receiving a written request from such Grantor accompanied by a certificate
signed by the principal executive officer or principal financial officer of the
Borrower stating that no Event of Default has occurred and is continuing,
deliver to such Grantor or as specified in such request such proxies, powers of
attorney, consents, ratifications and waivers in respect of any of the Pledged
Stock which is registered in the name of the Pledgee or its nominee as shall be
specified in such request and be in form and substance satisfactory to the
Pledgee.
If an Event of Default shall have occurred and be continuing,
the Pledgee shall have the right to the extent permitted by law and subject to
the provisions of the PST Documents, and each Grantor shall take all such action
as may be necessary or appropriate to give effect to such right, to vote and to
give consents, ratifications and waivers, and take any other action with respect
to any or all of the Pledged Stock with the same force and effect as if the
Pledgee were the absolute and sole owner thereof.
Section 9. General Authority.
Each Grantor hereby irrevocably appoints the Pledgee its true
and lawful attorney, with full power of substitution, in the name of the
Grantors, the Pledgee, the Lenders or otherwise, for the sole use and benefit of
the Pledgee and Lenders, but at the expense of such Grantor, to the extent
permitted by law to exercise, and subject to the provisions of the PST
Documents, at any time and from time to time while an Event of Default has
occurred and is continuing, all or any of the following powers with respect to
all or any of the Collateral:
(i) to demand, ▇▇▇ for, collect, receive and give
acquittance for any and all monies due or to become due upon or by
virtue thereof,
(ii) to settle, compromise, compound, prosecute or
defend any action or proceeding with respect thereto,
(iii) to sell, transfer, assign or otherwise deal in or
with the same or the proceeds or avails thereof, as fully and
effectually as if the Pledgee were the absolute owner thereof, and
(iv) to extend the time of payment of any or all thereof
and to make any allowance and other adjustments with reference thereto;
provided that the Pledgee shall give the relevant Grantor not less than thirty
(30) days' prior written notice of the time and place of any sale or other
intended disposition of any of the Collateral. The Pledgee and the Grantors
agree that such notice constitutes "reasonable notification" within the meaning
of Section 9-504(3) of the Uniform Commercial Code.
Section 10. Remedies upon Event of Default.
(a) If any Event of Default shall have occurred and be
continuing, the Pledgee may exercise on behalf of the Lenders all the rights of
a secured party under the Uniform Commercial Code (whether or not in effect in
the jurisdiction where such rights are exercised), and, in addition, the
Pledgee may, without being required to give any notice, except as herein
provided or as may be required by mandatory provisions of law, (i) apply the
cash, if any, then held by it as Collateral as specified in Section 13 and (ii)
if there shall be no such cash or if such cash shall be insufficient to pay all
the Secured Obligations in full, after not less than thirty (30) days' prior
written notice to the relevant Grantor, sell the Collateral or any part thereof
at public or private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery, and at such price or
prices as the Pledgee may deem satisfactory. Any Lender may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale). The Pledgee is authorized, in connection with any such sale, if it deems
it advisable so to do, (i) to restrict the prospective bidders on or purchasers
of any of the Pledged Securities to a limited number of sophisticated investors
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all
of the Pledged Securities or on any other securities pledged hereunder a legend
to the effect that such security has not been registered under the Securities
Act of 1933 and may not be disposed of in violation of the provisions of said
Act, and (iii) to impose such other limitations or conditions in connection
with any such sale as the Pledgee deems necessary or advisable in order to
comply with said Act or any other law. Each Grantor will execute and deliver
such documents and take such other action as the Pledgee reasonably deems
necessary or advisable in order that any such sale may be made in compliance
with law. Upon any such sale the Pledgee shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold absolutely and
free from any claim or right of whatsoever kind, including any equity or right
of redemption of the Grantors which may be waived, and each Grantor, to the
extent permitted by law, hereby specifically waives all rights of redemption,
stay or appraisal which it has or may have under any law now existing or
hereafter adopted. The notice of such sale required by Section 9 and this
Section 10 shall (1) in the case of a public sale, state the time and place
fixed for such sale, (2) in the case of a sale at a broker's board or on a
securities exchange, state the board or exchange at which such sale is to be
made and the day on which the Collateral, or the portion thereof so being sold,
will first be offered for sale at such board or exchange, and (3) in the case
of a private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Pledgee may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels, as the Pledgee may determine. The Pledgee shall not be
obligated to make any such sale pursuant to any such notice. The Pledgee may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
same may be so adjourned. In the case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so sold may be
retained by the Pledgee until the selling price is paid by the purchaser
thereof, but the Pledgee shall not incur any liability in the case of the
failure of such purchaser to take up and pay for the Collateral so sold and, in
the case of any such failure, such Collateral may again be sold upon like
notice. The Pledgee, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
Security Interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction.
(b) Notwithstanding anything to the contrary herein, the
exercise of any remedies and the taking of any other action by the Pledgee
pursuant to this Agreement shall be subject to the provisions of the PST
Documents, and in no event shall the Pledgee exercise any such remedies or take
any such other action to the extent such exercise or action would conflict with
such provisions.
Section 11. Expenses.
The Grantors jointly and severally agree that they will
forthwith upon demand pay to the Pledgee:
(i) the amount of any taxes which the Pledgee may have
been required to pay by reason of the Security Interests or to free any
of the Collateral from any Lien thereon, and
(ii) the amount of any and all reasonable out-of-pocket
expenses, including the fees and disbursements of counsel and of any
other experts, which the Pledgee may incur in connection with (w) the
administration or enforcement of this Agreement, including such
expenses as are incurred to preserve the value of the Collateral and
the validity, perfection, rank and value of any Security Interest, (x)
the collection, sale or other disposition of any of the Collateral, (y)
the exercise by the Pledgee of any of the rights conferred upon it
hereunder or (z) any Default or Event of Default.
Any such amount not paid within five business days after
demand shall bear interest at the rate applicable to Base Rate Loans plus 2% and
shall be an additional Secured Obligation hereunder.
Section 12. Limitation on Duty of Pledgee in Respect of Collateral.
Beyond the exercise of reasonable care in the custody thereof,
the Pledgee shall have no duty as to any Collateral in its possession or control
or in the possession or control of any Pledgee or bailee or any income thereon
or as to the preservation of rights against prior parties or any other rights
pertaining thereto. The Pledgee shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which it accords
its own property, and the Pledgee shall not be liable or responsible for any
loss or damage to any of the Collateral, or for any diminution in the value
thereof, by reason of the act or omission of any Pledgee or bailee selected by
the Pledgee in good faith.
Section 13. Application of Proceeds.
Upon the occurrence and during the continuance of an Event of
Default, the proceeds of any sale of, or other realization upon, all or any part
of the Collateral and any cash held shall be applied by the Pledgee in the
following order of priorities:
first, to payment of the expenses of such sale or other
realization, including reasonable compensation to Pledgees and counsel
for the Pledgee, and all expenses, liabilities and advances incurred or
made by the Pledgee in connection therewith, and any other unreimbursed
expenses for which the Pledgee or any Lender is to be reimbursed
pursuant to Section 10.03 of the Credit Agreement or Section 11 hereof
and unpaid fees owing to the Pledgee under the Credit Agreement;
second, to the ratable payment of unpaid principal of the
Secured Obligations;
third, to the ratable payment of accrued but unpaid interest
on the Secured Obligations in accordance with the provisions of the
Credit Agreement;
fourth, to the ratable payment of all other Secured
Obligations, until all Secured Obligations shall have been paid in
full; and
finally, to payment to the Grantors or their successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining from such proceeds.
The Pledgee may make distributions hereunder in cash or in
kind or, on a ratable basis, in any combination thereof.
Section 14. Existing PST Senior Secured Notes/Margin Stock.
Notwithstanding anything to the contrary contained herein, (i) so long as
any Existing PST Senior Secured Notes remain outstanding, the Security
Interests in any Collateral which has been pledged by PST or any of its
subsidiaries to secure the Existing PST Senior Secured Notes in accordance
with the requirements of the Existing PST Senior Secured Notes Indenture
shall be subject to the prior security interests so created in favor of the
holders of the Existing PST Senior Secured Notes and any application of
proceeds pursuant to Section 13 shall be subject to any prior required
application of proceeds pursuant to the PST Documents; provided that at all
times the security interests created pursuant to the Loan Documents in all
Collateral of PST thereunder shall be required to be fully perfected in
accordance with applicable law.
Section 15. Concerning the Pledgee.
The provisions of Article VII of the Credit Agreement shall
inure to the benefit of the Pledgee in respect of this Agreement and shall be
binding upon the parties to the Credit Agreement in such respect. In furtherance
and not in derogation of the rights, privileges and immunities of the Pledgee
therein set forth:
(A) The Pledgee is authorized to take all
such action as is provided to be taken by it as Pledgee hereunder and
all other action reasonably incidental thereto. As to any matters not
expressly provided for herein (including, without limitation, the
timing and methods of realization upon the Collateral), the Pledgee
shall act or refrain from acting in accordance with written
instructions from the Required Lenders or, in the absence of such
instructions, in accordance with its discretion.
(B) The Pledgee shall not be responsible
for the existence, genuineness or value of any of the Collateral or for
the validity, perfection, priority or enforceability of the Security
Interests in any of the Collateral, whether impaired by operation of
law or by reason of any action or omission to act on its part
hereunder. The Pledgee shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms of this Agreement by
the Grantors.
Section 16. Appointment of Co-Pledgees.
At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Pledgee may appoint another bank or trust
company or one or more other persons, either to act as co-Pledgee or
co-Pledgees, jointly with the Pledgee, or to act as separate Pledgee or Pledgees
on behalf of the Lenders, with such power and authority as may be necessary for
the effectual operation of the provisions hereof and may be specified in the
instrument of appointment (which may, in the discretion of the Pledgee, include
provisions for the protection of such co-Pledgee or separate Pledgee similar to
the provisions of Section 14).
Section 17. Termination of Security Interests; Release of Collateral.
(a) After the termination of the Total Commitment and
all Derivatives Obligations Agreements, when no Note or Letter of Credit is
outstanding and when all Loans and other Obligations (other than contingent
indemnity obligations) have been paid in full, this Agreement shall
terminate (provided that all indemnities set forth herein including,
without limitation, in Section 11 hereof shall survive such termination),
and the Pledgee, at the request and expense of the relevant Grantor, will
execute and deliver to such Grantor a proper instrument or instruments
acknowledging the satisfaction and termination of this Agreement, and will
duly assign, transfer and deliver to such Grantor (without recourse and
without any representation or warranty) such of the Collateral as may be in
the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 5.07 of the Credit Agreement (it
being agreed for such purposes that a release will be deemed "permitted by
Section 5.07 of the Credit Agreement" if the proposed transaction constitutes
an exception to Section 5.07 of the Credit Agreement) or is otherwise released
at the direction of the Required Banks (or all the Banks if required by Section
10.05 of the Credit Agreement), and the proceeds of such sale or sales or from
such release are applied in accordance with the terms of the Credit Agreement
to the extent required to be so applied, the Pledgee, at the request and
expense of the respective Grantor will release such Collateral from this
Agreement, duly assign, transfer and deliver to such Grantor (without recourse
and without any representation or warranty) such of the Collateral as is then
being (or has been) so sold or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
(c) At any time that the relevant Grantor desires that the
Pledgee take any action to give effect to any release of Collateral pursuant
to the foregoing Section 17(b), it shall deliver to the Collateral
Agent a certificate signed by an authorized officer describing the
Collateral to be sold and the relevant provision of Section 5.07 of the
Credit Agreement on which it is relying to make such sale. In the event
that any part of the Collateral is released as provided in the preceding
paragraph (b), the Pledgee, at the request and expense of such Grantor, will
duly release such Collateral and assign, transfer and deliver to such Grantor
or its designee (without recourse and without any representation or warranty)
such of the Collateral as is then being (or has been) so sold and as may be in
the possession of the Pledgee and not theretofore been released pursuant to
this Agreement. The Pledgee shall have no liability whatsoever to any Secured
Creditor as the result of any release of Collateral by it as permitted by this
Section 17. Upon any release of Collateral pursuant to Section 17(a) or (b),
none of the Secured Creditors shall have any continuing right or interest in
such Collateral, or the proceeds thereof.
Section 18. Notices.
All notices hereunder shall be given in accordance with
Section 10.01 of the Credit Agreement.
Section 19. Waivers, Non-exclusive Remedies.
No failure on the part of the Pledgee to exercise, and no
delay in exercising and no course of dealing with respect to, any right under
this Agreement shall operate as a waiver thereof; nor shall any single or
partial exercise by the Pledgee of any right under the Credit Agreement or this
Agreement preclude any other or further exercise thereof or the exercise of any
other right. The rights in this Agreement and the Credit Agreement are
cumulative and are not exclusive of any other remedies provided by law.
Section 20. Successors and Assigns.
This Agreement is for the benefit of the Pledgee and the
Lenders and their successors and assigns, and in the event of an assignment of
all or any of the Secured Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Agreement shall be binding on the Pledgee, the Lenders, the
Grantors and their respective successors and assigns.
Section 21. Waiver; Amendment. None of the terms
and conditions of this Agreement may be changed, waived, modified or varied in
any manner whatsoever unless in writing duly signed by the Pledgee (with the
consent of the Required Lenders or, to the extent required by Section 10.05 of
the Credit Agreement, all of the Lenders), and each Grantor affected thereby (it
being understood that the addition or release of any Grantor hereunder shall not
constitute a change, waiver, discharge or variance affecting any Grantor other
than the Company and the Grantor so added or released) provided that (i) no such
change, waiver, modification or variance shall be made to Section 13 hereof
(directly or indirectly by modifying Section 8(A) of the Security Agreement), or
this Section 21 without the consent of each Secured Creditor adversely affected
thereby and (ii) that any change, waiver, modification or variance affecting the
rights and benefits of a single Class of Secured Creditors (and not all Secured
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors of such Class of Secured Creditors. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
whether (x) the Lenders and Pledgee as holders of the Loan Document Obligations
or (y) the Derivatives Creditors as holders of the Interest Rate Obligations.
For the purpose of this Agreement, the term "Requisite Creditors" of any Class
shall mean each of (x) with respect to each of the Loan Document Obligations,
the Required Lenders and (y) with respect to the Interest Rate Obligations, the
holders of at least a majority of all obligations outstanding from time to time
under the Derivatives Obligations Agreements.
Section 22. New York Law.
This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, except as otherwise required by
mandatory provisions of law and except to the extent that remedies provided by
the laws of any jurisdiction other than New York are governed by the laws of
such jurisdiction.
Section 23. Severability.
If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Pledgee and the Lenders in order to
carry out the intentions of the parties hereto as nearly as may be possible; and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
Section 24. Attachment.
Each Grantor acknowledges that (i) value has been given, (ii)
it has rights in the Collateral (other than after-acquired Collateral), (iii) it
has not agreed to postopone the time of attachment of the Security Interest and
(iv) it has received a duplicate original copy of this Pledge Agreement
EXHIBIT E
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
TEKNI-PLEX, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
OZITE CORPORATION
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
PTI PLASTICS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
PLASTIC SPECIALITIES AND
TECHNOLOGIES, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
BURLINGTON RESINS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
PLASTIC SPECIALTIES AND
TECHNOLOGIES INVESTMENTS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
PURE TECH APR, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
MULTI TECH APR, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
COAST RECYCLING NORTH, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
DISTRIBUTERS RECYCLING, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
REI DISTRIBUTORS, INC.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
PURE TECH RECYCLING OF CALIFORNIA
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
ALUMET SMELTING CORPORATION
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
CONCONRE CORP.
By: /s/ Dr. F. ▇▇▇▇▇▇▇ ▇▇▇▇▇
______________________________
Title: CEO
▇▇▇▇▇▇ GUARANTY TRUST COMPANY
OF NEW YORK, as Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
______________________________
Title: Vice President
SCHEDULE I
SUBSIDIARIES/PLEDGED STOCK
1. PureTec Corporation (Delaware)
2. Ozite Corporation (Delaware)
3. PTI Plastics, Inc. (Delaware)
4. Plastic Specialties and Technologies, Inc. (Delaware)
5. Burlington Resins, Inc. (Delaware)
6. Plastic Specialties and Technologies Investments, Inc. (Delaware)
7. Pure Tech APR, Inc. (New York)
8. Multi Container Recycler, Inc. (Michigan)
9. Coast Recycling North, Inc. (California)
10. Distributors Recycling, Inc. (New Jersey)
11. REI Distributors, Inc. (New Jersey)
12. Pure Tech Recycling of California (California)
13. Alumet Smelting Corporation (New Jersey)
14. Conconre Corp. (Connecticut)
INTERCOMPANY NOTES
None.
------------------------
1 TO BE UPDATED
EXHIBIT F
FORMS OF MORTGAGE, DEED OF TRUST, DEED TO SECURE DEBT, AMENDMENT TO
MORTGAGE AND AMENDMENT TO DEED OF TRUST
This instrument was prepared by the attorney described below in consultation
with counsel in the State in which the Property is located and, when recorded,
the recorded counterparts should be returned to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
================================================================================
MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
dated as of March __ 1998
by
[----------------------],
the Mortgagor,
to
▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF NEW YORK,
as Agent for the Banks,
the Mortgagee
Property:
County of ___________
State of ___________
===============================================================================
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS AND SECURES
OBLIGATIONS CONTAINING PROVISIONS FOR CHANGES IN INTEREST RATES. THIS INSTRUMENT
ALSO SECURES FUTURE ADVANCES.
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE
FILING (this "Mortgage") dated as of March __, 1998 by
__________________________, a _________corporation, having an address at
________________________________________ (the "Mortgagor"), to ▇▇▇▇▇▇ GUARANTY
TRUST COMPANY OF NEW YORK, a New York banking corporation, as Agent for the
Banks (hereinafter defined), having an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Mortgagee").
W I T N E S S E T H:
RECITALS
A. Credit Agreement. Reference is hereby made to the Credit
Agreement (as amended from time to time, the "Credit Agreement"), dated as of
March 3, 1998 among Tekni-Plex, Inc. (the "Borrower"), each other Guarantor
which is or may hereafter become a party thereto, each Bank which is or may
hereafter become a party thereto, the LC Issuing Banks referred to therein, and
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent (the "Agent") providing for
the making of loans to the Borrower and the issuance of, and participation in,
letters of credit for the account of the Borrowers, as contemplated therein in
the maximum principal amount of $205,000,000.
B. Mortgage. The Lien of this Mortgage is being granted to
secure payment, performance and observance of the following indebtedness,
liabilities and obligations, whether now or hereafter owed or owing, hereinafter
referred to collectively as the "Secured Obligations":
(i) (a) all principal of and interest (including any interest
which accrues after the commencement of any case, proceeding or other
action relating to the bankruptcy, insolvency or reorganization of any
Obligor) on any Note or Loan, and any LC Reimbursement Obligation
arising under the Credit Agreement, (b) all other amounts payable by
the Mortgagor hereunder or under any other Loan Document and (c) any
renewals or extensions of any of the foregoing; and
(ii) the performance and observance of each other term,
covenant, agreement, obligation, requirement, condition and provision
to be performed or observed by the Mortgagor under this Mortgage or any
other Loan Document.
GRANTING CLAUSES
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, for the purpose of securing the due and punctual payment,
performance and observance of the Secured Obligations and intending to be bound
hereby, the Mortgagor does hereby GRANT, BARGAIN, SELL, CONVEY, MORTGAGE,
ASSIGN, TRANSFER and WARRANT to the Mortgagee and its successors under the Loan
Documents, with power of sale and right of entry as hereinafter provided, and
(to the extent covered by the Local UCC) does hereby GRANT AND WARRANT to the
Mortgagee and its successors under the Loan Documents, a continuing first
security interest in and to all of the property and rights described in the
following Granting Clauses (all of which property and rights are collectively
called the "Mortgaged Property"), to wit:
GRANTING CLAUSE I.
Land. The parcel or parcels of land located in ________County,
State of ____________ and more particularly described in Exhibit A annexed
hereto (the "Land").
GRANTING CLAUSE II.
Improvements. All estate, right, title and interest of the
Mortgagor in, to, under or derived from: all buildings, structures, facilities
and other improvements of every kind and description now or hereafter located on
the Land, including all parking areas, roads, driveways, walks, fences, walls
and berms; all estate, right, title and interest of the Mortgagor, if any, in,
to, under or derived from: all recreation, drainage and lighting facilities and
other site improvements; all water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone, telecommunications and other utility
equipment and facilities; all plumbing, lighting, heating, ventilating,
air-conditioning, refrigerating, incinerating, compacting, fire protection and
sprinkler, surveillance and security, vacuum cleaning, public address and
communications equipment and systems; all kitchen and laundry appliances; all
walls, screens, awnings, floor coverings, partitions, elevators, escalators,
motors, electrical, computer and other wiring, machinery, pipes, fittings and
racking and shelving; and all other items of fixtures, equipment and personal
property of every kind and description, in each case now or hereafter located on
the Land or affixed (actually or constructively) to the Improvements which by
the nature of their location thereon or affixation thereto are real property
under applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, equipment, fixtures, structures and improvements, all of
which materials shall be deemed to be part of the Mortgaged Property immediately
upon delivery thereof on the Land and to be part of the Improvements immediately
upon their incorporation therein (the foregoing being collectively called the
"Improvements").
GRANTING CLAUSE III.
Equipment. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from: all fixtures, chattels and
articles of personal property owned or leased by the Mortgagor or in which the
Mortgagor has or shall acquire an interest, wherever situated, and now or
hereafter located on or in the Land or the Improvements, whether or not affixed
thereto (actually or constructively) and which are not real property under
applicable law, including all cabinets, lockers, bookcases, shelving, keys or
other entry systems, partitions, shades, blinds, curtains, drapes, draperies,
carpets, rugs, furniture and furnishings, china, glassware, silverware, pots,
pans, utensils, linens, stoves, refrigerators, freezers, dishwashers, laundry
and kitchen appliances and equipment; all heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, gas, steam, electrical,
incinerating and compacting plants, systems, fixtures and equipment, bulbs and
bells; all elevators, stoves, ranges, vacuum and other cleaning systems, floor
cleaning, waxing and polishing equipment, intercom, paging and call systems,
switchboards, sprinkler systems and other fire prevention, alarm and
extinguishing apparatus and materials; all pictures, paintings, works of art and
decorations; all pipes, conduits, dynamos, engines, compressors, generators,
boilers, stokers, furnaces, pumps, trunks, ducts, utensils, tools, implements
and fittings; and all other furniture, appliances, equipment, supplies, and
tangible property of every kind and nature whatsoever owned or leased by the
Mortgagor, or in which the Mortgagor has or shall have an interest, now or
hereinafter located upon the Land, or appurtenances thereto, or usable in
connection with the present or future operation or occupancy of the Land or the
Improvements, and including any of the foregoing that is temporarily removed
from the Land or Improvements to be repaired and later reinstalled thereon or
therein (the foregoing being collectively called the "Equipment"; and the Land
with the Improvements thereon and the Equipment therein being collectively
called the "Property"). If the Lien of this Mortgage is subject to a security
interest covering any Property described in this GRANTING CLAUSE III, then all
of the right, title and interest of the Mortgagor in and to any and all such
Property is hereby assigned to the Mortgagee, together with the benefits of all
deposits and payments now or hereafter made thereon by or on behalf of the
Mortgagor.
GRANTING CLAUSE IV.
Appurtenant Rights. All estate, right, title and interest of
the Mortgagor, if any, in, to, under or derived from all tenements,
hereditaments and appurtenances now or hereafter relating to the Property; the
streets, roads, sidewalks and alleys abutting the Property; all strips and gores
within or adjoining the Land; all land in the bed of any body of water adjacent
to the Land; all land adjoining the Land created by artificial means or by
accretion; all air space and rights to use air space above the Land; all
development or similar rights now or hereafter appurtenant to the Land; all
rights of ingress and egress now or hereafter appertaining to the Property; all
easements and rights of way now or hereafter appertaining to the Property; and
all royalties and other rights now or hereafter appertaining to the use and
enjoyment of the Property, including alley, party walls, support, drainage,
crop, timber, agricultural, horticultural, oil, gas and other mineral, water
stock, riparian and other water rights.
GRANTING CLAUSE V.
Agreements. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from: all Insurance Policies
(including all unearned premiums and dividends thereunder), any zoning lot
agreements and air rights and development rights which may be vested in the
Mortgagor, all guarantees and warranties relating to the Property, all supply
and service contracts for water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone and other utilities now or hereafter relating
to the Property and all other contract rights, now or hereafter relating to the
use or operation of the Property (the foregoing being collectively called the
"Agreements").
GRANTING CLAUSE VI.
Leases. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from all Leases now or hereafter in
effect, whether or not of record, for the use or occupancy of all or any part of
the Property, together with all amendments, supplements, consolidations,
replacements, extensions, renewals and other modifications of any thereof.
GRANTING CLAUSE VII.
Rents, Issues and Profits. All estate, right, title and
interest of the Mortgagor, if any, in, to, under or derived from: all rents,
royalties, issues, profits, receipts, revenue, income and other benefits now or
hereafter, including during any period of redemption, accruing with respect to
the Property, including all rents and other sums now or hereafter, including
during any period of redemption, payable pursuant to the Leases; all other sums
now or hereafter, including during any period of redemption, payable with
respect to the use, occupancy, management, operation or control of the Property;
and all other claims, rights and remedies now or hereafter, including during any
period of redemption, belonging or accruing with respect to the Property,
including fixed, additional and percentage rents, occupancy charges, security
deposits, parking, maintenance, common area, tax, insurance, utility and service
charges and contributions (whether collected under the Leases or otherwise),
proceeds of sale of electricity, gas, heating, air-conditioning and other
utilities and services (whether collected under the Leases or otherwise), and
deficiency rents and liquidated damages following default or cancellation (the
foregoing rents and other sums described in this Granting Clause being
collectively called the "Rents"), all of which the Mortgagor hereby irrevocably
directs be paid to the Mortgagee, subject to the license granted to the
Mortgagor pursuant to Section 5.07(b), to be held, applied and disbursed as
provided in this Mortgage.
GRANTING CLAUSE VIII.
Permits. All estate, right, title and interest of the
Mortgagor, if any, in, to, under or derived from all licenses, authorizations,
certificates, variances, concessions, grants, franchises, consents, approvals
and other permits now or hereafter pertaining to the ownership, management or
operation of the Property (the foregoing being collectively called the
"Permits").
GRANTING CLAUSE IX.
Proceeds and Awards. All estate, right, title and interest of
the Mortgagor, if any, in, to, under or derived from all proceeds of any
Transfer, financing, refinancing or conversion into cash or liquidated claims,
whether voluntary or involuntary, of any of the Mortgaged Property, including
all Insurance Proceeds, Awards and title insurance proceeds under any title
insurance policy now or hereafter held by the Mortgagor, and all rights,
dividends and other claims of any kind whatsoever (including damage, secured,
unsecured, priority and bankruptcy claims) now or hereafter relating to any of
the Mortgaged Property, all of which the Mortgagor hereby irrevocably directs be
paid to the Mortgagee to the extent provided hereunder, to be held, applied and
disbursed as provided in this Mortgage.
GRANTING CLAUSE X.
Books and Records. All books and records (including customer
lists, credit files, computer programs, print outs and other computer materials
and records) of the Mortgagor, if any, now or hereafter pertaining to the
ownership, management or operation of the Property.
GRANTING CLAUSE XI.
Other Intangible Property. All estate, right, title and
interest of the Mortgagor, if any, in, to, under or derived from all intangible
property, to the extent not described in the foregoing Granting Clauses, now or
hereafter necessary to operate the Property as a going concern.
GRANTING CLAUSE XII.
Additional Property. All greater, additional or other estate,
right, title and interest of the Mortgagor in, to, under or derived from the
Mortgaged Property now or hereafter acquired by the Mortgagor, including all
right, title and interest of the Mortgagor in, to, under or derived from all
extensions, improvements, betterments, renewals, substitutions and replacements
of, and additions and appurtenances to, any of the Mortgaged Property hereafter
acquired by or released to the Mortgagor or constructed or located on, or
affixed to, the Property, in each case, immediately upon such acquisition,
release, construction, location or affixation; all estate, right, title and
interest of the Mortgagor in, to, under or derived from any other property and
rights which are, by the provisions of the Loan Documents, required to be
subjected to the Lien hereof; all estate, right, title and interest of the
Mortgagor in, to, under or derived from any other property and rights which are
necessary to maintain the Property and the Mortgagor's business or operations
conducted therein as a going concern, in each case, to the fullest extent
permitted by law, without any further conveyance, Mortgage, assignment or other
act by the Mortgagor; and all estate, right, title and interest of the Mortgagor
in, to, under or derived from all other property and rights which are by any
instrument or otherwise subjected to the Lien hereof by the Mortgagor or anyone
acting on its behalf.
GRANTING CLAUSE XIII.
Refunds, Credits or Reimbursements. All of the Mortgagor's
right, title and interest in and to any and all of the real estate tax refunds
payable to the Mortgagor with respect to the Land or the Improvements, and
refunds, credits or reimbursements payable with respect to bonds, escrow
accounts or other sums payable in connection with the use, development, or
ownership of the Land or Improvements.
TO HAVE AND TO HOLD the Mortgaged Property, together with all
estate, right, title and interest of the Mortgagor and anyone claiming by,
through or under the Mortgagor in, to, under or derived from the Mortgaged
Property and all rights and appurtenances relating thereto, to the Mortgagee,
forever.
PROVIDED ALWAYS that this Mortgage is upon the express
condition that the Mortgaged Property shall be released from the Lien of this
Mortgage in full or in part in the manner and at the time provided in Section
7.02.
THE MORTGAGOR ADDITIONALLY COVENANTS AND AGREES WITH THE
BENEFICIARY AS FOLLOWS:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01. Definitions. (a) Capitalized terms used in this
Mortgage, but not otherwise defined herein, are defined in, or are defined by
reference to, the Credit Agreement and have the same meanings herein as therein.
(b) In addition, as used herein, the following terms have the
following meanings:
"Agreements" is defined in Granting Clause V.
"Awards" means, at any time, all awards or payments received
or receivable by reason of any Condemnation, including all amounts
received or receivable with respect to any Transfer in lieu or
anticipation of Condemnation or in connection with any agreement with
any condemning authority which has been made in settlement of any
proceeding relating to a Condemnation.
"Bankruptcy Code" means the Bankruptcy Code of 1978, as
amended.
"Casualty" means any damage to, or destruction of, the
Property.
"Condemnation" means any condemnation or other taking or
temporary or permanent requisition of the Property, any interest
therein or right appurtenant thereto, or any change of grade affecting
the Property, as the result of the exercise of any right of
condemnation or eminent domain. A Transfer to a governmental authority
in lieu or anticipation of Condemnation shall be deemed to be a
Condemnation.
"Credit Agreement" is defined in the Recitals.
"Equipment" is defined in Granting Clause III.
"Impositions" means all taxes (including real estate taxes,
transfer taxes and sales and use taxes), assessments (including all
assessments for public improvements or benefits, whether or not
commenced or completed prior to the date hereof), water, sewer or other
rents, rates and charges, excises, levies, license fees, permit fees,
inspection fees and other authorization fees and other charges, in each
case whether general or special, ordinary or extraordinary, foreseen or
unforeseen, of every character (including all interest and penalties
thereon), which at any time may be assessed, levied, confirmed or
imposed on or in respect of, or be a Lien upon, (i) the Property, any
other Mortgaged Property or any interest therein, (ii) any occupancy,
use or possession of, or activity conducted on, the Property to the
extent that the failure to pay the same would create a Lien on the
Property, (iii) the Rents from the Property or the use or occupancy
thereof to the extent that the failure to pay the same would create a
Lien on the Property, or (iv) the Secured Obligations or the Loan
Documents, but excluding income, excess profits, franchise, capital
stock, estate, inheritance, succession, gift or similar taxes of the
Mortgagor or the Mortgagee or any other Secured Party, except to the
extent that such taxes of the Mortgagor or the Mortgagee or any other
Secured Party are imposed in whole or in part in lieu of, or as a
substitute for, any taxes which are or would otherwise be Impositions.
"Improvements" is defined in Granting Clause II.
"Insurance Policies" means the insurance policies and
coverages required to be maintained by the Mortgagor with respect to
the Property pursuant to the Credit Agreement.
"Insurance Premiums" means all premiums payable under the
Insurance Policies.
"Insurance Proceeds" means, at any time, all insurance
proceeds (except proceeds of business interruption insurance) or
payments to which the Mortgagor may be or become entitled under the
Insurance Policies by reason of any Casualty plus all insurance
proceeds and payments to which the Mortgagor may be or become entitled
by reason of any Casualty under any other insurance policies or
coverages maintained by the Mortgagor with respect to the Property.
"Insurance Requirements" means all provisions of the Insurance
Policies, all requirements of the issuer of any of the Insurance
Policies and all orders, rules, regulations and any other requirements
of the National Board of Fire Underwriters (or any other body
exercising similar functions) binding upon the Mortgagor and
applicable to the Property, any adjoining vaults, sidewalks, parking
areas or driveways or any use or condition thereof.
"Land" is defined in Granting Clause I.
"Lease" means each lease, sublease, tenancy, subtenancy,
license, franchise, concession or other occupancy agreement relating to
the Property, together with any guarantee of the obligations of the
tenant or occupant thereunder or any right to possession under any
federal or state bankruptcy code in the event of the rejection of any
sublease by the sublandlord thereof or its Mortgagee pursuant to said
code.
"Legal Requirements" means all provisions of the Leases, the
Agreements, the Permitted Liens, and the Permits and all applicable
laws, statutes, codes, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, directions and requirements of, and
agreements with, governmental bodies, agencies or officials, now or
hereafter applicable to the Property, any adjoining vaults, sidewalks,
streets or ways, or any use or condition thereof.
"Local UCC" means the Uniform Commercial Code as in effect in
the State in which the Property is located.
"Material Adverse Effect" is defined in the Credit Agreement.
"Mortgage" is defined in the Preamble.
"Mortgaged Property" is defined in the Granting clauses.
"Mortgagee" is defined in the Preamble.
"Mortgagor" is defined in the Preamble.
"National Flood Insurance Program" means the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973 (42
U.S.C. Sections 4001 et seq.).
"Permits" is defined in Granting Clause VIII.
"Permitted Disposition" means any (i) Transfer in connection
with a Condemnation, (ii) Transfer of obsolete unused, or unnecessary
Equipment in the ordinary course of business or (iii) easement or
similar encumbrance with respect to the Property granted by the
Mortgagor to any adjoining landowner or any railroad, telephone, cable
television, water, sewer, utility or similar company, municipality or
other governmental subdivision in the ordinary course of business.
"Permitted Liens" means (i) any Liens permitted under clauses
(g),(h) and (k) of Section 5.09 of the Credit Agreement and, with
respect to Equipment, clauses (a) through (f) of Section 5.09 of the
Credit Agreement, (ii) Liens being contested pursuant to Section 2.06
and (iii) Permitted Encumbrances.
"Permitted Encumbrances" means those matters set forth on
Exhibit B annexed hereto.
"Post-Default Rate" means, with respect to any amount payable
by the Mortgagor hereunder which is not paid when due, a rate per annum
equal to the sum of 2% plus the rate applicable to Base Rate Loans from
time to time.
"Property" is defined in Granting Clause III.
"Receiver" is defined in Section 5.02(a)(iv).
"Rents" is defined in Granting Clause VII.
"Restoration" means the restoration, repair, replacement or
rebuilding of the Property after a Casualty or Condemnation, and
"Restore" means to restore, repair, replace or rebuild the Property
after a Casualty or Condemnation, in each case to a utility and
condition adequate to the Mortgagor's use as conducted immediately
prior to the Casualty or Condemnation.
"Secured Obligations" is defined in the Recitals.
"Secured Parties" means the Mortgagee and all other holders of
any of the Secured Obligations (including all Persons to whom any of
the Secured Obligations may be payable from time to time).
"Transfer" means, when used as a noun, any sale, conveyance,
assignment, lease, or other transfer and, when used as a verb, to sell,
convey, assign, lease, or otherwise transfer, in each case (i) whether
voluntary or involuntary, (ii) whether direct or indirect and (iii)
including any agreement providing for a Transfer or granting any right
or option providing for a Transfer.
"Unavoidable Delays" means delays due to acts of God, fire,
flood, earthquake, explosion or other Casualty, inability to procure or
shortage of labor, equipment, facilities, sources of energy (including
electricity, steam, gas or gasoline), materials or supplies, failure of
transportation, strikes, lockouts, action of labor unions,
Condemnation, litigation relating to Legal Requirements, inability to
obtain Permits or other causes beyond the reasonable control of the
Mortgagor, provided that lack of funds shall not be deemed to be a
cause beyond the control of the Mortgagor.
(c) In this Mortgage, unless otherwise specified, references
to this Mortgage or to Agreements, Leases, Permits, the Credit Agreement, the
Security Agreement, Notes, Loan Documents and Collateral Documents include all
amendments, supplements, consolidations, replacements, restatements, extensions,
renewals and other modifications thereof, in whole or in part.
SECTION 1.02. Interpretation. In this Mortgage, unless
otherwise specified, (i) singular words include the plural and plural words
include the singular; (ii) words which include a number of constituent parts,
things or elements, including the terms Leases, Improvements, Land, Secured
Obligations, Property and Mortgaged Property, shall be construed as referring
separately to each constituent part, thing or element thereof, as well as to all
of such constituent parts, things or elements as a whole; (iii) words importing
any gender include the other genders; (iv) references to any Person include such
Person's successors and assigns and in the case of an individual, the word
"successors" includes such Person's heirs, devisees, legatees, executors,
administrators and personal representatives; (v) references to any statute or
other law include all applicable rules, regulations and orders adopted or made
thereunder and all statutes or other laws amending, consolidating or replacing
the statute or law referred to; (vi) the words "consent", "approve", "agree" and
"request", and derivations thereof or words of similar import, mean the prior
written consent, approval, agreement or request of the Person in question; (vii)
the words "include" and "including", and words of similar import, shall be
deemed to be followed by the words "without limitation"; (viii) the words
"hereto", "herein", "hereof" and "hereunder", and words of similar import, refer
to this Mortgage in its entirety; (ix) references to Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are to the Articles,
Sections, Schedules, Exhibits, subsections, paragraphs and clauses of this
Mortgage; (x) the Schedules and Exhibits to this Mortgage are incorporated
herein by reference; (xi) the titles and headings of Articles, Sections,
Schedules, Exhibits, subsections, paragraphs and clauses are inserted as a
matter of convenience and shall not affect the construction of this Mortgage;
(xii) all obligations of the Mortgagor hereunder shall be satisfied by the
Mortgagor at the Mortgagor's sole cost and expense; and (xiii) all rights and
powers granted to the Mortgagee hereunder shall be deemed to be coupled with an
interest and be irrevocable.
SECTION 1.03. Resolution of Drafting Ambiguities. The
Mortgagor acknowledges that it was represented by counsel in connection with
this Mortgage, that it and its counsel reviewed and participated in the
preparation and negotiation of this Mortgage and that any rule of construction
to the effect that ambiguities are to be resolved against the drafting party or
the Mortgagee shall not be employed in the interpretation of this Mortgage.
ARTICLE II
CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR
SECTION 2.01. Title. (a) The Mortgagor warrants that, as of
the date hereof, (i) (x) the Mortgagor has good and marketable title to the fee
simple interest in the Land and the Improvements thereon, (y) the Mortgagor is
the owner of, or has a valid leasehold interest in, the Equipment and all other
items constituting the Mortgaged Property, and (z) this Mortgage constitutes a
valid, binding and enforceable first Lien on the Mortgaged Property, in each
case subject only to Permitted Encumbrances with respect thereto; and (ii) the
Permitted Encumbrances do not materially interfere with the enjoyment, use or
operation of the Property or materially, adversely affect the value thereof.
(b) The Mortgagor shall forever preserve, protect, warrant and
defend (i) the estate, right, title and interest of the Mortgagor in and to the
Mortgaged Property; (ii) the validity, enforceability and priority of the Lien
of this Mortgage on the Mortgaged Property; and (iii) the right, title and
interest of the Mortgagee, and any purchaser at any sale of the Mortgaged
Property hereunder or relating hereto, in each case against all other Liens and
claims whatsoever, subject only to Permitted Liens.
(c) The Mortgagor, at its sole cost and expense, shall (i)
promptly correct any defect or error which may be discovered in this Mortgage or
any financing statement or other document relating hereto; and (ii) promptly
execute, acknowledge, deliver, record and re-record, register and re-register,
and file and re-file this Mortgage and any financing statements or other
documents which the Mortgagee may require from time to time (all in form and
substance reasonably satisfactory to the Mortgagee) in order (A) to effectuate,
complete, perfect, continue or preserve the Lien of this Mortgage as a first
Lien on the Mortgaged Property, whether now owned or hereafter acquired, subject
only to the Permitted Liens, or (B) to effectuate, complete, perfect, continue
or preserve any right, power or privilege granted or intended to be granted to
the Mortgagee hereunder or otherwise accomplish the purposes of this Mortgage,
provided the same does not, in any material respect, increase the obligations
of, or diminish the rights reserved to, the Mortgagor hereunder. To the extent
permitted by law, the Mortgagor hereby authorizes the Mortgagee to execute and
file financing statements or continuation statements without the Mortgagor's
signature appearing thereon. The Mortgagor shall pay within fifteen (15) days of
demand therefor the costs of, or incidental to, any recording or filing of any
financing or continuation statement, or amendment thereto, concerning the
Mortgaged Property.
(d) Nothing herein shall be construed to subordinate the Lien
of this Mortgage to any Permitted Lien to which the Lien of this Mortgage is not
otherwise subordinate.
SECTION 2.02. Secured Obligations. The Mortgagor shall duly
and punctually pay, perform and observe the Secured Obligations to the extent
required of the Mortgagor in accordance with the terms and provisions of the
Loan Documents.
SECTION 2.03. Impositions. The Mortgagor shall (i) subject to
Section 2.06, duly and punctually pay all material Impositions, including any
accrued interest on the unpaid balance of any Imposition which is being paid in
installments prior to the delinquency date thereof; (ii) subject to Section
2.06, duly and punctually file all returns and other statements required to be
filed with respect to any material Imposition prior to the delinquency date
thereof; (iii) promptly notify the Mortgagee of the receipt by the Mortgagor of
any notice of default in the payment of any material Imposition or in the filing
of any return or other statement relating to any material Imposition and
simultaneously furnish to the Mortgagee a copy of such notice of default; and
(iv) not make deduction from or claim any credit on any Secured Obligation by
reason of any Imposition and, to the extent permitted under applicable law,
hereby irrevocably waives any right to do so, provided, however, that if any
such Imposition may be paid in installments (whether or not interest shall
accrue on the unpaid balance thereof), the Mortgagor may pay the same in
installments (together with any accrued interest payable on the unpaid balance
thereof) as the same respectively become due, before any fine or penalty,
attaches thereto, and provided further, that if the Mortgagor in good faith
contests the validity or amount of any such Imposition or claim by appropriate
proceedings and in accordance with Section 2.06, the Mortgagor may defer payment
thereof during the pendency of such contest including any appeal period.
SECTION 2.04. Legal and Insurance Requirements. (a) The
Mortgagor represents and warrants that as of the date hereof, (i) to the best of
the Mortgagor's knowledge, (x) the Property and the use and operation thereof
comply with all Insurance Requirements and all material Legal Requirements, and
(y) there is no default under any Legal Requirement or Insurance Requirement
which would have a material adverse effect on the use or operation of the
Property, and (ii) the execution, delivery and performance of this Mortgage will
not contravene any provision of or constitute a default under any Legal
Requirement or Insurance Requirement.
(b) The Mortgagor shall (i) duly and punctually comply with
all material Legal Requirements and Insurance Requirements other than Legal
Requirements and Insurance Requirements the validity or applicability of which
are being contested pursuant to Section 2.06; (ii) procure, maintain and duly
and punctually comply with all Permits required for any construction,
reconstruction, repair, alteration, addition, improvement, maintenance,
management, use and operation of the Property as then conducted other than
Permits the necessity of which are being contested pursuant to Section 2.06;
(iii) promptly notify the Mortgagee of the receipt by the Mortgagor of any
notice of default regarding any Legal Requirement, Insurance Requirement or
Permit or any possible or actual termination of any Permit or Insurance Policy
and furnish to the Mortgagee a copy of such notice of default or termination,
except with respect to any default or termination which would not have a
material adverse effect on the use or operation of the Property as then
conducted; and (iv) promptly after obtaining knowledge thereof notify the
Mortgagee of any condition which, with or without the giving of notice or the
passage of time or both, would constitute a default regarding any Legal
Requirement or Insurance Requirement or a termination of any Permit or Insurance
Policy which default or termination would have a material adverse effect on the
use or operation of the Property as then conducted and the action being taken to
remedy such condition.
SECTION 2.05. Status of the Property. The Mortgagor represents
and warrants that, to the best of the Mortgagor's knowledge, (i) the Property is
served by all necessary water, sanitary and storm sewer, drainage, electric,
steam, gas, telephone and other utilities and utility facilities, which utility
facilities have capacities which are sufficient to serve the current use and
occupancy of the Property; (ii) subject to Section 2.06, the Mortgagor will pay
when due all utility charges which are incurred by the Mortgagor for the benefit
of the Mortgaged Property or which may become a charge or lien against the
Mortgaged Property for gas, electricity, steam, water or sewer services
furnished to the Mortgaged Property and all other assessments or charges of a
similar nature, whether public or private, affecting the Mortgaged Property
whether or not such taxes, assessments or charges are liens thereon; (iii) the
Property has legal access to all streets, roads or alleys adjacent to the
Property (including, as appropriate, access over properly granted, perpetual,
private right-of-way or easement Agreements) sufficient to serve the current use
and operation of the Property; (iv) the Improvements are not located in an area
designated as "flood prone" (as defined under the regulations adopted under the
National Flood Insurance Program), or to the extent the Improvements are located
in an area designated as "flood prone", the Mortgagor maintains in full force
and effect flood insurance under the National Flood Insurance Program to the
extent and in the minimum amounts required by applicable law; and (v) to the
best of the Mortgagor's knowledge, since the date of the survey described on
Exhibit B, there have been no additions to or any alterations of the
Improvements that encroach upon any adjoining property or that fail to comply
with applicable zoning laws.
SECTION 2.06. Permitted Contests. After prior notice to the
Mortgagee, the Mortgagor may contest, by appropriate proceedings conducted in
good faith and with due diligence, any Legal Requirement, any Insurance
Requirement or any Imposition, provided that (i) no Event of Default has
occurred and is continuing (it being agreed that the failure to comply with such
Legal Requirement or Insurance Requirement, or to pay such Imposition or to
discharge such Lien during such contest shall not constitute an Event of
Default, provided that the Mortgagor is otherwise in compliance with this
Section); (ii) no Mortgaged Property or interest therein is in danger of being
sold, forfeited or lost, or the priority of the Lien of the Mortgagee is not at
risk, as a result of such contest or proceedings; (iii) in the case of any Legal
Requirement, the Mortgagee and the other Secured Parties are not in danger of
any criminal or material civil penalty or any other liability for failure to
comply therewith and no Mortgaged Property or interest therein is subject to the
imposition of any Lien as a result of such failure which is not properly
contested pursuant to this Section; and (iv) in the case of any Insurance
Requirement, no Insurance Policy or coverage is in danger of being forfeited or
lost as a result of such contest or proceedings, unless replaced; and provided
further that the Mortgagor establishes any reserve or other appropriate
provision required with respect to such contest under generally accepted
accounting principles consistently applied.
SECTION 2.07. Liens. Subject to the rights of contest provided
the Mortgagor in Section 2.06, the Mortgagor shall not create or permit to be
created or to remain, any Lien on the Mortgaged Property or any interest therein
and shall cause to be discharged any such Lien within forty-five (45) days
following receipt of notice of such Lien, in each case (i) whether voluntarily
or involuntarily created, (ii) whether directly or indirectly a Lien thereon and
(iii) whether subordinated hereto, except Permitted Liens. The provisions of
this Section shall apply to each and every Lien (other than Permitted Liens) on
the Mortgaged Property or any interest therein, regardless of whether a consent
to, or waiver of a right to consent to, any other Lien thereon has been
previously obtained in accordance with the terms of the Loan Documents. Nothing
herein shall obligate the Mortgagor to remove any inchoate statutory Lien in
respect of obligations not yet due and payable.
SECTION 2.08. Transfer. The Mortgagor shall not Transfer, or
suffer any Transfer of, the Mortgaged Property or any part thereof or interest
therein, except Permitted Dispositions. The provisions of this Section shall
apply to each and every Transfer of the Mortgaged Property or any interest
therein, regardless of whether a consent to, or waiver of a right to consent to,
any other Transfer thereof has been previously obtained in accordance with the
terms of the Loan Documents.
SECTION 2.09. Agreements. The Mortgagor has not entered into
any contract or other agreement providing for the transfer, conveyance or
encumbrance of the Mortgaged Property or any part thereof or interest therein
except as may be permitted by the Credit Agreement.
SECTION 2.10. Maintenance, Repair, Alterations, Etc. The
Mortgagor will: keep and maintain the Mortgaged Property in good working order
and condition (ordinary wear and tear excepted); subject to Section 3.02(c),
make or cause to be made, as and when necessary, all repairs, renewals and
replacements, structural and nonstructural, exterior and interior, ordinary and
extraordinary, foreseen and unforeseen which are necessary to so maintain the
Mortgaged Property, except to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect; comply with all
applicable statutes, regulations and orders of and all applicable restrictions
imposed by, all governmental bodies, domestic and foreign (collectively, a
"Law") now or hereafter affecting this Mortgaged Property or any part thereof or
the use thereof or requiring any alterations or improvements, except to the
extent such non-compliances could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect; not commit or
permit any waste or deterioration (ordinary wear and tear excepted) of the
Mortgaged Property; not permit the Improvements to be demolished or
substantially altered; comply with the provisions of any lease, easement or
other agreement affecting all or any part of the Mortgaged Property except to
the extent that the failure to do so could not reasonably be expected to result
in a Material Adverse Effect; and not permit the Improvements or any part
thereof to become abandoned.
SECTION 2.11. Actions Affecting this Mortgaged Property. The
Mortgagor will appear in and contest any action or proceeding brought by any
third parties unrelated to the Mortgagee purporting to affect the security
hereof or the rights or powers of the Mortgagee hereunder; and the Mortgagor
will pay all costs and expenses incurred by the Mortgagor, including cost of
evidence of title and reasonable attorneys' fees, in any such action or
proceeding. The Mortgagor shall give the Mortgagee prompt notice in writing of
any such action or proceeding.
SECTION 2.12. Environmental Protection Matters. The Mortgagor
shall comply with the provisions of the Credit Agreement relating to
environmental matters, including, but not limited to, Section 4.07 of the Credit
Agreement, which provision is incorporated herein by reference.
SECTION 2.13. The Credit Agreement and The Security Agreement.
This Mortgage is made pursuant to the Credit Agreement, and this Mortgage is
subject to all of the provisions of the Credit Agreement including, without
limitation, the provisions of the Credit Agreement entitling the Mortgagee, the
Banks and/or the other Secured Creditors to declare the respective indebtedness
secured hereby to be immediately due and payable, as the case may be, all of
which provisions are incorporated herein with the same force and with like
effect as if they were fully set forth herein at length and made a part hereof.
In the event of a conflict between any of the provisions of the Credit Agreement
and the Security Agreement on the one hand and any of the provisions of this
Mortgage, on the other, the provisions of the Credit Agreement and the Security
Agreement shall control.
SECTION 2.14. Brokers. The Mortgagor represents and warrants
that it has not dealt with any broker in connection with this transaction and
that it knows of no other Person who is entitled to a commission in connection
with this transaction. The Mortgagor hereby agrees to indemnify, defend and hold
the Indemnitees harmless from and against any and all claims, liabilities,
damages, demands, costs, expenses (including, without limitation, the costs and
expenses of defending or settling any such claims and all attorneys' fees and
disbursements) or causes of action arising out of a breach of the
representations, warranties or agreements contained in this Section 2.14. The
representations, warranties and agreements contained in this Section 2.14 shall
survive repayment of the Obligations and discharge of this Mortgage.
SECTION 2.15. Recordation of Mortgage and Financing
Statements. The Mortgagor will execute, acknowledge and deliver any financing
statements, continuation statements and other instruments in addition or
supplemental hereto, including, without limitation, contracts, licenses and
permits affecting the Mortgaged Property, which may be necessary or reasonably
requested by the Mortgagee from time to time in order to perfect and maintain
the validity and effectiveness of this Mortgage and the lien and security
thereof to the Mortgagee and in such manner and places and within such times, in
each case as is commercially reasonable and as may be necessary or appropriate
to accomplish such purposes and to preserve and protect the rights and remedies
of the Mortgagee. The Mortgagor or its agents will furnish reasonably
satisfactory evidence of every such recording, filing and registration to the
Mortgagee. The Mortgagor hereby appoints the Mortgagee as its true and lawful
attorney-in-fact to file, with the Mortgagor's signature, or without Mortgagor's
signature in the state and county where the Mortgaged Property is located and
any other jurisdiction in which such filing may lawfully and effectively be made
without the Mortgagor's signature, any and all Uniform Commercial Code financing
and continuation statements which the Mortgagee may reasonably deem necessary or
appropriate to file with respect to this Mortgage.
SECTION 2.16. Changes to Mortgage or Related Loan Documents.
If the Obligations or any part thereof are extended or varied or if any part of
the security is released, all persons now or at any time hereafter liable
therefor, or whose consent to this Mortgage was obtained, shall be held to
assent to such extension, variation or release, and their liability and the lien
and all provisions hereof shall continue in full force, the right of recourse,
if any, against all such persons being expressly reserved by the Mortgagee,
notwithstanding such extension, variation or release. Any person or entity
taking a junior mortgage or other lien upon the Mortgaged Property or any
interest therein, shall take said lien subject to the rights of the Mortgagee to
amend, modify, and supplement, restate and consolidate this Mortgage and/or the
other Financing Documents and to impose additional fees and other charges, and
to extend the maturity of said indebtedness, and to grant partial releases of
the lien of this Mortgage, in each and every case without obtaining the consent
of the holder of such lien and without the lien of this Mortgage losing its
priority over the rights of any such junior lien. Nothing contained in this
Section shall be construed as waiving any provision contained herein which
provides, among other things, that it shall constitute an Event of Default if
the Mortgaged Property be sold, conveyed, or encumbered unless permitted by this
Mortgage and/or the other Financing Documents.
ARTICLE III
INSURANCE, CASUALTY AND CONDEMNATION
SECTION 3.01. Insurance. (a) The Mortgagor shall maintain
in full force and effect Insurance Policies with respect to the Property as
required by the Credit Agreement.
The physical damage insurance maintained with respect to the Property shall name
the Mortgagee as an insured party and shall provide that all property losses
insured against shall be adjusted by the Mortgagor, subject to the Mortgagee's
rights pursuant to Section 3.03(a) hereof and the Credit Agreement. All
insurance maintained by the Mortgagor with respect to the Property shall provide
that no cancellation or material change thereof shall be effective until at
least 30 days after receipt by the Mortgagee of written notice thereof; and all
losses shall be payable notwithstanding any foreclosure or other action or
proceeding taken pursuant to this Mortgage.
(b) The Mortgagor shall furnish to the Mortgagee from time to
time not later than 15 days prior to the expiration date of each policy required
to be maintained by the Mortgagor hereunder, an insurance certificate or
certificates executed by the insurer or its authorized agent with respect to the
new or extended policy. If the Mortgagor fails to maintain the Insurance
Policies required to be maintained under this Section, the Mortgagee shall have
the right to obtain such Insurance Policies and pay the premiums therefor. If
the Mortgagee obtains such Insurance Policies or pays the premiums therefor,
upon demand, the Mortgagor shall reimburse the Mortgagee for its reasonable
expenses in connection therewith, together with interest thereon, pursuant to
Section 4.01.
(c) The Mortgagor may effect such coverage under subsection
(a) of this Section under blanket insurance policies covering other properties
of the Mortgagor, provided that (i) any such blanket insurance policy shall
specify therein, or the insurer under such policy shall certify to the
Mortgagee, (A) the maximum amount of the total insurance afforded by the blanket
policy allocated to the Property, and (B) any sublimits in such blanket policy
applicable to the Property, which sublimits shall not be less than the amounts
required pursuant to this Section; (ii) any such blanket insurance policy shall
comply in all respects with the other provisions of this Section; and (iii) the
protection afforded under any such blanket insurance policy shall be no less
than that which would have been afforded under a separate policy relating only
to the Property.
(d) The Mortgagor shall not maintain additional or separate
insurance concurrent in form or contributing in the event of loss with the
insurance required under this Section, unless (i) the policies providing such
additional or separate insurance are submitted to the Mortgagee for its
approval, which approval shall not be unreasonably withheld; (ii) the insurers
under such policies and the terms thereof are approved by the Mortgagee, which
approval shall not be unreasonably withheld; and (iii) the Mortgagee and the
other Secured Parties are included in such policies as additional insureds.
SECTION 3.02. Casualty and Condemnation. (a) The Mortgagor
represents and warrants that, as of the date hereof, (i) there is no Casualty or
Condemnation affecting in any material respect the use and occupancy of the
Property, (ii) there are no negotiations or proceedings presently pending in
connection with a Condemnation and (iii) to the knowledge of the Mortgagor, no
Condemnation is proposed or threatened.
(b) If any Casualty occurs, the Mortgagor shall immediately
take such action as is required by the Credit Agreement and the Other Loan
Documents.
(c) If any Casualty or Condemnation occurs (and provided the
applicable Insurance Proceeds or Awards have not been applied to the prepayment
of the Loans in accordance with Section 2.10(f) of the Credit Agreement and have
been made available to the Mortgagor), the Mortgagor shall promptly commence and
diligently pursue to completion the Restoration of such Property, subject to
Unavoidable Delays, whether or not the Insurance Proceeds or Awards with respect
to such Casualty or Condemnation are sufficient for such purpose; provided that
(i) any such Restoration shall be effected with due diligence, in a good and
workmanlike manner, in compliance with all applicable Legal Requirements and
Insurance Requirements; (ii) any such Restoration shall be conducted under the
supervision of an architect or engineer if customary for such Restoration; (iii)
any such Restoration shall be located wholly on the Land and, unless consented
to by the Mortgagee and by the owner of the adjacent property, shall be
independent of and not connected with improvements located on adjacent property;
(iv) each such Restoration shall be promptly and fully paid for by the Mortgagor
except to the extent that any such payment is being contested in good faith; and
(vi) the Mortgagor shall procure prior to the commencement of any such
Restoration, and maintain throughout the continuation of the work involved, such
insurance and performance and payment bonds as are customary for the type of
construction and work involved.
SECTION 3.03. Insurance Claims and Proceeds; Condemnation
Awards. (a) If any Casualty occurs, (i) the Mortgagor shall promptly make proof
of loss under the applicable Insurance Policies and diligently pursue to
conclusion its claim for the Insurance Proceeds payable thereunder and any suit,
action or other proceeding necessary or appropriate to obtain payment of such
Insurance Proceeds and (ii) all such Insurance Proceeds shall be paid to the
Mortgagor in accordance with the Credit Agreement. If such Insurance Proceeds
are required to be delivered by the Mortgagor to the Mortgagee, then, until so
delivered, any such Insurance Proceeds received by the Mortgagor shall be held
in trust by the Mortgagor for and as the property of the Mortgagee and the other
Secured Parties and shall not be commingled with any other funds or property of
the Mortgagor.
(b) If any Condemnation occurs, or if any negotiation or
proceeding is commenced which might in the reasonable judgment of the Mortgagor
result in a Condemnation, or if any Condemnation is proposed or threatened, the
Mortgagor shall, promptly after receiving notice or obtaining knowledge thereof,
do all things deemed reasonably necessary or appropriate by the Mortgagor to
preserve the Mortgagor's interest in such Property and promptly make claim for
the Awards payable with respect thereto and diligently pursue to conclusion such
claim for such Awards and any suit, action or other proceeding necessary or
appropriate to obtain payment thereof. All Awards with respect to any
Condemnation shall be paid to the Mortgagor in accordance with the Credit
Agreement. If such Awards are required to be delivered by the Mortgagor to the
Mortgagee, then, until so delivered, any such Awards received by the Mortgagor
shall be held in trust by the Mortgagor for and as the property of the Mortgagee
and the other Secured Parties and shall not be commingled with any other funds
or property of the Mortgagor.
ARTICLE IV
CERTAIN SECURED OBLIGATIONS
SECTION 4.01. Interest After Default. If, pursuant to the
terms of this Mortgage, the Mortgagee shall make any payment on behalf of the
Mortgagor (including any payment made by the Mortgagee pursuant to Section
5.10), or shall incur hereunder any expense for which the Mortgagee is entitled
to reimbursement pursuant to the terms of the Loan Documents, such Secured
Obligation shall be payable within fifteen (15) days of notice and any amounts
not paid within fifteen (15) days of notice shall bear interest from the date
incurred until paid at the Post-Default Rate. Such interest, and any other
interest on the Secured Obligations payable at the Post-Default Rate pursuant to
the terms of the Loan Documents, shall accrue through the date paid
notwithstanding any intervening judgment of foreclosure or sale. All such
interest shall be part of the Secured Obligations and shall be secured by this
Mortgage.
SECTION 4.02. Changes in the Laws Regarding Taxation. If,
after the date hereof, there shall be enacted any applicable law deducting from
the value of the Property for the purpose of taxation the Lien of any Collateral
Document or changing in any way the applicable law for the taxation of
mortgages, deeds of trust or other Liens or obligations secured thereby, or the
manner of collection of such taxes, so as to adversely affect this Mortgage, the
Secured Obligations or any Secured Party, upon demand by the Mortgagee or any
other affected Secured Party and to the extent permitted under applicable law,
the Mortgagor shall pay all taxes, assessments or other charges resulting
therefrom or shall reimburse such Secured Party for all such taxes, assessments
or other charges which such Secured Party is obligated to pay as a result
thereof.
SECTION 4.03. Indemnification. (a) The Mortgagor shall
protect, indemnify and defend each of the Mortgagee and the other Secured
Parties and their respective successors, assigns, employees, agents and servants
from and against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever (including reasonable attorneys' fees and expenses) which may
be imposed on, incurred by or asserted against any Secured Party by reason or on
account of, or in connection with (a) the Mortgagee's exercise of any of its
rights and remedies hereunder; (b) any accident, injury to or death of persons
or loss of or damage to property occurring in, on or about the Mortgaged
Property or any part thereof or on the adjoining sidewalks, curbs, adjacent
property or adjacent parking areas, street or ways; (c) any failure on the part
of the Mortgagor to perform or comply with any of the terms of this Mortgage;
(d) the performance of any labor or services or the furnishing of any materials
or other property in respect of the Mortgaged Property or any part thereof; or
(e) any other conduct or misconduct of the Mortgagor, any lessee of any of the
Mortgaged Property, or any of their respective agents, contractors,
subcontractors, servants, employees, licensees or invitees; provided, however,
that any claims caused by the willful misconduct or gross negligence of any
Secured Party as determined by a court of competent jurisdiction shall be
excluded from the foregoing indemnification of such Secured Party. Any amount
payable under this Section will be deemed a demand obligation and will bear
interest pursuant to Section 4.01. The obligations of the Mortgagor under this
Section shall survive the termination of this Mortgage.
(b) All sums payable by the Mortgagor hereunder shall be paid
without counterclaim, set-off, or deduction and without abatement, suspension,
deferment, diminution or reduction, and the obligations and liabilities of the
Mortgagor hereunder shall in no way be released, discharged or otherwise
affected (except as expressly provided herein) by reason of: (i) any damage or
any condemnation of the Mortgaged Property or any part thereof; (ii) any
restriction or prevention of or interference with any use of the Mortgaged
Property or any part thereof; (iii) any title defect or encumbrance or any
eviction from the Mortgaged Property or any part thereof by title paramount or
otherwise; (iv) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Mortgagee, or the Mortgagor, or any action taken with respect to this Mortgage
by any agent or receiver of the Mortgagee; (v) any claim which the Mortgagor has
or might have against the Mortgagee; (vi) any default or failure on the part of
the Mortgagee to perform or comply with any of the terms hereof or of any other
Financing Documents; or (vii) any other occurrence whatsoever, whether similar
or dissimilar to the foregoing, whether or not the Mortgagor shall have notice
or knowledge of any of the foregoing. The Mortgagor waives, to the extent
permitted by law, all rights now or hereafter conferred by statute or otherwise
to any abatement, suspension, deferment, diminution or reduction of any of the
Obligations.
(c) Any amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement shall constitute Obligations secured
by the Mortgaged Property. The indemnity obligations of the Mortgagor contained
in this Section 4.03 shall continue in full force and effect notwithstanding the
full payment of all the notes issued under the Credit Agreement, and the payment
of all other Secured Obligations and notwithstanding the discharge thereof.
ARTICLE V
DEFAULTS, REMEDIES AND RIGHTS
SECTION 5.01. Events of Default. Any Event of Default under
the Credit Agreement shall constitute an Event of Default hereunder. All notice
and cure periods provided in the Credit Agreement and the other Loan Documents
shall run concurrently with any notice or cure periods provided under applicable
law.
SECTION 5.02. Remedies. (a) Upon the occurrence and
continuance of an Event of Default, the Mortgagee shall have the right and
power to exercise any of the following remedies and rights, subject to
mandatory provisions of applicable law, to wit:
(i) to institute a proceeding or proceedings, by
advertisement, judicial process or otherwise as provided under
applicable law, for the complete or partial foreclosure of this
Mortgage or the complete or partial sale of the Mortgaged Property
under the power of sale hereunder or under any applicable provision of
law; or
(ii) to sell the Mortgaged Property, and all estate, right,
title, interest, claim and demand of the Mortgagor therein and thereto,
and all rights of redemption thereof, at one or more sales, as an
entirety or in parcels, with such elements of real or personal
property, at such time and place and upon such terms as the Mortgagee
may deem expedient or as may be required under applicable law, and in
the event of a sale hereunder or under any applicable provision of law
of less than all of the Mortgaged Property, this Mortgage shall
continue as a Lien on the remaining Mortgaged Property; or
(iii) to institute a suit, action or proceeding for the
specific performance of any of the provisions of this Mortgage; or
(iv) to be entitled to the appointment of a receiver,
supervisor, Mortgagee, liquidator, conservator or other custodian (a
"Receiver") of the Mortgaged Property, without notice to Mortgagor, to
the fullest extent permitted by law, as a matter of right and without
regard to, or the necessity to disprove, the adequacy of the security
for the Secured Obligations or the solvency of the Mortgagor or any
other Obligor, and the Mortgagor hereby, to the fullest extent
permitted by applicable law, irrevocably waives such necessity and
consents to such appointment, without notice, said appointee to be
vested with the fullest powers permitted under applicable law,
including to the extent permitted under applicable law those under
clause (v) of this subsection (a); or
(v) to enter upon the Property, by the Mortgagee or a Receiver
(whichever is the Person exercising the rights under this clause), and,
to the extent permitted by applicable law, exclude the Mortgagor and
its managers, employees, contractors, agents and other representatives
therefrom in accordance with applicable law, without liability for
trespass, damages or otherwise, and take possession of all other
Mortgaged Property and all books, records and accounts relating
thereto, and upon demand the Mortgagor shall surrender possession of
the Property, the other Mortgaged Property and such books, records and
accounts to the Person exercising the rights under this clause; and
having and holding the same, the Person exercising the rights under
this clause may use, operate, manage, preserve, control and otherwise
deal therewith and conduct the business thereof, either personally or
by its managers, employees, contractors, agents or other
representatives, without interference from the Mortgagor or its
managers, employees, contractors, agents and other representatives;
and, upon each such entry and from time to time thereafter, at the
expense of the Mortgagor and the Mortgaged Property, without
interference by the Mortgagor or its managers, employees, contractors,
agents and other representatives, the Person exercising the rights
under this clause may, as such Person deems expedient, (A) insure or
reinsure the Property, (B) make all reasonably necessary or proper
repairs, renewals, replacements, alterations, additions, Restorations,
betterments and improvements to the Property and (C) in such Person's
own name or, at the option of such Person, in the Mortgagor's name,
exercise all rights, powers and privileges of the Mortgagor with
respect to the Mortgaged Property, including the right to enter into
Leases with respect to the Property, including Leases extending beyond
the time of possession by the Person exercising the rights under this
clause; and the Person exercising the rights under this clause shall
not be liable to account for any action taken hereunder, other than for
Rents actually received by such Person, and shall not be liable for any
loss sustained by the Mortgagor resulting from any failure to let the
Property or from any other act or omission of such Person, except to
the extent, in any case, such loss is caused by such Person's own
willful misconduct or gross negligence; or
(vi) with or, to the fullest extent permitted by applicable
law, without entry upon the Property, in the name of the Mortgagee or a
Receiver as required by law (whichever is the Person exercising the
rights under this clause) or, at such Person's option, in the name of
the Mortgagor, to collect, receive, ▇▇▇ for and recover all Rents and
proceeds of or derived from the Mortgaged Property, and after deducting
therefrom all costs, expenses and liabilities of every character
incurred by the Person exercising the rights under this clause in
collecting the same and in using, operating, managing, preserving and
controlling the Mortgaged Property and otherwise in exercising the
rights under clause (v) of this subsection (a) or any other rights
hereunder, including all amounts necessary to pay Impositions, Rents,
Insurance Premiums and other costs, expenses and liabilities relating
to the Property, as well as reasonable compensation for the services of
such Person and its managers, employees, contractors, agents or other
representatives, and to apply the remainder as provided in Section
5.06; or
(vii) to take any action with respect to any Mortgaged
Property permitted under the Local UCC; or
(viii) by notice to the Mortgagor (to the extent such notice
is required to be given under the Credit Agreement), but without formal
demand, presentment, notice of intention to accelerate or of
acceleration, protest or notice of protest, all of which are hereby
waived by the Mortgagor, declare all of the indebtedness secured hereby
to be immediately due and payable, and upon such declaration all of
such indebtedness shall become and be immediately due and payable,
anything in this Mortgage or the other Credit Documents to the contrary
notwithstanding; or
(ix) to take any other action, or pursue any other remedy or
right, as the Mortgagee may have under applicable law, including the
right to foreclosure through court action, and the Mortgagor does
hereby grant the same to the Mortgagee (as the case may be).
(b) To the fullest extent permitted by applicable law,
(i) each remedy or right hereunder shall be in addition to,
and not exclusive or in limitation of, any other remedy or right
hereunder, under any other Loan Document or under applicable law;
(ii) every remedy or right hereunder, under any other Loan
Document or under applicable law may be exercised concurrently or
independently and whenever and as often as deemed appropriate by the
Mortgagee;
(iii) no failure to exercise or delay in exercising any remedy
or right hereunder, under any other Loan Document or under applicable
law shall be construed as a waiver of any Default or other occurrence
hereunder or under any other Loan Document;
(iv) no waiver of, failure to exercise or delay in exercising
any remedy or right hereunder, under any other Loan Document or under
applicable law upon any Default or other occurrence hereunder or under
any other Loan Document shall be construed as a waiver of, or otherwise
limit the exercise of, such remedy or right upon any other or
subsequent Default or other or subsequent occurrence hereunder or under
any other Loan Document;
(v) no single or partial exercise of any remedy or right
hereunder, under any other Loan Document or under applicable law upon
any Default or other occurrence hereunder or under any other Loan
Document shall preclude or otherwise limit the exercise of any other
remedy or right hereunder, under any other Loan Document or under
applicable law upon such Default or occurrence or upon any other or
subsequent Default or other or subsequent occurrence hereunder or under
any other Loan Document;
(vi) the acceptance by the Mortgagee or any other Secured
Party of any payment less than the amount of the Secured Obligation in
question shall be deemed to be an acceptance on account only and shall
not be construed as a waiver of any Default hereunder or under any
other Loan Document with respect thereto; and
(vii) the acceptance by the Mortgagee or any other Secured
Party of any payment of, or on account of, any Secured Obligation shall
not be deemed to be a waiver of any Default or other occurrence
hereunder or under any other Loan Document with respect to any other
Secured Obligation.
(c) If the Mortgagee has proceeded to enforce any remedy or
right hereunder or with respect hereto by foreclosure, sale, entry or otherwise,
it may compromise, discontinue or abandon such proceeding for any reason without
notice to the Mortgagor or any other Person (except other Secured Parties to the
extent required by the other Loan Documents); and, if any such proceeding shall
be discontinued, abandoned or determined adversely for any reason, the Mortgagor
and the Mortgagee shall retain and be restored to their former positions and
rights hereunder with respect to the Mortgaged Property, subject to the Lien
hereof except to the extent any such adverse determination specifically provides
to the contrary.
(d) For the purpose of carrying out any provisions of Section
5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, 5.10 or 6.01 or, if an Event of Default has
occurred, any other provision hereunder authorizing the Mortgagee or any other
Person to perform any action on behalf of the Mortgagor, the Mortgagor hereby
irrevocably appoints the Mortgagee or a Receiver appointed pursuant to Section
5.02(a)(iv) or such other Person as the attorney-in-fact of the Mortgagor (with
a power to substitute any other Person in its place as such attorney-in-fact) to
act in the name of the Mortgagor or, at the option of the Person appointed to
act under this subsection, in such Person's own name, to take the action
authorized under Section 5.02(a)(v), 5.02(a)(vi), 5.05, 5.07, 5.10 or 6.01 or
such other provision, and to execute, acknowledge and deliver any document in
connection therewith or to take any other action incidental thereto as the
Person appointed to act under this subsection shall deem appropriate in its
discretion (subject to the provisions of this Mortgage); and the Mortgagor
hereby irrevocably authorizes and directs any other Person to rely and act on
behalf of the foregoing appointment and a certificate of the Person appointed to
act under this subsection that such Person is authorized to act under this
subsection.
SECTION 5.03. WAIVERS BY THE MORTGAGOR. TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW, THE MORTGAGOR SHALL NOT ASSERT, AND HEREBY
IRREVOCABLY WAIVES, ANY RIGHT OR DEFENSE THE MORTGAGOR MAY HAVE UNDER ANY
STATUTE OR RULE OF LAW OR EQUITY NOW OR HEREAFTER IN EFFECT RELATING TO (I)
APPRAISEMENT, VALUATION, HOMESTEAD EXEMPTION, EXTENSION, MORATORIUM, STAY,
STATUTE OF LIMITATIONS, REDEMPTION, MARSHALLING OF THE MORTGAGED PROPERTY OR THE
OTHER ASSETS OF THE MORTGAGOR, SALE OF THE MORTGAGED PROPERTY IN ANY ORDER OR
NOTICE OF DEFICIENCY OR INTENTION TO ACCELERATE ANY SECURED OBLIGATION; (II)
IMPAIRMENT OF ANY RIGHT OF SUBROGATION OR REIMBURSEMENT; (III) ANY REQUIREMENT
THAT AT ANY TIME ANY ACTION MUST BE TAKEN AGAINST ANY OTHER PERSON, ANY PORTION
OF THE MORTGAGED PROPERTY OR ANY OTHER ASSET OF THE MORTGAGOR OR ANY OTHER
PERSON; (IV) ANY PROVISION BARRING OR LIMITING THE RIGHT OF THE BENEFICIARY TO
SELL ANY MORTGAGED PROPERTY AFTER ANY OTHER SALE OF ANY OTHER MORTGAGED PROPERTY
OR ANY OTHER ACTION AGAINST THE MORTGAGOR OR ANY OTHER PERSON; (V) ANY PROVISION
BARRING OR LIMITING THE RECOVERY BY THE BENEFICIARY OF A DEFICIENCY AFTER ANY
SALE OF THE MORTGAGED PROPERTY; OR (VI) THE RIGHT OF THE MORTGAGEE OR THE
BENEFICIARY AS AGENT TO FORECLOSE THIS MORTGAGE IN ITS OWN NAME ON BEHALF OF ALL
OF THE SECURED PARTIES BY JUDICIAL ACTION AS THE REAL PARTY IN INTEREST WITHOUT
THE NECESSITY OF JOINING ANY OTHER SECURED PARTY. NOTHING HEREIN, HOWEVER, SHALL
BE CONSTRUED TO LIMIT ANY RIGHTS, INCLUDING RIGHT TO NOTICE, AFFORDED TO THE
MORTGAGOR UNDER THE LOAN DOCUMENTS.
SECTION 5.04. Jurisdiction and Process. (a) To the extent
permitted under applicable law, in any suit, action or proceeding arising out of
or relating to this Mortgage or any other Collateral Document as it relates to
any Mortgaged Property, the Mortgagor (i) irrevocably consents to the
non-exclusive jurisdiction of any state or federal court sitting in the State in
which the Property is located and irrevocably waives any defense or objection
which it may now or hereafter have to the jurisdiction of such court or the
venue of such court or the convenience of such court as the forum for any such
suit, action or proceeding; and (ii) irrevocably consents to the service of (A)
any process in any such suit, action or proceeding, or (B) any notice relating
to any sale, or the exercise of any other remedy by the Mortgagee hereunder by
mailing a copy of such process or notice by United States registered or
certified mail, postage prepaid, return receipt requested to the Mortgagor at
its address specified in or pursuant to Section 7.03, such service to be
effective when such process or notice is mailed as aforesaid.
(b) Nothing in this Section shall affect the right of the
Mortgagee to bring any suit, action or proceeding arising out of or relating to
this Mortgage or any other Collateral Document in any court having jurisdiction
under the provisions of any other Collateral Document or applicable law or to
serve any process, notice of sale or other notice in any manner permitted by any
other Collateral Document or applicable law.
SECTION 5.05. Sales. Except as otherwise provided herein, to
the fullest extent permitted under applicable law, at the election of the
Mortgagee, the following provisions shall apply to any sale of the Mortgaged
Property hereunder, whether made pursuant to the power of sale hereunder, any
judicial proceeding or any judgment or decree of foreclosure or sale or
otherwise:
(a) The Mortgagee or the court officer (whichever is the
Person conducting any sale) may conduct any number of sales from time
to time. The power of sale hereunder or with respect hereto shall not
be exhausted by any sale as to any part or parcel of the Mortgaged
Property which is not sold, unless and until the Secured Obligations
shall have been paid in full, and shall not be exhausted or impaired by
any sale which is not completed or is defective. Any sale may be as a
whole or in part or parcels and, as provided in Section 5.03, the
Mortgagor has waived its right to direct the order in which the
Mortgaged Property or any part or parcel thereof is sold.
(b) Any sale may be postponed or adjourned by public
announcement at the time and place appointed for such sale or for such
postponed or adjourned sale without further notice.
(c) After each sale, the Person conducting such sale shall
execute and deliver to the purchaser or purchasers at such sale a good
and sufficient instrument or instruments granting, conveying,
assigning, Transferring and delivering all right, title and interest of
the Mortgagor in and to the Mortgaged Property sold and shall receive
the proceeds of such sale and apply the same as provided in Section
5.06. The Mortgagor hereby irrevocably appoints the Person conducting
such sale as the attorney-in-fact of the Mortgagor (with full power to
substitute any other Person in its place as such attorney-in-fact) to
act in the name of the Mortgagor or, at the option of the Person
conducting such sale, in such Person's own name, to make without
warranty by such Person any conveyance, assignment, Transfer or
delivery of the Mortgaged Property sold, and to execute, acknowledge
and deliver any instrument of conveyance, assignment, Transfer or
delivery or other document in connection therewith or to take any other
action incidental thereto, as the Person conducting such sale shall
deem appropriate in its discretion; and the Mortgagor hereby
irrevocably authorizes and directs any other Person to rely and act
upon the foregoing appointment and a certificate of the Person
conducting such sale that such Person is authorized to act hereunder.
Nevertheless, upon the request of such attorney-in-fact the Mortgagor
shall promptly execute, acknowledge and deliver any documentation which
such attorney-in-fact may require for the purpose of ratifying,
confirming or effectuating the powers granted hereby or any such
conveyance, assignment, Transfer or delivery by such attorney-in-fact.
(d) Any statement of fact or other recital made in any
instrument referred to in Section 5.05(c) given by the Person
conducting any sale as to the nonpayment of any Secured Obligation, the
occurrence of any Event of Default, the amount of the Secured
Obligations due and payable, the request to the Mortgagee to sell, the
notice of the time, place and terms of sale and of the Mortgaged
Property to be sold having been duly given, the refusal, failure or
inability of the Mortgagee to act, the appointment of any substitute or
successor agent, any other act or thing having been duly done by the
Mortgagor, the Mortgagee or any other such Person, shall be taken as
conclusive and binding against all other Persons as evidence of the
truth of the facts so stated or recited.
(e) The receipt by the Person conducting any sale of the
purchase money paid at such sale shall be sufficient discharge therefor
to any purchaser of any Mortgaged Property sold, and no such purchaser,
or its representatives, grantees or assigns, after paying such purchase
price and receiving such receipt, shall be bound to see to the
application of such purchase price or any part thereof upon or for any
trust or purpose of this Mortgage or the other Loan Documents, or, in
any manner whatsoever, be answerable for any loss, misapplication or
nonapplication of any such purchase money or be bound to inquire as to
the authorization, necessity, expediency or regularity of such sale.
(f) Subject to mandatory provisions of applicable law, any
sale shall operate to divest all of the estate, right, title, interest,
claim and demand whatsoever, whether at law or in equity, of the
Mortgagor in and to the Mortgaged Property sold, and shall be a
perpetual bar both at law and in equity against the Mortgagor and any
and all Persons claiming such Mortgaged Property or any interest
therein by, through or under the Mortgagor.
(g) At any sale, the Mortgagee may bid for and acquire the
Mortgaged Property sold and, in lieu of paying cash therefor, may make
settlement for the purchase price by causing the Secured Parties to
credit against the Secured Obligations, including the expenses of the
sale and the cost of any enforcement proceeding hereunder, the amount
of the bid made therefor to the extent necessary to satisfy such bid.
(h) If the Mortgagor or any Person claiming by, through or
under the Mortgagor shall transfer or fail to surrender possession of
the Mortgaged Property, after the exercise by the Mortgagee of the
Mortgagee's remedies under Section 5.02(a)(v) or after any sale of the
Mortgaged Property pursuant hereto, then the Mortgagor or such Person
shall be deemed a tenant at sufferance of the purchaser at such sale,
subject to eviction by means of summary process for possession of land,
or subject to any other right or remedy available hereunder or under
applicable law.
(i) Upon any sale, it shall not be necessary for the Person
conducting such sale to have any Mortgaged Property being sold present
or constructively in its possession.
(j) If a sale hereunder shall be commenced by the Mortgagee,
the Mortgagee may at any time before the sale abandon the sale, and may
institute suit for the collection of the Secured Obligations or for the
foreclosure of this Mortgage; or if the Mortgagee shall institute a
suit for collection of the Secured Obligations or the foreclosure of
this Mortgage, the Mortgagee may at any time before the entry of final
judgment in said suit dismiss the same and sell the Mortgaged Property
in accordance with the provisions of this Mortgage.
SECTION 5.06. Proceeds. Except as otherwise provided herein or
required under applicable law, upon being instructed to do so in an Enforcement
Notice, the proceeds of any sale of, or other realization upon, the Mortgaged
Property hereunder, whether made pursuant to the power of sale hereunder, any
judicial proceeding or any judgment or decree of foreclosure or sale or
otherwise, shall be applied and paid as follows:
(a) First: to the payment of all expenses of such sale or
other realization, including compensation for the Person conducting
such sale (which may include the Mortgagee), the cost of title
searches, foreclosure certificates and attorneys' fees and expenses
incurred by such Person, together with interest on any such expenses
paid by such Person at the Post-Default Rate from the date of demand
through the date repaid to such Person;
(b) Second: to the payment of the expenses and other amounts
payable under Sections 4.02 and 5.10, if any;
(c) Third: to the payment of the other Secured Obligations in
the order and priority set forth in Section 8 of the Security
Agreement, until all Secured Obligations shall have been paid in full;
and
(d) Fourth: to pay to the Mortgagor or its successors and
assigns, or as a court of competent jurisdiction may direct, any
surplus then remaining from such proceeds.
SECTION 5.07. Assignment of Leases. (a) Subject to paragraph
(d) below, the assignments of the Leases and the Rents under Granting Clauses VI
and VII are and shall be present, absolute and irrevocable assignments by the
Mortgagor to the Mortgagee and, subject to the license to the Mortgagor under
Section 5.07(b), a Receiver appointed pursuant to Section 5.02(a)(iv) (whichever
is the Person exercising the rights under this Section) shall have the absolute,
immediate and continuing right to collect and receive all Rents now or
hereafter, including during any period of redemption, accruing with respect to
the Property. At the request of the Mortgagee or such Receiver, the Mortgagor
shall promptly execute, acknowledge, deliver, record, register and file any
additional general assignment of the Leases or specific assignment of any Lease
which the Mortgagee or such Receiver may require from time to time (all in form
and substance satisfactory to the Mortgagee or such Receiver) to effectuate,
complete, perfect, continue or preserve the assignments of the Leases and the
Rents under Granting Clauses VI and VII.
(b) The Mortgagor shall have a license granted hereby to
collect and receive all Rents and apply the same subject to the provisions of
the Loan Documents, such license to be terminable by the Mortgagee as provided
in Section 5.07(c).
(c) Upon the occurrence and continuance of an Event of
Default, the Mortgagee or a Receiver appointed pursuant to Section 5.02(a)(iv)
(whichever is the Person exercising the rights under this Section) shall have
the right to terminate the license granted under Section 5.07(b) by notice to
the Mortgagor and to exercise the rights and remedies provided under Section
5.07(a), under Sections 5.02(a)(v) and (vi) or under applicable law. Upon demand
by the Person exercising the rights under this Section, the Mortgagor shall
promptly pay to such Person all security deposits under the Leases and all Rents
allocable to any period after such demand. Subject to Sections 5.02(a)(v) and
(vi) and any applicable requirement of law, any Rents received hereunder by such
Person shall be promptly paid to the Mortgagee, and any Rents received hereunder
by the Mortgagee shall be deposited in the Collateral Account, to be held as
provided in the Credit Agreement, provided that, subject to Sections 5.02(a)(v)
and (vi) and any applicable requirement of law, any security deposits actually
received by such Person shall be promptly paid to the Mortgagee, and any
security deposits actually received by the Mortgagee shall be held, applied and
disbursed as provided in the applicable Leases and applicable law. Once the
Event of Default is remedied, the license granted in Section 5.07(b) shall
automatically be reinstated.
(d) Nothing herein shall be construed to be an assumption by
the Person exercising the rights under this Section, or otherwise to make such
Person liable for the performance, of any of the obligations of the Mortgagor
under the Leases, provided that such Person shall be accountable as provided in
Section 5.07(c) for any Rents or security deposits actually received by such
Person.
SECTION 5.08. Dealing With the Mortgaged Property. Subject to
Section 7.02, the Mortgagee shall have the right to release any portion of the
Mortgaged Property, or grant or consent to the granting of any Lien affecting
any portion of the Mortgaged Property, to or at the request of the Mortgagor,
for such consideration as the Mortgagee may require without, as to the remainder
of the Mortgaged Property, in any way impairing or affecting the Lien or
priority of this Mortgage, or improving the position of any subordinate
lienholder with respect thereto, or the position of any guarantor, endorser,
co-maker or other obligor of the Secured Obligations, except to the extent that
the Secured Obligations shall have been reduced by any actual monetary
consideration received for such release and applied to the Secured Obligations,
and may accept by assignment, pledge or otherwise any other property in place
thereof as the Mortgagee may require without being accountable therefor to any
other lienholder.
SECTION 5.09. Right of Entry. The Mortgagee and the
representatives of the Mortgagee shall have the right, upon being instructed to
do so by the Required Banks (i) without notice, if an Event of Default has
occurred and is continuing, (ii) with simultaneous notice, if any payment or
performance is required in the reasonable opinion of the Mortgagee to preserve
the Mortgagee's rights under this Mortgage or with respect to the Mortgaged
Property, or (iii) after reasonable notice, in all other cases, to enter upon
the Property at reasonable times, and with reasonable frequency, to inspect the
Mortgaged Property or, subject to the provisions hereof, to exercise any right,
power or remedy of the Mortgagee hereunder, provided that any Person so entering
the Property shall not unreasonably interfere with the ordinary conduct of the
Mortgagor's business, and provided further that no such entry on the Property,
for the purpose of performing obligations under Section 5.10 or for any other
purpose, shall be construed to be (x) possession of the Property by such Person
or to constitute such Person as a mortgagee in possession, unless such Person
exercises its right to take possession of the Property under Section 5.02(a)(v),
or (y) a cure of any Default or waiver of any Default or Secured Obligation. The
expense of any inspection pursuant to clause (iii) above shall be borne by the
Mortgagee unless an Event of Default shall have occurred and be continuing at
the time of such inspection, in which case the Mortgagor shall pay, or reimburse
the Mortgagee for, such expense.
SECTION 5.10. Right to Perform Obligations. If the Mortgagor
fails to pay or perform any obligation of the Mortgagor hereunder, the Mortgagee
and the representatives of the Mortgagee shall have the right, upon being
instructed to do so by the Required Banks at any time, to pay or perform such
obligation (i) without notice, if an Event of Default has occurred and is
continuing, (ii) with simultaneous notice, if such payment or performance is
required in the reasonable opinion of the Mortgagee to preserve the Mortgagee's
rights under this Mortgage or with respect to the Mortgaged Property or (iii)
after notice given reasonably in advance to allow the Mortgagor an opportunity
to pay or perform such obligation, provided that the Mortgagor is not contesting
payment or performance in accordance with the terms hereof and further provided
that no such payment or performance shall be construed to be a cure of any
Default or waiver of any Default or Secured Obligation. The Mortgagor shall
reimburse the Mortgagee on demand for the reasonable costs of performing any
such obligations and any amounts not paid on demand shall bear interest, payable
on demand, for each day until paid at the Post-Default Rate for such day.
SECTION 5.11. Concerning the Mortgagee. (a) The provisions of
Article 7 of the Credit Agreement shall inure to the benefit of the Mortgagee in
respect of this Mortgage and shall be binding upon the parties to the Credit
Agreement in such respect. In furtherance and not in derogation of the rights,
privileges and immunities of the Mortgagee therein set forth:
(i) The Mortgagee is authorized to take all such action as is
provided to be taken by it as Mortgagee hereunder and all other action
reasonably incidental thereto. As to any matters not expressly provided
for herein (including the timing and methods of realization upon the
Mortgaged Property) the Mortgagee shall act or refrain from acting in
accordance with written instructions from the Required Banks or, in the
absence of such instructions, in accordance with its discretion.
(ii) The Mortgagee shall not be responsible for the existence,
genuineness or value of any of the Mortgaged Property or for the
validity, perfection, priority or enforceability of the Lien of this
Mortgage on any of the Mortgaged Property, whether impaired by
operation of law or by reason of any action or omission to act on its
part hereunder. The Mortgagee shall have no duty to ascertain or
inquire as to the performance or observance of any of the terms of this
Mortgage by the Mortgagor.
(b) At any time or times, in order to comply with any legal
requirement in any jurisdiction, the Mortgagee may appoint another bank or trust
company or one or more other Persons, either to act as co-agent or co-agents,
jointly with the Mortgagee, or to act as separate agent or agents on behalf of
the Secured Parties with such power and authority as may be necessary for the
effectual operation of the provisions hereof and may be specified in the
instrument of appointment (which may, in the discretion of the Mortgagee,
include provisions for the protection of such co-agent or separate agent similar
to the provisions of this Section 5.11). References to the Mortgagee in Section
5.12 shall be deemed to include any co-agent or separate agent appointed
pursuant to this Section 5.11.
SECTION 5.12. Expenses. The Mortgagor agrees that it will
within fifteen (15) days of demand pay to the Mortgagee (i) the amount of any
taxes which the Mortgagee may have been required to pay by reason of the Lien of
this Mortgage and has failed to pay or to free any of the Mortgaged Property
from any Lien thereon (other than Permitted Liens), (ii) the amount of any and
all reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel and of any other experts, which the Mortgagee may incur
in connection with preserving the value of the Mortgaged Property and the
validity, perfection, rank and value of the Lien of this Mortgage and (iii) the
amount of any and all out-of-pocket expenses, including the fees and
disbursements of counsel and of any other experts, which the Mortgagee may incur
in connection with the collection, sale or other disposition of any of the
Mortgaged Property.
ARTICLE VI
SECURITY AGREEMENT AND FIXTURE FILING
SECTION 6.01. Security Agreement. To the extent that the
Mortgaged Property constitutes or includes tangible or intangible personal
property, including goods or items of personal property which are or are to
become fixtures under applicable law, the Mortgagor hereby grants a security
interest therein and this Mortgage shall also be construed as a pledge and a
security agreement under the Local UCC; and, upon the occurrence and continuance
of an Event of Default, the Mortgagee shall be entitled to exercise with respect
to such tangible or intangible personal property all remedies available under
the Local UCC and all other remedies available under applicable law. Without
limiting the foregoing, any personal property may, at the Mortgagee's option
and, except as otherwise required by applicable law, without the giving of
notice, (i) be sold hereunder, (ii) be sold pursuant to the Local UCC or (iii)
be dealt with by the Mortgagee in any other manner permitted under applicable
law. The Mortgagee may require the Mortgagor to assemble the personal property
and make it available to the Mortgagee at a place to be designated by the
Mortgagee. At any time and from time to time upon the occurrence and continuance
of an Event of Default, the Mortgagee shall be the attorney-in-fact of the
Mortgagor with respect to any and all matters pertaining to the personal
property with full power and authority to give instructions with respect to the
collection and remittance of payments, to endorse checks, to enforce the rights
and remedies of the Mortgagor and to execute on behalf of the Mortgagor and in
Mortgagor's name any instruction, agreement or other writing required therefor.
The Mortgagor acknowledges and agrees that a disposition of the personal
property in accordance with the Mortgagee's rights and remedies in respect to
the Property as heretofore provided is a commercially reasonable disposition
thereof. Notwithstanding the foregoing, to the extent that the Mortgaged
Property includes personal property covered by the Security Agreement the
provisions of the Security Agreement shall govern with respect to such personal
property.
SECTION 6.02. Fixture Filing. To the extent that the Mortgaged
Property includes goods or items of personal property which are or are to become
fixtures under applicable law, and to the extent permitted under applicable law,
the filing of this Mortgage in the real estate records of the county in which
the Mortgaged Property is located shall also operate from the time of filing as
a fixture filing with respect to such Mortgaged Property, and the following
information is applicable for the purpose of such fixture filing, to wit:
(a) Name and Address of the debtor:
--------------------
--------------------
--------------------
(b) Name and Address of the secured party:
▇▇▇▇▇▇ Guaranty Trust Company of New York, as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(c) This document covers goods or items of personal property
which are or are to become fixtures upon the Property.
(d) The name of the record owner of the real estate on which
such fixtures are or are to be located is ____________________
SECTION 6.03. Survival of Security Agreement. Notwithstanding
any release of any or all of the property included in the Mortgaged Property
which is deemed "real property", or any proceedings to foreclose this Mortgage
or its satisfaction of record, the terms hereof shall survive as a security
agreement with respect to the security interest created hereby and referred to
above until the repayment or satisfaction in full of the Secured Obligations.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Revolving Loans. The Secured Obligations secured
by this Mortgage include Loans made and LC Reimbursement Obligations relating to
Letters of Credit issued or extended under the Credit Agreement which are
advanced, paid and readvanced from time to time. Notwithstanding the amount
outstanding at any particular time, this Mortgage secures the total amount of
Secured Obligations. The unpaid balance of the Loans and the unpaid balance of
the LC Reimbursement Obligations may at certain times be, or be reduced to,
zero. A zero balance, by itself, does not affect any Bank's or LC Issuing Bank's
obligation to issue or extend Letters of Credit or to make payments upon draws
under Letters of Credit, or any Bank's obligation to advance Revolving Loans
which are obligatory subject to the conditions stated in the Credit Agreement.
Each of the security interest of the Mortgagee hereunder and the priority of the
Lien of this Mortgage will remain in full force and effect with respect to all
of the Secured Obligations notwithstanding such a zero balance of the Loans or
the LC Reimbursement Obligations, and the Lien of this Mortgage will not be
extinguished until this Mortgage has been terminated pursuant to Section
7.02(a).
SECTION 7.02. Release of Mortgaged Property. (a) This Mortgage
shall cease, terminate and thereafter be of no further force or effect (except
as provided in Section 4.03) upon payment in full of all Secured Obligations,
the expiration of all Letters of Credit issued under the Credit Agreement and
the termination of all Commitments under the Credit Agreement. At any time and
from time to time prior to such termination of this Mortgage, the Mortgagee may
release any of the Mortgaged Property with the consent of the Required Banks,
provided that if such release is in connection with the release of all or
substantially all of the collateral granted to secure the Secured Obligations,
such release shall require the consent of all Banks. In addition, the Mortgagee
shall release any and all Mortgaged Property required in connection with any
transaction, or sale, transfer, assignment or other disposition of the Mortgaged
Property, consummated by the Mortgagor and not prohibited by any Loan Document,
and shall be fully protected in relying on a certificate of an authorized
officer of the Mortgagor to such effect.
(b) Any termination or release under this Section 7.02 shall
be at the Mortgagor's request and expense and either in the statutory form or in
a form reasonably satisfactory to the Mortgagee.
SECTION 7.03. Notices. All notices, requests and other
communications required or permitted to be given under this Mortgage shall be in
writing (including facsimile transmission or similar writing) and shall be given
to the Mortgagor or the Mortgagee as specified in Section 10.01 of the Credit
Agreement. Except as otherwise provided herein, each notice, request or other
communication shall be effective as determined by Section 10.01 of the Credit
Agreement.
SECTION 7.04. Amendments in Writing. No provision of this
Mortgage shall be modified, waived or terminated, and no consent to any
departure by the Mortgagor from any provision of this Mortgage shall be
effective, unless the same shall be by an instrument in writing, signed by the
Mortgagor and the Mortgagee in accordance with Section 10.05 of the Credit
Agreement. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 7.05. Severability. All rights, powers and remedies
provided in this Mortgage may be exercised only to the extent that the exercise
thereof does not violate applicable law, and all the provisions of this Mortgage
are intended to be subject to all mandatory provisions of applicable law and to
be limited to the extent necessary so that they will not render this Mortgage
illegal, invalid, unenforceable or not entitled to be recorded, registered or
filed under applicable law. If any provision of this Mortgage or the application
thereof to any Person or circumstance shall, to any extent, be illegal, invalid
or unenforceable, or cause this Mortgage not to be entitled to be recorded,
registered or filed, the remaining provisions of this Mortgage or the
application of such provision to other Persons or circumstances shall not be
affected thereby, and each provision of this Mortgage shall be valid and be
enforced to the fullest extent permitted under applicable law.
SECTION 7.06. Binding Effect. (a) The provisions of this
Mortgage shall be binding upon and inure to the benefit of each of the parties
hereto and their respective successors and assigns.
(b) To the fullest extent permitted under applicable law, the
provisions of this Mortgage binding upon the Mortgagor shall be deemed to be
covenants which run with the land.
(c) Nothing in this Section shall be construed to permit the
Mortgagor to Transfer or ▇▇▇▇▇ ▇ ▇▇▇▇ upon the Mortgaged Property contrary to
the provisions of the Credit Agreement.
SECTION 7.07. GOVERNING LAW. THIS Mortgage SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH THE PROPERTY
IS LOCATED.
SECTION 7.08. Non-Agricultural Property. The Mortgaged
Property is not used for agricultural or farming purposes.
SECTION 7.09. Statute of Frauds Provision. ORAL AGREEMENTS
OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER APPLICABLE
STATE LAW.
SECTION 7.10. Commercial Purposes. The obligations and
indebtedness secured by this Mortgage were incurred primarily for commercial,
investment or business purposes and not for personal, family or household
purposes.
SECTION 7.11. Counterparts. This Agreement may be signed in
any number of counterparts each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 7.12. Last Dollars Secured. This Mortgage secures only
a portion of the Secured Obligations owing or which may become owing by the
Mortgagor Notwithstanding anything to the contrary contained in the Financing
Documents, the parties agree that any payments or repayments of such Secured
Obligations by the Mortgagor shall be deemed to apply first to the portion of
the Secured Obligations that is not secured hereby, it being the parties' intent
that the portion of the Secured Obligations last remaining unpaid shall be
deemed secured hereby.
SECTION 7.13. Obligations Absolute. The obligations of the
Mortgagor hereunder shall remain in full force and effect without regard to, and
shall not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the
Mortgagor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Mortgage or any other
Financing Document; or (c) any amendment to or modification of any Financing
Document or any security for any of the Obligations; whether or not the
Mortgagor shall have notice or knowledge of any of the foregoing.
SECTION 7.14. Further Assurances. The Mortgagor, at its own
expense, will execute, acknowledge and deliver all such instruments and take all
such action as may be necessary to assure to the Mortgagee the interest in the
Mortgaged Property herein described and the rights intended to be provided to
the Mortgagee herein.
SECTION 7.15. Remedies Cumulative. Each and every right, power
and remedy hereby specifically given to the Mortgagee shall be in addition to
every other right, power and remedy specifically given under this Mortgage or
now or hereafter existing at law or in equity, or by statute and each and every
right, power and remedy whether specifically herein given or otherwise existing
may be exercised from time to time or simultaneously and as often and in such
order as may be deemed expedient by the Mortgagee. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of
one shall not be deemed a waiver of the right to exercise of any other or
others. No delay or omission of the Mortgagee in the exercise of any such right,
power or remedy and no renewal or extension of any of the Obligations shall
impair any such right, power or remedy or shall be construed to be a waiver of
any default or Event of Default or an acquiescence therein. In the event the
Mortgagee shall seek to enforce its rights hereunder and shall be entitled to
judgment, then in such suit the Mortgagee may recover reasonable expenses,
including attorneys' fees, and the amounts thereof shall be included in such
judgment.
SECTION 7.16. Partial Invalidity If any of the provisions of
this Mortgage or the application thereof to any person, party or circumstances
shall to any extent be invalid or unenforceable, the remainder of this Mortgage,
or the application of such provision or provisions to persons, parties or
circumstances other than those as to whom or which it is held invalid or
unenforceable, shall not be affected thereby, and every provision of this
Mortgage shall be valid and enforceable to the fullest extent permitted by law.
SECTION 7.17. Priority. This Mortgage is intended to and shall
be valid and have priority over all subsequent liens and encumbrances, including
statutory liens, excepting solely taxes and assessments levied on the real
estate, to the extent of the maximum amount secured hereby.
SECTION 7.18. Full Recourse. This Mortgage is made with full
recourse to the Mortgagor (including as to all assets of the Mortgagor,
including the Secured Mortgaged Property) and pursuant to and upon the
representations, warranties, covenants and the agreements on the part of the
Mortgagor contained herein, in the other Financing Documents and otherwise in
writing in connection herewith or therewith.
SECTION 7.19. Acknowledgment of Receipt. The Mortgagor
hereby acknowledges receipt of a true copy of this Mortgage.
[SECTION 7.20. Open-End Mortgage. This Mortgage is given to
secure the Mortgagor's obligations under, or in respect of, the Credit Documents
and the Interest Rate Agreements to which the Mortgagor is "party" and shall
secure not only obligations with respect to presently existing indebtedness
under the foregoing documents and agreements but also any and all other
indebtedness now owing or which may hereafter be owing by the Mortgagor to the
Secured Creditors, however incurred, whether interest, discount or otherwise,
and whether the same shall be deferred, accrued or capitalized, including future
advances and re-advances, pursuant to the Credit Agreement, whether such
advances are obligatory or to be made at the option of the Banks, or otherwise,
to the same extent as if such future advances were made on the date of the
execution of this Mortgage. The lien of this Mortgage shall be valid as to all
indebtedness secured hereby, including future advances, from the time of its
filing for record in the recorder's office of the county in which the Mortgaged
Property is located. This Mortgage is intended to and shall be valid and have
priority over all subsequent liens and encumbrances, including statutory liens,
excepting solely taxes and assessments levied on the real estate, to the extent
of the maximum amount secured hereby.]
SECTION 7.21. Leases. Any foreclosure of this Mortgage and any
other transfer of all or any part of the Mortgaged Property in extinguishment of
all or any part of the Obligations may, at the Mortgagee's option, be subject to
any or all leases of all or any part of the Mortgaged Property and the rights of
tenants under such leases. No failure to make any such tenant a defendant in any
foreclosure proceedings or to foreclose or otherwise terminate any such lease
and the rights of any such tenant in connection with any such foreclosure or
transfer shall be, or be asserted to be, a defense or hindrance to any such
foreclosure or transfer or to any proceedings seeking collection of all or any
part of the Obligations (including, without limitation, any deficiency remaining
unpaid after completion of any such foreclose or transfer).
SECTION 7.22. Limitation on Interest. Notwithstanding anything
contained in this Mortgage to the contrary, the Mortgagee shall never be deemed
to have contracted for or be entitled to receive, collect or apply as interest
of the indebtedness secured hereby, any amount in excess of the amount permitted
and calculated at the highest lawful rate, and, in the event the Mortgagee ever
receives, collects or applies as interest any amount in excess of the amount
permitted and calculated at the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the unpaid principal
balance of the indebtedness secured hereby, and, if the principal balance of the
indebtedness secured hereby is paid in full, any remaining excess shall
forthwith be paid to the Mortgagor. In determining whether or not the interest
paid or payable under any specific contingency exceeds the amount of interest
permitted and calculated at the highest lawful rate, the Mortgagor and the
Mortgagee shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payment (other than payments which are expressly
designated as interest payments hereunder) as an expense, fee, or premium,
rather than as interest, (ii) exclude voluntary prepayments and the effect
thereof, and (iii) spread the total amount of interest throughout the entire
contemplated term of the indebtedness and other Obligations secured hereby.
IN WITNESS WHEREOF, the Mortgagor has executed and
delivered this Mortgage as of the day first set forth above.
[MORTGAGOR]
[Seal]
By:_______________________
Name:
Title:
STATE OF )
) ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that
_____________ the person who appeared before me, and said person acknowledged
that he or she signed this instrument, on oath stated that he or she was
authorized to execute the instrument and acknowledged it as the ___________of
[____________________] to be the free and voluntary act of such party for the
uses and purposes mentioned in this instrument.
DATED: _____________________________
[Notary Signature]
-----------------------------
[Type or Print Name of Notary]
NOTARY PUBLIC for the State of
________________, residing
at ___________________________
My appointment expires:
------------------------------
EXHIBIT A
DESCRIPTION OF THE LAND
EXHIBIT B
Permitted Encumbrances
TABLE OF CONTENTS*
Page
----
RECITALS.....................................................................2
GRANTING CLAUSES.............................................................3
GRANTING CLAUSE I. Land......................................................3
GRANTING CLAUSE II. Improvements.............................................3
GRANTING CLAUSE III. Equipment...............................................4
GRANTING CLAUSE IV. Appurtenant Rights.......................................4
GRANTING CLAUSE V. Agreements................................................5
GRANTING CLAUSE VI. Leases...................................................5
GRANTING CLAUSE VII. Rents, Issues and Profits...............................5
GRANTING CLAUSE VIII. Permits................................................6
GRANTING CLAUSE IX. Proceeds and Awards......................................6
GRANTING CLAUSE X. Books and Records.........................................6
GRANTING CLAUSE XI. Other Intangible Property................................6
GRANTING CLAUSE XII. Additional Property.....................................6
GRANTING CLAUSE XIII. Refunds, Credits or Reimbursements.....................7
ARTICLE I
DEFINITIONS AND INTERPRETATION...............................................7
SECTION 1.01. Definitions................................................7
SECTION 1.02. Interpretation............................................11
SECTION 1.03. Resolution of Drafting Ambiguities........................12
ARTICLE II
CERTAIN WARRANTIES AND COVENANTS OF THE MORTGAGOR...........................12
SECTION 2.01. Title.....................................................12
SECTION 2.02. Secured Obligations.......................................13
SECTION 2.03. Impositions...............................................13
SECTION 2.04. Legal and Insurance Requirements..........................14
SECTION 2.05. Status of the Property....................................14
SECTION 2.06. Permitted Contests........................................15
SECTION 2.07. Liens.....................................................15
SECTION 2.08. Transfer..................................................15
SECTION 2.09. Agreements................................................16
SECTION 2.10. Maintenance, Repair, Alterations, Etc.....................16
SECTION 2.11. Actions Affecting this Mortgaged Property.................16
SECTION 2.12. Environmental Protection Matters..........................16
SECTION 2.13. The Credit Agreement and The Security Agreement...........16
SECTION 2.14. Brokers...................................................17
SECTION 2.15. Recordation of Mortgage and Financing Statements..........17
SECTION 2.16. Changes to Mortgage or Related Loan Documents.............18
ARTICLE III
INSURANCE, CASUALTY AND CONDEMNATION........................................18
SECTION 3.01. Insurance.................................................18
SECTION 3.02. Casualty and Condemnation.................................19
SECTION 3.03. Insurance Claims and Proceeds; Condemnation Awards........20
ARTICLE IV
CERTAIN SECURED OBLIGATIONS.................................................20
SECTION 4.01. Interest After Default....................................20
SECTION 4.02. Changes in the Laws Regarding Taxation....................21
SECTION 4.03. Indemnification...........................................21
ARTICLE V
DEFAULTS, REMEDIES AND RIGHTS...............................................22
SECTION 5.01. Events of Default.........................................22
SECTION 5.02. Remedies..................................................22
SECTION 5.03. WAIVERS BY THE MORTGAGOR..................................26
SECTION 5.04. Jurisdiction and Process..................................27
SECTION 5.05. Sales.....................................................27
SECTION 5.06. Proceeds..................................................30
SECTION 5.07. Assignment of Leases......................................31
SECTION 5.08. Dealing With the Mortgaged Property.......................32
SECTION 5.09. Right of Entry............................................32
SECTION 5.10. Right to Perform Obligations..............................32
SECTION 5.11. Concerning the Mortgagee..................................33
SECTION 5.12. Expenses..................................................33
ARTICLE VI
SECURITY AGREEMENT AND FIXTURE FILING.......................................34
SECTION 6.01. Security Agreement........................................34
SECTION 6.02. Fixture Filing............................................34
SECTION 6.03. Survival of Security Agreement............................35
ARTICLE VII
MISCELLANEOUS...............................................................36
SECTION 7.01. Revolving Loans...........................................36
SECTION 7.02. Release of Mortgaged Property.............................36
SECTION 7.03. Notices...................................................36
SECTION 7.04 Amendments in Writng......................................36
SECTION 7.05. Severability..............................................37
SECTION 7.06. Binding Effect............................................37
SECTION 7.07. GOVERNING LAW.............................................37
SECTION 7.08. Non-Agricultural Property.................................37
SECTION 7.09. Statute of Frauds Provision...............................37
SECTION 7.10. Commercial Purposes.......................................38
SECTION 7.11. Counterparts..............................................38
SECTION 7.12. Last Dollars Secured......................................38
SECTION 7.13. Obligations Absolute......................................38
SECTION 7.14. Further Assurances........................................38
SECTION 7.15. Remedies Cumulative.......................................38
SECTION 7.16. Partial Invalidity........................................39
SECTION 7.17. Priority..................................................39
SECTION 7.18. Full Recourse.............................................39
SECTION 7.19. Acknowledgement of Receipt................................39
[SECTION 7.20. Open-End Mortgage.........................................39]
SECTION 7.21. Leases....................................................39
SECTION 7.22. Limitations on Interest...................................40
Exhibit A - Description of the Land
Exhibit B - Permitted Encumbrances