EXHIBIT 4.0
$1,440,000,000
CREDIT AGREEMENT
Dated as of
March 8, 1995,
among
FORT HOWARD CORPORATION,
THE LENDERS IDENTIFIED HEREIN
and
BANKERS TRUST COMPANY,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
and
CHEMICAL BANK,
as Arrangers,
and
BANKERS TRUST COMPANY,
as Administrative Agent
FORT HOWARD CORPORATION
CREDIT AGREEMENT
dated as of March 8, 1995
TABLE OF CONTENTS
Heading Page
INTRODUCTION................................ 1
RECITALS.................................... 1
ARTICLE I DEFINITIONS................................. 2
Section 1.1 Certain Defined Terms....................... 2
Section 1.2 Accounting Terms............................ 61
Section 1.3 Other Definitional Provisions;
Anniversaries............................ 61
Section 1.4 Adjustment for Special Reserve.............. 61
Section 1.5 Currency Equivalent Generally............... 61
ARTICLE II COMMITMENTS AND LOANS; NOTES................ 62
Section 2.1 Term Loans and Term Notes................... 62
2.1.1 Term Loan Commitments....................... 63
2.1.2 Notice of Borrowing......................... 63
2.1.3 Disbursement of Funds....................... 64
2.1.4 Term Notes.................................. 65
2.1.5 Scheduled Payments of Term Loans............ 65
Section 2.2 Letters of Credit........................... 65
2.2.1 Letters of Credit........................... 65
2.2.2 Request for Issuance........................ 67
2.2.3 Determination of Fronting Bank.............. 68
2.2.4 Payment of Amounts Drawn Under Letters
of Credit................................ 69
2.2.5 Payment by the Lenders...................... 70
2.2.6 Compensation................................ 71
2.2.7 Obligations Absolute........................ 73
2.2.8 Additional Payments......................... 73
2.2.9 Indemnification; Nature of Fronting
Bank's Duties............................ 75
2.2.10 Computation of Interest..................... 76
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Section 2.3 Revolving Loans and Revolving Notes......... 77
2.3.1 Revolving Loan Commitments.................. 77
2.3.2 Notice of Borrowing......................... 78
2.3.3 Disbursement of Funds....................... 79
2.3.4 Revolving Notes............................. 80
Section 2.4 Total Loan Commitments; Limitations on
Outstanding Loan Amounts................. 80
Section 2.5 Interest on the Loans....................... 80
2.5.1 Rate of Interest............................ 80
2.5.2 Interest Periods............................ 83
2.5.3 Interest Payments........................... 85
2.5.4 Conversion or Continuation.................. 85
2.5.5 Post-Maturity Interest...................... 86
2.5.6 Computation of Interest..................... 87
Section 2.6 Commissions................................. 87
2.6.1 Commitment Commissions...................... 87
2.6.2 Bankers and Arrangers Commissions........... 87
2.6.3 No Refund of Fees........................... 87
Section 2.7 Prepayments and Payments; Reductions in
Commitments.............................. 88
2.7.1 Voluntary Prepayments....................... 88
2.7.2 Mandatory Prepayments....................... 88
2.7.3 Company's Mandatory Prepayment
Obligation; Application of
Prepayments.............................. 91
2.7.4 Manner and Time of Payment.................. 94
2.7.5 Apportionment of Payments................... 94
2.7.6 Payments on Non-Business Days............... 95
2.7.7 Payment Accounts; Notation of Payment...... 95
2.7.8 Voluntary Reductions of Swing Line
Commitment and Revolving Loan
Commitments.............................. 96
2.7.9 Mandatory Reductions of Revolvin Loan
Commitments and Swing Line Commitment.... 96
Section 2.8 Use of Proceeds............................. 97
2.8.1 Term Loans.................................. 97
2.8.2 Revolving Loans............................. 97
2.8.3 Swing Line Loans............................ 97
2.8.4 Margin Regulations.......................... 98
Section 2.9 Special Provisions Governing Adjusted
LIBOR Loans.............................. 98
2.9.1 Determination of Interest Rate.............. 98
2.9.2 Increased Costs............................. 98
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2.9.3 Required Termination and Prepayment......... 100
2.9.4 Options of Company.......................... 100
2.9.5 Compensation................................ 101
2.9.6 Quotation of LIBOR.......................... 101
2.9.7 Taxes....................................... 102
2.9.8 Booking of Adjusted LIBOR Loans............. 106
2.9.9 Assumptions Concerning Funding of
Adjusted LIBOR Loans..................... 106
2.9.10 Adjusted LIBOR Loans After an Event of
Default.................................. 106
2.9.11 Affected Lender's Obligation to
Mitigate................................. 107
Section 2.10 Capital Requirements........................ 107
Section 2.11 Replacement Rights of Company............... 108
Section 2.12 Swing Line Loans and Swing Line Notes....... 108
2.12.1 Swing Line Loans............................ 108
2.12.2 Notice of Borrowing......................... 109
2.12.3 Disbursement of Funds....................... 110
2.12.4 Swing Line Note............................. 110
2.12.5 Purchase of Swing Line Loans................ 110
ARTICLE III CONDITIONS TO LOANS AND LETTERS OF
CREDIT................................... 111
Section 3.1 Conditions to Loans Made on the Closing
Date.................................... 111
3.1.1 ........................................... 111
3.1.2 ........................................... 111
3.1.3 ........................................... 112
3.1.4 ........................................... 113
3.1.5 ........................................... 115
3.1.6 ........................................... 116
3.1.7 ........................................... 116
3.1.8 ........................................... 116
3.1.9 ........................................... 117
3.1.10 ........................................... 117
3.1.11 ........................................... 117
3.1.12 ........................................... 117
3.1.13 ........................................... 117
Section 3.2 Conditions to Loans........................ 118
3.2.1 ........................................... 118
3.2.2 ........................................... 118
3.2.3 ........................................... 119
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Section 3.3 Conditions to Tranche A Term Loans and
Certain Revolving Loans on the
Deferred Funding Date................... 119
3.3.1 ........................................... 120
3.3.2 ........................................... 120
3.3.3 ........................................... 120
Section 3.4 Conditions to Initial Revolving Loans
and Swing Line Loans.................... 120
3.4.1 ........................................... 120
3.4.2 ........................................... 120
3.4.3 ........................................... 120
Section 3.5 Conditions to All Letters of Credit........ 120
3.5.1 ........................................... 121
3.5.2 ........................................... 121
3.5.3 ........................................... 121
ARTICLE IV REPRESENTATIONS AND WARRANTIES............ 121
Section 4.1 Organization, Powers, Good Standing,
Business and Subsidiaries............... 121
4.1.1 Organization and Powers.................... 121
4.1.2 Good Standing.............................. 122
4.1.3 Conduct of Business........................ 122
4.1.4 Subsidiaries............................... 122
Section 4.2 Authorization of Borrowing, etc............ 122
4.2.1 Authorization of Borrowing................. 122
4.2.2 No Conflict................................ 122
4.2.3 Governmental Consents...................... 123
4.2.4 Binding Obligation......................... 123
4.2.5 Valid Issuance of Common Stock............. 124
Section 4.3 Financial Condition........................ 124
Section 4.4 No Adverse Material Change; No Stock
Payments................................ 124
Section 4.5 Title to Properties; Liens................. 124
Section 4.6 Litigation; Adverse Facts.................. 125
Section 4.7 Payment of Taxes........................... 126
Section 4.8 Performance of Agreements.................. 126
Section 4.9 Governmental Regulation.................... 126
Section 4.10 Securities Activities...................... 126
Section 4.11 Employee Benefit Plans..................... 127
4.11.1 ........................................... 127
4.11.2 ........................................... 127
4.11.3 ........................................... 127
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4.11.4 ........................................... 127
4.11.5 ........................................... 127
4.11.6 ........................................... 127
Section 4.12 Certain Fees............................... 127
Section 4.13 Disclosure................................. 128
Section 4.14 Patents, Trademarks, etc................... 129
Section 4.15 Environmental Protection................... 130
4.15.1 ........................................... 130
4.15.2 ........................................... 130
4.15.3 ........................................... 130
4.15.4 ........................................... 130
Section 4.16 Security Interests......................... 131
Section 4.17 IDA and Certain Documents.................. 131
Section 4.18 Solvency................................... 132
4.18.1 ........................................... 132
4.18.2 ........................................... 132
ARTICLE V AFFIRMATIVE COVENANTS..................... 132
Section 5.1 Financial Statements and Other Reports.... 133
Section 5.2 Corporate Existence, etc................... 139
Section 5.3 Payment of Taxes and Claims; Tax
Consolidation........................... 139
5.3.1 ........................................... 139
5.3.2 ........................................... 139
Section 5.4 Maintenance of Properties; Insurance....... 140
Section 5.5 Inspection................................. 140
Section 5.6 No Further Negative Pledges................ 141
Section 5.7 Compliance with Laws, etc.................. 141
Section 5.8 Interest Rate Agreements................... 142
Section 5.9 Lender Meeting............................. 142
Section 5.10 Security Interests......................... 142
5.10.1 ........................................... 142
5.10.2 ........................................... 142
Section 5.11 Future Guarantor Subsidiaries and
Additional Pledge Agreements; Certain
Future Acquisitions of Material
Assets.................................. 143
5.11.1 ........................................... 143
5.11.2 Grant of Security Interest in Material
Assets.................................. 143
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Heading Page
5.11.3 Limitations on Pledging of Shares and
other Assets of Certain Foreign
Subsidiaries and Delivery of Certain
Guarantees............................. 145
5.11.4 .......................................... 146
5.11.5 .......................................... 146
5.11.6 .......................................... 147
5.11.7 .......................................... 147
Section 5.12 Expansion Projects........................ 147
5.12.1 Mill Expansion Transactions............... 147
5.12.2 Greenfield Expansion Projects............. 152
Section 5.13 Certain Dispositions of Collateral........ 153
Section 5.14 Georgia Mill Lease and Mortgage........... 155
5.14.1 .......................................... 155
5.14.2 .......................................... 156
5.14.3 .......................................... 156
5.14.4 .......................................... 157
Section 5.15 Transfer of Permits and Licenses.......... 157
Section 5.16 Recapitalization.......................... 157
Section 5.17 Green Bay Sludge Boiler................... 157
5.17.1 .......................................... 157
5.17.2 .......................................... 157
ARTICLE VI NEGATIVE COVENANTS........................ 158
Section 6.1 Indebtedness.............................. 158
Section 6.2 Liens..................................... 161
Section 6.3 Investments; Joint Ventures............... 164
Section 6.4 Contingent Obligations.................... 168
Section 6.5 Restricted Junior Payments................ 170
Section 6.6 Financial Covenants....................... 171
6.6.1 Interest Coverage Ratio................... 171
6.6.2 Maximum Leverage Ratio.................... 172
Section 6.7 Restriction on Fundamental Changes........ 172
6.7.1 .......................................... 172
6.7.2 .......................................... 172
6.7.3 .......................................... 174
6.7.4 .......................................... 174
6.7.5 .......................................... 174
6.7.6 .......................................... 174
6.7.7 .......................................... 174
Section 6.8 ERISA..................................... 174
6.8.1 .......................................... 175
6.8.2 .......................................... 175
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Heading Page
6.8.3 ......................................... 175
6.8.4 ......................................... 175
Section 6.9 Restriction on Leases.................... 175
Section 6.10 Sales and Leasebacks..................... 176
Section 6.11 Sale or Discount of Receivables;
Receivables Transactions.............. 176
6.11.1 ......................................... 176
6.11.2 ......................................... 177
6.11.3 ......................................... 177
Section 6.12 Transactions with Shareholders and
Affiliates............................ 177
Section 6.13 Disposal of Subsidiary Stock............. 177
6.13.1 ......................................... 178
6.13.2 ......................................... 178
Section 6.14 Limitation on Capital Expenditur......... 178
6.14.1 ......................................... 178
6.14.2 ......................................... 178
6.14.3 ......................................... 178
6.14.4 ......................................... 179
6.14.5 ......................................... 180
6.14.6 ......................................... 180
Section 6.15 Conduct of Business...................... 180
Section 6.16 Amendments or Waivers of Certain
Documents; Prepayments of
Indebtedness.......................... 181
6.16.1 ......................................... 181
6.16.2 ......................................... 181
6.16.3 ......................................... 181
6.16.4 ......................................... 182
6.16.5 ......................................... 182
6.16.6 ......................................... 182
6.16.7 ......................................... 183
6.16.8 ......................................... 183
Section 6.17 Payment of Cash Interest on
Subordinated Debt..................... 183
ARTICLE VII EVENTS OF DEFAULT........................ 184
Section 7.1 Failure To Make Payments When Due........ 184
Section 7.2 Default in Other Agreements.............. 184
Section 7.3 Breach of Certain Covenants.............. 185
Section 7.4 Breach of Warranty....................... 185
Section 7.5 Other Defaults Under Agreement or Loan
Document.............................. 185
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Heading Page
Section 7.6 Involuntary Bankruptcy; Appointment of
Receiver, etc........................... 185
7.6.1 ........................................... 185
7.6.2 ........................................... 185
Section 7.7 Voluntary Bankruptcy; Appointment of
Receiver, etc........................... 186
Section 7.8 Judgments and Attachments.................. 186
Section 7.9 Dissolution................................ 187
Section 7.10 Unfunded ERISA Liabilities................. 187
7.10.1 ........................................... 187
7.10.2 ........................................... 187
7.10.3 ........................................... 187
7.10.4 ........................................... 187
7.10.5 ........................................... 187
Section 7.11 Withdrawal Liability Under
Multiemployer Plan...................... 187
Section 7.12 Invalidity of Guarantees................... 188
Section 7.13 Failure of Security........................ 188
Section 7.14 Change in Control.......................... 188
ARTICLE VIII THE ADMINISTRATIVE AGENT.................. 190
Section 8.1 Appointment............................... 190
Section 8.2 Powers; General Immunity.................. 190
8.2.1 Duties Specified.......................... 190
8.2.2 No Responsibility for Certain Matters..... 191
8.2.3 Exculpatory Provisions.................... 191
8.2.4 Administrative Agent Entitled to Act as
Lender................................. 192
Section 8.3 Representations and Warranties; No
Responsibility for Appraisal of
Creditworthiness....................... 192
Section 8.4 Right to Indemnity........................ 193
Section 8.5 Registered Holder of Note Treated as
Owner.................................. 193
Section 8.6 Resignation by Administrative Agent....... 193
8.6.1 .......................................... 193
8.6.2 .......................................... 193
8.6.3 .......................................... 194
8.6.4 .......................................... 194
Section 8.7 Guarantor Subsidiary Guarantee and
Collateral Documents................... 194
Section 8.8 Successor Administrative Agent............ 194
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Heading Page
ARTICLE IX MISCELLANEOUS............................ 194
Section 9.1 Successors and Assigns; Participations.... 195
9.1.1 .......................................... 195
9.1.2 .......................................... 195
9.1.3 .......................................... 197
9.1.4 .......................................... 198
9.1.5 .......................................... 199
Section 9.2 Expenses.................................. 200
Section 9.3 Indemnity................................. 200
Section 9.4 Set Off................................... 201
Section 9.5 Ratable Sharing........................... 202
9.5.1 .......................................... 202
9.5.2 .......................................... 203
Section 9.6 Amendments and Waivers.................... 203
Section 9.7 Independence of Covenants................. 205
Section 9.8 Change in Accounting Principles; Fiscal
Year or Tax Laws....................... 205
Section 9.9 Notices................................... 206
Section 9.10 Survival of Warranties and Certain
Agreements............................. 206
Section 9.11 Failure or Indulgence Not Waiver;
Remedies Cumulative.................... 206
Section 9.12 Severability.............................. 207
Section 9.13 Obligations Several; Independent Nature
of the Lenders' Rights................. 207
Section 9.14 Headings.................................. 207
Section 9.15 Applicable Law............................ 207
Section 9.16 Consent to Jurisdiction and Service of
Process................................ 207
Section 9.17 Confidentiality........................... 208
Section 9.18 Counterparts; Effectiveness............... 209
Section 9.19 Determinations Pursuant to Collateral
Documents.............................. 209
Section 9.20 Certain Obligations of Company............ 209
Section 9.21 Waiver of Jury Trial...................... 209
Section 9.22 Defaulting Lenders........................ 210
9.22.1 .......................................... 210
9.22.2 .......................................... 210
9.22.3 .......................................... 211
Section 9.23 Lenders' ERISA Matters.................... 211
9.23.1 Lenders' Representations and Warranties... 211
9.23.2 General Account Assets.................... 212
9.23.3 Representations of Transferees............ 212
9.23.4 Additional ERISA Representations.......... 213
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SIGNATURE PAGES.................................................. 214
SCHEDULES
A LOAN PARTIES AND SUBSIDIARIES
B LENDERS' COMMITMENTS, PRO RATA SHARES AND FUNDING PERCENTAGES
C EXISTING INDEBTEDNESS
D EXISTING LIENS
E EXISTING INVESTMENTS
F CREDIT FACILITIES TO BE TERMINATED ON THE CLOSING DATE
G CONTINGENT OBLIGATIONS
H LEASEHOLD MORTGAGEE PROVISIONS
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF TRANCHE A TERM NOTE
IV FORM OF REVOLVING NOTE
V FORM OF TRANCHE B TERM NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF SWING LINE NOTE
VIII FORM OF OPINION OF SHEARMAN & STERLING, COUNSEL TO FORT
HOWARD
IX-A FORM OF OPINION OF JAMES W. NELLEN, II, ESQ., COUNSEL TO FORT
HOWARD
IX-B FORMS OF OPINION OF LOCAL COUNSEL TO FORT HOWARD (REAL
PROPERTY)
IX-C FORMS OF OPINION OF LOCAL COUNSEL TO FORT HOWARD (PERSONAL
PROPERTY)
IX-D FORM OF OPINION OF MICHAEL, BEST & FRIEDRICH (INTELLECTUAL
PROPERTY)
X FORM OF OPINION OF CAHILL GORDON & REINDEL
XI FORM OF OFFICER'S CLOSING CERTIFICATE
XII FORM OF IDA ESTOPPEL
XIII FORM OF GUARANTOR SUBSIDIARY GUARANTEE
XIV-A FORM OF COMPANY RECEIVABLE/INVENTORY PLEDGE AGREEMENT
XIV-B FORM OF GUARANTOR SUBSIDIARY RECEIVABLE/INVENTORY PLEDGE
AGREEMENT
XV FORM OF COMPANY STOCK PLEDGE AGREEMENT
XVI FORM OF SPECIAL FUNDING PROCEDURES LETTER
XVII FORM OF INTELLECTUAL PROPERTY PLEDGE AGREEMENT
XVIII FORM OF REGISTERED TRANSFER SUPPLEMENT
XIX-A(i) FORM OF MORTGAGE - WISCONSIN
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XIX-A(ii) FORM OF MILL MORTGAGE - WISCONSIN
XIX-B(i) FORM OF MILL MORTGAGE - OKLAHOMA
XIX-B(ii) FORM OF MORTGAGE - OKLAHOMA
XIX-C(i) FORM OF GEORGIA MILL DEED TO SECURE DEBT
XIX-C(ii) FORM OF GEORGIA DEED TO SECURE DEBT
XX FORM OF LETTER ESCROW AND SECURITY AGREEMENT
XXI FORM OF OFFICER'S FUNDING DATE CERTIFICATE
XXII FORM OF OFFICER'S SECTION 5.1(iv) CERTIFICATE
XXIII FORM OF OFFICER'S SECTION 5.1(xiv) CERTIFICATE
XXIV FORM OF EXPANSION INTERCREDITOR AGREEMENT
XXV NONDISTURBANCE, CURE RIGHTS AND PURCHASE
OPTION AGREEMENT, DATED AS OF OCTOBER 20, 1989
XXVI CURE RIGHTS AND PURCHASE OPTION AGREEMENT,
DATED AS OF OCTOBER 20, 1989
XXVII RECEIVABLES TERM SHEET
XXVIII FORM OF STATUS CERTIFICATE
XXIX FORM OF COLLATERAL TRUST AGREEMENT
XXX FAIR VALUE DETERMINATION PROCEDURES
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of March 8, 1995, by and among FORT
HOWARD CORPORATION, a Delaware corporation (the "Company"), THE PARTIES
IDENTIFIED AS LENDERS ON THE SIGNATURE PAGES HEREOF (each, together with
its successors and assigns, a "Lender"), BANKERS TRUST COMPANY ("Bankers"),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOA") and CHEMICAL
BANK, as Arrangers (each (exclusive of any assignee or successor), an
"Arranger"), and BANKERS TRUST COMPANY, as administrative agent for the
Lenders (in such capacity and together with its successors in such
capacity, the "Administrative Agent").
R E C I T A L S :
A. The parties hereto desire to provide for, among other
things, (i) the Company to borrow on a term basis Tranche A Term Loans (as
hereinafter defined; other capitalized terms used in these Recitals having
the meanings set forth in Section 1.1 hereof) in an aggregate principal
amount not to exceed $810,000,000, (ii) the Company to borrow on a term
basis Tranche B Term Loans in an aggregate principal amount not to exceed
$330,000,000, (iii) the Company to borrow on a revolving basis Swing Line
Loans in an aggregate principal amount at any time outstanding not to
exceed $25,000,000, (iv) one or more Fronting Banks to issue letters of
credit, on the terms and subject to the conditions set forth in this
Agreement, in an aggregate face amount at any time outstanding not in
excess of $50,000,000 and (v) the Company to borrow on a revolving basis,
at any time and from time to time prior to the Revolving Credit Maturity
Date Revolving Loans, in an aggregate principal amount at any time
outstanding not to exceed $300,000,000 minus the sum of the aggregate
principal amount of the Swing Line Loans outstanding at such time and the
Letters of Credit Usage at such time.
B. The Lenders desire that the Obligations be secured by
(i) a security interest in certain Inventory and a junior security interest
in certain Receivables in each case owned by the Company and certain of its
Subsidiaries, (ii) a security interest in certain Intellectual Property
owned by the Company, (iii) a security interest in stock of certain
Subsidiaries of the Company, and (iv) a Mortgage of each of the Existing
Mills and certain other property.
C. From time to time hereafter, one or more of the Lenders
and the Company may be parties to a Qualified Interest
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Rate Agreement or a Qualified Currency Agreement and the parties hereto
intend that the obligations of the Company pursuant thereto (to the extent
not in excess of $200,000,000) be secured on an equal and ratable basis
with the Obligations.
A G R E E M E N T :
The Company, the Lenders, the Administrative Agent and the
Arrangers agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. The following terms used
in this Agreement shall have the following meanings:
"ABR Borrowing" means a Borrowing comprised of ABR Loans.
"ABR Loan" means any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Borrowing" means a Borrowing comprised of ABR
Revolving Loans.
"ABR Revolving Loan" means any Revolving Loan bearing interest
at a rate determined by reference to the Alternate Base Rate in accordance
with the provisions of subsection 2.5.1.
"ABR Spread" means (A) with respect to Tranche A Term Loans and
Revolving Loans, the percent per annum from time to time in effect pursuant
to paragraph (d) of subsection 2.5.1, and (B) with respect to Tranche B
Term Loans, 2% per annum.
"ABR Term Borrowing" means a Borrowing comprised of ABR Term
Loans.
"ABR Term Loan" means any Term Loan bearing interest at a rate
determined by reference to ABR in accordance with the provisions of
subsection 2.5.1.
"Accepting Tranche B Lenders" has the meaning assigned to that
term in paragraph (c) of subsection 2.7.3.
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"A Credit Exposure Amount" has the meaning assigned to that
term in the definition of "Credit Exposure Amount."
"Additional Collateral Documents" has the meaning assigned to
that term in paragraph (a) of subsection 5.11.2.
"Additional Georgia Mortgage" has the meaning assigned to that
term in subsection 5.14.1.
"Adjusted Consolidated Net Income" means, for any period,
Consolidated Net Income during such period, plus (minus) the amount of
depreciation, depletion, amortization of intangibles, deferred taxes,
accreted and zero coupon bond interest and other non-cash expenses
(income), losses (gains) or charges (credits) that, pursuant to GAAP, were
deducted (added) in determining such Consolidated Net Income.
"Adjusted LIBOR" means, for any Interest Rate Determination
Date, the rate per annum (rounded upward to the next higher one hundredth
of one percent) obtained by dividing (A) LIBOR for such Interest Rate
Determination Date by (B) a percentage equal to 100% minus the stated
maximum rate, as of such Interest Rate Determination Date, of all reserves
required to be maintained against "Eurocurrency Liabilities" as specified
in Regulation D (or against any other category of liabilities specified in
Regulation D which includes deposits by reference to which the interest
rate on Adjusted LIBOR Loans is determined or any category of extensions of
credit or other assets specified in Regulation D which includes loans by a
non-United States office of any Lender to United States residents).
"Adjusted LIBOR Borrowing" means a Borrowing comprised of
Adjusted LIBOR Loans.
"Adjusted LIBOR Loan" means any Adjusted LIBOR Term Loan or
Adjusted LIBOR Revolving Loan.
"Adjusted LIBOR Loans" means Loans bearing interest at rates
determined by reference to Adjusted LIBOR as provided in subsection 2.5.1.
"Adjusted LIBOR Revolving Borrowing" means a Borrowing
comprised of Adjusted LIBOR Revolving Loans.
"Adjusted LIBOR Revolving Loan" means any Revolving Loan
bearing interest at a rate determined by reference to Adjusted LIBOR in
accordance with the provisions of subsection 2.5.1.
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"Adjusted LIBOR Term Borrowing" means a Borrowing comprised of
Adjusted LIBOR Term Loans.
"Adjusted LIBOR Term Loan" means any Term Loan bearing interest
at a rate determined by reference to Adjusted LIBOR in accordance with the
provisions of subsection 2.5.1.
"Adjusted Revolving Loan Commitments" means at any time the
aggregate of the Revolving Loan Commitments of all Lenders less the sum of
the Defaulting Lender Deduction Amounts of all Defaulting Lenders.
"Adjusted Revolving Loan Percentage" means (A) at a time when
no Lender Default exists, for each Lender its percentage determined by
dividing such Lender's Revolving Loan Commitment at such time by the
aggregate amount of all Revolving Loan Commitments at such time and (B) at
a time when a Lender Default exists (1) for each Lender that is a
Defaulting Lender, zero and (2) for each Lender that is a Non-Defaulting
Lender, the percentage determined by dividing such Lender's Revolving Loan
Commitment at such time by the aggregate Revolving Loan Commitments of all
Lenders that are not Defaulting Lenders at such time, it being understood
that all references herein to Revolving Loan Commitments at a time when the
Total Revolving Loan Commitment has been terminated shall be references to
the Revolving Loan Commitments in effect immediately prior to such
termination; provided, that (x) no Lender's Adjusted Revolving Loan
Percentage shall change upon the occurrence of a Lender Default from that
in effect immediately prior to such Lender Default if, after giving effect
to such Lender Default, and any repayment of Revolving Loans and Swing Line
Loans at such time pursuant to paragraph (c) of subsection 2.7.2 or
otherwise, the Total Utilization of Revolving Loan Commitments exceeds the
Adjusted Revolving Loan Commitments (after giving effect to such Lender
Default), and (y) the changes to the Adjusted Revolving Loan Percentage
that would have become effective upon the occurrence of a Lender Default
but that did not become effective as a result of the preceding subclause
(x) shall become effective on the first date after the occurrence of the
relevant Lender Default on which the Total Utilization of Revolving Loan
Commitments is equal to or less than the Adjusted Revolving Loan
Commitments (after giving effect to such Lender Default).
"Adjusted Working Capital" means, at any time, Consolidated
Current Assets minus Consolidated Current Liabilities at such time.
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"Administrative Agent" has the meaning assigned to that term in
the introduction to this Agreement.
"Affected Lender" means any Lender affected by any of the
events described in subsection 2.9.2 or subsection 2.9.3.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with such Person. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled
by" and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities or otherwise. No Lender or parent or
Subsidiary of any Lender shall be treated as an Affiliate of the Company
solely by virtue of its being a Lender or a parent or Subsidiary of a
Lender.
"Agreement" means this credit agreement, as from time to time
in effect.
"ALTA Survey" means a survey of any Real Property (and all
improvements thereon): (A) prepared by a surveyor or engineer licensed to
perform surveys in the state where such Real Property is located, (B) dated
(or redated) not earlier than six months prior to the date of delivery
thereof (unless there shall have occurred within six months prior to such
date of delivery any exterior construction on the site of such Real
Property, in which event such survey shall be dated (or redated) after the
completion of such construction or if such construction shall not have been
completed as of such date of delivery, not earlier than 20 days prior to
such date of delivery, (C) certified by such surveyor (in a manner
reasonably acceptable to the Requisite Lenders) to the Administrative
Agent, as agent for the Lenders, and (D) complying in all respects with the
minimum detail requirements of the American Land Title Association as such
requirements are in effect on the later of the date of preparation of such
survey or the date such survey is redated.
"Alternate Base Rate" or "ABR" means, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (A) the Prime Rate in effect on such day, (B) the Base CD Rate
in effect on such day plus 1% and (C) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, the term "Base CD
Rate" means, the sum of (A) the product of (1) the Three-Month
-6-
Secondary CD Rate multiplied by (2) Statutory Reserves and (B) the
Assessment Rate. The term "Three-Month Secondary CD Rate" means, for any
day, the secondary market rate for three-month certificates of deposit
reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the
public information telephone line of the Federal Reserve Bank of New York
(which rate will, under the current practices of the Board, be published in
Federal Reserve Statistical Release H.15(519) during the week following
such day) or, if such rate shall not be so reported on such day or such
next preceding Business Day, the average of the secondary market quotations
for three-month certificates of deposit of major money center banks in New
York City received at approximately 10:00 a.m., New York City time, on such
day (or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it. The term "Federal Funds Effective Rate" means, for any day, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by the Federal funds broker,
as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is
a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Base
CD Rate or the Federal Funds Effective Rate or both for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (B) or (C), or both,
of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate shall be effective on
the effective date of such change in the Prime Rate, the Three-Month
Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Alternative Existing Mill Expansion Conditions" has the
meaning assigned to that term in subsection 5.12.1.
"Annual Prepayment" has the meaning assigned to that term in
paragraph (b) of subsection 2.7.2.
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"Annual Voluntary Prepayment Adjustment Amount" means (A) in
each fiscal year of the Company in which Excess Cash Flow is a positive
amount or zero, zero and (B) in each fiscal year in which Excess Cash Flow
is less than zero, the lesser of (1) the amount of voluntary prepayments
which constitute Discretionary Voluntary Prepayments of Term Loans pursuant
to Section 2.7.1 in respect of such fiscal year and (2) the amount of
additional Net Cash Provided From Operations which would have been required
in respect of such fiscal year to result in Excess Cash Flow for such
fiscal year being zero.
"Applicable Category" means, at any date of determination
thereof, the category in the table appearing in paragraph (d) of subsection
2.5.1 having the lowest spreads and which, as of the last day of the fiscal
quarter of the Company immediately preceding such date of determination, is
applicable to the Company based upon both Ratio 1 and Ratio 2 for the
period of four consecutive fiscal quarters of the Company ending on such
last day.
"A/R Eligible Receivables" means those Receivables of the
Company pledged under the 1995 A/R Bridge.
"Arranger" has the meaning assigned to that term in the
introduction to this Agreement.
"Assessment Rate" means for any date the annual rate most
recently estimated by Bankers as the then-current net annual assessment
rate that will be employed in determining amounts payable by Bankers to the
Federal Deposit Insurance Corporation (or any successor) for insurance by
such Corporation (or such successor) of time deposits made in Dollars at
Bankers' domestic offices.
"Asset Sale" means the sale, transfer or other disposition
after the Closing Date (in a single transaction or a series of related
transactions) by the Company or any of its Subsidiaries to any Person
(other than the Company or any of its Subsidiaries) of (A) any of the stock
of any of the Company's Subsidiaries, (B) substantially all of the assets
of any geographic or other division or line of business of the Company or
any of its Subsidiaries, or (C) any Real Property or a portion of any Real
Property or any other asset or assets (including, without limitation, any
assets which do not constitute substantially all of the assets of any
geographic or other division or line of business but excluding any assets
manufactured, constructed or otherwise produced or purchased for sale to
others in the ordinary course of business) of the Company or any of its
Subsidiaries having a Fair Value in
-8-
excess of $2,000,000 (it being understood that if the Fair Value thereof
exceeds $2,000,000, the entire amount and not just the portion in excess of
$2,000,000 shall be subject to paragraph (a) of subsection 2.7.2); provided
that any asset sale described in clause (C) above shall not be deemed to be
an "Asset Sale" unless and until the aggregate amount of the Fair Values of
the proceeds of all such sales after the Closing Date by the Company and
its Subsidiaries occurring in any fiscal year of the Company equals or
exceeds $10,000,000 (it being understood that any such amounts less than
$10,000,000 in any fiscal year of the Company shall not be included in the
calculation of "Asset Sales" in any subsequent fiscal year of the Company);
and provided, further, that "Asset Sales" shall not include (1) sales of
Cash and Cash Equivalents in the ordinary course of business, (2) sales or
other transfers of Program Receivables pursuant to a Receivables
Transaction or so long as the 1995 A/R Bridge shall be in effect, any other
transaction to the extent that net proceeds of such transaction are
required to be applied as a prepayment under the 1995 A/R Bridge, (3) sales
of assets effected pursuant to a Sale/Leaseback Transaction that is subject
to the provisions of Section 5.12, and (4) dispositions of plants or
facilities of the Company, or of a Subsidiary of the Company, located
outside the United States of America, its territories and its possessions,
but only to the extent that the Company or a Subsidiary of the Company
prior to, simultaneously with or within six months following each such
disposition, uses or irrevocably commits to use the proceeds of such
disposition to build or purchase another facility in the same jurisdiction
or to invest in other assets located outside the United States of America,
its territories and its possessions; and provided, further, that (i) the
greater of the aggregate book value or Fair Value of all assets subject to
dispositions referred to in clause (4) in the proviso above during the term
of this Agreement shall not exceed $30,000,000 and (ii) the Administrative
Agent shall have been provided with (a) upon the Company's determination to
make any disposition referred to in clause (4) in the proviso above, a
certificate of the chief financial officer of the Company describing in
reasonable detail such disposition, the anticipated proceeds of such
disposition, the anticipated use of such proceeds and a description of the
facility to be so built or acquired or the investment in such other assets
to be made, and (b) if there is any material change in the matters set
forth in such certificate, a certificate of the chief financial officer of
the Company describing such material change(s), to be delivered upon
receipt of the proceeds of such disposition.
-9-
"Average Life to Stated Maturity" means, with respect to any
Indebtedness, as at any date of determination thereof, the quotient
obtained by dividing (A) the sum of the products of (1) the number of years
from such date to the date or dates of each successive scheduled principal
payment (including, without limitation, any sinking fund requirements) of
such Indebtedness multiplied by (2) the amount of each such principal
payment by (B) the sum of all such principal payments.
"Bankers" means Bankers Trust Company, in its individual
capacity.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"Base Annual Capex Amount" has the meaning assigned to that
term in subsection 6.14.3.
"B Credit Exposure Amount" has the meaning assigned to that
term in the definition of "Credit Exposure Amount."
"Benefited Subsidiary" means, with respect to any Letter of
Credit, the Person for whose benefit such Letter of Credit was issued,
which shall be either the Company or one of its Subsidiaries, as specified
by the Company in the request for issuance of such Letter of Credit made
pursuant to paragraph (a) of subsection 2.2.1.
"Borrowing" means the borrowing of any Loan or group of Loans
occurring on the same date and having the same maturity and bearing
interest computed on the same basis.
"Business Day" means (A) for all purposes other than as covered
by clause (B) below, any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of New York or is a day on
which banking institutions located in such State are authorized or required
by law or other governmental action to close and (B) with respect to all
notices, determinations, fundings and payments in connection with LIBOR,
any day which is a Business Day described in clause (A) and which is also a
day for trading by and between banks in Dollar deposits in the applicable
London interbank market.
"Capex Carryover Amount" has the meaning assigned to that term
in subsection 6.14.5.
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"Capital Expenditures" means, in respect of any Person,
(A) expenditures (whether paid in cash or accrued as a liability and
including, without limitation, interest which is required to be capitalized
under GAAP) by such Person which, in conformity with GAAP, are required to
be included in "additions to property, plant or equipment" or similar items
reflected in a statement of changes in financial position of such Person
and (B) to the extent not included in clause (A) above, any Indebtedness
(whether or not recourse to such Person and whether or not assumed or
guaranteed by such Person) secured by any asset acquired by such Person
pursuant to any expenditure of the type described in clause (A) above, or
owing by any entity acquired by such Person pursuant to any expenditure of
the type described in clause (A) above (it being understood that each item
covered in this clause (B) shall be deemed incurred as of the date of the
applicable acquisition); provided that any Indebtedness referred to in this
clause (B) owing by an entity acquired by such Person that is not a Wholly
Owned Subsidiary of such Person shall only be included in an amount equal
to the product of (1) such Person's direct or indirect percentage of equity
ownership in such entity at the time such Indebtedness is incurred or
deemed incurred and (2) the amount of such Indebtedness.
"Capital Lease", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by such Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Equivalents" means (A) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the
date of acquisition thereof, (B) marketable direct obligations issued by
any state of the United States of America or any political subdivision of
any such state or any public instrumentality thereof maturing within one
year from the date of acquisition thereof and, at the time of acquisition,
having the highest rating obtainable from either Standard & Poor's
Corporation or Moody's Investors Service, Inc., (C) commercial paper
maturing no more than one year from the date of creation thereof and, at
the time of acquisition, having the highest rating obtainable from either
Standard & Poor's Corporation or Moody's Investors Service, Inc.,
(D) certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof
-11-
issued by any Lender or by any commercial bank organized under the laws of
the United States of America or any state thereof or the District of
Columbia having combined capital and surplus of not less than $250,000,000,
(E) Eurodollar time deposits having a maturity of less than one year
purchased from any Lender directly (whether such deposit is with such
Lender or any other Lender hereunder) and (F) repurchase agreements and
reverse repurchase agreements with any Lender or any primary dealer of
United States government securities relating to marketable direct
obligations issued or unconditionally guaranteed by the United States
Government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one year from the
date of acquisition thereof; provided that the terms of such agreements
comply with the guidelines set forth in the Federal Financial Institutions
Examination Council Supervisory Policy--Repurchase Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the
Comptroller of the Currency on October 31, 1985 (the "Supervisory Policy")
and, in the case of a repurchase agreement with a primary dealer, the
Company or a Subsidiary of the Company shall take possession of the
obligations subject to such arrangement.
"Cash Proceeds" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant
to a note receivable or otherwise (other than the portion of such deferred
payment constituting interest which shall be deemed not to constitute Cash
Proceeds), but only as and when so received) received from such Asset Sale.
"CG&R" means Cahill Gordon & Reindel, as counsel for the
Lenders in connection with this Agreement and the transactions contemplated
hereby, and any successor counsel thereto.
A "Change in Control" shall be deemed to have occurred if
(A) any person or group (within the meaning of Rule 13d-5 of the Securities
and Exchange Act of 1934, as in effect on the date hereof) other than
(1) The Morgan Stanley Leveraged Equity Fund II, L.P. ("MSLEF II"), Morgan
Stanley Group Inc. ("MS Group"), Fort Howard Equity Investors L.P., Fort
Howard Equity Investors II, L.P. and their respective general or limited
partners and/or Affiliates or (2) any employee benefit plan of the Company
or of any of its Affiliates shall become the beneficial owner of shares
representing 25% or more of any outstanding class of capital stock having
ordinary voting power in the election of directors of the Company or
(B) there shall occur during any period after the Closing Date a change in
the
-12-
Board of Directors of the Company pursuant to which the individuals who
constituted the Board of Directors of the Company at the beginning of such
period (together with any other director whose election by the Board of
Directors of the Company (or whose nomination by the Board of Directors for
election by the stockholders of the Company) was approved by a vote of at
least a majority of the directors then in office who either were directors
at the beginning of such period or whose election was previously so
approved or by a duly authorized committee of the Board of Directors (which
committee was designated by at least a majority of directors then in office
who either were directors at the beginning of such period or whose election
was previously so approved)) cease to constitute 75% of the Directors of
the Company at the end of such period.
"Closing Date" means the date of the initial funding of the
Term Loans.
"Closing Date Excess Equity Proceeds Amount" means the amount
of net cash proceeds derived from the Common Stock Offering in excess of
the difference between (A) $300,000,000 and (B) the amount of Transaction
Costs reasonably estimated by the Company to be attributable to the
issuance of common stock in the Common Stock Offering assuming it provides
gross proceeds to the Company equal to $300,000,000.
"Closing Date Tranche A Funding Amount" means that portion of
the aggregate amount of the Tranche A Commitments that is equal to the
difference between (A) the sum of the principal amount of all loans
outstanding as of the Closing Date pursuant to the Existing Credit
Facilities, together with all interest accrued thereon and other amounts
then due and payable pursuant to the Existing Credit Facilities, plus the
principal amount of all Senior Secured Notes outstanding as of the Closing
Date, together with all interest accrued thereon and other amounts then due
in respect thereof, plus the amount reasonably estimated by the Company to
be due and payable on and as of the Closing Date in respect of Transaction
Costs and (B) the gross proceeds received by the Company on the Closing
Date from the issuance of Common Stock in the Common Stock Offering, plus
the aggregate principal amount of the Tranche B Term Loans made on the
Closing Date.
"Collateral" means, as of any date of determination, the
Inventory and Receivables (other than any Program Receivables), the
Intellectual Property, the Real Properties, the interest of the Company in
and to the Project Agreement, the Escrow Agreement, the Georgia Mill Lease,
the capital stock of or other evidence of the ownership interest in each
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Receivables Subsidiary (except as otherwise provided in the definition of
Receivables Subsidiary), the capital stock of or other evidence of the
ownership interest in each Subsidiary, but only to the extent such capital
stock or other evidence has been pledged to the Administrative Agent on or
prior to such date pursuant to the provisions of Section 5.11, and all the
other property described in the Collateral Documents (including, without
limitation, all Material Assets which shall have on or prior to such date
become Collateral pursuant to Section 5.11).
"Collateral Documents" means the Mortgages, the Collateral
Trust Agreement, the Pledge Agreements and all other instruments or
documents delivered by the Company or any Subsidiary thereof in order to
grant Liens on any Collateral (including, without limitation, any
Additional Collateral Document delivered pursuant to Section 5.11), as
amended, supplemented or otherwise modified from time to time in accordance
herewith and therewith.
"Collateral Trust Agreement" means the Collateral Trust
Agreement, substantially in the form annexed as Exhibit XXIX between the
Company and the Collateral Trustee, as amended, supplemented or otherwise
modified from time to time in accordance herewith and therewith.
"Collateral Trustee" means the Administrative Agent or such
other Person that is the collateral trustee pursuant to the Collateral
Trust Agreement.
"Commercial Letter of Credit" means any letter of credit or
similar instrument issued for the account of the Company for the purpose of
providing the primary payment mechanism in connection with the purchase of
any materials, goods or services by the Company or any of its Subsidiaries
in the ordinary course of business of the Company or such Subsidiary.
"Commitment Fee Letters" means, collectively, the fee letter
agreement dated January 31, 1995 among the Company and the Arrangers and
the three supplementary fee letter agreements of the Company dated
January 31, 1995, in each case as such agreements are in effect on the
Closing Date and as thereafter amended, supplemented or otherwise modified
from time to time.
"Commitment Percentage" means (A) during the one year period
following the Closing Date, .50% and (B) at all times after the first
anniversary of the Closing Date, (1) .50%, when the LIBOR Spread is 1.50%
or greater, (2) .375%, when the LIBOR
-14-
Spread is 1.25% or 1.00%, (3) .25%, when the LIBOR Spread is .75% and
(4) .1875%, when the LIBOR Spread is .625%.
"Commitments" means the commitments of the Lenders as set forth
in subsections 2.1.1, 2.2.1, 2.3.1 and 2.12.1.
"Commodities Agreement" means any forward contract, option,
futures contract, futures option, or similar agreement or arrangement
entered into by the Company designed to protect the Company or any of its
Subsidiaries from fluctuations in the price of commodities.
"Common Stock" means the common stock of the Company, par value
$.01 per share.
"Common Stock Offering" means the initial public offering by
the Company on the Closing Date of shares of newly issued Common Stock, on
the terms and subject to the conditions described in the Prospectus
(including, without limitation, any shares sold pursuant to any over-
allotment option granted in connection therewith).
"Company" has the meaning assigned to that term in the
introduction to this Agreement.
"Company Stock Pledge Agreement" means the Company Stock Pledge
Agreement, in substantially the form annexed hereto as Exhibit XV, made by
the Company, HAC Holding Corp., Harmon Assoc. Corp., and Fort Howard
Holding, on the Closing Date, as it may be amended, supplemented or
otherwise modified from time to time in accordance herewith and therewith.
"Company's Portion of Excess Cash Flow" means, at any date of
determination thereof, the cumulative amount of Excess Cash Flow for each
full fiscal year of the Company (other than a fiscal year for which Excess
Cash Flow shall be less than zero) commencing on or after January 1, 1995,
and ending prior to such date of determination that was not or is not
required to be applied to the prepayment of Loans or the reduction of
Commitments, in each case as described in paragraph (b) of subsection 2.7.2
or subsection 2.7.9.
"Compliance Certificate" means a certificate substantially in
the form annexed hereto as Exhibit VI delivered to the Lenders by the
Company pursuant to clause (B) of subparagraph (iv) of Section 5.1.
"Consolidated Capital Expenditures" means, for any period, the
sum of (A) the aggregate of all Capital
-15-
Expenditures by the Company and its Subsidiaries during such period, plus
(B) to the extent not covered by clause (A) hereof, the aggregate of all
expenditures by the Company and its Subsidiaries to acquire by purchase or
otherwise any business, property or fixed assets of, or stock or other
evidence of beneficial ownership of or interest in, any Person, including,
without limitation, the amount of any Indebtedness of any such acquired
Person existing at the date of or by reason of such purchase or
acquisition, whether or not such Indebtedness is assumed or guaranteed by
the Company or any Subsidiary of the Company (other than any such
expenditures of the type permitted under clause (x) or clause (xi) of
Section 6.3), it being understood that each item covered by this clause (B)
shall be deemed incurred as of the date of the applicable acquisition;
provided that any Indebtedness referred to in this clause (B) of any
acquired Person that is not a Wholly-Owned Subsidiary of the Company shall
only be included in an amount equal to the product of (1) the Company's
direct or indirect percentage of equity ownership in such acquired Person
at the time such Indebtedness is incurred or deemed incurred and (2) the
amount of such Indebtedness.
"Consolidated Current Assets" means, at any time, the
consolidated current assets (other than Cash and Cash Equivalents) of the
Company and its Subsidiaries (whether or not consolidated with the Company
pursuant to GAAP for financial reporting purposes and including, without
limitation, all Receivables Subsidiaries) at such time.
"Consolidated Current Liabilities" means, at any time, the
consolidated current liabilities of the Company and its Subsidiaries
(whether or not consolidated with the Company pursuant to GAAP for
financial reporting purposes and including, without limitation, all
Receivables Subsidiaries) at such time, but excluding the current portion
of any long-term Indebtedness which would otherwise be included therein and
any Indebtedness with a maturity which may, by the terms of the instrument
evidencing or governing such Indebtedness, be extended, renewed or
reborrowed (whether conditionally or unconditionally) by the Company or any
of its Subsidiaries to a date that is later than one year after such time.
"Consolidated Domestic Capital Expenditures" means, for any
period, the sum of (A) the aggregate of all Capital Expenditures by the
Company and its Domestic Subsidiaries during such period, plus (B) to the
extent not covered by clause (A) hereof, the aggregate of all expenditures
by the Company and its Domestic Subsidiaries to acquire by purchase or
otherwise the business, property or fixed assets of, or stock
-16-
or other evidence of beneficial ownership of, any Person, including,
without limitation, the amount of any Indebtedness of any such acquired
Person, whether or not such Indebtedness is assumed or guaranteed by the
Company or any Subsidiary of the Company (other than any such expenditures
of the type permitted under clause (x) or clause (xi) of Section 6.3), it
being understood that each item covered by this clause (B) shall be deemed
incurred as of the date of the applicable acquisition; provided that any
Indebtedness referred to in this clause (B) of any acquired Person that is
not a Wholly Owned Subsidiary of the Company shall only be included in an
amount equal to the product of (1) the Company's direct or indirect
percentage of equity ownership in such acquired Person at the time such
Indebtedness is incurred or deemed incurred and (2) the amount of such
Indebtedness.
"Consolidated EBITDA" means, without duplication, for any
period, the total of the amounts for such period of (A) Consolidated Net
Income, plus (B) provision for taxes based on income, plus (C) total
interest expense (including that attributable to Capital Leases and
including, without limitation, to the extent not otherwise included in this
clause (C), all interest expense or expenses in the nature of interest
expense incurred by any Receivables Subsidiary), plus (D) depreciation
expense, plus (E) amortization expense, plus (F) other non-cash items
reducing or deducted in calculating Consolidated Net Income, minus (G)
other non-cash items increasing Consolidated Net Income, minus (H) charges
against the Special Reserve, all as determined on a consolidated basis for
the Company and its Subsidiaries for such period taken as a single
accounting period determined (other than in the case of clause (H)) in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, (A) total interest expense for such period (including that
attributable to Capital Leases) of the Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of the
Company and its Subsidiaries including, without limitation, all
commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing (and excluding
capitalized interest, to the extent such capitalized interest constitutes a
Capital Expenditure or a Consolidated Domestic Capital Expenditure) and
(B) net costs under Interest Rate Agreements for such period, and (C) to
the extent not otherwise included above, all interest expense or expenses
in the nature of interest expense incurred by any Receivables Subsidiary
but excluding, however, in the case of clause (A), interest expense not
payable in cash (including amortization of
-17-
discount), any amounts referred to in Section 2.6 payable to the
Administrative Agent and the Lenders on or before the Closing Date and
Transaction Costs relating to the Recapitalization, all as determined on a
consolidated basis for the Company and its Subsidiaries in conformity with
GAAP.
"Consolidated Net Income" for any period, means the net income
(or loss) of the Company and its Subsidiaries (whether or not consolidated
with the Company pursuant to GAAP for financial reporting purposes and
including, without limitation, all Receivables Subsidiaries) on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP; provided that there shall be excluded
(A) the income (or loss) of any Person (other than a Subsidiary of the
Company) in which any other Person (other than the Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of its
Subsidiaries by such Person during such period, (B) the income (or loss) of
any Person accrued prior to the date it becomes a Subsidiary of the Company
or is merged into or consolidated with any of the Company's Subsidiaries or
that Person's assets are acquired by the Company or any of its
Subsidiaries, (C) the income of any Subsidiary of the Company to the extent
that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Subsidiary, and (D) any after-tax cash gains or losses attributable to
Asset Sales.
"Consolidated Rental Payments" means, for any period, the
aggregate amount of all amounts paid or payable or accrued or accruable
during such period under all Capital Leases and Operating Leases of the
Company and its Subsidiaries (net of sublease income), all as determined on
a consolidated basis for the Company and its Subsidiaries in conformity
with GAAP.
"Construction Cost" means, in respect of the cost of any assets
purchased or constructed in connection with any Expansion Project, the
total cost of all labor and materials and professional and permitting fees
to acquire and construct such assets, including, without limitation, all
capitalized interest in respect thereof and other items which, in
accordance with GAAP, would be required to be reflected in the financial
statements of the Company as additions to plant, property and equipment.
-18-
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person
(A) with respect to any indebtedness, lease, dividend, letter of credit or
other obligation of another if the primary purpose or intent thereof by the
Person incurring the Contingent Obligation is to provide assurance to the
obligee of such obligation of another that such obligation of another will
be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be protected (in
whole or in part) against loss in respect thereof, (B) under any letter of
credit issued for the account of that Person or for which that Person is
otherwise liable for reimbursement thereof, or (C) under Commodities
Agreements, Currency Agreements or Interest Rate Agreements. Contingent
Obligations shall include, without limitation, (A) the direct or indirect
guarantee, endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another, and (B) any
liability of such Person for the obligations of another through any
agreement (contingent or otherwise) (1) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise),
(2) to maintain the solvency or any balance sheet item, level of income or
financial condition of another, or (3) to make take-or-pay or similar
payments if required regardless of non-performance by any other party or
parties to an agreement, if in the case of any such agreement the primary
purpose or intent thereof is as described in the preceding sentence. The
amount of any Contingent Obligation shall be equal to in the case of a
Contingent Obligation described in clause (A) in the first sentence of this
definition, the amount of the obligation so guaranteed or otherwise
supported, in the case of a Contingent Obligation described in clause (B)
in the first sentence of this definition, the amount available to be drawn
under the relevant letter of credit and in the case of a Contingent
Obligation described in clause (C) in the first sentence of this
definition, the relevant Termination Value.
"Contractual Obligation", as applied to any Person, means any
provision of any security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is subject.
-19-
"Controlled Foreign Corporation" means any direct or indirect
Subsidiary of the Company which is a controlled foreign corporation, as
defined in section 957(a) (or successor provision) of the Internal Revenue
Code.
"Corresponding Debt Instrument" means, (A) in respect of any
Secured Expansion Financing, the Loan Documents, as the same may be
amended, supplemented or otherwise modified from time to time, (B) in
respect of any Sale/Leaseback Financing, the leases, indentures and related
instruments (as in effect on the Closing Date) comprising (1) the Sale/
Leaseback Transaction of the Company's "Phase III" expansion at its
Savannah, Georgia, Mill or (2) the Sale/Leaseback Transaction of the
Company's "Phase IV" expansion at its Savannah, Georgia, Mill, (C) in
respect of any Unsecured Expansion Financing that constitutes Subordinated
Debt, the instruments (as in effect on the Closing Date) evidencing or
governing the Subordinated Notes and (D) in respect of any Unsecured
Expansion Financing that is not Subordinated Indebtedness, the instruments
(as in effect on the Closing Date) evidencing or governing the Senior
Unsecured Notes.
"Credit Exposure Amount" of any Lender means, as of any date of
determination, an amount equal to the sum of (A) the aggregate amount of
such Lender's unused Term Loan Commitments, if any, then in effect (it
being understood that the amount of such unused Term Loan Commitment of a
Defaulting Lender shall be deemed to be zero), increased by the aggregate
principal amount of such Lender's Term Loans then outstanding, plus (B) the
principal amount of Revolving Loans of such Lender, increased by the then
unutilized portion of such Lender's Revolving Loan Commitment in effect on
such date, reduced by such Lender's Defaulting Lender Deduction Amount, if
any, then in effect. The "A Credit Exposure Amount" of any Lender means
the "Credit Exposure Amount" of such Lender adjusted so that each of such
Lender's Tranche B Commitment and Tranche B Term Loans are deemed to equal
zero. The "B Credit Exposure Amount" of any Lender means the "Credit
Exposure Amount" of such Lender adjusted so that each of such Lender's
Tranche A Commitment, Tranche A Term Loans and Revolving Loan Commitment
are deemed to equal zero.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement entered
into by the Company designed to protect the Company or any of its
Subsidiaries against fluctuations in currency values.
-20-
"Defaulting Lender" means any Lender as to which a Lender
Default has occurred.
"Defaulting Lender Deduction Amount" means, as to each
Defaulting Lender at any date, the sum of (A) the aggregate amount of
participations of such Lender in respect of drawn but unreimbursed Letters
of Credit and all undrawn Letters of Credit as of such date, plus (B) any
amount owing by such Defaulting Lender to Bankers pursuant to subsection
2.12.5 as of such date, plus (C) the unutilized portion of the Revolving
Loan Commitment of such Lender as of such date.
"Deferred Funding Date" means a Business Day selected by the
Company and identified in a Notice of Borrowing delivered in accordance
with subsection 2.1.2 for the funding by the Lenders having Tranche A
Commitments of the Deferred Tranche A Funding Amount, which Business Day
shall not be later than 45 days after the Closing Date.
"Deferred Tranche A Funding Amount" means the difference, if
any, between the aggregate amount of the Tranche A Commitments and the
Closing Date Tranche A Funding Amount.
"Deposit Account" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or
like organization, other than an account evidenced by a negotiable
certificate of deposit.
"Destruction" has the meaning assigned to that term in the
Mortgages.
"Discretionary Equity Proceeds Balance" means, as at any date
of determination thereof, the sum (which shall not be less than zero) of
the Closing Date Excess Equity Proceeds Amount, plus the aggregate amount
of net cash proceeds received by the Company or any of its Subsidiaries
after the Closing Date and on or prior to such date of determination of all
Equity Offerings after the Closing Date, minus the sum of (1) the aggregate
of all such amounts applied by the Company, on or prior to such date of
determination, (A) as a voluntary prepayment pursuant to subsection 2.7.1
which constitutes a Discretionary Voluntary Prepayment, (B) to the making
of Consolidated Domestic Capital Expenditures pursuant to the provisions of
subsection 6.14.5, (C) to the making of Investments pursuant to the
provisions of clause (C) of subparagraph (x) of Section 6.3 or clause (B)
of subparagraph (xvi) of Section 6.3 and (D) to the making of Restricted
Junior Payments pursuant to the provisions of clause (G) of Section 6.5 and
(2) the sum of the Discretionary Equity Proceeds
-21-
Deduction Amounts in respect of each fiscal year of the Company (commencing
with fiscal year 1995) which has ended prior to the March 31st immediately
preceding such date of determination.
"Discretionary Equity Proceeds Deduction Amount" means, in
respect of each fiscal year of the Company, the
portion of the Discretionary Equity/Cash Flow Proceeds Deduction Amount (as
defined below) in respect of such fiscal year that the Company shall have
elected to allocate (in accordance with the following sentence) to the
Discretionary Equity Proceeds Balance in respect of such fiscal year. For
purposes of this definition and the definition of "Discretionary Excess
Cash Flow Deduction Amount", the Company shall allocate the Discretionary
Equity/Cash Flow Proceeds Deduction Amount in respect of any fiscal year to
the Discretionary Equity Proceeds Balance or the Discretionary Excess Cash
Flow Balance in respect of such fiscal year, or to both, as the Company
shall elect in its sole discretion; provided that, all such Discretionary
Equity/Cash Flow Proceeds Deduction Amounts shall be allocated as aforesaid
and no such allocation shall reduce such Discretionary Equity Proceeds
Balance or such Discretionary Excess Cash Flow Balance below zero. As used
herein, "Discretionary Equity/Cash Flow Proceeds Deduction Amount" means,
in respect of any fiscal year, the lesser of (i) the Annual Voluntary
Prepayment Adjustment Amount in respect of such fiscal year and (ii) the
sum of the Discretionary Equity Proceeds Balance and the Discretionary
Excess Cash Flow Balance, in each case under this clause (ii), as of the
March 31st immediately following the end of such fiscal year.
"Discretionary Excess Cash Flow Balance" means, as at any date
of determination thereof, the sum (which shall not be less than zero) of
the aggregate amount of the Company's Portion of Excess Cash Flow for all
fiscal years of the Company (commencing with fiscal year 1995) which have
ended prior to the March 31st immediately preceding such date of
determination, minus the sum of (1) the aggregate of all such amounts
applied by the Company on or prior to such date of determination (A) as a
voluntary prepayment pursuant to subsection 2.7.1 which constitutes a
Discretionary Voluntary Prepayment, (B) to the making of Consolidated
Domestic Capital Expenditures pursuant to the provisions of subsection
6.14.5, (C) to the making of Investments pursuant to the provisions of
clause (C) of subparagraph (x) of Section 6.3 or clause (B) of subparagraph
(xvi) of Section 6.3 and (D) to the making of Restricted Junior Payments
pursuant to the provisions of clause (C) of Section 6.5, clause (H) of
Section 6.5 and (2) the sum of the Discretionary Excess Cash Flow Deduction
Amounts in
-22-
respect of each fiscal year of the Company (commencing with fiscal year
1995) which has ended prior to the March 31st immediately preceding such
date of determination.
"Discretionary Excess Cash Flow Deduction Amount" means, in
respect of each fiscal year of the Company, the portion of the
Discretionary Equity/Cash Flow Proceeds Deduction Amount (as defined in the
definition of "Discretionary Equity Proceeds Deduction Amount") in respect
of such fiscal year that the Company shall have elected to allocate (in
accordance with the second sentence of the definition of "Discretionary
Equity Proceeds Deduction Amount") to the Discretionary Excess Cash Flow
Balance in respect of such fiscal year.
"Discretionary Voluntary Prepayment" means a prepayment made by
the Company pursuant to subsection 2.7.1 which is elected by the Company to
be charged against the Discretionary Excess Cash Flow Balance or the
Discretionary Equity Proceeds Balance.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Domestic Capex Maximum" has the meaning assigned to such term
in subsection 6.14.4.
"Domestic Subsidiary" means, at any date of determination, any
Subsidiary of the Company other than a Foreign Subsidiary.
"8-1/4% Unsecured Notes" means the Company's 8-1/4% Senior
Notes due February 1, 2002, issued and outstanding pursuant to a certain
indenture, dated as of February 1, 1994 between the Company and Norwest
Bank Wisconsin, N.A., as Trustee, as in effect on the Closing Date and as
thereafter amended, supplemented or otherwise modified from time to time in
accordance herewith or therewith.
"Environmental Laws" means federal, state, local and foreign
law or regulations, codes, orders, decrees, judgments, permits,
authorizations, agreements, or injunctions issued, promulgated, approved or
entered thereunder relating to pollution or protection of the environment,
including, without limitation, laws relating to occupational safety and
health and other laws relating to emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes into the environment (including,
without limitation, ambient air,
-23-
surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or
wastes.
"Equity Offering" means any issuance or sale by the Company or
any Subsidiary of the Company whether pursuant to a registered public
offering, private placement or otherwise of any shares of capital stock or
other equity securities of the Company or any Subsidiary of the Company, or
any obligations convertible into or exchangeable for, or giving any Person
a right, option or warrant to acquire, such securities or such convertible
or exchangeable obligations, other than issuances or sales of Common Stock
pursuant to the Common Stock Offering and other than issuances and sales of
shares of capital stock or other equity securities of a Subsidiary of the
Company to the Company or a Subsidiary of the Company.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time and any successor statute.
"ERISA Affiliate", as applied to any Person, means any trade or
business (whether or not incorporated) which is under common control with
that Person within the meaning of Section 4001(b) of ERISA and the
regulations promulgated thereunder or that would be treated as a single
employer with that Person (A) under Section 414(b) or (c) of the Internal
Revenue Code or (B) solely for purposes of any section or sections of the
Internal Revenue Code or ERISA to which such section or sections apply,
under Section 414(m) or (o) of the Internal Revenue Code.
"Escrow Agreement" has the meaning assigned to that term in the
Georgia Mill Mortgage.
"Escrow Letter and Security Agreement" means a letter agreement
of the Company substantially in the form of Exhibit XX annexed hereto.
"Estimated Net Cash Proceeds" means, with respect to any Asset
Sale, an amount equal to 90% of the amount estimated in good faith by the
Company to be the Net Cash Proceeds of Sale of such Asset Sale.
"Event of Default" means each of the events set forth in
ARTICLE VII.
-24-
"Excess Cash Flow" means, in respect of any fiscal year of the
Company and its Subsidiaries, (A) the Net Cash Provided From Operations in
respect of such fiscal year, reduced by (B) the sum, without duplication,
of each of the following amounts paid during such fiscal year (but only to
the extent that the Company shall not have elected to charge the payment of
such amounts against the Discretionary Equity Proceeds Balance or the
Discretionary Excess Cash Flow Balance): (1) the amount of Scheduled Term
Loans Principal Payments paid by the Company, plus (2) payments by the
Company or any of its Subsidiaries with respect to the principal portion of
Indebtedness constituting Capital Leases, plus (3) mandatory prepayments of
Loans pursuant to clause (c) of subsection 2.7.2 (but only to the extent by
the terms of this Agreement, as in effect on the date of determination of
such Excess Cash Flow, such prepaid amount could not be reborrowed) or
clause (d) of subsection 2.7.2, plus (4) voluntary prepayments of Term
Loans in accordance with subsection 2.7.1, plus (5) scheduled, mandatory or
voluntary payments or prepayments by the Company or any of its Subsidiaries
of the principal of any Indebtedness permitted to be incurred or
outstanding pursuant to any provision of this Agreement (other than (w)
Intercompany Indebtedness, (x) Loans, (y) amounts which, by the terms of
the instruments evidencing or governing such Indebtedness, may be
reborrowed and (z) Indebtedness of the type specified in clause (D) of the
definition of Indebtedness), plus (6) payments by the Company or any of its
Subsidiaries which constitute Consolidated Domestic Capital Expenditures,
plus (7) payments by the Company or any of its Subsidiaries which
constitute Consolidated Capital Expenditures (other than Consolidated
Domestic Capital Expenditures) but only to the extent not financed with the
proceeds of Indebtedness (excluding Intercompany Indebtedness) incurred by
a Foreign Subsidiary, plus, (8) Restricted Junior Payments made pursuant to
clause (A), (B) or (D)(2) of Section 6.5, plus (9) Investments of Cash and
Cash Equivalents pursuant to (a) clause (vi) of Section 6.3 or pursuant to
clause (x)(A) or (x)(B) of Section 6.3 (but only to the extent that the
Person in which such Investment is made does not constitute a Subsidiary of
the Company and does not become a Subsidiary of the Company by virtue of
such Investment) or (b) clause (xvi)(A) of Section 6.3 (but only to the
extent that each such Investment is of a type and relates to a Person such
that it would be permitted to be deducted from Net Cash Provided From
Operations pursuant to clause (9)(a) above, without giving effect (for
purposes of this clause (b)) to the limitations set forth in clause (vi),
(x)(A) or (x)(B) of Section 6.3, as applicable).
-25-
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Excluded New Indebtedness" means Refinancing Senior Unsecured
Debt, Refinancing Foreign Debt, Indebtedness constituting Permitted
Expansion Construction Financing and Indebtedness incurred pursuant to
clause (i), (iii), (vi), (viii), (ix), (xiii) or (xiv) of Section 6.1.
"Existing Credit Facilities" means the 1988 Credit Agreement
and the 1992 Credit Agreement, together with, in each case, all notes,
mortgages, security instruments and other ancillary or related
documentation.
"Existing Indebtedness" means Indebtedness of the Company and
its Subsidiaries listed on Schedule C annexed hereto.
"Existing Mill" and "Existing Mills" mean, respectively,
(A)(1) the Mill leased by the Company in Effingham County, Georgia, (2) the
Company's Muskogee, Oklahoma Mill and (3) the Company's Green Bay,
Wisconsin Mill, in each case as more particularly described in the Mill
Mortgage applicable thereto, including, in each case, all leasehold
estates, real estate and improvements thereon, and all equipment used in
the operations thereof owned by the Company or a Subsidiary of the Company
and (B) any one of such Mills.
"Existing Mill Expansion Conditions" has the meaning assigned
to that term in subsection 5.12.1.
"Existing Mill Expansion Documents" means, with respect to any
Existing Mill Expansion Transaction, an Expansion Easement, an Expansion
Lease, a Recognition Instrument or Expansion Intercreditor Agreement and
such other instruments in form and substance reasonably satisfactory to the
Requisite Lenders as may reasonably be required to consummate such Existing
Mill Expansion Transaction.
"Existing Mill Expansion Easement" means an instrument in form
and substance reasonably satisfactory to the Requisite Lenders pursuant to
which an Existing Mill Expansion Lessor is granted an easement (or, in the
case of an Existing Mill Expansion Transaction involving Land subject to
the Georgia Mill Lease, a sublease) to construct and maintain upon any Land
any Existing Mill Expansion Equipment, which instrument shall provide for
(A) rights of access to and egress from such Existing Mill Expansion
Equipment and (B) rights to utility lines and structures necessary for the
use and
-26-
enjoyment of such Existing Mill Expansion Equipment; provided that no
Existing Mill Expansion Easement shall provide rights which conflict in any
material respect with the rights of the Company in and to a Mill or which
impair in any material respect the value, legality or utility of such Mill
(determined without regard to the installation or construction of any
Existing Mill Expansion Equipment).
"Existing Mill Expansion Equipment" means those structures,
equipment, facilities, apparatus and other property which are not necessary
for the proper and efficient operation of a Mill (as constituted on the
Closing Date or, in the case of a Mill acquired or constructed after the
Closing Date, as constituted on the date such Mill becomes Collateral) or
for the compliance by any such Mill (as constituted on the Closing Date or,
in the case of a Mill acquired or constructed after the Closing Date, as
constituted on the date such Mill becomes Collateral) with any applicable
law, code or ordinance, including, without limitation, any Environmental
Law, all of which property, structures, equipment, facilities and apparatus
shall be subject to the provisions of Article 4 of the applicable Mill
Mortgage.
"Existing Mill Expansion Lease" means (A) any lease, sublease,
license or similar instrument pursuant to which the Company is granted the
use and enjoyment of Existing Mill Expansion Equipment and (B) any and all
rights of reversion relating to Existing Mill Expansion Equipment and any
purchase options or similar rights to acquire such Existing Mill Expansion
Equipment.
"Existing Mill Expansion Lessor" means the Person named as
lessor, licensor or grantor in any Existing Mill Expansion Lease.
"Existing Mill Expansion Transaction" has the meaning assigned
to that term in paragraph (a) of subsection 5.12.1.
"Existing Subordinated Debt" means the 12-5/8% Subordinated
Debentures and the 14-1/8% Discount Debentures, together with, in each
case, all obligations of the Company set forth in the indentures relating
thereto.
"Expansion Intercreditor Agreement" has the meaning assigned to
that term in subsection 5.12.1.
"Expansion Lease" means any Preexisting Expansion Lease or any
Existing Mill Expansion Lease.
-27-
"Expansion Project" means the acquisition or construction of
Existing Mill Expansion Equipment or a Greenfield Expansion Project;
provided that neither (A) the Green Bay Sludge Boiler nor (B) the Savannah
Boiler shall constitute an Expansion Project.
"Facing Fee" has the meaning assigned to that term in paragraph
(c) of subsection 2.2.6.
"Fair Value" means, with respect to any asset or property
(including intangibles or instruments), the fair market value thereof as
determined by the Board of Directors of the Company or a committee thereof
(or, if authorized to do so by the Board of Directors of the Company or a
committee thereof, by the Chief Financial Officer or the Chief Accounting
Officer of the Company) in each case pursuant to standards, assumptions and
procedures set forth in Exhibit XXX annexed hereto.
"First Tier Foreign Subsidiary" means, at any date of
determination, a Foreign Subsidiary of the Company (A)(i) which is
organized under the laws of a jurisdiction other than the United States or
any State thereof and (ii) as to which the Company and/or one or more
Subsidiaries organized under the laws of the United States of America or
any State thereof hold directly shares of stock or other equity interests
having more than 50% of the total voting power of shares of the capital
stock or other equity interests therein (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or
trustees thereof or (B) which is organized under the laws of the United
States of America or any State therein and which does not have any
Subsidiaries that are Foreign Subsidiaries.
"Foreign Subsidiary" means each of the following: (A) each
Subsidiary or Joint Venture of the Company identified as such on Schedule A
annexed hereto, (B) each Subsidiary or Joint Venture of the Company which
is organized under the laws of a jurisdiction other than the United States
of America or any State thereof and (C) each Subsidiary or Joint Venture of
the Company which is organized under the laws of the United States of
America or any State thereof more than 80% of the sales, earnings or assets
(determined on a consolidated basis) of which are located or derived from
operations in territories of the United States of America and jurisdictions
outside the United States of America.
-28-
"Fort Howard Holding" means Fort Howard Holding, Inc., a
Delaware corporation and a Wholly Owned Subsidiary of the Company.
"Fort Sterling" means Fort Sterling Limited, an English limited
liability company and a Foreign Subsidiary of the Company.
"14-1/8% Discount Debentures" means the Company's 14-1/8%
Junior Subordinated Discount Debentures due November 1, 2004, issued and
outstanding pursuant to a certain indenture, dated as of November 1, 1988
between the Company and Society National Bank, as in effect on the Closing
Date and as thereafter amended, supplemented or otherwise modified from
time to time in accordance herewith or therewith.
"Fronting Bank" means, as the context may require, (A) (1)
Bankers, with respect to Letters of Credit issued by Bankers, and (2) with
respect to each Letter of Credit issued by an Arranger other than Bankers,
the issuer thereof, or (B) collectively, all of the foregoing.
"Funded Debt", as applied to any Person, means all Indebtedness
of that Person which by its terms or by the terms of any instrument or
agreement relating thereto matures more than one year from, or is directly
renewable or extendable at the option of the debtor to a date more than one
year from (including an option of the debtor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more from) the date of the creation thereof.
"Funding Date" means the date of the borrowing of one or more
Loans, including, without limitation, the Closing Date and the Deferred
Funding Date.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as
of the date of determination; provided that compliance by the Company with
the financial covenants set forth in Section 6.6 shall be calculated in
accordance with GAAP as in effect on the Closing Date.
-29-
"General Account Assets" means the assets allocated to the
general account of an insurance company subject to state regulation.
"Georgia Mill Lease" has the meaning assigned to that term in
the Georgia Mill Mortgage.
"Georgia Mill Mortgage" means the Mill Mortgage to be executed
and delivered by the Company in respect of the Georgia Mill Lease and other
property relating to the Company's Effingham County, Georgia Mill as it may
be amended, supplemented or otherwise modified from time to time.
"Government Acts" has the meaning assigned to that term in
paragraph (a) of subsection 2.2.9.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Green Bay Dry Form Machine" means the third air-laid (dry
form) paper machine installed at the Company's Green Bay, Wisconsin Mill,
together with related ancillary improvements or equipment.
"Green Bay Sludge Boiler" means the industrial boiler installed
in the vicinity or as a part of the Company's Green Bay, Wisconsin Mill
following the date of this Agreement which is designed to burn, among other
things, sludge generated by the Company's wastepaper recycling operations.
"Greenfield Expansion Assets" means those parcels of land,
leasehold estates, easements or other realty interests in the United States
and those structures, equipment, facilities, apparatus and other property
acquired or constructed by the Company in connection with the consummation
of any Greenfield Expansion Project.
"Greenfield Expansion Financing Conditions" has the meaning
assigned to that term in subsection 5.12.2.
"Greenfield Expansion Lease" means (A) any lease, sublease,
license or similar instrument pursuant to which the Company or any Domestic
Subsidiary of the Company is granted the use and enjoyment of Greenfield
Expansion Assets and (B) any and all rights of reversion relating to
Greenfield Expansion Assets and any purchase options or similar rights to
acquire such Greenfield Expansion Equipment.
-30-
"Greenfield Expansion Project" means the acquisition or
construction by the Company or any Domestic Subsidiary of the Company of
any assets consisting of land or interests (including, without limitation,
easement or leasehold interests) in land in the United States or
improvements not, at the time of acquisition or construction thereof,
adjacent, contiguous to or located on any land comprising a portion of any
Mill (including any facility in the general area of a Mill that is used in
connection with such Mill) existing at the Closing Date, which land or
improvements are intended to be utilized by the Company or any Domestic
Subsidiary of the Company, upon the completion and placing into service
thereof, as a Mill.
"Guarantor Subsidiary" means each of HAC Holding Corp. and
Harmon Assoc., Corp. and, after any Material Subsidiary has executed a
counterpart of the Guarantor Subsidiary Guarantee pursuant to
subsection 5.11.1, such Material Subsidiary.
"Guarantor Subsidiary Guarantee" means the guarantee agreement
executed and delivered by each Guarantor Subsidiary pursuant to
subparagraph (v) of subsection 3.1.2 or subsection 5.11.1, which shall be
substantially in the form of Exhibit XIII annexed hereto, with appropriate
modifications as consented to by the Requisite Lenders, as such guarantee
agreement may hereafter be amended, supplemented or otherwise modified from
time to time.
"HAC Holding Corp." means HAC Holding Corp., a Delaware
corporation and a Wholly Owned Subsidiary of the Company.
"Harmon Assoc. Corp." means Harmon Assoc. Corp., a New York
corporation and a Wholly Owned Subsidiary of the Company.
"IDA" means the Effingham County Industrial Development
Authority and its successors and assigns.
"IDA Estoppel" means a certificate substantially in the form of
Exhibit XII annexed hereto executed by an officer of the IDA certifying as
to certain matters relating to the Georgia Mill Lease.
"Improvements" has the meaning assigned to that term in the
Mortgages.
-31-
"Indebtedness", as applied to any Person, means (A) all
indebtedness for borrowed money, (B) that portion of obligations with
respect to Capital Leases which is properly classified as a liability on a
balance sheet in conformity with GAAP, (C) notes payable and drafts
accepted representing extensions of credit whether or not representing
obligations for borrowed money, (D) any obligation owed for all or any part
of the deferred purchase price of property or services which purchase price
is (1) due more than six months after the date of placing such property in
service or taking delivery and title thereto or the completion of such
services in respect thereof, or (2) evidenced by a note or similar written
instrument and (E) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to
the credit of that Person.
"Indemnities" has the meaning assigned to that term in Section
9.3.
"Information Package" means, collectively, the Memorandum dated
January 1995 delivered by the Administrative Agent to the Lenders, the
Registration Statement and any supplementary letter delivered by the
Company to the Administrative Agent, in each case as it may be supplemented
on or prior to the date of the signing of this Agreement.
"Initial Cash Proceeds Payment" has the meaning assigned to
that term in paragraph (a) of subsection 2.7.2.
"Initial Major Expansion Project" means the first Expansion
Project to be commenced by the Company or any of its Subsidiaries after the
Closing Date that involves or will involve Capital Expenditures by the
Company and its Subsidiaries in respect thereof in an aggregate amount
estimated by the Company in its reasonable judgment to be $100,000,000 or
more to complete and put in service.
"Intellectual Property" has the meaning assigned to that term
in the Intellectual Property Pledge Agreement.
"Intellectual Property Pledge Agreement" means the Intellectual
Property Pledge Agreement substantially in the form of Exhibit XVII annexed
hereto executed and delivered by the Company, as the same may be amended,
supplemented or otherwise modified from time to time.
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"Intercompany Indebtedness" means any Indebtedness of the
Company or any Subsidiary of the Company which, in the case of the Company,
is owing to any Subsidiary or which, in the case of any such Subsidiary, is
owing to the Company or any other Subsidiary of the Company.
"Interest Coverage Ratio" means, for any period, the ratio of
Consolidated EBITDA for such period to Consolidated Interest Expense for
such period.
"Interest Payment Date" means, with respect to any Adjusted
LIBOR Loan, the last day of each Interest Period applicable to such Loan;
provided that in the case of each Interest Period of six or more months,
"Interest Payment Date" shall also include each Interest Period Anniversary
Date for such Interest Period.
"Interest Period" means any interest period applicable to a
Loan as determined pursuant to subsection 2.5.2.
"Interest Period Anniversary Date" means, for each Interest
Period which is six or more months, each three-month anniversary of the
commencement of such Interest Period.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement or arrangement entered into by the Company designed
to protect the Company or any of its Subsidiaries against fluctuations in
interest rates.
"Interest Rate Determination Date" means, for each Interest
Period, the second Business Day prior to the first day of the related
Interest Period for an Adjusted LIBOR Loan.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time hereafter and any successor statute.
"Inventory" means, inclusively, all inventory of the Company
and each Guarantor Subsidiary, wherever located in the United States of
America, its territories or possessions, and whether now existing or
hereafter acquired, including, without limitation, all raw materials, work
in process, supplies, returned goods, finished goods, samples, and
consigned goods to the extent of the consignee's interest therein.
"Investment", as applied to any Person (the "Investor"), means
any direct or indirect purchase or other
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acquisition by the Investor of, or a beneficial interest in, stock or other
Securities of any other Person other than (A) in the case of each Investor
that is a Foreign Subsidiary, a direct or indirect Subsidiary of such
Foreign Subsidiary and (B) in the case of each Investor that is the Company
or a Domestic Subsidiary, a Subsidiary that is not a Foreign Subsidiary or
a Receivables Subsidiary, or any direct or indirect loan, advance (other
than advances to employees for moving and travel expenses, drawing accounts
and similar expenditures in the ordinary course of business) or capital
contribution by the Investor to any other Person other than (A) in the case
of each Investor that is a Foreign Subsidiary, a direct or indirect
Subsidiary of such Foreign Subsidiary and (B) in the case of each Investor
that is the Company or a Domestic Subsidiary, a Subsidiary that is not a
Foreign Subsidiary or a Receivables Subsidiary, including all indebtedness
and accounts receivable owing to the Investor from such other Person which
are not current assets or did not arise from sales to such other Person in
the ordinary course of the Investor's business (other than Royalty or
Management Fees). The amount of any Investment shall be the original cost
of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs
or write-offs with respect to such Investment. A Contingent Obligation of
the Company or any of its Subsidiaries in respect of the obligations of a
Foreign Subsidiary shall constitute an Investment in such Foreign
Subsidiary to the extent of such Contingent Obligation. The amount of such
Investment shall be equal to the amount of the Contingent Obligation as
determined by the last sentence of the definition of Contingent Obligation.
Any renewals, extensions or replacements of an existing Contingent
Obligation or other Indebtedness which constitutes an Investment hereunder
shall not constitute a new Investment at the time of such renewal,
extension or replacement except to the extent such renewal, extension or
replacement increases the amount of such Contingent Obligation or other
Indebtedness and then only to the extent of such increase.
"Investment Grade Ratings" has the meaning assigned to that
term in subsection 2.5.1.
"Investor" has the meaning assigned to that term in the
definition of Investment.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that, as to any such arrangement in corporate form, such
corporation shall not, as to any Person of
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which such corporation is a Subsidiary, be considered to be a Joint Venture
to which such Person is a party.
"Land" has the meaning assigned to that term in the Mortgages.
"Landfill Area" has the meaning assigned to that term in the
form of Mortgage attached hereto as Exhibit XIX-A(i).
"Lender" has the meaning assigned to that term in the
introduction to this Agreement and includes Bankers, BOA and Chemical Bank,
in their individual capacities.
"Lender Default" means (A) the refusal (which has not been
retracted) of a Lender to make available its portion of any Borrowing or to
fund its portion of any drawing under a Letter of Credit or to pay any
amount owing to Bankers pursuant to subsection 2.12.5 or (B) a Lender
having refused to comply, or having notified in writing (which notification
has not been retracted) the Administrative Agent that it does not intend to
comply, with its obligations under Section 2.1, 2.2, 2.3 or 2.12.
"Letter of Credit" means (A) a Standby Letter of Credit or (B)
a Commercial Letter of Credit, in each case, issued or to be issued by a
Fronting Bank for the account of the Company pursuant to Section 2.2.
"Letters of Credit Usage" means, as at any date of
determination, the sum of (A) the maximum aggregate amount which is, or,
with respect to any Letter of Credit that by its terms provides for
increases over time in the maximum amount available to be drawn thereunder,
may become at any given time, available under all Letters of Credit then
outstanding plus (B) the aggregate amount of all drawings under Letters of
Credit honored by one or more Fronting Banks and not theretofore reimbursed
by the Company or any Benefited Subsidiary; provided that the Letters of
Credit Usage of a Fronting Bank shall be deemed to be only such portion of
the Letters of Credit Usage of such Fronting Bank which the Lenders have
not bought by participation pursuant to paragraph (b) of subsection 2.2.1.
"Leverage Ratio" means, for any period, the ratio of the
principal amount of Senior Secured Indebtedness outstanding at the last day
of such period to Consolidated EBITDA for such period.
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"Leveraged Swap" means any Commodities Agreement, Currency
Agreement or Interest Rate Agreement pursuant to which any party shall be
entitled to receive from the counterparty thereto, in respect of each
notional Dollar or other applicable unit that is the subject thereof, any
payment or credit in excess of the amount necessary to compensate such
party for the actual and direct cost or deemed cost to such party of any
fluctuation in interest rates or currency exchange rates in respect of such
Dollar or other unit of currency or market costs or prices in respect of
each such unit.
"LIBOR" means, in respect of any Adjusted LIBOR Borrowing for
any Interest Period, the rate per annum at which dollar deposits
approximately equal in principal amount to the Administrative Agent's
portion of such Adjusted LIBOR Borrowing and for a maturity comparable to
such Interest Period are offered to the Administrative Agent in immediately
available funds in the London interbank market at approximately 11:00 a.m.
(London time) on the Interest Rate Determination Date for such Interest
Period.
"LIBOR Spread" means (A) with respect to Tranche A Term Loans
and Revolving Loans, the percent per annum from time to time in effect
pursuant to paragraph (d) of subsection 2.5.1, and (B) with respect to
Tranche B Term Loans, 3% per annum.
"Lien" means any lien, mortgage, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other
title retention agreement or any lease in the nature thereof).
"Loan" or "Loans" means one or more of the Revolving Loans, the
Swing Line Loans or the Term Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Guarantor
Subsidiary Guarantees and the Collateral Documents.
"Loan Parties" means the Company, Fort Howard Holding, HAC
Holding Corp., Harmon Assoc. Corp. and the Guarantor Subsidiaries.
"Lower Tier Foreign Subsidiary" means, as at any date of
determination, a Foreign Subsidiary of the Company other than (A) a First
Tier Foreign Subsidiary or (B) any other Foreign Subsidiary which is
organized under the laws of the United States of America or any State
thereof.
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"Management Agreements" means (A) the Management Equity
Participation Agreements between the Company and certain officers and
directors and holders of stock (or options on stock), (B) the Fort Howard
Corporation Management Equity Plan (the "Plan") effective as of April 29,
1991, and the Agreements (as defined in the Plan) related thereto, (C) the
Fort Howard Corporation 1995 Stock Incentive Plan (the "1995 Plan")
effective as of January 15, 1995, and the Award Agreements (as defined in
the 1995 Plan) related thereto, and (D) any equity-based plan (a "Broad-
Based Plan") adopted by the Company for its employees generally (provided
that any such Broad-Based Plan may not cause the Company to exceed (i) the
limitation on Investments set forth in subparagraph (xiv) of Section 6.3 or
(ii) the limitation on repurchases or redemptions of Common Stock set forth
in subclause (D)(2) of Section 6.5), as such Management Equity
Participation Agreements, the Plan, the Agreements, the 1995 Plan and the
Award Agreements and any Broad-Based Plan are in effect on the date of this
Agreement (or the date of adoption in the case of any Broad-Based Plan) and
as they may have been and hereafter may be amended, supplemented or
otherwise modified from time to time in accordance herewith and therewith.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System of the
United States as in effect from time to time.
"Material Asset" means (A) any asset or group of related assets
(other than equity interests or other securities in Foreign Subsidiaries)
acquired (whether by purchase, lease, grant of contract rights or
otherwise) after the Closing Date or constructed (whether contemporaneously
or pursuant to a series of related transactions) after the Closing Date by
the Company or any Domestic Subsidiary of the Company having a Fair Value
(for any such asset, individually or, for any such group in the aggregate)
at the date of its acquisition or construction (or, in the case of related
acquisitions or constructions, as of the date of the last of such
acquisitions or constructions) in excess of $15,000,000 other than
(1) assets acquired or constructed as part of any Greenfield Expansion
Project or (2) any Existing Mill Expansion Transaction and (B) the equity
interests or other securities owned by the Company or any Domestic
Subsidiary of the Company in any Foreign Subsidiary of the Company in
respect of which the total of the Fair Values of all Investments (measured
as of the date of each Investment) of the Company and its Domestic
Subsidiaries after the Closing Date exceeds at any time the Dollar
equivalent of $10,000,000 (it being understood that any
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Investment by the Company or any Domestic Subsidiary of the Company in a
Subsidiary of a First Tier Foreign Subsidiary shall be deemed to be an
Investment in an equal amount in such First Tier Foreign Subsidiary);
provided that the term "Material Asset" shall not include acquisitions of
inventory, Receivables and other assets (including Cash and Cash
Equivalents) in the ordinary course of business (other than any such assets
of the character described in clause (A) of the definition of "Capital
Expenditures").
"Material Subsidiary" means each Subsidiary of the Company or
its successors now existing or hereafter acquired or formed by the Company
or such successors (other than any Receivables Subsidiary) which (A) for
the most recent fiscal year of the Company or such successors accounted for
more than 10% of the consolidated revenues of the Company or such
successors, or (B) as at the end of such fiscal year, was the owner of more
than 10% of the consolidated assets of the Company or such successors as
shown on the consolidated financial statements of the Company or such
successors, as the case may be, for such fiscal year.
"Mill" means any Existing Mill or any completed and operational
facility (other than a warehouse) located in the United States acquired or
constructed by the Company or any Subsidiary of the Company after the
Closing Date (whether pursuant to a Greenfield Expansion Project or
otherwise) for the purpose of expanding the Company's capacity to produce
and/or convert tissue or paper products.
"Mill Lot" has the meaning assigned to that term in
subsection 5.14.1.
"Mill Mortgage" means any Mortgage affecting a Mill.
"Moody's" means Moody's Investors Service, Inc., together with
any successor thereto that issues ratings of corporate securities.
"Mortgage" and "Mortgages" mean each of the mortgage
instruments required to be delivered by the Company under this Agreement
with respect to Real Properties (including, without limitation, any such
instrument required to be delivered pursuant to Section 5.11), which shall
be substantially in the form of Exhibit XIX-A(i) or (ii), XIX-B(i) or (ii)
or XIX-C(i) or (ii), as applicable in each case, and containing such
schedules and including such additional provisions and other deviations
from each such Exhibit as shall not be inconsistent with the provisions of
subsection 3.1.4 or shall be necessary
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to conform such Exhibit to applicable law and which shall be dated the date
of delivery thereof and made by the Company for the benefit of the
Administrative Agent, as agent for the Lenders, as mortgagee or grantee,
assignee and secured party, as the same may be amended, supplemented or
otherwise modified from time to time in accordance herewith and therewith.
"Mortgaged Property" means those items of property from time to
time subject to any Mortgage.
"MS Group" means Morgan Stanley Group Inc.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA which is maintained for employees of the
Company or any ERISA Affiliate of the Company.
"Muskogee/Oklahoma Mortgage Recording Taxes" means any mortgage
recording taxes arising from the recording of the Mortgage relating to the
Mill located in Muskogee, Oklahoma.
"Net Cash Proceeds of Sale" means cash payments (including any
cash received by way of deferred payment pursuant to a note receivable or
otherwise (other than the portion of such deferred payment constituting
interest, which shall be deemed not to constitute Net Cash Proceeds of
Sale), but only as and when so received) received from an Asset Sale, net
of costs of sale (including payment of the outstanding principal amount of,
premium or penalty, if any, and interest on any Indebtedness other than
Loans or other Obligations required to be repaid under the terms thereof as
a result of such Asset Sale) and taxes paid or payable by the Company or
any of its Subsidiaries as a result thereof or directly as a result of
distributions by the Company or any of its Subsidiaries of such payments.
"Net Cash Provided From Operations" means, in respect of any
period, the Adjusted Consolidated Net Income for such period, minus (plus)
the increase (decrease), if any, in Adjusted Working Capital from the
opening of business on the first day to the close of business on the last
day of such period.
"9% Senior Subordinated Notes" means the Company's 9% Senior
Subordinated Notes due February 1, 2006, issued and outstanding pursuant to
a certain indenture, as amended, dated as of February 1, 1994 between the
Company and The Bank of New York, as Trustee, as in effect on the Closing
Date and as thereafter amended, supplemented or otherwise modified from
time to time in accordance herewith and therewith.
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"9-1/4% Unsecured Notes" means the Company's 9-1/4% Senior
Notes due March 15, 2001, issued and outstanding pursuant to a certain
indenture, dated as of March 15, 1993 between the Company and Norwest Bank
Wisconsin, N.A., as Trustee, as in effect on the Closing Date and as
thereafter amended, supplemented or otherwise modified from time to time in
accordance herewith and therewith.
"1988 Credit Agreement" means that certain Amended and Restated
Credit Agreement, dated as of October 24, 1988, among FH Acquisition Corp.
and the lenders party thereto and Bankers Trust Company, Bank of America
National Trust and Savings Association, The Bank of Nova Scotia, Chemical
Bank, The Industrial Bank of Japan, Limited, New York Branch and Wells
Fargo, N.A., as lead managers and Bankers Trust Company, as agent, as
amended to the Closing Date.
"1988 Revenue Bond Indenture" means the indenture pursuant to
which the 1988 Revenue Bonds were issued.
"1988 Revenue Bonds" means the Development Authority of
Effingham County Pollution Control Revenue Bonds (Fort Howard Corporation
Project) Series 1988, issued by the Development Authority of Effingham
County to refund the 1985 Revenue Bonds.
"1995 A/R Bridge" means the $60,000,000 receivables facility
provided pursuant to the Receivables Credit Agreement.
"1992 Credit Agreement" means that certain Credit Agreement,
dated as of March 22, 1993, among Fort Howard Corporation, the lenders
party thereto and Bankers Trust Company, as agent, as amended to the
Closing Date.
"Non-Defaulting Lender" means and includes each Lender other
than a Defaulting Lender.
"Non-U.S. Person" has the meaning assigned to that term in
paragraph (e) of subsection 2.9.7.
"Notes" means one or more of the Term Notes, the Swing Line
Notes, the Revolving Notes or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit I annexed hereto with respect to a proposed Borrowing.
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"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit II annexed hereto with respect to a
proposed conversion or continuation.
"Obligations" means all obligations of every nature of the
Company, each of the Guarantor Subsidiaries and the Subsidiaries of the
Company and such Guarantor Subsidiaries from time to time owed to the
Administrative Agent or the Lenders or any of them under the Loan
Documents.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its Chairman of the
Board (if an officer) or its President or one of its Vice Presidents and by
its Chief Financial Officer or its Treasurer; provided that every Officers'
Certificate with respect to the compliance with a condition precedent to
the making of any Loans hereunder shall include (A) a statement that the
officer or officers making or giving such Officers' Certificate have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (B) a statement that, in the opinion of the
signer or signers, he or they have made or have caused to be made such
examination or investigation as is necessary to enable him or them to
express an informed opinion as to whether or not such condition has been
complied with, and (C) a statement as to whether, in the opinion of the
signer or signers, such condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any property (whether real, personal or mixed) under
which that Person is a lessee and which is not a Capital Lease.
"Other Taxes" has the meaning assigned to that term in
paragraph (b) of subsection 2.9.7.
"Participants" has the meaning assigned to that term in
subsection 9.1.2.
"Pension Plan" means any employee plan which is subject to the
provisions of Title IV of ERISA and which is maintained for employees of
the Company or any ERISA Affiliate of the Company, other than a
Multiemployer Plan.
"Permitted After Acquired Collateral Liens" means, in respect
of any Material Asset, (A) Liens of the type described in clause (i) or
(vi) of the definition of Permitted Encumbrances, (B) Preexisting Assumed
Liens and (C) Liens
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which, pursuant to the provisions of the applicable form of Additional
Collateral Document to be used to encumber such Material Asset, are or may
be superior to the Lien created by such Additional Collateral Document.
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not at the time required by
Section 5.3;
(ii) Statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other liens imposed by law
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall
have been made therefor;
(iii) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory
obligations, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(iv) Any attachment or judgment Lien not in excess of
$20,000,000 (exclusive of any amount adequately covered by insurance
as to which the insurance company has acknowledged coverage) and any
other attachment or judgment lien unless the judgment it secures
shall, within 60 days after the entry thereof, not have been
discharged or execution thereof stayed pending appeal, or shall not
have been discharged within 60 days after the expiration of any such
stay;
(v) Leases or subleases granted to others not interfering in
any material respect with the business of the Company or any of its
Subsidiaries;
(vi) Easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Company or any of its Subsidiaries;
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(vii) Any interest or title of a lessor under any lease
permitted by Section 6.9;
(viii) Liens arising from UCC financing statements regarding
leases permitted by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(x) Liens securing surety bonds in an amount not to exceed
individually or in the aggregate $5,000,000 at any time outstanding;
and
(xi) Liens securing appeal bonds, which Liens do not cover
assets having a value in excess of $20,000,000 individually or in the
aggregate at any time and which assets are valued at the greater of
(A) fair market value and (B) book value.
"Permitted Expansion Construction Financing" means a
conventional short term construction loan facility in respect of the
construction of the Initial Major Expansion Project or any Greenfield
Expansion Project which (A) is secured only by the applicable assets
constituting the Initial Major Expansion Project or the applicable
Greenfield Expansion Assets, (B) provides for interest at market rates for
such type of financing as of the date of incurrence thereof, (C) matures
not later than one year after the applicable assets constituting all or a
substantial part of the Initial Major Expansion Project or the applicable
Greenfield Expansion Assets are first placed in service, (D) provides for
disbursements as construction progresses and (E) in the case of any such
facility that is utilized in connection with the Initial Major Expansion
Project, meets the requirements of paragraphs (c) and (d) of subsection
5.12.1 (assuming such subsection were applicable to the Initial Major
Expansion Project).
"Permitted Expansion Financing" means (A) in respect of any
Existing Mill Expansion Transaction, (1) a Sale/Leaseback Financing, (2) a
Secured Expansion Financing or (3) an Unsecured Expansion Financing, in
each case, consummated in accordance with the provisions of subsection
5.12.1 and (B) in respect of any Greenfield Expansion Transaction, (1) a
Sale/Leaseback Financing, (2) a Secured Expansion Financing or (3) an
Unsecured Expansion Financing, in each case consummated in accordance with
the provisions of subsection 5.12.2.
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"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal
entities, and governments and agencies and political subdivisions thereof.
"Plan" shall mean an employee benefit plan (as defined in
Section 3(3) of ERISA) which is subject to Section 406 of ERISA and a plan
(as defined in Section 4975 of the Code) which is subject to Section 4975
of the Code.
"Pledge Agreements" means the Intellectual Property Pledge
Agreement, the Receivable/Inventory Pledge Agreements and the Stock Pledge
Agreements.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of Default
if that condition or event were not cured or waived within any applicable
grace or cure period.
"Preexisting Assumed Lien" means any Lien securing Indebtedness
(A) of any Person that becomes a Foreign Subsidiary (or a Subsidiary of
such Person) at the time such Person becomes a Foreign Subsidiary, which
Indebtedness was not incurred in connection with the acquisition of such
Person or an interest therein by the Company or any Subsidiary of the
Company and which Indebtedness and Lien are not prohibited under Section
6.1 or Section 6.2 hereof, or (B) incurred by the Company or a Subsidiary
of the Company specifically to finance the acquisition of assets (which
acquisition is not prohibited hereunder) and which Indebtedness and Lien
are (1) as of the date of such acquisition, held by the seller of such
assets, (2) not prohibited under the provisions of Section 6.1 or 6.2 of
this Agreement and (3) evidenced by an instrument or instruments which (i)
neither prohibit or restrict the granting of a junior Lien on the
encumbered assets in favor of the Lenders nor limit any rights or remedies
of the Lenders in respect of any such junior Lien and (ii) contain a
warranty by the applicable seller that, as of the date of such acquisition,
such seller has no present intention or plan to transfer for value or
pledge such Indebtedness and Lien to any other Person.
"Preexisting Expansion Lease" means any of (A) the documents
entitled Facility Lease Agreement and Facilities Agreement, each dated as
of October 20, 1989, by and between the Company and The Connecticut
National Bank, as owner trustee, (B) the documents entitled Power
Installation Lease and Power Installation Facilities Agreement, each dated
as of
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October 20, 1989, by and between the Company and The Connecticut National
Bank, as owner trustee, (C) the document entitled Equipment Lease
Agreement, dated as of October 20, 1989, by and between the Company and The
Connecticut National Bank, as owner trustee, (D) the document entitled Dry
Former Lease Agreement, dated as of October 20, 1989, by and between the
Company and The Connecticut National Bank, as owner trustee, (E) the
document entitled Equipment Lease Agreement, dated as of October 20, 1989,
by and between the Company and The Connecticut National Bank, as owner
trustee, (F) the documents entitled Facility Lease Agreement, Facility Site
Lease and Easement Agreement and Facilities Agreement, each dated as of
December 19, 1991, by and between the Company and The Connecticut National
Bank, as owner trustee, (G) the documents entitled Power Plant Lease
Agreement, Power Plant Site Lease and Easement Agreement and Power Plant
Facilities Agreement, each dated as of December 19, 1991, by and between
the Company and The Connecticut National Bank, as owner trustee, (H) the
document entitled Amended and Restated Equipment Lease Agreement [1990],
dated as of December 19, 1991, by and between the Company and The
Connecticut National Bank, as owner trustee, (I) the document entitled
Equipment Lease Agreement [1991], dated as of December 19, 1991, by and
between the Company and The Connecticut National Bank, as owner trustee,
(J) the document entitled Amended and Restated Participation Agreement,
dated as of October 21, 1991, as amended by the First Amendment thereto, in
each case by and among the Company, as lessee, Bell Atlantic TriCon Leasing
Corporation, as owner participant, the initial loan participant described
therein, Wilmington Trust Company, as pass through trustee and loan
participant, The Connecticut National Bank, as owner trustee, and
Wilmington Trust Company, as indenture trustee, (K) the document entitled
Pass Through Trust Agreement, dated as of October 21, 1991, as amended by
the Amended and Restated Pass Through Trust Agreement, dated as of
December 13, 1991, in each case by and between the Company and Wilmington
Trust Company, as pass through trustee, and (L) the document entitled
Amended and Restated Tax Indemnification Agreement, dated as of
December 19, 1991, by and between the Company and Bell Atlantic TriCon
Leasing Corporation, as owner participant).
"Prime Rate" means the rate which Bankers announces from time
to time as its prime lending rate, as in effect from time to time. The
Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. Bankers may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
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"Prior Liens" means, in respect of the Collateral described in
any Collateral Document, the Liens described in the schedules annexed to
such Collateral Document (if any) and any other Liens which, pursuant to
the provisions of such Collateral Document, are or may be superior to the
Lien of such Collateral Document.
"Proceeds Adjustment" has the meaning assigned to that term in
paragraph (a) of subsection 2.7.2.
"Proceeds Payment Date" has the meaning assigned to that term
in paragraph (a) of subsection 2.7.2.
"Program Receivables" means all trade receivables and other
rights to payment (whether constituting accounts, chattel paper,
instruments, general intangibles or otherwise and including the right to
payment of interest or finance charges) and related contract and other
rights and property (including all general intangibles, collections and
other proceeds relating thereto, all security therefor (and the property
subject thereto), all guarantees and other agreements or arrangements of
whatsoever character from time to time supporting such right to payment,
and all other rights, title and interest of a Seller or a Receivables
Subsidiary in goods relating to a sale which gave rise to such right to
payment) sold or contributed by the Company to a Receivables Subsidiary to
consummate a Receivables Transaction pursuant to the Receivables Program
Documents.
"Project Agreement" has the meaning assigned to that term in
the Georgia Mill Mortgage.
"Projections" has the meaning assigned to such term in
subsection 3.1.13.
"Prospectus" means the prospectus of the Company dated February
8, 1995, relating to the Common Stock Offering, as amended and supplemented
on or prior to the date of the signing of this Agreement.
"Purchasing Lenders" has the meaning assigned to that term in
subsection 9.1.3.
"Qualified Currency Agreement" means a Currency Agreement
(other than a Leveraged Swap) which meets the requirements set forth in the
Collateral Documents for the obligations of the Company therewith to be
secured by the Collateral.
-46-
"Qualified Interest Rate Agreement" means an Interest Rate
Agreement (other than a Leveraged Swap) which meets the requirements set
forth in the Collateral Documents for the obligations of the Company
thereunder to be secured by the Collateral.
"Ratio 1" means, for each period of four consecutive fiscal
quarters of the Company (treated as a single accounting period), the
Interest Coverage Ratio for such period.
"Ratio 2" means, for each period of four consecutive fiscal
quarters of the Company (treated as a single accounting period), the
Leverage Ratio, as of the last day of such period.
"Real Properties" means, whether now owned or leased or
hereafter acquired or leased, the Mills and each parcel of realty
constituting a Material Asset.
"Recapitalization" means, collectively, (A) the Common Stock
Offering, (B) the repayment in full of all loans outstanding, and other
amounts due, under the Existing Credit Facilities and the Senior Secured
Notes, (C) the redemption and retirement of the Existing Subordinated Debt,
(D) the execution and delivery of the documents evidencing the 1995 A/R
Bridge and (E) the execution and delivery of this Agreement and the Loan
Documents and the consummation of the transactions contemplated hereunder
and thereunder.
"Receivable/Inventory Pledge Agreements" means each of (A) the
Company Receivable/Inventory Pledge Agreement substantially in the form of
Exhibit XIV-A annexed hereto, executed and delivered by the Company,
(B) the Receivable/Inventory Pledge Agreement, substantially in the form of
Exhibit XIV-B annexed hereto, executed and delivered by the Guarantor
Subsidiaries as of the Closing Date and (C) any other Receivable/Inventory
Pledge Agreement entered into pursuant to Section 5.11 hereof, as each such
agreement may be amended, supplemented or otherwise modified from time to
time in accordance herewith and therewith.
"Receivables" means, with respect to the Company and each
Guarantor Subsidiary, all of such Person's rights to payment for goods sold
or leased or services performed by such Person or any other party for or to
any Person (other than a Foreign Subsidiary of the Company that is a
Controlled Foreign Corporation), whether now in existence or arising from
time to time hereafter, including, without limitation, rights evidenced by
an account, note, contract, security agreement, chattel paper, or other
evidence of indebtedness or security, together
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with (1) all security pledged, assigned, hypothecated or granted to or held
by such Person to secure the foregoing, (2) general intangibles arising out
of such Person's rights in any goods, the sale of which gave rise thereto,
(3) all guarantees, endorsements and indemnifications on, or of, any of the
foregoing, (4) all powers of attorney for the execution of any evidence of
indebtedness or security or other writing in connection therewith, and
(5) all evidences of the filing of financing statements and other
statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured
parties, and certificates from filing or other registration officers.
"Receivables Credit Agreement" means that certain Receivables
Credit Agreement, dated as of the date hereof, by and among the Company and
the Arrangers, as in effect from time to time.
"Receivables Program" means a receivables securitization
program to be instituted and conducted by the Company and other Sellers (as
defined in the Receivables Term Sheet) after the Closing Date in accordance
with the provisions of Section 6.11 and the Receivables Term Sheet.
"Receivables Program Documents" means the documents giving
effect to the Receivables Program, as such documents may be amended,
modified or supplemented from time to time in accordance herewith and
therewith.
"Receivables Subsidiary" means any Subsidiary (regardless of
the form thereof) of the Company which has been formed for the specific
purpose of effecting a Receivables Transaction, all of the stock or other
equity interests in which have been pledged to the Administrative Agent
pursuant to an instrument in form and substance reasonably satisfactory to
the Administrative Agent and which (A) is a Wholly Owned Subsidiary, (B)
contains provisions in its charter or other governing documents which
satisfy the requirements set forth in the Receivables Term Sheet as
applicable to such Subsidiary, (C) does not engage in any business or have
any assets or liabilities other than those directly related to the
Receivables Program and (D) is not and will not at any time be a Benefited
Subsidiary; provided that if a Subsidiary of a Receivables Subsidiary is
formed for the specific purpose of effecting a Receivables Transaction, the
stock or equity interests of such second Receivables Subsidiary (1) need
not be wholly-owned to the extent contemplated by the Receivables Term
Sheet and (2) need not be pledged to the Administrative Agent and equity
interests in such Subsidiary (other than the residuary interest) may be
sold to investors in respect of such
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Receivables Transaction but such Subsidiary shall otherwise constitute a
Receivables Subsidiary.
"Receivables Term Sheet" means the term sheet annexed hereto as
Exhibit XXVII.
"Receivables Transaction" means any transaction (other than the
1995 A/R Bridge) meeting the requirements of Section 6.11 and the
Receivables Term Sheet.
"Recognition Instrument" means, with respect to any Existing
Mill Expansion Lease (A) relating to Land or Improvements subject to the
Georgia Mill Lease, an instrument in form and substance reasonably
satisfactory to the Requisite Lenders, pursuant to which the Administrative
Agent agrees that if the Administrative Agent or any purchaser in
foreclosure shall succeed to the Company's interest in such Mill, the
Existing Mill Expansion Lease described in such instrument shall remain in
full force and effect so long as no default shall occur and continue
thereunder (it being understood that an instrument in form and substance
substantially similar to that certain Nondisturbance, Cure Rights and
Purchase Option Agreement, dated as of October 20, 1989, a copy of which is
attached hereto as Exhibit XXV, in respect of an Existing Mill Expansion
Transaction relating to Land and Improvements located in Effingham County,
Georgia (with such changes as shall be reasonably satisfactory to the
Administrative Agent), shall qualify as an instrument reasonably
satisfactory to Requisite Lenders) and (B) relating to Land or Improvements
other than any subject to the Georgia Mill Lease, an instrument, in form
and substance reasonably satisfactory to the Requisite Lenders,
subordinating the Lien of the Mill Mortgage relating thereto to the
interest of an Existing Mill Expansion Lessor under an Existing Mill
Expansion Easement (it being understood that an instrument in form and
substance substantially similar to that certain Cure Rights and Purchase
Option Agreement, dated as of October 20, 1989, a copy of which is attached
hereto as Exhibit XXVI, in respect of an Existing Mill Expansion
Transaction relating to Land and Improvements located in Brown County,
Wisconsin (with such changes as shall be reasonably satisfactory to the
Administrative Agent) shall qualify as an instrument reasonably
satisfactory to the Requisite Lenders).
"Refinancing Foreign Debt" means any Indebtedness of a Foreign
Subsidiary of the Company, incurred in accordance with the provisions of
subparagraph (iv) of Section 6.1, all the net cash proceeds of which are
used to refinance the Indebtedness identified on Schedule C annexed hereto
as
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"Foreign Indebtedness" or any previously incurred Refinancing Foreign Debt
of such Subsidiary.
"Refinancing Senior Unsecured Debt" or "Refinancing Senior
Unsecured Indebtedness" means any unsecured Indebtedness of the Company,
incurred in accordance with the provisions of subparagraph (ii) of
Section 6.1, all of the net cash proceeds of which are used to refinance
Senior Unsecured Notes or any previously incurred Refinancing Senior
Unsecured Debt.
"Register" has the meaning assigned to that term in subsection
9.1.5.
"Registered Transfer Supplement" has the meaning assigned to
that term in subsection 9.1.3.
"Registration Statement" means the Registration Statement No.
33-56573, filed by the Company on February 8, 1995 with the Securities and
Exchange Commission in connection with the Common Stock Offering, as it may
be amended or supplemented on or prior to the date of the signing of this
Agreement.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System of the United States as in effect from time to
time.
"Release" has the meaning assigned to that term in Sec-
tion 5.13.
"Release Condition" has the meaning assigned to that term in
Section 5.13.
"Release Notice" has the meaning assigned to that term in Sec-
tion 5.13.
"Release Transaction" has the meaning assigned to that term in
Section 5.13.
"Replaced Lender" has the meaning assigned to that term in
subsection 9.22.1.
"Replacement Lender" has the meaning assigned to that term in
subsection 9.22.1.
"Required A Lenders" means, as of any date of determination,
one or more Tranche A Lenders having an aggregate A Credit Exposure
Percentage as of such date greater than 50%. As used herein, the "A Credit
Exposure Percentage"
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of one or more Lenders as of any date is a fraction, expressed as a
percentage, of which (A) the numerator is the A Credit Exposure Amounts of
such Lenders as of such date and (B) the denominator is the Total A Credit
Exposure Amount as of such date.
"Required B Lenders" means, as of any date of determination,
one or more Tranche B Lenders having an aggregate B Credit Exposure
Percentage as of such date greater than 50%. As used herein, the "B Credit
Exposure Percentage" of one or more Lenders as of any date is a fraction,
expressed as a percentage, the numerator of which is the B Credit Exposure
Amounts of such Lenders as of such date and the denominator is the Total B
Credit Exposure Amount as of such date.
"Requisite Lenders" means, as of any date of determination, one
or more Lenders having an aggregate Credit Exposure Percentage as of such
date greater than 50%. As used herein, the "Credit Exposure Percentage" of
one or more Lenders as of any date is a fraction, expressed as a
percentage, of which (A) the numerator is the Credit Exposure Amounts of
such Lenders as of such date and (B) the denominator is the Total Credit
Exposure Amount as of such date.
"Restoration" has the meaning assigned to that term in the
Mortgages.
"Restricted Junior Payment" means (A) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of the Company, now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock to the holders of that
class, (B) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares
of any class of stock of the Company now or hereafter outstanding,
(C) whether in cash or additional securities, any payment or prepayment of
principal of, premium, if any, or interest on, or any redemption, purchase,
retirement, defeasance, sinking fund or similar payment with respect to,
any Subordinated Indebtedness and (D) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock of the Company (other than Common
Stock of the Company or options or rights to acquire Common Stock of the
Company) now or hereafter outstanding.
"Revolving Credit Maturity Date" means the date which is the
seventh anniversary of the Closing Date.
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"Revolving Loan Commitment" means the aggregate amount of the
commitment (whether used or unused) of a Lender to make Revolving Loans and
issue or purchase participations in Letters of Credit and make or purchase
participations in Swing Line Loans, which may be reduced from time to time
pursuant to the provisions of this Agreement or by virtue of assignments
effected pursuant to a Registered Transfer Supplement. As of the Closing
Date, the Revolving Loan Commitment of each Lender is the amount set forth
opposite such Lender's name in Schedule B annexed hereto under the heading
"Revolving Loan Commitment."
"Revolving Loan Deduction Amount" means, as of any date of
determination thereof, the aggregate amount of Indebtedness then
outstanding which constitutes Permitted Expansion Construction Financing.
"Revolving Loans" means the Loans made by the Lenders to the
Company pursuant to subsection 2.3.1.
"Revolving Notes" means the promissory notes of the Company
issued in registered form pursuant to subsection 2.3.4 or issued as
replacement notes in connection with an assignment made pursuant to this
Agreement and, in each case, substantially in the form of Exhibit IV
annexed hereto, as the same may be modified, endorsed or amended from time
to time.
"Royalty or Management Fees" means those amounts owed or owing
from time to time by a Foreign Subsidiary of the Company to the Company or
any of its Domestic Subsidiaries pursuant to agreements which provide for
the provision of management or technical services or advice or the
licensing of patents, trademarks, trade secrets, know-how or proprietary
information; provided that such amounts for any period in respect of the
services or advice so provided or such licenses, as the case may be shall
not exceed the fees that would be charged by an unaffiliated third party
for such services, advice or licenses.
"Sale/Leaseback Financing" means a Sale/Leaseback Transaction
involving Existing Mill Expansion Equipment or Greenfield Expansion Assets;
provided that the principal amount of Indebtedness incurred by the Company
or any Subsidiary of the Company in connection with such transaction is (A)
not less than 50% of the Construction Cost to the Company or such
Subsidiary to acquire or construct such Existing Mill Expansion Equipment
or the assets constituting such Greenfield Expansion Project, as
applicable, (B) not more than 100% of the Construction Cost to the Company
or such Subsidiary to acquire
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or construct such Existing Mill Expansion Equipment or the assets
constituting such Greenfield Expansion Project, as applicable, and
(C) contains no representation and warranty, covenant or event of default
that (i) is in addition to the representations and warranties, covenants
and events of default that are currently set forth in one or more of the
Corresponding Debt Instruments or (ii) is more burdensome (to the Company)
than the most burdensome (to the Company) corresponding representation and
warranty, covenant or event of default set forth in any of the
Corresponding Debt Instruments.
"Sale/Leaseback Transaction" means an arrangement with any
bank, insurance company or other lender or investor or to which any such
lender or investor is a party, providing for the leasing by the Company or
a Subsidiary of the Company of any property, whether now owned or hereafter
acquired, which has been or is to be sold or transferred by the Company or
any Subsidiary of the Company to such lender or investor.
"Savannah Boiler" means the next industrial boiler installed at
the Company's Effingham County, Georgia Mill following the date of this
Agreement.
"Savannah Project" means the acquisition and construction of
the next tissue paper manufacturing machine to be constructed or acquired
after the Closing Date at the Company's Effingham County, Georgia Mill,
together with related manufacturing, converting and ancillary equipment,
improvements and facilities.
"Scheduled Term Loans Principal Payment" means, with respect to
the principal payments on Term Loans pursuant to subsection 2.1.5, for each
six-month period following the Closing Date set forth below, the
correlative amount set forth opposite thereto (as such amount may from time
to time be reduced by virtue of prepayments made under this Agreement):
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6-Month Tranche A Tranche B
Period Term Loans Term Loans
1st $ -0- $ -0-
2nd -0- -0-
3rd 42,000,000 2,000,000
4th 42,000,000 2,000,000
5th 55,000,000 2,000,000
6th 55,000,000 2,000,000
7th 67,500,000 2,000,000
8th 67,500,000 2,000,000
9th 67,500,000 2,000,000
10th 67,500,000 2,000,000
11th 80,000,000 2,000,000
12th 80,000,000 2,000,000
13th 93,000,000 45,000,000
14th 93,000,000 45,000,000
15th -0- 110,000,000
16th -0- 110,000,000
"Second Expansion Project" has the meaning assigned to that
term in subsection 6.14.4.
"Secured Expansion Financing" means the incurrence by the
Company or any Domestic Subsidiary of the Company of Indebtedness which is
secured by assets comprising Existing Mill Expansion Equipment or
Greenfield Expansion Assets and which (A) is in an amount not less than 50%
of the Construction Cost to the Company or such Domestic Subsidiary to
acquire or construct the applicable Existing Mill Expansion Equipment or
Greenfield Expansion Assets and not more than 100% of the Construction Cost
to the Company or such Domestic Subsidiary to acquire or construct the
applicable Existing Mill Expansion Equipment or Greenfield Expansion
Assets, (B) has a final scheduled maturity date that is subsequent to the
date on which the final Scheduled Term Loans Principal Payment in respect
of Tranche B Term Loans is due hereunder, (C) has an Average Life to Stated
Maturity that is greater than the remaining Average Life to Stated Maturity
of the Tranche B Term Loans on the date such Indebtedness is incurred,
(D) is nonrecourse to the Company or any Subsidiary of the Company or any
assets of the Company or any Subsidiary of the Company except the assets
comprising such Existing Mill Expansion Equipment or Greenfield Expansion
Assets, as the case may be, and (E) contains no representation and
warranty, covenant or event of default that (i) is in addition to the
representations and warranties, covenants and events of default that are
currently set forth in one or more of the Corresponding Debt Instruments in
respect thereof or (ii) is more burdensome (to the Company) than the
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most burdensome (to the Company) corresponding representation and warranty,
covenant or event of default set forth in any of the Corresponding Debt
Instruments in respect thereof.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, options, warrants, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities"
or any certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"Seller" has the meaning assigned to that term in the
Receivables Term Sheet.
"Senior Note Purchase Agreement" means that certain Note
Purchase Agreement, dated as of September 11, 1991, as amended, by and
among the Company and the other persons listed on the signature pages
thereto, relating to the Senior Secured Notes.
"Senior Secured Indebtedness" means the following obligations
of the Company and/or any of its Subsidiaries: (A) the amount of any
Indebtedness incurred by the Company or any Subsidiary of the Company
(including, without limitation, any Receivables Subsidiary) in connection
with the 1995 A/R Bridge or any Receivables Transaction, (B) Indebtedness
of the type described in clause (B) of the definition of Indebtedness, (C)
the Indebtedness described in subparagraph (vii) and subparagraph (x) of
Section 6.1, (D) any other Indebtedness of the Company or any Subsidiary of
the Company that is not Subordinated Indebtedness and is secured by any
Lien on any property of the Company or any Subsidiary of the Company and
(E) the full amount of the obligations of the Company or any Subsidiary of
the Company under any Letter of Credit issued for the account of the
Company or any Subsidiary of the Company that are secured by a Lien on any
property of the Company or any Subsidiary of the Company. In calculating
the amount of Senior Secured Indebtedness, there shall be excluded in the
case of any revolving loan facility or Letter of Credit commitment issued
in favor of the Company or any Subsidiary of the Company, the then
unutilized portion of such facility or commitment and, except as specified
in clause (E) of the preceding sentence, any Contingent Obligation.
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"Senior Secured Notes" means the Series A Senior Secured
Floating Rate Notes due 1997, the Series B Senior Secured Floating Rate
Notes due 1998, the Series C-1 Senior Secured Floating Rate Notes due 1999,
the Series C-2 Senior Secured Floating Rate Notes due 1999 and the Series D
Senior Secured Floating Rate Notes due 2000, each as issued, and as amended
from time to time, pursuant to the Senior Note Purchase Agreement.
"Senior Unsecured Notes" means the 9-1/4% Unsecured Notes and
the 8-1/4% Unsecured Notes.
"Sensitive Information" has the meaning assigned to that term
in Section 5.5.
"Severed Parcel" has the meaning assigned to that term in
subsection 5.14.1.
"SIL Company" means SIL Company, a California corporation that
is Wholly Owned by Fort Howard Holding and which owns indirectly 100% of
the outstanding equity securities of Fort Sterling.
"Sludge Boiler Land" has the meaning assigned to that term in
subsection 5.17.1.
"S&P" means Standard & Poor's Corporation, together with any
successor that issues ratings of corporate securities.
"Special Funding Procedures Letter" means a letter agreement
among the Company, the Administrative Agent and each Lender, substantially
in the form of Exhibit XVI annexed hereto with appropriate insertions,
pursuant to which special procedures are established with respect to the
Loans to be made on the Closing Date.
"Special Reserve" means the special reserve, in the amount of
$20,000,000, established as of December 31, 1994 by the Company in respect
of certain environmental matters.
"Standby Letter of Credit" means any standby letter of credit
or similar instrument issued for the purpose of supporting (A) workers'
compensation liabilities of the Company or any of its Subsidiaries, (B) the
obligations of third party insurers of the Company or any of its
Subsidiaries arising by virtue of the laws of any jurisdiction requiring
third party insurers to obtain such letters of credit, (C) Indebtedness of
the Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (D) obligations
-56-
with respect to Capital or Operating Leases of the Company or any of its
Subsidiaries, or (E) performance, payment, deposit or surety obligations of
the Company or any of its Subsidiaries if required by law or governmental
rule or regulation or in accordance with custom and practice in the
industry.
"Statutory Reserves" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum applicable reserve
percentages, including, without limitation, any marginal, special,
emergency or supplemental reserves (expressed as a decimal) established by
the Board of Governors of the Federal Reserve System of the United States
and any other banking authority to which the Administrative Agent is
subject, with respect to the Base CD Rate (as such term is used in the
definition of the term "Alternate Base Rate") for new negotiable
nonpersonal time deposits in dollars of over $100,000 with maturities
approximately equal to three months. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Sterling International Limited" means Sterling International
Limited, an English limited liability company and a Foreign Subsidiary of
the Company.
"Stock Pledge Agreement" means the Company Stock Pledge
Agreement or any Stock Pledge Agreement entered into pursuant to subsection
5.11.1 hereof.
"Stockholders Agreement" means one or more Stockholders
Agreements substantially in the form delivered to the Lenders (draft dated
as of 2/15/95), as the same may be amended, supplemented or otherwise
modified from time to time in accordance herewith or therewith.
"Subordinated Indebtedness" means the Indebtedness of the
Company subordinated in right of payment to the Obligations, including,
without limitation, the Subordinated Notes and the Existing Subordinated
Debt.
"Subordinated Notes" means the 9% Senior Subordinated Notes and
the 10% Subordinated Notes.
"Subsidiary" of any Person means any corporation, association
or other Person of which more than 50% of the total voting power of shares
of stock or other equity interests therein entitled (without regard to the
occurrence of any contingency) to vote in the election of directors,
managers or
-57-
trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof. Unless otherwise indicated, "Subsidiary"
means a Subsidiary of the Company.
"Swing Line Borrowing" means a Borrowing comprised of Swing
Line Loans.
"Swing Line Commitment" has the meaning assigned to that term
in paragraph (a) of subsection 2.12.1.
"Swing Line Loans" means the Loans made by Bankers to the
Company pursuant to subsection 2.12.1.
"Swing Line Note" means the promissory note of the Company
issued in registered form pursuant to subsection 2.12.4 and in
substantially the form of Exhibit VI annexed hereto, as the same may be
modified, endorsed or amended from time to time in accordance herewith or
therewith.
"Taking" has the meaning assigned to that term in the
Mortgages.
"Taxes" has the meaning assigned to that term in paragraph (a)
of subsection 2.9.7.
"10% Subordinated Notes" means the Company's 10% Subordinated
Notes due March 15, 2003, issued pursuant to a certain indenture dated as
of March 15, 1993 between the Company and United States Trust Company of
New York, as Trustee, as such notes and indenture shall be in effect on the
Closing Date and as thereafter amended, supplemented or otherwise modified
from time to time in accordance herewith or therewith.
"Term Borrowing" means a Borrowing comprised of Tranche A Term
Loans or Tranche B Term Loans.
"Term Loan Commitment" or "Term Loan Commitments" means the
commitment or commitments of a Lender or the Lenders to make Term Loans as
set forth in subsection 2.1.1.
"Term Loans" means the Tranche A Term Loans and Tranche B Term
Loans.
"Term Notes" means the promissory notes of the Company issued
in registered form in respect of Tranche A Term Loans or Tranche B Term
Loans pursuant to subsection 2.1.4 or
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issued as replacement notes in connection with an assignment made pursuant
to this Agreement and, in each case, substantially in the form of
Exhibit III or Exhibit V annexed hereto, as the same may be modified,
endorsed or amended from time to time in accordance herewith or therewith.
"Termination Event" means (A) a "Reportable Event" described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
"Reportable Event" not subject to the provision for 30-day notice to the
Pension Benefit Guaranty Corporation or any successor thereof under such
regulations), or (B) the withdrawal of the Company or any of its ERISA
Affiliates from a Pension Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, or (C)
the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041
of ERISA, or (D) the filing by the Pension Benefit Guaranty Corporation (or
any successor thereof) of a notice of its intent to terminate a Pension
Plan, or (E) the receipt by the Company or any ERISA Affiliate of notice of
the termination or reorganization of any Multiemployer Plan or (F) the
occurrence of any other event or condition that might constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; provided that, for the purposes of Section
4.11 only, the termination of any Pension Plan or termination or
reorganization of any Multiemployer Plan and any action taken with respect
to any such termination or reorganization shall not be a Termination Event
if the Company and its ERISA Affiliates shall not incur net liabilities
aggregating more than $25,000,000 (such liabilities to include, without
limitation, any liability to the Pension Benefit Guaranty Corporation (or
any successor thereof), or to any other party under ERISA or the Internal
Revenue Code) resulting from all such terminations or reorganizations.
"Termination Value" of an Interest Rate Agreement or Currency
Agreement at any time means the amount that would be payable by the Company
to the counterparty thereto if such agreement was terminated at such time
because of default of the Company thereunder.
"Title Company" means First American Title Insurance Company of
New York or such other title insurance or abstract company as shall be
designated by the Requisite Lenders.
"Total Credit Exposure Amount" means, as of any date of
determination, an amount equal to the sum of the Credit Exposure Amounts of
all Lenders as of such date.
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"Total A Credit Exposure Amount" means, as of any date of
determination, an amount equal to the sum of the A Credit Exposure Amounts
of all Lenders as of such date.
"Total B Credit Exposure Amount" means, as of any date of
determination, an amount equal to the sum of the B Credit Exposure Amounts
of all Lenders as of such date.
"Total Loan Commitment" and "Total Loan Commitments" have the
meanings assigned to those terms in Section 2.4.
"Total Revolving Loan Commitment" means, at any time, an amount
equal to the maximum aggregate amount of the Adjusted Revolving Loan
Commitments of all Lenders then in effect less the then effective Revolving
Loan Deduction Amount.
"Total Utilization of Revolving Loan Commitments" means, at any
date of determination, the sum of (A) the aggregate principal amount of all
outstanding Revolving Loans and Swing Line Loans plus (B) the Letters of
Credit Usage.
"Tranche" means the distinction among the Tranche A Term Loans,
the Tranche B Term Loans and the Revolving Loans.
"Tranche A Commitment" means, with respect to each Lender, the
aggregate amount of the commitment of such Lender to make Tranche A Term
Loans hereunder pursuant to subsection 2.1.1, which may be reduced from
time to time pursuant to the provisions of this Agreement or by virtue of
assignments effected pursuant to a Registered Transfer Supplement. As of
the Closing Date, the Tranche A Commitment of each Lender is the amount set
forth opposite such Lender's name in Schedule B annexed hereto under the
heading "Tranche A Commitment".
"Tranche A Funding Percentage" means, with respect to each
Lender having a Tranche A Commitment, the percentage designated as such
Lender's Tranche A Funding Percentage on Schedule B annexed hereto under
the heading "Tranche A Funding Percentage".
"Tranche A Lenders" means the Lenders having outstanding
Tranche A Term Loans.
"Tranche A Term Borrowing" means a Borrowing comprised of
Tranche A Term Loans.
"Tranche A Term Loans" means the term loans made by the Lenders
to the Company pursuant to subsection 2.1.1. Each
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Tranche A Term Loan shall be either an Adjusted LIBOR Term Loan or an ABR
Term Loan.
"Tranche A Term Maturity Date" has the meaning assigned to that
term in subsection 2.1.5.
"Tranche A Term Notes" means the promissory notes of the
Company issued in respect of Tranche A Term Loans pursuant to
subsection 2.1.4 or issued as replacement notes in connection with an
assignment made pursuant to this Agreement and substantially in the form of
Exhibit III annexed hereto, as the same may be modified, endorsed or
amended from time to time in accordance herewith or therewith.
"Tranche B Commitment" means, with respect to each Lender, the
aggregate amount of the commitment of such Lender to make Tranche B Term
Loans hereunder pursuant to subsection 2.1.1, which may be reduced from
time to time pursuant to the provisions of this Agreement or by virtue of
assignments effected pursuant to a Registered Transfer Supplement. As of
the Closing Date, the Tranche B Commitment of each Lender is the amount set
forth opposite such Lender's name in Schedule B annexed hereto under the
heading "Tranche B Commitment".
"Tranche B Escrow Account" has the meaning assigned to that
term in paragraph (c) of subsection 2.7.3.
"Tranche B Funding Percentage" means, with respect to each
Lender having a Tranche B Commitment, the percentage designated as such
Lender's Tranche B Funding Percentage on Schedule B annexed hereto under
the heading "Tranche B Funding Percentage".
"Tranche B Lender" means each Lender having outstanding a
Tranche B Term Loan.
"Tranche B Mandatory Prepayment Date" has the meaning assigned
to that term in paragraph (c) of subsection 2.7.3.
"Tranche B Term Maturity Date" has the meaning assigned to that
term in subsection 2.1.5.
"Tranche B Prepayment Amount" has the meaning assigned to that
term in paragraph (c) of subsection 2.7.3.
"Tranche B Prepayment Option Notice" has the meaning assigned
to that term in paragraph (c) of subsection 2.7.3.
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"Tranche B Term Borrowing" means a Borrowing comprised of
Tranche B Term Loans.
"Tranche B Term Loans" means the term loans made by the Lenders
to the Company pursuant to subsection 2.1.1.
"Tranche B Term Notes" means the promissory notes of the
Company issued in respect of Tranche B Term Loans pursuant to
subsection 2.1.4 or issued as replacement notes in connection with an
assignment made pursuant to this Agreement and substantially in the form of
Exhibit V annexed hereto, as the same may be modified, endorsed or amended
from time to time in accordance herewith or therewith.
"Transaction Costs" means the fees, costs and expenses payable
by the Company pursuant hereto and other fees, costs and expenses payable
by the Company or a Subsidiary thereof in connection with the
Recapitalization (other than interest expense).
"Transferee" has the meaning assigned to that term in
subsection 9.1.4.
"12-5/8% Subordinated Debentures" means the Company's 12-5/8%
Subordinated Debentures due November 1, 2000, issued and outstanding
pursuant to a certain indenture, dated as of November 1, 1988 between the
Company and United States Trust Company of New York, as Trustee, as in
effect on the Closing Date and as thereafter amended, supplemented or
otherwise modified from time to time in accordance herewith or therewith.
"UCC" means the Uniform Commercial Code, as in effect in the
applicable jurisdiction.
"Unsecured Expansion Financing" means, in respect of any
Existing Mill Expansion Equipment or Greenfield Expansion Assets, the
incurrence by the Company or any Subsidiary of the Company of Indebtedness
which is not secured by a Lien on any property or assets of the Company or
any Subsidiary of the Company, which Indebtedness (A) is in an amount that
does not exceed 100% of the Construction Cost to the Company or such
Subsidiary to acquire or construct such Existing Mill Expansion Equipment
or Greenfield Expansion Assets, (B) provides for interest at rates which do
not exceed the market rates in respect of similar types of financing
prevailing at the time such Indebtedness is incurred, (C) has a final
scheduled maturity date that is subsequent to the date on which the final
Scheduled Term Loans Principal Payment in respect of Tranche B Term Loans
is due hereunder, (D) has an Average Life to Stated
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Maturity that is greater than the remaining Average Life to Stated Maturity
of the Tranche B Term Loans on the date such Indebtedness is incurred,
(E) contains no representation and warranty, covenant or event of default
that (i) is in addition to the representations and warranties, covenants
and events of default that are currently set forth in one or more of the
Corresponding Debt Instruments applicable thereto or (ii) is more
burdensome (to the Company) than the most burdensome (to the Company)
corresponding representation and warranty, covenant or event of default set
forth in any of the Corresponding Debt Instruments applicable thereto and
(F) if such Indebtedness is Subordinated Indebtedness, contains
subordination provisions no less favorable to the Lenders than the least
favorable subordination provisions (to the Lenders) in the Existing
Subordinated Debt.
"Wholly Owned Subsidiary" of any Person means any Subsidiary
all of the shares of capital stock of which (except directors' qualifying
shares) are at the time directly or indirectly owned by such Person.
Section 1.2 Accounting Terms. For the purposes of this
Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to them in conformity with GAAP.
Section 1.3 Other Definitional Provisions; Anniversaries.
References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in Section 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference. For purposes of this Agreement, a monthly anniversary of the
Closing Date shall occur on the same day of the applicable month as the day
of the month on which the Closing Date occurred; provided that if the
applicable month has no such day (i.e., 29, 30 or 31), the monthly
anniversary shall be deemed to occur on the last day of the applicable
month.
Section 1.4 Adjustment for Special Reserve. For purposes of
calculating the Leverage Ratio in respect of periods which include fiscal
quarters ending on or prior to December 31, 1994, Consolidated EBITDA shall
be determined without taking into account the establishment of the Special
Reserve.
Section 1.5 Currency Equivalent Generally. For all purposes
of this Agreement, (A) the equivalent in Dollars of
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any amount in any other currency shall be determined at the rate of
exchange quoted by the Administrative Agent in New York City at 9:00 A.M.
(New York City time) on the date of determination to prime banks in New
York City for the spot purchase in the New York foreign exchange market of
such amount of such other currency with Dollars and (B) the equivalent in
any currency (other than Dollars) of any amount in Dollars shall be
determined at the rate of exchange quoted by the Administrative Agent in
New York City at 9:00 A.M. (New York City time) on the date of
determination to prime banks in New York City for the spot purchase in the
New York foreign exchange market of such amount of Dollars with such other
currency. In determining compliance with the covenants and other terms of
this Agreement that require amounts of another currency to be converted
into Dollars or amounts of Dollars to be converted into another currency,
as the case may be, such amounts shall be converted pursuant to the first
sentence of this Section 1.5 on the date that (A) Indebtedness is incurred,
(B) an Investment is made, (C) a transfer of assets occurs or (D) any other
relevant transaction occurs, as the case may be.
ARTICLE II
COMMITMENTS AND LOANS; NOTES
Section 2.1 Term Loans and Term Notes.
2.1.1. Term Loan Commitments. Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Loan Parties set forth herein and in each of the other
Loan Documents, (A) on the Closing Date, (1) each Lender having a Tranche A
Commitment hereby severally agrees to lend the Company an aggregate amount
not exceeding its Tranche A Funding Percentage of the Closing Date
Tranche A Funding Amount and (2) each Lender having a Tranche B Commitment
hereby severally agrees to lend the Company an aggregate amount not
exceeding its Tranche B Funding Percentage of the aggregate Tranche B
Commitments and (B) on the Deferred Funding Date, each Lender having a
Tranche A Commitment severally agrees to lend the Company an aggregate
amount not exceeding its Tranche A Funding Percentage of the Deferred
Tranche A Funding Amount. The aggregate amount of the Tranche A
Commitments is $810,000,000. Each Lender's Tranche A Commitment shall
expire on the Deferred Funding Date (immediately following any funding made
on such date) but, in any event, not later than 5:00 P.M. (New York time)
on the date 45 days after the Closing Date; provided that the Tranche A
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Commitment of any Lender that is a Defaulting Lender by reason of the
failure to advance its Tranche A Funding Percentage of the Deferred
Tranche A Funding Amount on the Deferred Funding Date shall not so
terminate until such Lender (or its assignee) shall have so funded such
Tranche A Funding Percentage. The aggregate amount of the Tranche B
Commitments is $330,000,000. Each Lender's Tranche B Commitment shall
expire on the Closing Date (immediately following the funding of the
Tranche B Term Loans). All Tranche A Term Loans under this Agreement shall
be made by the Lenders having a Tranche A Commitment simultaneously and
proportionately to their Tranche A Funding Percentages and all Tranche B
Term Loans under this Agreement shall be made by the Lenders having a
Tranche B Commitment simultaneously and proportionately to their Tranche B
Funding Percentages, it being understood that no Lender shall be
responsible for any default by any other Lender in such other Lender's
obligation to make a Term Loan hereunder nor shall the Tranche A Commitment
or Tranche B Commitment, as the case may be, of any Lender be increased or
decreased as a result of the default by any other Lender in such other
Lender's obligation to make a Term Loan hereunder. Term Loans made on any
Funding Date shall be made in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess of that amount.
2.1.2. Notice of Borrowing. The Company shall deliver to the
Administrative Agent a Notice of Borrowing substantially in the form of
Exhibit I annexed hereto in respect of the Borrowings to be made on the
Closing Date or the Deferred Funding Date as follows: (A) to the extent
such Borrowings will consist of an Adjusted LIBOR Term Borrowing, such
Notice of Borrowing shall be received by the Administrative Agent no later
than 11:00 a.m. (New York time), at least three Business Days in advance of
the Closing Date or the Deferred Funding Date, as the case may be, and
(B) to the extent such Borrowings will consist of an ABR Term Borrowing,
such Notice of Borrowing shall be received by the Administrative Agent no
later than 11:00 a.m. (New York time), at least one Business Day in advance
of the Closing Date or the Deferred Funding Date, as the case may be;
provided that the Notice of Borrowing delivered by the Company in respect
of the Tranche A Term Loans to be borrowed on the Deferred Funding Date
shall in any event be delivered to the Administrative Agent at least three
days prior to the Deferred Funding Date. Each such Notice of Borrowing
shall be irrevocable and shall specify (A) the date on which Term Loans are
to be made (which shall be a Business Day), (B) whether such Term Loans are
Tranche A Term Loans or Tranche B Terms Loans and the total amount of such
Term Loans, (C) in the case of Borrowings to be made on the Closing Date, a
computation, in reasonable detail,
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of the Closing Date Tranche A Funding Amount, and (D) whether the Term
Loans will be based on Adjusted LIBOR or ABR; and provided, further, in the
case of any such Loans borrowed on or prior to the 90th day following the
Closing Date, such Loans may consist only of Adjusted LIBOR Loans having a
one month Interest Period or ABR Loans.
2.1.3. Disbursement of Funds. (a) Promptly after receipt of
a Notice of Borrowing pursuant to subsection 2.l.2, the Administrative
Agent shall notify each applicable Lender of the proposed Borrowing.
Arrangements may be made satisfactory to the Company, the Administrative
Agent and each Lender whereby an amount up to the aggregate amount of Term
Loans to be borrowed on the Closing Date may be placed in escrow to
facilitate the making of such Loans on the Closing Date; provided that in
any event each Lender shall have made arrangements satisfactory to the
Company, the Administrative Agent and such Lender (pursuant to the Special
Funding Procedures Letter or otherwise) whereby the funds for the Term
Loans to be made on the Closing Date shall be made available by the Lenders
to the Administrative Agent, as escrow agent under the Special Funding
Procedures Letter, not later than 1:00 P.M. (New York time) on the Closing
Date. It is understood and agreed that the Term Loans to be made on the
Closing Date shall not be considered to have been made for any purposes of
this Agreement, and the Company shall have no interest in such funds, until
the escrow agent delivers such funds to the Administrative Agent pursuant
to paragraph 4 of the Special Funding Procedures Letter. Upon satisfaction
or waiver of the conditions precedent specified in Sections 3.2 and 3.3,
and, in the case of Term Loans made on the Closing Date, Section 3.1, the
Administrative Agent shall make the proceeds of the Term Loans available to
the Company on the relevant Funding Date by causing an amount of same day
funds equal to the proceeds of all such Loans received by the
Administrative Agent at its office located at One Bankers Trust Plaza, New
York, New York to be credited to the account of the Company at such office
of the Administrative Agent. The parties hereto acknowledge and agree that
all Term Loans will be borrowed in New York, New York, and that no Term
Loans will be made other than in New York, New York.
(b) Unless the Administrative Agent shall have been notified
by any Lender prior to the date of borrowing of Term Loans that such Lender
does not intend to make available to the Administrative Agent the amount of
funds necessary to satisfy such Lender's obligations under subsection 2.1.1
on such date, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such date
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and the Administrative Agent in its sole discretion may, but shall not be
obligated to, make available to the Company a corresponding amount on such
date. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from the date of borrowing of
Term Loans until the date such amount is paid to the Administrative Agent,
at the customary rate set by the Administrative Agent for the correction of
errors among banks for three Business Days and thereafter at ABR. If such
Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Company and the Company shall immediately pay such
corresponding amount to the Administrative Agent. Nothing in this
subsection 2.l.3 shall be deemed to relieve any Lender from its obligation
to fulfill its Tranche A Commitment and/or Tranche B Commitment, as the
case may be, hereunder or to prejudice any rights which the Company may
have against any Lender as a result of any default by such Lender
hereunder.
2.1.4. Term Notes. The Company shall execute and deliver to
each Lender, as applicable (or to the Administrative Agent for that
Lender), a Tranche A Term Note substantially in the form of Exhibit III or
a Tranche B Term Note substantially in the form of Exhibit V, each as
annexed hereto, to evidence such Lender's Term Loan(s), in the principal
amount of such Lender's Tranche A Commitment and/or Tranche B Commitment,
as the case may be, with other appropriate insertions.
2.1.5. Scheduled Payments of Term Loans. For each six-month
period after the Closing Date, the Company shall make a principal payment
in respect of Tranche A Term Loans and Tranche B Term Loans in the amount
of the Scheduled Term Loans Principal Payment applicable to such Term Loans
for such period. Each Scheduled Term Loans Principal Payment shall be due
and payable on the last Business Day of the relevant six-month period
identified in the definition of Scheduled Term Loans Principal Payment,
except that the principal payment for the 16th such six-month period shall
be made on December 31, 2002 (the "Tranche B Term Maturity Date"). Any
payment or prepayment of the Term Loans may not be reborrowed. The
Tranche A Term Loans and all other amounts owed hereunder with respect to
Tranche A Term Loans shall be paid in full no later than the date which is
the seventh anniversary of the Closing Date (such seventh anniversary, the
"Tranche A Term Maturity Date"). The Tranche B Term Loans and all other
amounts owed
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hereunder with respect to the Tranche B Term Loans shall be paid in full no
later than the Tranche B Term Maturity Date.
Section 2.2 Letters of Credit.
2.2.1. Letters of Credit. (a) In addition to requesting that
the Lenders make Revolving Loans pursuant to Section 2.3, the Company may
request, in accordance with the provisions of this subsection 2.2.1, that
on and after the Closing Date and prior to the date that is thirty Business
Days preceding the Revolving Credit Maturity Date one or more Fronting
Banks issue, subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of the Loan Parties set
forth herein and in each of the other Loan Documents, Letters of Credit for
the Company's account; provided that (A) the Company shall not request that
any Fronting Bank issue any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Revolving Loan Commitments would
exceed the Total Revolving Loan Commitment then in effect, (B) in no event
shall any Fronting Bank issue (1) any Letter of Credit having an expiration
date later than the Revolving Credit Maturity Date or (2) subject to the
foregoing subclause (1), any Commercial Letter of Credit having an
expiration date more than 270 days after its date of issuance or less than
thirty Business Days prior to the Revolving Credit Maturity Date, or having
terms under which the latest possible payments of obligations arising
thereunder could mature on or later than the Revolving Credit Maturity
Date, or any Standby Letter of Credit having an expiration date more than
one year after its date of issuance, provided that, subject to the
foregoing subclause (1), this subclause (2) shall not prevent any Fronting
Bank from agreeing that a Standby Letter of Credit will automatically be
renewed annually for a period not to exceed one year if such Fronting Bank
does not cancel such renewal, and (C) the Company shall not request that
any Fronting Bank issue any Letter of Credit if, after giving effect to
such issuance, the Letters of Credit Usage in respect of Letters of Credit
would exceed $50,000,000. The issuance of any Letter of Credit in
accordance with the provisions of this subsection 2.2.1 shall be given
effect in the calculation of the Total Utilization of Revolving Loan
Commitments and shall require the satisfaction of each condition set forth
in Sections 3.2 and 3.5.
(b) Immediately upon the issuance of each Letter of Credit,
each Lender having an Adjusted Revolving Loan Percentage greater than zero
shall be deemed to, and hereby agrees to, irrevocably purchase from the
Fronting Bank a participation in such Letter of Credit and all drawings
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thereunder in an amount equal to such Lender's Adjusted Revolving Loan
Percentage of the maximum amount which is or at any time may become
available to be drawn thereunder. Upon any change in the Revolving Loan
Commitments or Adjusted Revolving Loan Percentages of the Lenders pursuant
to Section 9.22 or 9.1 or as a result of the occurrence of a Lender Default
or the cure by any Defaulting Lender of a Lender Default, with respect to
all outstanding Letters of Credit and all then unreimbursed drawings under
any Letters of Credit, there shall be an automatic adjustment to the
participations pursuant to this subsection 2.2.1 to reflect the new
Adjusted Revolving Loan Percentages of the Lenders; provided that no such
adjustment shall relieve any Defaulting Lender of its obligations under
this Agreement to the Company or, in the circumstances contemplated in the
proviso to the definition of Adjusted Revolving Loan Percentage, to the
other Lenders and the Fronting Bank or Fronting Banks.
(c) Each Letter of Credit may provide that the applicable
Fronting Bank may (but shall not be required to) pay the beneficiary
thereof, upon the occurrence of an Event of Default or, if payment is not
then due to the beneficiary, provide for the deposit of funds in an account
to secure payment to the beneficiary and that any funds so deposited shall
be paid to the beneficiary of the Letter of Credit if conditions to such
payment are satisfied or returned to the Administrative Agent for ratable
distribution to the Lenders (or, if all Obligations then due shall have
been indefeasibly paid in full, to the Company) if no payment to the
beneficiary has been made and the final date available for drawings under
such Letter of Credit has passed. Each payment or deposit of funds by a
Fronting Bank as provided in this paragraph shall be treated for all
purposes of this Agreement as a drawing duly honored by such Fronting Bank
under the related Letter of Credit.
2.2.2. Request for Issuance. Whenever the Company desires the
issuance of a Letter of Credit, it shall deliver to the Administrative
Agent a written notice no later than 1:00 P.M. (New York time) at least ten
Business Days (in the case of Standby Letters of Credit), or five Business
Days (in the case of Commercial Letters of Credit), or, in each such case,
such shorter period as may be agreed to by any Fronting Bank in any
particular instance, in advance of the proposed date of issuance. Such
notice shall specify (A) the proposed date of issuance (which shall be a
business day under the laws of the jurisdiction of the applicable Fronting
Bank), (B) the face amount and type of the Letter of Credit requested,
(C) the expiration date of the Letter of Credit requested, (D) the name
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and address of the beneficiary thereof and (E) the Benefited Subsidiary or
Benefited Subsidiaries, if any, with respect to such Letter of Credit and
the amount inuring to the benefit of each such Benefited Subsidiary. As
soon as practicable after delivery of such notice, the Fronting Bank for
such Letter of Credit shall be determined as provided in subsection 2.2.3.
Prior to the date of issuance of any Letter of Credit, the Company shall
specify a precise description of the form of such Letter of Credit and
documents and the verbatim text of any certificate to be presented by the
beneficiary of such Letter of Credit which, if presented by such
beneficiary prior to the expiration date of such Letter of Credit, would
require the applicable Fronting Bank to make payment under such Letter of
Credit; provided that the Fronting Bank, in its sole reasonable judgment,
may prior to the date of issuance require changes in the form of such
Letter of Credit and any such documents and certificates; and provided,
further, that no Letter of Credit shall require payment against a
conforming draft to be made thereunder on the same business day (under the
laws of the jurisdiction of the Fronting Bank) that such draft is presented
if such presentation is made after 1:00 p.m. (in the time zone of the
jurisdiction of the Fronting Bank) on such business day. Promptly after
receipt of a request for issuance of a Letter of Credit and the
determination of the Fronting Bank therefor, the Administrative Agent shall
notify each Lender having a Revolving Loan Commitment of the proposed
issuance, the identity of the Fronting Bank and the amount of each such
other Lender's respective participation therein, determined in accordance
with subsection 2.2.1.
2.2.3. Determination of Fronting Bank. (a) Upon receipt by
the Administrative Agent of a notice from the Company pursuant to
subsection 2.2.2 requesting the issuance of a Letter of Credit, in the
event Bankers elects to issue such Letter of Credit, the Administrative
Agent shall so notify the Company and Bankers shall be the Fronting Bank
with respect thereto. In the event that Bankers, in its sole discretion,
elects not to issue such Letter of Credit, Bankers shall promptly so notify
the Company and the Company may request any other Arranger to issue such
Letter of Credit. Each such Arranger so requested to issue such Letter of
Credit shall promptly notify the Company and the Administrative Agent
whether or not, in its sole discretion, it has elected to issue such Letter
of Credit, and any such Arranger which so elects to issue such Letter of
Credit shall be the Fronting Bank with respect thereto. In the event that
all Arrangers shall have declined to issue such Letter of Credit,
notwithstanding the prior election of each Arranger not to issue such
Letter of Credit, each Arranger shall be obligated to issue a Letter of
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Credit in a maximum aggregate amount available for drawing equal to such
Arranger's proportionate share (based upon the relative Adjusted Revolving
Loan Percentages of the Arrangers) of the Letter of Credit requested by the
Company and each Arranger shall be a Fronting Bank with respect to the
Letter of Credit issued by it.
(b) Each Fronting Bank which elects to issue a Letter of
Credit shall promptly give written notice to the Administrative Agent and
each other Lender having an Adjusted Revolving Loan Percentage greater than
zero of the information required under clauses (A) through (E) of the
second sentence of subsection 2.2.2 relating to such Letter of Credit and
shall deliver a copy of such Letter of Credit, and any amendment thereto,
to the Administrative Agent.
2.2.4. Payment of Amounts Drawn Under Letters of Credit. (a)
In determining whether to pay under any Letter of Credit, the Fronting Bank
with respect thereto shall be responsible only to determine that the
documents and certificates required to be delivered under such Letter of
Credit have been delivered and that they substantially comply on their face
with the requirements of such Letter of Credit.
(b) In the event of any drawing under any Letter of Credit by
the beneficiary thereof, the Fronting Bank shall notify the Company and the
Administrative Agent on or before 11:00 a.m. (New York time) on the
Business Day on which such Fronting Bank intends to honor such drawing, and
if notified on or before such time, the Company shall reimburse such
Fronting Bank on the day on which such drawing is honored in an amount in
same day funds equal to the amount of such drawing; provided that, if the
Fronting Bank notifies the Company and the Administrative Agent after 11:00
a.m. (New York time) on the Business Day on which such Fronting Bank
intends to honor such drawing, the Company shall reimburse such Fronting
Bank on the Business Day immediately following the day on which it receives
notice that such drawing was honored in an amount in same day funds equal
to the amount of such drawing plus accrued interest on such amount at,
notwithstanding the provisions of subparagraph (a)(ii) of subsection 2.2.6,
the rate payable under this Agreement for ABR Loans; and provided, further,
that, anything contained in this Agreement to the contrary notwithstanding,
(A) unless the Company shall have notified the Administrative Agent and
such Fronting Bank prior to the time such reimbursement is due, as provided
above, that the Company intends to reimburse such Fronting Bank for the
amount of such drawing with funds other than the proceeds of Revolving
Loans or unless the Company shall have previously given to the
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Administrative Agent a timely Notice of Borrowing for Revolving Loans that
are Adjusted LIBOR Loans in an amount at least equal to the amount of such
drawing, the Company shall be deemed to have timely given a Notice of
Borrowing to the Administrative Agent requesting the Lenders having
Revolving Loan Commitments to make Revolving Loans which are ABR Loans on
the date on which the Company is obligated to reimburse the Fronting Bank
in an amount equal to the amount of such drawing, and (B) subject to
satisfaction or waiver of the conditions specified in Section 3.2, such
Lenders shall, on the date on which the Company is obligated to reimburse
the applicable Fronting Bank, make Revolving Loans which are Adjusted LIBOR
Loans or ABR Loans, as the case may be, in the amount of such drawing, the
proceeds of which shall be applied directly by the Administrative Agent to
reimburse such Fronting Bank for the amount of such drawing; and provided,
further, that if, for any reason, proceeds of Revolving Loans are not
received by such Fronting Bank on such date in an amount equal to the
amount of such drawing the Company shall reimburse such Fronting Bank, on
the business day (under the laws of the jurisdiction of such Fronting Bank)
immediately following the date of such drawing, in an amount in same day
funds equal to the excess of the amount of such drawing over the amount of
such Revolving Loans, if any, which are so received, plus accrued interest
on such amount at the rate set forth in subparagraph (a)(ii) of subsection
2.2.6; and provided, further, that, if proceeds of any Revolving Loan are
not received by the Fronting Bank as a result of the failure of a Lender to
fund such Revolving Loan when required to do so by the terms of this
Agreement, then the accrued interest on the amount so reimbursed shall be
at the rate set forth in subsection 2.5.1 which would have applied to such
Revolving Loan.
(c) The Fronting Bank shall, to the fullest extent permitted
by applicable law, apply all reimbursement funds received by it from the
Company pursuant to subsection 2.2.4(b) in the following order of priority:
first, to the Fronting Bank for any amount then due and payable to such
Fronting Bank in connection with such Letter of Credit, second, to all
other Lenders (other than Defaulting Lenders) ratably (according to the
respective amounts paid by such other Lenders in connection with such
Letter of Credit pursuant to subsection 2.2.5) for any amounts then due and
payable to such other Lenders in connection with such Letter of Credit, and
third, to all Defaulting Lenders ratably (according to the respective
amounts paid by such Lenders in connection with such Letter of Credit
pursuant to Section 2.2.5) for any amounts then due and payable to such
Lenders in connection with such Letter of Credit.
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2.2.5. Payment by the Lenders. In the event that the Company
shall fail to reimburse a Fronting Bank as provided in subsection 2.2.4 in
an amount equal to the amount of any drawing honored by such Fronting Bank
under a Letter of Credit issued by it, such Fronting Bank shall promptly
notify each Lender of the unreimbursed amount of such drawing, plus accrued
interest thereon, and of such Lender's respective participation therein.
Each Lender shall make available to such Fronting Bank an amount equal to
its respective participation in same day funds, at the office of such
Fronting Bank specified in such notice, not later than 1:00 P.M. (New York
time) on the business day (under the laws of the jurisdiction of such
Fronting Bank) after the date notified by such Fronting Bank. In the event
that any Lender fails to make available to such Fronting Bank the amount of
such Lender's participation in such Letter of Credit as provided in this
subsection 2.2.5, such Fronting Bank shall be entitled to recover such
amount on demand from such Lender together with interest at the customary
rate set by the Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at ABR. Nothing in this
subsection 2.2.5 shall be deemed to prejudice the right of any Lender to
recover from such Fronting Bank any amounts made available by such Lender
to such Fronting Bank pursuant to this subsection 2.2.5 in the event that
it is determined by a court of competent jurisdiction that the payment with
respect to a Letter of Credit by such Fronting Bank in respect of which
payment was made by such Lender constituted gross negligence or willful
misconduct on the part of such Fronting Bank. Each Fronting Bank shall
distribute to each other Lender which has paid all amounts payable by it
under this subsection 2.2.5 with respect to any Letter of Credit issued by
such Fronting Bank such other Lender's Adjusted Revolving Loan Percentage
of all payments received by such Fronting Bank from the Company in
reimbursement of drawings honored by such Fronting Bank under such Letter
of Credit when such payments are received.
2.2.6. Compensation. (a) The Company agrees to pay the
following amounts to each Fronting Bank with respect to each Letter of
Credit issued by it:
(i) with respect to the issuance, amendment or transfer of
each Letter of Credit and each drawing made thereunder, documentary
and processing charges in accordance with such Fronting Bank's
standard schedule for such charges in effect at the time of such
issuance, amendment, transfer or drawing, as the case may be; and
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(ii) except as otherwise provided in subsection 2.2.4, with
respect to drawings made under any Letter of Credit, interest,
payable on demand, on the amount paid by such Fronting Bank in
respect of each such drawing from the date of the drawing through the
date such amount is reimbursed by the Company (including any such
reimbursement out of the proceeds of Revolving Loans or Swing Line
Loans, as the case may be, pursuant to subsection 2.2.4) at a rate
which is at all times equal to 2.0% per annum in excess of the rate
of interest otherwise payable under this Agreement for ABR Loans.
(b) The Company agrees to pay to the Administrative Agent for
distribution to each Lender having a Revolving Loan Commitment in respect
of all Letters of Credit outstanding such Lender's Adjusted Revolving Loan
Percentage of a commission on the maximum amount available from time to
time to be drawn under such outstanding Letters of Credit at a rate per
annum equal to the LIBOR Spread then applicable to Adjusted LIBOR Revolving
Loans, payable in arrears on and through the last day of each fiscal
quarter of the Company (or the first date on which the Revolving Loan
Commitment shall have expired or been terminated and there shall be no
outstanding Letters of Credit, if earlier) and calculated on the basis of a
360-day year and the actual number of days elapsed.
(c) The Company agrees to pay to each Fronting Bank in respect
of all Letters of Credit outstanding issued by such Fronting Bank a facing
fee (the "Facing Fee") equal to .25% per annum of the maximum amount
available from time to time to be drawn under such outstanding Letters of
Credit, payable in arrears on and through the last day of each fiscal
quarter of the Company (or the first date on which the Revolving Loan
Commitments shall have expired or been terminated and there shall be no
outstanding Letters of Credit, if earlier) and calculated on the basis of a
360-day year and the actual number of days elapsed, provided that in no
event shall the annual Facing Fee with respect to each Letter of Credit be
less than $500, it being agreed that, on the date of issuance of any Letter
of Credit and on each anniversary thereof prior to the expiration or
termination of such Letter of Credit, if $500 will exceed the amount of
Facing Fees that will accrue with respect to such Letter of Credit for the
immediately succeeding 12-month period, the full $500 shall be payable on
the date of issuance of such Letter of Credit and on each such anniversary
thereof prior to the expiration or termination of such Letter of Credit.
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(d) Promptly upon receipt by the Administrative Agent or any
Fronting Bank of any amount described in subparagraph (a)(ii) or
paragraph (b) of this subsection 2.2.6, the Administrative Agent on behalf
of such Fronting Bank, or such Fronting Bank, as applicable, shall
distribute to each Lender its Adjusted Revolving Loan Percentage of such
amount. Amounts payable under subparagraph (a)(i) and paragraph (c) of
this subsection 2.2.6 shall be paid directly to the applicable Fronting
Bank.
(e) Once paid, any commissions or fees described in this
subsection shall not be refundable or creditable in any circumstances.
2.2.7. Obligations Absolute. The obligation of the Company to
reimburse each Fronting Bank for drawings made under the Letters of Credit
issued by it and the obligations of the Lenders under subsection 2.2.5
shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances
including, without limitation, the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which the Company or any Affiliate of the Company may have at
any time against a beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom any such beneficiary or
transferee may be acting), such Fronting Bank, any Lender or any
other Person, whether in connection with this Agreement, the 1988
Credit Agreement, the transactions contemplated herein or therein or
any unrelated transaction (including any underlying transaction
between the Company or one of its Subsidiaries and the beneficiary
for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect other than solely
as the result of gross negligence or willful misconduct of the
applicable Fronting Bank;
(iv) payment by such Fronting Bank under any Letter of Credit
against presentation of a demand, draft or certificate or other
document which does not comply with
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the terms of such Letter of Credit other than if said payment is
solely the result of the gross negligence or willful misconduct of
such Fronting Bank;
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing;
(vi) the fact that an Event of Default or a Potential Event of
Default shall have occurred and is continuing; or
(vii) any Lender Default.
2.2.8. Additional Payments. Without duplication of payments
under subsection 2.9.7, if by reason of (A) after the date of this
Agreement any change in applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or application
by any judicial or regulatory authority of any applicable law, regulation,
rule, decree or regulatory requirement or (B) compliance by any Fronting
Bank or any Lender with any direction, request or requirement (whether or
not having the force of law) of any governmental or monetary authority
including, without limitation, Regulation D:
(i) such Fronting Bank or any Lender shall be subject to any
tax, levy, charge or withholding of any nature or to any variation
thereof or to any penalty with respect to the maintenance or
fulfillment of its obligations in respect of Letters of Credit or
participations therein under this Section 2.2 (except for changes in
the rate of tax on the overall net income of such Fronting Bank or
Lender or its applicable lending office imposed by the jurisdiction
in which such Fronting Bank's or Lender's principal executive office
or applicable lending office is located), whether directly or by such
tax, levy, charge or withholding being imposed on payments in respect
of Letters of Credit or participations therein made to such Fronting
Bank or any Lender;
(ii) any reserve, deposit or similar requirement is or shall
be applicable, imposed or modified in respect of any Letter of Credit
issued by such Fronting Bank or participations therein purchased by
any Lender; or
(iii) there shall be imposed on such Fronting Bank or any
Lender any other condition regarding this Section 2.2, any Letter of
Credit or any participation therein;
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and the result of any of the foregoing is directly or indirectly to
increase the cost to such Fronting Bank or any Lender of issuing, making or
maintaining any Letter of Credit or of purchasing or maintaining any
participation between a Lender and the Fronting Bank in any Letter of
Credit, or to reduce the amount receivable in respect thereof by such
Fronting Bank or any Lender, then and in any such case such Fronting Bank
or such Lender may, from time to time after obtaining actual knowledge that
the additional cost was incurred or the amount received was reduced, notify
the Company and the Company shall, within 5 days of receipt of the request
therefor, pay such amounts as such Fronting Bank or such Lender may specify
to be necessary to compensate such Fronting Bank or such Lender for such
additional cost or reduced receipt, together with interest on such amount
from the date demanded until payment in full thereof at a rate per annum
equal at all times to the rate applicable to ABR Loans; provided that the
Company shall have no obligation to such Fronting Bank or such Lender under
this subsection 2.2.8 if (A) such Fronting Bank or such Lender shall not
have notified the Company within six months following the later of (1) the
date of the occurrence of the event which forms the basis for such request
and (2) the date such Fronting Bank or such Lender shall have become aware
of such event or (B) the obligation to pay additional amounts on account of
taxes, levies, charges or withholdings would not have arisen but for
(1) the failure of such Fronting Bank or such Lender to provide any
applicable forms or other documents requested by the Company which such
Fronting Bank or Lender is otherwise required to provide under this
Agreement that would establish the entitlement of such Fronting Bank or
such Lender to a reduced rate of, or an exemption from, such tax, levy,
charge, withholding or similar item or (2) any representation or warranty
made by such Fronting Bank or such Lender with respect to an exemption
(partial or complete) from taxes, levies, charges or withholdings proving
to have been incorrect, false or misleading in any material respect when so
made. The determination by such Fronting Bank or any Lender, as the case
may be, of any amount due pursuant to this subsection 2.2.8 as set forth in
a certificate setting forth the calculation thereof in reasonable detail,
shall, in the absence of manifest error, be final and conclusive and
binding on all of the parties hereto.
2.2.9. Indemnification; Nature of Fronting Bank's Duties. (a)
In addition to amounts payable as elsewhere provided in this Section 2.2,
without duplication, the Company hereby agrees to protect, indemnify, pay
and save each Fronting Bank, upon its demand and as incurred, harmless from
and against any and all claims, demands, liabilities, damages,
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losses, costs, charges and expenses (including reasonable attorneys' fees
and reasonable allocated costs of internal counsel) which such Fronting
Bank may incur or be subject to as a consequence, direct or indirect, of
(A) the issuance of the Letters of Credit, other than such claims, demands,
liabilities, damages, losses, costs, changes and expenses as result from
the gross negligence or willful misconduct of such Fronting Bank or (B) the
failure of such Fronting Bank to honor a drawing under any Letter of Credit
as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority
or court (all such acts or omissions, "Government Acts").
(b) As between the Company, on the one hand, and each Fronting
Bank, on the other hand, the Company assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by such Fronting
Bank by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, such Fronting Bank
shall not be responsible: (A) for the form, validity, sufficiency,
accuracy, genuineness or legal effects of any document submitted by any
party in connection with the application for and issuance of such Letters
of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged, (B) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason, (C) for failure of the
beneficiary of any such Letter of Credit to comply fully with conditions
required in order to draw upon such Letter of Credit, (D) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, telephone, facsimile or
otherwise, whether or not they be in cipher, (E) for errors in
interpretation of technical terms, (F) for any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof, (G) for
the misapplication by the beneficiary of any such Letter of Credit of the
proceeds of any drawing under such Letter of Credit and (H) for any
consequences arising from causes beyond the control of such Fronting Bank,
including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of any of such Fronting Bank's
rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth,
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any action taken or omitted by any Fronting Bank under or in connection
with the Letters of Credit issued by it or the related certificates, if
taken or omitted in good faith, shall not put such Fronting Bank under any
resulting liability to the Company.
(d) Notwithstanding anything to the contrary contained in this
subsection 2.2.9, the Company shall not have any obligation to indemnify
any Fronting Bank in respect of any liability incurred by such Fronting
Bank which (A) results from the gross negligence or willful misconduct of
such Fronting Bank or (B) arises out of the wrongful dishonor by such
Fronting Bank of proper demand for payment made under any Letter of Credit
issued by it.
2.2.10. Computation of Interest. Interest payable pursuant to
this Section 2.2 shall be computed on the basis of a 360-day year (except
for interest payable in respect of ABR Loans based on the Prime Rate, which
shall be computed on the basis of a 365/66 day year) and the actual number
of days elapsed in the period during which it accrues.
Section 2.3 Revolving Loans and Revolving Notes.
2.3.1. (a) Revolving Loan Commitments. Subject to the terms
and conditions of this Agreement and in reliance upon the representations
and warranties of the Loan Parties set forth herein and in each of the
other Loan Documents, each Lender having a Revolving Loan Commitment hereby
severally agrees to lend to the Company, from time to time during the
period from and including the Closing Date to but excluding the Revolving
Credit Maturity Date, its Adjusted Revolving Loan Percentage of Revolving
Loans which may from time to time be borrowed by the Company hereunder to
be used for the purposes identified in subsection 2.8.2. Each Lender's
Revolving Loan Commitment shall expire on the Revolving Credit Maturity
Date and all Revolving Loans and all other amounts owed hereunder with
respect to the Revolving Loans shall be paid in full no later than the
Revolving Credit Maturity Date. In no event shall the aggregate principal
amount of the Revolving Loans from and Letters of Credit Usage of any
Lender outstanding at any time exceed its Revolving Loan Commitment then in
effect less such Lender's Adjusted Revolving Loan Percentage of the
Revolving Loan Deduction Amount and such Lender's Adjusted Revolving Loan
Percentage of the amount of any Swing Line Loans then outstanding, and in
no event shall the Total Utilization of Revolving Loan Commitments exceed
the Total Revolving Loan Commitment.
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(b) Subject to subsection 2.9.4, all Revolving Loans under
this Agreement shall be made by the Lenders simultaneously and
proportionately to their Adjusted Revolving Loan Percentages, it being
understood that no Lender shall be responsible for any default by any other
Lender in such other Lender's obligation to make Revolving Loans hereunder
nor shall the amount of the Revolving Loan Commitment of any Lender be
increased or decreased as a result of the default by any other Lender in
such other Lender's obligation to make Revolving Loans hereunder. Amounts
borrowed by the Company under this subsection 2.3.1 may, subject to the
limitations set forth in subsection 2.7.1, be repaid and, subject to the
other limitations set forth in this Agreement, to but excluding the
Revolving Credit Maturity Date, be reborrowed. Revolving Loans made on any
Funding Date shall, except as provided in Section 2.9 and subsection
2.11.1, be made in an aggregate minimum amount of $10,000,000 and integral
multiples of $1,000,000 in excess of that amount or, if less, the
unutilized amount of the Total Revolving Loan Commitment.
2.3.2. Notice of Borrowing. (a) Whenever the Company desires
to borrow under this Section 2.3, it shall deliver to the Administrative
Agent a Notice of Borrowing substantially in the form of Exhibit I annexed
hereto (A) to the extent such Borrowings will consist of ABR Revolving
Borrowings, no later than 2:00 P.M. (New York time) at least one Business
Day in advance of the proposed Funding Date or (B) to the extent such
Borrowings consist of Adjusted LIBOR Revolving Borrowings, no later than
2:00 P.M. (New York time) at least three Business Days in advance of the
proposed Funding Date. The Notice of Borrowing shall specify (A) the
proposed Funding Date (which shall be a Business Day), (B) the amount of
the proposed Revolving Loans, (C) whether such Revolving Loans are
initially to consist of ABR Loans or Adjusted LIBOR Loans or a combination
thereof, and (D) if such Revolving Loans, or any portion thereof, are
initially to be Adjusted LIBOR Loans, the amount thereof and the initial
Interest Periods therefor; provided that the minimum amount of Adjusted
LIBOR Loans with a particular Interest Period included as a portion of any
such combination, if any, shall be $25,000,000 and integral multiples of
$1,000,000 in excess of that amount; and provided, further, in the case of
any such Loans borrowed on or prior to the 90th day following the Closing
Date, such Loans may consist only of Adjusted LIBOR Loans having a one
month Interest Period or ABR Loans. Revolving Loans may be continued as or
converted into ABR Loans or Adjusted LIBOR Loans in the manner provided in
subsection 2.5.4. In lieu of delivering the above-described Notice of
Borrowing, the Company may give the Administrative Agent telephonic notice
by the required time of any proposed
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borrowing under this Section 2.3; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Borrowing to the
Administrative Agent on or prior to the Funding Date of the requested
Revolving Loans.
(b) Neither the Administrative Agent nor any Lender shall
incur any liability to the Company in acting upon any telephonic notice
referred to above which the Administrative Agent believes in good faith to
have been given by a duly authorized officer or other person authorized to
borrow on behalf of the Company or for otherwise acting in good faith under
this subsection 2.3.2 and, upon the making of Revolving Loans by the
Lenders in accordance with this Agreement pursuant to any telephonic
notice, the Company shall have borrowed Revolving Loans hereunder.
(c) Except as provided in subsection 2.9.4, a Notice of
Borrowing for an Adjusted LIBOR Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination
Date, and the Company shall be bound to make a Borrowing in accordance
therewith.
2.3.3. Disbursement of Funds. (a) Promptly after receipt of
a Notice of Borrowing pursuant to subsection 2.3.2 (or telephonic notice in
lieu thereof), the Administrative Agent shall notify each Lender having an
Adjusted Revolving Loan Percentage greater than zero of the proposed
Borrowing. Each such Lender shall make the amount of its Revolving Loan
available to the Administrative Agent, in same day funds, at the office of
the Administrative Agent located at One Bankers Trust Plaza, New York, New
York not later than 12:00 Noon (New York time) on the applicable Funding
Date. Upon satisfaction or waiver of the conditions precedent specified in
Sections 3.1, 3.2 and 3.4, the Administrative Agent shall make the proceeds
of such Loans available to the Company on the applicable Funding Date by
causing an amount of same day funds equal to the proceeds of all such Loans
received by the Administrative Agent at its office located at One Bankers
Trust Plaza, New York, New York, to be credited to the account of the
Company at such office of the Administrative Agent. The parties hereto
acknowledge and agree that all Revolving Loans will be borrowed in New
York, New York, and that no Revolving Loans will be made other than in New
York, New York.
(b) Unless the Administrative Agent shall have been notified
by any Lender having a Revolving Loan Commitment prior to any Funding Date
in respect of any Revolving Loans that such Lender does not intend to make
available to the Administrative Agent such Lender's Revolving Loan on such
Funding Date, the
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Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such Funding Date and the
Administrative Agent in its sole discretion may, but shall not be obligated
to, make available to the Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Lender,
together with interest thereon, for each day from such Funding Date until
the date such amount is paid to the Administrative Agent at the customary
rate set by the Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at ABR. If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent shall promptly notify the Company
and the Company shall immediately pay such corresponding amount to the
Administrative Agent. Nothing in this subsection 2.3.3 shall be deemed to
relieve any Lender having a Revolving Loan Commitment from its obligation
to fulfill its Revolving Loan Commitment hereunder or to prejudice any
rights which the Company may have against any such Lender as a result of
any default by such Lender hereunder.
2.3.4. Revolving Notes. The Company shall execute and deliver
to each Lender having a Revolving Loan Commitment (or to the Administrative
Agent for such Lender) a Revolving Note substantially in the form of
Exhibit IV annexed hereto to evidence such Lender's Revolving Loans, in the
principal amount of such Lender's Revolving Loan Commitment.
Section 2.4 Total Loan Commitments; Limitations on Outstanding
Loan Amounts. The aggregate amount of the Tranche A Commitment, the
Tranche B Commitment and the Revolving Loan Commitment of each Lender
hereunder, as in effect at any time, is called its "Total Loan Commitment";
and the aggregate amount of the Tranche A Commitments, Tranche B
Commitments and Adjusted Revolving Loan Commitments of all the Lenders
hereunder as in effect at any time is herein called the "Total Loan
Commitments" at such time. The Total Loan Commitment as of the Closing
Date is $1,440,000,000. Anything contained in this Agreement to the
contrary notwithstanding, (A) in no event shall the sum of (1) the
aggregate principal amount of all Loans made by a Lender and (2) the amount
of Letters of Credit Usage of such Lender outstanding at any time exceed
its Total Loan Commitment less such Lender's Adjusted Revolving Loan
Percentage of the Revolving Loan Deduction Amount and such Lender's
Adjusted Revolving Loan Percentage of the amount of any Swing Line Loans
then outstanding, and (B) in
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no event shall the sum of (1) the aggregate principal amount of all Loans
made by all the Lenders and (2) the amount of Letters of Credit Usage of
all the Lenders outstanding exceed the Total Loan Commitments less the
Revolving Loan Deduction Amount and the amount of any portion of the
Deferred Tranche A Funding Amount that was not funded on the Deferred
Funding Date (because of a Lender Default).
Section 2.5 Interest on the Loans.
2.5.1. Rate of Interest. (a) The Loans shall bear interest
on the unpaid principal amount thereof from the date made through maturity
(whether by acceleration or otherwise) at a rate determined by reference to
ABR or Adjusted LIBOR. The applicable basis for determining the rate of
interest with respect to Term Loans and Revolving Loans shall be selected
by the Company at the time a Notice of Borrowing is given pursuant to sub-
section 2.1.2 or 2.3.2. If on any day a Term Loan or Revolving Loan is
outstanding with respect to which notice has not been delivered to the
Administrative Agent in accordance with the terms of this Agreement
specifying the basis for determining the rate of interest, then for that
day that Term Loan or Revolving Loan shall bear interest determined by
reference to ABR.
(b) Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of
365 or 366 days, as the case may be, when ABR is determined by reference to
the Prime Rate and over a year of 360 days at all other times) at a rate
per annum equal to ABR (as ABR changes from time to time) plus the ABR
Spread in effect at such time with respect to such Loans. Swing Line Loans
shall bear interest at the rate applicable to ABR Revolving Loans.
(c) Loans comprising each Adjusted LIBOR Borrowing shall bear
interest (computed on the basis of the actual number of days elapsed over a
year of 360 days) at a rate per annum equal to Adjusted LIBOR for the
Interest Period in effect for such Borrowing plus the LIBOR Spread in
effect at such time with respect to such Loans.
(d) The ABR Spread and LIBOR Spread per annum in respect of
Tranche A Term Loans and Revolving Loans (but not Tranche B Term Loans)
shall initially be as specified in "Category 1" in the table set forth
below and shall be subject to adjustment from time to time after the
Closing Date as provided in this paragraph. If, as of the last day of any
fiscal quarter of the Company, the results of Ratio 1 and
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Ratio 2, as set forth in a Compliance Certificate delivered pursuant to
subparagraph (iv) of Section 5.1, are such as to cause to be applicable any
Applicable Category other than the Category in the table below which was
applicable on the date of delivery of such Compliance Certificate, the ABR
Spread and the LIBOR Spread shall automatically be adjusted (effective as
of the times set forth in the next succeeding sentence) to equal the
amounts set forth as ABR Spread and LIBOR Spread, respectively, in such new
Applicable Category and the spreads set forth in such new Applicable
Category shall continue to be the ABR Spread and the LIBOR Spread until
such time as there shall be delivered a Compliance Certificate indicating
results of Ratio 1 and Ratio 2 which cause to be applicable a different
Applicable Category. Each adjustment of the ABR Spread and the LIBOR
Spread pursuant to this paragraph (d) shall take effect (A) in the case of
the ABR Spread, with respect to all ABR Loans outstanding on and after the
date that is five Business Days following the date of delivery to the
Administrative Agent of a Compliance Certificate pursuant to subparagraph
(iv) of Section 5.1 relating to the immediately preceding fiscal quarter
and (B) in the case of the LIBOR Spread, with respect to all Interest
Periods commencing on and after the date that is five Business Days
following the date of delivery to the Administrative Agent of such
Compliance Certificate.
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Interest Rate Step-Downs for
Tranche A Loans and Revolving Loans
Category 1 ABR Spread LIBOR Spread
When none of the Categories
below is applicable 1.50% 2.50%
Category 2
Ratio 1: 2.00 to 1 or higher 1.25% 2.25%
Ratio 2: 3.00 to 1 or lower
Category 3
Ratio 1: 2.25 to 1 or higher 1.00% 2.00%
Ratio 2: 2.75 to 1 or lower
Category 4
Ratio 1: 2.50 to 1 or higher 0.75% 1.75%
Ratio 2: 2.50 to 1 or lower
Category 5
Ratio 1: 2.75 to 1 or higher 0.50% 1.50%
Ratio 2: 2.25 to 1 or lower
Category 6
Ratio 1: 3.00 to 1 or higher 0.25% 1.25%
Ratio 2: 2.00 to 1 or lower
Category 7
Ratio 1: 3.25 to 1 or higher 0.00% 1.00%
Ratio 2: 1.50 to 1 or lower
Notwithstanding the foregoing provisions of this paragraph (d), (i) there
shall not be any adjustment to the ABR Spread or the LIBOR Spread, as
provided above, until the first anniversary of the Closing Date (except if
an Event of Default shall have occurred and is continuing) and (ii) at any
time during which the Company has failed to deliver a Compliance
Certificate described in subparagraph (iv) of Section 5.1 with respect to a
fiscal quarter in accordance with the provisions thereof, or at any time
that an Event of Default shall have occurred and shall be continuing, as of
the date such Compliance Certificate is
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due or as of the date such Event of Default shall have occurred, as the
case may be, the ABR Spread shall be reset, if necessary, to be 1-1/2% and
the LIBOR Spread shall be reset, if necessary, to be 2-1/2% until such time
as the Company shall deliver such certificate in accordance with the
provisions of subparagraph (iv) of Section 5.1 or such Event of Default
shall be cured or waived or shall otherwise no longer be continuing.
(e) Notwithstanding the foregoing and except where an Event of
Default shall have occurred and be continuing, if any senior unsecured debt
obligations of the Company receive a rating from S&P of at least BBB-, or
from Moody's of at least Baa3, from the date that is the fifth Business Day
of the fiscal quarter of the Company following the fiscal quarter
containing the first date that either such rating is announced and for so
long as such rating shall remain in effect the LIBOR Spread and the ABR
Spread, respectively, with respect to Tranche A Term Loans and Revolving
Loans (but not Tranche B Term Loans) shall be 0.75% and 0.00% and if any
senior unsecured debt obligations of the Company receive ratings from both
S&P and Moody's of at least BBB- and Baa3, respectively (such ratings, the
"Investment Grade Ratings"), from the date that is the fifth Business Day
of the fiscal quarter of the Company following the fiscal quarter
containing the first date that both the Investment Grade Ratings shall be
effective and for so long as both such ratings shall remain in effect the
LIBOR Spread and the ABR Spread, respectively, shall be 0.625% and 0.00%.
(f) The applicable ABR Spread or LIBOR Spread for each
Interest Period or day within an Interest Period, as the case may be, shall
be determined by the Administrative Agent, and such determination shall be
presumptively correct absent manifest error.
2.5.2. Interest Periods. In connection with each Adjusted
LIBOR Loan, the Company shall elect an interest period (each an "Interest
Period") to be applicable to such Loan, which Interest Period shall be
either a one, two, three or six month period or, if permitted under sub-
paragraph (viii) of this subsection 2.5.2, a twelve-month period; provided
that:
(i) subject to subparagraph (vi) below, the Interest Period
for any Adjusted LIBOR Loan shall commence on the date of such Loan
and each Interest Period occurring thereafter in respect of such
Adjusted LIBOR Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;
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(ii) if an Interest Period would otherwise expire on a day
which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iii) if an Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that if such Business Day
occurs in a different month, such Interest Period shall expire on the
Business Day next preceding such day;
(iv) no Interest Period with respect to any Revolving Loan,
any Tranche A Term Loan or any Tranche B Term Loan shall extend
beyond the Revolving Credit Maturity Date, the Tranche A Term
Maturity Date or the Tranche B Term Maturity Date, respectively;
(v) no Interest Period may extend beyond a date on which the
Company is required to make a scheduled payment of principal of such
Loan;
(vi) the initial Interest Period for a Loan which is converted
pursuant to subsection 2.9.4 shall commence on the date of such
conversion and shall expire on the date on which the Interest Periods
for the Loans of the other Lenders which were not converted expire;
(vii) there shall be no more than 20 Interest Periods relating
to Loans outstanding at any time (it being understood that Interest
Periods for Adjusted LIBOR Loans that are part of the same Tranche
and which are scheduled to end on the same date shall constitute one
Interest Period for purposes of this clause vii); and
(viii) no Tranche B Term Loan may have an Interest Period longer
than six months; and no Tranche A Term Loan or Revolving Loan may
have an Interest Period of twelve months unless the Administrative
Agent, after consultation with the Lenders, has determined in good
faith based on prevailing conditions in the London interbank market
on any date of determination that U.S. dollar deposits are generally
offered by the Lenders to first class banks in the London interbank
market for a comparable maturity.
2.5.3. Interest Payments. Subject to subsection 2.5.5,
interest shall be payable on the Loans as follows:
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(i) interest on each ABR Loan shall be payable in arrears on
and to each September 30, December 30, March 30 and June 30 of each
year, commencing on the first of such dates to occur after the
Closing Date, upon any prepayment of any such Loan (to the extent
accrued on the principal amount being prepaid) and at maturity of
such ABR Loan; and
(ii) interest on each Adjusted LIBOR Loan shall be payable in
arrears on and to each Interest Payment Date applicable to that Loan,
upon any prepayment of that Loan (to the extent accrued on the
principal amount being prepaid) and at maturity of such Adjusted
LIBOR Loan.
2.5.4. Conversion or Continuation. (a) Subject to the
provisions of Section 2.9, the Company shall have the option (A) to convert
at any time all or any part of its outstanding ABR Loans equal to
$10,000,000 principal amount and integral multiples of $1,000,000 in excess
of that amount to Adjusted LIBOR Loans; provided that, after giving effect
to each such conversion, there shall not exist any Adjusted LIBOR Loan with
a particular Interest Period that has a principal amount less than
$25,000,000 (it being understood that Interest Periods for Adjusted Libor
Loans that are part of the same Tranche and which are scheduled to end on
the same date shall constitute one Interest Period for this purpose) or
(B) upon the expiration of any Interest Period applicable to an Adjusted
LIBOR Loan, (1) to continue all or any portion of such Loan equal to
$25,000,000 principal amount and integral multiples of $1,000,000 in excess
of that amount as an Adjusted LIBOR Loan and the succeeding Interest
Period(s) of such continued Loan shall commence on the last day of the
Interest Period of the Loan to be continued or (2) to convert such Adjusted
LIBOR Loan to an ABR Loan; provided that no outstanding Loan may be
continued as, or be converted into, an Adjusted LIBOR Loan when any Event
of Default or Potential Event of Default has occurred and is continuing.
(b) The Company shall deliver a Notice of Conversion/
Continuation substantially in the form of Exhibit II annexed hereto to the
Administrative Agent no later than 1:00 P.M. (New York time) at least three
Business Days in advance of the proposed conversion/continuation date. A
Notice of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) the
amount of the Loan to be converted/continued and whether such Loan is a
Tranche A Term Loan, a Tranche B Term Loan or a Revolving Loan, (C) the
nature of the proposed conversion/continuation and (D) the requested
Interest Period.
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In lieu of delivering the above-described Notice of Conversion/
Continuation, the Company may give the Administrative Agent telephonic
notice by the required time of any proposed conversion/continuation under
this subsection 2.5.4; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Conversion/Continuation to
the Administrative Agent on or before the proposed conversion/continuation
date. If the Company has failed timely to deliver a Notice of Conversion/
Continuation or give such telephonic notice with respect to an Adjusted
LIBOR Loan, the Company shall be deemed to have delivered to the
Administrative Agent a Notice of Conversion/Continuation to convert such
Adjusted LIBOR Loan into an ABR Loan.
(c) Neither the Administrative Agent nor any Lender shall
incur liability to the Company in acting upon any telephonic notice
referred to above which the Administrative Agent believes in good faith to
have been given by a duly authorized officer or other person authorized to
act on behalf of the Company or for otherwise acting in good faith under
this subsection 2.5.4 and upon conversion/continuation by the
Administrative Agent in accordance with this Agreement pursuant to any
telephonic notice, the Company shall have continued or converted, as the
case may be, Loans hereunder.
(d) Except as provided in subsection 2.9.4, a Notice of
Conversion/Continuation for conversion to, or continuation of, an Adjusted
LIBOR Loan (or telephonic notice in lieu thereof) shall be irrevocable on
and after the related Interest Rate Determination Date, and the Company
shall be bound to convert or continue in accordance therewith.
2.5.5. Post-Maturity Interest. Any principal payments on the
Loans not paid when due and, to the extent permitted by applicable law, any
interest payment on the Loans not paid when due, in each case whether at
stated maturity, by notice of prepayment, by acceleration or otherwise,
shall thereafter bear interest payable upon demand at a rate which is 2.00%
per annum in excess of the rate of interest otherwise payable under this
Agreement for ABR Loans.
2.5.6. Computation of Interest. Interest on the Loans shall
be computed on the basis of a 360-day year (except for interest payable in
respect of ABR Loans based on the Prime Rate, which shall be computed on
the basis of a 365/66 day year) and the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the
date of the making of the Loan or the first day of an Interest Period, as
the case may be, shall be included and the
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date of payment or, in the case of Adjusted LIBOR Loans, the Interest
Payment Date, as the case may be, shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest
shall be paid on such Loan.
Section 2.6 Commissions.
2.6.1. Commitment Commissions. The Company agrees to pay to
the Administrative Agent for distribution to each Non-Defaulting Lender
having a Revolving Loan Commitment and/or a Tranche A Commitment commitment
commissions with respect to the unused portion of the Adjusted Revolving
Loan Commitments and/or the Tranche A Commitments for the period from and
including the Closing Date to and excluding the date such Commitments
expire or terminate, at an annual rate equal to the Commitment Percentage
applicable from time to time. Such annual rate shall be applied on a daily
basis to the aggregate of the daily unused portion of the Adjusted
Revolving Loan Commitments and the Tranche A Commitments from time to time.
Such commitment commissions shall be payable in arrears on September 30,
December 30, March 30 and June 30 of each year, commencing on the first
such date to occur after the Closing Date, and the date such Commitments
expire or terminate, calculated, in all cases, on the basis of a 360-day
year and the actual number of days elapsed. Letters of Credit Usage and
Swing Line Loans shall constitute usage of the Revolving Loan Commitments
for all purposes of this Agreement.
2.6.2. Bankers and Arrangers Commissions. The Company agrees
to pay to Bankers and the other Arrangers the commissions and other amounts
at such times or upon the happening of such events as are set forth in the
Commitment Fee Letters. Nothing herein set forth shall limit the rights of
Bankers or the other Arrangers to receive the fees and other amounts
payable under the Commitment Fee Letters.
2.6.3. No Refund of Fees. Once paid, all fees and commissions
payable pursuant to this Section 2.6 shall not be refundable under any
circumstances.
Section 2.7 Prepayments and Payments;
Reductions in Commitments.
2.7.1. Voluntary Prepayments. The Company may, upon not less
than two Business Days' (same Business Day's in the case of Swing Line
Loans) prior written or telephonic notice confirmed in writing to the
Administrative Agent (which notice the Administrative Agent will promptly
transmit by telegram, telex or telephone to each Lender), at any time and
from time
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to time, prepay Term Loans, Revolving Loans or Swing Line Loans in whole or
in part at any time, without penalty or premium, in an aggregate minimum
amount of (A) in the case of any Loan other than Swing Line Loans,
$5,000,000 and integral multiples of $1,000,000 in excess of that amount or
(B) in the case of Swing Line Loans, $100,000 and integral multiples of
$100,000 in excess of such amount or, if less, the outstanding principal
amount thereof. Voluntary prepayments of Term Loans made by the Company
out of (A) the Company's Portion of Excess Cash Flow or (B) the net cash
proceeds of any Equity Offering shall be allocated between (x) the then
outstanding Tranche A Term Loans and (y) the then outstanding Tranche B
Term Loans in a manner determined at the discretion of the Company. In the
case of such prepayments elected by the Company to be applied to (A) the
Tranche A Term Loans, all such prepayments shall be applied to such
Scheduled Term Loans Principal Payments as shall be elected by the Company
and (B) the Tranche B Term Loans, all such prepayments shall be applied pro
rata to all then remaining Scheduled Term Loans Principal Payments in
respect of Tranche B Term Loans. All other voluntary prepayments of Term
Loans shall be applied in the amounts and manner applicable to mandatory
prepayments as set forth in paragraph (b) of subsection 2.7.3. At the
Company's election in connection with any prepayment pursuant to this
subsection 2.7.1, amounts prepaid in respect of Revolving Loans shall not
be applied to any Revolving Loan of a Defaulting Lender until all Revolving
Loans of all Non-Defaulting Lenders have been paid in full. Notice of
prepayment having been given as aforesaid, the principal amount of the
Loans specified in such notice shall become due and payable on the
prepayment date. Amounts of Term Loans that are so prepaid may not be
reborrowed.
2.7.2. Mandatory Prepayments. Subject to the provisions of
the last sentence of this subsection 2.7.2, the Company shall upon the
occurrences set forth below make prepayments of Loans in the amounts and
manner set forth below.
(a) Prepayments from Asset Sales. Upon the later of (A) the
first date on which, in accordance with the definition of "Asset
Sale," any sale, transfer or other disposition of assets or
properties becomes an "Asset Sale" and (B) the date of the initial
receipt by the Company or any Subsidiary of the Company of Cash
Proceeds of such Asset Sale (such later date being a "Proceeds
Payment Date"), the Company shall prepay the Loans in an amount equal
to the lesser of (x) the Net Cash Proceeds of Sale then received in
respect of such Asset Sale and (y) Estimated Net Cash Proceeds of
such Asset Sale (such
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lesser amount being the "Initial Cash Proceeds Payment"). On or
before the sixtieth day after the Proceeds Payment Date with respect
to an Asset Sale, and at or before the end of each thirty-day period
thereafter, the Company shall prepay the Loans in an amount equal to
the excess ("Proceeds Adjustment"), if any, of (A) Net Cash Proceeds
of Sale of such Asset Sale theretofore received over (B) the amount
previously paid with respect to such Asset Sale hereunder; provided
that the Company shall not be required to apply any Initial Cash
Proceeds Payment or Proceeds Adjustments of an Asset Sale to the
prepayment of the Loans to the extent that the assets transferred
pursuant to such Asset Sale are located in a jurisdiction outside the
United States, the laws of such jurisdiction prohibit the transfer of
the proceeds of such Asset Sale to the United States, such proceeds
have not been transferred to the United States and the Company is
using its reasonable best efforts to transfer such funds on a basis
that complies with applicable law (and has informed the
Administrative Agent in writing of such efforts). Concurrently with
the making of any prepayment pursuant to this paragraph (a) of
subsection 2.7.2, the Company shall deliver to the Administrative
Agent an Officers' Certificate demonstrating the derivation of Net
Cash Proceeds of Sale from the gross sales price of the related Asset
Sale.
(b) Prepayments Due to Excess Cash Flow. On or before the
last day of March in each year, commencing March 31, 1996 and ending
on but including March 31, 2002, the Company shall make a mandatory
prepayment (each such prepayment, an "Annual Prepayment") in an
amount equal to 50% of Excess Cash Flow for the twelve-month period
commencing on January 1 (the first such period to commence January 1,
1995) and ending on December 31 immediately preceding such March 31.
Concurrently with the making of any prepayment pursuant to this
paragraph (b) of subsection 2.7.2, the Company shall deliver to the
Administrative Agent an Officers' Certificate demonstrating the
derivation of Excess Cash Flow.
(c) Prepayments Due to Other Reductions of Revolving Loan
Commitments. The Company shall make prepayments of Swing Line Loans
and Revolving Loans, and the Company shall cash collateralize
(pursuant to customary documentation and arrangements determined in
the reasonable discretion of the Administrative Agent) Letters of
Credit then outstanding, to the extent necessary so that the Total
Utilization of Revolving Loan Commitments
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at any time does not exceed the aggregate amount of the Revolving
Loan Commitments of all Lenders reduced by the sum of (A) the
Revolving Loan Deduction Amount then in effect, plus (B) the
aggregate of amounts described in clauses (A) and (B) of the
definition of Defaulting Lender Deduction Amount in respect of all
Lenders that are Defaulting Lenders.
(d) Prepayments Due to Casualty or Condemnation. In the event
there shall occur any Taking or Destruction of any Real Property and,
pursuant to the provisions of the applicable Mortgage, amounts
payable with respect thereto are to be applied to the Obligations in
accordance with the terms of such Mortgage, the Company shall prepay
Loans in such amount.
(e) Prepayments from Proceeds of Sale/Leaseback Transactions.
On each date on which the Company or any Subsidiary of the Company
receives any net cash proceeds of a Sale/Leaseback Transaction that
is subject to the provisions of Section 5.12, the Company shall
prepay Loans in the amount rounded to the nearest thousand Dollars of
such net cash proceeds (reduced by the actual expenditures of the
Company or any Subsidiary for customary and reasonable transaction
costs incurred in connection therewith).
(f) Prepayments from Proceeds of Receivables Transactions. On
the first date (on or immediately following the termination of the
1995 A/R Bridge) on which the Company or any Subsidiary of the
Company (other than a Receivables Subsidiary) receives proceeds from
the initial funding of a Receivables Program, the Company shall
prepay Loans in the amount of such proceeds (reduced by the actual
expenditures of the Company or any Subsidiary for customary and
reasonable transaction costs incurred in connection therewith);
provided that no such prepayment shall be due under this subparagraph
(f) in respect of any Receivables Transaction to the extent that the
net proceeds thereof are used to pay amounts owing pursuant to the
1995 A/R Bridge or to refinance any other Receivables Transaction.
(g) Prepayments with Proceeds of Indebtedness. In the event
that the Company or any Subsidiary of the Company shall incur any
Indebtedness after the date hereof (including, without limitation,
all Indebtedness constituting Permitted Expansion Financings but
excluding (A) Indebtedness the proceeds of which are required to be
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used to prepay Loans pursuant to the provisions of paragraphs (e) or
(f) above and (B) Excluded New Indebtedness), the Company shall, on
the date of receipt of the net cash proceeds of such Indebtedness,
prepay Loans in an amount equal to such net cash proceeds. The
provisions of this Section shall not in any manner affect or limit
the obligations of the Company pursuant to Section 6.1 hereof nor be
construed as a consent by the Lenders to any noncompliance with such
Section.
Notwithstanding the foregoing provisions of this subsection 2.7.2, the
Company shall not be required to make any mandatory prepayments (other than
by reason of paragraph (c) above) under this Section 2.7.2 so long as there
shall be in effect in respect of the senior unsecured debt obligations of
the Company the Investment Grade Ratings.
2.7.3. Company's Mandatory Prepayment Obligation; Application
of Prepayments. (a) All prepayments shall include payment of accrued
interest on the principal amount so prepaid and shall be applied to payment
of accrued and unpaid interest on the principal amount being prepaid before
application to principal. Subject to compliance with subsection 2.7.3(b),
when Term Loans, Swing Line Loans and Revolving Loans are being prepaid
separately, any mandatory prepayment shall be applied first to ABR Loans to
the full extent thereof before application to Adjusted LIBOR Loans as
determined by the Administrative Agent; provided that in lieu of
application of any such prepayment to Adjusted LIBOR Loans prior to the
expiration of the Interest Period with respect thereto, the Company may
execute an Escrow Letter and Security Agreement substantially in the form
of Exhibit XX annexed hereto with respect to the principal and interest due
in respect of such prepayment and deposit with the Administrative Agent
funds equal to such amount for application to Loans in accordance with the
terms of the Escrow Letter and Security Agreement.
(b) Mandatory prepayments made by the Company pursuant to
subsection 2.7.2 above shall be applied first to the prepayment of Term
Loans then to the prepayment of Swing Line Loans and then to the prepayment
of Revolving Loans; provided that all prepayments that are to be applied to
Revolving Loans shall be applied first, to all Lenders (other than
Defaulting Lenders) ratably (according to the respective amounts of
Revolving Loans then held by such Lenders) for the amounts then due and
payable to such Lenders in connection with such prepayment and, second, to
all Defaulting Lenders ratably (according to the respective amounts of
Revolving Loans then held by such Defaulting Lenders) for any amount then
due and
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payable to such Lenders in connection with such prepayment. Except as
otherwise provided in paragraph (c) below, all prepayments of Term Loans
shall be allocated pro rata between (A) the then outstanding Tranche A Term
Loans and (B) the then outstanding Tranche B Term Loans, with the amount so
allocated in clause (A) above to be applied, first, in direct order of
maturity until such application results in the prepayment in whole of all
Scheduled Term Loans Principal Payments scheduled to become due in respect
of Tranche A Term Loans in the twelve-month period immediately following
such date of prepayment, and then pro rata to the remaining such Scheduled
Term Loans Principal Payments, and with the amount so allocated in clause
(B) above to be applied pro rata against the remaining Scheduled Term Loans
Principal Payments due in respect of Tranche B Term Loans under Section
2.1.
(c) Notwithstanding the provisions of paragraph (b) above,
with respect to the amount of any mandatory prepayment described therein
that is allocated to the then outstanding Tranche B Term Loans (such
amount, the "Tranche B Prepayment Amount"), the Company may, in lieu of
applying such amount to the prepayment of Tranche B Term Loans as provided
in such paragraph, at least one Business Day prior to the date specified
therein for such prepayment, (A) deposit in the Tranche B Escrow Account
the Tranche B Prepayment Amount and (B) provide to each Tranche B Lender a
notice (each, a "Tranche B Prepayment Option Notice") as described below.
Each Tranche B Prepayment Option Notice shall be in writing, shall refer to
this subsection 2.7.3 and shall (1) set forth the Tranche B Prepayment
Amount and the portion thereof that the applicable Tranche B Lender will be
entitled to receive if it accepts such mandatory prepayment in accordance
with this paragraph, (2) offer to prepay on a specified date (each such
date, a "Tranche B Mandatory Prepayment Date"), which shall be not less
than 20 days or more than 25 days after the date of the Tranche B
Prepayment Option Notice, the Tranche B Term Loans of such Tranche B Lender
by an amount equal to the portion of the Tranche B Prepayment Amount
indicated in such Tranche B Lender's Tranche B Prepayment Option Notice as
being applicable to such Tranche B Lender, (3) request such Tranche B
Lender to notify the Company and the Administrative Agent in writing, no
later than the fifth day prior to the Tranche B Mandatory Prepayment Date,
of such Tranche B Lender's acceptance or rejection (in each case, in whole
and not in part) of such offer of prepayment and (4) inform such Tranche B
Lender that failure by such Tranche B Lender to accept such offer in
writing on or before the fifth day prior to the Tranche B Mandatory
Prepayment Date shall be deemed an acceptance of such prepayment offer.
Each Tranche B Prepayment
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Option Notice shall be given by telecopy, confirmed by hand delivery,
overnight courier service or registered or certified mail, in each case
addressed as provided in Section 9.9. On the Tranche B Mandatory
Prepayment Date, the Administrative Agent shall withdraw from the Tranche B
Escrow Account the aggregate amount necessary to prepay that portion of the
Tranche B Prepayment Amount in respect of which Tranche B Lenders have
accepted prepayment as described above (such Tranche B Lenders, the
"Accepting Tranche B Lenders"), and shall apply such amount on behalf of
the Company pro rata (based on the respective principal amounts thereof)
against the remaining installments of principal due in respect of the
Tranche B Term Loans of the Accepting Tranche B Lenders under subsection
2.1.5. The amount remaining in the Tranche B Escrow Account after the
payment described in the immediately preceding sentence (exclusive of any
interest or profits credited to the Tranche B Escrow Account) shall be
allocated pro rata (based on the respective principal amounts thereof)
between (x) the then outstanding Tranche A Term Loans and (y) the then
outstanding Tranche B Term Loans of the Accepting Tranche B Lenders, and
applied against the remaining Scheduled Term Loans Principal Payments due
(i) in respect of Tranche A Term Loans, in the manner specified in clause
(A) of paragraph 2.7.3(b) above and (ii) in respect of the Tranche B Term
Loans of the Accepting Tranche B Lenders, on a pro rata basis (based on the
respective principal amounts thereof). The term "Tranche B Escrow Account"
means an account established by the Company with the Administrative Agent
and over which the Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal for application in
accordance with this paragraph. The Administrative Agent will, at the
request of the Company, invest amounts on deposit in the Tranche B Escrow
Account in Cash Equivalents that mature prior to the Tranche B Mandatory
Prepayment Date; provided that (X) the Administrative Agent shall not be
required to make any investment that, in its sole judgment, would require
or cause the Administrative Agent to be in, or would result in any,
violation of any law, statute, rule or regulation and (Y) the
Administrative Agent shall have no obligation to invest amounts on deposit
in the Tranche B Escrow Account if a Potential Event of Default or Event of
Default shall have occurred and be continuing. The Company shall indemnify
the Administrative Agent for any losses relating to the investments so that
the amount available to prepay the Tranche B Term Loans of the Accepting
Tranche B Lenders on the Tranche B Mandatory Prepayment Date is not less
than the amount that would have been available had no investments been made
pursuant to this paragraph. Other than any interest earned on such
investments, the Tranche B Escrow Account shall not bear interest.
Interest
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or profits, if any, on such investments shall be paid to the Company at the
latest date of and after giving effect to the disbursements contemplated in
clauses (x) and (y) above. If the maturity of the Loans has been
accelerated pursuant to ARTICLE VII, the Administrative Agent may, in its
sole discretion, apply all amounts on deposit in the Tranche B Escrow
Account to satisfy any of the Obligations. The Company hereby grants to
the Administrative Agent, for its benefit and the benefit of any Fronting
Bank, the Swing Line Lender and the Lenders, a security interest in the
Tranche B Escrow Account to secure the Obligations.
2.7.4. Manner and Time of Payment. All payments of principal,
interest and fees hereunder and under the Notes by the Company shall be
made without defense, setoff or counterclaim and in same day funds and
delivered to the Administrative Agent not later than 12:00 Noon (New York
time) on the date due at its office located at One Bankers Trust Plaza, New
York, New York for the account of the applicable Lenders; funds received by
the Administrative Agent after that time shall be deemed to have been paid
by the Company on the next succeeding Business Day. The Company hereby
authorizes the Administrative Agent to charge its account with Bankers in
order to cause timely payment to be made to the Administrative Agent of all
principal, interest and fees due hereunder (subject to sufficient funds
being available in its account for such purpose).
2.7.5. Apportionment of Payments. Aggregate principal and
interest payments in respect of Loans and payments in respect of Letters of
Credit and commitment commissions shall be apportioned among all
outstanding Loans and Letters of Credit to which such payments relate,
proportionately to the applicable Lenders' respective interests in such
Loans and Letters of Credit, except that in the case of Swing Line Loans,
payments will only be made to Bankers and except that the rights of
Defaulting Lenders to receive pro rata payments in respect of principal
amounts of Revolving Loans and reimbursements of drawings under Letters of
Credit (together with accrued interest in respect of each thereof) shall be
limited as set forth in Section 2.7.3(b). The Administrative Agent shall
promptly distribute to each Lender at its primary address set forth below
its name on the appropriate signature page hereof, or at such other address
as any Lender may request, its share of all such payments received by the
Administrative Agent and the commitment commissions and Letter of Credit
commissions, if any, payable to such Lender when received by the
Administrative Agent.
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2.7.6. Payments on Non-Business Days. Whenever any payment to
be made hereunder or under the Notes shall be stated to be due on a day
which is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or under the Notes or of
the commitment and other commissions or fees hereunder, as the case may be;
provided that in the event that the day on which payment relating to an
Adjusted LIBOR Loan is due is not a Business Day but is a day of the month
after which no further Business Day occurs in that month, then the due date
thereof shall be the next preceding Business Day.
2.7.7. Payment Accounts; Notation of Payment. (a) Each
Lender shall maintain in accordance with its usual practice an account or
accounts evidencing the indebtedness to such Lender resulting from each
Loan, from time to time, including the amounts of principal and interest
payable and paid such Lender from time to time under this Agreement.
(b) The Administrative Agent shall maintain accounts in which
it will record (A) the amount of each Loan made hereunder, whether such
Loans consist of ABR Loans or Adjusted LIBOR Loans, and the Interest Period
applicable thereto, (B) the amount of any principal or interest due and
payable or to become due and payable from the Company to each Lender
hereunder and (C) the amount of any sum received by the Administrative
Agent hereunder from the Company and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to
paragraphs (a) and (b) of this subsection 2.7.7 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided that the failure of
any Lender or the Administrative Agent to maintain such accounts or any
error therein shall not in any manner affect the obligations of the Company
to repay the Loans in accordance with their terms.
(d) Each Lender agrees that before disposing of any Note held
by it, or any part thereof (other than by granting participations therein),
such Lender will make a notation thereon of all Loans and principal
payments previously made thereon and of the date to which interest thereon
has been paid; provided that the failure to make (or any error in the
making of) a notation of any Loan made under any such Note shall not limit
or otherwise affect the obligation of the
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Company hereunder or under such Note with respect to any Loan and payments
of principal or interest on any such Note.
2.7.8. Voluntary Reductions of Swing Line Commitment and
Revolving Loan Commitments. (a) The Company shall have the right, at any
time after the Closing Date and from time to time, to terminate in whole or
permanently reduce in part, without premium or penalty, the Swing Line
Commitment or the Total Revolving Loan Commitment. No such reduction of
the Total Revolving Loan Commitment shall reduce the amount of the Total
Revolving Loan Commitment to an aggregate amount less than an amount equal
to the Total Utilization of Revolving Loan Commitments then in effect.
(b) The Company shall give not less than three Business Days'
prior written notice to the Administrative Agent designating the date
(which shall be a Business Day) of such termination or reduction, the
amount of any partial reduction and, promptly after receipt of a notice of
such termination or partial reduction, the Administrative Agent shall
notify each Lender of the proposed termination or partial reduction. Such
termination or partial reduction of the Swing Line Commitment or the Total
Revolving Loan Commitment shall be effective on the date specified in the
notice delivered by the Company and shall reduce the Revolving Loan
Commitment of each Lender having an Adjusted Revolving Loan Percentage
greater than zero proportionately to its Adjusted Revolving Loan Percentage
and the Swing Line Commitment of Bankers by 100% of such reduction. Any
such partial reduction of the Swing Line Commitment or the Total Revolving
Loan Commitment shall be in an aggregate minimum amount of $5,000,000, and
integral multiples of $1,000,000 in excess of that amount.
2.7.9. Mandatory Reductions of Revolving Loan Commitments and
Swing Line Commitment. In the event and on each occasion that a prepayment
of Term Loans would be required under subsection 2.7.2 in a principal
amount greater than the principal amount of Term Loans then outstanding,
then the Total Revolving Loan Commitment shall be automatically and
permanently reduced at the time and in the amount of the difference between
(A) the prepayment that would have been required and (B) the principal
amount of Term Loans then outstanding; provided that the Total Revolving
Loan Commitment shall not be reduced at any time to an amount less than the
Total Utilization of Revolving Loan Commitments.
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Section 2.8 Use of Proceeds.
2.8.1. Term Loans. The proceeds of the portion of the
Tranche A Term Loans made by the Lenders to the Company on the Closing Date
(in the amount of the Closing Date Tranche A Funding Amount), together with
the entire amount of the proceeds of the Tranche B Term Loans made by the
Lenders to the Company on the Closing Date and the net cash proceeds of the
Common Stock Offering, shall be applied by the Company on the Closing Date
to (A) the payment of Transaction Costs, (B) the repayment in full of the
principal of all loans outstanding and all other amounts due, if any, under
the Existing Credit Facilities and (C) after the payment or repayment in
full of all amounts referred to in clause (B) above, the prepayment in
full, in accordance with their terms, of 100% of the outstanding Senior
Secured Notes, including, without limitation, the payment of accrued and
unpaid interest thereon, and all other amounts, if any, then due and
payable with respect thereto. The proceeds of the remaining portion of the
Tranche A Term Loans (in the amount equal to the Deferred Tranche A Funding
Amount) made by the Lenders to the Company on the Deferred Funding Date
shall be applied, together with the proceeds of the loans made pursuant to
the 1995 A/R Bridge, as soon as reasonably practicable, to (A) redeem in
full, in accordance with its terms, 100% of the outstanding principal
amount of the Existing Subordinated Debt and pay accrued interest and
premiums, if any, with respect thereto and (B) pay the fees and expenses
payable in connection with the redemption pursuant to clause (A) of this
sentence above.
2.8.2. Revolving Loans. The proceeds of the Revolving Loans
from and after the Closing Date may be applied by the Company (A) to
refinance Indebtedness constituting Permitted Expansion Construction
Financing, (B) for the purposes applicable to the proceeds of Term Loans,
as specified in the second sentence of subsection 2.8.1, (C) for the
purpose specified in clause (B) of subsection 6.16.8, (D) for working
capital and (E) for other general corporate purposes (including, without
limitation, all purposes which would cause a decrease in the Discretionary
Excess Equity Proceeds Balance or the Discretionary Excess Cash Flow
Balance).
2.8.3. Swing Line Loans. The proceeds of up to an aggregate
of $25,000,000 principal amount at any time outstanding of Swing Line Loans
made by Bankers to the Company from and after the Closing Date may be
applied by the Company for working capital and other general corporate
purposes.
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2.8.4. Margin Regulations. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Company in any manner
which might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T, or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of
the Board or to violate the Exchange Act, in each case as in effect on the
date or dates of such borrowing and such use of proceeds.
Section 2.9 Special Provisions Governing Adjusted LIBOR
Loans. Notwithstanding other provisions of this Agreement, the following
provisions shall govern with respect to Adjusted LIBOR Loans as to the
matters covered:
2.9.1. Determination of Interest Rate. As soon as practicable
after 11:00 a.m. (New York time) on an Interest Rate Determination Date,
the Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the
interest rate which shall apply to the Adjusted LIBOR Loans for which an
interest rate is then being determined for the applicable Interest Period
and shall promptly give notice thereof (in writing or by telephone
confirmed in writing) to the Company and to each Lender having an interest
in or bound hereunder to make any of such Adjusted LIBOR Loans.
2.9.2. Increased Costs. Without duplication of payments under
subsection 2.9.7, if, by reason of (A) after the date of this Agreement,
the introduction of or any change in or in the interpretation of any law or
regulation, or (B) the compliance with any guideline or request after the
date of this Agreement from any central bank or other governmental
authority or quasi-governmental authority exercising control over banks or
financial institutions generally (whether or not having the force of law):
(i) any Lender (or its applicable lending office) shall be
subject to any tax, duty or other charge with respect to its Adjusted
LIBOR Loans or its obligation to make Adjusted LIBOR Loans, or shall
change the basis of taxation of payments to any Lender of the
principal of or interest on its Adjusted LIBOR Loans or its
obligation to make Adjusted LIBOR Loans (except for changes in the
rate of tax on the overall net income of such Lender or its
applicable lending office imposed by the jurisdiction in which such
Lender's principal executive office or applicable lending office is
located); or
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(ii) any reserve (including, without limitation, any imposed
by the Board of Governors of the Federal Reserve System to the extent
not already contemplated in the definition of Adjusted LIBOR Rate),
special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender's
applicable lending office shall be imposed or deemed applicable or
any other condition affecting its Adjusted LIBOR Loans or its
obligation to make Adjusted LIBOR Loans shall be imposed on any
Lender or its applicable lending office or the London interbank
market;
and as a result thereof there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining Adjusted LIBOR
Loans (except to the extent already included in the determination of the
applicable Adjusted LIBOR), or there shall be a reduction in the amount
received or receivable by such Lender or its applicable lending office,
then the Company shall from time to time, upon written notice from and
demand by such Lender (with a copy of such notice and demand to the
Administrative Agent), pay to the Administrative Agent for the account of
such Lender, within five Business Days after the date specified in such
notice and demand, additional amounts sufficient to indemnify such Lender
against such increased cost or such reduction; provided that the Company
shall have no obligation to any Lender under this subsection 2.9.2 if
(A) such Lender shall not have delivered such written notice to the Company
within six months following the later of (1) the date of the occurrence of
the event which forms the basis for such notice and (2) the date such
Lender shall have become aware of such event or (B) the obligation to pay
increased costs or indemnify against such reduction on account of taxes,
duties or other charges would not have arisen but for (1) the failure of
such Lender to provide any applicable forms or other documents requested by
the Company which such Lender was otherwise required to provide under this
Agreement, that would establish the entitlement of such Lender to a reduced
rate of, or an exemption from, any tax, levy, charge, withholding or
similar item with respect to its Adjusted LIBOR Loans or (2) any
representation or warranty made by such Lender in connection with its
Adjusted Libor Loans regarding an exemption (partial or complete) from
taxes, levies, charges or withholdings proving to have been incorrect,
false or misleading in any material respect when so made. A certificate as
to the amount of such increased cost, submitted to the Company and the
Administrative Agent by such Lender, shall, except for manifest error, be
final, conclusive and binding for all purposes.
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2.9.3. Required Termination and Prepayment. In the event that
on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties)
that the making or continuation of its Adjusted LIBOR Loans has become
unlawful by compliance by such Lender in good faith with any law,
governmental rule, regulation or order (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful),
then, and in any such event, such Lender shall be an Affected Lender and it
shall promptly give notice (by telephone confirmed in writing) to the
Company and the Administrative Agent (which notice the Administrative Agent
shall promptly transmit to each Lender) of that determination. Subject to
the prior withdrawal of a Notice of Borrowing or a Notice of Conversion/
Continuation or prepayment of the Adjusted LIBOR Loans of an Affected
Lender as contemplated by subsection 2.9.5, the obligation of an Affected
Lender to make or maintain its Adjusted LIBOR Loans during any such period
shall be terminated at the earlier of the termination of the Interest
Period then in effect or when required by law and the Company shall no
later than the termination of the Interest Period in effect at the time any
such determination pursuant to this subsection 2.9.3 is made or earlier,
when required by law, repay its Adjusted LIBOR Loans of such Affected
Lender, together with all interest accrued thereon and such Adjusted LIBOR
Loans shall be reborrowed as an ABR Loan.
2.9.4. Options of Company. Without prejudice to the Company's
rights set forth in Section 2.11 and without limiting any accrued
obligations of the Company under subsection 2.9.2, if the Company is
required to pay an Affected Lender additional moneys under
subsection 2.9.2, the Company may, in lieu of the prepayment of Loans of an
Affected Lender as required under subsection 2.9.3, exercise any one of the
following options:
(i) Upon written notice to the Administrative Agent and each
Lender, the Company may terminate the obligations of the Lenders to
make or maintain Loans as, and to convert Loans into, Adjusted LIBOR
Loans and in such event, the Company shall, prior to the time any
payment pursuant to subsection 2.9.3 is required to be made or, if
the provisions of subsection 2.9.2 are applicable, at the end of the
then current Interest Period, convert all of the Adjusted LIBOR Loans
into ABR Loans in the manner contemplated by subsection 2.5.4 but
without satisfying the advance notice requirements therein; or
(ii) The Company may give notice (by telephone confirmed in
writing) to the Affected Lender and the
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Administrative Agent (who shall promptly give similar notice to each
Lender) and require the Affected Lender to make the Adjusted LIBOR
Loan then being requested as an ABR Loan or to continue to maintain
its outstanding ABR Loan then the subject of a Notice of Conversion/
Continuation as an ABR Loan or to convert its Adjusted LIBOR Loans
then outstanding that are so affected into ABR Loans at the end of
the then current Interest Period (or at such earlier time as
prepayment is otherwise required to be made pursuant to subsection
2.9.3) in the manner contemplated by subsection 2.5.4 but without
satisfying the advance notice requirements therein, such notice to
pertain only to the Loans of the Affected Lender and to have no
effect on the obligations of the other Lenders to make or maintain
Adjusted LIBOR Loans or to convert ABR Loans into Adjusted LIBOR
Loans.
2.9.5. Compensation. The Company shall compensate each
Lender, upon written request by such Lender (which request shall set forth
in reasonable detail the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation,
any interest paid by such Lender to lenders of funds borrowed by it to make
or carry its Adjusted LIBOR Loans and any loss sustained by such Lender in
connection with the re-employment of such funds), which such Lender may
sustain with respect to the Company's Adjusted LIBOR Loans: (A) if for any
reason (other than a default or error by such Lender) a Borrowing of any
Adjusted LIBOR Loan does not occur on a date specified therefor in a Notice
of Borrowing or a Notice of Conversion/Continuation or a telephonic request
for borrowing or conversion/continuation or a successive Interest Period
does not commence after notice therefor is given pursuant to subsection
2.5.4, (B) if any payment or prepayment of any of such Lender's Adjusted
LIBOR Loans occurs on a date which is not the last day of the Interest
Period applicable to that Loan, (C) if any prepayment of any such Lender's
Adjusted LIBOR Loans is not made on any date specified in a notice of
prepayment given by the Company or (D) as a consequence of any other
default by the Company to repay such Lender's Adjusted LIBOR Loans when
required by the terms of this Agreement; provided that the Company shall
have no obligation to any Lender under this subsection 2.9.5 if such Lender
shall not have delivered such written notice to the Company within six
months following the later of (1) the date of the occurrence of the event
which forms the basis for such notice and (2) the date such Lender shall
have become aware of such event.
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2.9.6. Quotation of LIBOR. Anything herein to the contrary
notwithstanding, if on any Interest Rate Determination Date LIBOR is not
available for any reason, the Administrative Agent shall give the Company
and each Lender prompt notice thereof and the Loans requested shall be made
as ABR Loans.
2.9.7. Taxes.
(a) No Withholding. Except as otherwise provided herein, any
and all payments by the Loan Parties under the Loan Documents shall be made
free and clear of and without deduction for any and all current or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or measured by
the overall net income and franchise or similar taxes of the Administrative
Agent, the Fronting Banks or any Lender (or any Purchasing Lender or
Replacement Lender) imposed by the United States or any jurisdiction under
the laws of which the Administrative Agent, the Fronting Bank or any such
Lender (or Purchasing Lender or Replacement Lender) is organized or has its
principal office or lending office or any political subdivision in which
the applicable Administrative Agent, Fronting Bank, Lender, Replacement
Lender or Purchasing Lender is engaged in business or any taxing authority
thereof or therein (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities, "Taxes"). If any Taxes
are required to be deducted from or in respect of any sum payable hereunder
to any Lender (or any Purchasing Lender or Replacement Lender), the
Administrative Agent or Fronting Bank, then, subject to paragraph (e) of
this subsection 2.9.7, (A) the sum payable shall be increased by the amount
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this
subsection 2.9.7) such Lender (or Purchasing Lender or Replacement Lender),
the Administrative Agent or the Fronting Bank (as the case may be) shall
receive an amount equal to the sum it would have received had no such
deductions been made, (B) the Company shall make such deductions and (C)
the Company shall pay the full amount deducted to the relevant taxing
authority or other Governmental Authority in accordance with applicable
law; provided that no Purchasing Lender or Replacement Lender shall be
entitled to receive any greater payment under this paragraph (a) or
paragraph (c) of subsection 2.9.7 than such transferring Lender would have
been entitled to receive with respect to the rights assigned or otherwise
transferred unless in the case of a Purchasing Lender or a Replacement
Lender (1) such assignment or transfer shall have been made at a time when
the circumstances (including changes in applicable law) giving rise to such
greater payment
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did not exist or had not yet occurred or (2) such assignment or transfer
shall have been at the request of or approved by the Company.
(b) Documentary and Similar Taxes. Except as otherwise
provided in this clause (b), the Company agrees to pay any current or
future stamp, intangible or documentary taxes or any other excise or
property taxes, charges or similar levies (including, without limitation,
mortgage recording taxes and similar fees) that arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement, any Registered Transfer Supplement entered
into at the request of the Company or any other Loan Document, but
excluding any current or future stamp, intangible or documentary taxes or
any other excise or property taxes, charges or similar levies (including,
without limitation, mortgage recording taxes and similar fees) that arise
as a result of sales, assignments or other transfers of rights hereunder to
any Transferee pursuant to Section 9.1 (including participations) or to any
Replacement Lender pursuant to Section 9.22 and any Muskogee/Oklahoma
Mortgage Recording Tax (all such non-excluded taxes, charges and levies are
hereinafter referred to as, collectively, "Other Taxes").
(c) Indemnity. Except as otherwise provided in this
subsection 2.9.7, the Company will indemnify each Lender (or Purchasing
Lender or Replacement Lender), the Administrative Agent and each Fronting
Bank for the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes on amounts payable under this subsection 2.9.7) paid by such
Lender (or Purchasing Lender or Replacement Lender), the Administrative
Agent or a Fronting Bank, as the case may be, and any liability (including
penalties, interest and reasonable expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted by the relevant taxing authority or other Governmental
Authority. Such indemnification shall be made within 30 days after the
date any Lender (or Purchasing Lender or Replacement Lender), the
Administrative Agent or a Fronting Bank, as the case may be, makes written
demand therefor. With respect to any Taxes which are paid by the Company
in accordance with this subsection 2.9.7, each Lender (or Purchasing Lender
or Replacement Lender) or Administrative Agent or Fronting Bank receiving
the benefits of such payment of Taxes hereby agrees to pay the Company any
amount refunded to such party which it determines in its sole discretion to
be a refund in respect of such Taxes, provided that the Company, upon the
request of such Lender (or Purchasing Lender or Replacement Lender), the
Administrative Agent or such Fronting Bank, agrees to return
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such refund (plus penalties, interest or other charges) to such Lender (or
Purchasing Lender or Replacement Lender), the Administrative Agent or such
Fronting Bank in the event the relevant taxing authority or other
Governmental Authority determines that such Lender (or Purchasing Lender or
Replacement Lender), the Administrative Agent or such Fronting Bank was not
entitled to receive such refund.
(d) Receipts. Within 30 days after the date of any payment of
Taxes or Other Taxes withheld by the Company in respect of any payment to
any Lender (or Purchasing Lender or Replacement Lender), the Administrative
Agent or any Fronting Bank, the Company will furnish to the Administrative
Agent, at its address referred to in Section 9.9, the original or a
certified copy of a receipt (if available) evidencing payment thereof or
other evidence reasonably satisfactory to such Lender (or Purchasing Lender
or Replacement Lender), the Administrative Agent or such Fronting Bank, as
the case may be.
(e) Non-U.S. Lenders. Each of the Administrative Agent, any
Fronting Bank and any Lender (or Purchasing Lender or Replacement Lender)
that is not incorporated or otherwise formed under the laws of the United
States of America or a state thereof (a "Non-U.S. Person") agrees that it
shall, on or prior to the Closing Date, or, if later, the date it becomes a
Lender (or Purchasing Lender or Replacement Lender), the Administrative
Agent or a Fronting Bank hereunder, deliver to the Company and the
Administrative Agent (A) two duly completed copies of United States
Internal Revenue Service Forms 1001 or 4224, or (B) in the case of Lenders
(or Purchasing Lender or Replacement Lender) exempt from United States
Federal withholding tax pursuant to Section 871(h) or 881(c) of the
Internal Revenue Code, two United States Internal Revenue Service Forms W-8
and a certificate, substantially in the form of Exhibit XXVIII annexed
hereto (such certificate, a "Status Certificate"), representing that such
Non-U.S. Person is not a bank described in Section 881(c) of the Internal
Revenue Code, or any successor applicable form of any thereof, certifying
in each case that such Lender (or Purchasing Lender or Replacement Lender),
the Administrative Agent or the Fronting Bank is entitled to receive
payments hereunder payable to it without deduction or withholding of any
United States Federal income taxes, or subject to a reduced rate thereof.
Each of the Administrative Agent, the Fronting Bank or any Lender (or
Purchasing Lender or Replacement Lender) that delivers to the Company and
the Administrative Agent any such form or certification further undertakes
to deliver to the Company and the Administrative Agent further copies of
any such form or certification or other manner of certification reasonably
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satisfactory to the Company on or before the date that any such form or
certification expires or becomes obsolete or of the occurrence of any event
requiring a change in the most recent form or certification previously
delivered by it to the Company or the Administrative Agent, and such
extensions or renewals thereof as may reasonably be requested by the
Company or the Administrative Agent, certifying that the Administrative
Agent, Fronting Bank or such Lender (or Purchasing Lender or Replacement
Lender), as the case may be, is entitled to receive payments hereunder
without deduction or withholding of any United States Federal income taxes,
or subject to a reduced rate thereof. If at any time on or after the date
of this Agreement there has occurred, on or prior to the date on which any
delivery of any such form or certification would otherwise be required, any
change in law, rule, regulation, treaty, convention or directive, or any
change in the interpretation or application of any thereof, that renders
all such forms or certification previously delivered inapplicable or which
would prevent the Administrative Agent, Fronting Bank or such Lender (or
Purchasing Lender or Replacement Lender), as the case may be, from duly
completing and delivering any such form or certificate with respect to it,
the Administrative Agent, Fronting Bank or such Lender (or Purchasing
Lender or Replacement Lender), as the case may be, shall advise the Company
that under applicable law it shall be subject to withholding of United
States Federal income tax at the full statutory rate, a reduced rate of
withholding or without deduction or withholding. A Non-U.S. Person shall
be required to furnish any such form or certification only if it is
entitled to claim an exemption from or a reduced rate of withholding. Each
of the Administrative Agent, the Fronting Bank and any Lender that is a
U.S. or Non-U.S. Person and that is a party hereto as of the Closing Date
hereby represents and warrants that, as of the Closing Date, payments made
to it hereunder are exempt from withholding of United States Federal income
taxes (A) because the Administrative Agent, the Fronting Bank or such
Lender is organized or otherwise formed under the laws of the United States
or any state thereof; (B) because such payments are effectively connected
with a United States trade or business conducted by such Non-U.S. Person;
(C) pursuant to the terms of an income tax treaty between the United States
and such Non-U.S. Person's country of residence; or (D) because such
payments are portfolio interest exempt pursuant to Section 871(h) or 881(c)
of the Internal Revenue Code. Notwithstanding any provision of
paragraph (a), (b) or (c) of this subsection 2.9.7 to the contrary, the
Company shall not have any obligation to pay any Taxes or Other Taxes or to
indemnify any Lender (or Purchasing Lender or Replacement Lender), the
Administrative Agent or the Fronting Bank for such
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Taxes or Other Taxes pursuant to this subsection 2.9.7 to the extent that
such Taxes or Other Taxes result from (A) the failure of any Lender (or
Purchasing Lender or Replacement Lender), the Administrative Agent or the
Fronting Bank to comply with its obligations pursuant to this paragraph (e)
or (B) any representation or warranty made in this paragraph (e), or made
on any form or certification (or successor applicable form or
certification) delivered pursuant to this paragraph (e) by the Lender (or
Purchasing Lender or Replacement Lender), the Administrative Agent or the
Fronting Bank incurring such Taxes or Other Taxes proving to have been
incorrect, false or misleading in any material respect when so made or
deemed to be made. Unless the Company and the Administrative Agent have
received forms or other documents reasonably satisfactory to them
indicating that payments hereunder are not subject to United States
withholding tax, the Company or the Administrative Agent will withhold at
the applicable statutory or treaty rate.
2.9.8. Booking of Adjusted LIBOR Loans. Any Lender may make,
carry or transfer Adjusted LIBOR Loans at, to, or for the account of, any
of its branch offices or the office of an Affiliate of such Lender.
Notwithstanding the foregoing, each Lender shall, to the extent requested
to do so by the Company, use commercially reasonable efforts consistent
with its internal policies and customary business practices to exercise the
right set forth in the preceding sentence so as to avoid or minimize Taxes
or Other Taxes in respect of Adjusted LIBOR Loans to the extent the
exercise of such right would not otherwise adversely affect such Lender.
2.9.9. Assumptions Concerning Funding of Adjusted LIBOR Loans.
Calculation of all amounts payable to a Lender under this Section 2.9 shall
be made as though such Lender had actually funded its relevant Adjusted
LIBOR Loan through the purchase of a Eurodollar deposit bearing interest at
LIBOR applicable to such Adjusted LIBOR Loan in an amount equal to the
amount of the Adjusted LIBOR Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States of America; provided that each Lender may fund
each of its Adjusted LIBOR Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 2.9.
2.9.10. Adjusted LIBOR Loans After an Event of Default.
Unless the Lenders shall otherwise agree, after the occurrence of and
during the continuance of a Potential Event
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of Default or Event of Default, the Company may not elect to have a Loan be
made or maintained as, or converted to, an Adjusted LIBOR Loan after the
expiration of any Interest Period then in effect for such Loan.
2.9.11. Affected Lender's Obligation to Mitigate. Each Lender
agrees that, as promptly as practicable after it becomes aware of the
occurrence of an event or the existence of a condition that would cause it
to be an Affected Lender under subsection 2.2.8, 2.9.2 or 2.9.3 or to be
entitled to payments pursuant to paragraph (a), (b) or (c) of subsection
2.9.7, it will so advise the Company and, if requested to do so by the
Company, it will, to the extent not inconsistent with such Lender's
internal policies and customary business practices, use commercially
reasonable efforts to make, fund or maintain the affected Adjusted LIBOR
Loans of such Lender through another lending office of such Lender if as a
result thereof the additional moneys which would otherwise be required to
be paid in respect of such Loans pursuant to subsection 2.9.2 or such
paragraphs of subsection 2.9.7 would be materially reduced or the
illegality or other adverse circumstances which would otherwise require
prepayment of such Loans pursuant to subsection 2.9.3 would cease to exist,
and if, as determined by such Lender, in its sole discretion, the making,
funding or maintaining of such Loans through such other lending office
would not otherwise adversely affect such Loans or such Lender. The
Company hereby agrees to pay all reasonable expenses incurred by any Lender
in utilizing another lending office of such Lender pursuant to this
subsection 2.9.11.
Section 2.10 Capital Requirements. If, while any of the
Commitments or Loans or Letters of Credit are outstanding, any Fronting
Bank or Lender determines that the adoption after the date of this
Agreement of any applicable law, rule or regulation regarding capital
adequacy or capital maintenance or any change therein, or any change after
the date of this Agreement 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 such
Fronting Bank or Lender, as the case may be, with any request or directive
after the date of this Agreement regarding capital adequacy or capital
maintenance (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 such Fronting Bank's or Lender's capital, as the case
may be, as a consequence of its Commitments, Letters of Credit, Loans or
participation in Letters of Credit to a level below that which such
Fronting Bank or Lender, as the case may be, could have achieved but for
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such adoption, change or compliance (taking into consideration such
Fronting Bank's or Lender's policies with respect to capital adequacy) by
an amount deemed by such Fronting Bank or Lender, as the case may be, to be
material, then from time to time, within 15 days after written demand by
such Fronting Bank or Lender, the Company shall pay to such Fronting Bank
or Lender such additional amount or amounts as will compensate it for such
reduction; provided that the Company shall have no obligation to any
Fronting Bank or Lender under this Section 2.10 if such Fronting Bank or
Lender shall not have delivered such written demand to the Company within
six months following the later of (1) the date of the occurrence of the
event which forms the basis for such demand and (2) the date such Lender
shall have become aware of such event.
Section 2.11 Replacement Rights of Company. In the event that
any Lender shall have delivered a notice or certificate or written demand
pursuant to subsection 2.2.8, subsection 2.9.2, subsection 2.9.3, or
Section 2.10, or one or more Loan Parties shall be required to make
additional payments to or on behalf of or to otherwise indemnify any
Lender, Replacement Lender or Purchasing Lender, for its own account or for
the account of any Participant, under paragraph (a), (b) or (c) of
subsection 2.9.7, so long as no Event of Default shall have occurred and be
continuing, the Company shall have the right, but not the obligation, at
its own expense (including with respect to the processing and recordation
fee referred to in subsection 9.1.3), upon notice to such Lender and the
Administrative Agent, to replace such Lender with an assignee (in
accordance with and subject to the restrictions contained in subsection
9.1.3) approved by the Administrative Agent (which approval shall not be
unreasonably withheld), and such Lender hereby agrees to transfer and
assign without recourse (in accordance with and subject to the restrictions
contained in subsection 9.1.3) all its interests, rights and obligations
under this Agreement to such assignee; provided that no Lender shall be
obligated to make any such assignment unless (A) such assignment shall not
conflict with any law or any rule, regulation or order of any Governmental
Authority, (B) such assignee shall pay to the affected Lender in
immediately available funds on the date of such assignment the principal of
the Loans made by such Lender hereunder and (C) the Company shall pay to
the Affected Lender in immediately available funds on the date of such
assignment the interest accrued to the date of payment on the Loans made by
such Lender hereunder and all other amounts accrued for such Lender's
account or owed to it hereunder. The provisions of this Section 2.11 shall
not be construed to limit or otherwise affect the rights of the
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Company in respect of Defaulting Lenders pursuant to the provisions of
Section 9.22.
Section 2.12 Swing Line Loans and Swing Line Notes.
2.12.1. Swing Line Loans. (a) Subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties of the Loan Parties set forth herein and in each of the other
Loan Documents, Bankers hereby agrees to lend to the Company from time to
time from and after the Closing Date through but excluding the Revolving
Credit Maturity Date its Swing Line Commitment (as defined below) to be
used for the purposes identified in subsection 2.8.3, notwithstanding the
fact that such Swing Line Loans, when aggregated with Bankers' outstanding
Revolving Loans, may exceed Bankers' Revolving Loan Commitment. Bankers'
agreement to make Swing Line Loans to the Company pursuant to this
subsection 2.12.1 is herein called the "Swing Line Commitment." The
initial amount of Bankers' Swing Line Commitment is $25,000,000. In no
event shall the aggregate principal amount of Swing Line Loans outstanding
at any time exceed the Swing Line Commitment. The Swing Line Commitment is
subject to reduction as set forth in subsections 2.7.8 and 2.7.9. The
Swing Line Commitment shall expire on and the Swing Line Loans shall be
paid in full no later than the Revolving Credit Maturity Date.
(b) Amounts borrowed by the Company under this subsection
2.12.1 may, subject to the limitations set forth in subsection 2.7.1, be
repaid and, subject to the other limitations set forth in this Agreement,
to but excluding the Revolving Credit Maturity Date, be reborrowed. All
Swing Line Loans shall be made as ABR Loans and shall not be entitled to be
converted into Adjusted LIBOR Loans. Swing Line Loans made on any Funding
Date shall be in an aggregate minimum amount of $100,000 and integral
multiples of that amount.
2.12.2. Notice of Borrowing. (a) Subject to subsection
2.12.1, whenever the Company desires to borrow under this Section 2.12, it
shall deliver to Bankers, a Notice of Borrowing (which may be telephonic
confirmed promptly in writing) no later than 1:00 p.m. (New York time) on
the proposed Funding Date. The Notice of Borrowing shall specify (A) the
proposed Funding Date (which shall be a Business Day), (B) the amount of
the proposed Swing Line Loan and (C) that such Swing Line Loan shall be an
ABR Loan.
(b) Neither the Administrative Agent nor Bankers shall incur
any liability to the Company in acting upon any
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telephonic notice referred to above which the Administrative Agent or
Bankers believes in good faith to have been given by a duly authorized
officer or other Person authorized to borrow on behalf of the Company or
for otherwise acting in good faith under this subsection 2.12.2 and, upon
funding of Swing Line Loans by Bankers in accordance with this Agreement
pursuant to any telephonic notice, the Company shall have borrowed Swing
Line Loans hereunder.
2.12.3. Disbursement of Funds. Promptly after receipt of a
Notice of Borrowing pursuant to subsection 2.12.2 (or telephonic notice in
lieu thereof), Bankers shall make the amount of its Swing Line Loan
available, in same day funds, at its office located at One Bankers Trust
Plaza, New York, New York not later than 2:00 p.m. (New York time) on the
Funding Date. Upon satisfaction or waiver (in accordance with Section 9.6)
of all applicable conditions precedent to the borrowing of such Swing Line
Loan, Bankers shall make the proceeds of such Loans available to the
Company on such Funding Date by causing an amount of same day funds equal
to the proceeds of such Swing Line Loan received by the Administrative
Agent to be credited to the account of the Company at such office of the
Administrative Agent.
2.12.4. Swing Line Note. The Company shall execute and
deliver to Bankers on the Funding Date a Swing Line Note substantially in
the form of Exhibit VII annexed hereto to evidence Bankers' Swing Line
Loans, in the principal amount of $25,000,000.
2.12.5. Purchase of Swing Line Loans. Bankers may by written
or telecopy notice given to each Lender not later than 10:00 a.m., New York
City time, on any Business Day require the Lenders to purchase all or any
portion of the Swing Line Loans outstanding. Such notice shall specify the
aggregate amount of Swing Line Loans to be purchased and such Lender's pro
rata percentage (based on such Lender's Adjusted Revolving Loan Percentage)
of such Swing Line Loan or Swing Line Loans. Each Lender having an
Adjusted Revolving Loan Percentage greater than zero shall pay to Bankers,
not later than 2:00 p.m., New York City time, on the date of such notice,
such Lender's pro rata percentage (determined as aforesaid) of the
principal amount of such Swing Line Loan or Swing Line Loans. The
purchase of such participations shall not affect the character of the
applicable Swing Line Loans as Swing Line Loans or the Company's rights or
obligations with respect thereto (including, without limitation, the
Company's prepayment rights with respect thereto). Each Lender agrees that
(A) its obligation to purchase any such participation and
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to pay the purchase price in respect thereof is absolute and unconditional
and shall not be affected by any event or circumstance whatsoever,
including, without limitation, the occurrence of any Potential Event of
Default or Event of Default hereunder or any Lender Default by such Lender
or any other Lender or the failure of any condition precedent set forth in
ARTICLE III to be satisfied, and (B) each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
The effectiveness of this Agreement and the obligations of the
Lenders to make Loans and to issue Letters of Credit hereunder are subject
to the satisfaction of all of the following conditions:
Section 3.1 Conditions to Loans Made on the Closing Date. The
obligations of the Lenders to make all Loans hereunder, in addition to the
conditions precedent specified in Section 3.2, are subject to prior or
concurrent satisfaction of the following conditions on the Closing Date:
3.1.1. The Company shall have delivered, or caused to be
delivered, to the Administrative Agent for the Lenders with sufficient
copies, where appropriate, for each Lender and CG&R:
(i) Certified copies of the Certificate of Incorporation of
the Company, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation, each to be
dated a recent date prior to the Closing Date;
(ii) Copies of the By-laws of the Company, certified as of the
Closing Date by its corporate secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors of the Company
approving and authorizing such documents and actions as are
contemplated hereby in form and substance satisfactory to the
Administrative Agent and the Requisite Lenders, certified by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
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(iv) Signature and incumbency certificates of officers of the
Company executing instruments, documents or agreements required to be
executed in connection with this Agreement; and
(v) Executed copies of the Collateral Documents.
3.1.2. Each Subsidiary that as of the Closing Date is a
Material Subsidiary or a Guarantor Subsidiary shall have delivered, or
caused to be delivered, to the Administrative Agent for the Lenders with
sufficient copies, where appropriate, for each Lender and CG&R:
(i) Certified copies of the Certificate of Incorporation of
such Subsidiary, together with a certificate from the secretary or
assistant secretary of such Subsidiary, each to be dated a recent
date prior to the Closing Date;
(ii) Copies of the By-laws of such Subsidiary, certified as of
the Closing Date by the corporate secretary or an assistant secretary
of such Subsidiary;
(iii) Resolutions of the Board of Directors of such Subsidiary
approving and authorizing such documents and actions as are
contemplated hereby in form and substance satisfactory to the
Administrative Agent and the Requisite Lenders, certified by its
corporate secretary or an assistant secretary as being in full force
and effect without modification or amendment;
(iv) Signature and incumbency certificates of the officers of
each Subsidiary executing the Guarantor Subsidiary Guarantee, the
Collateral Documents to which such Guarantor Subsidiary is party, and
the other instruments, documents and agreements required to be
executed in connection therewith;
(v) Executed copies of the Guarantor Subsidiary Guarantee and
the Collateral Documents to which each Guarantor Subsidiary is party;
and
(vi) Executed copies of any other instruments, documents and
certificates required to be executed in connection with the execution
of the Guarantor Subsidiary Guarantee and the other Collateral
Documents to which such Subsidiary is party.
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3.1.3. The Company shall have taken or caused to be taken such
actions in such a manner so that the Administrative Agent, on behalf of the
Lenders, has, immediately following the Closing Date, a valid and perfected
Lien on the entire Collateral, which Lien shall be a first priority Lien
subject only to Prior Liens. Such actions shall include, without
limitation: (A) the delivery of the Pledge Agreements, (B) the delivery
pursuant to the applicable Pledge Agreement of UCC financing statements
(which shall name the Administrative Agent as secured party, in form and
substance satisfactory to the Administrative Agent) granting a security
interest in all Receivables, Inventory and Intellectual Property or
evidence satisfactory to the Administrative Agent of filing of UCC
financing statements in each office where filing is necessary or
appropriate and (C) appropriate documents, including the applicable filings
with the United States Patent and Trademark Office and United States
Copyright Office, with respect to the Intellectual Property.
3.1.4. The Company shall have caused to be delivered to the
Administrative Agent, on behalf of the Lenders, the following documents and
instruments:
(i) A Mortgage encumbering each Real Property, duly executed
and acknowledged and otherwise in form for recording in the recording
office of each political subdivision where such Real Property is
situated, together with such certificates, affidavits, questionnaires
or returns as shall be required in connection with the recording or
filing thereof and such UCC-1 financing statements and other similar
statements as are contemplated in respect of such Mortgage,
accompanied by the local counsel opinion set forth as Exhibit IX-B,
in the applicable form, which Mortgage and financing statements and
other instruments shall be effective to create a Lien on such Real
Property securing the Obligations subject to no Liens other than
Prior Liens;
(ii) With respect to each Real Property, such consents,
approvals, amendments, supplements, estoppels, tenant subordination
agreements or other instruments as shall reasonably be deemed
necessary by the Administrative Agent and the Requisite Lenders in
order for the owner or holder of the fee or leasehold interest to
grant or continue the Lien contemplated by the Mortgage with respect
to such Real Property;
(iii) With respect to each Mortgage, a policy of title
insurance (or a commitment, dated and recertified as of
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the Closing Date, to issue such a policy) insuring (or committing to
insure) the Lien of such Mortgage as a valid first mortgage Lien on
the Real Property described therein in an amount not less than the
fair market value thereof or, in lieu thereof with respect to any
group of Mortgages, a policy or policies (or commitment) providing
such insurance (or commitment or commitments to provide such
insurance) on a "tie-in" or "cluster" basis (i.e., policies or
commitments which insure against (or commit to insure against) losses
regardless of location or allocated value of the insured property up
to a stated maximum coverage amount) in an amount acceptable to the
Administrative Agent, each of which policy or policies (or
commitment) shall (A) be issued by the Title Company, (B) include
such reinsurance arrangements (with provisions for direct access) as
shall be reasonably acceptable to the Administrative Agent and the
Requisite Lenders, (C) have been supplemented by such endorsements,
or, where such endorsements are not available at commercially
reasonable premium costs, opinion letters of special counsel,
architects or other professionals, which counsel, architects or other
professionals shall be reasonably acceptable to the Administrative
Agent and the Requisite Lenders, as shall be requested by the
Administrative Agent and the Requisite Lenders (including, without
limitation, endorsements or opinion letters on matters relating to
usury, zoning, contiguity, revolving credit, last dollar, first loss,
doing business, and so-called comprehensive coverage over covenants
and restrictions) and (D) contain only such exceptions to title as
shall constitute Prior Liens or are otherwise agreed to by the
Administrative Agent and the Requisite Lenders prior to the Closing
Date with respect to such Real Property;
(iv) With respect to each Real Property located in Oklahoma
and Wisconsin, an ALTA Survey thereof, and, with respect to Real
Property located in Georgia, a perimeter survey thereof which
identifies to the reasonable satisfaction of the Administrative Agent
any and all encroachments and any and all utility and access
easements, and other encumbrances, crossing or otherwise intersecting
with the surveyed perimeter or affecting any of the improvements
comprising a portion of such Real Property;
(v) With respect to each Real Property, policies or
certificates of insurance as required by the Mortgage relating
thereto, which policies or certificates shall
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bear mortgagee endorsements of the character required by such
Mortgage;
(vi) With respect to each Real Property, UCC, judgment and tax
lien searches confirming that the personal property comprising a part
of such Real Property is subject to no Liens except Prior Liens and
the Liens agreed to by the Administrative Agent and the Requisite
Lenders prior to the Closing Date with respect to such Real Property;
(vii) With respect to each Real Property, such affidavits,
certificates and instruments of indemnification as shall reasonably
be required to induce the Title Company to issue the endorsements
contemplated in subparagraph (iii) above;
(viii) With respect to each Real Property, copies of all Leases
(as defined in the Mortgages), all of which Leases shall, to the
extent not previously approved in writing by the Administrative Agent
and the Requisite Lenders, be reasonably satisfactory to the
Administrative Agent and the Requisite Lenders;
(ix) With respect to each Real Property, confirmation that
there has been issued and is in effect a valid and proper certificate
of occupancy or local equivalent, if required by the local codes or
ordinances, for the use then being made of such Real Property and
that there is not outstanding any citation, violation or similar
notice indicating that such Real Property contains conditions which
are not in material compliance with local codes or ordinances
relating to building or fire safety or structural soundness (other
than any conditions which are being corrected in a timely manner and
other than any provisions of such codes or ordinances the validity or
applicability of which is being contested in good faith by
appropriate proceedings diligently prosecuted and as to which
enforcement proceedings have not been instituted or, if instituted,
have been stayed);
(x) A certificate of an officer of the Company certifying
that, as of the date of delivery of such certificate, there has not
occurred any material Taking or Destruction of any Real Property or,
to the knowledge of such officer, any material adverse change in
respect of any matter described in the Facilities Environmental
Report, dated October 26, 1994, prepared by the Company and
previously provided to the Lenders; and
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(xi) The IDA Estoppel.
3.1.5. The Company shall have caused to be delivered to each
Lender an Officer's Certificate (substantially in the form of Exhibit XI
annexed hereto) and an opinion satisfactory in all respects to the
Requisite Lenders from an independent valuation firm satisfactory to the
Requisite Lenders, in each case to the effect that, after giving effect to
the Recapitalization, the Company will not be insolvent, will not be
rendered insolvent by the indebtedness incurred in connection therewith,
will not be left with unreasonably small capital with which to engage in
its business and will not have incurred debts beyond its ability to pay
such debts as they mature.
3.1.6. The Administrative Agent and CG&R shall have received
copies of one or more favorable written opinions of Shearman & Sterling,
counsel for the Company, substantially in the form of Exhibit VIII annexed
hereto, dated as of the Closing Date, and pertaining to such other matters
as the Administrative Agent may reasonably request. The Administrative
Agent and the Lenders shall have received copies of a written opinion of
CG&R substantially in the form of Exhibit X.
3.1.7. The Administrative Agent and CG&R shall have received
copies of one or more favorable written opinions of (A) James W. Nellen,
II, Esq., Vice President and General Counsel for the Company substantially
in the form of Exhibit IX-A annexed hereto, and Liebmann, Conway,
Olejniczak & Jerry, Hunter, MacLean, Exley & Dunn, and Conner & Winters,
special local counsel for the Company in Wisconsin, Georgia and Oklahoma,
respectively, in the form of Exhibit IX-B annexed hereto, (B) opinions of
counsel in each jurisdiction where there exists any inventory or accounts
receivable to be subjected to the Lien of a Collateral Document which has a
value in excess of $20,000,000 with respect to the perfection of the
security interests contemplated by the Collateral Documents and certain
related matters, in each case in substantially the form of Exhibit IX-C
annexed hereto, and (C) an opinion of Michael, Best & Friedrich with
respect to the perfection of security interests in the Intellectual
Property contemplated by the Intellectual Property Pledge Agreement,
substantially in the form of Exhibit IX-D annexed hereto, all of which
opinions shall be dated as of the Closing Date, and cover such other
matters as the Administrative Agent may reasonably request.
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3.1.8. The Company shall have (A) consummated the Common Stock
Offering, in accordance with applicable law and on terms satisfactory in
all respects to the Requisite Lenders, and received not less than
$300,000,000 in aggregate gross cash proceeds from the Common Stock
Offering, (B) paid any and all amounts owing in respect of the Senior
Secured Notes and the Existing Credit Facilities and terminated all
commitments under the Existing Credit Facilities, (C) paid any and all
amounts owing on or prior to the Closing Date pursuant to the Commitment
Fee Letters and (D) paid all Transaction Costs in respect of the
Recapitalization that are due as of the Closing Date or made arrangements
to do so acceptable to the Requisite Lenders.
3.1.9. The Company shall have entered into the 1995 A/R
Bridge, on terms satisfactory in all respects to the Requisite Lenders.
3.1.10. There shall be no governmental or judicial action,
actual or threatened, that is likely to restrain, prevent or impose
burdensome conditions on the transactions contemplated hereby.
3.1.11. The Lenders shall have received satisfactory pro forma
consolidated balance sheets of the Company and its Subsidiaries after
giving effect to the Recapitalization and the Requisite Lenders shall be
reasonably satisfied that such balance sheets are not inconsistent in any
material respect with the Projections.
3.1.12. Except as has been disclosed in the Information
Package delivered to the Lenders prior to the Closing Date, there shall not
have occurred any material adverse change with respect to the condition
(financial or otherwise), operations, business, assets, liabilities or
prospects of the Company and its Subsidiaries, taken as a whole, since
September 30, 1994.
3.1.13. As of the Closing Date, (A) all information and data
(other than the Projections) concerning the Company and its Subsidiaries or
the transactions contemplated hereby that are contained in the Information
Package will not (to the best of the Company's knowledge with respect to
information made available by any of the Company's authorized
representatives), taken as a whole, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements contained therein, in light of the circumstances under which
such statements are made, not misleading and (B) all financial projections
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concerning the Company and its Subsidiaries (collectively, the
"Projections") that have been prepared by the Company or any of the
Company's authorized representatives and made available to the Lenders have
been prepared in good faith and are based upon reasonable assumptions (it
being understood that nothing contained herein shall constitute a
representation that the results forecasted in any Projections will in fact
be achieved).
The acceptance of the proceeds of the Loans and disbursements
made on the Closing Date shall constitute a representation and warranty to
the Administrative Agent and each of the Lenders that all of the applicable
conditions specified above exist as of that time, except for such
conditions that have been duly waived in writing hereunder by the
beneficiaries thereof.
Section 3.2 Conditions to Loans. The obligations of the
Lenders to make all Loans (other than any Tranche A Term Loans and any
Revolving Loans made on the Deferred Funding Date for the purposes
contemplated in subsection 2.8.1) are subject to the prior or concurrent
satisfaction or waiver of the following further conditions precedent:
3.2.1. The Administrative Agent shall have received, in
accordance with the provisions of subsection 2.1.2, 2.3.2 or 2.12.2, as the
case may be, before any Funding Date, an originally executed Notice of
Borrowing signed by the chief executive officer, the chief financial
officer or the treasurer of the Company requesting a Loan or by any
executive officer of the Company designated by any of the above-described
officers on behalf of the Company in writing delivered to the
Administrative Agent.
3.2.2. As of such Funding Date:
(i) The representations and warranties contained herein shall
be true, correct and complete in all material respects on and as of
such Funding Date to the same extent as though made on and as of that
date except that the representations and warranties need not be true
and correct to the extent that changes in the facts and conditions on
which such representations and warranties are based are required or
permitted under this Agreement and except to the extent such
representations and warranties specifically relate to an earlier
date, in which case such representations and warranties were true,
correct and complete in all material respects on and as of such
earlier date;
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(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Borrowing which would constitute (A) an Event of Default or
(B) a Potential Event of Default;
(iii) Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement provides shall be performed by it on or before such Funding
Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender
from making such Loan;
(v) The making of the Loans and disbursements requested on
such Funding Date shall not violate Regulation G, T, X or U of the
Federal Reserve Board; and
(vi) Except as has been disclosed in the Information Package,
there shall not be pending or, to the best knowledge of the Company,
threatened, any action, suit, proceeding, governmental investigation
or arbitration against or affecting any Loan Party or any of its
Subsidiaries, or any property of any Loan Party or any of its
Subsidiaries which has not been disclosed by the Company in writing
pursuant to Section 4.6 or subparagraph (ix) of Section 5.1 prior to
the making of the last preceding Loan (or in the case of the initial
Loans, prior to the execution of this Agreement), and there shall
have occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed, which, in either event, in the opinion of the Requisite
Lenders, would reasonably be expected to materially and adversely
affect the business, operations, properties, assets or condition
(financial or otherwise) of the Company and its Subsidiaries, in each
case, taken as a whole, or to impair the ability or obligation of any
Loan Party to perform or of the Lenders to enforce the Obligations.
No injunction or other restraining order shall have been issued and
no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect to any action, suit
or proceeding seeking to enjoin or otherwise prevent the consummation
of, or to recover any damages or obtain relief as a result of, this
Agreement or the making of Loans or the issuance of Letters of Credit
hereunder.
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3.2.3. On such Funding Date, the Administrative Agent shall
have received an Officers' Certificate from the Company, dated such Funding
Date and substantially in the form of Exhibit XXI, with such changes as are
acceptable to the Administrative Agent, to the effect that the conditions
set forth in subsection 3.2.2 are satisfied on and as of that Funding Date.
Section 3.3 Conditions to Tranche A Term Loans and Certain
Revolving Loans on the Deferred Funding Date. The obligations of the
Lenders to make Tranche A Term Loans and Revolving Loans on the Deferred
Funding Date for the purposes contemplated in subsection 2.8.1 are subject
only to prior or concurrent satisfaction of the following conditions (in
addition to satisfaction of the conditions set forth in Section 3.1 unless
such conditions have been waived in accordance with Section 9.6):
3.3.1. The Company shall have made all necessary arrangements,
given all necessary notices and taken all other necessary action to redeem
all the outstanding Existing Subordinated Debt and pay all other amounts
and Transaction Costs owing in connection with such redemption, in
accordance with the terms of the indentures governing the Existing
Subordinated Debt.
3.3.2. There shall not have occurred and be continuing any
Event of Default or Potential Default pursuant to Section 7.1, 7.6, 7.7,
7.9, 7.13 or 7.14.
3.3.3. The Company shall have (A) received not less than
$60,000,000 in aggregate gross cash proceeds from the 1995 A/R Bridge and
(B) paid all Transaction Costs in respect of the 1995 A/R Bridge that are
due as of the Deferred Funding Date or made arrangements to do so
acceptable to the Administrative Agent.
Section 3.4 Conditions to Initial Revolving Loans and Swing
Line Loans. The obligations of the Lenders to make the initial Revolving
Loans and Swing Line Loans are, in addition to the conditions precedent
specified in Sections 3.1 and 3.2, subject to prior or concurrent
satisfaction of the following conditions:
3.4.1. On or before the Funding Date of the initial Revolving
Loan, the Company shall deliver to each Lender having a Revolving Loan
Commitment (or to the Administrative Agent for such the Lenders) the
Revolving Notes executed by it in accordance with subsection 2.3.4
substantially in the form of
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Exhibit IV annexed hereto, drawn to the order of each such Lender and with
appropriate insertions.
3.4.2. On or before the Funding Date of the initial Swing Line
Loan, the Company shall deliver to Bankers the Swing Line Note executed by
it in accordance with subsection 2.12.4 substantially in the form of
Exhibit VII annexed hereto, drawn to the order of Bankers and with
appropriate insertions.
3.4.3. The conditions precedent specified in Section 3.1 shall
have been satisfied or waived in accordance with Section 9.6.
Section 3.5 Conditions to All Letters of Credit. The
obligation of each Fronting Bank to issue any Letter of Credit hereunder is
subject to the prior or concurrent satisfaction of all of the following
conditions:
3.5.1. On or before the date of issuance of the initial Letter
of Credit, each of the conditions set forth in Sections 3.1 and 3.4 shall
have been satisfied or waived in accordance with Section 9.6.
3.5.2. On or before the date of issuance of a Letter of
Credit, the Administrative Agent shall have received in accordance with the
provisions of subsection 2.2.2, a notice requesting the issuance of such
Letter of Credit, all other information specified in subsection 2.2.2, and
such other documents as the Fronting Bank may reasonably require in
connection with the issuance of such Letter of Credit.
3.5.3. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsections 3.2.2 and 3.2.3 shall be
satisfied to the same extent as though the issuance of such Letter of
Credit were the making of a Loan and the date of issuance of such Letter of
Credit were a Funding Date; provided that the Officers' Certificate
required to be delivered pursuant to subsection 3.2.3 shall be delivered to
the Fronting Bank as well as to the Administrative Agent.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and
to make the Loans and the disbursements pursuant
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to the Assignment Agreement and to issue Letters of Credit, the Company
represents and warrants to each Lender as follows:
Section 4.1 Organization, Powers, Good
Standing, Business and Subsidiaries.
4.1.1. Organization and Powers. Each of the Loan Parties is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation (which jurisdiction as of the
date of this Agreement is set forth on Schedule A annexed hereto). Each of
the Loan Parties has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into each Loan Document to which it is a
party and to carry out the transactions contemplated hereby and thereby,
and in the case of the Company, to issue the Notes and the Common Stock.
4.1.2. Good Standing. Each of the Loan Parties is in good
standing wherever necessary to carry on its present business and
operations, except in jurisdictions in which the failure to be in good
standing has not had and will not have a material adverse effect on the
conduct of the business of the Company and its Subsidiaries, taken as a
whole.
4.1.3. Conduct of Business. On the date of this Agreement,
the Company and its Subsidiaries are engaged only in the businesses
described in the Prospectus.
4.1.4. Subsidiaries. All of the Subsidiaries (other than
inactive Subsidiaries or Foreign Subsidiaries having no significant assets
or activities) of each of the Loan Parties, as of the date of this
Agreement, are identified on Schedule A annexed hereto. The capital stock
of each of the Subsidiaries identified on Schedule A is duly authorized,
validly issued, fully paid and nonassessable. The capital stock of each
Person identified on Schedule A is not Margin Stock. Each of the
Subsidiaries of each Loan Party is validly existing and in good standing
under the laws of its respective jurisdiction of incorporation and has full
corporate power and authority to own its assets and properties and to
operate its business as presently owned and conducted except where failure
to be in good standing or a lack of corporate power and authority has not
had and will not have a material adverse effect on the Company and its
Subsidiaries, taken as a whole. Schedule A correctly sets forth as of the
date of this Agreement the ownership interest of each of the Loan Parties
in each of its Subsidiaries identified therein.
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Section 4.2 Authorization of Borrowing, etc.
4.2.1. Authorization of Borrowing. The execution, delivery
and performance of the Loan Documents and the issuance, delivery and
payment of the Notes and the reimbursement of Fronting Banks of payments
made under the Letters of Credit and the grant and continuation of the
security interests in the Collateral pursuant to the Collateral Documents
have been duly authorized by all necessary corporate action by each Loan
Party.
4.2.2. No Conflict. The execution, delivery and performance
by each Loan Party of each Loan Document to which it is respectively a
party and the issuance, delivery and performance of the Notes, the
consummation of the Common Stock Offering and the issuance of Common Stock
and the other transactions comprising the Recapitalization and the
reimbursement of Fronting Banks of payments made under Letters of Credit
and the grant and continuation of the security interests in the Collateral
pursuant to the Collateral Documents do not and will not (A) violate (1)
any provision of law applicable to any Loan Party, (2) the Certificates of
Incorporation or Bylaws of any Loan Party, or (3) any order, judgment or
decree of any court or other agency of government binding on any Loan
Party, (B) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation
of any Loan Party, (C) result in or require the creation or imposition of
any Lien upon any of its properties or assets (other than Liens in favor of
the Lenders) or (D) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of any Loan Party,
except for such violations, conflicts, breaches, Liens and defaults which
would not have, and such approvals the absence of which would not have, a
material adverse effect on the Company and its Subsidiaries, taken as a
whole.
4.2.3. Governmental Consents. The execution, delivery and
performance by each Loan Party of the Loan Documents to which it is a party
and application of the proceeds of the Loans, the issuance, delivery and
performance of the Notes, the reimbursement of Fronting Banks of payments
made under Letters of Credit, the consummation of the Common Stock
Offering, the issuance of Common Stock, and the grant and continuation of
the security interests in the Collateral pursuant to the Collateral
Documents do not and will not require any registration with, authorization,
order, consent or approval of, or notice to, or other action to, with or
by, any federal, state or other governmental authority or regulatory
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body except such registration, consent, approval or notice as has been
made, obtained or given and is in full force and effect and except for the
filings to perfect security interests granted pursuant to Collateral
Documents, and other filings, authorizations, notices, orders, consents and
approvals the absence of which would not have a material adverse effect on
the Company and its Subsidiaries, taken as a whole or on the legality,
validity or enforceability of any Loan Document.
4.2.4. Binding Obligation. This Agreement is, and the other
Loan Documents and the Notes, when executed and delivered will be, the
legally valid and binding obligations of the Loan Parties party thereto,
enforceable against the applicable Loan Parties in accordance with their
respective terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.2.5. Valid Issuance of Common Stock. The Common Stock
issued in the Common Stock Offering has been duly and validly issued, fully
paid and nonassessable. Such Common Stock has been registered or qualified
under applicable federal and state securities laws.
Section 4.3 Financial Condition. The Company has delivered to
the Lenders true and complete copies of the Company's financial statements
for the fiscal year of the Company ending December 31, 1994. Except as set
forth in the Information Package, all such financial statements and all
financial statements set forth in the Prospectus fairly present the con-
solidated financial position of the Company and its Subsidiaries as at the
respective dates thereof and the consolidated results of operations and
cash flows of the Company and its Subsidiaries for each of the periods
covered thereby, subject to changes resulting from audit and normal year-
end adjustments. Neither the Company nor any of its Subsidiaries has as of
the Closing Date any material Contingent Obligation, material contingent
liability or material liability for taxes, long-term lease or unusual
forward or long-term commitment which is not reflected in the foregoing
financial statements, or the notes thereto.
Section 4.4 No Adverse Material Change; No Stock Payments.
Except as has been disclosed in the Information Package, since December 31,
1994, there has been no change in the business, operations, properties,
assets or condition (financial or otherwise) of the Company and its
Subsidiaries, which has been, either in any case or in the aggregate,
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materially adverse to the business, operations, property, assets or
conditions (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole.
Section 4.5 Title to Properties; Liens. Each Loan Party and
each Subsidiary thereof has good, sufficient and legal title to and
beneficial ownership of all its respective properties and assets (other
than the Collateral) reflected in the most recent consolidated balance
sheet referred to in Section 4.3 or in the most recent financial statements
delivered pursuant to Section 5.1 of this Agreement, except for assets
acquired or disposed of in the ordinary course of business since the date
of such consolidated balance sheet and except for sales and other
dispositions permitted hereunder and except for such defects that in the
aggregate do not materially adversely affect the business, operations,
properties, assets or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole. Except for the Liens created by the
Collateral Documents and other Liens permitted by this Agreement, all such
properties and assets are free and clear of Liens. The Company or another
Loan Party has title to all the Collateral and title to each item of
Collateral is subject to no Liens other than Liens which would be permitted
pursuant to any Collateral Documents; provided that (A) no such Lien (other
than Prior Liens) shall be superior to the Lien of such applicable
Collateral Document and (B) except as otherwise provided in the form of
Mortgage annexed hereto as Exhibit XIX-A(i), no warranty is made by the
Company with respect to the Company's state of title to any Land within the
Landfill Area (as defined in such form of Mortgage). The Company holds all
material licenses, certificates of occupancy or operation and similar
material certificates and clearances of municipal and other authorities
necessary to own and operate its properties in the manner and for the
purposes currently operated by the Company. Each Mill is suitable for its
intended purposes and is served by such utilities as are necessary for the
proper and efficient operation thereof. Each of the Recognition
Instruments in existence as of the Closing Date is in full force and effect
and the Administrative Agent and (assuming the Collateral Trustee, Lenders
and the Administrative Agent shall have executed and delivered the
assumption instrument contemplated in Section 4.2.2 of each such
Recognition Instrument) the Collateral Trustee is entitled, in respect of
the Collateral Documents, to exercise all the rights and receive all the
benefits contemplated in each such Recognition Instrument to be exercisable
by or available to the "Collateral Trustee" thereunder.
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Section 4.6 Litigation; Adverse Facts. Except as has been
disclosed in the Information Package, there is no action, suit, proceeding,
governmental investigation of which the Company has knowledge or
arbitration (whether or not purportedly on behalf of any Loan Party or any
respective Subsidiary thereof) at law or in equity or before or by any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, pending or,
to the knowledge of the Company, threatened against or affecting any Loan
Party or any of its respective Subsidiaries or any property of any Loan
Party or any Subsidiary thereof which would reasonably be expected to
result in any material adverse change in the business, operations,
properties, assets or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole, or that would impair the ability of any
Loan Party to perform any of the Obligations.
Section 4.7 Payment of Taxes. Except to the extent permitted
by Section 5.3, all material tax returns and reports of each Loan Party and
each Subsidiary thereof required to be filed by any of them have been
filed, and all taxes, assessments, fees and other governmental charges upon
such Persons and upon their respective properties, assets, income and
franchises which are due and payable have been paid. The Company does not
know of any proposed tax assessment against any such Person that would be
material to the condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, which is not being actively contested in
good faith by such Person to the extent affected thereby in good faith and
by appropriate proceedings; provided that such reserves or other
appropriate provisions, if any, as shall be required in conformity with
GAAP shall have been made or provided therefor.
Section 4.8 Performance of Agreements. None of the Loan
Parties or any Subsidiary of a Loan Party is in default in the performance,
observance or fulfillment of any of the material obligations, covenants or
conditions contained in any Contractual Obligation of any such Person, and
no condition exists which, with the giving of notice or the lapse of time
or both, would constitute such a default, except where the consequences,
direct or indirect, of such default or defaults, if any, would not have a
material adverse effect on the business, properties, assets, operations or
condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole. Schedules C and F annexed hereto correctly identify all
credit facilities of the Company and its Subsidiaries as of December 31,
1994 in excess of $1,000,000.
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Section 4.9 Governmental Regulation. None of the Loan Parties
or any Subsidiary of a Loan Party (A) is subject to regulation under the
Public Utility Holding Company Act of 1935 or to any federal or state
statute or regulation limiting its ability to incur Indebtedness for money
borrowed as contemplated hereby or by any other Loan Document or (B) is an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.
Section 4.10 Securities Activities. None of the Loan Parties
or any Subsidiary of a Loan Party is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose
of purchasing or carrying any Margin Stock.
Section 4.11 Employee Benefit Plans.
4.11.1. Each of the Loan Parties and each of its ERISA
Affiliates is and each Pension Plan is in compliance in all material
respects with all applicable provisions of ERISA and the Internal Revenue
Code and the regulations and published interpretations thereunder with
respect to all Pension Plans and Multiemployer Plans.
4.11.2. Except for (A) the standard termination in accordance
with Section 4041(b) of ERISA of the Lily-Tulip, Inc. Salary Retirement
Plan and (B) the occurrence of the Reportable Event described in Regulation
29 C.F.R. Section 2615.23(a)(1)(ii) with respect to the Fort Howard Cup
Corporation Bargaining Unit Pension Plan upon the transfer of all the
issued and outstanding shares of capital stock of Sweetheart Cup Company,
Inc., no Termination Event has occurred or is reasonably expected to occur
with respect to any Pension Plan and no Termination Event that is described
in clause (E) of the definition of "Termination Event" has occurred.
4.11.3. The sum of the amount of unfunded benefit liabilities
under all Pension Plans (excluding each Pension Plan with an amount of
unfunded benefit liabilities of zero or less) is not more than $35,000,000.
4.11.4. No Loan Party or any of its ERISA Affiliates has
incurred or reasonably expects to incur any withdrawal liability under
Title IV of ERISA to any Multiemployer Plan individually or in the
aggregate in excess of $25,000,000.
4.11.5. No Loan Party or any of its ERISA Affiliates has
incurred any accumulated funding deficiency (whether or not
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waived) with respect to any Pension Plan individually or in the aggregate
in excess of $15,000,000.
4.11.6. No Loan Party or any of its ERISA Affiliates has or
reasonably expects to become subject to a lien in favor of any Pension Plan
under Section 302(f) of ERISA individually or in the aggregate in excess of
$15,000,000.
As used in this Section 4.11, the term "amount of unfunded
benefit liabilities" has the meaning specified in Section 4001(a)(18) of
ERISA, and the term "accumulated funding deficiency" has the meaning
specified in Section 302 of ERISA and Section 412 of the Internal Revenue
Code.
Section 4.12 Certain Fees. Other than as disclosed in the
Information Package by the Company, no broker's or finder's fee or
commission will be payable with respect to the offer, issue and sale, of
the Notes and the Company hereby indemnifies the Lenders against and agrees
that it will hold the Lenders harmless from any claim, demand or liability
for broker's or finder's fees alleged to have been incurred in connection
with any such offer, issue and sale or any of the other transactions
contemplated hereby and any expenses, including reasonable legal fees,
arising in connection with any such claim, demand or liability. Except as
so disclosed, no other similar fees or commissions will be payable by any
Loan Party or any of its Subsidiaries for any other services rendered to
the Company or any of its Subsidiaries ancillary to the transactions
contemplated hereby.
Section 4.13 Disclosure. Except as disclosed in the
Information Package, taken as a whole, the representations and warranties
of the Loan Parties contained in this Agreement and any other document,
certificate or written statement furnished to the Lenders by or on behalf
of any Loan Party for use in connection with the transactions contemplated
by this Agreement (including, without limitation, the Information Package
but excluding the Projections (as to which the Company makes the
representations and warranties set forth below)) do not contain any untrue
statement of a material fact or omit to state a material fact (known to any
such person in the case of any document not furnished by it) necessary in
order to make the statements contained herein or therein not misleading.
Any reaffirmation of the foregoing sentence is subject to any change in the
facts and conditions on which such representations and warranties are
based, which changes are required, contemplated or permitted under this
Agreement and subject to further disclosure contemplated by Section 5.1 and
subparagraph (vi) of subsection 3.2.2; provided that in all
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cases, taken as a whole, representations and warranties of any Loan Party
contained in this Agreement and any other document, certificate or written
statement furnished to the Lenders by or on behalf of any Loan Party for
use in connection with the transactions contemplated by this Agreement did
not contain at the time made any untrue statement of a material fact or
omit at the time made to state a material fact (known to any Loan Party in
the case of any document not furnished by it) necessary in order to make
the statement contained herein or therein not misleading. The Projections
are based upon good faith estimates and assumptions believed by the Loan
Parties to be reasonable at the time made, it being recognized by the
Lenders that projections as to future events are not to be viewed as facts
and that actual results during the period or periods covered by the
Projections may differ from the projected results. Except as disclosed in
the Information Package, there is no fact known to any Loan Party (other
than matters of a general economic nature) which materially and adversely
affects the business, operations, property, assets or condition (financial
or otherwise) of any Loan Party and its respective Subsidiaries, taken as a
whole, which has not been disclosed herein or in such other documents,
certificates and statements furnished to the Lenders for use in connection
with the transactions contemplated hereby.
Section 4.14 Patents, Trademarks, etc. Each of the Loan
Parties and its Subsidiaries owns, or is licensed to use, all patents,
trademarks, trade names, copyrights, technology, know-how and processes,
service marks and rights with respect to the foregoing used in or necessary
for the conduct of their respective businesses as currently conducted which
are material to the condition (financial or otherwise), business or
operations of the Company and its Subsidiaries, taken as a whole. To the
Company's knowledge, the use of such patents, trademarks, trade names,
copyrights, technology, know-how, processes and rights with respect to the
foregoing by the Loan Parties and their respective Subsidiaries does not
infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liability on
the part of any Loan Party and its Subsidiaries which is material to the
Company and its Subsidiaries, taken as a whole. The consummation of the
transactions contemplated by this Agreement (including the transactions
contemplated by the Intellectual Property Pledge Agreement) does not
require any consent to be obtained with respect to such patents,
trademarks, trade names, copyrights, technology, know-how or processes, or
the license to use any of such patents, trademarks, trade names,
copyrights, technology, know-how, processes or rights with respect thereto,
which if not obtained
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will in any material manner or to any material extent impair the ownership
of (or the license to use, as the case may be) any of such patents,
trademarks, trade names, copyrights, technology, know-how or processes by
each Loan Party and its Subsidiaries to an extent which in the aggregate
would have a material adverse effect on the condition (financial or
otherwise), business or operations of the Company and its Subsidiaries,
taken as a whole. To the best knowledge of the Company, the rights of each
Loan Party and its Subsidiaries so to sell, franchise or license under such
brand names then being used may be transferred in connection with any sale
of assets or stock of the related business by any Loan Party or any of its
Subsidiaries with only such exceptions as are not material to the Company
and its Subsidiaries, taken as a whole.
Section 4.15 Environmental Protection.
4.15.1. Each of the Loan Parties and their respective Subsidi-
aries has either (A) obtained all material permits, licenses and other
authorizations which are required with respect to the operation of its
business under any Environmental Law or (B) submitted a timely application
in respect of such permits, licenses or other authorizations (the
submission of which, by itself or in conjunction with other appropriate
action by such Loan Party or its Subsidiaries, is sufficient under
applicable law to allow such Loan Party or any of its Subsidiaries to
continue its business or operations pending a determination with respect to
such application) and received at least oral confirmation from the relevant
government authority that such permits, licenses or other authorizations
will be issued or reserved, as appropriate under current operating
conditions.
4.15.2. Each of the Loan Parties and their respective
Subsidiaries is in material compliance with all terms and conditions of the
required material permits, licenses and authorizations, and is also in
material compliance with all other material limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules
and timetables contained in any applicable Environmental Laws.
4.15.3. Except as disclosed in the Information Package, there
is no material civil, criminal or administrative action, suit, demand,
claim, hearing, notice of violation, investigation, proceeding, notice of
demand letter pending or, to the knowledge of the Company, threatened
against any Loan Party or any of their respective Subsidiaries under the
Environmental Laws.
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4.15.4. Except as disclosed in the Information Package, there
are no material past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans which may materially
interfere with or prevent material compliance with the Environmental Laws,
or which may give rise to any material common law or legal liability,
including, without limitation, liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
or similar state, local or foreign laws, or otherwise form the basis of any
material claim, action, demand, suit, proceeding, hearing or notice of
violation, study or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling, or the emission, discharge, release or threatened release into
the environment, of any pollutant, contaminant, chemical or industrial,
toxic or hazardous substance or waste which would have a material adverse
effect on the business, operations, condition (financial or otherwise) of
the Company and its Subsidiaries taken as a whole.
Section 4.16 Security Interests. On and as of the Closing
Date, each of the Collateral Documents creates, as security for the
obligations purported to be secured thereby, a valid and enforceable
perfected security interest in and Lien on all of the Collateral, which
Lien shall be a first priority Lien subject only to Prior Liens. No
filings or recordings are required in order to perfect the Liens created
under the Collateral Documents except for filings or recordings which on or
before the date of execution and delivery of such Collateral Document will
have been made; provided that with respect to any Real Property, no failure
to record any Mortgage relating thereto shall be deemed a breach of this
Section if the Title Company has issued or committed to issue in respect of
such Real Property an endorsement or endorsements complying with the
provisions of subparagraph (iii) of subsection 3.1.4.
Section 4.17 IDA and Certain Documents. Each of the Georgia
Mill Lease, the Escrow Agreement and the Project Agreement is the valid and
binding obligation of IDA, enforceable against IDA in accordance with its
terms. Except as has been disclosed in writing to the Lenders, none of the
Georgia Mill Lease, the Escrow Agreement or the Project Agreement has been
modified, amended, supplemented or terminated. To the knowledge of the
Company (after due inquiry), IDA is not in default under (and no condition
exists which with notice or the lapse of time or both would constitute a
default by IDA under) any of the Georgia Mill Lease, the Escrow Agreement
or the Project Agreement. To the knowledge of
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the Company (after due inquiry), IDA's interest in each of the Georgia Mill
Lease, the Escrow Agreement and the Project Agreement has not been
assigned, pledged, mortgaged, hypothecated or otherwise encumbered or
transferred to any party. Neither the execution and delivery by the
Company of the Mortgages nor consummation of the transactions contemplated
therein will conflict or be inconsistent with or result in any breach of
any of the terms, covenants or provisions of or constitute a default under
the Georgia Mill Lease, the Escrow Agreement or the Project Agreement. As
of the time of the execution of the Escrow Agreement and the concurrent
deposit of the limited warranty deed and bill of sale therein described
from IDA to the Company with the Escrow Agent (as defined in the Escrow
Agreement), all equitable interest in the Project (as defined in the
Project Agreement) was irrevocably vested in the Company, and, as a result
thereof, IDA's estate in the Project is limited to legal title.
Section 4.18 Solvency.
4.18.1. Immediately after the consummation of the transactions
to occur on the Closing Date and immediately following the making of each
Loan made on the Closing Date and after giving effect to the application of
the proceeds of such Loans, (A) the fair value of the assets of the Company
and its Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of
the Company and its Subsidiaries on a consolidated basis, (B) the fair
saleable value of the property of the Company and its Subsidiaries on a
consolidated basis will be greater than the amount that will be required to
pay the probable liability of the Company and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become
absolute and matured, (C) the Company and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, and (D) the Company and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted following the Closing Date.
4.18.2. The Company does not intend to, or to permit any of
its Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, incur debts beyond the Company's or such Subsidiary's
ability to pay such debts as they mature, taking into account the timing of
and amounts of cash to be
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received by the Company or such Subsidiary and the timing of the amounts of
cash to be payable on or in respect of the Company's Indebtedness or the
Indebtedness of such Subsidiary.
ARTICLE V
AFFIRMATIVE COVENANTS
The Company covenants and agrees that, so long as any of the
Commitments hereunder shall be in effect and until payment in full of all
of the Loans and Notes and the cancellation or expiration of all Letters of
Credit issued hereunder and the reimbursement in full of all amounts drawn
thereunder unless the Requisite Lenders shall otherwise agree in writing,
the Company shall perform all covenants in this ARTICLE V:
Section 5.1 Financial Statements and Other Reports. The
Company will maintain, and cause each of its Subsidiaries to maintain, a
system of accounting established and administered in accordance with sound
business practices to permit preparation of consolidated financial
statements in conformity with GAAP. The Company will deliver to the
Lenders:
(i) As soon as practicable and in any event within 30 days
after the end of each month ending after the Closing Date in each of
the Company's fiscal years, other than months which are the last
month in a fiscal quarter, (A) the consolidated balance sheet of the
Company and its consolidated Subsidiaries, as at the end of such
month, and (B) the related consolidated statements of earnings and
retained earnings and cash flow statements of the Company and its
consolidated Subsidiaries for such month and for the period from the
beginning of the then current fiscal year to the end of such month;
(ii) As soon as practicable and in any event within 45 days
after the end of each fiscal quarter ending during or after 1995,
other than quarters which are the last quarter in a fiscal year,
(A) the consolidated balance sheet of the Company and its
consolidated Subsidiaries, as at the end of such period and (B) the
related consolidated statements of earnings and retained earnings and
cash flow statements of the Company and its consolidated Subsidiaries
for such fiscal quarter and for the period from the beginning of the
then current fiscal year to the end of such fiscal quarter, all
prepared in accordance
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with Rule 10-01 of Regulation S-X of the General Rules and
Regulations Under the Securities Act of 1933, or any successor rule
that sets forth the manner in which interim financial statements
shall be prepared, it being understood that the foregoing shall
include (1) a statement of profit and loss to the gross margin,
including specified cost components and (2) statements of capital
expenditures setting forth in comparative form, the corresponding
periods of the previous fiscal year, the corresponding figures from
the consolidated plan for the then current fiscal year delivered
pursuant to subparagraph (xii) of this Section 5.1, all in reasonable
detail and certified by the chief financial officer of the Company
that, in the case of such consolidated financial statements, they
fairly present the financial condition of the Company and its
consolidated Subsidiaries as at the dates indicated and the results
of their operations and cash flows for the periods indicated, subject
to changes resulting from audit and normal year-end adjustment and,
insofar as relates to divisions, based on the Company's normal
accounting procedures applied on a consistent basis;
(iii) As soon as practicable and in any event within 90 days
after the end of each fiscal year of the Company (commencing with
fiscal year 1995) (A) (1) the consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such year
and (2) the related consolidated statements of earnings and retained
earnings and cash flow statements of the Company and its consolidated
Subsidiaries for such fiscal year, it being understood that the
foregoing shall include (x) a statement of profit and loss to the
gross margin, including specified cost components and (y) statements
of capital expenditures setting forth in comparative form the
corresponding figures for the previous year, the corresponding
figures from the consolidated plan for the current fiscal year
delivered pursuant to subparagraph (xii) of this Section 5.1, all in
reasonable detail, and (B) in the case of such consolidated financial
statements, accompanied by a report thereon of Arthur Andersen & Co.
or such other independent certified public accountants of recognized
national standing selected by the Company which report shall be
unqualified as to going concern and scope of audit and shall state
that such consolidated financial statements present fairly the
financial position of the Company and its consolidated Subsidiaries
as at the dates indicated and the results of their operations and
cash flows for the periods indicated
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in conformity with GAAP applied on a basis consistent with prior
years (except for such changes as are concurred in by such
accountants) and that the examination by such accountants in
connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(iv) Together with each delivery of financial statements of
the Company and its Subsidiaries pursuant to subparagraphs (ii) and
(iii) of this Section 5.1, (A) an Officers' Certificate of the
Company substantially in the form of Exhibit XXII annexed hereto
stating that the signers have reviewed or caused to be reviewed under
their supervision the terms of this Agreement, the Notes, the Letters
of Credit and the other Loan Documents and have made, or caused to be
made under their supervision, a review in reasonable detail of the
transactions and condition of the Company and its Subsidiaries during
the accounting period covered by such financial statements and that
such review has not disclosed the existence during or at the end of
such accounting period, and that the signers do not have knowledge of
the existence as at the date of the Officers' Certificate, of any
condition or event which constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and
what action the Company has taken, is taking and proposes to take
with respect thereto and (B) a Compliance Certificate substantially
in the form of Exhibit VI annexed hereto demonstrating in reasonable
detail compliance (as determined in accordance with GAAP) during and
at the end of such accounting periods with the restrictions contained
in Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.9, 6.10 and 6.14 and
a computation as of the last day of the applicable fiscal quarter of
the Company of Ratio 1, Ratio 2 and the Applicable Category in
respect of the period succeeding such quarter and the then unutilized
amounts of the Discretionary Excess Cash Flow Balance and the
Discretionary Equity Proceeds Balance and a computation of Excess
Cash Flow in respect of the most recently ended fiscal year and, in
addition, a written statement of the chief accounting officer or
chief financial officer of the Company describing in reasonable
detail the differences between the financial information contained in
such financial statements and the information contained in the
Compliance Certificate relating to the Company's compliance with
Sections 6.6, 6.9 and 6.14;
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(v) Together with each delivery of consolidated financial
statements of the Company and its consolidated Subsidiaries pursuant
to subparagraph (iii) of this Section 5.1, a written statement by the
independent public accountants giving the report thereon (A) stating
that their audit examination has included a review of the terms of
this Agreement and the other Loan Documents as they relate to
accounting matters, (B) stating whether, in connection with their
audit examination, any condition or event which constitutes an Event
of Default or Potential Event of Default has come to their attention,
and if such a condition or event has come to their attention,
specifying the nature and period of existence thereof; provided that
such accountants shall not be liable to any Lender by reason of any
failure to obtain knowledge of any such Event of Default or Potential
Event of Default that would not be disclosed in the ordinary course
of their audit examination and (C) stating that based on their audit
examination nothing has come to their attention which causes them to
believe that the information contained in either or both of the
certificates delivered therewith pursuant to subparagraph (iv) of
this Section 5.1 is not correct or that the matters set forth in the
Compliance Certificate delivered therewith pursuant to clause (B) of
such subparagraph (iv) of this Section 5.1 for the applicable fiscal
year are not stated in accordance with the terms of this Agreement;
(vi) Promptly upon receipt thereof, copies of all reports
submitted to the Company or any Subsidiary thereof by independent
public accountants in connection with each annual, interim or special
audit of the financial statements of the Company or any Subsidiary
thereof made by such accountants, including, without limitation, any
comment letter submitted by such accountants to management in
connection with their annual audit;
(vii) Promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or
made available generally by the Company or by any Subsidiary thereof
to its respective security holders (other than the Company or any
Subsidiary thereof), of all regular and periodic reports and all
registration statements and prospectuses, if any, filed by the
Company or any Subsidiary thereof with any securities exchange or
with the Securities and Exchange Commission and of all press releases
and other statements made available generally by the Company or any
such Subsidiary
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to the public concerning material developments in the business of the
Company or any Subsidiary thereof;
(viii) Promptly upon any officer of the Company obtaining
knowledge (A) of any condition or event which constitutes an Event of
Default or Potential Event of Default, or becoming aware that any
Lender has given any notice or taken any other action with respect to
a claimed Event of Default or Potential Event of Default under this
Agreement, (B) that any Person has given any notice to the Company or
any Subsidiary of the Company or taken any other action with respect
to a claimed default or event or condition of the type referred to in
Section 7.2, (C) of any condition or event which would be required to
be disclosed in a current report filed by the Company with the
Securities and Exchange Commission on Form 8-K (Items 1, 2 and 4 of
such Form as in effect on the date hereof) if the Company were
required to file such reports under the Exchange Act or (D) of a
material adverse change in the business, operations, properties,
assets or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole, an Officers' Certificate specifying
the nature and period of existence of any such condition or event, or
specifying the notice given or action taken by such holder or Person
and the nature of such claimed default, Event of Default, Potential
Event of Default, event or condition, and what action the Company has
taken, is taking and proposes to take with respect thereto;
(ix) Promptly upon any officer of the Company obtaining
knowledge of (A) the institution of, or non-frivolous threat of, any
action, suit, proceeding, governmental investigation or arbitration
against or affecting the Company or any of its Subsidiaries or any
property of the Company or any of its Subsidiaries not previously
disclosed by the Company to the Lenders, or (B) any material
development in any such action, suit, proceeding, governmental
investigation or arbitration, which, in either case, if adversely
determined, would materially and adversely affect the business,
operations, properties, assets or condition (financial or otherwise)
of the Company and its Subsidiaries, taken as a whole, the Company
shall promptly give notice thereof to the Lenders and provide such
other information as may be reasonably available to it (without
waiver of any applicable evidentiary privilege) to enable the Lenders
and CG&R to evaluate such matters;
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(x) Promptly upon any officer of the Company becoming aware
of the occurrence of any (A) Termination Event, (B) "prohibited
transaction", within the meaning of Section 406 of ERISA or Section
4975 of the Internal Revenue Code, or (C) filing by the Company or
any of its ERISA Affiliates of an application for a waiver of an
accumulated funding deficiency, in connection with any Pension Plan
or any trust created thereunder, a written notice specifying the
nature thereof, what action the Company or its ERISA Affiliates have
taken, are taking or propose to take with respect thereto, and, when
known, any action taken or threatened by the Internal Revenue
Service, Department of Labor or the Pension Benefit Guaranty
Corporation with respect thereto;
(xi) With reasonable promptness copies of (A) all notices
received by the Company or any of its ERISA Affiliates of the Pension
Benefit Guaranty Corporation's intent to terminate any Pension Plan
or to have a trustee appointed to administer any Pension Plan, (B)
each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by the Company or any of its ERISA Affiliates with
the Internal Revenue Service with respect to each Pension Plan and
(C) all notices received by the Company or any of its ERISA
Affiliates from a Multiemployer Plan sponsor concerning the
imposition or amount of withdrawal liability pursuant to Section 4202
of ERISA;
(xii) As soon as practicable and in any event by the sixtieth
day of each fiscal year of the Company, a consolidated plan, prepared
in accordance with the Company's normal accounting procedures applied
on a consistent basis, for such fiscal year of the Company,
including, without limitation, (A) a forecasted consolidated balance
sheet and a consolidated statement of changes in financial position
of the Company for such fiscal year, including a forecasted statement
of profit and loss to the gross margin and forecasted statements of
working capital and capital expenditures and (B) the amount of total
forecasted capital expenditures and forecasted consolidated selling,
general and administrative expenses for such fiscal year;
(xiii) As soon as practicable and in any event by the last day
of each fiscal year of the Company, a report in form and substance
reasonably satisfactory to the Administrative Agent and the Requisite
Lenders outlining all material insurance coverage maintained as of
the date
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of such report by the Company and its Subsidiaries and all material
insurance coverage planned to be maintained by such Persons in the
subsequent fiscal year;
(xiv) Together with each delivery of financial statements of
the Company and its Subsidiaries pursuant to subparagraph (ii) of
this Section 5.1, an Officers' Certificate of the Company
substantially in the form of Exhibit XXIII annexed hereto stating
that the signers made, or caused to be made under their supervision,
a review of the terms of, and the records relating to, all of the
Intercompany Indebtedness of the Company and its Subsidiaries and
stating the amount of all outstanding Intercompany Indebtedness,
including all Intercompany Indebtedness of all Subsidiaries to other
Subsidiaries and the Company and all Intercompany Indebtedness of all
Consolidated Subsidiaries to other Consolidated Subsidiaries and the
Company as of the date of such financial statements; and
(xv) With reasonable promptness, such other information and
data (other than Sensitive Information), with respect to the Company
or any of its Subsidiaries as from time to time may be reasonably
requested by the Administrative Agent or any Lender.
Notwithstanding anything to the contrary set forth above, the Company's
failure to comply with subparagraphs (viii) and (ix) of this Section 5.1
(other than clause (A) of subparagraph (viii) of this Section 5.1, except
to the extent that materiality is relevant to the existence or
non-existence of an Event of Default or a Potential Event of Default) based
on a good-faith determination by an officer of the Company that such
condition, event or development is not material shall not be the basis for
an Event of Default.
Section 5.2 Corporate Existence, etc. The Company will at
all times preserve and keep in full force and effect its corporate
existence and rights and franchises material to its business and those of
each of its Subsidiaries; provided that the corporate existence of any such
Subsidiary may be terminated if such termination is in the best interest of
its parent and would not have a material adverse effect on the ability of
the Loan Parties to perform their obligations under the Loan Documents; and
provided, further, that neither the Company nor any of its Subsidiaries
shall be required to preserve any right or franchise if the Board of
Directors of the Company or such Subsidiary shall have determined that the
preservation thereof is no longer desirable in the conduct of
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the business of the Company or such Subsidiary, as the case may be.
Section 5.3 Payment of Taxes and
Claims; Tax Consolidation.
5.3.1. The Company will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental charges
imposed upon them or any of their properties or assets or in respect of any
of their franchises, business, income or property before any material
penalty accrues thereon, and all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums which have
become due and payable and which by law have or may become a material Lien
upon any of their material properties or assets, prior to the time when any
material penalty or fine shall be incurred with respect thereto; provided
that no such charge or claim need be paid if being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted and
if such reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made therefor.
5.3.2. The Company will not, and will not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated income
tax return with any Person (other than any of their respective Subsidiaries
or such other Person as may be reasonably acceptable to the Requisite
Lenders).
Section 5.4 Maintenance of Properties; Insurance. The Company
will maintain or cause to be maintained in good repair, working order and
condition (ordinary wear and tear excepted) all material properties used in
the business of the Company and its Subsidiaries and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof and will maintain and renew as necessary all material licenses,
permits and other material clearances necessary to use and occupy the
material properties of the Company and its Subsidiaries. The Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and business of its Subsidiaries against loss or damage of the
kinds customarily insured against by corporations of established reputation
engaged in the same or similar businesses and similarly situated, of such
types and in such amounts as are customarily carried under similar
circumstances by such other corporations to the extent that such types and
such amounts of insurance are available at commercially reasonable rates.
The Company will maintain such
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insurance as may be required to comply with any Mortgage and each Pledge
Agreement, and shall otherwise comply with all provisions of the Collateral
Documents relating to insurance. The Company will furnish to each Lender,
upon reasonable request, information as to the insurance carried, and will
not cancel any such insurance without the consent of the Requisite Lenders.
Section 5.5 Inspection. The Company shall permit any
authorized representatives designated by any Lender to visit and inspect
any of the properties of the Company or any of its Subsidiaries, including
its and their financial and accounting records, and, subject to
Section 9.17, to make copies and take extracts therefrom, and to discuss
its and their affairs, finances and accounts with its and their officers
and independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may be
reasonably requested; provided that in light of (A) the highly proprietary
nature of the following information, (B) its historically demonstrated and
ongoing value and importance in the Company's operating performance and
(C) the substantial risk to the value of the Company's business if such
information were not maintained on a strictly confidential basis, in no
event shall the Company be required to disclose to any Person any
information with regard to the Company's dry form technology or de-inking
technology, any formulas, recipes, process flow diagrams, equipment
specifications, equipment purchase costs or manufacturing and process costs
related thereto (the "Sensitive Information").
Section 5.6 No Further Negative Pledges. Except as provided
in this Section 5.6, neither the Company nor any of its Subsidiaries shall
enter into any agreement prohibiting the creation or assumption of any Lien
upon its properties or assets, whether now owned or hereafter acquired.
The foregoing provisions of this Section 5.6 shall not be deemed violated
by the following: (A) any Contractual Obligation restricting Liens on
assets owned by a Foreign Subsidiary or on the shares of stock of any
Foreign Subsidiary (other than any such shares that constitute Collateral
and other than the shares of stock of Sterling International (U.K.) Limited
and Sterling International Limited) or on the shares of stock of SIL
Company (other than any such shares that constitute Collateral), (B) the
provisions of (1) Section 3.08 of the indenture governing the 9 1/4%
Unsecured Notes, as in effect on the Closing Date, (2) Section 3.08 of the
indenture governing the 8 1/4% Unsecured Notes, as in effect on the Closing
Date, or (3) any similar provision of any instrument comprising the
Refinancing Senior Unsecured Debt that is no less favorable to
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the Company and the Lenders than the provisions of each such Section 3.08
referred to above, (C) the provisions of Section 3.08 of the indenture
governing the 9% Senior Subordinated Notes, as in effect on the Closing
Date, or the provisions of Section 3.08 of the indenture governing the 10%
Subordinated Notes, as in effect on the Closing Date, (D) the provisions of
any Capital Leases that restrict the imposition of Liens on the assets
specifically demised pursuant thereto, (E) any agreement entered into by
the Receivables Subsidiary in connection with a Receivables Transaction
that prohibits or restricts the creation or assumption of any Liens upon
the assets or properties of such Receivables Subsidiary, (F) the provisions
of Section 5.6 of the Receivables Credit Agreement, as in effect on the
date hereof, or (G) the provisions of any other instrument governing
Indebtedness of the Company or any Domestic Subsidiary of the Company
permitted under Section 6.1, which Indebtedness is secured by a Lien
permitted under Section 6.2, to the extent such provisions operate to
restrict the ability of the Company or any of its Subsidiaries to grant
Liens on the specific assets securing such Indebtedness.
Section 5.7 Compliance with Laws, etc. The Company and its
Subsidiaries shall comply with the requirements of all applicable laws,
including Environmental Laws, rules, regulations and orders of any
Governmental Authority, noncompliance with which would materially adversely
affect the business, properties, assets, operations or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a whole.
Section 5.8 Interest Rate Agreements. On or prior to the 90th
day following the Closing Date, the Company will enter into or obtain, and
thereafter maintain in full force and effect, Interest Rate Agreements
(other than Leveraged Swaps) as shall result in effectively fixing, for a
period of not less than three years from the Closing Date, the interest
rate per annum to the Company of Adjusted LIBOR Loans having a principal
amount of not less than $500 million to an amount that does not exceed the
sum, from time to time, of 10% per annum plus the LIBOR Spread.
Section 5.9 Lender Meeting. The Company will participate in a
meeting of Lenders once during each fiscal year to be held at a location
and a time selected by the Company.
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Section 5.10 Security Interests.
5.10.1. The Company shall and shall cause each of the other
Loan Parties to perform any and all acts and execute any and all documents
(including, without limitation, the execution, amendment or supplementation
of any financing statement, continuation statement or other statement) for
filing under the provisions of the UCC and the rules and regulations
thereunder, or any other statute, rule or regulation of any applicable
federal, state or local jurisdiction, including, without limitation, any
filings in local real estate land record offices and the United States
Patent and Trademark Office, or the United States Copyright Office, which
are necessary or advisable, from time to time, in order to grant, continue
and maintain in favor of the Collateral Trustee for the benefit of the
Lenders a valid and perfected Lien on the Collateral, which Lien is a first
priority Lien subject only to Prior Liens.
5.10.2. The Company shall and shall cause each of the other
Loan Parties to undertake to deliver or cause to be delivered to the
Administrative Agent from time to time such other documentation, consents,
authorizations, approvals and orders in form and substance satisfactory to
the Collateral Trustee as the Collateral Trustee shall deem reasonably
necessary or advisable to perfect or maintain the Liens for the benefit of
the Lenders, including assets which are required to or do become Collateral
after the Closing Date.
Section 5.11 Future Guarantor Subsidiaries and
Additional Pledge Agreements; Certain
Future Acquisitions of Material Assets.
5.11.1. Promptly upon any Person or Subsidiary (in each case,
other than a Lower Tier Foreign Subsidiary that constitutes a Controlled
Foreign Corporation) becoming a direct or indirect Material Subsidiary of
the Company, such Person or Subsidiary shall execute a Guarantor Subsidiary
Guarantee guaranteeing all of the obligations owing to Lenders hereunder,
to the fullest extent permitted by applicable law, substantially in the
form of Exhibit XIII annexed hereto and shall, if it has not previously
done so, enter into a Receivable/Inventory Pledge Agreement, to the fullest
extent permitted by applicable law, substantially in the form of
Exhibit XIV-B annexed hereto, with such changes therein (whether before or
after the execution and delivery thereof) as are otherwise permitted by the
Requisite Lenders. In addition, any Subsidiary of the Company (other than
a Lower Tier Foreign Subsidiary that constitutes a Controlled Foreign
Corporation)
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that meets the above criteria but cannot execute any such Pledge Agreement
because of applicable law or whose Guarantor Subsidiary Guarantee or Pledge
Agreement is limited because of applicable law, shall promptly upon any
change of law reducing or removing such prohibition or limitation enter
into a Guarantor Subsidiary Guarantee or such Pledge Agreement or shall
promptly amend such instrument in a manner satisfactory to the
Administrative Agent to reduce or remove such prohibition or limitation
consistent with such law as so changed. In addition, the Company shall, if
such Subsidiary is directly owned by the Company, or shall cause its
relevant directly or indirectly owned Subsidiaries to, if such Subsidiary
is not directly owned by the Company, complete and provide to the
Administrative Agent a form of the Company Stock Pledge Agreement,
substantially in the form of Exhibit XV annexed hereto with respect to such
Subsidiary, which shall be effective to create, in favor of the Lenders and
the Administrative Agent, a perfected, first priority Lien on all the
capital stock or other equity interest in such Subsidiary.
5.11.2. Grant of Security Interest in Material Assets.
Promptly upon (A) the acquisition by the Company or any Domestic Subsidiary
of the Company of any Material Assets (as defined in clause (A) of the
definition of Material Asset) not acquired in connection with or as part of
an Expansion Project or (B) the capital stock or other equity interests in
any First Tier Foreign Subsidiary of the Company becoming Material Assets
pursuant to the provisions of clause (B) of the definition of Material
Asset:
(a) the Company and the Collateral Trustee will enter into
such amendments or supplements to the Collateral Documents, or
additional Collateral Documents, in each case in recordable form (if
involving real estate) and in substantially the forms attached hereto
as Exhibits XIV-A and XIV-B (to the extent the Material Assets
consist of personal property) and Exhibits XIX-A(i) and (ii) through
XIX-C(i) and (ii) (to the extent the Material Assets consist of real
property) with, in each case, such changes thereto as are
necessitated by local law or other applicable circumstances (the
"Additional Collateral Documents") and as are necessary in order to
grant to the Collateral Trustee for the benefit of the Lenders a
valid first priority Lien and security interest in such Material
Assets subject only to Permitted After Acquired Collateral Liens; and
(b) the Company will also deliver to the Collateral Trustee
the following:
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(i) to the extent the Material Assets consist of real
property, an ALTA Survey and a policy of title insurance
insuring that the Lien of the Additional Collateral Documents
constitutes a valid and perfected first priority Lien on such
real property in an aggregate amount equal to the fair value of
the real property, together with an Officers' Certificate
stating that any specific exceptions to such title insurance
are Permitted After Acquired Collateral Liens and containing,
or accompanied by, to the extent applicable, such endorsements
and other assurances of the type included in or accompanying
the title insurance policy required to be delivered to the
Collateral Trustee pursuant to subsection 3.1.4;
(ii) to the extent the Material Assets consist of
personal property, UCC financing statements and all such other
filings, notices or other instruments as shall be deemed
necessary (in the reasonable judgment of the Collateral
Trustee) to perfect such Lien of the Additional Collateral
Documents in respect of such Material Assets and, if such
Material Assets shall be of a character such that possession
thereof is required to perfect such Lien, such Material Assets
shall have been delivered to the Collateral Trustee;
(iii) evidence of payment or a closing statement
indicating payment of all filing fees, recording charges,
transfer taxes and other costs and expenses, including, without
limitation, reasonable legal fees and disbursements of counsel
for the Collateral Trustee (and any local counsel), that may be
incurred to validly and effectively subject such Material
Assets to the Lien of any applicable Additional Collateral
Document and perfect such Lien; and
(iv) an opinion of counsel to the Company (which shall
contain such limitations and exceptions as are customary for
such opinions) to the effect that the Collateral Trustee has a
valid and perfected Lien in respect of such Material Assets and
that any applicable Additional Collateral Document is
enforceable in accordance with its terms.
5.11.3. Limitations on Pledging of Shares and other Assets of
Certain Foreign Subsidiaries and Delivery of Certain Guarantees. (a)
Notwithstanding the provisions of subsections
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5.11.1 and 5.11.2 above, so long as Section 956 (or a successor provision)
of the Internal Revenue Code shall remain in effect and shall operate with
respect to the Company and its Domestic Subsidiaries to (1) cause
restrictive covenants coupled with a pledge of shares possessing 66 2/3% or
more of the voting power of all classes of capital stock or other equity
interests entitled to vote of any First Tier Foreign Subsidiary that
constitutes a Controlled Foreign Corporation (the stock or other equity
interests of which would otherwise be required to be pledged to the Lenders
pursuant to subsection 5.11.1 or 5.11.2) or (2) cause, in the case of a
First Tier Foreign Subsidiary that is a Material Subsidiary, the granting
by such First Tier Foreign Subsidiary of any security interest pursuant to
a Receivable/Inventory Pledge Agreement or of any rights pursuant to a
Guarantor Subsidiary Guarantee to trigger an inclusion in the income of the
Company or a Domestic Subsidiary pursuant to Section 951 (or a successor
provision) of the Internal Revenue Code, the Company and its Subsidiaries
shall not be required to cause such First Tier Foreign Subsidiary to
execute and deliver such Guarantor Subsidiary Guarantee or such
Receivable/Inventory Pledge Agreement and the Company and its Domestic
Subsidiaries shall only be required to pledge, or to cause to be pledged,
to the Lenders pursuant to subsection 5.11.1 or 5.11.2 shares representing
the lesser of (i) the percentage held by the Company and its Domestic
Subsidiaries and (ii) 65% of the voting power of all shares entitled to
vote of such First Tier Foreign Subsidiary.
(b) Upon any change in law or other applicable circumstances
the effect of which is to permit a pledge of shares in a Foreign Subsidiary
in addition to those contemplated to be pledged pursuant to paragraph (a)
of this subsection 5.11.3 or (if such Foreign Subsidiary shall be a
Material Subsidiary) the execution and delivery by such a Foreign
Subsidiary of a Guarantor Subsidiary Guarantee or the granting by such
Foreign Subsidiary of a security interest pursuant to a
Receivable/Inventory Pledge Agreement without triggering an inclusion in
the income of the Company or any Domestic Subsidiary of the Company
pursuant to Section 951 (or a successor provision) of the Internal Revenue
Code, the Company shall, and shall cause all applicable Subsidiaries of the
Company to, (A) execute and deliver all such instruments, share
certificates, financing statements, amendments or other documents as shall
be reasonably requested by the Collateral Trustee to pledge all such
additional shares to the Lenders as contemplated in subsections 5.11.1 and
5.11.2 and, (B) if such Foreign Subsidiary shall be a Material Subsidiary,
to cause such Foreign Subsidiary to execute and deliver to the
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Administrative Agent a Guarantor Subsidiary Guarantee and/or a
Receivables/Inventory Pledge Agreement.
5.11.4. At all times from and after the Closing Date, the
Company shall cause each First Tier Foreign Subsidiary of the Company
either (A) not to own any equity interests or other Investments in any
Lower Tier Foreign Subsidiary or (B) not to engage in any business or
activity other than the ownership of equity interests and/or other
Investments in one or more Lower Tier Foreign Subsidiaries and not to incur
any liabilities of any kind other than the granting of a guarantee and of a
pledge of any such equity interests in Lower Tier Foreign Subsidiaries in
favor of one or more financial institutions or other lending institutions
to support or secure Indebtedness incurred by such Lower Tier Foreign
Subsidiaries in compliance with the provisions of Section 6.1, each such
guarantee and pledge to be without recourse to such First Tier Foreign
Subsidiary, the Company or the Domestic Subsidiaries (except as permitted
by Section 6.4). The provisions of the preceding sentence of this
subsection 5.11.4 shall not apply to SIL Company or any direct or indirect
Wholly Owned Subsidiary of SIL Company.
5.11.5. The provisions of subsections 5.11.1, 5.11.2 and
5.11.3 shall not be applicable to the capital stock or other equity
securities in SIL Company, Fort Howard Holding or the capital stock or
other equity securities in Sterling International Limited, Sterling
International (U.K.) Limited or Sterling International Preference Limited
(collectively, the "UK Holding Companies") and their direct and indirect
Wholly Owned Subsidiaries and none of Fort Howard Holding, SIL Company, the
UK Holding Companies and their direct and indirect Wholly Owned
Subsidiaries shall be required to execute and deliver a Guarantor
Subsidiary Guarantee or a Receivable/Inventory Pledge Agreement or, except
as otherwise provided below with respect to equity securities of SIL
Company, to otherwise pledge their assets or to guarantee the Obligations
to the Lenders or the Administrative Agent hereunder. None of Fort Howard
Holding, SIL Company or the UK Holding Companies shall enter into any new
line of business or incur any new obligations in respect of its existing
business after the date hereof (other than in the ordinary course of its
existing business). The Company shall not create, or permit the creation
of, any new Subsidiaries to own or hold any Investment, direct or indirect,
in Fort Sterling. Notwithstanding the provisions of the first sentence of
this subsection 5.11.5, the Company shall at all times cause to be
maintained, pursuant to the Collateral Documents, in favor of the
Collateral Trustee for the benefit of the Lenders, a first
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priority security interest in the equity securities of SIL Company
representing 65% of the voting power of all equity securities entitled to
vote of SIL Company.
5.11.6. Notwithstanding the provisions of subsection 5.11.2,
the Company shall not be required to cause to be granted in favor of the
Collateral Trustee and the Lenders any Lien in respect of a Material Asset
if such Material Asset is encumbered by a Preexisting Assumed Lien the
granting instrument in respect of which prohibits the granting to the
Collateral Trustee and the Lenders of any Lien in respect of such Material
Asset; provided that, at the earlier of (A) such time as the Indebtedness
secured by such Pre-existing Assumed Lien shall be retired and (B) the
scheduled maturity date of such Indebtedness (exclusive of any extensions
of maturity effected in connection with the acquisition of such Material
Asset or thereafter), the Company shall promptly comply with the provisions
of subsection 5.11.2 in respect thereof to the extent such compliance would
not otherwise be in violation of subsection 5.11.3 or 5.11.5.
5.11.7. Notwithstanding the foregoing, the provisions of this
Section 5.11 shall not apply to any Receivables Subsidiary.
Section 5.12 Expansion Projects.
5.12.1. Mill Expansion Transactions. (a) Upon compliance
with the provisions of this subsection 5.12.1, the Company may enter into a
Permitted Expansion Financing with respect to the construction or
installation of Existing Mill Expansion Equipment at a Mill (whether or not
an Existing Mill) that has been encumbered by the Collateral Documents
(each, an "Existing Mill Expansion Transaction"). Not later than 10 days
after any Existing Mill Expansion Equipment is first placed into service by
the Company, the Company shall deliver to the Administrative Agent an
Officers' Certificate (i) identifying such Existing Mill Expansion
Equipment, (ii) stating the date such Existing Mill Expansion Equipment was
placed in service and (iii) stating whether the Company expects to enter
into a Permitted Expansion Financing within 12 months after the date such
Existing Mill Expansion Equipment was first placed in service. If the
Company fails to deliver such Officer's Certificate to the Administrative
Agent within the time period specified above or the Company states in such
Officer's Certificate that it does not intend to enter into a Permitted
Expansion Financing within 12 months of the date on which the applicable
Existing Mill Expansion Equipment was first placed in service, such
Existing Mill Expansion Equipment shall become
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subject to the Lien of the Collateral Documents and the Company shall
promptly deliver to the Administrative Agent such instruments as the
Administrative Agent or the Requisite Lenders may reasonably require to
confirm that the Lien of the applicable Mortgage or other Collateral
Document has attached thereto, including, without limitation, amendments to
the applicable Mortgage or other Collateral Documents. If at any time
within such 12-month period the Company determines to pursue an Unsecured
Expansion Financing, the Company shall so notify the Administrative Agent
in writing and the applicable Existing Mill Expansion Equipment shall
become subject to the Lien of the Collateral Documents to the extent it is
not already so subject and the Company shall deliver such instruments and
take such other actions as are contemplated in the immediately preceding
sentence. If the Company elects to enter into a Secured Expansion
Financing or a Sale/Leaseback Financing in respect of such Existing Mill
Expansion Equipment, the Company shall comply with the provisions of
paragraphs (b) and (c) of subsection 5.12.1, as applicable.
(b) If the Company elects to enter into a Permitted Expansion
Financing which constitutes a Sale/Leaseback Financing, the Company may
grant an Existing Mill Expansion Easement in respect of any Existing Mill
Expansion Equipment and enter into an Existing Mill Expansion Lease with
respect thereto upon the satisfaction of all the Existing Mill Expansion
Conditions and delivery to the Administrative Agent of an Officers'
Certificate confirming such satisfaction, which Officers' Certificate shall
be accompanied by the Existing Mill Expansion Documents, each fully
executed and acknowledged by the Company and all parties thereto other than
the Administrative Agent and in form for execution by the Administrative
Agent. The Administrative Agent shall execute, acknowledge (if applicable)
and deliver to the Company a Recognition Instrument and any other Existing
Mill Expansion Documents to which the Administrative Agent is, or is to be,
a party following receipt thereof by the Administrative Agent and the
satisfaction of the Existing Mill Expansion Conditions. The Administrative
Agent's obligation to deliver any Existing Mill Expansion Documents and the
Company's rights to enter into such Sale/Leaseback Financing shall be
subject to the following conditions (collectively, the "Existing Mill
Expansion Conditions"):
(i) no Event of Default or Potential Event of Default shall
have occurred and be continuing as at the date of delivery of such
Existing Mill Expansion Documents;
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(ii) following the delivery of the applicable Recognition
Instrument, the affected Mill (exclusive of the property subject to
any Existing Mill Expansion Easement) shall have sufficient utility
services and sufficient access to public roads, rail spurs, harbors,
canals, terminals and other transportation structures for the
continued use of such Mill for the production of tissue and paper
products in substantially the manner carried on by the Company prior
to such delivery;
(iii) the Existing Mill Expansion Documents shall not create
any Lien on property other than Existing Mill Expansion Equipment and
the Land described in any related Existing Mill Expansion Easement;
(iv) following commencement of construction relating to any
Existing Mill Expansion Equipment and after completion thereof, the
affected Mill shall comply in all material respects with applicable
Environmental Laws and laws, rules, regulations and ordinances
relating to zoning, land use and building and workplace safety;
(v) following the delivery of a Recognition Instrument and
the completion of construction or installation of any Existing Mill
Expansion Equipment, the value of the affected Mill (exclusive of the
value of the Existing Mill Expansion Equipment) shall not be less
than the value of such Mill prior to such delivery and construction
or installation;
(vi) the applicable Existing Mill Expansion Lease shall
provide to the Administrative Agent in substance all the material
rights contemplated by Schedule H annexed to this Agreement (it being
understood that in the event that the Recognition Instrument is
substantially in the form of (A) that certain Nondisturbance, Cure
Rights and Purchase Option Agreement, dated as of October 20, 1989,
in respect of any Existing Mill Expansion Transaction relating to
Land and Improvements located in Effingham County, Georgia (with such
changes as shall be reasonably satisfactory to the Administrative
Agent), or (B) that certain Cure Rights and Purchase Option Agreement
dated as of October 20, 1989, in respect of any Existing Mill
Expansion Transaction relating to Land and Improvements located in
Brown County, Wisconsin (with such changes as shall be reasonably
satisfactory to the Administrative Agent), the provisions of this
subparagraph (vi) shall be deemed satisfied);
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(vii) to the extent that the Title Company shall be authorized
by law to do so, the Title Company shall have committed to issue an
endorsement to the title insurance policy in favor of the
Administrative Agent relating to the affected Mill confirming that
the Lien of the applicable Mortgage has attached to the tenant's
interest under the applicable Existing Mill Expansion Lease and that
the priority of such Lien with respect to such interest is subject to
no Liens other than Prior Liens;
(viii) unless such Existing Mill Expansion Equipment is located
within existing Improvements, the Company shall have delivered to the
Administrative Agent an ALTA Survey showing the location of the
Existing Mill Expansion Equipment and/or, if applicable, the
perimeter of the land affected (or to be affected) by the Existing
Mill Expansion Easement relating to such Existing Mill Expansion
Equipment; and
(ix) such Sale/Leaseback Financing shall comply with the
provisions of Sections 6.10 and 6.14.
(c) If the Company elects to finance an Existing Mill
Expansion Transaction with any Secured Expansion Financing, the Company's
rights to enter into such transaction shall be subject to the following
conditions (collectively, the "Alternative Existing Mill Expansion
Conditions"):
(i) the conditions set forth under subparagraphs (i), (iv)
and (viii) of paragraph (b) of this subsection 5.12.1 shall be
satisfied;
(ii) the conditions set forth under subparagraphs (iii) and
(v) of paragraph (b) of this subsection 5.12.1 shall be satisfied
except that for purposes of satisfaction of such conditions, the term
"Expansion Intercreditor Agreement" shall be substituted for the term
"Recognition Instrument" as used therein;
(iii) the lender in respect of such Permitted Expansion
Financing shall have executed and delivered to the Administrative
Agent an intercreditor agreement in substantially the form of
Exhibit XXIV hereto (each, an "Expansion Intercreditor Agreement");
and
(iv) the asset or assets subject to the Lien of such lender in
connection with such financing shall be of such a nature that it or
they at all times will be capable of being removed from the Mill at
which such asset or assets
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is or are located without causing any material damage to or any
diminution (other than a de minimis diminution) in value of any
property comprising such Mill and without interfering with or
impairing, in any material manner or for any material period, the
operations of the Company at such Mill or causing such Mill or any
portion thereof to fail to comply with any Environmental Law or any
other law, rule, regulation or policy of any Governmental Authority.
(d) In connection with the construction or installation of any
Existing Mill Expansion Equipment or the execution of any Existing Mill
Expansion Documents, the Company shall (A) execute, deliver and record, and
obtain from any Expansion Lessor, if applicable, such instruments as the
Administrative Agent or the Requisite Lenders may reasonably require,
including, without limitation, amendments to the Collateral Documents and
this Agreement and (B) deliver to the Administrative Agent such evidence of
the satisfaction of the Existing Mill Expansion Conditions or Alternative
Existing Mill Expansion Conditions as the Administrative Agent or the
Requisite Lenders may reasonably require. Any and all construction and
construction activities performed in connection with any Existing Mill
Expansion Equipment shall be performed in compliance with the provisions of
any applicable Mortgage and shall conform in all material respects with the
provisions of applicable laws, rules, regulations and policies of all
Governmental Authorities having jurisdiction and no Existing Mill Expansion
Equipment may be operated or occupied unless, if applicable, a proper
certificate of occupancy (or local equivalent) and, if applicable, all
other required permits, licenses and clearances from all Governmental
Authorities having jurisdiction shall have first been obtained and be in
effect.
5.12.2. Greenfield Expansion Projects. (a) Upon compliance
with the provisions of this subsection 5.12.2, the Company may enter into a
Permitted Expansion Financing with respect to a Greenfield Expansion
Project. Not later than 10 days after any Mill constituting Greenfield
Expansion Assets is first placed into service by the Company, the Company
shall deliver to the Administrative Agent an Officer's Certificate (i)
identifying such Greenfield Expansion Assets, (ii) stating the date such
Greenfield Expansion Assets were first placed in service and (iii) stating
whether the Company expects to enter into a Permitted Expansion Financing
with respect to such Greenfield Expansion Assets within 12 months of the
date on which such Greenfield Expansion Assets were first placed in
service. If the Company fails to deliver such Officer's
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Certificate within the time period specified above or the Company states in
such Officer's Certificate that it does not intend to enter into such a
Permitted Expansion Financing within 12 months of the date on which such
Greenfield Expansion Assets were first placed in service, the Company shall
promptly grant to the Administrative Agent for the benefit of the Lenders a
first priority Lien (subject only to Permitted Encumbrances) on all assets
and property acquired by the Company in connection with such Greenfield
Expansion Assets by executing amendments or supplements to the Collateral
Documents or by executing Additional Collateral Documents of the character
contemplated to be delivered pursuant to paragraph (a) of subsection 5.11.2
in connection with the acquisition by the Company of Material Assets. If
at any time within such 12-month period the Company determines to pursue an
Unsecured Expansion Financing, the Company shall so notify the
Administrative Agent in writing and the applicable Greenfield Expansion
Assets shall become subject to the Lien of the Collateral Documents and the
Company shall deliver such instruments and take such other actions as are
contemplated in the immediately preceding sentence. In addition to such
amendments or Additional Collateral Documents, the Company shall deliver to
the Administrative Agent each of the documents and instruments enumerated
in subsection 5.11.2(b) with respect to the acquisition of Material Assets
except that for purposes of this requirement the term "Greenfield Expansion
Assets" shall be substituted for the term "Material Asset" as used therein.
The Company's rights to enter into any Permitted Expansion Financing in
respect of Greenfield Expansion Assets shall be subject to the following
conditions (collectively, the "Greenfield Expansion Financing Conditions"):
(i) no Event of Default or Potential Event of Default shall
have occurred and be continuing as of the date the Company proposes
to enter into such Permitted Expansion Financing;
(ii) no Lien shall be created in connection with such
Permitted Expansion Financing on any asset other than the Greenfield
Expansion Assets acquired or constructed in connection with such
Greenfield Expansion Project and the land or leasehold estate related
thereto; and
(iii) if such Permitted Expansion Financing is a Sale/Leaseback
Financing, such Sale/Leaseback Financing shall comply with the
provisions of Sections 6.10 and 6.14.
(b) Any and all construction and construction activities
performed in connection with any Greenfield
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Expansion Project shall conform in all material respects to the provisions
of applicable law and no Greenfield Expansion Assets may be operated or
occupied unless, if applicable, a proper certificate of occupancy or local
equivalent) and, if applicable, all other required permits, licenses and
clearance from governmental authorities shall have first been obtained.
Section 5.13 Certain Dispositions of Collateral. The Company
shall not, and shall not permit any of its Subsidiaries to, sell, lease,
assign, transfer or otherwise dispose of any interest in any Real Property
or any equipment or other tangible Collateral subject to a Mortgage or
transfer or contribute any such Collateral to a Foreign Subsidiary pursuant
to clause (xi) of Section 6.3 (each, a "Release Transaction") except in
compliance with this Section 5.13, Section 6.7 or the Collateral Documents.
Upon such compliance, the Company shall be entitled to receive from the
Administrative Agent an instrument (each, a "Release") releasing the Lien
of any applicable Collateral Document with respect to such Collateral. The
Company shall exercise its rights under this Section 5.13 by delivery to
the Administrative Agent of a notice (each, a "Release Notice"), which
shall refer to this subsection, describe with particularity the items of
property proposed to be covered by the Release and be accompanied by a
counterpart of the Release fully executed and acknowledged by all parties
thereto other than the Administrative Agent and in form for execution by
the Administrative Agent, and an Officers' Certificate certifying as to the
satisfaction of the Release Conditions. The Administrative Agent shall
execute, acknowledge (if applicable) and deliver to the Company such
counterpart within 10 days after receipt by the Administrative Agent of a
Release Notice and the satisfaction of the Release Conditions. The
Administrative Agent's obligation to deliver any Release and the Company's
rights to transfer any Collateral to a Foreign Subsidiary pursuant to the
provisions of subparagraph (xi) of Section 6.3 or to enter into any sale,
lease, assignment, transfer or other disposition of any Collateral pursuant
to the provisions of this Section shall be subject to the following
conditions (collectively, "Release Conditions"):
(i) no Event of Default or Potential Event of Default shall
have occurred and be continuing as of the proposed effective date of
such Release;
(ii) if such Release relates to only a portion of a discrete
parcel of Real Property or a portion of any property comprising a
Mill, following such sale, transfer or other disposition and release
of the Lien of any
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applicable Mortgage with respect thereto, the affected Real Property
shall have sufficient utility services and sufficient access to
public roads, rail spurs, harbors, canals, terminals and other
transportation structures for the continued use of such Real Property
for its use in substantially the manner carried on by the Company
prior to such Release;
(iii) if such Release relates to only a portion of a discrete
parcel of Real Property or a portion of any property comprising a
Mill, following such sale, transfer or other dispositions the
affected Real Property or Mill shall comply in all material respects
with applicable Environmental Laws and laws, rules, regulations and
ordinances relating to zoning, land use and building and workplace
safety;
(iv) if such Release relates to only a portion of a discrete
parcel of Real Property or a portion of any property comprising a
Mill, following such sale, transfer or other disposition, the value
of the affected Real Property or Mill (exclusive of the value of the
released Collateral) shall not be less than the value of such Real
Property or Mill prior to such Release and the transfer of such
Collateral shall not impair the utility or legality of the affected
Mill in any respect;
(v) if such Release relates to only a portion of a discrete
parcel of Real Property or a portion of any property comprising a
Mill, the Title Company shall have committed to issue an endorsement
to the title insurance policy in favor of the Administrative Agent
for the benefit of the Lenders relating to the affected Real Property
confirming that after such release the Lien of the applicable
Mortgage continues unimpaired as a first priority Lien upon the
remaining Mortgaged Property subject only to Prior Liens; and
(vi) if such Release relates to a Real Property, the Company
shall have delivered to the Administrative Agent for the benefit of
the Lenders an ALTA Survey showing the property proposed to be
released.
In connection with any Release Transaction, the Company shall (A) execute,
deliver, record and obtain such instruments as the Administrative Agent or
the Requisite Lenders may reasonably require, including, without
limitation, amendments to the Collateral Documents and this Agreement and
(B) deliver to the Administrative Agent such evidence of the satisfaction
of the
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Release Conditions as the Administrative Agent or the Requisite Lenders may
reasonably require. The Company shall reimburse the Administrative Agent
and Lenders upon demand for all costs or expenses incurred by each thereof
in connection with any action contemplated by this Section 5.13. The
provisions of this Section shall not be construed to prohibit the Company
from leasing non-essential, non-manufacturing facilities located on any
Real Property subject to a Mortgage so long as the rights granted to any
lessee under such lease do not materially interfere with the operations of
the Company at such Real Property as presently conducted and so long as the
granting of such lease would not constitute a breach of any provision of
such Mortgage.
Section 5.14 Georgia Mill Lease and Mortgage.
5.14.1. Upon any expiration, termination or surrender (whether
pursuant to actions taken by the Administrative Agent under the provisions
of Article 2 of the Georgia Mill Mortgage or otherwise) of the Georgia Mill
Lease, the Company shall take all actions and execute and file all
instruments necessary to cause to be approved by all authorities having
jurisdiction and recorded as soon as reasonably possible following any such
expiration, termination or surrender a plat of subdivision (in form
reasonably acceptable to Requisite Lenders) relating to the Land affected
by the Georgia Mill Mortgage, which plat shall reflect as a single
subdivided parcel ("Mill Lot") the Land underlying all Improvements
constituting the Effingham County Mill and all additional Land required to
meet local zoning and setback rules and laws and Environmental Laws as they
relate to such Improvements and the severance from the Mill Lot of all
other portions of the Land subject to the Georgia Mill Mortgage
(collectively, "Severed Parcel"), including, without limitation, those
portions used for sludge disposal and landfill purposes. Upon such
approval and recordation, the Company shall (A) execute, deliver and record
(and pay all expenses and taxes imposed in connection therewith and the
reasonable attorneys' fees of the Administrative Agent's attorneys) a
Mortgage ("Additional Georgia Mortgage") in the form of Exhibit XIX-C(ii)
on the Severed Parcel and (B) deliver to the Administrative Agent on behalf
of the Lenders a title insurance commitment or policy, in form and
substance reasonably satisfactory to Requisite Lenders, in respect of the
Additional Georgia Mortgage and such other assurances (including, without
limitation, counsel opinions) as shall be reasonably requested by the
Administrative Agent to confirm that the Additional Georgia Mortgage
creates in favor of the Administrative Agent on behalf of the Lenders a
valid and
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enforceable Lien on the Severed Parcel with a priority that is equal to the
priority of the Georgia Mill Mortgage on the Severed Parcel. Upon
compliance by the Company with its obligations set forth in the immediately
preceding sentence, the Administrative Agent shall execute and record at
the Company's expense (including, without limitation, payment by the
Company of all applicable taxes and recording fees and the reasonable
attorneys' fees of the Administrative Agent's attorneys) a partial release
of the Lien of the Georgia Mill Mortgage from all Land comprising the
Severed Parcel.
5.14.2. Notwithstanding the provisions of subsection 5.14.1,
following any such expiration, termination or surrender of the Georgia Mill
Lease and upon compliance by the Company with the provisions of Section
5.13 of this Agreement, the Administrative Agent shall deliver to the
Company, without consideration or prepayment of any kind (other than the
Administrative Agent's expenses incurred in connection therewith,
including, without limitation, attorneys' fees), a partial release from the
Lien of the Additional Georgia Mortgage of any parcel of Land encumbered
thereby which (A) does not comprise any portion of the landfill or sludge
operation serving or anticipated to serve the Effingham County Mill and
(B) is not necessary for the proper and efficient operation of the
Effingham County Mill or the landfill property related thereto or the
compliance with zoning and setback rules and laws and Environmental Laws as
they relate to any Improvements comprising such Effingham County Mill or to
such landfill.
5.14.3. Upon failure by the Company to perform any obligation
set forth in this Section 5.14, the Administrative Agent may perform such
obligation on behalf of the Company, and the Administrative Agent shall be
deemed to be the attorney-in-fact of the Company for such purpose.
5.14.4. The Company shall only be required to comply with the
provisions of this Section 5.14 as and to the extent it is permitted to do
so under the laws of the State of Georgia.
Section 5.15 Transfer of Permits and Licenses. In addition
to, and not in limitation of any right granted to the Administrative Agent
under any Mortgage or obligation of the Company thereunder, the Company
shall, and shall cause its Subsidiaries to, upon the foreclosure of any
Mill that benefits from a permit or license required for the operation
thereof, use its and their reasonable best efforts to cause the transfer
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of such permit or license to the entity then operating or which is to
operate such foreclosed Mill.
Section 5.16 Recapitalization. The Company shall take all
reasonable actions to cause to be consummated as soon as practicable
following the Closing Date the redemption and retirement of the Existing
Subordinated Debt and the other transactions and payments required to
complete the Recapitalization.
Section 5.17 Green Bay Sludge Boiler.
5.17.1. Upon the commencement of construction of the Green Bay
Sludge Boiler on land not then encumbered by a Mill Mortgage ("Sludge
Boiler Land"), the Company shall take all actions and execute and file all
instruments reasonably requested by the Administrative Agent to cause to be
granted to the Lenders a mortgage lien on the Sludge Boiler Land having a
priority and being on terms that are substantially similar to those
applicable to the Mill Mortgage which encumbers the Company's Green Bay
Wisconsin Mill. If any such mortgage is granted by the Company, the
Company shall deliver to the Administrative Agent on behalf of the Lenders
a title insurance commitment or policy, in form and substance reasonably
satisfactory to the Administrative Agent, in respect of such mortgage and
such other assurances (including, without limitation, counsel opinions) as
shall be reasonably requested by the Administrative Agent to confirm that
such mortgage creates in favor of the Administrative Agent on behalf of the
Lenders a valid and enforceable Lien on the Sludge Boiler Land having a
priority as set forth above.
5.17.2. Upon failure by the Company to perform any obligation
set forth in this Section 5.17, the Administrative Agent may perform such
obligation on behalf of the Company, and the Administrative Agent shall be
deemed to be the attorney-in-fact of the Company for such purpose.
ARTICLE VI
NEGATIVE COVENANTS
The Company covenants and agrees that, so long as any of the
Commitments shall be in effect and until payment in full of all of the
Loans and the Notes and the cancellation or expiration of all Letters of
Credit issued hereunder and the reimbursement in full of all amounts drawn
thereunder, unless
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the Requisite Lenders shall otherwise give prior written consent, the
Company will perform all covenants in this ARTICLE VI.
Section 6.1 Indebtedness. The Company and its Subsidiaries
shall not directly or indirectly create, incur, assume, guaranty, or
otherwise become or remain directly or indirectly liable with respect to,
any Indebtedness, except:
(i) The Company and its Subsidiaries may become and remain
liable with respect to the Obligations;
(ii) The Company may become and remain liable with respect to
the Indebtedness evidenced by the Refinancing Senior Unsecured Debt;
provided that the principal amount of such Indebtedness shall not
exceed, in the case of a refinancing of the 9-1/4% Unsecured Notes,
the 8-1/4% Unsecured Notes or any Refinancing Senior Unsecured Debt,
the then outstanding principal amount thereof; and provided, further,
that such Indebtedness (A) provides for interest at rates which do
not exceed the market rates for similar types of Indebtedness
prevailing at the time such Indebtedness is incurred, (B) has a final
scheduled maturity date that is subsequent to the date on which the
final Scheduled Term Loans Principal Payment in respect of Tranche B
Loans is due hereunder, (C) has an Average Life to Stated Maturity
greater than the remaining Average Life to Stated Maturity of the
Tranche B Term Loans on the date such Indebtedness is incurred, (D)
contains no representation and warranty, covenant or event of default
that (1) is in addition to the representations and warranties,
covenants and events of default that are currently set forth in the
instruments (as in effect on the Closing Date) evidencing or
governing the 9-1/4% Unsecured Notes or the 8-1/4% Unsecured Notes,
as the case may be, or (2) is more burdensome (to the Company) than
the most burdensome (to the Company) corresponding representation and
warranty, covenant or event of default set forth in the instruments
(as in effect on the Closing Date) evidencing or governing the 9-l/4%
Unsecured Notes or the 8-l/4% Unsecured Notes, as the case may be and
(E) if the Refinancing Senior Unsecured Debt is Subordinated
Indebtedness, contains subordination provisions no less favorable to
the Lenders than the least favorable subordination provisions (to the
Lenders) in the Existing Subordinated Debt;
(iii) The Company and its Subsidiaries may remain and may
become and remain liable with respect to Intercompany
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Indebtedness (including, without limitation, Intercompany
Indebtedness to a Receivables Subsidiary); provided that (A) all such
Intercompany Indebtedness (other than Intercompany Indebtedness to a
Receivables Subsidiary) shall be evidenced by promissory notes, which
may be master promissory notes governing all advances made by the
maker of such note to the payee of such note and (B) any Intercompany
Indebtedness owed by the Company to any Subsidiary shall be
subordinated pursuant to the terms of the promissory note or notes
evidencing such Intercompany Indebtedness in right of payment, from
and after such time as the Loans shall have become due and payable
(whether at date of maturity, by acceleration or otherwise), to the
payment in full of the Obligations; and provided, further, that the
aggregate amount of Intercompany Indebtedness of all Foreign
Subsidiaries owing to the Company and the Subsidiaries of the Company
(other than any Foreign Subsidiaries) shall not exceed the amounts
permitted pursuant to the provisions of Section 6.3 (other than
Intercompany Indebtedness owing as a result of or incurred to finance
payment of Royalty or Management Fees that are payable by Foreign
Subsidiaries to the Company and the Subsidiaries of the Company);
(iv) The Company and its Subsidiaries may remain liable with
respect to Existing Indebtedness which is described on Schedule C
annexed hereto and may become and remain liable in respect of the
Refinancing Foreign Debt;
(v) The Company and its Subsidiaries (other than any Foreign
Subsidiary) may become and remain liable (A) with respect to
Indebtedness in respect of Capital Leases if such Capital Leases
would be permitted by Section 6.9 and (B) with respect to other
Indebtedness secured by Liens permitted by Section 6.2;
(vi) The Company and its Subsidiaries (other than any Foreign
Subsidiary) may become and remain liable with respect to Contingent
Obligations permitted by Section 6.4 and, upon any obligations
actually arising pursuant thereto, with respect to the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(vii) The Company and its Subsidiaries (other than any Foreign
Subsidiary) may become and remain liable with respect to Indebtedness
incurred in connection with Sale/Leaseback Transactions permitted by
Section 6.10 (other than any such Sale/Leaseback Transaction that is
subject to the provisions of Section 5.12) so long as, if
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such Sale/Leaseback involves an Asset Sale, the Net Cash Proceeds of
Sale received by the Company and its Subsidiaries in connection
therewith are used as provided in such subsection;
(viii) The Company may become and remain liable with respect to
Indebtedness of the Company incurred pursuant to the Management
Agreements;
(ix) Any Foreign Subsidiary of the Company may become and
remain liable with respect to Indebtedness for money borrowed to the
extent that the Dollar equivalent of the aggregate Indebtedness of
such Foreign Subsidiary outstanding pursuant to this
subparagraph (ix) does not exceed, at any time, an amount equal to
150% of the aggregate amount of (A)(i) each investment made by the
Company (whether in the form of equity contributions, Intercompany
Indebtedness, contribution of a Contingent Obligation or otherwise)
and the amount of each equity investment of all other investors in
such Foreign Subsidiary since the Closing Date (all such investments
being valued as at the time of investment) and (ii) the Fair Value
(as of the Closing Date) of all equity Investments in such Foreign
Subsidiary made by all such other investors prior to the Closing Date
reduced by (B) the excess, if any, of (1) the aggregate Fair Value of
all assets (determined, in each case, as at the time of transfer
thereof) transferred by such Foreign Subsidiary (whether by dividend,
loan, contribution or otherwise (other than obligations of any
Subsidiary of the Company)) since the Closing Date (other than
interest on Intercompany Indebtedness in amounts and at rates not in
excess of those payable in transactions between unaffiliated parties
and payments of, or payments of principal of indebtedness related to,
Royalty or Management Fees) to any investor in such Foreign
Subsidiary over (2) the net income of such Foreign Subsidiary since
the later of the Closing Date and the first date of such Investment
by the Company or any Subsidiary of the Company; provided that,
except as otherwise permitted in Section 6.4, neither the Company nor
any of its Domestic Subsidiaries shall have personal liability for
repayment of such Indebtedness;
(x) The Company may become and remain liable with respect to
Indebtedness for money borrowed constituting Permitted Expansion
Construction Financing to the extent that the aggregate Indebtedness
outstanding pursuant to this subparagraph (x) does not exceed, at any
time, the
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difference between the Adjusted Revolving Loan Commitments
(determined without regard to any deduction of the Revolving Loan
Deduction Amount) and the then outstanding amount of Revolving Loans
and Letters of Credit Usage;
(xi) The Sellers and one or more Receivables Subsidiaries may
become and remain liable for Indebtedness (in addition to permitted
Intercompany Indebtedness) in an aggregate amount not exceeding at
any one time
$100,000,000 in connection with a Receivables Program; provided that
such Indebtedness shall not (A) include any obligations other than
obligations directly related to the Receivables Program or (B) be, as
to principal and interest only (i.e., excluding liabilities for
claims arising from (1) breach of customary representations and
warranties, (2) customary indemnities and covenants, (3) dilution
obligations and (4) breach of any customary servicing obligations),
enforceable against the Company or any Subsidiary of the Company or
any of its or their assets (other than assets of the applicable
Receivables Subsidiary);
(xii) The Company may become and remain liable with respect to
Indebtedness constituting Permitted Expansion Financings;
(xiii) The Company may become and remain liable for Indebtedness
in an aggregate amount not exceeding $60,000,000 under the 1995 A/R
Bridge; and
(xiv) In addition to the Indebtedness permitted by
subparagraphs (i) through (xiii) of this Section 6.1, the Company and
its Subsidiaries may become and remain liable with respect to
Indebtedness not exceeding $25,000,000 in the aggregate at any time
outstanding.
Section 6.2 Liens. The Company will not, and will not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume
or suffer or permit to exist any Lien (A) upon or with respect to any
property of the Company or any of its Subsidiaries that is or should
(pursuant to the terms hereof) be subject to the Lien of any Collateral
Document or (B) upon any shares of stock of Fort Howard Holding, Sterling
International (U.K.) Limited and Sterling International Limited, except, in
the case of clause (A), for Liens which would be permitted pursuant to any
applicable Collateral Documents and, in the case of clause (B), Permitted
Encumbrances; provided that, in the case of clause (A), no such Lien (other
than Prior Liens) shall be superior to the Lien of
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such applicable Collateral Document. With respect to all assets of the
Company and its Subsidiaries other than (1) shares of stock of SIL Company
and (2) assets described in clauses (A) and (B) above, the Company will
not, and will not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with
respect to such property or asset, whether now owned or hereafter acquired,
or any income or profits therefrom, except:
(i) Permitted Encumbrances;
(ii) Liens described on Schedule D annexed hereto;
(iii) Liens affecting assets, comprised of Existing Mill
Expansion Equipment or Greenfield Expansion Assets, securing
reimbursement obligations of the Company and its Subsidiaries with
respect to letters of credit permitted by subparagraph (vii) of
Section 6.4, in each case which Liens do not encumber Collateral
pledged pursuant to any Collateral Document and which are granted
pursuant to documents relating to such letters of credit;
(iv) Liens encumbering customary initial deposits and margin
deposits, and other Liens incurred in the ordinary course of business
(other than any Lien imposed by ERISA) and which are either within
the general parameters customary in the industry (as concurred in by
the Administrative Agent) or are otherwise approved by the Requisite
Lenders securing obligations under Commodities Agreements entered
into by the Company or any of its Subsidiaries;
(v) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty
requirements of the Company or any of its Subsidiaries incurred in
the ordinary course of business or as a result of this Agreement or
the incurrence, guaranteeing or granting of security interests in
respect of Obligations incurred pursuant to this Agreement or the
other Loan Documents;
(vi) Liens securing Indebtedness permitted under subparagraph
(v) (clause A) or (vii) of Section 6.1, incurred in connection with
Capital Leases or Sale/Leaseback Transactions permitted by Section
6.9 or 6.10 so long as such Liens do not extend to assets other than
the assets subject to such Capital Lease or Sale/Leaseback
Transaction and do not secure any
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Indebtedness other than Indebtedness directly incurred to finance
such Capital Lease or Sale/Leaseback Transaction;
(vii) Liens securing Indebtedness of (or of the Wholly Owned
Subsidiaries of) a Foreign Subsidiary of the Company permitted under
Section 6.1 so long as such Liens do not extend to assets other than
assets owned by such Foreign Subsidiary or its Wholly Owned
Subsidiaries and do not secure any Indebtedness other than
Indebtedness of (or of the Wholly Owned Subsidiaries of) such Foreign
Subsidiary; provided that no such Liens (other than Liens
constituting Preexisting Assumed Liens) may encumber any common stock
or other equity interest in any First Tier Foreign Subsidiary;
(viii) Liens granted on Program Receivables pursuant to a
Receivables Program, including, without limitation, proceeds thereof
in any form and bank accounts in which any such proceeds are
deposited; provided that, except as specifically provided otherwise
in this clause (viii), no such Lien may extend to any assets of the
Company or any Subsidiary of the Company that is not a Receivables
Subsidiary;
(ix) Liens (which may be pari passu with the Liens securing
the Obligations) granted in favor of a Lender to secure the
obligations of the Company pursuant to any Qualified Interest Rate
Agreement or Qualified Currency Agreement;
(x) Liens securing Indebtedness constituting Permitted
Expansion Construction Financing and incurred in accordance with the
provisions of subparagraph (x) of Section 6.1; provided that no such
Lien may extend to any assets of the Company other than the assets
contemplated in the definition of Permitted Expansion Construction
Financing;
(xi) Liens affecting assets, comprised of Existing Mill
Expansion Equipment or Greenfield Expansion Assets, securing
Indebtedness constituting Permitted Expansion Financings (other than
any such Indebtedness constituting Unsecured Expansion Financings);
(xii) Liens granted by the Company on A/R Eligible Receivables;
and
(xiii) In addition to Liens permitted by subparagraphs (i)
through (xii) above, the Company and its Subsidiaries
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may at any time have Liens securing the payment of Indebtedness with
respect to property or assets with an aggregate Fair Value of not
more than $25,000,000 (as measured from the Closing Date).
Nothing in this Section 6.2 shall prohibit (A) the sale, assignment,
transfer, conveyance or other disposition of any Margin Stock owned by the
Company or any of its Subsidiaries at its fair value or (B) the creation,
incurrence, assumption or existence of any Lien on or with respect to any
Margin Stock.
Section 6.3 Investments; Joint Ventures. The Company will
not, and will not permit any of its Subsidiaries to, directly or indirectly
make or own any Investment in any Person or enter into any Joint Venture,
except:
(i) The Company and its Subsidiaries may make and own
Investments in Cash and Cash Equivalents;
(ii) The Company may acquire and own Common Stock to the
extent permitted under Section 6.5;
(iii) The Company and its Subsidiaries may continue to own
Investments in existence on the date hereof, and which are
specifically described in Schedule E annexed hereto;
(iv) The Company and its Subsidiaries may make intercompany
loans to the Company or any Domestic Subsidiary of the Company to the
extent permitted under Section 6.1;
(v) The Company and its Subsidiaries may continue to own
Investments in respect of Joint Ventures in existence on the date
hereof, and which are specifically described in Schedule E annexed
hereto;
(vi) The Company and its Subsidiaries may make and own
Investments in Joint Ventures operating in the United States after
the date hereof; provided that the aggregate amount of such
Investments made after the date hereof shall not exceed $25,000,000;
(vii) The Company and its Subsidiaries may acquire and retain
ownership of Investments as part of the consideration received by
them from Asset Sales not prohibited by Section 6.7; provided that
(A) no such Investment may be held or transferred to a Foreign
Subsidiary of the Company unless (i) the asset which was the subject
of such Asset Sale was owned by a Foreign
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Subsidiary of the Company or (ii) such transfer is not prohibited
pursuant to the provisions of clause (x) of this Section 6.3, (B) no
more than 25% of the consideration received by the Company and its
Subsidiaries in respect of any Asset Sale for which the total
consideration to be so received is in excess of $5,000,000 shall be
represented by evidences of Indebtedness, (C) each promissory note
evidencing such Indebtedness will be secured by a perfected security
interest, subject to no prior Lien securing such Indebtedness, in all
of the assets sold or otherwise disposed of in such Asset Sale in
favor of the seller thereof and (D) the aggregate Fair Value of all
such Investments shall not at any time exceed $30,000,000; and
provided, further, that for purposes of compliance with this
subparagraph (vii) of Section 6.3, Asset Sales involving the
simultaneous receipt of notes and sale of such notes to a third party
shall be excluded if such sale is permitted by Section 6.11;
(viii) The Company or any Subsidiary of the Company may make and
own Investments received in connection with the bankruptcy or
reorganization of any of its suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, its
customers and suppliers arising in the ordinary course of business;
(ix) The Company or any Subsidiary of the Company may make and
own Investments arising in connection with Commodities Agreements
entered into in the ordinary course of its business;
(x) The Company and its Domestic Subsidiaries may make and
own Investments in Foreign Subsidiaries; provided that the aggregate
amount of the Fair Values of all assets (including, but not limited
to, Cash, Cash Equivalents, capital and other assets) transferred by
the Company and its Domestic Subsidiaries (such Fair Value to be
measured in each case as of the actual date of transfer) to, and the
maximum amount of all Contingent Obligations incurred for the benefit
of, one or more Foreign Subsidiaries by way of capital contribution,
loan, guarantee or otherwise shall not exceed at any time (A) the
aggregate Fair Value of all assets (including, but not limited to,
Cash, Cash Equivalents, capital and other assets) transferred after
the Closing Date by all Foreign Subsidiaries in the aggregate to the
Company and its Domestic Subsidiaries (such Fair Value to be measured
in each case as of the actual date of transfer) by way of capital
contribution, loan, dividend, distribution or otherwise (other than
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obligations of any Subsidiary of the Company) and all net reductions
in Investments constituting Contingent Obligations (effected as a
result of the retirement after the Closing Date by the applicable
Foreign Subsidiary of Indebtedness guaranteed by the Company or any
Domestic Subsidiary of the Company), plus (B) (i) during the period
commencing on the Closing Date and ending on June 30, 1996,
$40,000,000, and (ii) during all periods after June 30, 1996,
$40,000,000 until such time as the Company shall have achieved an
Interest Coverage Ratio of 1.9 or more, after which time such amount
shall be increased to $100,000,000, plus (C) the aggregate of all
amounts of the unutilized Discretionary Excess Equity Proceeds
Balance and the unutilized Discretionary Excess Cash Flow Balance
which the Company has from time to time elected to apply to the
making of Investments pursuant to this subparagraph (x) (provided
that the total of all amounts of the unutilized Discretionary Equity
Proceeds Balance which the Company may elect to apply pursuant to
this clause (C) shall not exceed, at any time, an amount equal to 50%
of the sum of the Closing Date Excess Equity Proceeds Amount and the
aggregate amount, as of such time, of all net cash proceeds received
by the Company or any of its Subsidiaries after the Closing Date from
all Equity Offerings after the Closing Date (exclusive of any shares
sold pursuant to an overallotment option in respect of the Common
Stock Offering) plus (D) the aggregate amount of Royalty and
Management Fees on a consolidated basis previously paid after the
Closing Date by Foreign Subsidiaries to the Company and its
Subsidiaries; and provided, further, that nothing set forth in this
subparagraph (x) shall be construed to permit the transfer to any
Foreign Subsidiary of any asset which constitutes Collateral;
(xi) The Company and its Domestic Subsidiaries may make and
own Investments in any Foreign Subsidiary consisting of the transfer
of tangible assets to such Foreign Subsidiary; provided that (A) the
aggregate book value of all such tangible assets so transferred after
the Closing Date pursuant to this subparagraph (xi) (determined, in
each case, as of the date of transfer) after the Closing Date shall
not exceed $10,000,000, (B) the aggregate Fair Value (as so
determined) of all such tangible assets so transferred after the
Closing Date pursuant to this subparagraph (xi) shall not exceed
$25,000,000, and (C) if any such assets shall constitute, at the time
of such transfer, Collateral, the Company
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shall have complied with the provisions of Section 5.13 concerning
releases of Collateral;
(xii) The Company and its Subsidiaries may make and own
Investments in equity securities (other than equity securities of the
Company or any of its Subsidiaries) listed on the New York Stock
Exchange ("NYSE"); provided that the aggregate value, as determined
by the closing price on the NYSE for such equity securities on the
Business Day prior to making the Investment, of such equity
securities shall not at any time exceed $2,000,000;
(xiii) The Company or any Subsidiary may continue to own
Investments in, and may make and own Investments in, Consolidated
Capital Expenditures permitted to be made or owned by the Company or
such Subsidiary under Section 6.14 and may make Investments as a
direct consequence of the discharge of Contingent Obligations
permitted under Section 6.4;
(xiv) The Company may make Investments constituting recourse
and non-recourse loans to management and other employees of the
Company to purchase Common Stock and to pay taxes in respect of such
purchases as permitted by the Management Agreements in an aggregate
principal amount not to exceed $10,000,000 (plus accrued and unpaid
interest thereon) at any time outstanding;
(xv) The Company and its Subsidiaries may make and own
Investments in Receivables Subsidiaries in accordance with the
provisions of Section 6.11; and
(xvi) In addition to Investments permitted by
subparagraphs (i) through (xv) of this Section 6.3, the Company and
its Subsidiaries may after the Closing Date make and own Investments
(other than Investments in Foreign Subsidiaries or other Persons,
properties or operations that are not organized or located in the
United States of America (exclusive of its territories and
possessions)) (A) with an aggregate Fair Value (determined, in each
case, at the time such Investment is made) of not more than
$25,000,000 outstanding at any time, and (B) (without limiting the
rights of the Company under clause (A) hereof) in an aggregate amount
(determined, in each case, at the time such Investment is made)
outstanding at any time not exceeding the aggregate of all amounts of
the unutilized Discretionary Excess Equity Proceeds Balance and the
unutilized Discretionary Excess Cash Flow Balance which the Company
has from time
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to time elected to apply to the making of Investments pursuant to
this subparagraph (xvi); provided that, except as set forth in
subparagraph (xii) of this Section 6.3, neither the Company nor any
of its Subsidiaries may make or own Investments in any Margin Stock
other than Common Stock.
Section 6.4 Contingent Obligations. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, create
or become or be liable with respect to any Contingent Obligation except:
(i) Guarantees resulting from endorsement of negotiable
instruments for collection in the ordinary course of business;
(ii) Obligations under the Guarantor Subsidiary Guarantees;
(iii) Guarantees of Interest Rate Agreements and Currency
Agreements entered into by the Company which are permitted by
subparagraphs (v) and (vi) of this Section 6.4;
(iv) The Company and any other Seller and one or more
Receivables Subsidiaries may become and remain liable for Contingent
Obligations (other than, in the case of the Company and its
Subsidiaries that are not Receivables Subsidiaries, Contingent
Obligations for payment of the principal or interest as such in
respect of Indebtedness of a Receivables Subsidiary) directly related
to or comprising a portion of any Receivables Transaction;
(v) Interest Rate Agreements and Currency Agreements (other
than Leveraged Swaps) entered into by the Company and any Lender;
(vi) Commodities Agreements and Currency Agreements (other
than Leveraged Swaps) entered into by the Company or any Subsidiary
of the Company and any financial institution in the ordinary course
of business or in connection with Asset Sales;
(vii) Contingent reimbursement obligations not exceeding
$10,000,000 in the aggregate outstanding at one time under letters of
credit (including any such letters of credit in existence as of the
date hereof) other than Letters of Credit under this Agreement;
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(viii) Contingent Obligations in existence on the date hereof
described in Schedule G and extensions and renewals thereof so long
as the amount of any such Contingent Obligations so extended or
renewed is not increased thereby from the amount thereof at the time
extended or renewed;
(ix) Contingent Obligations in respect of any obligation
(other than any obligation with respect to Indebtedness) of (A) the
Company or one of its Domestic Subsidiaries and (B) Foreign
Subsidiaries to the extent, in the case of clause (A) and (B), such
Contingent Obligation is an Investment permitted under Section 6.3;
(x) Contingent Obligations represented by performance bonds
and similar obligations relating to the sale of the Company's or its
Subsidiaries' products incurred in the ordinary course of business
(exclusive of obligations for payment of borrowed money) not to
exceed $10,000,000 at any time;
(xi) Contingent Obligations represented by surety bonds and
similar obligations incurred in the ordinary course of business
(exclusive of obligations for payment of borrowed money) not to
exceed $15,000,000 at any time;
(xii) Contingent Obligations pursuant to the Management
Agreements;
(xiii) Contingent Obligations in respect of Indebtedness of (A)
the Company or a Domestic Subsidiary of the Company and (B) Foreign
Subsidiaries to the extent such Contingent Obligations are
Investments permitted under Section 6.3; and
(xiv) In addition to the Contingent Obligations permitted by
subparagraphs (i) through (xiii) of this Section 6.4, the Company and
its Subsidiaries may become and remain liable with respect to other
Contingent Obligations except Contingent Obligations which constitute
Investments in Foreign Subsidiaries pursuant to Section 6.3 or which
are for the benefit of any Foreign Subsidiary of the Company;
provided that the maximum aggregate liability of the Company and its
Subsidiaries in respect of all Contingent Obligations incurred
pursuant to this subparagraph (xiv) shall not at any time exceed
$25,000,000.
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Section 6.5 Restricted Junior Payments. The Company will not,
and will not permit any of its Subsidiaries to, directly or indirectly,
declare, order, pay, make or set apart any sum for any Restricted Junior
Payment except that (A) during each of the first two twelve-month periods
starting on the Closing Date, the Company may declare and pay cash
dividends to holders of its Common Stock in an amount up to $3,000,000 for
each such period, (B) during any twelve-month period commencing on or after
the second anniversary of the Closing Date, the Company may declare and pay
cash dividends to holders of its Common Stock in an annual amount not to
exceed 6% of the sum of (1) $300,000,000 less the amount of all Transaction
Costs reasonably determined by the Company to be attributable to the first
$300,000,000 of gross proceeds of the Common Stock Offering and (2) the
aggregate net cash proceeds of all issuances of Common Stock of the Company
occurring after the Closing Date (excluding the Common Stock Offering and
any Common Stock sold pursuant to an overallotment option in connection
with the Common Stock Offering); provided that no dividend in excess of
$3,000,000 that is proposed to be declared or paid pursuant to this clause
(B) may be declared or paid unless at the date of declaration and the date
of payment thereof the unutilized portion of the Revolving Loan Commitment
shall equal or exceed $100,000,000, (C) the Company may, commencing on
March 31, 1996 and on each March 31 thereafter, declare and pay cash
dividends to holders of its Common Stock in an amount not to exceed the
then unutilized portion of the Discretionary Excess Cash Flow Balance,
(D) the Company may (1) repurchase or redeem the Senior Unsecured Notes, in
each case on the terms provided in the indentures governing the Senior
Unsecured Notes (each as in effect on the date hereof), with the proceeds
of Refinancing Senior Unsecured Indebtedness incurred in compliance with
the provisions of Section 6.1, (2) repurchase or redeem its Common Stock
pursuant to the Management Agreements and the Stockholders Agreements (each
as in effect on the date hereof or, in the case of the Broad-Based Plan,
the date of adoption thereof) to the extent that the aggregate amount of
such repurchases and redemptions does not exceed $35,000,000 in the
aggregate (as measured from the Closing Date) and (3) make purchases of
Common Stock owned by MS Group for immediate resale to Persons other than
the Company or a Subsidiary of the Company, (E) the Company may issue
Indebtedness permitted under subparagraph (viii) of Section 6.1, (F) the
Company may make Investments under subparagraph (xiv) of Section 6.3,
(G) the Company may make, from time to time, Restricted Junior Payments of
the character contemplated in clauses (A) and (D)(1) above and, following
the retirement of all the Senior Unsecured Notes, the Company may
repurchase or redeem Subordinated Indebtedness in an aggregate
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amount not exceeding, at any time, the aggregate of all amounts of the
unutilized Discretionary Excess Equity Proceeds Balance which the Company
has from time to time elected to apply to the making of Restricted Junior
Payments pursuant to this clause (G); provided that if and for so long as
the Company shall have achieved the Investment Grade Ratings in respect of
the senior unsecured debt obligations of the Company, the Company shall not
be required, as a condition to any exercise of its rights under this clause
(G) with respect to redemptions and repurchases of Subordinated
Indebtedness, to first refinance, repurchase or retire all Senior Unsecured
Notes and all Refinancing Senior Unsecured Notes, (H) the Company may, from
time to time, make Restricted Junior Payments of the character contemplated
in clauses (A) and (D)(1) above, and the Company may repurchase or redeem
Subordinated Indebtedness in an aggregate amount not exceeding at any time,
the aggregate of all amounts of the unutilized Discretionary Excess Cash
Flow Balance which the Company has from time to time elected to apply to
the making of Restricted Junior Payments pursuant to this clause (H) and
(I) the Company may redeem the 12 5/8% Subordinated Debentures and the
14 1/8% Discount Debentures as contemplated by the Recapitalization.
Notwithstanding the foregoing, the Company may not declare or pay any
dividends or redeem or repurchase any Securities or issue any Indebtedness
or make any Investments referred to above (1) except to the extent
permitted by applicable law or (2) if, at the time of such declaration or
payment or redemption, repurchase, issuance or investment and immediately
after giving effect thereto, no Potential Event of Default or Event of
Default shall have occurred and be continuing.
Section 6.6 Financial Covenants.
6.6.1. Interest Coverage Ratio. The Company will not permit
the Interest Coverage Ratio to be less than (A) for the first and second
full fiscal quarters (taken as one accounting period) beginning after the
Closing Date, 1.25, (B) for the first, second, and third full fiscal
quarters (taken as one accounting period) beginning after the Closing Date,
1.25, and (C) for any period of four consecutive full fiscal quarters (in
each case taken as one accounting period) beginning after the Closing Date
and ended during a period set forth below, the ratio set forth opposite
such period:
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Period Ratio
12/31/95 - 12/30/96 1.40x
12/31/96 - 12/30/97 1.50x
12/31/97 - 12/30/98 1.60x
12/31/98 - 12/30/99 1.75x
12/31/99 - 12/30/00 1.85x
12/31/00 and thereafter 2.00x
6.6.2. Maximum Leverage Ratio. The Company will not permit
the Leverage Ratio as of the end of any fiscal quarter set forth during any
period below to be more than the ratio set forth opposite such period:
Period Ratio
09/30/95 - 12/30/95 4.25x
12/31/95 - 03/30/96 4.00x
03/31/96 - 06/29/96 3.90x
06/30/96 - 09/29/96 3.80x
09/30/96 - 12/30/96 3.70x
12/31/96 - 03/30/97 3.45x
03/31/97 - 06/29/97 3.30x
06/30/97 - 09/29/97 3.20x
09/30/97 - 12/30/97 3.10x
12/31/97 - 12/30/98 3.00x
12/31/98 - 12/30/99 2.75x
12/31/99 - 12/30/00 2.50x
12/31/00 and thereafter 2.00x
Section 6.7 Restriction on Fundamental Changes. Subject to
Section 5.2, neither the Company nor any of its Subsidiaries will enter
into any transaction of merger or consolidate, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey,
sell, lease, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, property or fixed
assets, whether now owned or hereafter acquired, or acquire by purchase or
otherwise all or substantially all the business, property or fixed assets
of, or stock or other evidence of beneficial ownership of, any Person,
except:
6.7.1. The Company and the other Sellers, on the one hand, and
any Receivables Subsidiary, on the other hand, may enter into and perform
one or more Receivables Transactions;
6.7.2. Any Subsidiary of the Company (other than a Receivables
Subsidiary) may be merged or consolidated with or
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into the Company or any Wholly Owned Subsidiary of the Company (other than
a Foreign Subsidiary or a Receivables Subsidiary), or be liquidated, wound
up or dissolved, or all or substantially all of its business, property or
assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to the Company or any
Wholly Owned Subsidiary of the Company (other than a Foreign Subsidiary or
a Receivables Subsidiary); provided that (A) any Foreign Subsidiary of the
Company (other than a Foreign Subsidiary that is a Material Subsidiary) may
be merged or consolidated with or into any other Foreign Subsidiary, or be
liquidated, wound up or dissolved, or (B) all or substantially all of the
business, property or assets of any Foreign Subsidiary (other than a
Foreign Subsidiary that is a Material Subsidiary) may be conveyed, sold,
leased, or transferred or otherwise disposed of, in one transaction or a
series of transactions to another Foreign Subsidiary (other than to a
Foreign Subsidiary that is also a Material Subsidiary) or (C) any of the
foregoing transactions may occur between two Foreign Subsidiaries that are
Material Subsidiaries; and provided, further, that, in the case of such a
merger or consolidation of a Subsidiary and the Company, the Company shall
be the continuing or surviving corporation, or, in the case of a merger or
consolidation of a Subsidiary and a Wholly Owned Subsidiary, the Wholly
Owned Subsidiary shall be the continuing or surviving corporation, or, in
the case of a merger or consolidation of two Wholly Owned Subsidiaries,
either of such Subsidiaries shall be the surviving or continuing
corporation; and provided, further, that, in the case of such a merger or
consolidation or disposition of a majority of the stock of a Guarantor
Subsidiary or of substantially all of the business, property or assets of a
Guarantor Subsidiary (A) the continuing, surviving or transferee
corporation shall expressly assume the obligations of such Guarantor
Subsidiary under the relevant Guarantor Subsidiary Guarantee and (B) in the
case of a merger or consolidation, the net worth of the continuing or
surviving corporation (calculated without giving effect to any increase in
the amount of Intercompany Indebtedness for which the continuing or
surviving corporation is liable as compared to the amount of Intercompany
Indebtedness for which such Guarantor Subsidiary was liable immediately
prior to such merger or consolidation) shall not be less than the net worth
of such Guarantor Subsidiary immediately prior to such merger or
consolidation; and provided, further, that, subject to the terms of the
applicable Collateral Document, in the case of such a merger or
consolidation or disposition of a majority of the stock of a Subsidiary or
of all or substantially all of the business, property or assets of such a
Subsidiary of the
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Company, the stock of which is pledged to secure the Obligations, the stock
of the continuing, surviving or transferee corporation shall, at the time
of consummation of such merger, consolidation or transfer, be pledged to
secure the Obligations;
6.7.3. The Company or any of its Subsidiaries may convey,
sell, transfer or otherwise dispose of any Margin Stock, whether now owned
or hereafter acquired; provided that such disposition is for Fair Value;
6.7.4. The Company and its Subsidiaries may sell or dispose of
in the ordinary course of business (A) property which is obsolete or no
longer useful in any of its businesses or is of de minimis value (as
determined, in the case of any such property the Fair Value of which is in
excess of $10,000,000, in good faith by the Board of Directors of the
Company or any Subsidiary selling such property, as the case may be),
(B) Cash and Cash Equivalents, (C) other Investments described in
subparagraphs (viii), (ix) and (xii) of Section 6.3; provided that any such
sale or other disposition is made for at least the Fair Value of such
assets and (D) Receivables subject to the requirements of Section 6.11;
6.7.5. Subject to Sections 5.2 and 6.7 so long as no Event of
Default has occurred and is continuing or shall be caused thereby, the
Company and its Subsidiaries may sell or otherwise dispose of any of their
respective assets outside the ordinary course of business; provided that
(A) any such sale or other disposition is made for at least the Fair Value
of such assets, (B) any sale or other disposition of more than $250,000,000
in Fair Value of stock or other assets in any one transaction or a related
series of transactions shall be subject to the prior written consent of
Requisite Lenders unless such sale or other disposition is of Margin Stock,
(C) in the case of a Sale/Leaseback Transaction or a Secured Expansion
Financing, such sale or other disposition of tangible Collateral shall be
subject to the requirements of Sections 5.12 and 5.13, respectively, and
(D) in the case of any Receivables shall be subject to the requirements of
Section 6.11;
6.7.6. The Company and its Subsidiaries may sell, resell or
otherwise dispose of real or personal property held for sale or resale in
the ordinary course of business; and
6.7.7. The Company and its Subsidiaries may make Investments
otherwise permitted pursuant to Section 6.3 and
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Capital Expenditures otherwise permitted pursuant to Section 6.14.
Section 6.8 ERISA. The Company will not, and will not permit
any of its ERISA Affiliates to:
6.8.1. engage in any transaction in connection with which the
Company or any of its ERISA Affiliates could be subject to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Internal Revenue Code in either case in an aggregate
amount in excess of $1,000,000;
6.8.2. fail to make full payment when due of all amounts
which, under the provisions of any Pension Plan, or under ERISA or the
Internal Revenue Code, the Company or any of its ERISA Affiliates is
required to pay as contributions thereto; or permit to exist any
accumulated funding deficiencies for which a waiver from the Internal
Revenue Service has not been obtained with respect to all Pension Plans in
an aggregate amount greater than $5,000,000;
6.8.3. permit the sum of the amount of unfunded benefit
liabilities under all Pension Plans (excluding each Pension Plan with an
amount of unfunded benefit liabilities of zero or less) to exceed
$25,000,000; or
6.8.4. fail to make any payments in an amount individually or
in the aggregate greater than $1,000,000 to any Multiemployer Plan that the
Company or any of its ERISA Affiliates may be required to make under such
Multiemployer Plan, any agreement relating to such Multiemployer Plan, or
any law pertaining thereto.
As used in this Section 6.8, the term "accumulated funding
deficiency" has the meaning specified in Section 302 of ERISA and Section
412 of the Internal Revenue Code, and the term "amount of unfunded benefit
liabilities" has the meaning specified in Section 4001(a)(18) of ERISA.
Section 6.9 Restriction on Leases. The Company will not, and
will not permit any of its Subsidiaries to, become or remain liable in any
way, whether directly or by assignment or as a guarantor or other surety,
for the obligations as or of the lessee under any lease (other than
intercompany leases between and among the Company and its Domestic
Subsidiaries (other than a Receivables Subsidiary)), whether an Operating
Lease or a Capital Lease, unless, immediately after giving effect to the
incurrence of liability with respect to such
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lease, the Consolidated Rental Payments at the time in effect during the
then current fiscal year of the Company shall not exceed the applicable
amount set forth below:
Fiscal Year Amount
1995 $ 50,000,000
1996 $ 55,000,000
1997 $ 60,000,000
1998 $ 65,000,000
1999 $ 70,000,000
2000 $ 75,000,000
2001 $ 80,000,000
2002 $ 85,000,000
Notwithstanding the foregoing, if the Company or any of its Subsidiaries
shall have sold any Subsidiary or any line of business to any Person (other
than the Company or any Subsidiary), each of the above amounts with respect
to any period from or after the date of such sale shall be reduced by an
amount equal to the reasonable good faith estimates by the Company (using
such methods as the Administrative Agent may reasonably approve) of
Consolidated Rental Payments of such Subsidiary or such line of business
for such periods.
Section 6.10 Sales and Leasebacks. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, become
or remain liable as lessee or as guarantor or other surety with respect to
any lease, whether an Operating Lease or a Capital Lease, of any property
(whether real or personal or mixed), whether now owned or hereafter
acquired in a Sale/Leaseback Transaction; provided that the Company or any
of its Subsidiaries may enter into Sale/Leaseback Transactions otherwise
prohibited under this Section 6.10 if (A) the assets to be subject to such
Sale/Leaseback Transaction are acquired, constructed or placed in service
after the Closing Date, (B) the provisions of Section 6.9 would not be
breached thereby, (C) in the case of assets located at any Mill subject to
a Mill Mortgage, the Company has complied with the applicable provisions of
Section 5.12 of this Agreement, and (D) if such Sale/Leaseback involves an
Asset Sale the Net Cash Proceeds of Sale of such Sale/Leaseback Transaction
are applied as required by Section 2.7.2(a).
Section 6.11 Sale or Discount of Receivables;
Receivables Transactions.
6.11.1. The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, sell with
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or without recourse, or discount or otherwise sell for less than the face
value thereof, notes or accounts receivable except notes issued in favor of
the Company or any of its Subsidiaries in connection with sales or other
dispositions of assets (other than inventory) so long as the Company or
such Subsidiary, as the case may be, receives the Fair Value of such notes
and such notes are sold without recourse.
6.11.2. Notwithstanding the foregoing, the Company and its
Subsidiaries shall be entitled to enter into and perform (and sell and
transfer notes or accounts receivables in accordance with) (i) the 1995 A/R
Bridge and (ii) Receivables Transactions pursuant to a Receivables Program
to be established and administered substantially in accordance with, and to
have the characteristics set forth in, the Receivables Term Sheet and to
make contributions to any Receivables Subsidiary from time to time;
provided that, for purposes of this Agreement only one Receivables Program
may be in effect at any time.
6.11.3. So long as any Receivables Program shall remain in
effect, the Company shall cause the Administrative Agent and the Lenders to
have a valid and perfected first Lien on the equity securities of each
Receivables Subsidiary (except to the extent otherwise provided in the
proviso to the definition of Receivables Subsidiary).
Section 6.12 Transactions with Shareholders and Affiliates.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of
any property or the rendering of any service) with any holder of 5% or more
of any class of equity securities of the Company or with any Affiliate of
the Company or of any such holder, on terms that are less favorable to the
Company or such Subsidiary, as the case may be, than those which might be
obtained at the time from Persons who are not such a holder or Affiliate;
provided that the foregoing restriction shall not apply to (A) any
transaction between the Company and any of its Wholly Owned Subsidiaries or
between any of its Wholly Owned Subsidiaries, (B) customary fees paid to
members of the Board of Directors of the Company and its Subsidiaries,
(C) the payment of fees to MS group or its Affiliates from time to time for
financial, consulting and underwriting services, such fees not to exceed
the then usual and customary fees of MS Group or its Affiliates for similar
services, (D) transactions contemplated by the Management Agreements and
the Stockholders Agreement, (E) transactions permitted by Section 6.5 and
(F) any transaction necessary to
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consummate a Receivables Transaction pursuant to the Receivables Term
Sheet.
Section 6.13 Disposal of Subsidiary Stock. Except as
permitted by Section 5.6, 5.11, 6.2 or 6.7 and as provided in the
Collateral Documents and except with respect to Margin Stock, the Company
will not:
6.13.1. directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock or other
equity securities of (or warrants, rights or options to acquire shares or
other equity securities of) any of its Subsidiaries, except to qualify
directors if required by applicable law; or
6.13.2. permit any of its Subsidiaries directly or indirectly
to sell, assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity securities or convertible debt securities of
(or warrants, rights or options to acquire shares or other equity
securities or convertible debt securities of) such Subsidiary, except to
the Company, another Wholly Owned Subsidiary of the Company or to qualify
directors if required by applicable law, except for equity interests in any
Subsidiary of a Receivables Subsidiary as contemplated by the Receivables
Program.
Nothing in this Section 6.13 shall prohibit the sale,
assignment, transfer, conveyance or other disposition of any Margin Stock
owned by the Company or any of its Subsidiaries or the creation,
incurrence, assumption or existence of any Lien on or with respect to any
Margin Stock.
Section 6.14 Limitation on Capital Expenditures.
6.14.1. The Company will not, and will not permit any of its
Subsidiaries to, incur Capital Expenditures, except as specifically
permitted in the following subsections of this Section 6.14.
6.14.2. Any one or more of the Foreign Subsidiaries of the
Company may incur Capital Expenditures in such amounts and for such
purposes as shall be determined by the Company or any such Foreign
Subsidiary in its discretion; provided, however, that the Company and its
Subsidiaries shall comply and have complied in all respects with the
provisions of subsections (x) and (xi) of Section 6.3 in respect thereof to
the extent applicable to such Capital Expenditures.
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6.14.3. During each fiscal year of the Company ending on or
after December 31, 1995, the Company and its Domestic Subsidiaries may
incur on or after January 1, 1995, in respect of (A) the Green Bay Sludge
Boiler, (B) the Savannah Boiler and (C) other matters not constituting
Expansion Projects, Consolidated Domestic Capital Expenditures in an
aggregate amount not in excess of $75,000,000 (the "Base Annual Capex
Amount").
6.14.4. Without limiting the rights of the Company and its
Domestic Subsidiaries to incur Consolidated Domestic Capital Expenditures
in accordance with subsection 6.14.3 above, the Company and its Domestic
Subsidiaries may incur Consolidated Domestic Capital Expenditures in
respect of Expansion Projects (other than the Green Bay Sludge Boiler and
the Savannah Boiler) on the following terms and subject to each of the
following conditions:
(i) the aggregate amount (the "Domestic Capex Maximum") of
Consolidated Domestic Capital Expenditures in the aggregate which may
be incurred in respect of all such Expansion Projects shall not at
any time exceed the sum of (a) $250,000,000 plus (b) the total amount
of net cash proceeds received by the Company or any of its
Subsidiaries after the Closing Date and prior to such time in respect
of Permitted Expansion Financings (other than any Permitted Expansion
Financings relating solely to the Green Bay Sludge Boiler or the
Savannah Boiler);
(ii) except for Capital Expenditures incurred in connection
with the Initial Major Expansion Project or the Green Bay Dry Form
Machine, neither the Company nor any of its Domestic Subsidiaries
shall be permitted to incur, or become bound by any Contractual
Obligation to incur, Consolidated Domestic Capital Expenditures in
respect of any single such Expansion Project (the first of such
Expansion Projects, the "Second Expansion Project") in excess of
$30,000,000, unless the Company shall have, in respect of any period
of four full consecutive fiscal quarters of the Company commencing
after the Closing Date and ending with the quarter immediately
preceding the quarter in which such amount in excess of $30,000,000
is first committed to be spent by the Company, achieved an Interest
Coverage Ratio of 1.9 or greater, (it being understood that, if such
Interest Coverage Ratio shall have been so achieved, the Company
shall not be required to maintain such Interest Coverage Ratio as a
condition to incurring further expenditures in respect of the Second
Expansion Project); and
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(iii) except for Capital Expenditures incurred in connection
with the Initial Major Expansion Project or the Second Expansion
Project (to the extent permitted under clause (ii) above), neither
the Company nor any of its Domestic Subsidiaries shall be permitted
to incur, or become bound by any Contractual Obligation to incur,
Consolidated Domestic Capital Expenditures in respect of any single
Expansion Project in excess of $30,000,000 unless the Company shall
have, in respect of any period of four consecutive fiscal quarters of
the Company commencing on or after the Closing Date and ending after
the quarter immediately preceding the quarter in which such amount in
excess of $30,000,000 is first spent or committed to be spent by the
Company in respect of such Expansion Project, achieved an Interest
Coverage Ratio of 2.15 or greater (it being understood that, if such
Interest Coverage Ratio shall have been so achieved, the Company
shall not be required to maintain such Interest Coverage Ratio as a
condition to incurring further expenditures in respect of such
Expansion Project).
6.14.5. The Company may elect by written notice to the Lenders
to apply to the making of Consolidated Domestic Capital Expenditures, in
addition to the Base Annual Capex Amount and the Domestic Capex Maximum
permitted under subsection 6.14.3 and 6.14.4, as applicable, (A) portions
of the then unutilized Discretionary Excess Equity Proceeds Balance and the
then unutilized Discretionary Excess Cash Flow Balance and (B) 100% of the
unused amount (the "Capex Carryover Amount") of Consolidated Domestic
Capital Expenditures, if any, in respect of prior fiscal years (beginning
with fiscal year 1995) permitted under subsection 6.14.3.
6.14.6. For purposes of this Section 6.14 only, "Capital
Expenditures" shall exclude expenditures of insurance proceeds received
upon destruction of property to the extent such proceeds are used to effect
restoration, replacement or repair of such property.
Section 6.15 Conduct of Business. The Company will not, and
will not permit any of its Subsidiaries (other than any Receivables
Subsidiary) to, engage in any business other than (A) the business it and
its Subsidiaries are engaged in on the date hereof as described in the
Prospectus and similar or related businesses, (B) such other businesses as
are engaged in by it and its Subsidiaries on the date hereof as shall not
be of a nature which are material to it and its Subsidiaries and (C) such
other lines of business as may be consented to by the Requisite Lenders
(such consent not to be unreasonably
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withheld). The Company will not permit the Receivables Subsidiaries to
engage in any business other than as contemplated by the Receivables
Program.
Section 6.16 Amendments or Waivers of Certain
Documents; Prepayments of Indebtedness.
6.16.1. Neither the Company nor any of its Subsidiaries will
agree to any (A) amendment to provisions of the Management Agreements
imposing any additional obligation on the Company with respect to the
acquisition by the Company or any of its Subsidiaries of any capital stock
of the Company to the extent the aggregate amount of all such additional
obligations would cause the Company to exceed the limitation on repurchases
or redemptions of its Common Stock set forth in subclause (D)(2) of Section
6.5 (it being understood that any and all such additional obligations will
be taken into account in determining whether such limitation has been
exceeded), or (B) amendment to provisions of the Stockholders' Agreement
which is materially adverse to the interests of the Lenders.
6.16.2. Neither the Company nor any of its Subsidiaries will
(A) amend or otherwise change the terms of the Subordinated Notes or the
indentures relating thereto, the Existing Subordinated Debt or the
indentures relating thereto, the Senior Unsecured Notes or the indentures
related thereto, any Refinancing Senior Unsecured Debt, any Permitted
Expansion Financing, any Expansion Lease, the documents evidencing the 1995
A/R Bridge, the 1988 Revenue Bonds or the 1988 Revenue Bond Indenture, if
the effect of such amendment or change is to increase the interest rate on
such Indebtedness or the rental amounts due thereunder, as the case may be,
change the dates upon which payments of rent, principal or interest are due
thereon, change any event of default or condition to an event of default
with respect to such Indebtedness or Expansion Lease, grant any security
interest in favor of such Indebtedness, change the redemption provisions
thereof, change the subordination provisions thereof, cause such
Indebtedness or Expansion Lease to be guaranteed by any Subsidiary of the
Company or which, together with all other amendments or changes made,
increase materially the obligations of the obligor or confer additional
rights on the holder of such Indebtedness or Expansion Lease which would be
adverse to the Company or the Lenders or (B) except as otherwise expressly
permitted in this Agreement, defease, or make any payments the effect of
which is to defease, any such Indebtedness in whole or in part (whether
pursuant to the defeasance provisions of such Indebtedness or otherwise).
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6.16.3. Except for the making of Restricted Junior Payments
expressly permitted under Section 6.5, the Company will not make any
payment or prepayment of principal of, or interest on, or premium (if any)
on, any of the Subordinated Notes except, in each case, for (A) regularly
scheduled payments of principal, if any, and interest in accordance with
the terms of the instruments evidencing or governing such Indebtedness and
(B) payment of principal on the scheduled final maturity date of such
Indebtedness in accordance with the terms of the governing instruments with
respect thereto and (C) any mandatory payment or prepayment required to be
made as a result of acceleration pursuant to the terms of the instruments
governing such Indebtedness as in effect on the date hereof.
6.16.4. Neither the Company nor any of its Subsidiaries will
make any payment or prepayment of principal of, or interest on, or premium
(if any) on, the Senior Unsecured Notes or the Refinancing Senior Unsecured
Debt, except, in each case, for (A) a refinancing of the Senior Unsecured
Notes with the proceeds of Refinancing Senior Unsecured Debt permitted
under Section 6.5, (B) regularly scheduled payments of interest in
accordance with the terms of the applicable Senior Unsecured Notes
Indenture or the instruments governing the Refinancing Senior Unsecured
Debt, as the case may be, (C) payment of principal on the scheduled final
maturity date of the Senior Unsecured Notes or the Refinancing Senior
Unsecured Debt, in each case, in accordance with the terms of the
applicable loan agreement, indenture or other governing instruments and
(D) any mandatory payment or prepayment required to be made as a result of
acceleration pursuant to the terms of the applicable Senior Unsecured Notes
Indenture or the instruments governing the Refinancing Senior Unsecured
Debt, as the case may be, in each case as in effect on the date hereof.
6.16.5. Neither the Company nor any of its Subsidiaries will
voluntarily terminate any Expansion Lease or otherwise optionally make,
either directly or indirectly, any payment to acquire or otherwise
reacquire any assets leased by the Company under any Expansion Lease or any
interest therein (including, without limitation, any beneficial interest
therein) or any Indebtedness secured thereby, or make any optional
prepayment of any rental obligation under any Expansion Lease to any other
party to any Expansion Lease.
6.16.6. Neither the Company nor any of its Subsidiaries will
make any payment or prepayment of principal of, or interest on, or premium
(if any) on, any Indebtedness
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constituting Permitted Expansion Financing except for (A) regularly
scheduled payments of principal, if any, and interest in accordance with
the terms of the instruments governing such Indebtedness, (B) payment of
principal on the scheduled final maturity date of such Indebtedness in
accordance with the terms of the instruments governing such Indebtedness
and (C) any mandatory payment or prepayment required to be made as a result
of acceleration pursuant to the terms of the instruments governing such
Indebtedness.
6.16.7. Neither the Company nor any of its Subsidiaries will
(A) make any payment or prepayment of principal of, or interest on, any
Indebtedness incurred in connection with a Receivables Transaction except
for (1) regularly scheduled payments of interest thereon and payment of all
principal thereof at the maturity thereof or (2) mandatory or optional
prepayments (including prepayments related to a decline in the balance of
Program Receivables) or prepayments required to be made as a result of
acceleration or mandatory prepayment events which are in the nature of
acceleration; provided that no such mandatory or optional prepayment (other
than prepayments required to be made as a result of acceleration or events
in the nature of acceleration) may be made unless (i) there is no reduction
in the commitment amount or other availability under the Receivables
Program for the Company to obtain funds secured directly or indirectly by
Program Receivables and (ii) the Company intends to reborrow or refund with
new Indebtedness the amount so prepaid, or (B) make or permit any amendment
to the documentation governing any Receivables Transaction which would
cause such documentation (after giving effect thereto) not to comply with
the requirements herein set forth with respect to Receivables Subsidiaries
and Receivables Transactions.
6.16.8. Neither the Company nor any of its Subsidiaries will
make any payment or prepayment of principal of, or interest on, or premium
(if any) on the 1995 A/R Bridge, except, in each case, for (A) a payment of
principal at the final maturity or the refinancing of the 1995 A/R Bridge
with the net cash proceeds of the sale of A/R Eligible Receivables, (B) a
payment of principal at the final maturity or the refinancing of the 1995
A/R Bridge to be funded, at the option of the Company, with the proceeds of
Revolving Loans; provided that the amount of such Revolving Loans shall not
exceed the lesser of $15,000,000 and the difference between the then
outstanding principal amount of the 1995 A/R Bridge and the net cash
proceeds of a Receivables Transaction utilized to refinance the 1995 A/R
Bridge; (C) regularly scheduled payments of interest in accordance with the
terms of the 1995 A/R Bridge
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and (D) any mandatory payment or prepayment required to be made as a result
of acceleration or otherwise pursuant to the terms of the 1995 A/R Bridge
as in effect on the date hereof.
Section 6.17 Payment of Cash Interest on Subordinated Debt.
Except with the consent of the Requisite Lenders, the Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, pay any
interest in cash on Subordinated Debt where the Company has the option to
pay such interest in securities or to accrue the interest payable with
respect to such Subordinated Debt.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
Section 7.1 Failure To Make Payments When Due. Failure to pay
any installment of principal of any Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise or failure
to pay for 5 days after the day when due any interest on any Loan or any
other amount due under this Agreement; or
Section 7.2 Default in Other Agreements. Failure of the
Company or any of its Subsidiaries to pay when due (A) any principal or
interest on any Indebtedness (other than Indebtedness referred to in
Section 7.1 or Indebtedness of any Receivables Subsidiary) in an individual
principal amount of $15,000,000 or more or items of Indebtedness with an
aggregate principal amount of $30,000,000 or more or (B) any Contingent
Obligation in an individual amount of $15,000,000 or more or Contingent
Obligations with an aggregate amount of $30,000,000 or more, in each case
at the stated maturity thereof or beyond the end of any period after which
the obligee thereunder is permitted to accelerate payment thereunder, or
breach or default of the Company or any of its Subsidiaries (other than any
Receivables Subsidiary) with respect to any other material term of any loan
agreement, mortgage, indenture or other agreement relating to any
Indebtedness in an individual principal amount of $15,000,000 or more or
items of Indebtedness with an aggregate principal amount of $30,000,000 or
more or any Contingent Obligation in an individual amount of $15,000,000 or
more or Contingent Obligations with an aggregate amount of $30,000,000 or
more; if the effect of such failure,
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default or breach is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation (or a trustee on behalf of such
holder or holders) then to cause, that Indebtedness or Contingent
Obligation to become or be declared due prior to its stated maturity (or
the stated maturity of any underlying obligation, as the case may be); or
Section 7.3 Breach of Certain Covenants. Failure of the
Company to perform or comply with any term or condition contained in
Section 2.8, 5.2, 5.6 or 5.15, ARTICLE VI or Section 9.6 of this Agreement;
or
Section 7.4 Breach of Warranty. Any representation or
warranty made by any Loan Party in any Loan Document or in any statement or
certificate at any time given by such Person in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any
material respect on the date as of which made; or
Section 7.5 Other Defaults Under Agreement or Loan Documents.
Any Loan Party shall default in the performance of or compliance with any
term contained in this Agreement or other Loan Documents other than those
referred to above in Sections 7.1, 7.3 or 7.4 and such default shall not
have been remedied or waived within 30 days after receipt of notice from
the Administrative Agent or any Lender of such default; or
Section 7.6 Involuntary Bankruptcy;
Appointment of Receiver, etc.
7.6.1. A court having jurisdiction in the premises shall enter
a decree or order for relief in respect of the Company, or any of its
Subsidiaries which, as of the date of entry of such decree or order, would
constitute a Material Subsidiary (whether or not, as of such date, such
Subsidiary is or has been deemed to be, or not to be, a Material Subsidiary
under any other applicable provision of this Agreement) in an involuntary
case under the Bankruptcy Code or any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, which decree or order is not
stayed; or any other similar relief shall be granted under any applicable
federal or state law; or
7.6.2. An involuntary case is commenced against the Company or
any of its Subsidiaries which, as of the date of such commencement, would
constitute a Material Subsidiary (whether or not, as of such date, such
Subsidiary is or has been deemed to be, or not to be, a Material Subsidiary
under any other applicable provision of this Agreement) under any
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applicable bankruptcy, insolvency or other similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Company or any of
such Subsidiaries, or over all or a substantial part of the property of the
Company or any of such Subsidiaries, shall have been entered; or an interim
receiver, trustee or other custodian of the Company or any of such
Subsidiaries for all or a substantial part of the property of the Company
or any of such Subsidiaries is involuntarily appointed; or a warrant of
attachment, execution or similar process is issued against any substantial
part of the property of the Company or any of such Subsidiaries, and the
continuance of any such events in this subsection 7.6.2 for 60 days unless
dismissed, bonded or discharged; or
Section 7.7 Voluntary Bankruptcy; Appointment of Receiver,
etc. The Company or any of its Subsidiaries which, as of the date of entry
of such decree or order, would constitute a Material Subsidiary (whether or
not, as of such date, such Subsidiary is or has been deemed to be, or not
to be, a Material Subsidiary under any other applicable provision of this
Agreement) shall have a decree or an order for relief entered with respect
to it or commence a voluntary case under the Bankruptcy Code or any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of a decree or an order for relief in
an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of
or taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; the making by the Company or any of such
Subsidiaries of any general assignment for the benefit of creditors; or the
inability or failure of the Company or any of such Subsidiaries generally
to pay its debts as such debts become due; or the Board of Directors of the
Company or any of such Subsidiaries (or any committee thereof) adopts any
resolution or otherwise authorizes action to approve any of the foregoing;
or
Section 7.8 Judgments and Attachments. Any money judgment,
writ or warrant of attachment, or similar process involving (A) in any
individual case an amount in excess of $10,000,000 or (B) in the aggregate
at any time an amount in excess of $20,000,000 (in either case not
adequately covered by insurance as to which the insurance company has
acknowledged coverage) shall be entered or filed against the Company or any
of its Subsidiaries which, as of the date of such entry or filing, would
constitute a Material Subsidiary (whether or not,
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as of such date, such Subsidiary is or has been deemed to be, or not to be,
a Material Subsidiary under any other applicable provision of this
Agreement) or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 30 days or in any event
later than five days prior to the date of any proposed sale thereunder; or
Section 7.9 Dissolution. Any order, judgment or decree shall
be entered against the Company or any of its Subsidiaries which, as of the
date of such entry, would constitute a Material Subsidiary (whether or not,
as of such date, such Subsidiary is or has been deemed to be, or not to be,
a Material Subsidiary under any other applicable provision of this
Agreement) decreeing the dissolution or split up of the Company or such
Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or
Section 7.10 Unfunded ERISA Liabilities.
7.10.1. Any Pension Plan maintained by the Company or any of
its ERISA Affiliates shall be terminated within the meaning of Title IV of
ERISA; or
7.10.2. A trustee shall be appointed by an appropriate United
States district court to administer any Pension Plan; or
7.10.3. The Pension Benefit Guaranty Corporation (or any
successor thereto) shall institute proceedings to terminate any Pension
Plan or to appoint a trustee to administer any Pension Plan; or
7.10.4. The Company or any of its respective ERISA Affiliates
shall withdraw (under Section 4063 of ERISA) from a Pension Plan; or
7.10.5. The Termination Event that is described in clause (E)
of the definition of "Termination Event" shall have occurred and be
continuing;
if as of the date thereof or any subsequent date, the sum of each of the
Company's and its ERISA Affiliates' various liabilities (such liabilities
to include, without limitation, any liability to the Pension Benefit
Guaranty Corporation (or any successor thereto) or to any other party under
ERISA or the Internal Revenue Code and to be calculated after giving effect
to the tax consequences thereof) resulting from all such events listed in
subsections 7.10.1 through 7.10.5 above exceeds $25,000,000; or
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Section 7.11 Withdrawal Liability Under Multiemployer Plan.
The Company or any of its ERISA Affiliates as employer under a
Multiemployer Plan shall have made a complete or partial withdrawal from
such Multiemployer Plan and the plan sponsor of such Multiemployer Plan
shall have notified such withdrawing employer that such employer has
incurred a withdrawal liability requiring annual payments in an amount
individually or in the aggregate exceeding $1,500,000 in any one year;
unless (A) prior to the time any payment of such withdrawal liability is
due in accordance with Section 4219(c)(2) of ERISA, the plan sponsor agrees
in writing that the correct amount of the annual payment is less than
$1,500,000, or (B) prior to the time any payment of such withdrawal
liability is due in accordance with Section 4219(c)(2) of ERISA, a court of
competent jurisdiction has enjoined and continues to enjoin the collection
of such payment, or (C) Section 4219 of ERISA has been amended to provide
that notification that such withdrawing employer has incurred a withdrawal
liability would not, in the ordinary course or with the lapse of time,
require the payment; provided that, in the event of such an amendment, an
Event of Default shall be deemed to occur when any payment of such
withdrawal liability becomes due or would, in the ordinary course or with
the lapse of time, become due; or
Section 7.12 Invalidity of Guarantees. Any Guarantor
Subsidiary Guarantee for any reason, other than the satisfaction in full of
all Obligations and termination of this Agreement, ceases to be in full
force and effect or is declared to be null and void, or any Guarantor
Subsidiary denies or disaffirms any of its obligations under the Guarantor
Subsidiary Guarantee to which it is party or gives notice to such effect;
or
Section 7.13 Failure of Security. Any Pledge Agreement,
Mortgage or any other Collateral Document shall, at any time, cease to be
in full force and effect or shall be declared null and void, or the
legality, validity or enforceability thereof shall be contested by any Loan
Party or the Administrative Agent, as agent for the Lenders, shall not have
or shall cease to have valid and perfected (to the extent required by the
Collateral Documents) Lien in the Collateral with a fair market value or
book value (whichever is greater) of more than $20,000,000 in the aggregate
of the priority contemplated by the applicable Collateral Document in each
case for any reason other than the failure of the Administrative Agent to
take any action within its control, or any Loan Party shall fail to perform
or observe in any material respect any Collateral Document; or
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Section 7.14 Change in Control. If there shall occur any
Change in Control;
THEN (A) upon the occurrence of and during the continuance of
any Event of Default described in the foregoing Section 7.6 or 7.7 (other
than the last clause of Section 7.7), each of (1) the unpaid principal
amount of and accrued interest on the Loans, (2) an amount equal to the
maximum amount which may at any time be drawn under all Letters of Credit
then outstanding (whether or not any beneficiary under any Letter of Credit
shall have presented, or shall be entitled at such time to present, the
drafts of other documents required to draw under such Letter of Credit) and
(3) all other amounts comprising the Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by the
Company and the obligation of each Lender to make any Loan and the
obligation of any Fronting Bank to issue any Letter of Credit hereunder
shall thereupon terminate, and (B) upon the occurrence of and during the
continuance of any other Event of Default, the Requisite Lenders may, by
written notice to the Company, declare all of the Loans and an amount equal
to the amounts described in subclause (2) and subclause (3) above to be,
and the same shall forthwith become, due and payable, together with accrued
interest thereon and the obligation of each Lender to make any Loan and the
obligation of any Fronting Bank to issue any Letter of Credit hereunder
shall thereupon terminate; provided that the foregoing shall not affect in
any way the obligations of Lenders to purchase from any Fronting Bank
participations in the unreimbursed amount of any drawings under any Letters
of Credit as provided in subsection 2.2.5. Whether or not any Loans or
other Obligations shall have been accelerated or become due as set forth
above, upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent or any Lender may exercise any remedy
available under the Loan Documents or applicable law in respect thereof
(including, without limitation, foreclosure of the Liens in respect of the
Collateral). If at any time within 60 days after acceleration of the
maturity of any Loan, the Company shall pay all arrears of interest and all
payments on account of the principal which shall have become due otherwise
than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement or the Notes) and all Events of Default and Potential Events of
Default (other than non-payment of principal of and accrued interest on the
Loans and the Notes, and payments of amounts referred to in subclause (2)
above, in each case due and payable solely by virtue of acceleration) shall
be remedied or
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waived pursuant to Section 9.6, then the Requisite Lenders by written
notice to the Company may rescind and annul the acceleration and its
consequences, but such action shall not affect any subsequent Event of
Default or Potential Event of Default or impair any right consequent
thereon.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.1 Appointment. Bankers is hereby appointed the
Administrative Agent hereunder by each Lender, and each Lender hereby
authorizes the Administrative Agent to act hereunder and under the other
instruments and agreements referred to herein as its agent hereunder and
thereunder. Bankers is hereby authorized, as the Administrative Agent to
execute consents to service of process and such other documents on behalf
of Lenders, as may be required by law or as may be necessary or desirable.
Bankers agrees to act as such upon the express conditions contained in this
ARTICLE VIII and in the Collateral Documents. The provisions of this
ARTICLE VIII, except as provided in subsections 8.6.2 and 8.6.3 and
Section 8.7 where the consent of the Company is required, are solely for
the benefit of the Administrative Agent, and the Company shall not have any
rights as a third party beneficiary of any of the provisions hereof except
for those contained in subsections 8.6.2 and 8.6.3 and Section 8.7 where
the consent of the Company is required. In performing its functions and
duties under this Agreement, the Administrative Agent shall act solely as
agent of the Lenders and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or
for the Company.
Section 8.2 Powers; General Immunity.
8.2.1. Duties Specified. Each Lender irrevocably authorizes
the Administrative Agent to take such action on such Lender's behalf and to
exercise such powers hereunder and under the other instruments and
agreements referred to herein as are specifically delegated to the
Administrative Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. The Administrative Agent
shall have only those duties and responsibilities which are expressly
specified in this Agreement and the Collateral Documents and it may perform
such duties by or through its agents or employees. The duties of the
Administrative Agent shall be mechanical and administrative in nature; and
the Administrative Agent shall
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not have by reason of this Agreement a fiduciary relationship in respect of
any Lender. Nothing in this Agreement, expressed or implied, is intended
to or shall be so construed as to impose upon the Administrative Agent any
obligations in respect of this Agreement or the other instruments and
agreements referred to herein except as expressly set forth herein or
therein.
8.2.2. No Responsibility for Certain Matters. The
Administrative Agent shall not be responsible to any Lender for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement, the Collateral Documents
or the Notes issued hereunder, or for the issuance of Letters of Credit and
such Lender's purchase of participations therein, if any, or for the
perfection or priority of any Lien created or purported to be created by
any Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement
or in any financial or other statements, instruments, reports, certificates
or any other documents in connection herewith or therewith furnished or
made by the Administrative Agent to Lenders or by or on behalf of the
Company or any of its Subsidiaries to the Administrative Agent or any
Lender, or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or
agreements contained herein or therein or as to the use of the proceeds of
the Loans or of the existence or possible existence of any Event of Default
or Potential Event of Default.
8.2.3. Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees or agents shall be
liable to the Lenders for any action taken or omitted hereunder or in
connection herewith (including, without limitation, any act or omission
under the Collateral Documents) unless caused by its or their gross
negligence or willful misconduct. If the Administrative Agent shall
request instructions from the Lenders with respect to any act or action
(including the failure to take an action) in connection with this Agreement
or the other instruments and agreements referred to herein, the
Administrative Agent shall be entitled to refrain from such act or taking
such action unless and until the Administrative Agent shall have received
instructions from the Requisite Lenders. Without prejudice to the
generality of the foregoing, (A) the Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any communication,
instrument or document believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, and shall be
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entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for the Company), accountants,
experts and other professional advisors selected by it and (B) no Lender
shall have any right of action whatsoever against the Administrative Agent
as a result of the Administrative Agent acting or (where so instructed)
refraining from acting under this Agreement or the other instruments and
agreements referred to herein in accordance with the instructions of the
Requisite Lenders. The Administrative Agent shall be entitled to refrain
from exercising any power, discretion or authority vested in it under this
Agreement or the other instruments and agreements referred to herein unless
and until it has obtained the instructions of the Requisite Lenders.
8.2.4. Administrative Agent Entitled to Act as Lender. The
agency hereby created shall in no way impair or affect any of the rights
and powers of, or impose any duties or obligations upon, the Administrative
Agent in its individual capacity as a Lender hereunder. With respect to
its participation in the Loans or any Letter of Credit, the Administrative
Agent shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or
any similar term shall, unless the context clearly otherwise indicates,
include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of banking, trust, financial
advisory or other business with the Company or any Subsidiary or Affiliate
of the Company as if it were not performing the duties specified herein,
and may accept fees and other consideration from the Company or any such
Subsidiary or Affiliate for services in connection with this Agreement and
otherwise without having to account for the same to the Lenders.
Section 8.3 Representations and Warranties; No Responsibility
for Appraisal of Creditworthiness. Each Lender represents and warrants
that it has made its own independent investigation of the financial
condition and affairs of the Company and its Subsidiaries in connection
with the making of the Loans and other disbursements on the Closing Date
and thereafter and the issuance of Letters of Credit hereunder and has made
and shall continue to make its own appraisal of the creditworthiness of
each of them. The Administrative Agent shall not have any duty or
responsibility either initially or on a continuing basis to make any such
investigation or any such appraisal on behalf of the Lenders or to provide
any
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Lender with any credit or other information with respect thereto whether
coming into its possession before the making of the Loans and other
disbursements on the Closing Date and thereafter or the issuance of any
Letter of Credit or any time or times thereafter, and the Administrative
Agent shall have no responsibility with respect to the accuracy of or the
completeness of the information provided to Lenders.
Section 8.4 Right to Indemnity. Each Lender severally agrees
to indemnify the Administrative Agent, on its demand and as incurred
proportionately to its respective Indemnity Amount (as defined below), to
the extent the Administrative Agent shall not have been reimbursed by the
Company, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including,
without limitation, counsel fees and disbursements) or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in performing its duties hereunder or in
any way relating to or arising out of this Agreement or any other Loan
Document; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that result from the Administrative
Agent's gross negligence or willful misconduct. If any indemnity furnished
to the Administrative Agent for any purpose shall, in the opinion of the
Administrative Agent be insufficient or become impaired, the Administrative
Agent may call for additional indemnity and cease, or not commence, to do
the acts indemnified against until such additional indemnity is furnished.
For purposes of this Section 8.4, "Indemnity Amount" means in respect of
any Lender the sum of all Loans held by such Lender plus such Lender's
share of the Letters of Credit Usage plus such Lender's unutilized
Commitments then in effect.
Section 8.5 Registered Holder of Note Treated as Owner. The
Administrative Agent may deem and treat the registered holder of any Note
as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been registered
with the Administrative Agent. Any request, authority or consent of any
person or entity who at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and
binding on any subsequent holder, transferee or assignee of that Note or of
any Note or Notes issued in exchange therefor.
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Section 8.6 Resignation by Administrative Agent.
8.6.1. The Administrative Agent may resign from the
performance of all its functions and duties hereunder at any time by giving
15 Business Days' prior written notice to the Company and the Lenders.
Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to subsections 8.6.2 and 8.6.3
below or as otherwise provided below.
8.6.2. Upon any such notice of resignation, the Requisite
Lenders shall appoint a successor Administrative Agent acceptable to the
Company in its reasonable discretion and which shall be an incorporated
bank or trust company.
8.6.3. If a successor Administrative Agent shall not have been
so appointed within such 15 Business Day period, the resigning
Administrative Agent with the consent of the Company, shall then appoint a
successor Administrative Agent who shall serve as the Administrative Agent
until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent as provided above.
8.6.4. If no successor Administrative Agent has been appointed
pursuant to subsection 8.6.2 or 8.6.3 by the 20th Business Day after the
date such notice of resignation was given by the resigning Administrative
Agent, the Administrative Agent's resignation shall become effective and
Requisite Lenders shall thereafter perform all the duties of the
Administrative Agent hereunder until such time, if any, as the Requisite
Lenders appoint a successor Administrative Agent as provided above.
Section 8.7 Guarantor Subsidiary Guarantee and Collateral
Documents. Each Lender hereby authorizes the Administrative Agent to act
as Collateral Trustee on behalf of and for the benefit of such Lender.
Each Lender hereby authorizes (A) the Collateral Trustee to enter into the
Collateral Documents and to take all action contemplated by the Collateral
Documents and (B) the Administrative Agent to enter into the Guarantor
Subsidiary Guarantee; provided that the Collateral Trustee shall not enter
into or consent to any amendment, modification, termination or waiver of
any provision contained in the Collateral Documents without the prior
consent of the Requisite Lenders. Each Lender agrees that no Lender shall
have any right individually to seek or to enforce the Guarantor Subsidiary
Guarantee or to realize upon the security granted by any Collateral
Document, it being understood and agreed that such rights and remedies may
be exercised by the
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Administrative Agent for the benefit of the Lenders upon the terms of the
Guarantor Subsidiary Guarantee and by the Collateral Trustee upon the terms
of the Collateral Documents.
Section 8.8 Successor Administrative Agent. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent, and
the retiring or removed Administrative Agent shall be discharged from its
duties and obligations as the Administrative Agent under this Agreement.
After any retiring or removed Administrative Agent's resignation or removal
hereunder as the Administrative Agent the provisions of this ARTICLE VIII
shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was the Administrative Agent under this Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns; Participations.
9.1.1. This Agreement shall be binding upon and inure to the
benefit of the Company, the Lenders, the Administrative Agent and all
future registered holders of the Notes and their respective successors and
registered assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of each Lender.
9.1.2. Any Lender may at any time sell to one or more banks or
other entities ("Participants") participating interests in its Revolving
Loan Commitment and Revolving Loans, Term Loan Commitments, Tranche A Term
Loans, Tranche B Term Loans, any Letter of Credit or participation therein
or any other right of such Lender hereunder or thereunder; provided that no
sale of participating interests in any Letter of Credit or participations
therein may be made separately from the sale of a corresponding interest in
the Revolving Loan Commitment and the Revolving Loans of the Lender
effecting such sale. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under
this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the
registered holder of any such Note and such
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interest in such Letter of Credit for all purposes under this Agreement,
and the Company and the Administrative Agent shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. The Company agrees that if amounts
outstanding under this Agreement, the Notes or the Letters of Credit are
due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall,
to the extent permitted by applicable law, be deemed to have the right of
setoff in respect of its participating interest in amounts owing under this
Agreement and any Note or Letter of Credit to the same extent as if the
amount of its participating interest were owing directly to it as a Lender
under this Agreement or any Note or Letter of Credit; provided that such
right of setoff shall be subject to the obligation of such Participant to
share with the Lenders, and the Lenders agree to share with such
Participant, as provided in Sections 9.4 and 9.5 hereof. The Company also
agrees that each Participant shall be entitled to the benefits, subject to
any limitations set forth therein, of Sections 2.2, 2.9 and 2.10 hereof
with respect to its participation in the Adjusted LIBOR Loans and ABR Loans
outstanding from time to time; provided that no Participant shall be
entitled to receive any greater payment under any of such Sections than the
relevant Lender would have been entitled to receive with respect to the
relevant Loans, unless such participation is made with the Company's prior
written consent. Each Lender agrees that any agreement between such Lender
and any such Participant in respect of such participating interest shall
refer to this Agreement and shall not restrict such Lender's right to agree
to any amendment, supplement or modification to this Agreement or any of
the Loan Documents except (A) to extend the final maturity of any Loan or
Note, or any installment thereof, or of any Letter of Credit (unless such
Letter of Credit is not extended beyond the Revolving Credit Maturity
Date), 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 waivers or modifications of conditions
precedent, covenants, Events of Default or of a mandatory reduction in
Total Loan Commitments 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 such Participant's
participation is not increased as a result thereof), or (B) to consent to
the assignment or transfer by
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the Company of any of its rights and obligations under this Agreement.
Each Lender agrees to use commercially reasonable efforts to include and
require in each participation agreement delivered by it pursuant to this
subsection 9.1.2 to a Participant that is not a commercial bank a specific
acknowledgement by such Participant (and by each other Person that may
obtain, directly or indirectly from such Participant, an interest in any
one or more Commitments and Loans) of the representations, warranties,
covenants and agreements deemed to be made by such Participant pursuant to
the provisions of Section 9.23; provided that no Lender shall have any
liability hereunder in respect of any act or omission of, or state of facts
or circumstances relating to, any Person to whom the holder of any such
participating interest may grant or sell sub-participating interests.
9.1.3. (a) Any Lender may (A) without the consent of any
Person, at any time, assign to any Lender or any Affiliate thereof and
(B) with the prior written consent of the Company (which consent shall not
be unreasonably withheld or delayed) to one or more additional banks or
financial institutions (all such Affiliates, Lenders and additional banks
or financial institutions being, "Purchasing Lenders"), all or any part of
its Credit Exposure pursuant to a Registered Transfer Supplement,
substantially in the form of Exhibit XVIII annexed hereto (any such
Registered Transfer Supplement, a "Registered Transfer Supplement"),
executed by such Purchasing Lender, such transferor Lender and the
Administrative Agent and in compliance with subsection 9.1.5; provided that
(1) each such assignment pursuant to clause (B) above shall be limited to
an amount equal to the lesser of (x) such Lender's Credit Exposure Amount
then in effect and (y) a minimum amount of $5,000,000 and integral
multiples of $1,000,000 above such amount, (2) such transferor Lender and
Purchasing Lender deliver to the Administrative Agent the tax documentation
required by paragraph (e) of subsection 2.9.7, if applicable, (3) in the
case of assignments of Revolving Loan Commitments or Revolving Loans, such
transferor Lender obtains, additionally, the consent of each Lender then
constituting a Fronting Bank, (4) no such consent of the Company will be
required if a Potential Event of Default or an Event of Default shall have
occurred and be continuing and (5) the Company shall be entitled to
withhold its consent to any such proposed assignment for any reason or no
reason if (x) immediately after giving effect thereto, the Purchasing
Lender would be an Affected Lender or the Company or other Loan Parties
would be required to make payments pursuant to or on behalf of such
Purchasing Lender pursuant to subsection 2.9.7 and (y) the transferor
Lender was not an Affected Lender as to which the
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Company has declined or failed to exercise its rights pursuant to Section
2.11 and was not, at the time of such assignment, entitled to receive any
payments pursuant to paragraph (a), (b) or (c) of subsection 2.9.7.
Subject to compliance with the foregoing sentence, upon (A) such execution
of such Registered Transfer Supplement, (B) delivery of an executed copy
thereof to the Company, (C) payment by such Purchasing Lender to such
transferor Lender of an amount equal to the purchase price agreed between
such transferor Lender and such Purchasing Lender, (D) the receipt of a
processing and recording fee of $2,500 by the Administrative Agent and
(E) recordation of assignment in the Register pursuant to subsection 9.1.5,
such Purchasing Lender shall for all purposes be a Lender party to this
Agreement and shall have all the rights (including, without limitation, the
benefits of Section 2.10) and obligations of a Lender under this Agreement
to the same extent as if it were an original party hereto with the
Tranche A Funding Percentage, Tranche B Funding Percentage, Revolving Loan
Commitment, Adjusted Revolving Loan Percentage, Credit Exposure Amount, A
Credit Exposure Amount and B Credit Exposure Amount set forth in such
Registered Transfer Supplement, and no further consent or action by the
Company, the Lenders or the Administrative Agent shall be required. Such
Registered Transfer Supplement shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of
such Purchasing Lender and the resulting adjustment of the Tranche A
Funding Percentages, Tranche B Funding Percentages, Revolving Loan
Commitments, Adjusted Revolving Loan Percentages, Credit Exposure Amounts,
A Credit Exposure Amounts and B Credit Exposure Amounts arising from the
purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the
Commitments, the Notes and the Letters of Credit. Upon the consummation of
any transfer to a Purchasing Lender pursuant to this subsection 9.1.3, the
transferor Lender, the Administrative Agent and the Company shall make
appropriate arrangements as required under subsection 9.1.5 so that a
replacement Note is issued to such transferor Lender and a new Note or, as
appropriate, a replacement Note, issued to such Purchasing Lender, in each
case in principal amounts reflecting their Tranche A Funding Percentages,
Tranche B Funding Percentages, Revolving Loan Commitments, Adjusted
Revolving Loan Percentages, Credit Exposure Amounts, A Credit Exposure
Amounts and B Credit Exposure Amounts or, as appropriate, their outstanding
Loans, as adjusted pursuant to such Registered Transfer Supplement.
(b) In addition to the assignments permitted under paragraph
(a) of subsection 9.1.3 above, any Lender may at any
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time assign all or any portion of its rights under this Agreement to a
Federal Reserve Bank without the prior written consent of the Company, the
Administrative Agent, any Fronting Bank or Bankers; provided that no such
assignment shall release a Lender from any of its obligations hereunder or
substitute any such Federal Reserve Bank for such Lender as a party or
entitle such Federal Reserve Bank to require such Lender to take or omit to
take any action hereunder.
9.1.4. The Company authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Company and any Subsidiary of the Company which has been
delivered to such Lender by or on behalf of the Company pursuant to this
Agreement or any other Loan Document or which has been delivered to such
Lender by the Company in connection with such Lender's credit evaluation of
the Company and its Subsidiaries prior to entering into this Agreement;
provided that if such information is confidential information as
contemplated by Section 9.17 hereof, such Lender may so disclose such
information only if such Transferee or prospective Transferee previously
agrees to be bound by the terms of Section 9.17.
9.1.5. (a) The Company and other Loan Parties hereby
designate the Administrative Agent to serve as the Company's agent, solely
for purposes of this subsection 9.1.5, to maintain a register (the
"Register") on which the Administrative Agent will record the Commitments
from time to time of each Lender, the Loans made by each Lender and each
repayment in respect of the principal amount of the Loans of each Lender
and to retain a copy of each Registered Transfer Supplement delivered to
the Administrative Agent pursuant to this subsection. Failure to make any
such recordation, or any error in such recordation shall not affect the
Company's oblligations in respect of such Loans. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Company, the other Loan Parties, the Administrative Agent, the Fronting
Banks and the Lenders shall treat each Person in whose name a Loan and the
Note evidencing the same is registered as the owner thereof for all
purposes of this Agreement, notwithstanding notice or any provision herein
to the contrary. With respect to any Lender, the assignment or other
transfer of the Commitments of such Lender and the rights to the principal
of, and interest on, any Loan made and Note issued pursuant to this
Agreement shall not be effective until such assignment or other transfer is
recorded on the Register and, except to the extent provided in this
subsection 9.1.5,
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otherwise complies with subsection 9.1.3, and prior to such recordation all
amounts owing to the transferor Lender with respect to such Commitments,
Loans and Notes shall remain owing to the transferor Lender. The
registration of assignment or other transfer of all or part of any
Commitments, Loans and Notes for a Lender shall be recorded by the
Administrative Agent on the Register only upon the acceptance by Agent of a
properly executed and delivered Registered Transfer Supplement
substantially in the form of Exhibit XVIII annexed hereto. Coincident with
the delivery of such Registered Transfer Supplement to the Administrative
Agent for acceptance and registration of assignment or sale 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 Company agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities or whatsoever
nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this subsection 9.1.5
(other than losses, claims, damages and liabilities arising from acts or
omissions that represent gross negligence or willful misconduct on the part
of the Administrative Agent). The Register shall be available at the
offices where kept by the Administrative Agent for inspection by the
Company and any Lender at any reasonable time upon reasonable prior notice
to the Administrative Agent.
(b) The Company may not replace any Lender pursuant to
Section 2.11 or Section 9.22, unless, with respect to any Notes held by
such Lender, the requirements of subsection 9.1.5(a) have been satisfied.
Section 9.2 Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Company agrees to promptly
pay (A) all the actual and reasonable costs and expenses of preparation of
the Loan Documents and all the costs of furnishing all opinions by counsel
for the Company and the other Loan Parties (including, without limitation,
any
opinions requested by Requisite Lenders as provided in ARTICLE III hereof
as to any legal matters arising hereunder), (B) the reasonable fees,
expenses and disbursements of CG&R in connection with the negotiation,
preparation, execution and administration of the Loan Documents and the
Loans hereunder, and any amendments and waivers hereto or thereto, (C) all
the actual costs and expenses of creating, perfecting, continuing and
maintaining Liens in favor of Lenders pursuant to any Loan
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Document, including filing and recording fees and expenses (other than
Muskogee/Oklahoma Mortgage Recording Taxes, which shall be paid by Bankers,
for the account of the Lenders), title insurance, fees and expenses of
counsel for providing such opinions as Requisite Lenders may reasonably
request as provided therein and reasonable fees and expenses of CG&R, and
(D) after the occurrence of an Event of Default, all costs and expenses
(including, without limitation, reasonable attorneys fees, including
allocated costs of internal counsel) incurred by the Lenders and/or the
Administrative Agent in enforcing any Obligations of or in collecting any
payments due from the Company hereunder or under the Notes or any of the
other Loan Documents by reason of such Event of Default or in connection
with any refinancing or restructuring of the credit arrangements provided
under this Agreement, including, without limitation, in the nature of a
"work-out" or of any insolvency or bankruptcy proceedings.
Section 9.3 Indemnity. In addition to the payment of expenses
pursuant to Section 9.2, whether or not the transactions contemplated
hereby shall be consummated, the Company agrees to indemnify, pay and hold
the Administrative Agent, and each Person who is or was a Lender and any
holder of any of the Notes, and the officers, directors, employees, agents,
and affiliates of such Person and such holders (collectively called the
"Indemnitees"), upon their demand and as incurred, harmless from and
against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto), which may be imposed on, incurred by,
or asserted against such Indemnitee, in any manner relating to or arising
out of this Agreement, the other Loan Documents, the Lenders' agreement to
make the Loans or other disbursements on the Closing Date or thereafter or
issue the Letters of Credit or the use or intended use of the proceeds of
any of the Loans or disbursements hereunder or use or intended use of the
Letters of Credit (the "indemnified liabilities"); provided that the
Company shall have no obligation to an Indemnitee hereunder with respect to
indemnified liabilities that result from the gross negligence or willful
misconduct of that Indemnitee or from claims, litigation, investigations or
proceedings made or initiated by, as the case may be, one Indemnitee
against any other Indemnitee. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding
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sentence may be unenforceable because it is violative of any law or public
policy, the Company shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all indemnified liabilities incurred by the Indemnitees or
any of them except to the extent set forth in the proviso to the next
preceding sentence.
Section 9.4 Set Off. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any
such rights, upon the occurrence of any Event of Default, each Lender is
hereby authorized by the Company at any time or from time to time, without
notice to the Company, or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, without limitation, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured but not
including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of the Company
against and on account of the obligations and liabilities of the Company to
such Lender or that subsequent holder under this Agreement and the Notes
and the Letters of Credit, including, without limitation, all claims of any
nature or description arising out of or connected with this Agreement or
the Notes, irrespective of whether or not (A) such Lender shall have made
any demand hereunder or (B) such Lender shall have declared the principal
or the interest on the Loans and Notes, any obligation of the Company with
respect to the Letters of Credit and other amounts due hereunder to be due
and payable as permitted by ARTICLE VII and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
Section 9.5 Ratable Sharing.
9.5.1. Each Lender and each subsequent holder by acceptance of
a Note agree among themselves that (A) with respect to all amounts received
by them which are applicable to the payment of principal of or interest on
the Notes and amounts payable in respect of Letters of Credit and
commitment commissions with respect to the Commitments, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among the Lenders proportionately to their respective interests in the
Notes, the Tranche A Term Loans, the Revolving Loans or the Tranche B Term
Loans, as the same may appear, whether received by voluntary payment, by
the exercise of the right of set-off or banker's lien, by counterclaim or
cross action or by the enforcement of any or all of the Notes, (B) if any
of them shall exercise any right
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of counterclaim, set-off, banker's lien or similar right with respect to
amounts owed by the Company hereunder or under the Notes relating to any
facility hereunder or in respect of the Letters of Credit, such Lender or
holder, as the case may be, shall apportion the amount recovered as a
result of the exercise of such right pro rata in accordance with all
amounts outstanding at such time owed by the Company in respect of such
facility, and (C) if any of them shall thereby through the exercise of any
right of counterclaim, set-off, banker's lien or otherwise or as adequate
protection of a deposit treated as cash collateral under the Bankruptcy
Code, receive payment or reduction of a proportion of the aggregate amount
of principal and interest due with respect to the Notes held by the Lender
relating to any facility hereunder, the amount of any Letter of Credit or
any participation therein or any amount payable hereunder, as the case may
be, which is greater than the proportion received by any other holder of
the Notes relating to the same facility in respect to such aggregate amount
of principal and interest due with respect to such Notes held by it, the
amount of any Letter of Credit or any participation therein or any amount
payable hereunder, such Lender or such holder of such Notes receiving such
proportionately greater payments shall (1) notify each other applicable
Lender and the Administrative Agent of such receipt and (2) enter into
arrangements as directed by the Administrative Agent relating to the Notes
relating to such facility held by the other holders and to Letters of
Credit issued by other Lenders so that all such recoveries of principal and
interest with respect to such Notes and reimbursement of amounts drawn
under or payable with respect to Letters of Credit, if applicable, shall be
proportionate to their respective interests in such facility or the Letters
of Credit, as the case may be; provided that, if all or part of such
proportionately greater payment received by such holder is thereafter
recovered from such holder, all such arrangements shall be rescinded and
the purchase prices paid in respect of such arrangements shall be returned
to that holder to the extent of such recovery, but without interest. The
Company expressly consents to the foregoing arrangement and agrees that any
holder of an interest in any such Note or Letter of Credit, as the case may
be, purchased pursuant to such arrangements and any other subsequent holder
of an interest in any Note otherwise acquired may to the extent permitted
by applicable law, exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by the Company to
such holder as fully as if that holder were a holder of such a Note in the
amount of the interest held by such holder. Any amounts required to be
shared or used to purchase an interest pursuant to this subsection 9.5.1
(in each case, in connection with Revolving
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Loans, Swing Line Loans and Letters of Credit) shall be applied first, to
all Lenders (other than Defaulting Lenders), ratably in respect of all such
amounts then due and payable to each such lender and second, to the
Defaulting Lenders, ratably for any amount due and payable to such Lenders.
9.5.2. Notwithstanding anything to the contrary contained
herein, the provisions of the preceding subsection 9.5.1 shall be subject
to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Lenders as opposed to
Defaulting Lenders.
Section 9.6 Amendments and Waivers. 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 Company and the Requisite Lenders;
provided that no such change, waiver, discharge or termination shall,
without the consent of each Lender affected thereby, (A) extend the Tranche
A Term Maturity Date, the Tranche B Term Maturity Date or the Revolving
Credit Maturity Date (it being understood that any waiver of the
application of any prepayment of or collateralization for or the method of
application of any prepayment to the amortization of the Loans or other
Obligations shall not constitute any such extension), or reduce the rate or
extend the time of payment of interest, commissions or fees (other than as
a result of waiving the applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the
Commitment of any Lender over the amount thereof then in effect (it being
understood that a waiver of any Potential Event of Default or Event of
Default or of a mandatory reduction in the Total Commitments or a waiver of
the type contemplated in the second next preceding parenthetical shall not
constitute a change in the terms of any Commitment of any Lender), (B)
release or permit the release of all or substantially all of the Collateral
or release any Guarantor Subsidiary from its Guarantor Subsidiary Guarantee
(in each case except as expressly provided in the Loan Documents),
(C) amend, modify or waive any provision of this Section, (D) reduce the
percentage specified in, or otherwise modify, the definition of Requisite
Lenders, Credit Exposure Amount, A Credit Exposure Amount, B Credit
Exposure Amount, Tranche A Funding Percentage, Tranche B Funding Percentage
or Adjusted Revolving Loan Percentage, (E) consent to the assignment or
transfer by the Company of any of its rights and obligations under this
Agreement or (F) amend, modify or waive the provisions of the proviso to
paragraph (a) of subsection 2.2.1; and provided, further, that
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no such change, waiver, discharge or termination shall amend, modify or
waive any of the terms contained in subsection 2.1.5 or Section 2.7 or the
definition of Scheduled Term Loans Principal Payment (x) without the
consent of the Required A Lenders (to the extent that, in any such case,
such amendment, modification or waiver would reduce, or change the time of
payment of, any amounts received by Lenders owning Tranche A Term Loans) or
(y) without the consent of the Required B Lenders (to the extent that, in
any case, such amendment, modification or waiver would reduce, or change
the time of payment of, any amount received by Lenders owning Tranche B
Term Loans); and provided, further, that no such change, waiver, discharge
or termination shall, without the prior written consent of (x) the
Required B Lenders, effect (i) any increase in the total outstanding amount
of the Tranch B Term Loans or the maximum aggregate amount of the Tranche B
Commitments of all Lenders or (ii) any subordination in right of payment
with respect to the principal or interest or other Obligations in respect
of the Tranche B Term Loans or any subordination in the rights of Lenders
holding Tranche B Term Loans to receive proceeds of Collateral pursuant to
the Collateral Trust Agreement on a ratable basis with all other Secured
Parties (as defined in the Collateral Trust Agreement) and (y) the Required
A Lenders, effect any subordination in right of payment with respect to any
Obligations (other than principal and interest and other Obligations in
respect of the Tranche B Term Loans) or any subordination in the rights of
Lenders holding Obligations (other than principal and interest and other
Obligations in respect of the Tranche B Term Loans) to receive proceeds of
Collateral pursuant to the Collateral Trust Agreement on a ratable basis
with all other Secured Parties. Any amendment, modification, termination
or waiver of any of the provisions contained in ARTICLE III shall be
effective only if evidenced by a writing signed by or on behalf of the
Administrative Agent and the Requisite Lenders. No amendment,
modification, termination or waiver of any provision of ARTICLE VIII hereof
shall be effective without the written concurrence of the Administrative
Agent. The Administrative Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications, waivers
or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on the Company in any case
shall entitle the Company to any further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or
consent effected in accordance with this Section 9.6 shall be binding upon
each holder of the Notes at the time
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outstanding, each future holder of the Notes, and, if signed by the
Company, on the Company.
Section 9.7 Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action
or condition is prohibited by any of such covenants, the fact that it would
be permitted by an exception to, or be otherwise outside the limitation of,
another covenant shall not avoid the occurrence of an Event of Default or
Potential Event of Default if such action is taken or condition exists.
Section 9.8 Change in Accounting Principles; Fiscal Year or
Tax Laws. If (A) any change in the accounting principles under GAAP used
in preparation of the financial statements referred to in Section 4.3
hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants
(or successors thereto or agencies with similar functions) result in a
change in the method of calculation of financial covenants, standards or
terms found in ARTICLES I, V and VI hereof, or (B) there is a material
change in federal tax laws which materially affects the Company's ability
to comply with the financial covenants, standards or terms found in
ARTICLE I, V or VI hereof, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
Company's financial condition shall be the same after such changes as if
such changes had not been made; provided that, unless and until an
agreement is reached following such negotiations, such provisions shall
remain unchanged and in full force and effect.
Section 9.9 Notices. Unless otherwise provided herein, any
notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telecopied, telexed or
sent by United States mail and shall be deemed to have been given (A) when
delivered in person or a legible copy is received by telecopy or telex or
(B) four Business Days after deposit in the United States mail, registered
or certified, with postage prepaid and properly addressed; provided that
notices to the Administrative Agent shall not be effective until received
by the Administrative Agent. For the purposes hereof, the address of each
of the parties hereto (until notice of a change thereof is delivered as
provided in this Section 9.9) shall be set forth under such party's name on
the signature pages hereto.
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Section 9.10 Survival of Warranties and Certain Agreements.
Notwithstanding anything in this Agreement or implied by law to the
contrary and without limiting any survival provision set forth in any
Collateral Document, the agreements of the Company set forth in subsections
2.2.8, 2.2.9, 2.8.4, 2.9.2, 2.9.5, 2.9.7 and 2.9.9 and Sections 9.2 and 9.3
and the agreements of Lenders set forth in subsections 2.9.7, 2.9.8,
2.9.11, 8.2.3 and 9.1.2 (last sentence only) and Sections 8.4, 9.4 and 9.5
shall survive the payment of the Loans and the Notes, the cancellation or
expiration of the Letters of Credit and the reimbursement of any amount
drawn thereunder and the termination of this Agreement.
Section 9.11 Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of any Lender or any holder of
any Note in the exercise of any power, right or privilege under any Loan
Document shall impair such power, right or privilege or be construed to be
a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under any Loan Document are cumulative to and
not exclusive of, any rights or remedies otherwise available.
Section 9.12 Severability. In case any provision in or
obligation under this Agreement or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not, to the extent
permitted by law, in any way be affected or impaired thereby.
Section 9.13 Obligations Several; Independent Nature of the
Lenders' Rights. The obligation of each Lender hereunder is several, and
no Lender shall be responsible for the obligation or commitment of any
other Lender hereunder. Nothing contained in this Agreement and no action
taken by Lenders pursuant hereto shall be deemed to constitute Lenders to
be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be
a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall
not be necessary for any other Lender to be joined as an additional party
in any proceeding for such purpose. Notwithstanding the foregoing, each
Lender agrees that no Lender shall have any right individually to realize
upon the security granted by the
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Collateral Documents, it being understood and agreed that such rights and
remedies may only be exercised by the Administrative Agent for the benefit
of the Lenders.
Section 9.14 Headings. Section and subsection headings in
this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose or be
given any substantive effect.
Section 9.15 Applicable Law. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR
RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY
CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION
NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE
UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
Section 9.16 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY WITH RESPECT TO THIS
AGREEMENT, ANY NOTE OR ANY LETTER OF CREDIT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY ACCEPTS (TO THE
MAXIMUM EXTENT PERMITTED BY LAW) FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT SUBJECT TO RIGHT OF
APPEAL. THE COMPANY DESIGNATES AND APPOINTS THE PRENTICE HALL CORPORATION
SYSTEM, INC., 500 CENTRAL AVENUE, ALBANY, NEW YORK 12206 AND SUCH OTHER
PERSONS AS MAY HEREAFTER BE SELECTED BY THE COMPANY IRREVOCABLY AGREEING IN
WRITING TO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF, SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING
HEREBY ACKNOWLEDGED BY THE COMPANY TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY
REGISTERED MAIL TO THE COMPANY AT ITS ADDRESS PROVIDED IN THE APPLICABLE
SIGNATURE PAGE HERETO, EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE
LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE
OF PROCESS. IF ANY AGENT APPOINTED BY THE COMPANY REFUSES TO ACCEPT
SERVICE, THE COMPANY HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL
CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO
SERVE PROCESS IN ANY OTHER MANNER
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PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF ANY LENDER TO BRING
PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER JURISDICTION.
Section 9.17 Confidentiality. Subject to Section 9.1, the
Lenders shall hold all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as such by the
Company in accordance with their customary procedures for handling
confidential information of this nature and in accordance with safe and
sound commercial practices and in any event, subject to Section 9.1, may
make disclosure reasonably required by any bona fide prospective or current
transferee or Participant in connection with any Note or participation
therein or in any Obligation or as required or requested by any
governmental agency or representative thereof or pursuant to legal process;
provided that, unless specifically prohibited by applicable law or court
order, each Lender shall notify the Company of any request by any
governmental agency or representative thereof (other than any such request
in connection with an examination of the financial condition of such Lender
by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information so that either or both
of them may seek an appropriate protective order; and provided, further,
that in no event shall any Lender be obligated or required to return any
materials furnished by the Company or any of its Subsidiaries.
Section 9.18 Counterparts; Effectiveness. This Agreement and
any amendments, waivers, consents or supplements may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto, and
written or telephonic notification of such execution and authorization of
delivery thereof has been received by the Company and the Administrative
Agent and all applicable conditions to such effectiveness have been
satisfied.
Section 9.19 Determinations Pursuant to Collateral Documents.
In each circumstance where, under any provision of a Collateral Document,
the Collateral Trustee shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action
under such Collateral Document, the Collateral Trustee shall act in respect
of such consent, exercise of remedies, determination or
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action, as the case may be, only with the consent of or at the direction of
the Requisite Lenders; provided that no consent of any party shall be
required with respect to any consent, determination or other matter that
is, in the reasonable judgment of the Collateral Trustee, ministerial or
administrative in nature. In each circumstance where any consent of or
direction from the Requisite Lenders is required, the Collateral Trustee
shall send to the Lenders a notice setting forth a description in
reasonable detail of the matter as to which consent or direction is
requested and the Collateral Trustee's proposed course of action with
respect thereto. In the event the Collateral Trustee shall not have
received a response from any Lender within ten Business Days after the
giving of such notice, such Lender shall be deemed to have agreed to the
course of action proposed by the Collateral Trustee. Each Lender hereby
authorizes the Collateral Trustee to execute and deliver one or more
intercreditor agreements of the character contemplated in the Receivables
Term Sheet.
Section 9.20 Certain Obligations of Company. Nothing in this
Agreement shall be construed to limit any obligation of the Company set
forth in any Collateral Document.
Section 9.21 Waiver of Jury Trial. Each of the Company and
the Lenders hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or related to any of the Loan Documents or the
actions of the Administrative Agent, any Arranger and any Lender in the
negotiation, administration, performance or enforcement hereof and thereof.
Section 9.22 Defaulting Lenders.
9.22.1. If any Lender becomes a Defaulting Lender, the Company
shall have the right to replace such Lender (the "Replaced Lender"), in
accordance with the requirements of Section 9.1, if no Event of Default or
Potential Event of Default will exist after giving effect to such
replacement, with one or more other Lenders or Purchasing Lenders, none of
whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender"), reasonably acceptable to the
Administrative Agent; provided that (A) at the time of any replacement
pursuant to this Section 9.22, the Replacement Lender shall execute and
deliver one or more Registered Transfer Supplements pursuant to Section 9.1
(and with the fee payable pursuant to said Section 9.1 to be paid by the
Replacement Lender) pursuant to which the Replacement Lender shall acquire
all of the
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Commitments and outstanding Loans of, and participations in Letters of
Credit by, the Replaced Lenders and, in connection therewith, shall pay to
(1) the Replaced Lender in respect thereof an amount equal to the sum of
(x) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, (y) an amount equal to all
unreimbursed drawings 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 (z) an amount equal to all accrued, but
theretofore unpaid, fees owing to the Replaced Lender pursuant to
Section 2.6 and subsection 2.2.6, (2) the Fronting Bank an amount equal to
such Replaced Lender's Adjusted Revolving Loan Percentage of any then
unreimbursed drawings under Letters of Credit to the extent such amount was
not theretofore funded by such Replaced Lender and (3) Bankers an amount
equal to such Replaced Lender's Adjusted Revolving Loan Percentage of any
Swing Line Loans as to which Bankers has exercised the option set forth in
subsection 2.12.5 to the extent such amount was not theretofore funded by
such Replaced Lender, and (B) all obligations of the Company owing to the
Replaced Lender (other than those specifically described in clause (A)
above in respect of which the transfer purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement.
9.22.2. Upon the execution of the respective Registered
Transfer Supplements, the payment of amounts referred to in clauses (A) and
(B) of subsection 9.22.1 and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes
executed by the Company, (A) 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, which shall survive as to such Replaced Lender, and (B) the
Adjusted Revolving Loan Percentages of the Lenders shall be automatically
adjusted at such time to give effect to such replacement (and to give
effect to the replacement of a Defaulting Lender with one or more Non-
Defaulting Lenders).
9.22.3. Nothing herein shall relieve any Defaulting Lender of
its liability to the Company for all damages suffered by the Company as a
result of the Lender Default of such Defaulting Lender.
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Section 9.23 Lenders' ERISA Matters.
9.23.1. Lenders' Representations and Warranties. Except as
otherwise provided in subsection 9.23.2, each Lender and each Transferee,
solely with respect to itself, severally represents and warrants that one
or more of the following is true with respect to all of the funds used to
make or purchase any interest in any Loan (or one or more of the following
is true with respect to each portion of the funds used to make or purchase
such interest in such Loan if such funds are from more than one source):
(i) no part of the funds to be used by it constitutes
under the Internal Revenue Code or ERISA the assets of any Plan; or
(ii) (A) the funds to be used by it constitute, under the
Internal Revenue Code or ERISA, the assets of an insurance company
pooled separate account, as such term is used in Prohibited
Transaction Class Exemption 90-1 issued by the U.S. Department of
Labor, or a "collective investment fund," as defined in Section IV of
Prohibited Transaction Class Exemption 91-38 issued by the U.S.
Department of Labor, in which a Plan has an interest, and (B) such
Loan or interest therein is, and the subsequent holding of the Note
or any agreement related thereto shall at all times thereafter be,
entitled to full relief under Prohibited Transaction Class Exemption
90-1 or 91-38, as applicable; or
(iii) (A) the funds to be used by it for any Loan or
interest therein which constitute, under the Internal Revenue Code or
ERISA, the assets of any Plan are invested in an investment fund
which is managed by a "Qualified Professional Asset Manager" as such
term is defined in Prohibited Transaction Class Exemption 84-14
issued by the U.S. Department of Labor, and (B) such Loan or interest
therein is and the subsequent holding of the Note or any agreement
related thereto shall at all times thereafter be, exempt under
Prohibited Transaction Class Exemption 84-14 to the fullest extent
provided therein; or
(iv) the assets to be used by it constitute the assets of an
investment company registered under the Investment Company Act of
1940.
9.23.2. General Account Assets. A Lender or Transferee which
is an insurance company subject to state regulation that is making or
purchasing an interest in a Loan
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with General Account Assets represents with respect to the portion of its
assets constituting General Account Assets, in lieu of making a
representation under subsection 9.23.1 with respect thereto, that one of
the following is true:
(i) no part of the General Account Assets used to make or
purchase such interest in a Loan will be from assets allocated to a
segment of its general account in which one or more Plans has any
interest, other than an interest which will not result in the Note
relating thereto being deemed to be the assets of any such Plan; or
(ii) such Lender or Transferee is an "insurance company"
and such General Account Assets are assets of an "insurance company
general account" as defined in Section V of Proposed Class Exemption
for Certain Transactions Involving Insurance Company General Accounts
issued by the U.S. Department of Labor, 59 Federal Register 43134,
August 22, 1994 (Application No. D-9662) ("Proposed Prohibited
Transaction Exemption D-9662") and such Loan or interest therein is,
and shall at all times thereafter satisfy the requirements to be and
shall be exempt under the Proposed Prohibited Transaction Exemption
D-9662 to the fullest extent provided therein (assuming for this
purpose that the Proposed Prohibited Transaction Exemption D-9662 was
granted as a final prohibited transaction exemption by the U.S.
Department of Labor on the date and in the form it was proposed).
9.23.3. Representations of Transferees. Each Person that
becomes a Transferee hereunder shall be deemed to make, effective upon the
acceptance of any assignment of an interest hereunder or the entering into
of any participation agreement contemplated in subsection 9.1.2, the
representations and warranties set forth in subsection 9.23.1 or, with
respect to General Account Assets used to acquire its interest or
participation, subsection 9.23.2. Such deemed representation shall be
effective against, and binding on, such Transferee to the same extent as if
such Transferee had executed an original counterpart of this Agreement.
9.23.4. Additional ERISA Representations. Each Lender that
now or hereafter makes or maintains any Loan with any assets of any Plan
(i) represents and warrants that it has evaluated for itself the merits of
making or maintaining such Loan; has not solicited and has not received
from the Company, MS Group or any of their Affiliates, any evaluation or
other investment advice on any basis in respect of the advisability of
making or maintaining such Loan; and is not relying and has
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not relied on the Company, MS Group or any of their Affiliates for any
investment advice with respect to making or maintaining such Loan in any
manner that would cause the Company, MS Group or any of their Affiliates to
become a "party in interest" (within the meaning of ERISA) or a
"disqualified person" (within the meaning of the Internal Revenue Code) in
connection with making or maintaining such Loan and (ii) acknowledges and
confirms that none of the Company, MS Group or any of their Affiliates is
acting as a "fiduciary" (within the meaning of ERISA, the Internal Revenue
Code or any other applicable law or any rulings or regulations thereunder)
for such Lender in connection with making or maintaining such Loan.
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WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written above.
BORROWER:
FORT HOWARD CORPORATION
By: /s/ R. Michael Lempke
Print Name: R. Michael Lempke
Title: Vice President and
Treasurer
Notice Address:
Fort Howard Corporation
1919 South Broadway
Green Bay, Wisconsin 54304
Attention:
Telephone:
Telecopier:
BANKERS TRUST COMPANY,
Individually, and as Arranger
and Administrative Agent
By: /s/ Mary Kay Coyle
Print Name: Mary Kay Coyle
Title: Vice President
Notice Address:
Bankers Trust Company
One Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Attention: Mary Kay Coyle
Telephone: (212) 250-9094
Telecopier: (212) 250-7218
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
Individually, and as Arranger
By: /s/ Barry R. Dunn
Print Name: Barry R. Dunn
Title: Vice President
Notice Address:
Bank of America National Trust
and Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Barry Dunn
Telephone: (312) 828-3023
Telecopier: (312) 828-3864
CHEMICAL BANK,
Individually, and as Arranger
By: /s/ C. C. Wardell
Print Name: C. C. Wardell
Title: Managing Director
CHRISTIANA BANK OG KREDITKASSE,
Lender
By: /s/ Carl P. Svendsen
Print Name: Carl P. Svendsen
Title: First Vice President
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE,
Lender
By: /s/ Brian O'Leary, Sean Mounier
Print Name: Brian O'Leary, Sean Mounier
Title: Vice President, First Vice
President
CREDIT SUISSE,
Lender
By: /s/ Charles R. Shaw
Print Name: Charles R. Shaw
Title: Member of Senior Management
By: /s/ Lynn Allegaert
Print Name: Lynn Allegaert
Title: Member of Senior Management
CRESCENT/MACH 1 PARTNERS, L.P.
By its attorney-in fact
CRESCENT CAPITAL CORPORATION
By: /s/ J. Driscoll
Print Name: J. Driscoll
Title: Vice President
THE DAI-ICHI KANGYO BANK,
LTD., Chicago Branch,
Lender
By: /s/ Masami Tsuboi
Print Name: Masami Tsuboi
Title: Vice President
DRESDNER BANK AG,
Chicago & Grand Cayman Branches,
Lender
By: /s/ John H. Schaus
Print Name: John H. Schaus
Title: First Vice President
By: /s/ E. Ronald Holder
Print Name: E. Ronald Holder
Title: Senior Vice President
THE FIRST NATIONAL BANK OF
CHICAGO,
Lender
By: /s/ Jerry Kane
Print Name: Jerry Kane
Title: Senior Vice President
FIRSTRUST BANK,
Lender
By: /s/ Edward D'Ancona
Print Name: Edward D'Ancona
Title: Vice President
THE HOKKAIDO TAKUSHOKU BANK, LTD.,
Lender
By: /s/ Kathleen M. Sweeney
Print Name: Kathleen M. Sweeney
Title: Senior Vice President and
Manager
THE LONG TERM CREDIT BANK OF
JAPAN, LTD.,
Lender
By: Richard E. Stahl
Print Name: Richard E. Stahl
Title: Senior Vice President and
Joint General Manager
MERRILL LYNCH SENIOR FLOATING
RATE FUND, INC.
By: /s/ R. Douglas Henderson
Print Name: R. Douglas Henderson
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO,
INC.
By: /s/ R. Douglas Henderson
Print Name: R. Douglas Henderson
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO
II, INC.
By: /s/ R. Douglas Henderson
Print Name: R. Douglas Henderson
Title: Authorized Signatory
SENIOR STRATEGIC INCOME FUND,
INC.
By: /s/ R. Douglas Henderson
Print Name: R. Douglas Henderson
Title: Authorized Signatory
THE MITSUBISHI BANK, LTD.
Lender
By: /s/ Hiroaki Fuchida
Print Name: Hiroaki Fuchida
Title: Vice President, Manager
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK,
Lender
By: /s/ David Common
Print Name: David Common
Title: Vice President
NATIONSBANK, N.A. (CAROLINAS),
Lender
By: /s/ Michael O. Lincoln
Print Name: Michael O. Lincoln
Title: Senior Vice President
THE NIPPON CREDIT BANK, LTD.,
Lender
By: /s/ Yasuhide Yahiro
Print Name: Yasuhide Yahiro
Title: Assistant Vice President
ORIX USA CORPORATION
Lender
By: /s/ Masaaki Tashiro
Print Name: Masaaki Tashiro
Title: Deputy President
PILGRIM PRIME RATE TRUST,
Lender
By: /s/ Michael D. Hatley
Print Name: Michael D. Hatley
Title: Assistant Portfolio Manager
PRIME INCOME TRUST,
Lender
By: /s/ Rajesh K. Gupta
Print Name: Rajesh K. Gupta
Title: Senior Vice President
SENIOR DEBT PORTFOLIO,
By: Boston Management and
Research, as Investment
Advisor
By: /s/ Barbara Campbell
Print Name: Barbara Campbell
Title: Assistant Treasurer
SOCIETE GENERALE,
Lender
By: /s/ Seth F. Asofsky
Print Name: Seth F. Asofsky
Title: Vice President
TORONTO-DOMINION BANK,
Lender
By: /s/ Kimberly Burleson
Print Name: Kimberly Burleson
Title: Mgr. or Admin.
UNION BANK OF FINLAND, LTD.,
Grand Cayman Branch
Lender
By: /s/ Pentti Mansukoski
Print Name: Pentti Mansukoski
Title: Senior Vice President
By: /s/ Eric I. Mann
Print Name: Eric I. Mann
Title: Vice President
VAN KAMPEN MERRITT PRIME RATE
INCOME TRUST,
Lender
By: /s/ Jeffrey W. Maillet
Print Name: Jeffrey W. Maillet
Title: Vice President and
Portfolio Manager
WELLS FARGO BANK,
Lender
By: /s/ Kathleen J. Harrison
Print Name: Kathleen J. Harrison
Title: Vice President