EXHIBIT 4.1
$60,000,000
RECEIVABLES CREDIT AGREEMENT
Dated as of
March 8, 1995,
among
FORT HOWARD CORPORATION
and
BANKERS TRUST COMPANY,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
and
CHEMICAL BANK,
as Lenders,
and
BANKERS TRUST COMPANY,
as Administrative Agent
FORT HOWARD CORPORATION
RECEIVABLES CREDIT AGREEMENT
dated as of March 8, 1995
TABLE OF CONTENTS
Heading Page
INTRODUCTION................................ 1
RECITALS.................................... 1
ARTICLE I DEFINITIONS................................. 1
Section 1.1 Certain Defined Terms....................... 1
Section 1.2 Accounting Terms............................ 37
Section 1.3 Other Definitional Provisions;
Anniversaries............................ 37
Section 1.4 Adjustment for Special Reserve.............. 37
Section 1.5 Currency Equivalent Generally............... 37
ARTICLE II COMMITMENTS AND LOANS; NOTES............... 38
Section 2.1 Loans and Notes............................. 38
2.1.1 Loan Commitments............................ 38
2.1.2 Notice of Borrowing......................... 38
2.1.3 Disbursement of Funds....................... 39
2.1.4 Notes....................................... 40
2.1.5 Maturity Date............................... 40
Section 2.2 Total Loan Commitment;
Limitations on Outstanding
Loan Amounts.............................. 40
Section 2.3 Interest on the Loans....................... 40
2.3.1 Rate of Interest............................ 40
2.3.2 Interest Periods............................ 43
2.3.3 Interest Payments........................... 44
2.3.4 Conversion or Continuation.................. 45
2.3.5 Post-Maturity Interest...................... 46
2.3.6 Computation of Interest..................... 46
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Heading Page
Section 2.4 Commissions................................. 46
2.4.1 Commitment Commissions...................... 46
2.4.2 Bankers and Lenders' Commissions............ 47
2.4.3 No Refund of Fees........................... 47
Section 2.5 Prepayments and Payments.................... 47
2.5.1 Voluntary Prepayments....................... 47
2.5.2 Mandatory Prepayments....................... 47
2.5.3 Company's Mandatory Prepayment
Obligation; Application of
Prepayments.............................. 48
2.5.4 Manner and Time of Payment.................. 48
2.5.5 Apportionment of Payments................... 48
2.5.6 Payments on Non-Business Days............... 49
2.5.7 Payment Accounts; Notation of
Payment.................................. 49
Section 2.6 Use of Proceeds............................. 50
2.6.1 The Loans................................... 50
2.6.2 Margin Regulations.......................... 50
Section 2.7 Special Provisions Governing
Adjusted LIBOR Loans..................... 50
2.7.1 Determination of Interest Rate.............. 50
2.7.2 Increased Costs............................. 50
2.7.3 Required Termination and
Prepayment............................... 52
2.7.4 Options of Company.......................... 52
2.7.5 Compensation................................ 53
2.7.6 Quotation of LIBOR.......................... 54
2.7.7 Taxes....................................... 54
2.7.8 Booking of Adjusted LIBOR Loans............. 58
2.7.9 Assumptions Concerning Funding of
Adjusted LIBOR Loans..................... 58
2.7.10 Adjusted LIBOR Loans After an
Event of Default......................... 58
2.7.11 Affected Lender's Obligation to
Mitigate................................. 59
Section 2.8 Capital Requirements........................ 59
Section 2.9 Replacement Rights of Company............... 60
ARTICLE III CONDITIONS TO LOANS......................... 60
Section 3.1 Conditions to Effectiveness of
Agreement................................ 61
Section 3.2 Conditions to the Loans..................... 64
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Heading Page
ARTICLE IV REPRESENTATIONS AND WARRANTIES............. 65
Section 4.1 Organization, Powers, Good
Standing, Business and
Subsidiaries............................. 65
4.1.1 Organization and Powers..................... 65
4.1.2 Good Standing............................... 65
4.1.3 Conduct of Business......................... 66
4.1.4 Subsidiaries................................ 66
Section 4.2 Authorization of Borrowing, etc............. 66
4.2.1 Authorization of Borrowing.................. 66
4.2.2 No Conflict................................. 66
4.2.3 Governmental Consents....................... 67
4.2.4 Binding Obligation.......................... 67
4.2.5 Valid Issuance of Common Stock.............. 67
Section 4.3 Financial Condition......................... 67
Section 4.4 No Adverse Material Change; No
Stock Payments........................... 68
Section 4.5 Title to Properties; Liens.................. 68
Section 4.6 Litigation; Adverse Facts................... 69
Section 4.7 Payment of Taxes............................ 69
Section 4.8 Performance of Agreements................... 69
Section 4.9 Governmental Regulation..................... 70
Section 4.10 Securities Activities....................... 70
Section 4.11 Employee Benefit Plans...................... 70
Section 4.12 Certain Fees................................ 71
Section 4.13 Disclosure.................................. 71
Section 4.14 Patents, Trademarks, etc.................... 72
Section 4.15 Environmental Protection.................... 73
Section 4.16 Security Interests.......................... 74
Section 4.17 Solvency.................................... 74
ARTICLE V AFFIRMATIVE COVENANTS....................... 75
Section 5.1 Financial Statements and Other
Reports.................................. 75
Section 5.2 Corporate Existence, etc.................... 82
Section 5.3 Payment of Taxes and Claims; Tax
Consolidation............................ 82
Section 5.4 Maintenance of Properties;
Insurance................................ 83
Section 5.5 Inspection.................................. 83
Section 5.6 No Further Negative Pledges................. 84
Section 5.7 Compliance with Laws, etc................... 84
Section 5.8 Lender Meeting.............................. 85
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Heading Page
Section 5.9 Security Interests.......................... 85
Section 5.10 Certain Dispositions of
Collateral............................... 85
Section 5.11 Recapitalization............................ 86
Section 5.12 Collateral Reporting........................ 86
Section 5.13 Cash Collateral............................. 87
ARTICLE VI NEGATIVE COVENANTS.......................... 88
Section 6.1 Indebtedness................................ 88
Section 6.2 Liens....................................... 91
Section 6.3 Investments; Joint Ventures................. 93
Section 6.4 Contingent Obligations...................... 97
Section 6.5 Restricted Junior Payments.................. 98
Section 6.6 Financial Covenants......................... 100
6.6.1 Interest Coverage Ratio..................... 100
6.6.2 Maximum Leverage Ratio...................... 100
Section 6.7 Restriction on Fundamental
Changes.................................. 101
Section 6.8 ERISA....................................... 103
Section 6.9 Restriction on Leases....................... 103
Section 6.10 Sales and Leasebacks........................ 104
Section 6.11 Sale or Discount of Receivables............. 104
Section 6.12 Transactions with Shareholders
and Affiliates........................... 105
Section 6.13 Disposal of Subsidiary Stock................ 105
Section 6.14 Limitation on Capital
Expenditures............................. 106
Section 6.15 Conduct of Business......................... 108
Section 6.16 Amendments or Waivers of Certain
Documents; Prepayments of
Indebtedness............................. 108
Section 6.17 Payment of Cash Interest on
Subordinated Debt........................ 110
ARTICLE VII EVENTS OF DEFAULT........................... 111
Section 7.1 Failure To Make Payments When Due........... 111
Section 7.2 Default in Other Agreements................. 111
Section 7.3 Breach of Certain Covenants................. 111
Section 7.4 Breach of Warranty.......................... 112
Section 7.5 Other Defaults Under Agreement or
Loan Documents........................... 112
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Heading Page
Section 7.6 Involuntary Bankruptcy;
Appointment of Receiver, etc............. 112
Section 7.7 Voluntary Bankruptcy; Appointment
of Receiver, etc......................... 113
Section 7.8 Judgments and Attachments................... 113
Section 7.9 Dissolution................................. 114
Section 7.10 Unfunded ERISA Liabilities.................. 114
Section 7.11 Withdrawal Liability Under
Multiemployer Plan....................... 114
Section 7.12 Failure of Security......................... 115
Section 7.13 Change in Control........................... 115
ARTICLE VIII THE ADMINISTRATIVE AGENT.................... 116
Section 8.1 Appointment................................. 116
Section 8.2 Powers; General Immunity.................... 117
8.2.1 Duties Specified............................ 117
8.2.2 No Responsibility for Certain
Matters.................................. 117
8.2.3 Exculpatory Provisions...................... 118
8.2.4 Administrative Agent Entitled to
Act as Lender............................ 118
Section 8.3 Representations and Warranties;
No Responsibility for Appraisal
of Creditworthiness...................... 119
Section 8.4 Right to Indemnity.......................... 119
Section 8.5 Registered Holder of Note Treated
as Owner................................. 120
Section 8.6 Resignation by Administrative
Agent.................................... 120
Section 8.7 Collateral Documents........................ 120
Section 8.8 Successor Administrative Agent.............. 121
ARTICLE IX MISCELLANEOUS............................... 121
Section 9.1 Successors and Assigns;
Participations........................... 121
Section 9.2 Expenses.................................... 126
Section 9.3 Indemnity................................... 127
Section 9.4 Set Off..................................... 127
Section 9.5 Ratable Sharing............................. 128
Section 9.6 Amendments and Waivers...................... 129
Section 9.7 Independence of Covenants................... 130
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Heading Page
Section 9.8 Change in Accounting Principles;
Fiscal Year or Tax Laws.................. 130
Section 9.9 Notices..................................... 131
Section 9.10 Survival of Warranties and
Certain Agreements....................... 131
Section 9.11 Failure or Indulgence Not Waiver;
Remedies Cumulative...................... 131
Section 9.12 Severability................................ 132
Section 9.13 Obligations Several; Independent
Nature of the Lenders' Rights............ 132
Section 9.14 Headings.................................... 132
Section 9.15 Applicable Law.............................. 132
Section 9.16 Consent to Jurisdiction and
Service of Process....................... 132
Section 9.17 Confidentiality............................. 133
Section 9.18 Counterparts; Effectiveness................. 133
Section 9.19 Determinations Pursuant to
Collateral Documents..................... 134
Section 9.20 Certain Obligations of Company.............. 134
Section 9.21 Waiver of Jury Trial........................ 134
Section 9.22 Lenders' ERISA Matters...................... 134
9.22.1 Lenders' Representations and
Warranties............................... 134
9.22.2 General Account Assets...................... 135
9.22.3 Representations of Transferees.............. 136
9.22.4 Additional ERISA Representations............ 136
SIGNATURE PAGES ............................................ 138
SCHEDULES
A SUBSIDIARIES
B LENDERS' COMMITMENTS
C EXISTING INDEBTEDNESS
D EXISTING LIENS
E EXISTING INVESTMENTS
F CREDIT FACILITIES TO BE TERMINATED ON THE CLOSING
DATE
G CONTINGENT OBLIGATIONS
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTE
IV FORM OF COMPLIANCE CERTIFICATE
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V FORM OF OPINION OF SHEARMAN & STERLING, COUNSEL TO
FORT HOWARD
VI FORM OF OPINION OF JAMES W. NELLEN, II, ESQ.,
COUNSEL TO FORT HOWARD
VII FORM OF OPINION OF LOCAL COUNSEL TO FORT HOWARD
VIII FORM OF OFFICER'S CLOSING CERTIFICATE
IX FORM OF COMPANY RECEIVABLES PLEDGE AGREEMENT
X FORM OF REGISTERED TRANSFER SUPPLEMENT
XI FORM OF LETTER ESCROW AND SECURITY AGREEMENT
XII FORM OF OFFICER'S FUNDING DATE CERTIFICATE
XIII FORM OF OFFICER'S SECTION 5.1(iv) CERTIFICATE
XIV FORM OF OFFICER'S SECTION 5.1(xiv) CERTIFICATE
XV FORM OF STATUS CERTIFICATE
XVI FORM OF BORROWING BASE CERTIFICATE
XVII FORM OF CASH COLLATERAL AGREEMENT
XVIII FAIR VALUE DETERMINATION PROCEDURES
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RECEIVABLES CREDIT AGREEMENT
RECEIVABLES CREDIT AGREEMENT, dated as of March 8,
1995, by and among FORT HOWARD CORPORATION, a Delaware
corporation (the "Company"), BANKERS TRUST COMPANY ("Bankers"),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOA")
and CHEMICAL BANK, as lenders (each, together with its
successors and assigns, a "Lender"), 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, the Company to borrow on a term basis the Loans
(as hereinafter defined) in an aggregate principal amount not
to exceed $60,000,000.
B. The Lenders desire that the Obligations (as
hereinafter defined) be secured by a security interest in
certain Receivables (as hereinafter defined) owned by the
Company.
A G R E E M E N T:
The Company, the Lenders and the Administrative Agent
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 Loan" means any Loan bearing interest at a rate
determined by reference to ABR in accordance with the
provisions of subsection 2.3.1.
"ABR Spread" means the percent per annum from time to
time in effect pursuant to paragraph (d) of subsection 2.3.1.
"Adjusted Consolidated Net Income" means, for any
period, Consolidated Net Income during such period, plus
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(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 Loan bearing interest
at a rate determined by reference to Adjusted LIBOR in
accordance with the provisions of subsection 2.3.1.
"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 2.7.2 or subsection 2.7.3.
"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.
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"Agreement" means this receivables credit agreement
as from time to time in effect.
"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
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
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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.
"Applicable Category" means, at any date of
determination thereof, the category in the table appearing in
paragraph (d) of subsection 2.3.1 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.
"Arrangers" has the meaning assigned to such term in
the Senior Credit Agreement as in effect on the date hereof.
"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" has the meaning assigned to such term in
the Senior Credit as in effect on the date hereof.
"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.
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"Board" means the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" means the borrowing of Loans hereunder.
"Borrowing Base" means, as at any time, an amount
equal to (i) the aggregate amount of Eligible Receivables (as
reflected in the most recent Borrowing Base Certificate
delivered to the Administrative Agent, pursuant to
Section 5.12, prior to such time), minus (ii) 25% of such
aggregate amount, minus (iii) the Permitted Lien Deduction
Amount, minus (iv) the Additional Reserve, if any, as at such
time. As used herein, "Additional Reserve" means, as at any
time, an amount that, (x) on the basis of any increase (as
compared to the historical levels as of the Closing Date)
(other than a de minimis increase) in the aggregate amounts or
ratios of defaulting or delinquent Receivables, dilutions or
liabilities of the Company to its customers that may be
asserted against the Receivables or any other change (other
than a de minimis change) in the characteristics of Receivables
or Eligible Receivables or the speed of collections or similar
applicable circumstances deemed relevant by the Administrative
Agent in its reasonable judgment, the Administrative Agent has
determined (after giving effect to the deduction referred to in
clause (ii) above, the deductions referred to in the definition
of "Eligible Receivable" and the amount then on deposit,
pursuant to Section 5.13, in the Cash Collateral Account) is
required to be deducted from the Borrowing Base as at such time
in order to insure that the collections received from time to
time shall suffice for the payment hereunder in a timely
fashion of the principal of and interest on the Loans and all
other amounts then or within the following month due hereunder.
"Borrowing Base Certificate" means the certificates
of the Company concerning the Company's Borrowing Base, which
certificate shall be substantially in the form of Exhibit XVI
annexed hereto, with such changes and schedules attached
thereto as the Administrative Agent may from time to time
reasonably require.
"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
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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.
"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 such Person.
"Cash" means money, currency or a credit balance in a
Deposit Account.
"Cash Collateral Account" means that certain cash
collateral account of the Company established and maintained
pursuant to the Cash Collateral Agreement.
"Cash Collateral Agreement" means the Cash Collateral
Agreement substantially in the form of Exhibit XVII annexed
hereto, executed and delivered by the Company, as such
agreement may be amended, supplemented or otherwise modified
from time to time in accordance herewith or therewith.
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"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
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 shall take possession of the obligations
subject to such arrangement.
"Cash Release Request" has the meaning assigned to
that term in Section 5.13 of this Agreement.
"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.
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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"), 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 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 "Closing Date" as such term
is defined in the Senior Credit Agreement as in effect on the
date hereof.
"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.
"Collateral" means, as of any date of determination,
the Receivables and all other property encumbered by the
Collateral Documents.
"Collateral Agent" means the Administrative Agent or
such other Person that is the collateral agent pursuant to the
Collateral Documents.
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"Collateral Documents" means the Pledge Agreements
and all other instruments or documents delivered by the Company
in order to grant Liens on any Collateral, as amended,
supplemented or otherwise modified from time to time in
accordance herewith and therewith.
"Collections" means all Cash, funds, checks, notes,
instruments and any other form of remittance tendered by
account debtors in payment of Receivables.
"Commitment" means, with respect to each Lender, the
commitment of such Lender to make the Loans hereunder in a
maximum aggregate amount set forth opposite such Lender's name
in Schedule B annexed hereto under the heading "Commitments" as
such maximum amount may be reduced pursuant to subsection 9.1.3
by such Lender entering into a Registered Transfer Supplement.
"Commitment Fee Letter" means the fee letter
agreement dated January 31, 1995 among the Company and the
Arrangers, as such agreement is in effect on the Closing Date
and as thereafter amended, supplemented or otherwise modified
from time to time.
"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.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit IV annexed hereto
delivered to the Lenders by the Company pursuant to clause (B)
of subparagraph (iv) of Section 5.1.
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"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
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 (ix) or clause (x) 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), 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
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Rate Agreements for such period, but excluding, however, in the
case of clause (A), interest expense not payable in cash
(including amortization of discount), any amounts referred to
in Section 2.4 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) 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.
"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
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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.
"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.
"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
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Company or any of its Subsidiaries against fluctuations in
currency values.
"Deficiency Amount" has the meaning assigned to that
term in Section 5.13.
"Deficiency Notice" has the meaning assigned to that
term in Section 5.13.
"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.
"Discretionary Excess Cash Flow Deduction Amount" has
the meaning assigned to such term in the Senior Credit
Agreement as in effect on the date hereof.
"Discretionary Excess Cash Flow Balance" has the
meaning assigned to such term in the Senior Credit Agreement as
in effect on the date hereof.
"Discretionary Equity Proceeds Balance" has the
meaning assigned to such term in the Senior Credit Agreement as
in effect on the date hereof.
"Discretionary Voluntary Prepayment" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"Dollars" or the sign "$" means the lawful money of
the United States of America.
"Domestic Capex Maximum" has the meaning assigned to
that 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.
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"Eligible Receivables" means each Receivable of the
Company except a Receivable:
(i) to which the Company does not have sole legal
and beneficial ownership;
(ii) which arises out of a sale made by the Company
to a Subsidiary;
(iii) (a) which is unpaid more than 90 days from the
date of invoice or (b) which has been written off the
books of the Company or has been otherwise designated by
the Company as uncollectible;
(iv) which is from an account debtor or an Affiliate
of such account debtor that has a Receivable excluded
under clause (iii) above and fifty percent (50%) or more
of all Receivables from such account debtor and such of
its Affiliates are ineligible under clause (iii);
(v) as to which the account debtor for such
Receivable is a creditor of the Company, has or has
asserted a right of setoff, has disputed its liability or
made any claim with respect to the Receivable or any other
Receivable which has not been resolved, in which case such
Receivable shall be deemed not to be an Eligible
Receivable but only to the extent of the amount owed by
the Company to the account debtor, the amount of such
actual or asserted right of setoff, or the amount of such
dispute or claim, as the case may be;
(vi) as to which the account debtor is (or its assets
are) the subject of an Insolvency Event;
(vii) which is not payable in Dollars or as to which
the account debtor for the Receivable is either not
organized under the laws of the United States of America
or any State thereof or is located outside or has its
principal place of business or substantially all of its
assets outside the continental United States, except to
the extent such Receivable is supported by an irrevocable
letter of credit reasonably satisfactory to the
Administrative Agent (as to form, substance and issuer)
and in the possession of the Administrative Agent;
(viii) as to which the sale to the account debtor is on
a bill-and-hold, guaranteed sale, sale-and-return,
ship-and-return, sale on approval or consignment or other
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similar basis or made pursuant to any other written
agreement providing for repurchase or return of any
merchandise which has been claimed to be defective or
otherwise unsatisfactory, other than sales made in the
ordinary course of the Company's business containing
customary terms for the return of defective or
non-conforming goods;
(ix) the account debtor is the United States of
America or any department, agency or instrumentality
thereof, unless the Company duly assigns its rights to
payment of such Receivable to the Administrative Agent
pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. {{ 3727 et seq.), which assignment and
related documents and filings shall be in form and
substance reasonably satisfactory to the Administrative
Agent;
(x) which does not comply with all requirements of
law, including, without limitation, the Federal Consumer
Credit Protection Act, the Federal Truth in Lending Act
and Regulation Z of the Board of Governors of the Federal
Reserve System;
(xi) as to which there shall have attached any Lien
(whether or not such Lien may be permitted to exist under
the provisions of the Company Receivables Pledge
Agreement) other than the Lien granted pursuant to the
Company Receivables Pledge Agreement; or
(xii) (a) as to which either the perfection,
enforceability or validity of the Administrative Agent's
security interest or the Lenders' right or ability to
receive direct payments is governed by any federal or
state statutory requirement other than those of (x) the
statute referred to in clause (ix) above or (y) the UCC,
or (b) which is not subject to a valid and perfected Lien
in favor of the Administrative Agent for the benefit of
the Lenders having the priority required by Section 4(a)
of the Receivables Pledge Agreement.
"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
-16-
threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the
environment (including, without limitation, ambient air,
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.
"Event of Default" means each of the events set forth
in ARTICLE VII.
"Excess Cash Flow" has the meaning assigned to such
term in the Senior Credit Agreement as in effect on the date
hereof.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor statute.
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"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 Expansion Equipment" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"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 Lease" has the meaning assigned to such
term in the Senior Credit Agreement as in effect on the date
hereof.
"Expansion Project" has the meaning assigned to such
term in the Senior Credit Agreement as in effect on the date
hereof.
"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 XVIII 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
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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.
"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.
"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
of the Loans, which Business Day shall not be later than 45
days after the Closing 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
-19-
forth in Section 6.6 shall be calculated in accordance with
GAAP as in effect on the Closing Date.
"General Account Assets" means the assets allocated
to the general account of an insurance company subject to state
regulation.
"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" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"Guarantor Subsidiary" has the meaning assigned to
such term in the Senior Credit Agreement as in effect on the
date hereof.
"Guarantor Subsidiary Guarantee" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"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
-20-
whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that
Person.
"Indemnitees" 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 to
the date of the signing of this Agreement.
"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.
"Insolvency Event" means, with respect to any Person,
the occurrence of any of the following: (a) a voluntary or
involuntary petition for bankruptcy or other relief involving
that Person, its assets or its liabilities under the Bankruptcy
Code or any similar statute, (b) an assignment of its assets
for the benefit of creditors, (c) its failure, suspension of
business operations, or insolvency, (d) appointment of a
receiver or trustee for it or a substantial portion of its
assets, or (e) general failure to pay its debts as they become
due.
"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 a
Loan, if it is an 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
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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
2.3.2.
"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.
"Investment", as applied to any Person (the
"Investor"), means any direct or indirect purchase or other
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 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, 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
-22-
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
and then only to the extent of such increase.
"Investment Grade Ratings" has the meaning assigned
to that term in subsection 2.3.1.
"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
which such corporation is a Subsidiary, be considered to be a
Joint Venture to which such Person is a party.
"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.
"Letter of Credit" has the meaning assigned to such
term in the Senior Credit Agreement as in effect on the date
hereof.
"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.
"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
-23-
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 the percent per annum from time
to time in effect pursuant to paragraph (d) of subsection
2.3.1.
"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 the loans made by the Lenders
to the Company pursuant to Section 2.1.1. Each Loan shall be
either an Adjusted LIBOR Loan or an ABR Loan.
"Loan Documents" means this Agreement, the Notes and
the Collateral Documents.
"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 (xiii) 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
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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 Subsidiary" means each Subsidiary of the
Company or its successors now existing or hereafter acquired or
formed by the Company or such successors 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.
"Maturity Date" means the seventh anniversary of the
Closing Date.
"Moody's" means Moody's Investors Service, Inc.,
together with any successor thereto that issues ratings of
corporate securities.
"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.
"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.
"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
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amended, supplemented or otherwise modified from time to time
in accordance herewith or 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.
"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-U.S. Person" has the meaning assigned to that
term in paragraph (e) of subsection 2.7.7.
"Notes" means one or more of the promissory notes of
the Company issued in registered form in respect of the Loans
pursuant to subsection 2.1.4 or issued in registered form as
replacement notes in connection with an assignment made
pursuant to this Agreement and, in each case, substantially in
the form of Exhibit III annexed hereto, as the same may be
modified, endorsed or amended from time to time.
"Notice of Borrowing" means a notice substantially in
the form of Exhibit I annexed hereto with respect to the
proposed Borrowing.
"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 from time to time owed to the Administrative
Agent or the Lenders or any of them under the Loan Documents.
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"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 the 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 2.7.7.
"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 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
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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;
(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
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(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" has the
meaning assigned to such term in the Senior Credit Agreement as
in effect on the date hereof.
"Permitted Expansion Financing" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"Permitted Lien Deduction Amount" means, at any time,
the aggregate amount of Liens (other than the Lien of the Cash
Collateral Agreement) that are permitted to encumber the Cash
Collateral Account pursuant to Section 8 of the Cash Collateral
Agreement (but only to the extent such Liens do not also
encumber the Receivables).
"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 Internal Revenue Code) which is subject to Section 4975 of
the Internal Revenue Code.
"Pledge Agreements" means the Receivables Pledge
Agreement and the Cash Collateral Agreement.
"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
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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.
"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.
"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.
"Projections" has the meaning assigned to such term
in subsection 3.1.11.
"Proportionate Share" of a Lender means a fraction,
expressed as a decimal, obtained by dividing its Commitment by
the Total Loan Commitment.
"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" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
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"Qualified Interest Rate Agreement" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"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.
"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 Senior Credit Agreement and any additional
documentation required pursuant to the Senior Credit Agreement
and the consummation of the transactions contemplated
thereunder and (E) the execution and delivery of this Agreement
and the Loan Documents and the consummation of the transactions
contemplated hereunder and thereunder.
"Receivables" means all of the Company's rights to
payment for goods sold or leased or services performed by the
Company 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 with
(1) all security pledged, assigned, hypothecated or granted to
or held by the Company to secure the foregoing, (2) general
intangibles arising out of the Company'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 Pledge Agreement" means the Company
Receivables Pledge Agreement substantially in the form of
Exhibit IX annexed hereto executed and delivered by the
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Company, as such agreement may be amended, supplemented or
otherwise modified from time to time in accordance herewith and
therewith.
"Receivables Transaction" has the meaning assigned to
such term in the Senior Credit Agreement as in effect on the
date hereof.
"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
"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
Section 5.10.
"Release Condition" has the meaning assigned to that
term in Section 5.10.
"Release Notice" has the meaning assigned to that
term in Section 5.10.
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"Release Transaction" has the meaning assigned to
that term in Section 5.10.
"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 Commitment of such Lender as of
such date and (B) the denominator is the Total Loan Commitment
as of such date.
"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 Loan Commitment" shall have the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"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.
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"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" has the
meaning assigned to such term in the Senior Credit Agreement as
in effect on the date hereof.
"Second Expansion Project" has the meaning assigned
to that term in subsection 6.14.4.
"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.
"Senior Credit Agreement" means that certain Credit
Agreement, dated as of the date hereof, among the Company, the
lenders identified therein and Bankers, BOA and Chemical Bank,
as arrangers and Bankers as administrative agent.
"Senior Lenders" means the lenders from time to time
party to the Senior Credit Agreement.
"Senior Loans" means the loans made by the lenders to
the Company pursuant to the Senior Credit Agreement.
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"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) Indebtedness of the type described in clause (B) of the
definition of Indebtedness, (B) the Indebtedness described in
subparagraph (vii) and subparagraph (x) of Section 6.1, (C) 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 (D) 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 (D)
of the preceding sentence, any Contingent Obligation.
"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.
"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.
"S&P" means Standard & Poor's Corporation, together
with any successor that issues ratings of corporate securities.
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"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.
"Status Certificate" has the meaning assigned to that
term in paragraph (e) of subsection 2.7.7.
"Stockholders Agreement" means one or more
Stockholders Agreements substantially in the form delivered to
the Lenders (draft 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
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.
"Taxes" has the meaning assigned to that term in
paragraph (a) of subsection 2.7.7.
"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.
"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
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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.
"Total Loan Commitment" has the meaning assigned to
that term in Section 2.2.
"Tranche B Term Loans" has the meaning assigned to
such term in the Senior Credit Agreement as in effect on the
date hereof.
"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.
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"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 Financings" has the meaning
assigned to such term in the Senior Credit Agreement as in
effect on the date hereof.
"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 Loans and Notes.
2.1.1. Loan Commitments. Subject to the terms and
conditions of this Agreement and in reliance upon the
representations and warranties of the Company set forth herein
and in each of the other Loan Documents, on the Funding Date,
each Lender having a Commitment hereby severally agrees to lend
the Company an aggregate amount not exceeding its Commitment.
The aggregate amount of the Commitments is $60,000,000. Each
Lender's Commitment shall expire on the Funding Date if the
Loans are borrowed on the Funding Date but, in any event, not
later than 5:00 P.M. (New York time) on the date 45 days after
the Closing Date. The Loans under this Agreement shall be made
by the Lenders simultaneously and proportionately to their
Commitments, it being understood that no Lender shall be
responsible for any default by any other Lender in such other
Lender's obligation to make the Loans hereunder nor shall the
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 the Loans hereunder. The Loans made on the
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Funding Date shall be made in an aggregate amount of
$60,000,000.
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 Borrowing to be made on the Funding Date. Such
Notice of Borrowing shall be irrevocable and shall specify (A)
the date on which the Loans are to be made (which shall be the
same Business Day for all Loans made hereunder) and (B) whether
such Loans will be based on Adjusted LIBOR or ABR. In the
event that such Borrowing shall consist, in whole or in part,
of Adjusted LIBOR Loans, such Notice of Borrowing shall be
received by the Administrative Agent no later than 2:00 p.m.
(New York time), at least three Business Days in advance of the
Funding Date. In the event that such Borrowing shall consist
solely of ABR Loans, 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 Funding
Date.
2.1.3. Disbursement of Funds. (a) Promptly after
receipt of the Notice of Borrowing pursuant to subsection
2.l.2, the Administrative Agent shall notify each Lender of the
proposed Borrowing. Arrangements may be made satisfactory to
the Company, the Administrative Agent and each Lender whereby
an amount equal to the aggregate amount of the Loans to be
borrowed on the Funding Date may be placed in escrow to
facilitate the making of the Loans on the Funding Date;
provided that in any event each Lender shall have made
arrangements satisfactory to the Company, the Administrative
Agent and such Lender whereby the funds for the Loans made on
the Funding Date shall be made available by the Lenders to the
Administrative Agent, not later than 1:00 P.M. (New York time)
on the Funding Date. Upon satisfaction or waiver of the
conditions precedent specified in Section 3.2, the
Administrative Agent shall make the proceeds of the Loans
available to the Company on the 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 the Loans will be borrowed in New York, New York.
(b) Unless the Administrative Agent shall have been
notified by any Lender prior to the Funding Date that such
Lender does not intend to make available to the Administrative
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Agent the amount of funds necessary to satisfy such Lender's
obligations under subsection 2.1.1 on the Funding Date, the
Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on the 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 the 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 the date of borrowing of the 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 Commitment 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. Notes. As of the Funding Date, the Company
will have executed and delivered to each Lender, as applicable
(or to the Administrative Agent for that Lender), a Note
substantially in the form of Exhibit III annexed hereto, to
evidence such Lender's Loans, in the principal amount of such
Lender's Commitment, with other appropriate insertions.
2.1.5. Maturity Date. Any prepayment of the Loans
may not be reborrowed. The Loans and all other amounts owed
hereunder with respect to the Loans shall be paid in full no
later than the Maturity Date.
Section 2.2 Total Loan Commitment; Limitations on
Outstanding Loan Amounts. The aggregate amount of the
Commitments of all the Lenders hereunder as in effect at any
time is herein called the "Total Loan Commitment" at such time.
The Total Loan Commitment as of the Closing Date is
$60,000,000. Anything contained in this Agreement to the
contrary notwithstanding, in no event shall the aggregate
principal amount of the Loans made by a Lender exceed such
Lender's Proportionate Share of the Total Loan Commitment.
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Section 2.3 Interest on the Loans.
2.3.1. 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 the Loans shall be selected by the Company at the
time the Notice of Borrowing is given pursuant to sub-
section 2.1.2. If on any day a Loan is outstanding in respect
of 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 such Loan shall bear interest determined by reference to
ABR.
(b) If a Loan is an ABR Loan, such Loan 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 Loan.
(c) If a Loan is an Adjusted LIBOR Loan, such Loan
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 Loan plus the LIBOR Spread in effect at such time with
respect to such Loan.
(d) The ABR Spread and LIBOR Spread per annum in
respect of the 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 Funding 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
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
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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
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 be 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 is 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 the
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.
2.3.2. 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 subparagraph (vii) of this
subsection 2.3.2, a twelve-month period; provided that:
(i) subject to subparagraph (v) below, the Interest
Period for an 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 shall extend beyond the
Maturity Date;
(v) the initial Interest Period for a Loan which is
converted pursuant to subsection 2.7.4 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
the Lenders which were not converted expire;
(vi) there shall be no more than 6 Interest Periods
relating to Loans outstanding at any time (it being
understood that Interest Periods for Adjusted LIBOR Loans
which are scheduled to end on the same date shall
constitute one Interest Period for purposes of this clause
(vi)); and
(vii) no 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.
2.3.3. Interest Payments. Subject to subsection
2.3.5, interest shall be payable on the Loans as follows:
(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 Funding 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
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(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.
2.3.4. Conversion or Continuation. (a) Subject to
the provisions of Section 2.7, the Company shall have the
option (A) to convert at any time all or any part of an
outstanding ABR Loan equal to $10,000,000 principal amount and
integral multiples of $1,000,000 in excess of that amount to an
Adjusted LIBOR Loan; 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 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 Convers-
ion/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, (C) the
nature of the proposed conversion/continuation and (D) the
requested Interest Period. 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 2.3.4; 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
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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 2.3.4 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 2.7.4, 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.
2.3.5. Post-Maturity Interest. To the extent
permitted by applicable law, any interest payment on the Loans
not paid when due, 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.
2.3.6. 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 an ABR Loan 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
date of payment or, in the case of an Adjusted LIBOR Loan, 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 2.4 Commissions.
2.4.1. Commitment Commissions. The Company agrees
to pay to the Administrative Agent for distribution to each
Lender commitment commissions with respect to the Total Loan
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Commitment for the period from and including the Closing Date
to and excluding the Funding Date, at an annual rate equal to
0.50%, such annual rate shall be applied on a daily basis to
$60,000,000 from the Closing Date to the Funding Date. 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.
2.4.2. Bankers and Lenders' Commissions. The
Company agrees to pay to Bankers and the other Lenders the
commissions and other amounts at such times or upon the
happening of such events as are set forth in the Commitment Fee
Letter. Nothing herein set forth shall limit the rights of
Bankers or the other Lenders to receive the fees and other
amounts payable under the Commitment Fee Letter.
2.4.3. No Refund of Fees. Once paid, all fees and
commissions payable pursuant to this Section 2.4 shall not be
refundable under any circumstances.
Section 2.5 Prepayments and Payments.
2.5.1. Voluntary Prepayments. The Company may, upon
not less than two Business Days' 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 to time, prepay the Loans, in whole or in part at any
time, without penalty or premium, in an aggregate minimum
amount of $5,000,000 and integral multiples of $1,000,000 in
excess of that amount or, if less, the outstanding principal
amount thereof. All voluntary prepayments of the Loans shall
be applied in the amounts and manner applicable to mandatory
prepayments as set forth in subsection 2.5.3. 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 the Loans that are
so prepaid may not be reborrowed.
2.5.2. Mandatory Prepayments. The Company shall,
upon the occurrences set forth below, make prepayments of the
Loans in the amounts and manner set forth below.
(a) Prepayments from Sales of Collateral. Upon any
sale, transfer or other disposition of any Collateral, in
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accordance with the provisions of Section 5.10, the
Company shall prepay the Loans in an amount equal to the
proceeds received by the Company in respect of such sale,
transfer or other disposition net of costs of sale and
taxes paid or payable by the Company as a result thereof.
(b) Prepayments from Proceeds of Receivables
Transactions. On the first date on which the Company or
any Subsidiary of the Company receives proceeds of a
Receivables Transaction, the Company shall prepay the
Loans in full.
2.5.3. Company's Mandatory Prepayment Obligation;
Application of Prepayments. 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. 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 substantially in the form of Exhibit XI 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 the Loans in accordance
with the terms of the Escrow Letter.
2.5.4. 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).
2.5.5. Apportionment of Payments. Aggregate
principal and interest payments in respect of the Loans shall
be apportioned according to the applicable Lenders' respective
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Commitments. 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, if any,
payable to such Lender when received by the Administrative
Agent.
2.5.6. 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
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.
2.5.7. 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 the Loans, 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 the Loans made
hereunder, whether the 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 2.5.7
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.
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(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
Company hereunder or under such Note with respect to the Loan
and payments of principal or interest on any such Note.
Section 2.6 Use of Proceeds.
2.6.1. The Loans. The proceeds of the Loans made by
the Lenders to the Company on the Funding Date shall be
applied, 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 premium, 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.
2.6.2. Margin Regulations. No portion of the
proceeds of the Loans 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
of such borrowing and such use of proceeds.
Section 2.7 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:
2.7.1. 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.
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2.7.2. Increased Costs. Without duplication of
payments under subsection 2.7.7, 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
execution 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
(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), 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
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2.7.2 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 and 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.
2.7.3. 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 Conversion/Continuation or
prepayment of the Adjusted LIBOR Loans of an Affected Lender as
contemplated by subsection 2.7.5, 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 2.7.3 is made or
earlier, when required by law, repay its Adjusted LIBOR Loans
of such Affected Lender, together with all interest accrued
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thereon and such Adjusted LIBOR Loans shall be reborrowed as an
ABR Loan.
2.7.4. Options of Company. Without prejudice to the
Company's rights set forth in Section 2.9 and without limiting
any accrued obligations of the Company under subsection 2.7.2,
if the Company is required to pay an Affected Lender additional
moneys under subsection 2.7.2, the Company may in lieu of the
prepayment of Loans of an Affected Lender as required under
subsection 2.7.3, 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, an Adjusted LIBOR Loan and in such
event, the Company shall, prior to the time any payment
pursuant to subsection 2.7.3 is required to be made or, if
the provisions of subsection 2.7.2 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 2.3.4 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
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 2.7.3) in the manner
contemplated by subsection 2.3.4 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.
2.7.5. 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
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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) the Borrowing of any Adjusted
LIBOR Loan does not occur on a date specified therefor in the
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 2.3.4, (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 2.7.5 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.
2.7.6. 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.
2.7.7. Taxes.
(a) No Withholding. Except as otherwise provided
herein, any and all payments by the Company, 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, or any Lender (or any Purchasing Lender)
imposed by the United States or any jurisdiction under the laws
of which the Administrative Agent or any such Lender (or
Purchasing Lender) is organized or has its principal office or
lending office or any political subdivision in which the
applicable Administrative Agent, Lender or Purchasing Lender is
engaged in business or any taxing authority thereof or therein
(all such nonexcluded taxes, levies, imposts, deductions,
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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
the Administrative Agent, then, subject to paragraph (e) of
this subsection 2.7.7, (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 2.7.7) such Lender (or Purchasing
Lender) or the Administrative Agent (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 shall be entitled to receive any greater
payment under this paragraph (a) or paragraph (c) of
subsection 2.7.7 than such transferring Lender would have been
entitled to receive with respect to the rights assigned,
participated or otherwise transferred unless in the case of a
Purchasing 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 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 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 that arise as a result of sales,
assignments or other transfers of rights hereunder to any
Transferee pursuant to Section 9.1 (including participations)
(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 2.7.7, the Company will indemnify each Lender (or
Purchasing Lender) and the Administrative Agent for the full
amount of Taxes and Other Taxes (including any Taxes or Other
Taxes on amounts payable under this subsection 2.7.7) paid by
such Lender (or Purchasing Lender) or the Administrative Agent,
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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 the Administrative Agent, 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 2.7.7,
each Lender (or Purchasing Lender) or Administrative Agent
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 the Administrative Agent,
agrees to return such refund (plus penalties, interest or other
charges) to such Lender (or Purchasing Lender) or the
Administrative Agent in the event the relevant taxing authority
or other Governmental Authority determines that such Lender (or
Purchasing Lender) or the Administrative Agent 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
the Administrative Agent, 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 the Administrative Agent, as the case may be.
(e) Non-U.S. Lenders. Each of the Administrative
Agent and any Lender (or Purchasing 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
the Administrative Agent 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 Lenders) 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 XV annexed hereto (such
certificate, a "Status Certificate"), representing that such
Non-U.S. Person is not a bank described in Section 881(c) of
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the Internal Revenue Code, or any successor applicable form of
any thereof, certifying in each case that such Lender (or
Purchasing Lender) or the Administrative Agent 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 or any Lender (or Purchasing 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
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
or such Lender (or Purchasing 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 or such Lender (or Purchasing Lender), as
the case may be, from duly completing and delivering any such
form or certificate with respect to it, the Administrative
Agent or such Lender (or Purchasing 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 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 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
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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 2.7.7 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 the Administrative Agent for such Taxes or Other
Taxes pursuant to this subsection 2.7.7 to the extent that such
Taxes or Other Taxes result from (A) the failure of any Lender
(or Purchasing Lender) or the Administrative Agent 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 the Administrative Agent
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.
2.7.8. 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.
2.7.9. Assumptions Concerning Funding of Adjusted
LIBOR Loans. Calculation of all amounts payable to a Lender
under this Section 2.7 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
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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 2.7.
2.7.10. 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
of Default or Event of Default, the Company may not elect to
have Loans 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.
2.7.11. 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 2.7.2 or 2.7.3 or to be entitled to payments
pursuant to paragraphs (a), (b) or (c) of subsection 2.7.7, 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 2.7.2 or
such paragraphs of subsection 2.7.7 would be materially reduced
or the illegality or other adverse circumstances which would
otherwise require prepayment of such Loans pursuant to
subsection 2.7.3 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 the 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 2.7.11.
Section 2.8 Capital Requirements. If, while any of
the Commitments or the Loans are outstanding, any 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
Lender with any request or directive after the date of this
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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 Lender's capital as a
consequence of its Commitment or Loans to a level below that
which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, within
15 days after written demand by such Lender, the Company shall
pay to such Lender such additional amount or amounts as will
compensate it for such reduction; provided that the Company
shall have no obligation to any Lender under this Section 2.8
if such 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 2.9 Replacement Rights of Company. In the
event that any Lender shall have delivered a notice or
certificate or written demand pursuant to subsection 2.7.2,
subsection 2.7.3, or Section 2.8, or the Company shall be
required to make additional payments to or on behalf of or to
otherwise indemnify any Lender or Purchasing Lender, for its
own account or for the account of any Participant, under
paragraph (a), (b) or (c) of subsection 2.7.7, 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 Loan 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 Loan made by such Lender
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hereunder and all other amounts accrued for such Lender's
account or owed to it hereunder.
ARTICLE III
CONDITIONS TO LOANS
The obligations of the Lenders to make the Loans
hereunder are subject to the satisfaction of all of the
following conditions:
Section 3.1 Conditions to Effectiveness of
Agreement. The effectiveness of this Agreement is 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;
(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 each of the Collateral
Documents.
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3.1.2. The Company shall have taken or caused to be
taken such actions in such a manner so that, effective
immediately upon the funding of the Loans, the Collateral
Agent, on behalf of the Lenders, will have 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 and (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 Collateral or evidence
satisfactory to the Administrative Agent of filing of UCC
financing statements in each office where filing is necessary
or appropriate.
3.1.3. The Company shall have caused to be delivered
to each Lender an Officer's Certificate substantially in the
form of Exhibit VIII 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.
3.1.4. 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 V annexed hereto, dated as of the Closing
Date, and pertaining to such other matters as the
Administrative Agent may reasonably request.
3.1.5. 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
VI annexed hereto and (B) counsel in each jurisdiction where
there exists any accounts receivable to be subjected to the
Lien of a Collateral Document 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 VII annexed hereto.
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3.1.6. 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 Letter 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.
3.1.7. The Company shall have entered into the
Senior Credit Agreement, on terms satisfactory in all respects
to the Requisite Lenders and shall have borrowed thereunder the
loans contemplated to be borrowed on the Closing Date.
3.1.8. 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.
3.1.9. 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.
3.1.10. Except as has been disclosed in the
Information Package, 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 December 31, 1994.
3.1.11. 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
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made, not misleading and (B) all financial projections
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).
3.1.12. (A) The Company shall have delivered a
Borrowing Base Certificate to the Agent (with sufficient copies
for each of the Lenders and the Administrative Agent) duly
completed. Such Borrowing Base Certificate shall be made as of
March 6, 1995. Such Borrowing Base Certificate shall also
contain (1) a detailed schedule showing the aging of
Receivables as of the date of the Borrowing Base Certificate
and (2) a summary schedule showing the aging of Receivables as
of the Friday of the week immediately preceding the Closing
Date, in each case, in a form reasonably satisfactory to the
Administrative Agent.
(B) As of the date of the Borrowing Base Certificate
referred to in clause (A), and after giving effect to the
transactions to occur on the Closing Date, the Administrative
Agent shall be satisfied, in its sole discretion, that the
Company would have the availability to incur Loans under this
Agreement in the aggregate amount of $60,000,000.
The execution and delivery of this Agreement 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 the Loans. The
obligations of the Lenders to make the Loans on the Funding
Date for the purposes contemplated in subsection 2.6.1 are
subject to the prior or concurrent satisfaction or waiver of
the following further conditions precedent (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):
3.2.1. The Administrative Agent shall have received,
in accordance with the provisions of subsection 2.1.2, before
the Funding Date, an originally executed Notice of Borrowing
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signed by the chief executive officer, the chief financial
officer or the treasurer of the Company requesting the Loans 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 the Funding Date:
(i) 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.
(ii) There shall not have occurred and be continuing
any Event of Default or Potential Event of Default
pursuant to Section 7.1, 7.6, 7.7, 7.9, 7.12 or 7.13.
3.2.3. The Company shall have delivered a Borrowing
Base Certificate to the Administrative Agent (with sufficient
copies for each of the Lenders) duly completed. Such Borrowing
Base Certificate shall be made as of the last day of the month
immediately preceding the Funding Date; provided that if the
Funding Date is within ten (10) days of such month end, the
Borrowing Base Certificate shall be made as of the second
preceding month end. The Borrowing Base Certificate shall also
contain (1) a detailed schedule showing the aging of
Receivables as of the date of the Borrowing Base Certificate
and (2) a summary schedule showing the aging of Receivables as
of the Friday of the week immediately preceding the Funding
Date, in each case, in a form reasonably satisfactory 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, the Company represents and
warrants to each Lender as follows:
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Section 4.1 Organization, Powers, Good Standing,
Business and Subsidiaries.__________
4.1.1. Organization and Powers. The Company 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). The Company 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 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. The Company 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 the Company and its
Subsidiaries, 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 the Company 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 the Company and each of its
Subsidiaries in their respective 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 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 the Company.
4.2.2. No Conflict. The execution, delivery and
performance by the Company of each Loan Document 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 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 the Company, (2) the Certificates of
Incorporation or Bylaws of the Company, or (3) any order,
judgment or decree of any court or other agency of government
binding on the Company, (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 the Company,
(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 the Company, 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 the Company 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
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 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,
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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 Company, enforceable against the Company 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 consolidated financial position of the Company and its Sub-
sidiaries 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,
materially adverse to the business, operations, property,
assets or conditions (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole.
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Section 4.5 Title to Properties; Liens. The Company
has good, sufficient and legal title to and beneficial
ownership of all its 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
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 no such Lien (other than Prior Liens) shall be superior to
the Lien of such applicable Collateral Document. 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.
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 the Company or any 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 the Company or any of its Subsidiaries or any
property of the Company 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 the
Company 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 the Company and each Subsidiary thereof required to be filed
by any of them have been filed, and all taxes, assessments,
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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. Neither the
Company nor any of its Subsidiaries 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.
Section 4.9 Governmental Regulation. Neither the
Company nor any of its Subsidiaries (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. Neither the
Company nor any of its Subsidiaries 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. The Company and each of its ERISA Affiliates
are 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
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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. Neither the Company nor 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. Neither the Company nor any of its ERISA
Affiliates has incurred any accumulated funding deficiency
(whether or not waived) with respect to any Pension Plan
individually or in the aggregate in excess of $15,000,000.
4.11.6. Neither the Company nor 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
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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 the
Company 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 Company contained in this Agreement and any
other document, certificate or written statement furnished to
the Lenders by or on behalf of the Company or any Subsidiary of
the Company 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;
provided that in all cases, taken as a whole, representations
and warranties of the Company contained in this Agreement and
any other document, certificate or written statement furnished
to the Lenders by or on behalf of the Company or any Subsidiary
of the Company 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 the Company or any
Subsidiary of the Company in the case of any document not
furnished by it) necessary in order to make the statements
contained herein or therein not misleading. The Projections
are based upon good faith estimates and assumptions believed by
the Company and its Subsidiaries 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 the Company
(other than matters of a general economic nature) which
materially and adversely affects the business, operations,
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property, assets or condition (financial or otherwise) of the
Company and its 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. The Company
and its Subsidiaries own, or are 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
Company, its Subsidiaries 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 the Company, its Subsidiaries
and their respective Subsidiaries which is material to the
Company and its Subsidiaries, taken as a whole. The
consummation of the transactions contemplated by this 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 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 the Company 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 the Company, its Subsidiaries and their
respective 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 the Company, its Subsidiaries or any of their
respective Subsidiaries with only such exceptions as are not
material to the Company and its Subsidiaries, taken as a whole.
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Section 4.15 Environmental Protection.
4.15.1. The Company, its Subsidiaries and their
respective Subsidiaries have 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 the Company, its Subsidiaries or any of
their respective Subsidiaries, is sufficient under applicable
law to allow the Company, its Subsidiaries and their respective
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. The Company, its Subsidiaries and their
respective Subsidiaries are in material compliance with all
terms and conditions of the required material permits, licenses
and authorizations, and are 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 the
Company, its Subsidiaries or any of their respective
Subsidiaries under the Environmental Laws.
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,
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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.
Section 4.17 Solvency.
4.17.1. Immediately after the consummation of the
transactions to occur on the Closing Date and the Funding Date
and immediately following the making of the Loans and after
giving effect to the application of the proceeds of the 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 and the Funding Date.
4.17.2. 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
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such Subsidiary's ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be
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 the Loans and the Notes, 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
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their operations and cash flows for the periods indicated
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 XIII annexed hereto stating that the
signers have reviewed or caused to be reviewed under their
supervision the terms of this Agreement, the Notes 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 IV 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 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
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all material insurance coverage maintained as of the date
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 XIV 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 Company to perform its 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
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such Subsidiary shall have determined that the preservation
thereof is no longer desirable in the conduct of 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
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such types and such amounts of insurance are available at
commercially reasonable rates. 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 maintain
books and records pertaining to the Collateral in such detail,
form and scope as is consistent with good business practice and
agrees that such books and records will reflect the Collateral
Agent's and the Lenders' interest in the Receivables of the
Company. The Company shall permit any authorized
representatives designated by any Lender to visit and inspect
any of the properties of the Company, all upon reasonable
notice and at such reasonable times during normal business
hours and as often as may be reasonably requested, for the
purpose, subject to Section 9.17, of (i) inspecting and/or
copying (at the Company's expense) any and all records
pertaining to the Collateral, (ii) discussing the Company's and
its Subsidiaries' affairs, finances and accounts with its and
their officers and independent public accountants and (iii)
verifying Eligible Receivables; 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 Collateral as
defined in the Senior Credit Agreement 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 Collateral as defined in the Senior
Credit Agreement), (B) the provisions of (1) Section 3.08 of
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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 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) the provisions of Section 5.6 of the Senior
Credit Agreement as in effect on the date hereof, and (F) 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 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.
Section 5.9 Security Interests.
5.9.1. The Company shall 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, which are necessary or advisable, from time to
time, in order to grant, continue and maintain in favor of the
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Collateral Agent 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.
5.9.2. The Company shall 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
Agent as the Collateral Agent 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 5.10 Certain Dispositions of Collateral.
The Company shall not sell, lease, assign, transfer or
otherwise dispose of any interest in any Collateral (each, a
"Release Transaction") except in compliance with this
Section 5.10 and the Collateral Documents. Upon such
compliance, the Company shall be entitled to receive from the
Collateral 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 5.10 by delivery to the Collateral 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 by all parties
thereto other than the Collateral Agent and in form for
execution by the Collateral Agent, and an Officers' Certificate
certifying as to the satisfaction of the Release Conditions.
The Collateral Agent shall execute and deliver to the Company
such counterpart within 10 days after receipt by the Collateral
Agent of a Release Notice and the satisfaction of the Release
Conditions. The Collateral Agent's obligation to deliver any
Release and the Company's rights 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) Any Receivables sold, transferred or otherwise
disposed of by the Company shall be sold, transferred or
otherwise disposed of to a Person other than an Affiliate
of the Company for face value without any discount or
allowance;
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(iii) such sale, transfer or other disposition shall
not result in the incurrence by the Company of any
Indebtedness not otherwise permitted by Section 6.1; and
(iv) all proceeds of such sale, transfer or other
disposition shall be applied to prepay the Loans in
accordance with subsection 2.5.2(a).
In connection with any Release Transaction, the Company shall
(A) execute, deliver, file 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
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 5.10.
Section 5.11 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 5.12 Collateral Reporting. The Company
shall timely deliver to the Administrative Agent and each of
the Lenders weekly, before 12:00 noon on Friday of each week,
a duly completed Borrowing Base Certificate, which shall:
(i) identify the balance of the Company's Eligible Receivables
as of Friday of the immediately preceding week; (ii) be
prepared by or under the supervision of such Borrower's chief
executive officer or chief financial officer or treasurer and
certified by such officer subject only to adjustment upon
completion of the normal year-end audit; and (iii) have
attached thereto such additional schedules and other
information as the Administrative Agent may, from time to time,
reasonably request.
Section 5.13 Cash Collateral. If, at any time, the
aggregate principal amount of Loans outstanding shall exceed
the Borrowing Base (as determined by the Administrative Agent
based upon the Dollar amount of Eligible Receivables as
reflected in the most recent Borrowing Base Certificate
delivered by the Company to the Administrative Agent), the
Administrative Agent may, within five (5) Business Days of its
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receipt of such Borrowing Base Certificate, deliver to the
Company a notice (each, a "Deficiency Notice") indicating the
amount by which the principal amount of Loans then outstanding
exceeds the Borrowing Base (such amount, the "Deficiency
Amount"). The Company shall, within two (2) Business Days of
its receipt of any Deficiency Notice, cause Cash or Cash
Equivalents in an amount at least equal to the Deficiency
Amount to be deposited into the Cash Collateral Account. If
any subsequent Borrowing Base Certificate delivered to the
Administrative Agent and the Lenders indicates that (i) the
aggregate principal amount of Loans outstanding does not exceed
the Borrowing Base or (ii) the aggregate principal amount of
Loans outstanding exceeds the Borrowing Base by an amount which
is less than the amount of Cash and Cash Equivalents then on
deposit in the Cash Collateral Account, the Company may deliver
to the Administrative Agent a written request for the release
of such excess funds (each, a "Cash Release Request"), which
request shall indicate the amount of cash to be released, the
basis for the Company's determination that such release is
appropriate and a direction as to the manner of payment of such
funds. Upon its receipt of any Cash Release Request, the
Administrative Agent shall confirm the amount of funds to be
released and, upon such confirmation, shall promptly return
such funds as directed in the Cash Release Notice.
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 the Loans and all of the Notes, unless 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
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of such Indebtedness shall not exceed, in the case of a
refinancing of either 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 Term Loans is due under the Senior Credit
Agreement, (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
Indebtedness; provided that (A) all such Intercompany
Indebtedness 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 Inter-
company 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 Inter-
company Indebtedness of all Foreign Subsidiaries owing to
the Company and the Subsidiaries of the Company (other
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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;
(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
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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 or any Domestic Subsidiary of 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 the aggregate amounts
permitted under subsection 6.1(x) of the Senior Credit
Agreement;
(xi) The Company may become and remain liable with
respect to Indebtedness constituting Permitted Expansion
Financings;
(xii) The Company may become and remain liable with
respect to Indebtedness in an aggregate principal amount
not to exceed $1,440,000,000 under the Senior Credit
Agreement; and
(xiii) In addition to the Indebtedness permitted by
subparagraphs (i) through (xii) 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,
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create, incur, assume or suffer or permit to exist any Lien
upon or with respect to any property of the Company that is or
should (pursuant to the terms hereof) be subject to the Lien of
any Collateral Document except (i) Liens in favor of the
Collateral Agent for the benefit of the lenders under the
Senior Credit Agreement granted to secure the Company's
obligations thereunder, which Liens on the Collateral shall be
subject and subordinate to the Liens granted to the Collateral
Agent for the benefit of the Lenders hereunder, and (ii) Liens
which would be permitted pursuant to any applicable Collateral
Documents; provided that no such Lien (other than Prior Liens)
shall be superior to the Lien of such applicable Collateral
Document. With respect to assets other than Collateral, 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 (vi) 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
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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
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 in favor of a Lender under the
Senior Credit Agreement to secure the obligations of the
Company pursuant to any Qualified Interest Rate Agreement
or Qualified Currency Agreement;
(ix) 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;
(x) 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);
(xi) Liens on assets of the Company and its
Subsidiaries required pursuant to the Senior Credit
Agreement as in effect on the date hereof to be granted by
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the Company and its Subsidiaries to secure Indebtedness
under the Senior Credit Agreement; and
(xii) In addition to Liens permitted by subparagraphs
(i) through (xi) above, the Company and its Subsidiaries
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;
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(vii) 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;
(viii) 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;
(ix) 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
obligations of any Subsidiary of the Company) and all
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 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 (ix)
(provided that the total of all amounts of the unutilized
Discretionary Equity Proceeds Balance which the Company
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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 (ix) shall be construed to permit the
transfer to any Foreign Subsidiary of any asset which
constitutes Collateral or which constitutes Collateral (as
such term is defined in the Senior Credit Agreement as in
effect on the date hereof);
(x) 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 (x)
(determined, in each case, as of the date of transfer)
after the Closing Date shall not exceed $10,000,000 and
(B) the aggregate Fair Value (as so determined) of all
such tangible assets so transferred after the Closing Date
pursuant to this subparagraph (x) shall not exceed
$25,000,000;
(xi) 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;
(xii) The Company or any Subsidiary may continue to
own Investments in, and may make and own Investments in,
Consolidated Domestic 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;
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(xiii) 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; and
(xiv) In addition to Investments permitted by subpara-
graphs (i) through (xiii) 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 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 (xv);
provided that, except as set forth in subparagraph (xi) 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 as in effect on the date hereof;
(iii) Guarantees of Interest Rate Agreements and
Currency Agreements entered into by the Company which are
permitted by subparagraphs (iv) and (v) of this
Section 6.4;
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(iv) Interest Rate Agreements and Currency Agreements
(other than Leveraged Swaps) entered into by the Company
and any Lender;
(v) 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;
(vi) 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;
(vii) 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;
(viii) 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;
(ix) 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;
(x) 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;
(xi) Contingent Obligations pursuant to the
Management Agreements;
(xii) Contingent Obligations in respect of
Indebtedness of (A) the Company or a Domestic Subsidiary
of the Company and (B) Foreign Subsidiaries to the extent
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such Contingent Obligations are Investments permitted
under Section 6.3;
(xiii) Contingent reimbursement obligations not
exceeding $50,000,000 in the aggregate outstanding at any
time under Letters of Credit; 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.
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) dur-
ing 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
under the Senior Credit Agreement 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
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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 a 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 (xiii) 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
or the refinancing of all the Senior Unsecured Notes with
Refinancing Senior Unsecured Debt having a final maturity later
than the final maturity of the Tranche B Term Loans, 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 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
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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:
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
9/30/95 - 12/30/95 4.25x
12/31/95 - 3/30/96 4.00x
3/31/96 - 6/29/96 3.90x
6/30/96 - 9/29/96 3.80x
9/30/96 - 12/30/96 3.70x
12/31/96 - 3/30/97 3.45x
3/31/97 - 6/29/97 3.30x
6/30/97 - 9/29/97 3.20x
9/30/97 - 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
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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. Any Subsidiary of the Company may be merged
or consolidated with or into the Company or any Wholly Owned
Subsidiary of the Company (other than a Foreign 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); 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;
6.7.2. The Company or any of its Subsidiaries may
convey, sell, transfer or otherwise dispose of any Margin
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Stock, whether now owned or hereafter acquired; provided that
such disposition is for Fair Value;
6.7.3. 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 (vii) and (x) 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 Sections 5.10 and 6.11;
6.7.4. Subject to Sections 5.2 and 5.10 and 6.7 in
respect of sales of Collateral, 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, and (C) in the case of any
Collateral shall be subject to the requirements of Sections
5.10 and 6.11;
6.7.5. 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
6.7.6. The Company and its Subsidiaries may make
Investments otherwise permitted pursuant to Section 6.3 and
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
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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),
whether an Operating Lease or a Capital Lease, unless,
immediately after giving effect to the incurrence of liability
with respect to such 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:
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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, and (B) the provisions of
Section 6.9 would not be breached thereby.
Section 6.11 Sale or Discount of Receivables
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, sell with 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.
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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 and (E) transactions
permitted by Section 6.5.
Section 6.13 Disposal of Subsidiary Stock. Except
as permitted by Section 5.6, 6.2 or 6.7 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.
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.
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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 (ix) and (x) of Section 6.3 in respect thereof to
the extent applicable to such Capital Expenditures.
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
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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 the Second 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
(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 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
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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 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 withheld).
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 Senior Credit Agreement and
the documentation executed in connection therewith, the
documents evidencing 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
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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).
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, (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
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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
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 or otherwise pursuant to the terms of the
instruments governing such Indebtedness.
6.16.7. 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 Loans,
except, in each case, for (A) mandatory prepayments required
pursuant to Section 2.7.2 of the Senior Credit Agreement as in
effect on the date hereof, (B) regularly scheduled payments of
interest in accordance with the terms of the Senior Credit
Agreement as in effect on the date hereof and (C) any mandatory
payment or prepayment required to be made as a result of
acceleration or otherwise pursuant to the terms of the Senior
Credit Agreement 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.
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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 the Loans 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 the Loans 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) 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 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, 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 2.6, 5.2 or 5.6, ARTICLE VI or Section 9.6
of this Agreement; or
Section 7.4 Breach of Warranty. Any representation
or warranty made by the Company in any Loan Document or in any
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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. The Company 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
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
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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,
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
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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
Section 7.11 Withdrawal Liability Under Multi-
employer 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
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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 Failure of Security. Any 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 the
Company 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 face value of more than $2,000,000 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 the Company shall fail to perform or observe in
any material respect any Collateral Document; or
Section 7.13 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 (i) the unpaid principal amount of and accrued interest
on the Loans, and (ii) 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 (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 the
Loans to be, and the same shall forthwith become, due and
payable, together with accrued interest thereon. Whether or
not the 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
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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 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
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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
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 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,
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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
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, 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
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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 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 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 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 Commitment, 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.
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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.
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 Collateral Documents. Each Lender
hereby authorizes the Administrative Agent to act as Collateral
Agent on behalf of and for the benefit of such Lender. Each
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Lender hereby authorizes the Collateral Agent to enter into the
Collateral Documents and to take all action contemplated by the
Collateral Documents; provided that the Collateral Agent 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 realize upon the security granted by any
Collateral Document, it being understood and agreed that such
rights and remedies may be exercised by the Collateral Agent
for the benefit of the Lenders 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 Commitment or any other right of such Lender
hereunder or thereunder. In the event of any such sale by a
Lender of participating interests to a Participant, such
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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 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
or the Notes 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 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; 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 2.7 and 2.8 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 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 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
the Company of any of its rights and obligations under this
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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
acknowledgment 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 Commitment pursuant to a Registered Transfer
Supplement, substantially in the form of Exhibit X 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 (A) above shall be limited to an
amount equal to the lesser of (x) such Lender's Commitment 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 2.7.7, if applicable, and a processing and
recordation fee of $2,500, (3) 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 (4) 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 would be
required to make payments pursuant to or on behalf of such
Purchasing Lender pursuant to subsection 2.7.7 and (y) the
transferor Lender was not an Affected Lender as to which the
Company has declined or failed to exercise its rights pursuant
to Section 2.9 and was not, at the time of such assignment,
entitled to receive any payments pursuant to paragraph (a), (b)
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or (c) of subsection 2.7.7. 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 2.8) and
obligations of a Lender under this Agreement to the same extent
as if it were an original party hereto with the Commitment 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 Commitments 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, the Commitments
and the Notes. 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 Commitments 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
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 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
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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
obligations 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 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 Commitment 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, 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 Commitment, 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 X annexed hereto.
Coincident with the delivery of such Registered Transfer
Supplement to the Administrative Agent for acceptance and
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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 sub
section 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 2.9 or Section 9.22, unless, with respect to any
Notes held by such Lender, the requirements of sub-
section 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
Document, including filing and recording fees and expenses,
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
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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 the use or intended use of the
proceeds of the Loan or disbursements hereunder (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 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,
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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, 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 Loan
and Notes, 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
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 and the 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
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 the Loans, 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 the
Loans, 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 the Loans 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
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in respect to such aggregate amount of principal and interest
due with respect to such Notes held by it, 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 the Loans held by the other holders so
that all such recoveries of principal and interest with respect
to such Notes shall be proportionate to their respective
interests in the Loans; 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, so purchased 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
participations pursuant to this subsection 9.5.1 shall be
applied to all Lenders ratably in respect of all such amounts
then due and payable to each such lender.
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
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 Loan 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 Loan Commitment or a waiver of
the type contemplated in the second next preceding
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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 (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,
Commitment or (E) consent to the assignment or transfer by the
Company of any of its rights and obligations under this
Agreement; and provided, further, that no such change, waiver,
discharge or termination shall amend, modify or waive any of
the terms contained in subsection 2.1.5 or Section 2.5 without
the consent of the Required 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). 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
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
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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.
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 2.7.2,
2.7.5, 2.7.7 and 2.7.9 and Sections 9.2 and 9.3 and the
agreements of Lenders set forth in subsections 2.7.7, 2.7.8,
2.7.11, 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 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
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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
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.
Section 9.16 Consent to Jurisdiction and Service of
Process. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST THE COMPANY
WITH RESPECT TO THIS AGREEMENT OR ANY NOTE MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
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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 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
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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 Agent 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 Agent shall act in respect
of such consent, exercise of remedies, determination or 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 Agent, ministerial or administrative
in nature. In each circumstance where any consent of or
direction from the Requisite Lenders is required, the
Collateral Agent 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
Agent's proposed course of action with respect thereto. In the
event the Collateral Agent 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 Agent.
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
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or related to any of the Loan Documents or the actions of the
Administrative Agent and any Lender in the negotiation,
administration, performance or enforcement hereof and thereof.
Section 9.22 Lenders' ERISA Matters.
9.22.1. Lenders' Representations and Warranties.
Except as otherwise provided in subsection 9.22.2, 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.
9.22.2. General Account Assets. A Lender or
Transferee which is an insurance company subject to state
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regulation that is making or purchasing an interest in a Loan
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 9.22.1 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).
9.22.3. 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 9.22.1 or, with respect to
General Account Assets used to acquire its interest or
participation, subsection 9.22.2. 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.
9.22.4. 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
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investment advice on any basis in respect of the advisability
of making or maintaining such Loan; and is not relying and has
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
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,
as a Lender
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, as a Lender
By: /s/ Christopher C. Wardell
Print Name: Christopher C. Wardell
Title: Managing Director
Notice Address:
Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Doug Traver
Telephone: (212) 270-1915
Telecopier: (212) 270-1063